As filed with the Securities and Exchange Commission on ____________
SEC Registration no. 333-_________
- --------------------------------------------------------------------------------
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form SB-2
REGISTRATION STATEMENT
under the
SECURITIES ACT OF 1933
MEDIACOMM BROADCASTING SYSTEMS, INC.
(Name of small business issuer in its charter)
Colorado 7310 84-1474784
(State or jurisdiction (Primary Standard (IRS Employer
of incorporation Industrial Classification Identification
or organization) Code Number) Number)
925 W. Kenyon Avenue #15
Englewood, Colorado 80110
(303) 762-6444
(Address and telephone number of principal executive offices
and principal place of business)
Don E. Montague
Mediacomm Broadcasting Systems, Inc.
d/b/a Shopbiz.com
925 W. Kenyon Avenue #15
Englewood, Colorado 80110
(303) 762-6444
(Name, address and telephone number of agent for service)
COPIES OF ALL COMMUNICATIONS TO:
Ronald N. Vance, P.C.
57 West 200 South, Suite 310
Salt Lake City, UT 84101
(801) 359-9300
(801) 359-9310 FAX
<PAGE>
APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: AS SOON AS PRACTICABLE AFTER
THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
Calculation of Registration Fee
Proposed
Title of each Proposed Maximum Amount
Class of Amount Maximum Aggregate Of
Securities to To be Offering Offering Registration
Be registered Registered Price Price Fee
(1) (1)
Common Stock, no par
value, Maximum 900,000 $1.00 $900,000 $250
Series "A" Warrants,
each entitling the holder
to purchase one share
of Common Stock,
issuable upon exercise
of the warrants 1,800,000 -0- -0-
<PAGE>
Common Stock, no par
value, issuable upon
exercise of Series "A"
Warrants (2) 1,800,000 $2.00 $3,600,000 $1,001
------
Total Registration Fee $1,251
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) and (g).
(2) Represents shares of Common Stock underlying warrants held or to be held by
the Selling Security Holders and includes, pursuant to Rule 416, an
additional indeterminate number of shares that may be issuable upon
exercise of the warrants by reason of anti-dilution provisions of the
warrants which prevent dilution resulting from stock splits, stock
dividends or similar transactions.
Cross Reference Sheet
Form SB-2
Item No. Sections in Prospectus
1 Front of Registration Statement and Outside Cover Page
Front Cover of Prospectus
2 Inside Front and Outside Back Cover Pages Inside Front Cover
of Prospectus Pages (i)(ii); Table of
Contents
3 Summary Information and Risk Factors Prospectus Summary;
Risk Factors
4 Use of Proceeds Prospectus Summary;
Use of Proceeds
5 Determination of Offering Price Cover Page;
Subscription and Plan
of Distribution
6 Dilution Dilution
7 Selling Security Holders Cover Page,
Certain Transactions -
ConCurrent Offering
8 Plan of Distribution Prospectus Summary;
Subscription and Plan of
Distribution
<PAGE>
9 Legal Proceedings Legal Proceedings
10 Directors, Executive Officers, Promoters and Management; Principal
Control Persons Shareholders
11 Security Ownership of Certain Beneficial
Owners and Management Principal Shareholders
12 Description of Securities Description of Securities
13 Interest of Named Experts and Counsel Experts
14 Disclosure of Commission Position on Statement as to
Indemnification for Securities Act Liabilities Indemnification
15 Organization within Last Five Years Prospectus Summary;
Business
16 Description of Business Prospectus Summary;
Risk Factors; Business
17 Management's Discussion and Analysis or Business -
Plan of Operation Plan of Operations
18 Description of Property Business
19 Certain Relationships and Related Transactions Certain Transactions
20 Market for Common Equity and Related Cover Page; Risk
Stockholder Matters Factors, Description of
Securities
21 Executive Compensation Management - Executive
Compensation
22 Financial Statements Index to Financial
Statements
23 Changes In and Disagreements With Experts
Accountants on Accounting and Financial
Disclosure
24 Indemnification of Directors and Officers Indemnification of
Directors and Officers
<PAGE>
25 Other Expenses of Issuance and Distribution Other Expenses of
Issuance and Distribution
26 Recent Sales of Unregistered Securities Recent Sales of
Unregistered Securities
27 Exhibits Exhibits
28 Undertakings Undertakings
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED OCTOBER *, 1999
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not a solicitation of an offer to buy these
securities in any state where the offer or sale is not permitted.
MEDIACOMM BROADCASTING SYSTEMS, INC.
D/B/A SHOPBIZ.COM
------------------
450,000 shares minimum, 900,000
shares maximum of Common Stock
$1.00 per share
------------------
o Shopbiz.com is a start-up company principally operating on the Internet as
a retailer of the products of various manufacturers and distributors.
o This is our initial public offering, and no public market currently exists
for our shares. The offering price may not reflect the market price of our
shares following completion of the offering.
The Offering
Common Stock: Public Price Total
Number of Shares per Share Min. Max.
Minimum: 450,000 $1.00 $450,000
Maximum: 900,000 $1.00 $900,000
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Proceeds to Shopbiz.com $450,000 $900,000
o This offering of our shares is not underwritten. The offering is to be
made through our officers and directors, without remuneration to them, on
a 450,000 shares minimum "all or none," 900,000 shares maximum "best
efforts" basis until 60 days from the date of this Prospectus, which
period may be extended for an additional 60 days, at our option. The
minimum number of shares a person may purchase is 1,000 shares.
o An indeterminate number of the shares may be sold through broker/dealers
who are members of the National Association of Securities Dealers, Inc.,
and who will be paid a 10 per cent commission on sales they make. No
allowance has been made for such commissions in the above table.
<PAGE>
o Other than commissions which may be paid to participating broker/dealers,
the expenses of this offering which are estimated to be $40,000, including
legal and accounting fees, Blue Sky fees of various states, printing,
mailing, and miscellaneous items have been paid or will be paid from funds
on hand prior to the offering.
o We are escrowing proceeds from sales of the shares at Peak National Bank
of Lakewood, Colorado, until the sale of the 450,000 minimum number of
shares is achieved. If the minimum of $450,000 in proceeds is not received
prior to the expiration of the offering periods all escrowed funds will be
returned to subscribers without interest or deduction.
o Concurrently with this offering, we are registering for sale 1,800,000
Series "A" warrants to purchase shares of common stock of Shopbiz.com at a
price of $2.00 per share and the shares of common stock underlying the
warrants. We will not receive any of the proceeds from sale of the
warrants or the shares underlying the warrants, except for the exercise
price of the warrants in the aggregate amount of $3,600,000 if all of the
warrants are exercised.
o Your purchase of the shares would create for you a high degree of risk.
You should not purchase the shares unless you can afford a total loss of
your purchase price. See "Risk Factors" beginning on page *.
Neither the Securities and Exchange Commission nor any state securities
commission has approved these securities, or determined if the Prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
------------------
October *, 1999
<PAGE>
TABLE OF CONTENTS
Item Page
Prospectus Summary *
Summary Financial Information
Risk Factors
Forward Looking Statements
Business
Use of Proceeds
Management
Principal Shareholders
Dilution
Subscription and Plan of Distribution
Shares Eligible for Future Sale
Description of Securities
Certain Transactions
Legal Matters
Experts
<PAGE>
PROSPECTUS SUMMARY
The following is a summary, qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
Our Company Our Web site: shopbiz.com
Mediacomm Broadcasting Systems, In early March 1999, we initiated a
Inc., was incorporated as a Colorado limited version of our Web site, and
corporation on August 20,1998. began operations. On our Web site we
presently offer a fully featured
Our executive offices and operating service in the nature of an electronic
facilities are located at 925 W. shopping mall. We operate as an
Kenyon #15, Englewood, Colorado, Internet retailer of the products of
80110. Telephone: (303) 762-6444. manufacturers and distributors, a
practice known in today's economy as
Our company does business under the "e-commerce". Shoppers purchase one or
assumed name: Shopbiz.com, which is multiple products from approximately
our domain site name on the World Wide 2,000 products currently offered on
Web of the Internet which we refer to Shopbiz.com by about 200 sellers. Over
herein as the "Web". You can visit our the 12 months following completion of
Web site on the Internet at this offering, we plan to increase the
http:\\www.shopbiz.com. number of products offered on
shopbiz.com to 20,000. Purchases are
We are a start up company. We have automatically processed with sellers
had no significant revenues from as one secure credit card purchase -
operations to the date hereof. Whether our "shopping cart" feature. We
we will generate significant revenues provide a 60 day money back guarantee
from operations in the future is of satisfaction with products
highly uncertain. See "Business". purchased by our shoppers.
Organization and Financing Currently, Shopbiz.com is marketed
on 2,200 affiliated Web sites
In August and September 1999, we worldwide. With the proceeds of this
borrowed $225,000 from six lenders. We offering we will develop new features
have budgeted these proceeds for use on shopbiz.com and pursue extensive
over a six-month period beginning conventional and Internet marketing
August 6, 1999. The loans are payable campaigns. See "Business" and "Use of
upon completion of this offering of Proceeds."
our shares or by August 6 and
September 30, 2000. Our License For
denver.theexecutive.com
In addition, to the ten percent
interest we must pay for these loans, Denver.theexecutive.com, a Web page
we issued to the lenders 1,800,000 domain, provides Internet information
shares of the common stock of our relative to the Denver, Colorado
company and Series "A" Warrants to geographical area. We have obtained an
purchase 1,800,000 share of our common exclusive license to use the Internet
stock at $2.00 per share. See content of denver.theexecutive.com.
"Business Organization and Initial Through use of our license, we are
Financing" and ACertain able to provide a portal for Internet
TransactionsBPrivate Financings in access. This license allows us to
August and September 1999." market an Internet portal for
residents of the Denver metropolitan
area. See "Business-Our Internet
Portal: denver.theexecutive.com".
<PAGE>
The Offering
Common Stock Offered Price Per Share Total
Minimum Maximum
Minimum: 450,000 shares $1.00 $450,000
Maximum: 900,000 shares $1.00 $900,000
Net Proceeds to shopbiz.com $450,000 $900,000
o The foregoing tables does not include commissions which may be paid to
participating broker/dealers and the table does not include the expenses
of this offering which are estimated to be $40,000, including legal and
accounting fees, Blue Sky fees of various states, printing, mailing and
miscellaneous items which have been paid or will be paid from funds on
hand prior to the offering.
Use of Proceeds
We intend to use the proceeds of this offering for the purposes and in the
order set forth as follows:
o Payment of loans with interest
o Marketing of our Web sites
o Purchase of computer equipment
o Web site development
o General and administrative expenses
o Working capital
See "Use of Proceeds."
SUMMARY FINANCIAL INFORMATION
Set forth below is summary financial information of MediaComm Broadcasting
Systems, Inc. for the period from August 8, 1998 (inception) through June 30,
1999, and for the three months ended June 30, 1999. The summary financial
information should be read in conjunction with the financial statements included
elsewhere in this Prospectus and are qualified in their entirety by reference
thereto.
August 8, 1998
Three months (inception)
Ended Through
June 30, 1999 June 30, 1999
Operations
Net Sales $ 7,835 $ 8,059
Income from operations before special
items and income taxes $ (37,812) $ (82,780)
Income before income taxes $ (37,812) $ (82,780)
<PAGE>
Net income $ (37,812) $ (82,780)
Net income per comm share and common
share equivalent (primary and full diluted) $ (0.03) $ (0.07)
Average number of common shares and
common share equivalents outstanding 1,218,182 1,218,1182
Dividends paid per common share $ -0- $ -0-
Financial Position
Current Assets $ 25,429 $ 25,429
Current Liabilities $ 1,499 $ 1,499
Current Ratio 16.96 16.96
Total Assets $ 28,129 $ 28,128
Long-term Debt $ -0- $ -0-
Stockholders' Equity $ 26,630 $ 26,630
Book Value Per Share $ 0.02 $ 0.02
Income from continuing operations
before special items and income
taxes as a percent of sales -483% -1,027%
Return on net sales -483% -1,027%
RISK FACTORS
The securities we offer by this Prospectus involve a high degree of risk.
You should purchase them only if you can afford to lose the total amount of your
purchase. If you are considering a purchase of these shares, you should
carefully evaluate the following risk factors and all of the other information
in this Prospectus, including the financial statements.
o Uncertainty That We Will be Able to difficulties inherent in a
Continue as a Going Concern. new business enterprise such
Shopbiz.com was incorporated on as
August 20, 1998, has been in (i) brief operating experience;
business only since that date, has (ii) working capital
no significant revenue and had a limitations;
net worth of $26,630 at June 30, (iii) a limited customer base;
1999. You should, therefore, (iv) minimal recognition of our
carefully consider these company in the e-commerce
circumstances: economy of the Internet;
(a) Our activities have been (v) delays in implementing our
limited to organizing the operating plans; and
company, formulating our (vi) effective employment of
business plan and personnel and outside
establishing our Web site, contracts.
(b) We are subject to and
experiencing all the
<PAGE>
The foregoing circumstances, among Accordingly, you should carefully
others discussed in this Prospectus, consider this circumstance:
make it highly uncertain that we will there may be a very limited demand
be able to continue as a going for use of our Web site shopbiz.com
concern. See "Business". or our Web site
o Limited Capital. We have limited denver.theexecutive.com. See
capital and are obligated for "Business".
substantial debt. You should,
therefore, carefully consider the o Lack of Proven Technology. Our Web
following circumstances: site shopbiz.com is currently
(a) we are dependent upon the functioning, and we are currently
proceeds of this offering to developing improvements of our
retire debt in the amount of software and related technology.
$225,000 plus interest thereon, You should, therefore, carefully
(b) we have budgeted the proceeds evaluate the following related
of this offering to sustain us circumstances:
as a going concern for only a (a) our brief operating experience
period of 12 months following and limited availability of
completion of this offering, funds has restricted the extent
(c) following application of the to which we have been able to
proceeds of this offering it is test the operation of our Web
highly likely that we will site and to identify problems
require additional capital for that need to be addressed
(i) maintenance and improvement (b) our Web site operates through a
of our Web site, shopbiz.com, technologically complicated
and for our Web site system and is susceptible to yet
denver.theexecutive.com; undiscovered defects which could
(ii) marketing of our services; cause service interruptions and
(iii) employment of personnel failures with the consequent
and outside consultants; and loss of customers and revenue,
(iv) sustaining our operation as (c) the technology employed in our
a going concern. Web site is a recent development
(d) we can give no assurances that and may not allow a substantial
additional capital will be number of potential customers to
available to us through equity use our site because of their
or debt financing or through the older computer hardware or
highly unlikely source of software, and
commercial bank loans. See
"Business". (d) we believe that because the
Internet is in its infancy there
o Unproven Business Concepts. Our are inherent unforeseen risks of
business plan is based upon ideas (i) interruption of service,
derived from our internal (ii) insufficiency of capacity,
evaluation of the services (iii) undiscovered defects, and
currently being offered on the (iv) system failure. See
Internet by others. "Business".
<PAGE>
o Our Dependence Upon Rapidly o Dependence on Content Providers.
Evolving Technology. We are Currently our delivery of content
dependent upon a technology that is on our Web site,
in its early stages and is rapidly denver.theexecutive.com, is limited
evolving. It is uncertain that we to information related to the
will be able to keep abreast of new Denver, Colorado metropolitan area
technological developments. under our license agreement with
Information Highway, Inc. and our
o Our Dependence on Performance of portal agreement with Image Net,
Manufacturers and Distributors. Inc. Our ability to successfully
Because our Web site operates operate a portal and provide
principally as a medium for the marketable content to subscribers
sale of the goods of manufacturers will continue to be dependent upon
and distributors, our favorable this license and similar
reputation depends upon arrangements we may make with other
satisfactory performance of these content providers. See "Business".
vendors in at least the following
particulars: o Competition. The market for
(a) adequate inventory of goods Internet services is highly
offered by vendors; competitive and we expect that
(b) timely delivery of goods; competition will continue to
(c) quality of goods which meet the intensify. We face competition from
expectations of buyers; a number of enterprises operating
(d) vendors filling orders as separate Web sites, Internet
promised by them; and portals and on-line access to the
(e) misrepresentations to buyers by Internet. Most of these firms are
vendors. larger, better financed and have
See "Business". greater personnel and financial
resources than have we. Companies
o Breaches of Security on Our Web such as America On Line and NetCom
Site. Notwithstanding have operated on the Internet for a
implementation of security measures significant period of time and are
designed to provide confidentiality continually developing new
for customers on our Web site, our technologies to offer subscribers.
network may be vulnerable to We also face competition from
unauthorized access, computer smaller enterprises seeking to
viruses and other improper specialize in markets in which we
intercession. A party who is able intend to do business. While
to circumvent our security measures relatively smaller and less
could misappropriate proprietary experienced than the larger
information or cause interruption enterprises, these new enterprises
in our operations. We may be may have competitive advantages
required to expend significant over us due to their prior entry
additional capital to protect into the market. In pursuing our
against breaches of security and to business plan, we will essentially
alleviate interruptions caused by act as a Web developer, shopping
such breaches. See "Business". mall and content provider to
<PAGE>
potential users. In that capacity, o Dependence on Management: Limited
we will also face competition from Experience; Brief and Informal
local and regional shopping malls Terms. Although our officers have
and a myriad of retailers existing significant experience in the
in traditional physical facilities. marketing and selling aspects of
See "Business" and "Competition". our business, none of them have had
any experience conducting an
o Y2K Compliance. Potential problems enterprise of the nature we have
exist with the programming code in organized. Our employment
existing computer systems as the arrangements with each of our
year 2000 ("Y2K") approaches. This officers is for a relatively brief
problem is pervasive and complex, period and informal in nature.
as virtually every computer
operation will be effected in some Departure, for whatever reason,
way by the rollover of the from Shopbiz.com by any of our
two-digit year '99 to the year '00. current officers could have a
This issue will determine whether materially adverse effect on our
computer systems will properly company. Furthermore, we do not
recognize date-sensitive intend to obtain key-man life
information and potentially effect insurance on the life of any of our
both hardware and software. Systems officers or directors. See
that do not properly recognize such "Management".
information could generate
erroneous dates or cause systems to o Risk From Interruption or Failure
shut down. We believe we have taken of Our System. Our success, in
reasonable steps to address the Y2K particular our ability to
problem. All of our computer successfully receive and fulfill on
hardware and software has been behalf of vendors orders generated
certified as Y2K compliant by their by customers, largely depends on
manufacturers and authors. We will the efficient and uninterrupted
also require Y2K certification from operation of our computer and
our vendors prior to doing business communication hardware systems.
with such firms. We do not Substantially all of our computer
anticipate that we will incur and communication hardware is
significant operating expenses or located at a single facility in
require additional capital Denver, Colorado. Our systems and
investment to achieve Y2K operations are vulnerable to damage
compliance. However, significant or interruption from fire, flood,
uncertainty exists concerning the power loss, telecommunications
potential costs and effects failures, break-ins, and other
associated with Y2K problems. similar events. Although we
Failure of our vendors to achieve presently have a back-up system in
Y2K compliance could have a place in the event of such
materially adverse effect on our disaster, we do not carry
operations. sufficient business interruption
<PAGE>
insurance to compensate us for potentially inadequate development
losses of that nature which may of the necessary network
occur. The occurrence of any of the infrastructure or delayed
foregoing risks could have a development of enabling
materially adverse effect on our technologies and improvements in
operations. performance. Existing
infrastructure for the Internet and
o Dependence on Continued Growth of on-line service may be inadequate
Commerce on the Web. Our plan of and require additional development
operations and business are wholly to keep pace with demand. The
dependent upon the widespread Internet may be subject to future
acceptance and use of the Internet government regulations as a means
and other on-line services as an of commerce. Internet commerce is
effective medium of commerce. Rapid also subject to the availability
growth and use of the Internet, the and reliability of
Web and on-line services is a telecommunication services. See
recent phenomenon, and there can be "Business".
no assurance that acceptance and
use will continue to develop or o Sales Tax. We do not presently
that a sufficiently large base of collect sales or other similar
consumers will adopt and continue taxes on transactions that involve
to use the Internet and other on the transport of goods and services
line services. Demand and market into states other than Colorado.
acceptance for recently introduced However, one or more states may
services and products over the seek to impose sales tax collection
Internet are subject to a high obligations on out-of-state
order of uncertainty. We intend to companies such as ours who engage
rely on consumers who have in Internet commerce. While the
historically used traditional means U.S. Congress recently adopted
of commerce to purchase merchandise legislation declaring a moratorium
and services. For us to be on new state taxes and potentially
successful, these consumers must duplicative taxes among states, we
accept and utilize the novel ways can give no assurance that such a
of the Internet in conducting moratorium will prevent states from
business and using information from adopting future sales tax
the Internet. legislation and challenging the
Federal legislation. A successful
In addition, the Web and other effort by one or more states or any
Internet services may not be foreign country that requires us to
accepted as a viable commercial collect sales or other similar
market place for a number of taxes on transactions on our Web
technical reasons, including site could have a materially
adverse effect on our business.
<PAGE>
o Possible Lack of Market for Our these definitions. Being subject to
Shares. If our shares are not the penny stock rules, the market
quoted on the OTC Bulletin Board, liquidity for our shares could be
as anticipated, trading, if any, adversely affected.
would likely be conducted on the
so-called "pink sheets". o Depressing Effect on Market Price
Consequently, selling Shopbiz.com of Stock - Shares Overhanging
shares would be more difficult Market. After this offering, we
because smaller quantities of will have 8,700,000 shares of
shares would be bought and sold, common stock outstanding. This
transactions could be delayed, and includes the 900,000 shares we are
availability of quotations would be selling in this offering which may
more limited. These factors could be sold immediately in the public
result in lower prices and larger market. The remaining 7,800,000
spreads in the bid and asked prices shares, though originally
for our shares. restricted shares, will be
available for resale into the
Initially our shares will be market in the near future. This
subject to Rule 15g-9 under the could cause the market price of our
Securities Exchange Act of 1934. common stock to drop significantly.
That rule imposes additional sales See "Shares Eligible for Future
practice requirements on Sale."
broker/dealers that sell low-priced
securities to persons other than o No Commitment to Purchase Common
established customers and Stock. No one, including
institutional accredited investors. Shopbiz.com, an underwriter or any
For transactions covered by this broker/dealer, has any obligation
rule, a broker/dealer must make a to purchase any or all of the
special suitability determination shares of common stock offered
for the purchaser and have received hereby. Consequently, no assurance
the purchaser's written consent to can be given that any of the shares
the transaction prior to the sale. will be sold. See "Subscription and
Consequently, the rule may affect Plan of Distribution".
the ability of broker/dealers to
sell our shares and may affect the o Investors Bear the Risk of Loss.
ability of shareholders to sell Substantially all of the funds
Shopbiz.com shares in the secondary required for our operations for the
market. ensuing 12 months following
completion of this offering are
The Securities and Exchange being sought from investors in this
Commission's regulations define a offering. Investors in this
"penny stock" to be any equity offering will contribute $450,000
security that has a market price of our required funds if the
less than $5.00 per share or with minimum proceeds are received, and
an exercise price of less than $900,000 of our required funds if
$5.00 per share, subject to certain the maximum proceeds are received.
exceptions. Initially our stock Investors will therefore bear a
will be a penny stock. We cannot risk of loss disproportionate to
assure you that our shares will that of existing shareholders if
ever qualify for exemption from the business of Shopbiz.com is
unsuccessful. See "Dilution".
<PAGE>
o Arbitrary Offering Price: Dilution. contributions of previous
The offering price of the shares shareholders and estimated future
was determined arbitrarily by our offering prices were considered.
board of directors and not by
arms-length bargaining. This price Investors will experience
bears no necessary relationship to substantial dilution of their
our company's book value, assets, investment, as the $1.00 offering
lack of earning, trading price or price per share is substantially
any other recognized criterion of greater than the estimated tangible
value. In determining the offering book value of our outstanding
price, the prospects for success of shares of common stock as of June
our plan of operations, costs to 30, 1999, of $0.00399 per share.
operate our Web site shopbiz.com See "Dilution".
for the foreseeable future,
FORWARD LOOKING STATEMENTS
This prospectus contains "Use of Proceeds", "Business" and in
forward-looking statements that this prospectus generally. Our actual
address, among other things, our results could differ materially from
electronic commerce strategy, those anticipated by these
expansion strategy, the development of forward-looking statements as a result
services, use of proceeds, projected of various factors, including all the
capital expenditures, liquidity, risks and uncertainties discussed in
development of additional revenue "Risk Factors" and elsewhere in this
sources, development of marketing and prospectus.
distribution alliances, market
acceptance of the Internet, The Private Securities Litigation
technological advancement, and the Reform Act of 1995, which provides a
ability to develop name recognition. "safe harbor" for similar statements
These statements may be found in the by existing public companies may not
sections of this prospectus entitled currently apply to securities
"Prospectus Summary", "Risk Factors", offerings by our company.
BUSINESS
Organization and Initial Financing
We incorporated MediaComm Since incorporation we have been
Broadcasting Systems, Inc., as a primarily engaged in organizing
Colorado corporation on August 20, activities, raising funds, purchasing
1998. We are doing business as a personal computer, designing
Shopbiz.com, an assumed name on file computer software and establishing our
with the Secretary of State of web site domain, shopbiz.com on the
Colorado, Division of Corporations. Web.
<PAGE>
o Pursuant to a private placement McAdam, a member and the manager of
offering over the period from Summer Breeze LLC.
December 1, 1998 to approximately
February 17, 1999, we issued a Another beneficial owner of 600,000
total of 6,000,000 shares of our of said shares is David R. Nemelka,
common stock, including shares a member and the manager of David's
purchased by the organizers of our Odyssey LLC. Both Summer Breeze LLC
company, for $105,000 for an and David's Odyssey LLC are lenders
average of $.0175 per share, as of a portion of the $225,000 of
adjusted for a three-for-one loans to our company discussed
forward stock split of our shares below. See, "Principal
of common stock effective August 4, Shareholders", "Description of
1999. The beneficial owner of Securities-Warrants" and "Certain
750,000 of said shares is Gary Transactions-Private Financings in
August and September, 1999".
The proceeds from the foregoing private placements were allocated and
expended as of June 30, 1999, as follows: (See, "Financial Statements".)
Item Amount
Software development $ 41,737
License fees 1,250
Costs applicable to net sales and
gross revenues 4,835
Rent to an affiliate 3,098
Consulting services of an affiliate 3,400
General and administrative 36,519
Working capital 14,161
--------
Total $105,000
o In August and September, 1999, percent per annum upon completion of
and concurrent with our forward stock this offering of our common stock and
split, we borrowed $225,000. As from the proceeds of the offering or
partial consideration for loaning if the offering is not completed the
these funds to us we issued to the six loans with interest are payable on or
lenders 1,800,000 shares of our common before August 6, and September 30,
stock and 1,8000,000 Series "A" 2000. See "Certain
warrants to purchase shares of our Transactions-ConCurrent Offering" and
common stock at $2.00 per share. These "Certain Transactions-Private
loans are payable with interest at 10 Financings in August and September
1999".
<PAGE>
We have budgeted the $225,000 of borrowed funds for the following purposes:
Item Amount
Web site development $ 40,000
Advertising and Promotion 95,000
General and Administrative 50,000
Offering Expense 40,000
--------
Total $225,000
Our Business and the Internet International Data Corporation
projects that Internet commerce will
The success of our business is grow from approximately $50 billion in
primarily dependent upon growth of sales of goods and services in 1998 to
electronic commerce on the world wide $1.3 trillion of such sales in 2003.
web segment of the Internet, our Although this approximation does not
ability to provide a marketable identify what portion of the
service on the Internet and our projection represents sales of goods
ability to compete with other only, we believe the portion of that
enterprises using the Internet for projection that is composed of sales
commercial purposes. of goods will be substantial.
The Internet appears to be growing Notwithstanding recent growth of
at an unprecedented speed and volume activity on the Web and the Internet
as a global means of communicating and generally, their use as a commercial
doing business. Although estimates of marketplace is still at an early stage
growth of the Internet vary, they of development. Demand and market
appear to us to be reasonable acceptance for recently introduced
approximations. For example, products and services such as our web
International Data Corporation site shopbiz.com are uncertain. We
estimates that the number of Internet cannot predict whether sellers and
users will grow from approximately 142 buyers will be willing to shift their
million at the end of 1998 to 399 traditional commercial activities to
million by the end of 2002, and the Internet. The Internet and the
employing a once per week use of the world wide web in particular may not
Internet as a measurement, the prove to be a viable commercial market
Computer Industry Almanac estimates place for a number of reasons
that such use will grow from 19 including:
million users in 1996 to 320 million
users in 2000 and 720 million users in o Concerns about security of
2005. transactions;
o Inconsistent and unreliable
In particular relation to online service;
commerce on the Internet, it appears o Congestion on the Internet; and
that this means of doing business is o Unacceptable cost of high speed
becoming increasingly accepted. access.
<PAGE>
If use of the Internet does not procedures to disclose to and notify
grow and acceptance of it in the customers of privacy and security
marketplace increase we likely will be procedures, to obtain consent from
unable to develop a commercially customers for certain collection and
viable customer base. use of information and to provide
users with the ability to access,
Although we cannot provide you with correct and delete personal
our estimate in numerical terms, we information stored by those companies.
believe that the magnitude of use of These proposed regulations may also
the Internet, its global scope, the include enforcement and redress
manner of its functioning and its provisions. There can be no assurance
accessibility afford us a reasonable that we will adopt policies that
opportunity for marketing of our conform with any regulations adopted
shopbiz.com web site and our by the FTC. Moreover, even in the
development of related services on the absence of those regulations, the FTC
Internet. has begun investigations into the
privacy practices of companies that
Regulation of the Internet collect information on the Internet.
One investigation resulted in a
Congress has recently adopted consent decree pursuant to which an
legislation that regulates certain Internet company agreed to establish
aspects of the Internet, including programs to implement the practices
online content, user privacy, noted above. We may become subject to
taxation, access charges, liability a similar investigation, or the FTC's
for third-party activities and regulatory and enforcement efforts may
jurisdiction. The European Union has adversely affect our ability to
also enacted several directives collect demographic and personal
relating to the Internet, one of which information from customers which could
addresses online commerce. In have an adverse effect on our ability
addition, federal, state, local and to provide targeted customers from our
foreign governmental organizations are data base to advertisers and
considering other legislative and electronic commerce marketers,
regulatory proposals that would including sellers on our Web site. Any
regulate the Internet. Increased of these developments would materially
regulation of the Internet may and adversely affect our business,
decrease its growth, which may results of operation and financial
increase the cost of doing business condition.
via the Internet and otherwise
materially and adversely affect our The European Union has adopted a
business, results of operations and directive that imposes restrictions on
financial condition. the collection and use of personal
data. Under the directive, citizens of
The Federal Trade Commission the European Union are guaranteed the
("FTC") has proposed regulations right to access their data, the right
regarding the collection and use of to know where the data originated, the
personal identifying information right to have inaccurate data
obtained from individuals when rectified, the right to recourse in
accessing Web sites, with particular the event of unlawful processing and
emphasis on access by minors. These the right to withhold permission to
regulations may include requirements use their data for direct marketing.
that companies establish certain The directive could, among other
things, affect United States companies
<PAGE>
that collect information over the o Shoppers can purchase one product
Internet from individuals in European or multiple products from different
Union member countries, and may impose sellers in one purchasing
restrictions that are more stringent transaction.
than current Internet privacy o Purchases must be made by credit
standards in the United States. In card and upon placing an order the
particular, companies with offices shopper's request is automatically
located in European Union countries processed over a secure line off
will not be allowed to send personal the Internet and credit is approved
information to countries that do not or disapproved within approximately
maintain adequate standards of six seconds.
privacy. The directive does not, o Following verification by one of
however define what standards of our personnel, a shopper's order is
privacy are adequate. As a result, the automatically transmitted by e-mail
directive may adversely affect the to the seller of the product
activities of enterprises such as ours purchased.
that engage in data collection from o Contemporaneous with placing of the
users in European Union member shopper's order with the seller,
countries. the purchase is immediately
confirmed to the shopper by
Our Current Business automatic e-mail.
o Shoppers are automatically informed
We commenced operating a limited by e-mail that the product
version of our web site shopbiz.com on purchased has been shipped and
March 1, 1999. We are now principally given the relevant details
engaged in promoting and developing regarding the shipment.
our fully featured web site as a o Only when a product purchased has
shopping service on the Internet. been shipped is the shopper's
Essentially, we act as a retailer of purchase transaction closed and the
products for manufacturers and shopper's credit card account is
distributors who want to make sales of charged for the amount of the
their goods over the Internet. We do purchase.
not act for sellers of services. o For purposes of security personal
information supplied by the shopper
The Principal Features of Shopbiz.com in a purchase transaction is
encrypted.
Features That Serve Shoppers o Shoppers who elect to do so can
participate in a rating system
o Shoppers who visit our Web site can which affords them the opportunity
search for products by keyword, to rate products and review ratings
brand name and from multiple given by other shoppers.
categories. o Shoppers who wish, can participate
o Some products are classified in in a shoppers service which
more than one category. provides shoppers information by
o Shoppers can select one type of e-mail relating to products they
product that is available from more have designated as products in
than one seller. which they have a particular
interest.
<PAGE>
o Shoppers can submit questions to o Through keywords identifying our
sellers over shopbiz.com by e-mail sellers' products which are
directed to our Web site and electronically, though not visibly,
sellers can respond by e-mail to embedded in our Web site system are
shoppers over our Web site. automatically picked up and placed
in the data bases of those
Features That Serve Sellers enterprises that search the
Internet for such information for
o Once we have approved a seller the their particular e-commerce
seller can offer products on marketing purposes.
shopbiz.com free of charge. For
many sellers this arrangement is Our Administration of shopbiz.com
more attractive than incurring the
cost of establishing their own o We operate on shopbiz.com
individual web site. essentially as a retailer of the
o By logging-on to shopbiz.com using products of manufacturers and
a password assigned by us, sellers distributors.
can upload presentations of their o Our compensation for our retail
products in the form of images and services is fixed by a retail
text. mark-up of products offered on our
o Sellers can continually manage Web site in amounts negotiated with
their presentation of products for each seller.
sale on shopbiz.com by editing, o Our agreements with sellers
amending the content of their regarding our retail mark-up are
presentations and by adding and variable and arrived at in keeping
deleting products all by merely with our needs and those of each
accessing our Web site. individual seller.
o Sellers can review orders via the o Before admitting a seller to our
Web site and communicate with us by Web site we review and approve the
e-mail transmitted to the Web site. seller, the products to be offered
o Sellers products are promoted for sale and the content of the
without cost to them by our proposed presentation of those
advertising efforts such as our products.
affiliate program whereby o During regular business hours our
shopbiz.com and the products of our personnel monitor activity on our
sellers are presented on other Web Web site to insure the efficient
sites known as our affiliates. operation of the site, including
o We offer sellers the opportunity to our verification of each purchase
participate in co-branding made for the purpose of identifying
marketing efforts with us where the fraudulent transactions, where
costs of such marketing are shared. possible.
<PAGE>
o We continually store the relevant Our license is for a period of two
information pertaining to each years from November 23, 1998 and may
transaction over our Web site on be extended for successive periods of
computer disks as a back-up data two years, at our option.
base in the event of a disaster
which destroys our computer We have entered into an agreement
facilities. with Image Net, Inc. of Loveland,
Colorado, an Internet Service
Customers of shopbiz.com Provider, whereby Image Net, Inc. will
host our Web site
Currently approximately 100 sellers denver.theexecutive.com and we will
are offering approximately 2,000 endeavor to obtain subscribers for the
products in 22 categories on Internet access services of Image Net,
shopbiz.com. The number of sellers and Inc. Our agreement provides that
products that will be offered on our revenues from subscribers to our web
Web site in the future is uncertain. site denver.theexecutive.com will be
shared by Image Net, Inc., Information
To the date hereof we have had a Highway, Inc., and ourselves in the
minimal number of shoppers purchase following manner:
products on our Web site. To what We will share equally with
extent the number of purchasers on our Information Highway, Inc. the full
Web site will increase in the future amount of each subscription fee for
is uncertain. the first month. Thereafter, Image
Net., Inc., will receive the
Revenues of shopbiz.com substantial portion of such fee and
we will share the remainder of the
To the date hereof our revenues fee equally with Information
from operation of shopbiz.com have Highway, Inc., for every month
been insignificant. Whether our thereafter that the subscription
revenues from operation of shopbiz.com stays in force.
will be significant in the future is
uncertain. In addition, we have agreed to
share equally with Information
Our Internet Portal: Highway, Inc. our retail mark-ups on
denver.theexecutive.com all sales of products occurring on
shopbiz.com which have originated from
We have obtained a license from shopbiz.com links on Web sites of
Information Highway Inc., a Vancouver Information Highway, Inc.
Canada corporation, to operate the
World Wide Web site domain We propose to promote subscriptions
denver.theexecutive.com and offer its to denver.theexecutive.com. However,
content on the Internet. The content at the date hereof there are no
of denver.theexecutive.com is subscriptions for this service and no
information intended to interest an revenues from operation of
executive person in the geographical denver.theexecutive.com and whether we
area of Denver, Colorado pertaining to will generate significant revenue from
weather, health, travel and stock its operation in the future is
quotations and similar information. uncertain.
<PAGE>
Our Plan Of Operations install additional storage and
procedures that facilitate use of
Development of Our Web Site shopbiz.com our Web site. See "Use of
Proceeds".
Over the 12 months following
completion of this offering we will Computer Equipment
undertake to improve the efficiency of
our Web site in the following We intend to upgrade our existing
particulars: computer equipment which we currently
o Our Database. We intend to update have on loan from a consultant or
or install new computer equipment, install new equipment which we will
as in the circumstances appears to own depending upon our requirements,
us most feasible to operate our as our experience with shopbiz.com
data base compilation. warrants and as our financial and
o Speed in Processes. Also, we other resources allow. (See "Use of
propose to develop a new version of Proceeds" and "Certain
our software which would enable us Transactions-Option Granted to
to display information in more Consultant".) The functions of our Web
variable formats at shopbiz.com. site which such equipment will serve
These actions would speed the time are:
it takes to access and present data
at our Web site and would, o Our capacity to digitally store
therefore, be beneficial for users images on disk
of our Web site. o The uploading of products on our
o New Features. The new features we Web site from external sources such
intend to add to shopbiz.com as printed material or information
include product promotions for from a disk.
sellers that will allow them to use o The organization of our marketing
more complex and artistic designs materials such as digital pictures,
and that will allow sellers the banner advertisements, printed
concentrated promotion of a material, marketing procedures and
singular product. In addition, we marketing data relevant to buyers
intend to design cosmetic and sellers
improvements in the presentation of o Our internal back office accounting
our Web site. We intend to develop and accounting of sellers' and
new features for shopbiz.com as our buyers' activities on our Web site.
experience with the Web site in the See "Use of Proceeds".
rapidly changing e-commerce
environment of the Internet guides Marketing shopbiz.com
us.
o Additional Development of Our Proposed Automated Advertising
shopbiz.com. We intend to secure a System. We are developing a system on
faster Internet connection and our Web site which will provide
<PAGE>
enterprises selling products on sites by their owners who are known
shopbiz.com additional procedures to as affiliates
support their marketing efforts on the o Text linked advertising
Internet. Our Automated Advertising o Keyword advertising
System will provide our sellers with o Contextual advertising which is the
these two additional marketing tools: display of products available at
o Sellers of products on shopbiz.com Web sites of others whose products
with merely a click on shopbiz.com have a natural association with
will be able to purchase, jointly products offered for sale on our
with us, advertising of their Web site. This association is known
products on the multiple Web sites in e-commerce as affinity.
at which we have purchased
advertising. In this way we hope to Our Affiliate Program. We currently
expand the exposure of advertising have approximately 2,200 affiliated
for all of our sellers and for Web sites worldwide where our banner
ourselves. and logo are displayed. Our
o Sellers can design product relationship with these affiliates is
promotions such as giveaways and administered by Commission Junction
sweepstakes contests, create which has its Web site at www.cj.com.
advertising banners and hyperlinks Our arrangement with Commission
that with merely a click on our Web Junction provides for a sharing of
site shopbiz.com will be presented revenues whereby we pay a fee to
on our Web pages. See "Use of Commission Junction and a fee to an
Proceeds". affiliate when either a click or an
impression occurs on our Web site or a
Internet Advertising. We propose to sale occurs at our Web site and any of
expend approximately one-half of the which events has originated at the Web
proceeds we have budgeted for site of the affiliate.
marketing of our Web site for
advertising on the Internet. We have Our expenditure for these methods
limited experience with advertising on of advertising are consequent upon an
the Internet; therefore, our marketing action initiated by others and we,
on the Internet will be, to a therefore, classify these methods as
significant extent, experimental and indirect marketing.
the results of such advertising is
highly uncertain. Our Direct Purchase of Internet
Advertising. We propose to directly
The advertising on the Internet we purchase advertising at multiple Web
propose to undertake consists of the sites on the Internet from many such
following mediums: sites where we expect to achieve
o Banner advertising at our Web site exposure of shopbiz.com to thousands
which consists of a display of our of potential customers on the Internet
name and logo to a user who visits in the following ways:
shopbiz.com o Offering of our products on
o Display of our banner on other Web multiple Web sites within an
auction procedure
<PAGE>
o Our purchase of keywords linked to We hope to obtain a competitive
shopbiz.com that are displayed on advantage by being a relatively early
multiple Web sites. entrant into this market. However, due
to our status as a development stage
Conventional Advertising company and our need for working
capital and additional personnel, we
Approximately one-half of the may be at a competitive disadvantage
proceeds of this offering which we as compared to other participants in
have budgeted for marketing of commerce over the Internet.
shopbiz.com, we intend to spend on
conventional advertising such as In addition to individual
television, radio, newspapers, manufacturers and distributors of
magazines and bill boards, including products on the Internet, we will face
banners at stationary locations, and competition from established shopping
on taxicabs and other public malls presently in operation over the
conveyances. We propose to expend Internet. Enterprises such as Icat and
approximately 20 percent of the funds Netcom, presently maintain Web sites
on conventional marketing of our for distribution of products and
portal denver.theexecutive.com. See services. These enterprises maintain
"Use of Proceeds". Web sites designed to function in a
manner similar to our operation of
Competition shopbiz.com. These competitors may
hold a competitive advantage over us
Competition for customers by due to their prior presence and
sellers and distributors of developed technology.
merchandise on the Internet is growing
and we expect that it will increase Many larger, well-established
rapidly in the future. While we companies in traditional markets have
anticipate that the use of the also established a presence on the Web
Internet by consumers as a shopping as a means of reaching additional
medium will increase in the future, we customers. Some enterprises such as
expect that competition among Amazon.com focus exclusively on the
individual sellers will become Internet as a means of marketing and
increasingly intense as merchants and distribution. Other companies, such as
distributors seek to exploit the Republic Industries, a nationwide
Internet as a market place. As with distributor of new and used
other means of marketing and automobiles, uses the Internet as an
distribution, companies who have adjunct to traditional means of
established a presence in the Internet marketing and distribution. These and
market may have gained a competitive other enterprises are considerably
advantage over our company. While the larger and have more financial
number of shopping sites on the Web is resources than have we. We believe
presently small, relative to the that our company will initially be at
volume of goods and services consumed a competitive disadvantage with regard
in traditional markets in the United to working capital, personnel and
States and world wide, we believe that technology relative to other
commerce in goods on the Internet will enterprises, large and small, using
increase dramatically in the future. the Internet to market their products.
<PAGE>
Trademark further development and administration
of our Web site. However, computer
The company has reserved its domain programmers are currently in high
on the Web under the name shopbiz.com. demand and there is no assurance that
This registration is good for a period such individuals can be obtained on
of 2 years and may be renewed by us terms acceptable to us. In the event
prior to its expiration. We have also we are unable to obtain qualified
registered shopbiz.com as an assumed individuals to fill such positions, we
name with the Colorado Secretary of will continue to rely on third-party
State. We intend to file for contractors. We, also, anticipate
registration of the name shopbiz.com retaining a financial officer and
with the United States Patent and business development personnel in the
Trademark Office in the near future. future as circumstances and our
The process for completing such a financial resources permit. See "Use
registration is lengthy, and can of Proceeds".
extend to approximately 6 months.
Notwithstanding completion of an We, also, have retained the
application for name registration, services of third-party contractors to
there is no assurance that a name will assist in development of our computer
be accepted for registration. Unless software. In addition, we have
and until that registration is retained outside legal and accounting
complete and we have the protection of services. We believe we have
Federal trademark statutes, we must satisfactory relations with our
rely on court-established legal employees and consultants and that
principles to protect our rights in such relationships will continue for
the name. the foreseeable future. See "Certain
Transactions-Options Granted to
While we intend to pursue all Consultant".
reasonable means to protect our rights
in the name shopbiz.com we do not Facilities
believe trade name protection to be a
critical element for successful Our executive and operating offices
operation of our business. at 925 W. Kenyon #15, Englewood,
Colorado 80110, are occupied under a
Employees sublease from MediaComm Marketing
International, Inc., an affiliate. We
The company currently has four exclusively occupy approximately 1,000
employees, including its two executive square feet and we share secretarial,
officers, Messrs. Don E. Montague and reception, conference and other common
Steven S. Montague. In addition to areas with MediaComm Marketing
these executives, we employ two International, Inc. We rent these
individuals as software developers premises on a month-to-month basis at
whose employment is at our will. See a cost of $525 per month. We believe
"Management-Executive Compensation". these facilities are sufficient for
our needs for the foreseeable future.
Upon receipt of the proceeds of See "Certain Transactions-Arrangements
this offering, we intend to hire with Affiliate".
additional employees to assist in
<PAGE>
Legal Proceedings
Our computer equipment is on loan Neither Shopbiz.com nor any of our
from Cygen Technologies, Inc., our properties, nor any of our officers
technical consultant, and is located and directors in their capacities as
on the premises of that consultant in such, are the subject of any legal
Denver, Colorado. For the foreseeable proceedings, nor are there any such
future the loan and use of premises legal proceedings contemplated to the
are without charge to us. best of our knowledge and belief.
USE OF PROCEEDS
The following table sets forth the net proceeds to be received by us from
sale of our shares. Assuming no commissions will be paid to participating
broker/dealers, the net proceeds to Shopbiz.com will be approximately a minimum
of $450,000 and maximum of $900,000. We estimate that the proceeds will be
applied during the next twelve-month period essentially as follows:
Net Offering Proceeds
Description of Use Minimum Percentage Maximum Percentage
Payment of Loans with
Interest (1) $233,000 57% $233,000 27%
Marketing of Web site 45,000 8% 274,000 31%
Computer Equipment 12,000 2% 25,000 2%
Web site development 22,000 3% 41,000 4%
General and
Administrative expense 129,000 29% 302,000 34%
Working capital 9,000 1% 25,000 2%
--------- --------
TOTAL $450,000 100% $900,000 100%
(1) See "Business-Organization and Initial Financing" and "Certain
Transactions-Private Financings in August and September, 1999" for a description
of the terms of the loans.
<PAGE>
o Other than commissions which may be paid to participating broker/dealers,
the expenses of this offering which are estimated to be $40,000, including
legal and accounting fees, Blue Sky fees of various states, printing,
mailing and miscellaneous items, have been paid or will be paid from funds
on hand prior to the offering. See "Business - Organization and Initial
Financing."
o The amounts set forth above are estimates only. Consequently, the actual
amounts are likely to vary from that described. To the extent proceeds are
inadequate in any area of expenditure, supplemental amounts may be drawn
from working capital, if available. Any additional proceeds necessary for
operation will be obtained through debt financing or additional equity
financing. However, we have no specific plans for future financing and the
officers and directors have made no commitment to advance funds to us. Any
proceeds not required for the proposed expenditures we will retain and use
as working capital.
o Pending utilization, we may make temporary investments of the proceeds in
interest bearing certificates, including United States government
securities, short-term certificates of deposit, money market funds or other
short term interest bearing investments. We do not intend to register as an
Investment Company under the Investment Company Act of 1940. Accordingly,
any investment by us shall be made so as to avoid regulation as an
Investment Company.
MANAGEMENT
Officers and Directors
The following individuals are the officers and directors of Shopbiz.com:
Name Age Position
---- --- --------
Don E. Montague 58 Chairman of the Board of Directors,
President and Chief Executive Officer
Steven S. Montague 30 Vice President, Director of
Communications and a Director
Anthony "Anton" Delgado 48 Secretary Treasurer, and a Director
Gunther Than 52 Director
Don E. Montague is a "founder" and a "parent" of our company, as defined by
rules promulgated under the Securities Act of 1933 and the Securities Exchange
Act of 1934 as he is the principal person who founded and organized Shopbiz.com.
Don E. Montague. Mr. Montague's principal occupation is as President and
Chief Executive officer of MediaComm Marketing International, Inc., an affiliate
of Shopbiz.com, a position he has held since his founding of that corporation in
1989. MediaComm Marketing International, Inc., is engaged in public relations
and investor relations services for many business enterprises located in the
United States and Canada.
<PAGE>
Prior to founding MediaComm Marketing International, Inc., Mr. Montague was
production manager for KCNC Television in Denver, Colorado, when it was an NBC
affiliate. As production manager he was responsible for operations, personnel
and administration of the production department.
Although Mr. Montague devotes the substantial part of his time and efforts
on behalf of MediaComm Marketing International, Inc., he is able to expend such
time and effort on the business of Shopbiz.com, as its affairs require. See,
"Certain Transactions-Arrangements with Affiliate".
Steven S. Montague. Mr. Montague's principal occupation is as a Vice
President of our company. He has held this position from January 1, 1999 to the
present time. From approximately October 1994 to February 1996 he was a sales
representative and producer of video materials for Mediacomm Marketing
International, Inc., an affiliate of our company. From February 1996 to
September 1997, he was an account executive at Rocky Mountain News, a newspaper
of general circulation located in Denver, Colorado. From December 1997 to April
1998, Mr. Montague was an account executive for Microsoft Sidewalk, a company
providing Internet marketing solutions for local businesses. From April 1998 to
August 1998, he was marketing director for Credit Card Services, Inc., where his
principal responsibilities were the development and oversight of all media
campaigns and the implementation of a telephone call center.
Mr. Montague is, also, the manager of Shaw Communications, LLC, a privately
held company previously engaged in consulting with enterprises operating on the
Internet and providing media services to such enterprises and which is now
dormant.
Steven S. Montague is the son of Don E. Montague.
Anthony "Anton" Delgado. Mr. Delgado's principal occupation is as senior
producer and art director for MediaComm Marketing International, Inc., a
position he has held since inception of that company in 1989. He is responsible
for overseeing production of art, graphics and related design products,
coordinating and directing in studio and remote location production of video
presentations for clients of that corporation. In addition, he directs
production of promotional pieces, logo development and other print advertising
for clients of MediaComm Marketing International, Inc.
Mr. Delgado performs the duties of Secretary and Treasurer of Shopbiz.com
as required and acts in that capacity without compensation.
Gunther Than. Mr. Than's principal occupation is as President and Chief
Executive Officer of Views Systems, Inc., a publicly held company engaged in
developing software for compressing, storing, searching for and transmitting
<PAGE>
high quality digitized static and cinematic images over the Internet and
surveillance systems over the Internet. He has held said position from 1997 to
the present time. From 1994 to 1997, Mr. Than was President and a founder of
View Technologies, Inc., a privately held company engaged in computer software
development and systems integration. From 1990 to 1994, he was an independent
consultant with respect to computer software programming.
Mr. Than acts as a consultant to our company with respect to Internet
technology.
Mr. Than is a graduate of the University of Wisconsin with a dual Bachelors
Degree in Engineering Physics and Applied Mathematics. He, also, has completed
graduate studies toward a Ph.D. Degree in Mathematics at the University of
Wisconsin and completed graduate studies toward an MBA Degree at Marquette
University.
Executive Compensation
Steven S. Montague is employed by our company pursuant to a one-year
employment contract effective January 1, 1999. His salary is fixed at $50,000
per annum and he is entitled to participate in employee benefit plans maintained
by our company, including insurance, stock option and profit sharing plans. His
employment contract is renewable from year-to-year unless terminated by either
himself or our company upon not less than 14 days advance written notice. In
1998, we paid Shaw Communications, LLC $3,400, a company of which Steve S.
Montague is a principal member and its manager.
Mr. Don E. Montague has agreed with us to perform the duties of his office
without compensation for a period of 18 months from January 1, 1999. At the end
of that period we intend to negotiate compensation for Mr. Montague commensurate
with our financial resources at that time.
Mr. Delgado performs the duties of his office without compensation.
Commensurate with our financial resources, including revenues from operations
and the proceeds of this offering, we propose, from time to time, to pay Mr.
Delgado consulting fees for art work related to our marketing efforts.
Our directors are not compensated in their capacities as directors.
However, a director is entitled to be reimbursed for travel and other expenses
incurred in connection with his attendance at meetings of the board of
directors. All of our officers, directors and employees are entitled to
participate in the stock option plan discussed below.
<PAGE>
Indemnification of Directors Officers and Others
Article 109 of the Colorado Business Corporation Act expressly authorizes a
Colorado corporation to indemnify its directors, officers, employees,
fiduciaries and agents against claims or liabilities arising out of such
persons' conduct in those capacities if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of their
company. A corporation may also purchase and maintain liability insurance on
behalf of such persons.
Article IX of our Amended and Restated Articles of Incorporation provide
for the indemnification of our directors, officers, employees and agents. We do
not maintain any liability insurance on behalf of any such persons.
Insofar as indemnification by us for liabilities arising under the
Securities Act of 1933 may be permitted to our officers and directors pursuant
to the foregoing provisions, or otherwise we are informed that in the opinion of
the staff of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
Non-qualified Stock Option and Stock Grant Plan
We have a non-qualified stock option and stock grant plan for the benefit
of key personnel and others providing significant services to our company. An
aggregate of 3,000,000 shares of our common stock has been reserved for issuance
under the plan.
The plan is administered by our board of directors, which is empowered to
select optionees and recipients of any stock grants, the number of shares and
the terms and conditions of any options or grants to key persons as defined in
the plan. In determining the value of services rendered to us for purposes of
awards under the plan, the board of directors considers, among other things,
such person's employment position and relationship with our company, that
person's duties and responsibilities, ability, productivity, length of service
or association, morale, interest in our company, recommendation by supervisors
and the value of comparable services rendered by others in the business
community. All options granted pursuant to the plan must be exercisable at a
price not less than the fair market value of our shares of common stock on the
date of a grant.
There is no federal taxable income to an optionee as the result of the
grant of a non-qualified stock option unless the exercise price is set at less
than fair market value. However, an optionee has income subject to federal
taxation upon the exercise of a non-qualified stock option based on the
difference between the fair market value of the shares acquired at the time of
exercise and the option price. The company is not entitled to a tax deduction
upon the grant of a non-qualified stock option, but is entitled to a federal tax
deduction upon exercise of an option equivalent to the optionee's income subject
to federal income tax.
<PAGE>
Currently, under the plan, there is an option outstanding entitling one
employee the right to purchase 75,000 shares of our common stock at a price of
$.35 per share.
Separate from and outside the plan, we have granted an option to purchase
150,000 shares of common stock at $.20 per share to a consultant. See "Certain
Transactions - Option Granted to Consultant."
PRINCIPAL SHAREHOLDERS
As of the date of this Prospectus, there is a total of 7,800,000 shares of
our common stock outstanding, the only class of our voting securities currently
outstanding. The holders of our common stock are entitled to one vote for each
share held by them of record.
The following table sets forth holdings of our common stock by each person
who, as of the date of this Prospectus, holds of record or is known by us to own
beneficially 4 percent or more of the voting securities outstanding and, in
addition, by all directors and officers of Shopbiz.com as a group. The table
does not reflect up to 3,000,000 shares of common stock underlying our stock
option plan. The shareholders listed below have sole voting and investment
power.
Percentage of Voting Securities
After After
Number of Before Offering Offering
Name Shares Offering Minimum Maximum
Don E. Montague 3,060,000 39% 37% 35%
Steven S. Montague 270,000 4% 3% 3%
Gary McAdam 1,110,000 14% 13.5% 12.7%
David R. Nemelka 960,000 12% 11.7% 11%
Gunther Than 840,000 11% 10% 9.6%
All Officers and Directors
as a Group (4 persons) 4,260,000 55% 52% 49%
Don E. Montague and Steven S. Montague are respectively, father and son.
Messrs. Montague are officers and directors of Shopbiz.com and the address of
each of them is 925 West Kenyon Avenue #15, Englewood, Colorado 80110.
Gary McAdam is the beneficial owner of the 1,110,000 shares shown in the
above table. The record owners of these shares are: Summer Breeze LLC 360,000
shares; Second Chance Investments 600,000 shares; GJM Trading 150,000 shares,
the address of all of whom is: 14 Red Trail Drive, Highland Ranch, Colorado
80126.
<PAGE>
The 1,110,000 shares attributed to Gary McAdam do not include approximately
45,000 shares he could indirectly acquire by conversion of a promissory note
from our company held by Summer Breeze LLC, nor does it include 360,000 shares
he could indirectly acquire upon exercise of 360,000 Series "A" Warrants held by
Summer Breeze LLC, should Summer Breeze LLC not elect to sell such warrants as
it currently proposes to do. In addition, should we default in payment of the
promissory note, Summer Breeze LLC could convert the amount due on the note into
approximately 450,000 of our shares. See "Description of Securities-Warrants",
"Certain Transactions-Private Financings in August and September, 1999" and
"Certain Transactions-ConCurrent Offering".
Mr. Than is a director of Shopbiz.com and acts as a consultant to our
company. His address is 925 West Kenyon Avenue #15, Englewood, Colorado 80110.
David R. Nemelka is the beneficial owner of the 960,000 shares shown in the
above table. The record owners of these shares are: David's Odyssey LLC 360,000
shares; Tradeco Corp. 600,000 shares.
The 960,000 shares attributed to David R. Nemelka do not include
approximately 45,000 shares he could indirectly acquire by conversion of a
promissory note from our company held by David's Odyssey LLC nor does it include
360,000 shares he could indirectly acquire upon exercise of 360,000 Series "A"
Warrants held by David's Odyssey LLC, should David's Odyssey elect not to sell
such warrants as it currently proposes to do. In addition, should we default in
payment of the promissory note, David's Odyssey LLC could convert the amount due
on the note into approximately 450,000 of our shares. See "Description of
Securities-Warrants", "Certain Transactions-Private Financings in August and
September, 1999" and "Certain Transactions-ConCurrent Offering".
David R. Nemelka's address is 1310 East 1600 South, Mapleton, Utah 84664.
Changes in Control
We know of no arrangement, including the pledge by any person of our
securities, which may at a subsequent date result in a change of control of our
company.
DILUTION
As of June 30, 1999, there were 2,000,000 shares of our common stock
outstanding. This number of shares was increased to 6,000,000 as a result of a
three for one stock split effective August 4, 1999. Subsequently, in August and
<PAGE>
September 1999, the total number of our outstanding shares of common stock was
increased to 7,800,000 by the issue of 1,800,000 shares to persons who loaned us
$225,000. See "Certain Transactions - Private Financings in August and September
1999."
The financial statements of our company as of June 30, 1999, show a net
tangible book value of $23,930 or $.00399 per share of common stock calculated
on the basis of 6,000,000 shares outstanding as of June 30, 1999.
The information presented in the following two tables reflects 7,800,000
shares of our common stock outstanding as of the date of this Prospectus.
Relative Investments
Average
Shares Purchased Total Consideration Price per
Number Percent Amount Percent Share
Minimum Offering
Existing Shareholders 7,800,000 94.5% $109,410 19.56% $.014
New Investors 450,000 5.5% $450,000 80.44% $1.00
Maximum Offering
Existing Shareholders 7,800,000 90% $109,410 10.84% $.014
New Investors 900,000 10% $900,000 89.16% $1.00
Dilution to Investors in This Offering
Minimum Maximum
Net Tangible Book Value per Share
After Offering $.05745 $.106
Increase per Share to Existing Shareholders
Attributable to New Investors $.05346 $.102
Dilution per Share to New Investors $.94254 $.898
Dilution Percentage of Purchase Price 96% 90%
SUBSCRIPTION AND PLAN OF DISTRIBUTION
This offering is being conducted by who are members of the NASD. The
us, through our officers and minimum subscription is 1,000 shares,
directors, on a 450,000 share minimum except we may accept subscriptions for
"all or none", 900,000 share maximum 500 shares, in our sole discretion. We
"best efforts" basis at an offering will not pay a commission to our
price of $1.00 per share. The common officers or directors for sales made
stock may also be offered and sold by them. We and participating
through participating brokers/dealers broker/dealers may further agree to
<PAGE>
indemnify each other against certain We anticipate making sales of the
liabilities, including liabilities shares to residents of the states of
arising under the Securities Act of Colorado, New York and the District of
1933. No one, including us or any Columbia, as well as other persons
broker/dealer, has made any commitment resident in other states who have
to purchase any or all of the shares expressed an interest in our company,
offered hereby. Rather, the officers certain clients and subscribers of
and directors will use their best MediaComm Marketing International,
efforts to find purchasers for the Inc., our affiliate, or persons we
shares until *, 1999, subject to an believe may be interested in
extension in our sole discretion for purchasing our shares. We may sell
an additional period not to exceed shares to such persons only if they
sixty days. reside in a state in which we are
permitted to sell the shares. We are
All proceeds from subscriptions not obligated to sell any shares to
with respect to the first 450,000 any such persons.
shares will be deposited promptly with
Peak National Bank, Lakewood, Our officers, directors, present
Colorado, Escrow Agent for this shareholders and persons associated
offering pursuant to the terms of an with them, may purchase some of the
Escrow Agreement. All of the proceeds shares offered hereby. However,
of this offering will be deposited in officers, directors, present
the escrow account no later than noon shareholders and their associates will
of the business day next following not be permitted to purchase more than
receipt. In the event that 450,000 twenty percent of the shares to be
shares are not sold, on or before sold hereunder and such shares will be
*,1999, subject to an additional held by those persons for investment
period not to exceed sixty days, all and not for distribution. To the
funds will be refunded promptly to extent that such persons acquire
subscribers in full without deduction shares in the offering, the number of
therefrom or interest thereon. If the shares required to be purchased by new
minimum proceeds are received before investors to reach the minimum will be
expiration of the offering period, we reduced by a like amount. Any such
will hold an initial closing for sales will be made on the same terms
disbursement of funds. Subsequent and conditions as sales made to other
closings may be held upon receipt of purchasers. No proceeds from this
additional subscriptions. During the offering will be used to finance any
offering period or any extension purchases of shares by officers,
thereof, no subscriber will be directors, present shareholders or
entitled to a refund of any their associates.
subscription. We reserve the right to
accept or reject any subscription, in
whole or in part.
<PAGE>
Pricing the Common Stock In as much as we have not retained
an underwriter or broker/dealer to
The offering price of our shares of assist in this offering, the offering
common stock was determined price has not been arrived at through
arbitrarily by us. In arriving at that a process of arms-length negotiation.
price, our board of directors took Accordingly, new investors bear a
into account such factors as our lack disproportionate risk to that of
of history and operations, our assets, existing shareholders attendant to the
plan of operation and anticipated fact that the offering price was
costs of our continued development and arrived at arbitrarily, rather than by
operation. However, the offering price arms-length bargaining.
of the shares should not be understood
as an indication of the value of the Delivery of Common Stock
shares offered or an assurance that
you will be able to resell these We intend to timely issue
shares for an amount equal to or more certificates for the shares after
than the offering price. The offering completion of the offering and to
price of the shares bears no necessary forthwith mail such certificates
relationship to our assets, book directly to investors at their
value, lack of earnings, net worth or addresses as set forth in their
other recognized criterion of value. subscription agreements.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering there has without restriction under the
been no public market for our shares Securities Act of 1933 except that any
of common stock. We cannot predict the shares purchased in this offering by
effect, if any, that future market "affiliates" (as that term in defined
sales of our shares, or the in Rule 144 under the Securities Act
availability of such shares for sale, of 1933) will be subject to the resale
will have on the prevailing market limitations of Rule 144, except the
price of the common stock following holding period.
this offering. Nevertheless, sales of
substantial amounts of our shares of The remaining 7,800,000 shares are
common stock in the open market "restricted" within the meaning of
following this offering could Rule 144 under the Securities Act of
adversely affect the prevailing market 1933. Of this number, * shares will be
price of the shares. eligible for immediate sale in the
public market without restriction
Upon completion of this offering under Rule 144(k).
and assuming sale of the maximum
number of shares (900,000) and further In general, under Rule 144, as
assuming no exercise of outstanding currently in effect, any person (or
warrants to purchase shares of our persons whose shares are aggregated)
common stock, there will be 8,700,000 who has beneficially owned restricted
outstanding shares of our common securities for at least one year, is
stock. Of those, only the shares in entitled to sell, within any
this offering will be subject to any three-month period, a number of shares
applicable state law restrictions on that does not exceed the greater of
secondary trading, freely tradable
<PAGE>
(i) one percent of our outstanding Securities and Exchange Commission
shares (approximately 87,000 shares shares privately issued under certain
immediately after the offering), or compensatory stock-based plans, such
(ii) the average weekly trading volume as our Stock Bonus Plan, may be resold
of our stock during the four calendar under Rule 144 within ninety days from
weeks immediately preceding the date the date of this prospectus. Of the
on which notice of the sale is filed current outstanding shares none have
with the Securities and Exchange been issued under Rule 701 as of the
Commission. Sales pursuant to Rule 144 date of this offering.
will also be subject to certain
requirements relating to manner of Prior to this offering, there has
sale, notice and availability of been no pubic market for our common
current public information about our stock. We cannot predict the effect,
company. A person who is not deemed to if any, that sales of shares under
have been an affiliate of our company Rule 144 or the availability of shares
at any time during the 90 days for sale will have on the market price
immediately preceding the sale and of our stock prevailing from time to
whose restricted shares have been time after the offering. We are unable
fully-paid for two years since the to estimate the number of shares that
later of the date they were acquired may be sold in the public market under
from us, or the date they were Rule 144, because the amount will
acquired from one of our affiliates, depend on the trading volume in, and
may sell these restricted shares under market price for, our common stock and
Rule 144(k) without regard to the other factors. Nevertheless, sales of
limitations and requirements relating substantial amounts of shares in the
to number of shares outstanding or public market, or the perception that
trading volume described above. Under such sales could occur, could
Rule 701, promulgated by the adversely affect the market price of
our shares of common stock.
DESCRIPTION OF SECURITIES
Our authorized capital consists of respect to liquidation rights and
50,000,000 shares of common stock, no dividend rights. There are no
par value and 5,000,000 shares of preemptive rights to purchase any
preferred stock, no par value. The additional shares of common stock. Our
following description of our Articles of Incorporation prohibit
securities is qualified in its cumulative voting for the election of
entirety by reference to our Articles directors. In the event of
of Incorporation, a copy of which is liquidation, dissolution or winding up
available upon request of us. of our company, holders of shares of
common stock will be entitled to
Common Stock receive, on a pro rata basis, all
assets of our company remaining after
Each share of our common stock is satisfaction of all liabilities and
entitled to one vote at all meetings all liquidation preferences, if any,
of shareholders. All shares of common which may have been granted to holders
stock are equal to each other with of our preferred stock.
<PAGE>
All of our issued and outstanding rights, and, (x) other rights and
common stock is, and, when shares of obligations our board of directors may
this offering are paid for according provide, if any.
to the terms of the offering, will be
fully paid and non-assessable and is Warrants
not subject to any future call.
We have issued 1,800,000 Series "A"
Preferred Stock Warrants to purchase shares of our
common stock. The exercise price of
Our Articles of Incorporation the warrants is $2.00 per share,
authorize the board of directors to subject to adjustment in the
divide the preferred stock into series circumstances discussed below. Each
and to fix and determine the relative warrant entitles the holder to
rights and preferences of the shares purchase one share of common stock at
of any such series so established to the exercise price at any time
the full extent permitted by the laws beginning one year from the date of
of the State of Colorado and the issue of the warrants until five years
Articles of Incorporation in respect from March 31, 2000. See
to, (i) the number of shares to "Business-Financings in August and
constitute such series and the September 1999".
distinctive designations thereof; (ii)
the rate and preference of dividends, If a registration statement filed
if any, the time of payment of with the Securities and Exchange
dividends, whether dividends are Commission which includes the
cumulative and the date from which any warrants, and the shares underlying
dividend shall accrue, (iii) whether the warrants, does not remain
preferred stock may be redeemed and, effective during the period in which
if so, the redemption price and the the warrants may be exercised, then
terms and conditions of redemption; the holder may convert the warrants,
(iv) the liquidation preferences in whole or in part, into the number
payable on preferred stock in the of shares determined by dividing (a)
event of involuntary or voluntary the aggregate fair market value of the
liquidation; (v) sinking funds or shares of the common stock issuable
other provisions, if any, for upon exercise of the warrant minus the
redemption or purchase of preferred aggregate warrant price of such shares
stock; (vi) the terms and conditions by (b) the fair market value of one
by which preferred stock may be share.
converted, if the preferred stock of
any series are issued with the The Series "A" Warrants are not
privilege of conversion; and (vii) the cancellable or redeemable by our
effect upon the preferred stock of any company.
merger, combination, sale of
substantially all of the assets of our The Series "A" Warrants do
company or re-classification of shares not confer upon the holder any voting
of our company; (viii) arrears in the or preemptive rights, or any other
payment of dividends; (ix) voting rights of a stockholder of our
company.
<PAGE>
The Series "A" Warrant exercise information with the Securities and
price and the number of shares of Exchange Commission. You may read and
common stock to be obtained upon copy any reports, statements or other
exercise of the warrants are subject information we file at the public
to adjustment in the event of a stock reference room of the Securities and
split or, dividend on, or a Exchange Commission in Washington,
subdivision, combination, or D.C. You can request copies of these
recapitalization of the common stock documents, upon payment of a
or the sale of substantially all the duplicating fee, by writing the
assets of our company, or a merger or Securities and Exchange Commission at
consolidation of our company into Washington, D.C. 20549. You can call
another corporation or other business the Securities and Exchange Commission
entity where Shopbiz.com is not the at 1-800-SEC-0330 for further
surviving corporation. information relating to the operation
of the public reference rooms. Our
The Series "A" Warrants may be filings with the Securities and
exercised upon surrender of the Exchange Commission are also available
warrant certificate on or prior to the to the public on the Securities and
expiration date at our offices, with Exchange Commission Internet site at
the subscription form furnished with http:\\www.sec.gov.
the warrant certificate filled out and
executed as indicated, accompanied by Transfer Agent
payment of the full exercise price for
the number of warrants being We intend to appoint Securities
exercised. See "Certain Transfer Corporation as transfer agent
Transactions-Private Financings in for our common stock. Its address and
August and September, 1999". telephone number are 16910 Dallas
Parkway, Suite 100, Dallas, Texas
Reports to Shareholders 75248; (972) 447-9890.
Our fiscal year ends March 31. We Dividends
intend to furnish our shareholders
annual reports containing audited We have paid no dividend on our
financial statements and other shares of common stock since inception
appropriate reports. Following the and no dividends on our shares of
completion of this offering of our common stock are contemplated in the
shares, we will be required to file foreseeable future. Any earnings of
certain periodic reports and other Shopbiz.com will be reinvested in our
business for the foreseeable future.
<PAGE>
CERTAIN TRANSACTIONS
Initial Private Financings shares of our common stock and Series
"A" Warrants to purchase 1,800,000
We commenced financing of shares of common stock at $2.00 per
Shopbiz.com in December 1998, by share. The warrants are exercisable at
issuing 3,600,000 shares of our common any time beginning one year after the
stock, as adjusted to account for a date of issue of the warrants and
three-to-one forward stock split of before five years from March 31, 2000.
our shares on August 4, 1999, to a These loans bear interest at the rate
group of persons composed of the of 10 percent per annum and are
officers and directors and a limited payable together with interest
number of third parties. Messrs. Don E concurrently with the initial release
Montague, Steven S. Montague and from escrow of funds from this
Anthony Delgado acquired 3,060,000; offering of our shares or in the event
270,000 and 90,000 shares this offering is not completed, the
respectively, for a price per share of loans are payable on or before August
$.0082. Don Montague paid cash in the 6, September 1, and September 30,
amount of $25,000 for the shares 2000. Prior to maturity the total of
acquired by him; Messrs. Steve S. $225,000 of loans are convertible into
Montague and Anthony "Anton" Delgado shares of common stock of our company
performed services for Shopbiz.com at the rate of $1.00 of principal and
valued at the amounts of $2,205 and interest due at the time of such
$735 respectively. Messrs. Don E. conversion. This conversion right is
Montague and Anthony "Anton" Delgado subject to applicable law in force in
were the only members of the Board of the jurisdiction where exercise of
Directors approving those such right is involved. In addition,
transactions. if in the reasonable judgement of our
company, conversion cannot occur
Private Financings in August and without registration or qualification
September, 1999 under applicable federal and state
laws our company will not be obligated
On August 6, September 1, and to permit conversion of the loans into
September 30, 1999, we entered into shares of our common stock. However,
Funding Agreements which provided for in the event of our default in payment
loans to Shopbiz.com totaling of the loans, the lenders would have
$225,000. As consideration to the the option to convert the amount of
lenders for making these loans, we the loans and accrued interest into
issued an aggregate of 1,800,000 shares of our common stock at the rate
of $0.10 per share.
<PAGE>
The following table sets forth the identity of each of the lenders, the amount
of each loan and the number of shares and warrants issued to each lender.
Amount Number of Number of
Lender of Loan Shares Warrants
Business Development
Corporation $45,000 360,000 360,000
Mathis Family Partners 20,000 160,000 160,000
Earnest Mathis IRA Rollover 25,000 200,000 200,000
Summer Breeze LLC 45,000 360,000 360,000
David's Odyssey 45,000 360,000 360,000
David N. Nemelka 45,000 360,000 360,000
--------------------------------------------
Totals $225,000 1,800,000 1,800,000
Van R. Perkins of 340 Sunset Drive, Suite 1203, Ft. Lauderdale, Florida
33301, is the President of Business Development Corporation.
Earnest Mathis of 26 West Dry Creek Circle, Suite 600, Littleton, Colorado
80120, is the beneficial owner of the Earnest Mathis IRA Rollover. All documents
pertaining to this IRA are in the name of Earnest Mathis IRA, Rollover, U.S.
Bank, National Association, Custodian.
Earnest Mathis of 26 West Dry Creek Circle, Suite 600, Littleton, Colorado
80120, is a general partner of Mathis Family Partners. He is the same person as
the beneficiary of the Earnest Mathis IRA Rollover identified above.
Gary McAdam of 14 Red Trail Drive, Highland Ranch, Colorado 80126, is a
member and the manager of Summer Breeze LLC.
David R. Nemelka of 1310 East 1600 South, Mapleton, Utah 84664, is a member
and the manager of David's Odyssey LLC.
David N. Nemelka of 55 West 200 North, Provo, Utah 84601, is the son of
David R. Nemelka referred to above.
Option Granted to Consultant
On October 14, 1999, we issued to Cygen Technologies, Inc., a consultant to
our company, an option to purchase 150,000 shares of our common stock at $0.20
per share. The option is exercisable, in part or in whole, at any time beginning
October 15, 2000 and before October 15, 2002. This option is separate from and
<PAGE>
does not relate to the shares of common stock reserved under our Non-qualified
Stock Option and Stock Grant Plan. See "Management - Non-qualified Stock Option
and Stock Grant Plan."
Concurrent Offering approximately 1,000 square feet in
this space and share secretarial,
The registration statement of which reception, conference and other common
this Prospectus forms a part also areas. The space is leased to us on a
includes a Prospectus with respect to month-to-month basis. During the
an offering by selling security period from inception of our company
holders of Series "A" Warrants to to June 30, 1999, we have paid $3,098
purchase 1,800,000 shares of common to MediaComm Marketing International.
stock of our company at $2.00 per Don E. Montague, an officer, director
share and the shares of common stock and principal shareholder of
underlying these warrants. These Shopbiz.com is also an officer,
securities may be sold in the open director and principal shareholder of
market, in privately negotiated MediaComm Marketing International,
transactions, or otherwise directly by Inc.
the holders thereof. The Series "A"
Warrants were issued as partial As part of our ongoing business, we
consideration for loans by the selling retain MediaComm Marketing
stockholders to Shopbiz.com in the International, Inc., an affiliate of
aggregate amount of $225,000. We will our company, in connection with
not receive any proceeds from the sale graphic art and design services. We
of any of the selling securities are charged for these services based
holders' securities. Sales of such on cost plus profit based on industry
securities or the prevailing standards. During the period of
perception that such securities are inception of our company to June 30,
being offered for sale could have an 1999, we have paid a total of
adverse effect on the market price of approximately $3,400 to MediaComm
the shares offered hereby. Only if the Marketing International, Inc. We are
warrants are exercised will we of the opinion that the terms and
receive any proceeds from sale of the conditions of these transactions are
warrants. See "Certain Transactions - no less favorable than could be
Private Financings in August and obtained from an unaffiliated third
September, 1999" and "Principal party.
Shareholders" and "Description of
Securities" and "Risk Factors."
LEGAL MATTERS
Arrangements with Affiliate
The legality of the securities of
We currently occupy a portion of Shopbiz.com offered hereby will be
the office space owned by MediaComm passed on for Shopbiz.com by Ronald N.
Marketing International, Inc., an Vance P.C., 57 West 200 South, Suite
affiliate of ours. We occupy 310, Salt Lake City, UT 84101.
<PAGE>
EXPERTS
Our financial statements for the period from inception (August 20, 1998) to
June 30,1999, included in this Prospectus have been examined by Cordovano and
Harvey, P.C. Certified Public Accountants. The financial statements examined by
these Certified Public Accountants have been included in reliance upon their
audit report.
<PAGE>
MEDIACOMM BROADCASTING SYSTEMS, INC
(A Development Stage Company)
Index to Financial Statements
Page
----
Independent auditors' report............................................ F-2
Balance sheets, June 30, 1999 and March 31, 1999........................ F-3
Statements of operations, for the three months ended June 30, 1999,
from August 20, 1998 (inception) through March 31, 1999, and
from August 20, 1998 (inception) through June 30, 1999............. F-4
Statement of shareholders' equity, from August 20, 1998 (inception)
through June 30, 1999.............................................. F-5
Statements of cash flows, for the three months ended June 30, 1999,
from August 20, 1998 (inception) through March 31, 1999, and
from August 20, 1998 (inception) through June 30, 1999............. F-6
Notes to financial statements........................................... F-7
F-1
<PAGE>
To the Board of Directors and Shareholders
Mediacomm Broadcasting Systems, Inc.
Independent Auditors' Report
We have audited the balance sheet of Mediacomm Broadcasting Systems, Inc. as of
June 30, 1999 and March 31, 1999, and the related statements of operations,
shareholders' equity and cash flows for the three months ended June 30, 1999,
the period from August 20, 1998 (inception) through March 31, 1999 and the
period from August 20, 1998 (inception) through June 30, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements 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 financial statements referred to above present fairly, in
all material respects, the financial position of Mediacomm Broadcasting Systems,
Inc. as of June 30, 1999 and March 31, 1999, and the related statements of
operations and cash flows for the three months ended June 30, 1999, the period
from August 20, 1998 (inception) through March 31, 1999 and the period from
August 20, 1998 (inception) through June 30, 1999 , in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note A to the financial
statements, the Company has a limited operating history, limited capital and
working capital, an unproven business concept, and unproven technology at June
30, 1999. These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans regarding those matters also are
described in Note A. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Cordovano and Harvey, P.C.
Denver, Colorado
September 29, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
MEDIACOMM BROADCASTING SYSTEMS, INC
(A Development Stage Company)
Balance Sheets
June 30, March 31,
1999 1999
--------- ---------
ASSETS
<S> <C> <C>
Cash ..................................................................... $ 23,121 $ 60,235
Accounts receivable-trade ................................................ 39 --
Equipment, net of accumulated depreciation of $349, and $169, respectively 1,768 1,948
Security deposit500500
Deferred offering costs .................................................. 2,700 9,748
--------- ---------
$ 28,128 $ 72,431
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable, trade .................................................. $ 617 $ 86
Accrued payroll taxes payable ............................................ 881 655
Other accrued liabilities ................................................ -- 7,248
--------- ---------
TOTAL LIABILITIES 1,498 7,989
--------- ---------
COMMITMENT (Note F) ............................................................ -- --
SHAREHOLDERS' EQUITY (Note D)
Preferred stock, no par value, 5,000,000 shares authorized,
-0-, and -0- shares issued and outstanding, respectively ............... -- --
Common stock, no par value, 50,000,000 shares authorized,
6,000,000, and 6,000,000 shares issued and outstanding, respectively ... 109,410 109,410
Deficit accumulated during the development stage ......................... (82,780) (44,968)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 26,630 64,442
--------- ---------
$ 28,128 $ 72,431
========= =========
See accompanying notes to financial statements
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MEDIACOMM BROADCASTING SYSTEMS, INC
(A Development Stage Company)
Statements of Operations
August 8, 1998
Three Months (inception) Through
Ended ---------------------------
June 30, March 31, June 30,
1999 1999 1999
----------- ----------- -----------
<S> <C> <C> <C>
NET SALES AND GROSS REVENUE ............................................... $ 7,835 $ 224 $ 8,059
----------- ----------- -----------
COSTS AND EXPENSES
Cost applicable to net sales and gross revenue ....................... 4,701 134 4,835
Software development ................................................. 19,980 21,757 41,737
License fees (Note E) ................................................ -- 1,250 1,250
General and administrative ........................................... 19,443 17,076 36,519
General and administrative, related parties (Note B) ................. 1,523 4,975 6,498
----------- ----------- -----------
45,647 45,192 90,839
----------- ----------- -----------
LOSS BEFORE INCOME TAXES (37,812) (44,968) (82,780)
INCOME TAX BENEFIT (EXPENSE) (Note C)
Current .............................................................. 19,993 9,138 29,131
Deferred ............................................................. (19,993) (9,138) (29,131)
----------- ----------- -----------
NET LOSS $ (37,812) $ (44,968) $ (82,780)
=========== =========== ===========
Loss per common share ..................................................... $ (0.01) $ (0.01) $ (0.02)
=========== =========== ===========
Basic weighted average common shares outstanding .......................... 3,654,545* 3,654,545* 3,654,545*
=========== =========== ===========
*Restated (See Note F)
See accompanying notes to financial statements
F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MEDIACOMM BROADCASTING SYSTEMS, INC
Statement of Shareholders Equity
August 20, 1998 (inception) Through June 30, 1999
Deficit
Accumulated
Preferred Stock Common Stock During the Total
-------------------- ---------------------- Development Shareholders'
Shares Amount Shares Amount Stage Equity
------ ------ ------ ------ ----- ------
<S> <C> <C> <C> <C> <C> <C>
Balance, August 20, 1998,
(Inception) ...................... -- $ -- -- $ -- $ -- $ --
December 1, 1998, sale of
common stock ..................... -- -- 3,060,000* 25,000 -- 25,000
December 22, 1998, issuance of
common stock in exchange for
services, valued at cost ......... -- -- 540,000* 4,410 -- 4,410
December 22, 1998, sale of
common stock ..................... -- -- 750,000* 25,000 -- 25,000
December 31, 1998, sale of
common stock ..................... -- -- 750,000* 25,000 -- 25,000
February 17, 1999, sale of
common stock ..................... -- -- 900,000* 30,000 -- 30,000
Net loss for the period ............ -- -- -- -- (44,968) (44,968)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, MARCH 31, 1999 -- -- 6,000,000* 109,410 (44,968) 64,442
Net loss for the period ............ -- -- -- -- (37,812) (37,812)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, JUNE 30, 1999 -- $ -- 6,000,000* $ 109,410 $ (82,780) $ 26,630
========== ========== ========== ========== ========== ==========
* Restated (See Note F)
See accompanying notes to financial statements
F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MEDIACOMM BROADCASTING SYSTEMS, INC
(A Development Stage Company)
Statements of Cash Flows
August 8, 1998
Three Months (inception) Through
Ended ----------------------
June 30, March 31, June 30,
1999 1999 1999
--------- --------- ---------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss ................................................ $ (37,812) $ (44,968) $ (82,780)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation ......................................... 180 169 349
Stock issued in exchange for services ................ -- 4,410 4,410
--------- --------- ---------
(37,632) (40,389) (78,021)
Changes in current assets and liabilities:
Security deposit ..................................... -- (500) (500)
Accounts receivable .................................. (40) -- (40)
Accounts payable and accrued expenses ................ 558 (1,759) (1,201)
--------- --------- ---------
NET CASH (USED IN)
OPERATING ACTIVITIES (37,114) (42,648) (79,762)
--------- --------- ---------
INVESTING ACTIVITIES
Cash paid for equipment ................................. -- (2,117) (2,117)
--------- --------- ---------
NET CASH (USED IN)
INVESTING ACTIVITIES -- (2,117) (2,117)
--------- --------- ---------
FINANCING ACTIVITIES
Sale of common stock .................................... -- 105,000 105,000
--------- --------- ---------
NET CASH PROVIDED BY
FINANCING ACTIVITIES -- 105,000 105,000
--------- --------- ---------
Net change in cash ......................................... (37,114) 60,235 23,121
Cash, beginning of period .................................. 60,235 -- --
--------- --------- ---------
CASH, END OF PERIOD $ 23,121 $ 60,235 $ 23,121
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest ............................................. $ -- $ -- $ --
========= ========= =========
Income taxes ......................................... $ -- $ -- $ --
========= ========= =========
See accompanying notes to financial statements
F-6
</TABLE>
<PAGE>
MEDIACOMM BROADCASTING SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
Note A: Organization and summary of significant accounting policies
Description of operations and liquidity
- ---------------------------------------
Mediacomm Broadcasting Systems, Inc. (the "Company") was incorporated in
Colorado on August 20, 1998. The Company is a development stage enterprise that
plans to develop and operate a number of Internet-based information and commerce
solutions and to provide data storage and retrieval services. In addition, the
Company has acquired an exclusive license to use content applicable to the
Denver area for which it intends to establish an Internet portal.
The Company has devoted substantially all of its efforts since inception to the
research and development of its web site address showbiz.com and related matters
and to raising capital and organization matters. The Company plans to finance
its activities through an offering of 900,000 shares of its common stock at a
price of $1.00 per share. See Note D - Shareholders' Equity
The Company's financial statements are prepared in accordance with Statement of
Financial Accounting Standards No. 7 "Accounting for Development Stage
Enterprises".
The Company is in the early period of its development embarking on a new
venture. To date, the Company's product sales and service revenues have been
insignificant. The Company has limited capital, is dependent upon the proceeds
of its proposed initial public offering (See Note D), and achieving profitable
operations. The Company's business plan is based upon the limited experience of
certain other Internet companies. The Company's technology is unproven and will
take additional resources to perfect. The success of the Company's shopbiz.com
web site is dependent on attracting and retaining qualified suppliers. The
Company has not gained market acceptance for any of its products and there can
be no assurance that the Company will be able to gain such acceptance in the
future, that future sales and revenues will be significant, that any sales will
be profitable, or that the Company will have sufficient funds available to
research and develop its proposed products and services. The likelihood of the
success of the Company will depend upon its ability to raise sufficient capital
to overcome the problems, expenses and delays frequently encountered in the
operation of a new business and the competitive environment in which it will be
operating. These factors, among others, raise substantial doubt about the
Company's ability to continue as a going concern.
Management of the Company has budgeted the proceeds of its proposed initial
public offering of common stock for a period of approximately 12 months. In
order for the Company to complete implementation of its business plan and fund
anticipated growth, the Company will require additional financing from outside
sources. To meet those future needs, management contemplates an initial public
offering of the Company's common stock. However, no definitive arrangement with
an underwriter exists and there is no assurance that the Company's revenues will
increase such that a public offering would be unnecessary. Management believes
that the Company is not a viable candidate for commercial bank debt financing
due to its lack of operating history and the small amount of its tangible
assets. In the event that the Company is unable to attract an underwriter,
management would rely on additional private debt or equity financing. There is
no assurance that the Company's proposed public offering will be successful,
that it will meet the objectives of its business plan, or that it will be
successful in obtaining additional financing.
Financial instruments
- ---------------------
The Company's financial instruments consist of a security deposit, accounts
payable and accrued liabilities. The carrying value of these financial
instruments approximates fair value because of their short-term nature or
because they bear interest at rates which approximate market rates.
F-7
<PAGE>
MEDIACOMM BROADCASTING SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
Note A: Organization and summary of significant accounting policies
Description of operations and liquidity, concluded
- --------------------------------------------------
Cash and cash equivalents
- -------------------------
The Company considers all short-term, highly liquid investments with an original
maturity date of three months or less to be cash equivalents. At June 30, 1999
the Company did not have any cash equivalents. Cash is stated at cost, which
approximates fair value.
Deferred Offering Costs
- -----------------------
In connection with the offering of its common shares, the company incurred
offering costs consisting of legal and accounting costs. The costs are reflected
on the balance sheet as "deferred offering costs" and will be offset against
offering proceeds upon closing of the offering. The Company withdrew its
registration statement during the three months ended June 30, 1999. Accordingly,
the $9,748 recorded as deferred offering costs at March 31, 1999 was charged to
operations during the three months ended June 30, 1999.
Use of estimates
- ----------------
The preparation of the financial statements in conformity with generally
accepted accounting principals requires management to make estimates and
assumptions that affect certain reported amounts of assets and liabilities;
disclosure of contingent assets and liabilities at the date of the financial
statements; and the reported amounts of revenues and expenses during the
reporting period. Accordingly, actual results could differ from those estimates.
Income Taxes
- ------------
The Company reports income taxes in accordance with SFAS No. 109, "Accounting
for Income Taxes", which requires the liability method in accounting for income
taxes. Deferred tax assets and liabilities arise from the difference between the
tax basis of an asset or liability and its reported amount on the financial
statements. Deferred tax amounts are determined by using the tax rates expected
to be in effect when the taxes will actually be paid or refunds received, as
provided under currently enacted law. Valuation allowances are established when
necessary to reduce the deferred tax assets to the amounts expected to be
realized. Income tax expense or benefit is the tax payable or refundable,
respectively, for the period plus or minus the change during the period in the
deferred tax assets and liabilities.
Loss per common share
- ---------------------
The Company reports loss per share using a dual presentation of basic and
diluted loss per share. Basic loss per share excludes the impact of common stock
equivalents and preferred stock dividends. Diluted loss per share uses the
average market price per share when applying the treasury stock method in
determining common stock equivalents. As of June 30, 1999, there were no common
stock equivalents.
Software development costs
- --------------------------
The cost of developing and implementing its web site and related software is
expensed until the Company has determined that the web site and related software
will result in probable future economic benefits and management has committed to
funding the project. Thereafter, all direct external implementation costs and
purchased software costs are capitalized and amortized using the straight-line
method over the remaining estimated useful lives, not exceeding five years. No
software development costs have been capitalized in the accompanying financial
statements.
F-8
<PAGE>
MEDIACOMM BROADCASTING SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
Note A: Organization and summary of significant accounting policies, concluded
Start up costs
- --------------
Costs related to the organization of the Company have been expensed as incurred.
Research and development costs
- ------------------------------
Research and development costs are expensed as incurred.
Fiscal year
- -----------
The Company operates on a fiscal year ending on March 31.
New accounting pronouncements
- -----------------------------
The Company has adopted the following new accounting pronouncements for the
period ended June 30, 1999. There was no effect on the financial statements
presented from the adoption of the new pronouncements. SFAS No. 130, "Reporting
Comprehensive Income," requires the reporting and display of total comprehensive
income and its components in a full set of general-purpose financial statements.
The Company did not have comprehensive income for the periods presented;
therefore, comprehensive income and net income are equal. SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information," is based
on the "management" approach for reporting segments. The management approach
designates the internal organization that is used by management for making
operating decisions and assessing performance as the source of the Company's
reportable segments. SFAS No. 131 also requires disclosure about the Company's
products, the geographic areas in which it earns revenue and holds long-lived
assets, and its major customers. SFAS 131 is not applicable, as the Company had
no segment reporting for the periods presented. SFAS No. 132, "Employers'
Disclosures about Pensions and Other Post-retirement Benefits," which requires
additional disclosures about pension and other post-retirement benefit plans,
but does not change the measurement or recognition of those plans.
Note B: Related party transactions
The Company leases office space from an affiliate and shares office expense with
the affiliate. For the period from August 20, 1998 (inception) through June 30,
1999, the Company paid the affiliate $3,098 for rent.
The Company purchased consulting services, totaling $3,400, from an affiliate
for the period from August 20, 1998 (inception) through June 30, 1999.
Certain officers have provided services at no charge to the Company. The
accompanying financial statements have not been adjusted for the value of such
services.
The Company has entered into a one-year, renewable, employment agreement with
its vice-president at $50,000 per year, plus benefits.
F-9
<PAGE>
MEDIACOMM BROADCASTING SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
Note C: Income taxes
A reconciliation of U.S. statutory federal income tax rate to the effective rate
follows for the period from August 20, 1998 (inception) through June 30, 1999,
and through March 31, 1999, respectively:
<TABLE>
<CAPTION>
June 30, March 31,
1999 1999
------- -------
<S> <C> <C>
U.S. statutory federal rate ............................................ 19.57% 15.00%
State income tax rate .................................................. 3.82% 4.75%
Other .................................................................. 0.76% 0.57%
Net operating loss (NOL) for which no tax benefit is currently available -24.15% -20.32%
------- -------
0.00% 0.00%
======= =======
</TABLE>
The benefit for income taxes from operations consisted of the following
components at June 30, 1999: current tax benefit of $19,993 resulting from a net
loss before income taxes, and deferred tax expense of $19,993 resulting from the
valuation allowance recorded against the deferred tax asset resulting from net
operating losses. The change in the valuation allowance for the three months
ended June 30, 1999 and for the period from August 20, 1998 (inception) through
March 31, 1999 was $19,993 and $9,138, respectively . NOL carryforwards at June
30, 1999 will begin to expire in 2018. The valuation allowance will be evaluated
at the end of each year, considering positive and negative evidence about
whether the asset will be realized.
At that time, the allowance will either be increased or reduced; reduction could
result in the complete elimination of the allowance if positive evidence
indicates that the value of the deferred tax asset is no longer impaired and the
allowance is no longer required.
Should the Company undergo an ownership change, as defined in Section 382 of
the Internal Revenue Code, the Company's tax net operating loss carryforwards
generated prior to the ownership change will be subject to an annual limitation
which could reduce or defer the utilization of those losses.
Note D: Shareholders' equity
Preferred stock
- ---------------
The preferred stock may be issued in series as determined by the Board of
Directors. As required by law, each series must designate the number of shares
in the series and each share of a series must have identical rights of (1)
dividend, (2) redemption, (3) rights in liquidation, (4) sinking fund provisions
for the redemption of the shares, (5) terms of conversion and (6) voting rights.
Offering of common stock
- ------------------------
The Company plans to offer up to 900,000 shares of its no par value common stock
to qualified investors at an offering price of $1.00 per share pursuant to a
registration statement on Form SB-2 to be filed with the Securities and Exchange
Commission. The shares of common stock will be offered on behalf of the Company
through its officers and directors on a 450,000 share minimum "all or none,"
900,000 share maximum "best efforts" basis for a period of sixty days. The
shares of common stock may also be offered through qualified broker-dealers. The
minimum purchase price will be $1,000. If the offering is successful, the
Company plans to use the net proceeds for the acquisition of equipment and for
working capital.
F-10
<PAGE>
MEDIACOMM BROADCASTING SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
Note D: Shareholders' equity, concluded
Stock option plan
- -----------------
The Company has adopted a non-qualified stock option and stock grant plan for
the benefit of key personnel and others providing significant services. An
aggregate of one million shares of common stock has been reserved under the
plan. Options granted pursuant to the plan will be exercisable at a price no
less than the fair value of the shares of common stock on the date of grant.
There were no options granted under this plan as of June 30, 1999.
Note E: License agreement
On November 23, 1998, the Company entered into a license agreement with
Information Highway, Inc. (IHI) in order to incorporate customized versions of
the IHI Gateway on Company Internet service provider web sites. The IHI Gateway
is a worldwide web site operated as a web portal for information about Denver,
Colorado. The license was granted for a period of two years. Under the terms of
the license agreement, the Company agreed to pay IHI a set up fee of $2,500; a
monthly maintenance fee of $300; and a technical support fee of $2.00 per user.
The maintenance and the technical support fees will be due after commencement of
the service.
Note F: Subsequent events
Bridge loans
- ------------
During the three months ended September 30, 1999, the Company issued promissory
notes in the aggregate amount of $225,000. The notes bear interest at 10
percent, are unsecured, and are due upon the closing of the initial public
offering. The notes are convertible into shares of the Company's no par value
common stock at the rate of one share for each $1.00 of principal and interest.
In consideration for making the bridge loans, the lenders were issued a total of
1,800,000 shares of the Company's common stock and common stock warrants to
purchase a total of 1,800,000 additional shares of common stock at $2.00 per
share.
Forward Stock Split
- -------------------
Effective August 4, 1999, the shareholders approved a forward split of common
stock of three shares for each share of common stock (3:1) held. The
accompanying financial statements have been retroactively restated to give
effect to the forward stock split for all periods presented.
F-11
<PAGE>
MEDIACOMM BROADCASTING SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
Note G: The Year 2000 Issue
The Y2K issue is the result of computer programs being written using two digits
rather than four to define the applicable year. Any of the Company's computer
and telecommunications programs that have date sensitive software may recognize
a date using "00" as the year 1900 instead of 2000. This could result in system
failure or miscalculations causing disruptions or operations, including, among
other things an inability to process transactions, send invoices, or engage in
similar normal business activities. The Company's equipment, consisting of a
computer and related components, has been certified as Y2K compliant as of June
30, 1999. The Company cannot determine the extent to which the Company is
vulnerable to third parties' failure to remediate their own Y2K problems. As a
result, there can be no guarantee that the systems of other companies on which
the Company's business relies will be timely converted, or that a failure to
convert by another company, or a conversion that is incompatible with the
Company's systems, would have a material adverse effect on the Company. In view
of the foregoing, there can be no assurance that the Y2K issue will not have a
material adverse effect on the Company's business.
F-12
<PAGE>
[ALTERNATE PAGE]
Prospectus
SUBJECT TO COMPLETION, DATED OCTOBER *, 1999
The Information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not a solicitation of an offer to buy these
securities in any state where the offer or sale is not permitted.
MEDIACOMM BROADCASTING SYSTEMS, INC.
D/B/A SHOPBIZ.COM
------------------------
1,800,000 Series "A" Warrants
1,800,000 Shares of Common Stock
This Prospectus relates to 1,800,000 Series "A" Warrants held by six
selling warrant holders. This Prospectus also relates to 1,800,000 shares of
common stock issuable upon exercise of the Series "A" Warrants. See "Description
of Securities."
The warrants, and the shares underlying the warrants, may be sold from time
to time by the warrant holders or by their transferees. The distribution of
these securities may be effected in one or more transactions that may take place
on the over-the-counter market (if the warrants and/or common stock are ever
quoted on an over-the-counter market), including ordinary brokers' transactions,
privately negotiated transactions, or through sales to one or more dealers for
their resale of such securities as principals, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Usual and customary or specifically negotiated brokerage fees
or commissions may be paid by the selling persons.
We will not receive any of the proceeds from the sale of these shares or
warrants, except the exercise price of the warrants. See "Selling Security
Holders" and "Plan of Distribution".
On the date of this Prospectus, a registration statement under the
Securities Act with respect to a public offering by the Company of 450,000
shares minimum and 900,000 shares maximum of common stock was declared effective
by the Securities and Exchange Commission. The Company will receive net proceeds
from such offering ranging from $450,000 to $900,000.
<PAGE>
This Offering is Highly Speculative and Involves Special Risks Concerning
the Company and its Business. Prior to this Offering There Has Been No Public
Market for the Shares. You Should Purchase Shares Only If You Can Afford a
Complete Loss. See "Risk Factors" Beginning on Page *.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is __*__, 1999.
<PAGE>
[ALTERNATE PAGE]
SELLING SECURITIES HOLDERS
An aggregate of up to 1,800,000 Series "A" Warrants and the common stock
underlying such warrants, may be offered for resale by the Selling Securities
Holders listed below.
The following table sets forth certain information with respect to each
Selling Securities Holder for whom the Company has registered Series "A"
Warrants and the common stock underlying such warrants, for resale to the
public. The Company will not receive any of the proceeds from the sale of such
securities, except for the exercise price of the warrants (see "Description of
Securities"). There are no material relationships between any of the Selling
Securities Holders and the Company or any of its predecessors or affiliates, nor
have any such material relationships existed within the past three years except
as set forth below. The Selling Securities Holders will beneficially own shares
of the Common Stock of the Company following sale by them of all of their
securities offered hereby. Each of the Selling Securities Holders intends to
offer and sell all of the Series "A" Warrants.
Shares of Common Stock
Name of Selling Number of to be Held After Sale of
Securities Holder Warrants the Registered Securities
Business Development
Corporation 360,000 360,000
Mathis Family Partners 160,000 160,000
Earnest Mathis, IRA Rollover 200,000 200,000
Summer Breeze, LLC 360,000 360,000
David's Odyssey, LLC 360,000 360,000
David N. Nemelka 360,000 360,000
--------- ----------
Total 1,800,000 1,800,000
See "Principal Shareholders" and "Certain Transactions-Private Financings in
August and September, 1999".
<PAGE>
[ALTERNATE PAGE]
PLAN OF DISTRIBUTION
The sale of the Series "A" Warrants or common stock underlying the
warrants, by the Selling Securities Holders may be effected from time to time in
transactions (which may include block transactions by or for the account of the
Selling Securities Holders) in the over-the-counter market (if such a market
should develop) or in negotiated transactions or otherwise. Sales may be made at
fixed prices which may be at market prices, if any, prevailing at the time of
sale, or at negotiated prices.
The Selling Securities Holders may effect such transactions by selling
their warrants or the shares of common stock underling the warrants, directly to
purchasers, through broker-dealers acting as agents for the Selling Securities
Holders or to broker-dealers who may purchase the securities as principals and
thereafter sell the common stock from time to time in the over-the-counter
market, if any, in negotiated transactions or otherwise (which compensation as
to a particular broker-dealer may exceed customary commissions).
Under applicable rules and regulations under the Securities Exchange Act of
1934 any person engaged in the distribution of the Selling Securities Holders
warrants or shares of common stock underlying the warrants, may not
simultaneously engage in market making activities with respect to any securities
of the Company for a period of at least two (and possibly nine) business days
prior to the commencement of such distribution.
The Selling Securities Holders and brokers-dealers, if any, acting in
connection with such sales might be deemed to be underwriters within the meaning
of Section 2(11) of the Securities Act of 1933 and any commission received by
them and any profit on the resale of the securities might be deemed to be
underwriting discounts and commissions under the Securities Act of 1933.
<PAGE>
[ALTERNATE PAGE]
CONCURRENT PUBLIC OFFERING
On the date of this Prospectus, a Registration Statement was declared
effective under the Securities Act of 1933 with respect to an offering by the
Company of 450,000 shares minimum and 900,000 shares maximum of Common Stock of
the Company.
<PAGE>
[ALTERNATE PAGE]
[OUTSIDE BACK COVER]
TABLE OF CONTENTS
Item Page
Prospectus Summary *
Summary Financial Information
Risk Factors
Forward Looking Statements
Business
Use of Proceeds
Management
Principal Shareholders
Dilution
Selling Security Holders
Concurrent Public Offering
Plan of Distribution
Shares Eligible for Future Sale
Description of Securities
Certain Transactions
Legal Matters
Experts
Until _____, 1999, (ninety days after the date of this Prospectus) all
dealers that effect transactions in these securities may be required to deliver
a Prospectus. This is in addition to the dealers' obligation to deliver a
Prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
<PAGE>
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Article 109 of the Colorado Business Corporation Act expressly authorizes a
Colorado corporation to indemnify its directors, officers, employees,
fiduciaries, and agents against claims or liabilities arising out of such
persons' conduct in such capacities if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation. In general, these provisions provide for indemnification in
instances when such persons acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation. A
corporation may also purchase and maintain liability insurance on behalf of such
persons.
Article IX of the Amended and Restated Articles of Incorporation of
MediaComm Broadcasting Systems, Inc., provides for the indemnification of the
corporation officers, directors, employees and agents. The Corporation does not
maintain any liability insurance on behalf of any director, officer, or other
person affiliated with the Corporation.
Item 25. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection with
the offering described in the registration statement:
Item Amount
Registration Fee
Blue Sky Fees
Accounting Fees and Expenses
Legal Fees and Expenses
Printing and Engraving
Transfer Agent Fees
Miscellaneous
Total Expenses $40,000
Item 26. Recent Sales of Unregistered Securities
o In December 1998 the Registrant issued 3,060,000 shares of its common stock
at $.0082 per share, as adjusted for a three-for-one forward stock split
effectual August 4, 1999, or a total of $25,000, to Don E. Montague, a
founder and principal promoter of the registrant.
<PAGE>
Also, concurrent with the issue of shares of common stock to Don E.
Montague, the Registrant issued 270,000 shares of its common stock as
adjusted for the aforesaid three-for-one forward stock split effective
August 4, 1999, to Steven S. Montague, son of Don E. Montague, in exchange
for services rendered on behalf of the Registrant in connection with its
organization valued at $2,205 or $.0082 per share.
Similarly, and concurrent with the issue of shares of common stock to
Messrs. Montague, the Registrant issued 90,000 shares of its common stock,
as adjusted for the three-for-one stock split of August 4, 1999, to Anthony
"Anton" Delgado in exchange for services rendered to the Registrant in
connection with its organization valued at $735 or $.0082 per share.
Messrs. Montague and Delgado each represented to the Registrant that he
acquired his shares for investment and without a view to distribution. The
Registrant issued these securities without registration in reliance on the
exemption afforded by Section 4(2) of the Securities Act of 1933 as
transactions by an issuer not involving any public offering. No
underwriting discounts or commissions were paid in connection with the
issue of the aforesaid shares.
Contemporaneously, with the issue of shares to Messrs. Montague and
Delgado, the Registrant issued 90,000 shares of its common stock to J. D.
Kish, a certified public accountant, for accounting services rendered to
the Registrant valued at $735 or $.0082 per share. Mr. Kish represented to
the Registrant that he acquired said shares for investment and without a
view to distribution. Also, contemporaneously with the issue of shares to
Messrs. Montague and Delgado, the Registrant issued 90,000 shares to World
Net Trading, Ltd, a corporation controlled by Randell Stevens, for services
rendered by Mr. Stevens in the preparation of a business plan for the
Registrant which services were valued at $735 or $.0082 per share. Acting
for World Net Trading, Ltd., Mr. Stevens represented to the Registrant that
said shares were acquired for investment and without a view to
distribution. Mr. Stevens has been a sales representative for MediaComm
Marketing International, Inc., for several years. The Registrant issued the
aforesaid shares to Mr. J. D. Kish and World Net Trading, Ltd., without
registration in reliance on the exemption afforded by Section 4(2) of the
Securities Act of 1933 as transactions not involving any public offering.
No underwriting discounts or commissions were paid in connection with the
issue of said shares to Mr. Kish or World Net Trading., Ltd.
Pursuant to a private offering memorandum dated December 1, 1998, and
during the period from December 1, 1998 to approximately February 17, 1999,
the Registrant issued 2,400,000 shares of its common stock at $.0333 per
share, as adjusted for the aforesaid three-for-one forward stock split to
the following persons:
<PAGE>
Number
Name Of Shares Consideration
World Net Trading Ltd. 30,000 $1,000
Camille and Michael Snyder 30,000 1,000
GJM Trading Partners, Ltd. 150,000 5,000
Dr. Andrew M. Georgeson 150,000 5,000
Second Chance Investments 600,000 20,000
Tradeco Corp. 600,000 20,000
View Systems, Inc. 840,000 28,000
--------- -------
Totals 2,400,000 $80,000
Each of the investors listed in the above table represented to the
Registrant that said investor acquired the shares listed above for investment
and without a view to distribution. The Registrant issued the designated shares
without registration in reliance on the exemption afforded by Section 4(2) of
the Securities Act of 1933 as transactions not involving any public offering. No
underwriting discounts or commissions were paid in connection with the issue of
the above listed securities.
World Net Trading, Ltd. is controlled by Randell Stevens, the individual
who acquired 90,000 shares referred to above for services rendered to the
Registrant.
Camille Snyder is the sister of Steven S. Montague, Vice President and a
director of the Registrant. Michael Snyder is the husband of Camille.
GJM Trading Partners, Ltd. and Second Chance Investments are legal persons
each controlled by Gary McAdam, the same person who controls Summer Breeze, LLC,
the legal person to whom the Registrant has given its promissory note, shares of
common stock of the Registrant and Series "A" Warrants to purchase share of the
common stock of the Registrant as discussed below.
Tradeco Corp. is a corporation controlled by David R. Nemelka, the same
person who controls David's Odyssey, LLC, a legal person to whom the Registrant
has given its promissory note, issued shares of its common stock and issued
Series "A" Warrants to purchase shares of the common stock of the Registrant as
discussed below.
Dr. Andrew M. Georgeson is the brother of a former employee of MediaComm
Marketing International, Inc., an affiliate of the Registrant.
View Systems, Inc. is a corporation controlled by Gunther Than, a director
of the Registrant.
Pursuant to funding agreements dated August 6, 1999, September 1, 1999, and
September 30, 1999, the Registrant borrowed an aggregate of $225,000, and issued
its promissory notes, issued shares of its common stock and issued Series "A"
Warrants to purchase shares of its common stock to the following persons:
<PAGE>
Amount of
Promissory Number of Number of
Name Note Shares Warrants
Business Development Corp. $ 45,000 360,000 360,000
Mathis Family Partnership $ 20,000 160,000 160,000
Earnest Mathis IRA Rollover $ 25,000 200,000 200,000
Summer Breeze, LLC $ 45,000 360,000 360,000
David's Odyssey $ 45,000 360,000 360,000
David N. Nemelka $ 45,000 360,000 360,000
--------- --------- ---------
Total $ 225,000 1,800,000 1,800,000
See Exhibits 10.2, 10.3 and 10.4 to be filed by amendment.
Van R. Perkins of 340 Sunset Drive, Ft. Lauderdale, Florida, 33301, is the
President of Business Development Corporation.
Earnest Mathis of 26 West Dry Creek Circle, Suite 600, Littleton, Colorado,
80120, is a general partner of the Mathis Family Partnership, and is the same
person identified as Easrnest Mathis IRA Rollover.
Summer Breeze, LLC, is controlled by Gary McAdam of 14 Red Tail Drive,
Highland Ranch, Colorado, 80126, and is the same person that controls GJM
Trading Partners, Ltd., and Second Chance Investments referred to above.
David's Odyssey, LLC, is controlled by David R. Nemelka of 1310 East 1600
South, Mapleton, UT, and is the same person that controls Tradeco Corp. referred
to above.
David N. Nemelka of 55 West 200 North, Provo, Utah, is the son of David R.
Nemelka.
Each of the aforesaid persons represented that the promissory notes, shares
of common stock and Series "A" Warrants were acquired for investment and without
a view to distribution. The Registrant issued its promissory notes, shares of
common stock and Series "A" Warrants to said persons without registration in
reliance on Section 4(2) of the Securities Act of 1933 as transactions not
involving any public offering. There were no underwriting discounts or
commissions paid in connection with the issue of said options.
On August 25, 1999, pursuant to the provisions of the stock option plan of
the Registrant, it granted to Jennifer Lausen, an employee of the Registrant,
options to purchase 75,000 shares of its common stock at $0.35 per share. Ms.
Lausen represented to the Registrant that the options, and the shares subject to
option if acquired, were acquired for investment and without a view to
distribution. The Registrant issued said options, and proposes to issue any
<PAGE>
shares issued pursuant to exercise of said options, in reliance on the exemption
afforded by Section 4(2) of the Securities Act of 1933, as a transaction not
involving any public offering and the exemption afforded by Rule 701 of
Regulation E under the Securities Act of 1933. There were no underwriting
discounts or commissions paid in connection with the issue of said options.
On August 25, 1999 the Registrant granted to Cygen Technologies, Inc., a
consultant to the Registrant, options to purchase 150,000 shares of the common
stock of the Registrant at $0.20 per share. Cygen Technologies, Inc. represented
to the Registrant that the options, and any shares acquired pursuant to exercise
of such options, were acquired for investment and without a view to
distribution. The Registrant issued said options, and proposes to issue shares
of its common stock on exercise of such options, in reliance on the exemption
afforded by Section 4(2) of the Securities Act of 1933, as a transactions not
involving any public offering. There were no underwriting discounts or
commissions paid in connection with the issue of said options.
Item 27. Exhibits
The exhibits set forth in the following index of exhibits are filed as a
part of this registration statement.
Exhibit
Number Description of Exhibit Page
1.1 Form of Subscription Agreement
1.2 Form of Escrow Agreement
3.1 Restated Articles of Incorporation
3.2 By-Laws of the Registrant Currently in effect
3.3 Certificate of Assumed or Trade Name
4.1 Specimen of Common Stock Certificate
4.2 Specimen form of Series "A" Warrant certificate,
with schedule of warrant holders
(to be furnished by amendment)
4.3 Stock Option and Stock Grant Plan
5.1 Opinion of Ronald N. Vance, P.C.
re: Legality of Securities and Consent
(to be furnished by amendment)
10.1 Form of Promissory note issued pursuant to Funding
Agreement, with schedule of lenders
(to be furnished by amendment)
<PAGE>
10.2 Copy of Funding Agreement dated August 6, 1999
(to be furnished by amendment)
10.3 Copy of Funding Agreement dated September 1, 1999
(to be furnished by amendment)
10.4 Copy of Funding Agreement dated September 30, 1999
(to be furnished by amendment)
10.5 Employment Agreement with Don E. Montague
10.6 Employment Agreement with Steven S. Montague
10.7 Stock Option Agreement with Jennifer Lausen
10.8 Stock Option Agreement with Cygen Technologies, Inc.
(to be furnished by amendment)
10.9 License Agreement with Information Highway, Inc.
10.10 Portal Agreement with Image Net, Inc.
10.11 Sharing of Revenues Agreement with
Information Highway, Inc.
23.1 Consent of Cordovano and Harvey, PC
23.2 Consent of Ronald N. Vance, P.C.
(contained in Exhibit 5.1)
(to be furnished by amendment)
Item 28. Undertakings
a. The Registrant hereby undertakes that it will:
(1) File, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to (in) include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
reflect in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information in the registration statement,
and (iii) include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) For the purpose of determining liability under the Securities Act
of 1933, treat each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at that time shall be
the initial bona fide offering.
<PAGE>
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
b. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid by a
director, officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
c. The Registrant will:
(1) For determining any liability under the Act, treat the information
omitted from the form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in the form of a prospectus filed by
the Company under Rule 424(b)(1) or (4) or 497(h) under the Act as part of this
registration statement as of the time the Commission declared it effective.
(2) For any liability under the 1933 Act, treat each post-effective
amendment that contains a form of prospectus as a new registration statement for
the securities offered in the registration statement, and that the offering of
the securities at that time as the initial bona fide offering of those
securities.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned in the city of
Englewood, State of Colorado, on the 28th day of October 1999.
MediaComm Broadcasting Systems, Inc.
By: /s/ Don E. Montague
President and Chief Executive Officer
<PAGE>
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
Date: October 28, 1999 /s/ Don E. Montague
Chairman of the Board of Directors,
President, Executive Officer, and
Chief Accounting and Financial Officer
Date: October 28, 1999 /s/ Anthony "Anton" Delgado
Secretary, Treasurer, and a Director
Date: October 28, 1999 /s/ Steven S. Montague
Vice President, Director of
Communications, and a Director
Date: October 28, 1999 /s/ Gunther Than
Director
EXHIBIT 1.1
IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING, THIS DOCUMENT
REQUIRES SIGNIFICANT REPRESENTATIONS BY A PURCHASER
SUBSCRIPTION AGREEMENT
MediaComm Broadcasting Systems, Inc.
d/b/a Shopbiz.com
925 W. Kenyon Avenue, #15
Englewood, Colorado 80110
Gentlemen:
1. The undersigned hereby tenders this subscription for the purchase of
_______ shares of the common stock of MediaComm Broadcasting Systems, Inc.,
d/b/a/ Shopbiz.com for the sum of $_______, upon the terms and conditions
as set forth below. A check, wire transfer or certified funds payable to
"Shopbiz.com Escrow Account" in the amount of $_______ is delivered
herewith. The undersigned understands that this subscription for the shares
may be rejected for any reason and that, in the event this subscription is
rejected, the funds delivered herewith will be promptly returned, without
interest thereon or deduction therefrom.
2. The undersigned hereby warrants and represent that (he/she/it) received
the Prospectus of Shopbiz.com dated _______ ___, ____, prior to this
subscription for shares of the common stock of Shopbiz.com offered by that
Prospectus.
The undersigned further warrants and represents that (he/she/it) has been
given access to full and complete information regarding Shopbiz.com and has
used such access to the satisfaction of undersigned for the purpose of
obtaining such information regarding Shopbiz.com that undersigned requested
and that undersigned was given every opportunity to ask questions of and
receive answers from representatives of Shopbiz.com concerning the affairs
of Shopbiz.com and the terms and conditions of this offering made by the
Prospectus and to obtain whatever information undersigned wished.
3. Undersigned acknowledges and agrees that undersigned's funds paid for
the within subscription for shares of the common stock of Shopbiz.com will
be paid into an Escrow Account at the Peak National Bank, Lakewood,
Colorado together with the subscription funds of other purchasers of the
shares of common stock of Shopbiz.com offered by the Prospectus until such
time as there shall have been deposited to said Escrow Account the sum of
$450,000 from sale of said shares during the stipulated offering period. At
such time as $450,000 shall have been so deposited undersigned understands
that undersigned's funds together with the funds of all other purchasers of
such shares will be remitted by said bank to Shopbiz.com.
<PAGE>
Undersigned acknowledges and agrees that if the sum of $450,000 shall not
have been deposited into the Escrow Account during the offering period
specified in the Prospectus, the funds of undersigned held in said Escrow
Account will be refunded to undersigned without payment of any interest
thereon to undersigned or deduction of any amount therefrom and this
subscription shall be cancelled.
4. The undersigned directs that certificates of the shares of common stock
of Shopbiz.com subscribed for herein be issued in the following numbers and
names:
Names Number of Certificates
The undersigned further directs that the title to said shares is to be held
by the following legal persons:
Place an "X" in the proper space below:
(a) individual
(b) joint tenancy
(c) community property
(d) tenancy in common
(e) partnership
(f) corporation
(g) trust
(h) other (specify)
SIGNATURES
Dated:
INDIVIDUAL Address to Which Correspondence
Should be Directed
- ----------------------------- ----------------------------------------
Signature (Individual)
----------------------------------------
- -----------------------------
Signature (all record holders ----------------------------------------
should sign) City, State and Zip Code
- ----------------------------- ----------------------------------------
Names(s) Typed or Printed Tax Identification or Social Security Number
- -----------------------------
----------------------------------------
Telephone Number
<PAGE>
CORPORATION, PARTNERSHIP, TRUST OR OTHER ORGANIZATION
Address to Which Correspondence
Should be Directed
- ----------------------------- ----------------------------------------
Name of Organization
----------------------------------------
By: ----------------------------------------
- -----------------------------
Signature ----------------------------------------
City, State and Zip Code
- ----------------------------- ----------------------------------------
Title Tax Identification or Social Security Number
Its:
- ----------------------------- ----------------------------------------
Telephone Number
- -----------------------------
Name Typed or Printed
*If shares are being subscribed for by an organization, the Certificate of
Signatory must also be completed.
CERTIFICATE OF SIGNATORY
To be completed if Shares are being subscribed for by an organization.
I, ___________________________, am the _________________________ of
________________________________________ (the organization).
I certify that I am empowered and duly authorized by the Organization to
execute and carry out the terms of the Subscription Agreement to purchase and
hold the Shares, and certify further that the Subscription Agreement has been
duly and validly executed on behalf of the Organization and constitutes a legal
and binding obligation of the organization.
IN WITNESS WHEREOF, I have hereto set my hand this _____ day of _________,
____.
------------------------------------
Signature
<PAGE>
ACCEPTANCE
This Subscription Agreement is accepted as of ______________, ____.
MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a Shopbiz.com
By:
----------------------------------
Name
----------------------------------
Title
----------------------------------
Date
EXHIBIT 1.2
ESCROW AGREEMENT
This Agreement, made this ___ day of ________ , ____ , by and between
MediaComm Broadcasting Systems, Inc., d/b/a Shopbiz.com, a Colorado corporation
(the "Company") and Peak National Bank, Lakewood, Colorado (the "Escrow Agent").
WITNESSETH:
WHEREAS, The Company has caused to be prepared a Prospectus dated _______
_____, ____,pursuant to which the Company proposes to issue, and to offer for
sale to the public shares of its Common Stock, no par value per share (the
"Common Stock"), the Common Stock to be offered and sold by the Company on a
450,000 shares minimum, "all-or-none", 900,000 shares maximum "best efforts"
basis at a price of $1.00 per share with a minimum purchase requirement
hereunder of $1,000; and
WHEREAS, pursuant to the terms of the Prospectus, provision must be made to
impound in escrow for the benefit of the purchasers in the Offering, $450,000 of
the gross proceeds which may be received from sale of the Common Stock which may
be sold; and
WHEREAS, the Company desires to enter into an agreement with the Escrow
Agent for the purpose of fulfilling the escrow requirements as set forth in the
Prospectus.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, terms and conditions hereinafter set forth, the parties hereto agree
as follows:
1. The Company shall, immediately upon receipt thereof, deliver to the
Escrow Agent, or cause others to deliver, all proceeds from the sale of up
to 450,000 shares of Common Stock, together with a written account of each
sale, which material shall set forth, among other things, the purchaser's
name and address, the number of shares purchased, the amount paid therefor,
and whether the consideration received was in the form of cash or evidenced
by a check.
<PAGE>
2. All funds or remittances delivered to the Escrow Agent pursuant hereto
shall be deposited immediately by the Escrow Agent in a separate account
designated substantially as "Shopbiz.com - Escrow Account" (the "Escrow
Account"). The Escrow Account shall be created and maintained subject to
provisions hereinafter and the policies and procedures of the Escrow Agent.
During the Escrow Period (hereinafter defined) none of the amounts
deposited in the Escrow Account shall become the property of the Company or
any other person or be subject to the debts of the Company or any other
person except as expressly provided herein with respect to payment by the
Escrow Agent to the Company, and the Escrow Agent shall neither make nor
permit any disbursements from the Escrow Account except as expressly
provided herein.
3. The Escrow Period shall begin on the effective date hereof and shall
terminate:
(i) upon sale of the 450,000 shares minimum within the Offering
Period; or
(ii) _________, ____ (60 days from the date of the Prospectus), which
period may be extended for an additional period not to exceed 60 days
(the "Offering Period").
4. In the event the Escrow Period terminates pursuant to the provision of
Paragraph 3(i) hereof, the Escrow Agent shall immediately provide written
notice to the Company that funds deposited in the Escrow Account total at
least $450,000 and the Escrow Agent shall deliver and pay over to the
Company on the Closing Date, all amounts deposited in the Escrow Account.
In the event proceeds in the minimum amount necessary have been received
before expiration of the Escrow Period, an additional period not to exceed
10 days may be allowed to collect funds deposited in the Escrow Account.
The Closing Date, as used herein, shall be defined as a date to be
designated by the Company which date shall be subsequent to the date upon
which proceeds in the amount of at least $450,000 are deposited in the
Escrow Account, if such event occurs prior to the expiration of the
Offering Period; subsequent Closing Dates shall also be held as designated
by the Company subsequent to receipt by the Escrow Agent of the first
$450,000 but prior to termination under Paragraph 3 (ii) above. On the
making of the payments by the Escrow Agent as provided for in this
paragraph, the Escrow Agent shall be completely discharged and released of
any further liabilities or responsibilities as to funds paid to the
Company.
5. In the event the Escrow Period terminates pursuant to the provision of
Paragraph 3(ii), under circumstances where the minimum of $450,000 shall
not have been deposited in the Escrow Account, then the Escrow Agent shall,
as promptly as possible after such termination and on the basis of its
records of the Escrow Account, return to each purchaser of the Common Stock
the collected amounts paid by him, without interest thereon or deduction
therefrom. All amounts paid or payable to each purchaser pursuant to this
paragraph shall be deemed to be the property of each purchaser, free and
<PAGE>
clear of any or all claims of the Company or of any of its credits, and all
subscriptions to purchase the Common Stock shall be deemed canceled without
any further liability of such purchasers to pay for the Common Stock. The
Escrow Agent shall be required to make such payments only to the persons
named in the written accounts of sale furnished by the Company pursuant to
Paragraph 1 hereof. At such time as the Escrow Agent shall have made all
the payments and remittances provided for in this paragraph, the Escrow
Agent shall be discharged completely and released of any and all further
liabilities and responsibilities hereunder.
6. With regard to any funds payable to the purchasers of the Common Stock
which the Escrow Agent cannot, for any reason, disburse to said purchaser
pursuant to Paragraph 5 herein, the Escrow Agent, may, after reasonable
efforts to locate said purchaser, deposit said funds with the Clerk of the
District Court of the County of Jefferson, State of Colorado, or with the
Clerk of the United States District Court for the District of Colorado, and
interplead the Company and said purchaser. Upon so depositing such funds
and filing its complaint in interpleader, the Escrow Agent shall be
completely discharged and released from the further liability or
responsibility under the terms hereof. The Company, for itself, its
successor and assigns, does hereby submit itself to the jurisdiction of
said court and does hereby appoint the clerk of said court as its agent for
service of all process in connection with the proceedings mentioned in this
paragraph, with a copy of any service mailed U.S. Mail, certified, return
receipt requested.
7. The Escrow Agent shall be solely responsible for determining proceeds
which constitute "collected amounts" as such term is used in this
Agreement. The Company shall reimburse the Escrow Agent for any checks
returned following the Escrow Agent's payment to the Company of the amounts
set forth in Paragraph 4 above.
8. The Company shall deliver to the Escrow Agent appropriate written notice
of any extension of the offering period at the date thereof.
9. In acting pursuant to this Agreement, the Escrow Agent shall be fully
protected in every reasonable exercise of its discretion and shall have no
obligation hereunder either to the Company or to any other party, except as
expressly set forth herein.
10. An escrow fee in the amount of $0.00 per share shall be paid to Escrow
Agent by the Company simultaneously with the execution of this Agreement.
11. The Escrow Agent shall pay interest only to the Company on any funds
deposited in escrow during the Offering Period in accordance with its
established procedures. Interest shall not be paid to subscribers in the
event the Offering terminates pursuant to the provisions of paragraph
3(ii). During the Escrow Period, the Escrow Agent shall invest offering
proceeds only in those investments which can be readily sold or otherwise
disposed of for cash by the time the Escrow Period terminates without any
dissipation of the offering proceeds invested, in recognition that offering
proceeds must be transmitted promptly to the purchasers upon termination of
the Escrow Period pursuant to paragraph 3(ii).
<PAGE>
12. The Escrow Agent shall not issue any certificate of deposit, share
certificates, or any other instrument or document representing any interest
in the deposited funds, except written notice acknowledging receipt of
deposited funds from the Company, a copy of such receipt to be delivered
from time to time by the Escrow Agent to the Company.
13. In performing any of its duties hereunder, the Escrow Agent shall not
incur any liability to anyone for any damages, losses or expenses, except
for willful default or negligence and it shall, accordingly, not incur any
such liability with respect to (a) any action taken or omitted in good
faith upon advise of its counsel or counsel for the Company given with
respect to any questions relating to the duties and responsibilities of the
Escrow Agent under this Agreement, and (b) any action taken or omitted in
reliance upon any instrument, including the written advice provided for
herein, not only as to the execution, validity and effectiveness of its
provisions, but also as to the truth and accuracy of any information
contained therein, which the Escrow Agent shall in good faith believe to be
genuine, to have been signed and presented by a proper person or persons,
and to be in compliance with the provisions of this Agreement.
14. The Company hereby agrees to indemnify and hold harmless the Escrow
Agent against any and all losses, claims, damages, liabilities and
expenses, including reasonable costs of investigation and counsel fees and
disbursement, which may be imposed on the Escrow Agent or incurred by the
Escrow Agent in connection with its acceptance of appointment as Escrow
Agent hereunder or the performance of its duties hereunder, except losses
occasioned by the negligence or willful misconduct of the Escrow Agent or
its agents, including any litigation arising from this Agreement or
involving the subject matter hereof.
15. In the event of any dispute between the parties or between a party and
a third party, as to the validity or meaning of these instructions, or any
other fact or matter relating to the transaction between the parties, the
Escrow Agent is instructed as follows:
(a) That it shall be under no obligation to act, except under process
or order of court, or until it has been adequately indemnified to its
full satisfaction and shall sustain no liability for its failure to
act pending such process or court order or indemnification;
(b) That, if the dispute does not involve the Escrow Agent, it may in
its sole and absolute discretion, after reasonable efforts to settle
the dispute have failed, deposit the property described herein or so
much thereof as remains in its hands with the then clerk, or acting
Clerk of the District Court of the County of Arapahoe, State of
Colorado, and interplead the Company, and any third party complainant,
and upon so depositing such property and filing its complaint in
interpleader, it shall be relieved of all liability under the terms
<PAGE>
hereof as to the property so deposited and shall be entitled to
recover in such interpleader action, from the Company, its reasonable
attorney's fees and related costs and expenses incurred in commencing
such action and further more, the Company, for itself, its successors
or assigns, does hereby submit itself to the jurisdiction of said
court and does hereby appoint the then clerk or acting clerk of said
court as its agent for the service of all process in connection with
such proceedings.
16. The Escrow Agent shall not be required to institute or defend any
action or legal process involving any matter referred to herein which in
any manner affects it or its duties or liabilities hereunder, unless or
until requested to do so by the Company and then only upon receiving full
indemnity in an amount, and of such a character as it shall require,
against any and all claims, liabilities, judgements, attorney's fees and
other expenses of every kind in relation thereto.
17. All notices, demands, or requests required or authorized hereunder
shall be deemed given sufficiently if in writing and sent by registered
mail or certified mail, return receipt requested and postage prepaid, or by
tested telex, telegram, or cable, in the case of the Company:
Don E. Montague, President
925 West Kenyon Avenue #15
Englewood, Colorado 80110
Phone: (303) 762-6444
Fax: (303) 762 6448
and in the case of the Escrow Agent:
Peak National Bank
12345 West Alameda Avenue
Lakewood, Colorado 80228
Phone: (303) 986-5575
Fax: (303) 986-5494
Attention: _________________________
18. The validity, interpretation and construction of this Agreement and
each party hereto shall be governed by the laws of the State of Colorado.
IN WITNESS WHEREOF, the Company and the Escrow Agent have executed this
Agreement on the day and year first above written.
THE COMPANY:
MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a Shopbiz.com
By: _________________________________
Don E. Montague, President
THE ESCROW AGENT:
PEAK NATIONAL BANK
By: _________________________________
Title: ______________________________
Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
MEDIACOMM BROADCASTING SYSTEMS, 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 correctly set forth the provisions of the Articles
of Incorporation, as amended, and supersede the original Articles of
Incorporation and all amendments thereto.
ARTICLE I. Name. The Name of the Corporation is MEDIACOMM BROADCASTING
SYSTEMS, INC.
ARTICLE II. Duration. The Corporation shall have perpetual duration.
ARTICLE III. Principal Office. The principal office of the Corporation in
the State of Colorado shall be at 925 W. Kenyon Ave., Suite 15, Englewood,
Colorado 80110, and after that at such location as the Board of Directors may
determine.
ARTICLE IV. Purposes. The nature of the business of the Corporation and the
objects and purposes and business thereof proposed to be transacted, promoted or
carried on are to engage in any lawful act or activity for which corporations
may be organized under the Colorado Business Corporation Act.
ARTICLE V. Capital Structure.
Section 1. Authorized Capital. The total number of shares of all classes
which the Corporation shall have authority to issue is 55,000,000 of which
5,000,000 shall be Preferred Shares, no par value per share and 50,000,000 of
which shall be Common Stock, no par value per share, and the designations,
preferences, limitations and relative rights of the shares of each class are as
follows:
Section 2. Preferred Shares. The Corporation, by resolution of its Board of
Directors, may divide and issue the Preferred Shares in series. Preferred Shares
of each series when issued shall be designated to distinguish them from the
shares of all other series. The Board of Directors is hereby expressly vested
with authority to divide the class of Preferred Shares into series and to fix
and determine the relative rights and preferences of the shares of any such
series so established to the full extent permitted by these Restated and Amended
Articles of Incorporation and the Colorado Business Corporation Act in respect
to the following:
A. The number of shares to constitute such series, and the distinctive
designations thereof,
B. The rate and preference of dividends, if any, the time of payment
of dividends, whether dividends are cumulative and the date from which
any dividend shall accrue;
<PAGE>
C. Whether shares may be redeemed and, if so, the redemption price and
the terms and conditions of redemption;
D. The amount payable upon shares in event of involuntary liquidation;
E. The amount payable upon shares in event of voluntary liquidation;
F. Sinking fund or other provisions, if any, for the redemption or
purchase of shares;
G. The terms and conditions on which shares may be converted, if the
shares of any series are issued with the privilege of conversion;
H. Voting powers, if any; and
I. Any other relative rights and preferences of shares of such series,
including, without limitation, any restriction on an increase in the number
of shares of any series theretofore authorized and any limitation or
restriction of rights or powers to which shares of any future series shall
be subject.
Section 3. Common Shares.
A. The rights of holders of Common Shares to receive dividends or
share in the distribution of assets in the event of liquidation,
dissolution or winding up of the affairs of the Corporation shall be
subject to the preferences, limitations and relative rights of the
Preferred Shares fixed in the resolution or resolutions which may be
adopted from time to time by the Board of Directors of the Corporation
providing for the issuance of one or more series of the Preferred Shares.
B. The holders of the Common Shares shall be entitled to one vote for
each Common Share held by them of record at the time for determining the
holders thereof entitled to vote.
ARTICLE VI. Board of Directors. The business and affairs of the Corporation
shall be managed by the Board of Directors. The number of Directors constituting
the Board of Directors shall be fixed in the manner provided in the Bylaws of
the Corporation.
In accordance with the Bylaws of the Corporation, the Board of Directors
may thereupon be divided into classes, each class to be as nearly equal in
number as possible, with the term of office of directors of the first class to
expire at the first annual meeting of shareholders after their election, and the
terms of the successive classes expiring at successive annual meetings of
shareholders thereafter. At each annual meeting following such classification
and division of the members of the Board of Directors, a number of directors
equal to the number of directorships in the class whose term expires
2
<PAGE>
at the time of such meeting shall be elected to hold office for a term of years
equal to the number of classes, and such term shall expire at the annual meeting
held during the final year of the term.
ARTICLE VII. Voting by Shareholders.
Section 1. Cumulative Voting. 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.
Section 2. Denial of Preemptive Rights. No shareholder of the Corporation
shall by reasons of his holding shares of any class or series have any
preemptive or preferential rights to purchase or subscribe to any shares of any
class or series of the Corporation now or hereafter to be authorized, or any
notes, debentures, bonds or other securities convertible into or carrying
options or warrants to purchase shares of any class or series now or hereafter
to be authorized, whether or not the issuance of any such shares or notes,
debentures, bonds or other securities would adversely affect the dividend or
voting rights of such shareholder, other than such rights, if any, as the Board
of Directors, in its discretion from time to time, may grant, and at such price
as the Board of Directors, in its discretion, may fix; and the Board of
Directors, if otherwise authorized by the provisions of these Amended and
Restated Articles of Incorporation may issue shares of any class or series of
the Corporation or any notes, debentures, bonds or other securities convertible
into or carrying options or warrants to purchase shares of any class or series,
without offering any such shares of any class or series either in whole or in
part to the existing shareholders of any class or series.
Section 3. Maioritv Vote. 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 greater than a majority of
the outstanding shares, or of any class or series entitled to vote thereon, any
and every such action shall be taken, notwithstanding the requirements of the
Colorado Business Corporation Act, by the affirmative vote or concurrence of the
holders of a majority of the outstanding shares, or of any class or series
entitled to vote thereon.
ARTICLE VIII. Right of Directors to Contract with Corporation.
Section 1. No contract or other transaction between the Corporation and one
or more of its directors or any other corporation, firm, association or entity
in which one or more of the directors of the Corporation are directors or
officers or are financially interested, shall be either void or voidable solely
because such directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes or approves 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
3
<PAGE>
the contract or transaction by a vote or consent sufficient for that
purpose without counting the votes or consents of the 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.
Section 2. 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.
ARTICLE IX. Indemnification of Officers. Directors and Others. The Board of
Directors of the Corporation shall have the power to:
Section 1. Indemnify any director, officer, employee or agent of the
Corporation to the fullest extent permitted by the Colorado Business Corporation
Act as presently existing or as hereafter amended.
Section 2. 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 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 X.
Section 3. 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 provisions of this Article X.
The indemnification provided by this Article X shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
these Articles of Incorporation, and 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, shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
4
<PAGE>
ARTICLE X. 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 Corppration 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 officers, directors 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 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 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 XI. Limitations on Director Liability. To the fullest extent
permitted by the Colorado Business Corporation Act as the same exists or may
hereafter be amended, a director of this Corporation shall not be liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, so long as such director acted in good faith.
ARTICLE XII. Powers and Limitations. The powers and limitations of the
Corporation shall be those set forth by the Colorado Business Corporation Act,
under which this Corporation is formed.
ARTICLE XIII. Rights to Amend, Alter, Change or Repeal. The Corporation
reserves the right to amend, alter, change or repeal any provision contained in
these Amended and Restated Articles of Incorporation in the manner now or
hereinafter prescribed herein or by statute, and all rights conferred upon
shareholders herein are granted subject to this reservation.
The Amended and Restated Articles of Incorporation were adopted by a vote
of the shareholders. The number of shares voted for the Amended and Restated to
the Articles of Incorporation was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 1st day of
May, 1999.
/s/ Don E. Montague
--------------------------------------
Don E. Montague, President
5
Exhibit 3.2
AMENDED BYLAWS
OF
MEDIACOMM BROADCASTING SYSTEMS, INC.
ARTICLE I
Office
------
The principal office of the Corporation in the State of Colorado shall be
located at 925 W. Kenyon Avenue, Suite 15, Englewood, Colorado 80110 and
thereafter at such location as the Board of Directors may determine.
The Corporation may have such other offices, either within or without the
State of Colorado, as the Board of Directors may determine or as the affairs of
the Corporation may require from time to time.
The Corporation shall have and continuously maintain in the State of
Colorado a registered office and a registered agent whose office is identical
with such registered office as required by the Colorado Business Corporation
Act.
ARTICLE II
Shareholders' Meetings
----------------------
Section 1. Annual Meetings.
A. Time and Place. The Annual Meeting of the Shareholders of the
Corporation, commencing with the year of incorporation, shall be as
determined by the Board of Directors on a date not less frequent than once
every 365 days. If said day is a legal holiday, the meeting shall be held
on the next succeeding day not a legal holiday.
B. Purpose of Annual Meeting. The business to be transacted at such
Annual Meeting shall be the election of Directors and such other business
as shall be properly brought before the meeting.
C. Alternate Election Date. If the election of Directors shall not be
held on the day designated for the Annual Meeting, or at the designated
date upon adjournment of such meeting, the Board of Directors shall call a
Special Meeting of the Shareholders as soon as conveniently possible
thereafter. At such meeting, the election of Directors shall take place,
and such election and any other business transacted there at shall have
the same force and effect as at an Annual Meeting duly called and held.
<PAGE>
D. Notice. Written notice at the address last shown on the books of
the Corporation stating the place, day and hour of the meeting, and in the
case of a Special Meeting the purpose for which the meeting is called,
shall be delivered not less than 10 days nor more than 50 days before the
date of the meeting, either personally or by mail at the direction of the
President, Secretary or other officer or person calling the meeting; except
that if the authorized shares of the Corporation are to be increased, at
least 30 days notice shall be given.
Section 2. Special Meetings. Special Meetings of the Shareholders may be
called by the President, Board of Directors or by the holders of at least 10% of
the stock entitled to vote at such meeting.
Section 3. Waiver of Notice. A Shareholder may waive the notice of meeting
by attendance, either in person or by proxy, at the meeting, or by so stating in
writing either before or after such meeting. Attendance at a meeting for the
express purpose of objecting that the meeting was not lawfully called or
convened shall not however, constitute a waiver of notice. Except where
otherwise required by law, notice need notice given of any adjourned meeting of
the Shareholders.
Section 4. Quorum. The holders of record of at least a majority of the
shares of the stock of the Corporation, issued and outstanding and entitled to
vote, present in person or by proxy, shall, except as otherwise provided by law
or by these Bylaws, constitute a quorum at all meetings of the Stockholders; if
there be no such quorum, the holders of a majority of such shares so present or
represented may adjourn the meeting from time to time until a quorum shall have
been obtained and, except as otherwise provided by law, no notice of any such
adjourned meeting need be given if the time and place to which the meeting is
adjourned are announced at the meeting so adjourned.
Section 5. Closing of Transfer Books; Record Date. In order to determine
the Shareholders of record of the Corporation's stock who are entitled to notice
of meetings, to vote at a meeting or adjournment thereof, and to receive payment
of any dividend, or to make a determination of the Shareholders of record for
any other proper purpose, the Board of Directors of the Corporation may order
that the Stock Transfer Books be closed for a period not to exceed 50 days. If
the purpose of such closing is to determine who is entitled to notice of a
meeting and to vote at such meeting, the Stock Transfer Books shall be closed
for at least ten days preceding such meeting.
A. Record Date. In lieu of closing the Stock Transfer Books, the
Board of Directors may fix a date as the record date for such determination
of Shareholders, such date in any case to be not more than 50 days prior to
the date of action which requires such determination, nor in the case of a
hareholders' meeting, not less than ten days in advance of such meeting.
2
<PAGE>
B. Alternate Record Date. If the Stock Transfer Books are not closed
and no record date is fixed for such determination of the Shareholders of
record, the date on which notice of the meeting is mailed or on which the
resolution of the Board of Directors declaring a dividend is adopted, as
the case may be, shall be the record date for such determination of
Stockholders.
C. Adjournment. When a determination of Stockholders entitled to vote
at any meeting has been made, as provided in this Section, such
determination shall apply to any adjournment of such meeting.
Section 6. Presiding Officer. Meetipgs of the Stockholders shall be
presided over by the President.
Section 7. Proxies. At all meetings of Stockholders, a Stockholder may vote
by proxy executed in writing by the Stockholder or the Stockholder's duly
authorized attorney-in-fact. Such proxies shall be filed with the Secretary of
the Corporation before or at the time of the meeting. No proxy shal1 be valid
after 11 months from the date of its execution, unless otherwise provided in
the proxy.
Section 8. Voting of Shares by Stockholders.
A. Neither treasury shares, nor shares of its own stock held by the
Corporation in a fiduciary capacity, nor shares held by another corporation
if a majority of the shares entitled to vote for the election of directors
of such other corporation is held by this Corporation, shall be voted at
any meeting or counted in determining the total number of outstanding
shares at any given time.
B. At each meeting of the Stockholders, except as otherwise provided
by law or by the Articles of Incorporation, every holder of record of stock
entitled to vote shall be entitled to one vote for each share of stock
standing in his name on the books of the Corporation. Elections of
directors sha11 be determined by a plurality of the votes cast, and except
as otherwise provided by law, the Articles of Incorporation, or these
Bylaws, all other actions shall be determined by a majority of the votes
cast at such meeting. Each proxy to vote shall be in writing and signed by
the Stockholder or by his duly authorized attorney and shall not be voted
or acted upon after eleven (11) months from the date of its execution,
unless such proxy expressly provides for a longer period.
C. At all elections of directors, the voting shall be by ballot or in
such other manner as may be determined by the Stockholders present in
person or by proxy entitled to vote at such election. With respect to any
other matter presented to the Stockholders for their consideration at a
meeting, any Stockholder entitled to vote may, on any question, demand a
vote by ballot. The cumulative system of voting for the election of
directors or for any other purpose shall not be allowed.
3
<PAGE>
D. A complete list of the Stockholders entitled to vote at each such
meeting, arranged in alphabetical order, with the address of each, and the
number of shares registered in the name of each Stockholder, shall be
prepared by the Secretary and shall be open to the examination of any
Stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any Stockholder who is present.
E. The Board of Directors in advance of any meeting of Stockholders
may appoint one or more inspectors of election to act at that meeting or
any adjournment thereof. If inspectors of election are not so appointed,
the Chairman of the meeting may, and on the request of any Stockholder
entitled to vote shall, appoint one or more inspectors of election. Each
inspector of election, before entering upon the discharge of his duries,
shall take and sign an oath faithfully to execute the duties of inspector
of election at such meeting with strict impartiality and according to the
best of his ability. If appointed, inspectors of election shall take charge
of the polls and, when the vote is completed, shall make a certificate of
the result of the vote taken and of such other facts as may be required by
law.
Section 9. Informal Action by Stockholders. Any action required to be taken
at a meeting of the Stockholders or any other action which may be taken at
a meeting of the Stockholders may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
Stockholders entitled to vote with respect to the subject matter therof. Such
consent shall have the same force and effect as a unanimous vote of the
Stockholders and may be stated as such in any documents filed with the Secretary
of State of Colorado under the Colorado Business Corporation Act.
A. Validity of Stockholder Meetings. Failure to comply with the
requirements of this Section shall not affect the validity of any action
taken at such meeting of the Stockholders.
Section 10. Presumption of Assent. A Stockholder of the Corporation who is
present at a meeting of the Stockholders at which action on any corporate matter
is taken shall be presumed to have assented to the action taken unless such
Stockholder's dissent shall be entered in the Minutes of the meeting or unless
such Stockholder shall have filed written dissent to such action with the person
acting as the Secretary of the meeting before the adjournment thereof or shall
forward such dissent by certified mail to the Secretary of the Corporation
immediately following the adjournment of the meeting. Such right to dissent
shall not apply to a Stockholder who voted in favor of such action.
4
<PAGE>
ARTICLE III
Directors
---------
Section 1. Number. The property, affairs and busines of the Corporation
shall be managed by a Board of Directors of not less than (2) two persons as
shall be fixed by the Board of Directors. Except as hereinafter provided,
Directors shall be elected at the Annual Meeting of the Stockholders and each
Director shall serve until the next annual meeting of shareholders or his
resignation or removal and until his successor shall be elected and qualify.
Section 2. Increase in Numbers. The number of Directors may be increased or
decreased from time to time by a majority vote of the whole Board of Directors,
provided however, that no vote to decrease the number of Directors shall have
the effect of shortening the term of any incumbent Director.
Section 3. Qualification. Directors need not be Stockholders of the
Corporation.
Section 4. Quorum. A majority of the Directors in office shall be necessary
to constitute a quorum for the transaction of business. If at any meeting of the
Board of Directors there shall be less than a quorum present, a majority of
those present may adjourn the meeting without further notice, from time to time,
until a quorum shall have been obtained.
Section 5. Vacancies. Any Director may resign at any time by giving written
notice to the President or to the Secretary of the Corporation. Such resignation
shall take effect at the specified therein except such resignations shall not be
submitted effective retroactively. Unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective. Any
Director may be removed at any time in the manner provided in the Colorado
Business Corporation Act. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of the Stockholders, or by the remaining
Directors, though less than a quorum, or by a sole remaining Director. A
Director elected tofill a vacancy shall be elected for the unexpired term of
such Director's predecessor in office. Any vacancy may be filled by the
affirmative vote of Directors then in office or by an election at an Annual
Meeting or at a Special Meeting of Stockholders called for that purpose, and a
Director so chosen shall hold office until the next Annual Meeting of
Stockholders and thereafter until such Director's successor shall have been
elected and qualified.
Section 6. Meetings. Regular meetings of the Board of Directors shall be
held at such times as are fixed from time to time by resolution of the Board.
Special Meetings may be held at any time upon call of the President, or a
majority of Directors serving as members of the Board of Directors. A meeting
of the Board of Directors shall be held without notice imediately following the
Annual Meeting of Stockholders. Notice need not be given of regular meetings of
the Board of Directors held at any time without notice if all the Directors are
present, or if before the meeting those not present waive such notice in
writing. Notice of a meeting of the Board of Directors need not state the
purpose of nor the busienss to be transacted at such meeting.
5
<PAGE>
Section 7. Presumption of Assent. 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 shall be presumed to have assented to the action taken unless
such Director's dissent shall be entered in the Minutes of the meeting or unless
such Director shall have filed written dissent to such action with the person
acting as the Secretary of the meeting before the adjournment thereof or shall
forward such dissent by certified mail to the Secretary of the Corporation
immediately following the adjournment of the meeting. Such right to dissent
shall not apply to a Director who voted in favor of such action.
Section 8. Removal. At any meeting of Stockholders, any Director or
Directors may be removed from office, without assignment of any reason therefor,
by a requisite majority of the Stockholders. When any Director or Directors are
removed, new Directors may be elected at the same meeting of Stockholders for
the unexpired term of the Director or Directors to be removed. If the
Stockholders fail to elect persons to fill the unexpired term or terms of the
Director or Directors removed, such unexpired terms shall be filled by the
remaining Directors.
Section 9. Informal Action by Directors. Any action required to be taken at
a meeting of the Board of Directors or any other action which may be taken at a
meeting of the Board of Directors may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
Directors entitled to vote with respect to the subject matter thereof. Such
consent shall have the same force and effect as a unanimous vote of the
Directors and may be stated as such in any documents filed with the Secretary of
State of Colorado under the Colorado Business Corporation Act.
Section 10. Compensation. Directors and members of any committee of the
Board of Directors shall be entitled to such reasonable compensation for their
services as Directors and members of any such committee as shall be fixed from
time to time by resolution of the Board of Directors, and shall also be entitled
to reimbursement for any reasonable expenses incurred in attending such
meetings. The compensation of Directors may be on such basis as is determined in
the resolution of the Board of Directors. Any Directors receiving compensation
under these provisions shall not be barred from serving the Corporation in any
other capacity and receiving reasonable compensation for such other services.
Section 11. Committees. The Board of Directors, by a resolution or
resolutions adopted by a majority of the members of the whole Board, may appoint
an executive committee and such other committees as it may deem appropriate.
Each such committee shall consist of at least two members of the Board of
Directors. Each committee shall have and may exercise such powers as shall
be conferred or authorized by the resolution appointing it and as otherwise
provided by Colorado law. A majority of any such committee may determine its
action and may fix the time and place of its meetings, unless provided otherwise
by the Board of Directors. The Board of Directors shall have the power at any
time to fill vacancies in, to change the size of membership of and to discharge
any such committee.
6
<PAGE>
A. Committee to Keep Written Records. Each such committee shall keep a
written record of its acts and proceedings and shall submit such record to
the Board of Directors at each regular meeting thereof and at such other
times as requested by the Board of Directors.
B. Failure to Keep Written Records. Failure to submit such records, or
failure of the Board to approve any action indicated therein will not,
however, invalidate such action to the extent it has been carried out by
the Corporation prior to the time the record of such action was, or should
have been, submitted to the Board of Directors as herein provided.
Section 12. Director Voting. At all meetings of the Board of Directos, each
Director present shall have one vote, irrespective of the number of shares of
stock, if any which such Director may hold.
Section 13. Majority. The action of a majority of the Directors present at
any meeting at which a quorum is present shall be the act of the Board of
Directors with respect to regularly conducted business affairs. Any action
authoized, in writing, by all of the Directors entitled to vote thereon and
filed with the minutes of the Corporation shall be the act of the Board of
Directors with the same force and effect as if the same had been passed by
unanimous vote at a duly called meeting of the Board.
Section 14. Board and Committee Meeting by Telephone. Any one or more
(including, without limitation, all) members of the Board of Directors, or any
committee thereof, may participate in a meeting of the Board or such committee
by means of a conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
ARTICLE IV
Officers
--------
Section 1. Election and Term of Office. The Officers of the Corporation
shall be elected by the Board of Directors annually at the first meeting of the
Board held after each Annual Meeting of the Stockholders. If the election of the
Officers shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may occur. Each Officer shall hold office until the
first of the following to occur: until such Officer's successor shall have been
duly elected and shall have qualified; or until such Officer's death; or until
such Officer shall resign; or until such Officer shall have been removed in the
manner herein provided. The Officers of the Corporation shall be a President,
Secretary, Treasurer and one (1) or more Vice-Presidents, Assistant Secretaries
or Assistant Treasurers, at the discretion of the Board of Directors. In
addition, there may be a Chairman of the Board of Directors and such subordinate
Officers as the Board of Directors may deem necessary.
7
<PAGE>
Section 2. Removal. Any Officer or agent or employee of the Corporation may
be removed by the Board of Directors whenever in its judgment the best interests
of the Corporation will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election or
appointment of any Officer or agent shall not of itself create contract rights.
Section 3. Vacancies. Any vacancy in an office from any cause may be
filled for the unexpired portion of the term by the Board of Directors.
Section 4. Chairman of the Board - Chief Executive Officer. The Chairman of
the Board shall be the chief executive officer of the Corporation and shall
preside at all meetings of the Board of Directors and of the Stockholders at
which he is present. He shall have general charge of the business and affairs of
the Corporation, may execute in the name of the Corporation authorized corporate
obligations or other instruments, shall perform such other duties as may be
prescribed by the Board of Directors from time to time, and, in the absence or
disability of the President, shall exercise all of the powers and duties of the
President. In the absence or disability of the Chairman of the Board, the
President shall exercise all the powers and duties of the Chairman of the Board.
In addition, the President shall perform such duties as may be prescribed by the
Board of Dirctors from time to time or as may from time to time be prscribed by
the Chairman of the Board.
Section 5. President. The President shall be the chief operating officer of
the Corporation and, in the absence or disability of the Chairman of the Board,
he shall exercise all of the powers and duties of the Chairman of the Board. He
shall have general and active supervision of the operations of teh Corporation
and shall, from time to time, make such reports of the Chairman of the Board may
require. He shall have the general powers and duties of supervision usually
vested in the office of the president of a corporatin and shall have such other
powers and duties as may, from time to time, be assigned to him by the Board of
Directors or the Chairman of the Board.
The President shall execute all deeds, conveyances, deeds of trust,
bonds and other contracts requiring a seal, under the seal of the Corporation,
except where required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be expressly delegated
by the Board of Directors to some Officer or agent of the Corporation.
Section 6. Duties of Secretary. The Secretary shall:
A. Keep the minutes of the meeting of the Stockholders and of the
Board of Directors in books provided for that purpose.
B. Disseminate all notices in accordance with the provisions of these
Bylaws or as required by law.
8
<PAGE>
Section 7. Duties of Treasurer - Chief Financial Officer. The Treasurer -
Chief Financial Officer shall have the care and custody of the corporate funds
and securities, sign checks, drafts, notes and orders for the payment of money,
pay out and disburse the funds of the Corporation as may be ordered by the
Board, taking proper vouchers for such payments and disbursements, deposit all
monies and securities belonging to the Corporation and, in general, perform such
other duties as are customarily performed by the Treasurer - Chief Financial
Officer.
The Treasurer shall:
A. Have charge and custody of, and be responsible for, all funds and
securities of the Corporation.
B. Render a statement of the condition of the finances of the
Corporation from time to time and at the specific request of the Board of
Directors.
C. Receive and give receipts for monies due and payable to the
Corporation from any source whatsoever.
D. Perform all duties incident to the office of Treasurer, and such
other duties as from time to time may be assigned by the Board of Directors
or by the President The Treasurer may be required to give bond for the
faithful performance of the Treasurer's duties in such sum and with such
surety as may be determined by the Board of Directors.
Section 8. Duties of Vice-President. The Vice-President(s), if appointed in
the discretion of teh Board of Directors, shall perform such duties as are
incident to their offices, or are properly required of them by the Board of
Directors or are assigned to them by the Articles of Incorporation or these
Bylaws.
Section 9. Duties of Assistant Secretaries, Assistant Treasurers and Other
Subordinate Officers. Assistant Secretaries, Assistant Treasurers, and other
subordinate Officers appointed by the Board of Directors shall exercise such
powers and perform such duties as may be delegated to them by the resolutions
appointing them, or by subsequent resolutions adopted from time to time.
Section 10. Duties of Officers May Be Delegated. In case of the absence or
disability of any officer of the Corporation, or for any other reason that the
Board may deem sufficient, the Board may delegate, for the time being, the
powers or duties, or any of them, of such officer to any other officer, or to
any director.
Section 11. Salaries. The salaries of all Officers of the Corporation shall
be fixed by the Board of Directors. No Officer shall be ineligible to receive
such salary by reaosn of the fact that he is also a Director of the Corporation
and receiving compensation therefor.
9
<PAGE>
Section 12. Checks and Endorsements. All checks and drafts upon the funds
to the credit of the Corporation in any of its depositories shall be signed by
such of its Officers or agents as shall from time to time be determined by
resolution of the Board of Directors which may provide for the use of signatures
under specific conditions, and all notes, bills, receivables, trade acceptances,
drafts and other evidences of indebtedness payable to the Corporation shall, for
the purpose of deposit, discount, or collection be endorsed by such Officers or
agents of the Corporation or in such manner as shall from time to time be
determined by resolution of the Board of Directors.
ARTICLE V
Stock
-----
Section 1. Certificates. The shares of stock shall be represented by
consecutively numbered certificates signed in the name of the Corporation by its
President and the Secretary and shall be sealed with the seal of the
Corporation, or with a facsimile thereof. The signatures of the Corporation's
Officers on such certificate may also be a facsimile engraved or printed if the
certificate is countersigned by the transfer agent, or registered by a
registrar. In the event any Officer who has signed or whose facsimile signature
has been placed upon such certificate shall have ceased to be such before the
certificate is issued, it may be issued by the Corporation with the same effect
as if such Officer had not ceased to be an officer at the date of its issue.
Certificates of stock shall be in such form consistent with law as shall be
prescribed by the Board of Directors. No certificate shall be issued until the
shares represented therby are fully paid.
Section 2. Consideration for Shares. Shares shall be issued for such
consideration, expressed in dollars as shall be fixed from time to time by the
Board of Directors. Treasury shares shall be disposed of for such consideration
expressed in dollars as may be fixed from time to time by the Board. Such
consideration may consist in whole or in part of money, other property, tangible
or intangible, a promissory note or in labor or services actually performed or
future services performed for the Corporation.
Section 3. Lost, Destroyed or Stolen Certificates. No certificates for
shares of 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 and with such terms and such surety as the Board of Directors
may, in its discretion, require.
Section 4. Transfer of Shares.
A. Upon surrender to the Corporation of a certificate of stock duly
endorsed or accompanied by proper evidence of succession, assignment, or
authority to transfer, it shall be the duty of the Cororation to issue a
new certificate to the person entitled thereto, and cancel the old
certificate. Every such transfer of stock shall be entered on the stock
10
<PAGE>
book of the Corporation which shall be kept either at the offices of the
Corporation's legal counsel, at the Corporation's principal office or by
its registered duly appointed agent.
B. The Corporation shall be entitled to treat the holder of record of
any share of stock as the holder in fact thereof, and, accordingly, shall
not be bound to recognize any equitable or other claim to interst in such
share on the part of any other person whether or not it shall have express
or other notice thereof, except as may be required by the laws of the State
of Colorado.
Section 5. Record Dates. The Board of Directors may fix in advance a date,
not less than ten (10) or more than fifty (50) days preceding the date of any
meeting of stockholders or the date for the payment of any dividend, or the date
for the distribution or allotment of rights, or the date when any change,
conversion or exchange of capital stock shall go into effect, as a record date
for the determination of Stockholders entitled to notice of, and to vote at, any
such meeting, or entitled to receive payment of any such dividend, or to receive
any distribution or allotment of such rights, or to exercise the rights in
respect of any such change, conversion or exchange or capital stock, and in such
case only such Stockholders as shall be Stockholders of record on the date so
fixed shall be entitled to such notice of, and to vote at, such meeting, or to
receive payment of such dividend, or to receive such distribution or allotment
of rights, or to exercise any stock on the books of the Corporation after any
such record date fixed as aforesaid.
Section 6. Voting on Stock. All stock owned by the Corporation, other than
stock of the Corporation, shall be voted, in person or by proxy, by the Chairman
of the Board, the Vice Chairman of the Board, the President or any Vice
President of teh Cororation on behalf of the Corporation upon resolution and
approval by the board.
ARTICLE VI
Contracts, Loans, Checks and Deposits
-------------------------------------
Section 1. Contracts. The Board of Directors may authorize any officer or
agent to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the Corporation, and such authority may be general or
confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the Corporation
and no evidence of indebtedness shall be issued in its name unless authorized by
a resolution of the Board of Directors. Such authority may be general or
confined to specific instances.
Section 3. Checks, Drafts, etc. All checks, drafts, or other orders for the
payment of money,notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by such officer or agent of the Cororation and
in such manner as shall from time to time be determined by resolution of the
Board of Dirctor.
11
<PAGE>
Section 4. Deposits. The money of the Corporation shall be deposited in the
name of the Corporation in such banks, trust companies, or other dspositories,
as the Board of Directors may designate and shall be subject to the order of the
Corporation signed by such officer or agent of the Corporation, and in such
manner as shall from time to time be determined by resolution of the Board of
Directors.
ARTICLE VII
Corporate Seal
--------------
The corporate seal of the Corporation shall consist of a circular imprint
bearing around the outside rim the name of the Corporation and the word
"Colorado" and in the center shall be inscribed the word "Seal".
ARTICLE VIII
Amendment of Bylaws
-------------------
Section 1. By Shareholders. All Bylaws of the Corporation shall be subject
to alteration or repeal and new Bylaws may be made by the requisite vote of
Stockholders, a quorum being present in person or by proxy, provided that the
notice or waiver of notice of such meeting shall have summarized or set forth in
full therein the proposed amendment.
Section 2. By Directors. The Board of Directors shall have power to make,
adopt, later, amend or repeal, from time to time, these Bylaws of the
Corporation.
ARTICLE IX
Fiscal Year
-----------
The fiscal year end of the Corporation shall be as determined by the Board
of Directors.
ARTICLE X
Approval
--------
The undersigned hereby certifies that the foregoing Amended Bylaws
constitute a true and complete copy of the Bylaws of MEDIACOMM BROADCASTING
SYSTEMS, INC. and the same have been approved, ratified and accepted by the
Board of Directors as the Bylaws of the Corporation.
Dated: May 1, 1999 /s/ Anthony "Anton" Delagado
----------- --------------------------------------------
Anthony "Anton" Delagado, Secretary
12
Exhibit 3.3
Mail to: Secretary of State
Corporations Section
1560 Broadway, Suite 200
Denver, CO 80202
(303) 894-2251
Fax (303) 894-2242
For office use only 045
MUST BE TYPED
FILING FEE: $10.00
MUST SUBMIT TWO COPIES
Please include a typed
self-addressed envelope
CERTIFICATE OF
ASSUMED OR TRADE NAME
MEDIACOMM BROADCASTING SYSTEMS, INC, a corporation,
limited partnership or limited liability company under the laws of Colorado,
being desirous of transacting a portion of its businesss under an assumed or
trade name as permitted by 7-71-101, Colorado Revised Statutes, hereby
certifies:
1. The location of its principal office is: 925 W. Kenyon #15
Englewood, Colo 80110
2. The name, other than its own, under which the business is carried on is:
Shopbiz.com
- --------------------------------------------------------------------------------
3. A brief description of the kind of business transacted under such assumed
or trade name is:
Internet Commerce
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Limited Partnership or Limited Liability Corporations complete this section
Companies complete this section. MediaComm Broadcasting Systems, Inc.
- --------------------------------------------------------------------------------
Name of Entity Name of Corporation
by: by: /s/ Don Montague
-------------------------------------- ---------------------------------
Signature Signature
Its President
- ----------------------------------------- --------------------------------
Title, General Partner, or Manager Title
- --------------------------------------------------------------------------------
EXHIBIT 4.1
[Front of Certificate]
Incorporated under the laws of the State of Colorado
Number Shares
- ---------- ----------
MEDIACOMM BROADCASTING SYSTEMS, INC.
Authorized common stock 50,000. No par Value.
This Certifies That
Is the Holder of
of MEDIACOMM BROADCASTING SYSTEMS, INC. Common Stock transferable on the
books of the Corporation in person or by duly authorized attorney upon surrender
of this Certificate properly endorsed. This Certificate is not valid until
countersigned by the duly authorized officers of the Corporation.
Witness the facsimile Seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated
President Secretary/Treasurer
Exhibit 4.3
MEDIACOMM BROADCASTING SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AND STOCK GRANT PLAN
This Non-Qualified Stock Option and Stock Grant Plan (the "Plan") is
adopted this 1st day of March, 1999, in consideration of services rendered and
to be rendered by key personnel to MediaComm Broadcasting Systems, Inc., its
subsidiaries and affiliates.
1. Definitions.
------------
The terms used in this Plan shall, unless otherwise indicated or required
by the particular context, have the following meanings:
Board: The Board of Directors of MediaComm Broadcasting Systems, Inc., or
any duly authorized committee of the Board.
Common Stock: The no par value Common Stock of MediaComm Broadcasting
Systems, Inc..
Company: MediaComm Broadcasting Systems, Inc., a corporation incorporated
under the laws of Colorado, and any successors in interest by merger, operation
of law, assignment or purchase of all or substantially all of the property,
assets or business of the Company.
Date of Grant: The date on which an Option (see below) is granted under the
Plan.
Fair Market Value: The Fair Market Value of the Option Shares. Such Fair
Market Value as of any date shall be reasonably determined by the Board;
provided, however, that if there is a public market for the Common Stock, the
Fair Market Value of the Option Shares as of any (date shall not be less than
the bid price for the Common Stock on that date (or on the preceding business
day if such date is a Saturday, Sunday, or a holiday), on either an
over-the-counter market or national exchange, as reported thereby, or if not
available there, in the Wall Street Journal or other public news source;
provided, further, that if no such published bid price is available, the Fair
Market Value of such shares shall not be less than the average of the means
between the bid and asked prices quoted on that date by any two independent
persons or entities making a market for the Common Stock, such persons or
entities to be selected by the Board. Fair Market Value shall be determined
without regard to any restriction other than a restriction which, by its terms,
will never lapse.
Key Person: A person (including, without limitation, employees, directors,
officers, consultants or advisors) designated by the Board upon whose judgment,
initiative and efforts the Company or a Related Company may rely.
Option: The rights granted to a Key Person to purchase Common Stock
pursuant to the terms and conditions of an Option Agreement (see below).
<PAGE>
Option Agreement: The written agreement (and any amendment or supplement
thereto) between the Company and a Key Person designating the terms and
conditions of an Option.
Option Shares: The shares of Common Stock underlying an Option granted to a
Key Person.
Optionee: A Key Person who has been granted an Option.
Recipient: A Key Person who has been granted a Stock Grant.
Related Company: Any subsidiary or affiliate of the Company. The
determination of whether a corporation is a Related Company shall be made
without regard to whether the entity or the relationship between the entity and
the Company now exists or comes into existence hereafter.
Stock Grant: The grant of shares of the Company's Common Stock to a Key
Person pursuant to the terms of the Plan.
Stock Grant Shares: The shares of Common Stock represented by a Stock
Grant.
2. Purpose and Scope.
------------------
(a) The purpose of the Plan is to advance the interests of the Company and
its stockholders by affording Key Persons, upon whose judgment, initiative and
efforts the Company may rely for the successful conduct of their businesses, an
opportunity for investment in the Company and the incentive advantages inherent
in stock ownership in the Company.
(b) This Plan authorizes the Board to grant Options and make Stock Grants
to Key Persons selected by the Board while considering criteria such as
employmnent position or other relationship with the Company, duties and
responsibilities, ability, productivity, length of service or association,
morale, interest in the Company, recommendations by supervisors, and other
matters.
3. Administration of the Plan.
---------------------------
The Plan shall be administered by the Board. The Board shall have the
authority granted to it under this section and under each other section of the
Plan.
In accordance with and subject to the provisions of the Plan, the Board
shall select the Optionees and Recipients, shall determine (i) the number of
shares of Common Stock to be subject to each Option and/or Stock Grant, (ii) the
time at which each Option and/or Stock Grant is to be granted, (iii) whether an
Option shall be granted in exchange for the cancellation and termination of a
previously granted option or options under the Plan or otherwise, (iv) the
2
<PAGE>
purchase price for Option Shares, (v) the option period, (vi) the consideration
(if any) for a Stock Grant, and (vii) the manner in which an Option becomes
exercisable. In addition, the Board shall fix such other terms of each Option
amid/or Stock Grant as it may deem necessary or desirable. The Board shall
determine the form of Option Agreement to evidence each Option.
The Board from time to time may adopt such rules and regulations for
carrying out the purposes of the Plan as it may deem proper and in the best
interests of the Company.
The Board may from time to time make such changes in and additions to the
Plan as it may deem proper and in the best interest of the Company provided,
however, that no such change or addition shall impair any Option or Stock Grant
previously granted under the Plan.
Each determination, interpretation or other action made or taken by the
Board shall be final, conclusive and binding on all persons, including without
limitation, the Company, the Related Companies, the stockholders, directors,
officers and employees of the Company and the Related Companies, and the
Optionees, the Recipients and their respective successors in interest.
4. The Common Stock.
-----------------
The Board is authorized to appropriate, grant Options and make Stock Grants
with respect to, and otherwise issue and sell for the purposes of the Plan, a
total number not in excess of 1,000,000 shares of Common Stock, either treasury
or authorized but unissued, or the number and kind of shares of stock or other
securities which in accordance with Section 9 shall be substituted for the
1,000,000 shares or into which such 1,000,000 shares shall be adjusted. All or
any unsold shares subject to an Option that for any reason expires or otherwise
terminates may again be made subject to Options and Stock Grants under the Plan.
5. Eligibility.
------------
Options and Stock Grants shall be granted only to Key Persons. Key Persons
may hold more than one Option or Stock Grant under the Plan and may hold Options
and Stock Grants under the Plan and options granted pursuant to other plans or
otherwise.
6. Option Price.
-------------
The Board shall determine the purchase price for the Option Shares;
provided, however, that the purchase price to be paid by Optionees for Option
Shares shall not be less than one hundred percent of the Fair Market Value of
the Option Shares on the Date of Grant.
3
<PAGE>
7. Duration and Exercise of Options.
---------------------------------
(a) The option period shall commence on the Date of Grant and shall be up
to 10 years in length subject to the limitations in this Section 7 and the
Option Agreement.
(b) During the lifetime of the Optionee, the Option shall be exercisable
only by the Optionee. Any Option held by an Optionee at the time of his death
may be exercised by his estate only within six months of his death or such
longer period as the Board may determine.
(c) The Board may determine whether an Option shall be exercisable as
provided in Paragraph (a) of this Section 7 or whether the Option shall be
exercisable in installments only; if the Board determines the latter, it shall
determine the number of installments and the percentage of the Option
exercisable at each installment date. All such installments shall be cumulative.
(d) In the case of an Optionee who is an employee of the Company or a
Related Company, if, for any reason, other than the Optionee's death, the
Optionee ceases to be employed by either the Company or a Related Company, any
option held by the Optionee at the time his employment ceases may be exercised
within 90 days after the (late that his employment ceased, (subject to the
limitations of Paragraph (a) above), but only to the extent that the option was
exercisable according to its terms on the dlate the Optionee's employment
ceased. After such 90 day period, any unexercised portion of an Option shall
expire.
(e) Notwithstanding the provision of Paragraph (i) of this Section 7, in
the case of an Optionee who is an employee of the Company or a Related Company,
if the Optionee's employment by the Company or a Related Company ceases due
to the Company's or Related Company's termination of such Optionee's employment
for cause, any unexercised portion of any Option held by the Optionee shall
immediately expire.
(f)) Each Option shall be exercised in whole or in part by delivering to
the office of the Treasurer of the Company written notice of the number of
shares with respect to which the Option is to be exercised and by paying in full
the purchase price for the Option Shares purchasedl as set forth in Section 8;
provided, that an Option may not be exercised in part unless the purchase price
for the Option Shares Purchased is at least $1,000.00.
8. Payment for Option Shares.
--------------------------
If the purchase price of the Option Shares purchased by any Optionee at one
time exceeds $2,000, the Board may permit all or part of the purchase price
for the Option Shares to be paid by delivery to the Company for cancellation
shares of the Company's Common Stock previously owned by the Optionee with a
Fair Market Value as of the date of the payment equal to the portion of the
purchase price for the Option Shares that the Optionee does not pay in cash. In
the case of all other Option exercises, the purchase price shall be paid in cash
or certified funds upon exercise of the Option.
4
<PAGE>
9. Change in Stock, Adjustments Etc.
---------------------------------
In the event that each of the outstanding shares of Common Stock (other
than shares held by dissenting stockholders that are not changed or exchanged)
should be changed into, or exchanged for, a different number or kind of shares
of stock or other securities of the Company, or, if further changes or exchanges
of any stock or other securities into which the Common Stock shall have been
changed, or for which it shall have been exchanged, shall be made (whether by
reason of merger, consolidation, reorganization, recapitalization, stock
dividends, reclassification, split-up, combination of shares or otherwise), then
there shall be substituted for each share of Comumnon Stock that is subject to
the Plan, the number and kind of shares of stock or other securities into which
each outstanding share of Common Stock (other than shares held by dissenting
stockholders which are not changed or exchanged) shall be so changed or for
which each outstanding share of Common Stock (other than shares held by
dissenting stockholders) shall be so changed or for which each such share shall
be exchanged. Any securities so substituted shall be subject to similar
successive adjustments. In the event of any such changes or exchanges, the
Board shall determine whether, in order to prevent dilution or enlargement of
rights, an adjustment should be made in the number, kind, or option price of
the shares or other securities then subject to an Option or Stock Grant granted
pursuant to the Plan and the Board shall make any such adjustment, and such
adjustments shall be made and shall be effective and bindling for all purposes
of the Plan.
10. Relationship to Employment.
--------------------------
Nothing contained in the Plan, or in any Option or Stock Grant granted
pursuant to the Plan, shall confer upon any Optionee or Recipient any right with
respect to employment by the Company, or interfere in any way with the right of
the Company to termninate the Optionee's or Recipient's employment or services
at any time.
11. Nontransferability of Option or Stock Grant.
--------------------------------------------
No Option or Stock Grant granted under the Plan shall be transferable
by the Optionee or Recipient, either voluntarily or involuntarily, except by
will or the laws of descent and distribution, and any attempt to do so shall be
null and void.
12. Rights as a Stockholder.
------------------------
No person shall have any rights as a stockholder with respect to any share
covered by an Option or Stock Grant until that person shall become the holder of
record of such shares and, except as provided in Section 9, no adjustments
shall be made for dividends or other dlistributions or other rights as to which
there is an earlier record date.
5
<PAGE>
13. Securities Laws Requirements.
-----------------------------
No Option Shares or Stock Grants shall be issued unless and until, in the
opinion of the Company, any applicable registration requirements of the
Securities Act of 1933, as amended, any applicable listing requiremnents of any
securities exchange on which stock of the same class is then listed, and any
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery, have been fully complied with. Each Option and each
Option and Stock Grant Share certificate may be imprinted with legends
reflecting federal and state securities laws restrictions and conditions, and
the Company may comply therewith and issue "stop transfer" instructions to its
transfer agent and registrar in good faith without liability.
14. Disposition of Shares.
----------------------
Each Optionee, as a condition of exercise, and each Recipient shall
represent, warrant and agree, in a form of written certificate approved by the
Company, as follows: (a) that all Option and Stock Grant Shares are being
acquired solely for his own account and not on behalf of any other person or
entity; (b) that no Option or Stock Grant Shares will be sold or otherwise
distributed in violation of the Securities Act of 1933, as amended, or any other
applicable federal or state securities laws; (c) that if he is subject to
reporting requiremnents under Section 16(a) of the Securities Exchange Act of
1934, as amended, he will (i) not sell any shares of Common Stock within six
months of the date he acquired any Option or Stock Grant, (ii) furnish the
Company with a copy of each Form 3, 4 or 5 filed by him, and (iii) timely file
all reports required under the federal securities laws; andl (d) that he will
report all sales of Option and/or Stock Grant Shares to the Company in writing
on a form prescribed by the Company.
15. Effective Date of Plan; Termination Date of Plan.
-------------------------------------------------
The Plan shall be deemedl effective as of March 1, 1999. The Plan shall
terminate at midnight on February 27, 2009 except as to Options previously
granted and outstanding under the Plan at that time. No Options or Stock Grants
shall be granted after the date on which the Plan terminates. The Plan may be
amended, extended, abandoned or terminated at any earlier time by the Board,
except with respect to any Options or Stock Grant then outstanding under the
Plan.
16. Other Provisions.
-----------------
The following provisions are also in effect under the Plan:
(a) The use of a masculine gender in the Plan shall also include within its
mneaning the feminine, and the singular may include the plural, and the plural
may include the singular, unless the context clearly indicates to the contrary.
(b) Any expense of administering the Plan shall be borne by the Company.
6
<PAGE>
(c) This Plan shall be construed to be in addition to any and all other
compensation plans or programs. The adoption of the Plan by the Board shall not
be construed as creating any limitations on the power or authority of the Board
to adopt such other additional incentive or other compensation arrangements as
the Board may deem necessary or desirable.
(d) The validity, construction, interpretation. administration and effect
of the Plan and of its rules and regulations, and the rights of any and all
personnel having or claiming to have an interest therein or thereunder shall be
governed by and determined exclusively and solely in accordance with the laws
of the state of Colorado.
IN WITNESS WHEREOF, the Company adopts this Plan on the date first set
forth above.
MEDIACOMM BROADCASTING SYSTEMS, INC.
By:
/s/ Don E. Montague
- ------------------------------------------
Don E. Montague, President
7
Exhibit 10.5
MediaComm Broadcast Systems, Inc.
Employment Agreement
925 W. Kenyon Ave. #15
Englewood, Colorado 80110
This Agreement is made on December 01, 1998, by and between MediaComm
Broadcast Systems, Inc. (hereinafter "Company"), and Don E.Montague
(hereinafter "Employee").
I. Employee Responsibility:
-----------------------
A. Employee is responsible for carrying out the duties as President of
MediaComm Broadcasting Systems, Inc.
II. Compensation:
-------------
A. Employee will receive a no salary for the first eighteen months of
service for MediaComm Broadcasting Systems, Inc.
III. Termination:
------------
A. Compensation upon termination:
1). Voluntary termination (Employee resignation):
Salary will be paid to Employee up to and including the last day
on employment.
2). Involuntary termination (Employee fired by the Company):
Salary will be paid to Employee up to and including the last day
of employment.
B. Company Property:
Upon termination all company materials and property will be
returned by Employee to Company.
C. Company Clientele:
Employee agrees that, if terminated (voluntarily or
involuntarily), Employee will not, for a period of three months,
call upon any client of the Company.
In witness whereof, the parties below have executed this Agreement in Denver,
Colorado, on this date indicated above.
Contractor
/s/ Don E. Montague 12-1-98
- ----------------------------------- -------------------------------
Signature Date
MediaComm Broadcasting Systems, Inc.
/s/ Don E. Montague 12-1-98
- ----------------------------------- -------------------------------
Don E. Montague Date
President
Exhibit 10.6
925 E. Kenyon Ave. #15
Englewood, CO 80110 USA
E.Mail:[email protected]
Phone: 303 . 762 . 6446
Fax: 303 . 762 . 6448
1. 800 . 367 . 1275
MediaComm Broadcasting Systems, Inc.
- ------------------------------------
This Agreement, made on August 15, 1999, by and between MediaComm
Broadcasting Systems, Inc. (hereinafter MBSI), and Steve Montague
(hereinafter Employee). This agreement replaces any previous agreements.
1. Employee Responsibility:
a. Employee is responsible for carrying out the duties as
Vice President and Director of MBSI.
2. Compensation:
a. Employee will receive a salary of $50,000 per year.
b. Employee is entitled to participate in employee benefit
plans maintained by MBSI, including insurance, stock
option and profit sharing plans.
c. Employee can renew his contract from year-to-year unless
terminated by either himself or MBSI upon not less than 14
days advance written notice.
3. Termination:
a. Compensation upon termination:
i. Voluntary termination (Employee resignation)-
Salary will be paid to Employee up to and
including the last day on employment.
ii. Involuntary termination (Employee fired by
company)-Salary will be paid to Employee up to
and including the last day of employment.
b. Company Property- Upon termination all company materials
and property will be returned by Employee to MBSI.
c. Company Clientele: Employee agrees that, if terminated
(voluntarily of involuntarily), Employee will not, for a
period of three months; call upon any client of the
company.
In witness whereof, the parties below have executive this Agreement in
Denver, Colorado, on date indicated above.
Employee
/s/ Steve Montague 8-15-99
- ---------------------------- -------------------------------
Steve Montague Date
Signature
MBSI
/s/ Don Montague August 15, 1999
- ---------------------------- --------------------------------
Don Montague Date
Signature
Exhibit 10.7
MEDIACOMM BROADCASTING SYSTEMS, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into as
of October 15, 1999 (the "Date of Grant"), by and between MediaComm Broadcasting
Systems, Inc., a Colorado corporation (the "Company"), and Jennifer Lausen
("Optionee").
WITNESSETH:
WHEREAS, effective August 25, 1999, the Board of Directors determined that
the Optionee should receive an option to purchase shares of the Company's Common
Stock under the Company's Non-Qualified Stock Option and Stock Grant Plan in
order to provide the Optionee with an opportunity for investment in the Company
and additional incentive to pursue the success of the Company, said option to be
for the number of shares, at the price per share and on the terms set forth in
this Agreement; and
WHEREAS, Optionee desires to receive an option on the terms and conditions
set forth in this Agreement and agrees to perform the services requested by the
Company.
NOW, THEREFORE, the parties agree as follows:
1. Stock Option Plan. This agreement is granted pursuant to, and is subject
to the terms and conditions of the MediaComm Broadcasting Systems Non-Qualified
Stock Option and Stock Grant Plan dated March 1, 1999 (the "Plan"). All
conditions of the Plan, except as may be modified herein, shall govern the
rights of Optionee under this Agreement.
2. Grant of Option. The Company hereby giants to Optionee, as a matter of
separate agreement and not in lieu of salary or any other compensation for
service, and subject to the vesting schedule set forth in Section 3, the right
and option (the "Option") to purchase all or any part of an aggregate of 75,000
shares of reserved authorized and unissued no par value Common Stock of the
Company subject to adjustment as hereinafter set forth (the "Option Shares"),
pursuant to the terms and conditions set forth in this Agreement.
3. Vesting Schedule. The grant of the Option is subject to a vesting
schedule hereinafter set forth and is dependent on the Optionee remaining an
employee of the Company at all times during the time set forth in such vesting
schedule, subject only to vacation, sick leave, leaves of absence and other
absence permitted by the Company in accordance with its policies applicable
generally to employees. Optionee cbeame an employee of the Company on or about
April 1, 1999. Accordingly, the vesting schedule to which the grant of the
Option shall be subject as is follows:
Number of Shares Date Exercisable
---------------- -----------------
15,000 April 1, 2000
15,000 April 1, 2001
15,000 Apri1 1, 2002
15,000 April 1, 2003
15,000 April 1, 2004
Separation from employment by Optionee for any reason prior to any of the
foregoing dates shall void any options not vested prior thereto. Any options
previously vested shall also be subject to the terms and
1
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conditions of Section 7 hereof.
4. Option Price. At any time when shares are to be purchased pursuant to
the Option, the purchase price for each Option Share shall be $0.35 subject to
adjustment as hereinafter set forth (the "Option Price").
5. Option Period. Subject to Section 7 hereof, the Option shall be
exercisable beginning on the date of vesting described in Section 3 and
continuing until April 1, 2005.
65. Exercise of Option.
-------------------
(a) The Option may be exercised by delivering to the Company:
(i) a Notice and Agreement of Exercise of Option, substantially in
the form attached hereto as Exhibit A, specifying the number of
Option Shares with respect to which the Option is exercised; and
(ii) full payment in cash of the Option Price for such shares.
(b) Notwithstanding the foregoing, an Option may not be exercised in part
unless the purchase price of the Option Shares purchased is at least $1,000.00.
(c) Promptly upon receipt of the Notice and Agreement of Exercise and the
finial payment of the Option Price by the Optionee (including payment or
provision for payment of any applicable withholding or similar taxes), the
Company shall deliver to the Optionee a properly executed certificate or
certificates presenting the Option Shares being purchased.
(d) The Optionee shall report all sales of Option shares to the Company in
writing on a form prescribed by the Company. Based upon the report of sales
submitted by the Optionee, the Company may make any withholding required by
state or Federal income tax laws.
7. Termination of Employment. Exercise of the Option shall at all times be
subject to the terms and conditions of Section 7 of the Plan, the terms and
conditions of which are incorporated herein by reference in their entirety. Such
provisions include acceleration of the exercise period in the event the Optionee
shall die, become disabled or otherwise separate from employment with the
Company. Optionee hereby acknowledges receipt of a copy of the Plan, and agrees
to be bound by the terms and conditions hereof, in addition to the terms and
conditions of this Agreement.
8. Transferbility of Option. The Option shall not be transferable except by
will or the laws of descent and distribution, and any attempt to do so shall
void the Option. Any transfer by will or intestate laws shall be subject to the
provisions of Paragraph 7.
9. Adjustment By Stock Split, Stock Dividend, Etc. If at any time the
Company increases or decreases the number of its outstanding shares of Common
Stock, or changes in any way the rights and privileges of such shares, by means
of the payment of a stock dividend or the making of any other distribution on
such shares payable in its Common Stock, or through a stock split or subdivision
of shares, or a consolidation or combination of shares, or through a
reclassification or recapitalization involving its Common Stock included in the
Option and/or the exercise price of the Option shall be increased, decreased or
changed in like manner so that the Optionee shall be entitled to substantially
the same rights as set forth in this Agreement.
2
<PAGE>
10. Common Stock To Be Received Upon Exercise. Optionee understands that
the Option Shares represent restricted securities within the meaning of the
Securities Act of 1933, have not been registered and that the Company is under
no obligation to register the Option Shares under the 1933 Act, and that in the
absence of any such registration, the Option Shares cannot be sold unless they
are sold pursuant to an exemption from registration under the Act. The Company
is under no obligation to comply, or to assist the Optionee in complying with
any exemption from such registration requirement, including supplying the
Optionee with any information necessary to permit routines sales of the Stock
under Rule 144 of the Securities and Exchange Commission. Optionee also
understands that with respect to Rule 144, routine sales of securities made in
reliance upon such Rule can only be made in limited amounts in accordance with
the terms and conditions of the Rule, and that in cases in which the Rule is
inapplicable, compliance with either Regulation A or another disclosure
exemption under the Act will be required. Thus, the Option Shares will have to
be held indefinitely in the absence of registration under the Act or an
exemption from registration.
Furthermore the Optionee fully understands that the Option Shares have not
been registered under the Act and that they will be issued in reliance upon an
exemption which is available only if Optionee acquiressuch shares for investment
and not with a view to distribution. Optionee is familiar with the phrase
"acquired for investment and not with a view to distribution" as it relates to
the Act and the special meaning given to such term in various releases of the
Securities and Exchange Commission.
The forgoing restrictions or notices thereof may be placed on the
certificates representing the Option Shares purchased pursuant to the Option and
the Company may refuse to issue the certificates or to transfer the shares on
its books unless it is satisfied that no violation of such restrictions will
occur.
11. Privilege of Ownership. Optionee shall not have any of the rights of a
shareholder with respect to the shares covered by the Option except to the
extent that one or more certificates for such shares hall be delivered to him
upon exercise of the Option.
12. Notices. Any notices required or permitted to be given under this
Agreement shall be in writing and they shall be deemed to be given upon receipt
by sender or sender's return receipt for acknowledgment of delivery of said
notice by postage prepaid registered mail. Such notice shall be addressed o the
party to be notified as shown below:
Company: MediaComm Broadcasting Systems, Inc.
925 W. Kenyon #15
Englewood, Colorado 80112
Optionee: Jennifer Lausen
P.O. Box 521
Green Mountain Falls, Colorado 80819
Any party may change its address for purposes of this paragraph by giving
the other parties written notice of the new address in the manner set forth
above.
13. Miscellaneous. This Agreement and the Plan constitutes the entire
understanding of the parties with respect to the subject matter herein. This
Agreement shall be governed by the laws of the State Colorado. There are no
representations, promises, warranties, covenants or undertakings other than
those expressly set forth herein. No modification, waiver or termination of
any of the terms herein shall be valid unless in writing and executed with the
3
<PAGE>
same formality as this Agreement. No waiver by either party of any breach or
default hereof by the other shall be deemed to be a waiver of any preceding or
succeeding breach or default hereof, and no waiver shall be operative unless the
same shall be in writing. The headings contained in this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof. Should any provision of this agreement be declared invalid by
a court of competent jurisdiction, the remaining provisions hereof shall remain
in full force and effect regardless of such declaration. In the event of any
dispute or litigation between the parties, the prevailing party shall be
entitled to reasonable attorneys fees and costs. Time is of the essence.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
set forth below, to be effective as of the date and year first above written.
COMPANY: OPTIONEE:
MEDIACOMM BROADCASTING SYSTEMS, INC.
By:
/s/ Steve Montague /s/ Jennifer Lausen
- ------------------------------------ ---------------------------------
4
Exhibit 10.9
LICENSE AGREEMENT
THIS LICENSE AGREEMENT is made as of the 23rd day of November 1998.
BETWEEN:
INFORMATION HIGHWAY, INC.,
of #185, 10751 Shellbridge Way
Richmond, B.C. V6X2W8
(hereinafter referred to as "IHI")
OF THE FIRST PART
AND:
MEDIACOMM BROADCASTING SYSTEMS, INC.
of 925 W. Kenyon Ave., #15
Englewood, CO 80110
(hereinafter referred to as "MediaComm")
OF THE SECOND PART
WHEREAS:
A. IHI is in the business of providing online systems operations services
comprised generally of loading, storing and retrieving data and making the
stored data available through the Internet to online users;
B. IHI has developed and owns all rights to market and license the IHI Gateway
(as hereinafter defined);
C. MediaComm desires to acquire the License (as hereinafter defined) to
incorporate customized versions of the IHI Gateway on its ISP Websites,
subject to the terms and conditions herein;
D. IHI is willing to grant the License to MediaComm;
NOW THEREFORE, in view of the premises and in consideration of the mutual
covenants and agreements hereinafter set forth, the parties hereto do hereby
covenant and agree as follows:
DEFINITIONS
1. As used herein, the following terms shall have the following meanings:
<PAGE>
(a) "Agreement" shall mean this License Agreement and all other documents
which are made a part thereof;
(b) "Dollar" or "$" shall mean United States dollars;
(c) "Effective Date" shall mean the date of execution of this Agreement by
both parties hereto;
(d) "IHI Gateway" shall mean an Internet Worldwide Website operated as a
Web Portal and developed and maintained by IHI in a format similar to
the Website currently with a universal resource locator of
toronto.theexecutive.com or any updated or expanded variation thereof;
(e) "ISP" shall mean an Internet Service Provider or an association or
bank or any commercial customer with a potential of more than 250
customers;
(f) "Intellectual Property Rights" shall mean, with respect to any data,
device, or other asset of any kind, all copyright, patent, trade
secret, moral, termination, authorship and other proprietary rights
relating to any such data, device, object code, source code or other
asset including, without limitation, all rights necessary for the
worldwide development, manufacture, modification, enhancement, sale,
licensing, use, reproduction, publishing and display of such data,
device, object code, source code or other asset;
(g) "License" shall mean the non-transferable and non-exclusive right and
license to incorporate a version of an IHI Gateway to MediaComm
customers or the customers of ISP's owned or licensed to MediaComm
worldwide, at the sole discretion of IHI, which customized version
will be accessed by users of MediaComm and its ISP Internet sites;
(h) "Maintenance Fee" shall mean a monthly fee of Three Hundred Dollars
($300.00) per month; and
(i) "Revenue" shall mean all revenue generated by the IHI Gateways, after
payment of any License Fees, Maintenance Fees or set-up fees payable
hereunder, and less any user fees payable by customers of MediaComm
and/or its ISP's.
GRANTING OF LICENSE
2. IHI hereby grants the License to MediaComm on the terms and conditions set
out herein for an initial term of two years (the "Initial Term") from the
Effective Date. MediaComm will not use nor permit the use of the IHI
Gateway for any purpose other than that expressly authorized under this
Agreement. The License does not relate to the licensing by IHI of its
software or other technology for use or access by MediaComm or any third
party other than the right to access, market and distribute the IHI
Gateway.
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<PAGE>
3. IHI reserves the right to decline the Licensing of the IHI Gateway to any
ISP of MediaComm outside North America if the granting of the License would
create an unreasonable amount of time and effort by IHI in setting up the
IHI Gateway because of language or cultural differences.
RENEWAL OF LICENSE
4. After the expiry of the Initial Term of the License, the License may be
renewed for successive two year terms, provided that the parties hereto
mutually agree in writing to extend the term of the License.
SET UP FEE
5. In consideration for the creation, design and set up of the IHI Gateway for
each new ISP of MediaComm, MediaComm agrees to pay to IHI a set-up fee of
Two Thousand Five Hundred Dollars ($2,500.00), which fee shall be payable
as follows:
(a) the sum of One Thousand Two Hundred and Fifty Dollars ($1,250.00) in
advance; and
(b) the balance of One Thousand Two Hundred and Fifty Dollars ($1,250.00)
within thirty (30) days after the set up has been completed and
activated.
6. In the event that any new ISP requires unusual or extra options than those
provided on the IHI Gateway at the time of set up and the time required for
set up exceeds 32 hours, MediaComm agrees to pay to IHI an hourly fee of
$100.00 per hour thereafter.
MONTHLY MAINTENANCE FEE
7. IHI will maintain and update on a daily basis the IHI Gateway for each ISP.
In consideration therefor, MediaComm agrees to pay the Maintenance Fee to
IHI for each ISP, which Maintenance Fee is due and payable within five days
of the end of each month.
8. IHI may waive, in its sole discretion, the Maintenance Fee for any ISP that
has more than Two Thousand Five Hundred (2,500) paying subscribers to the
IHI Gateway.
TECHNICAL SUPPORT FEE
9. IHI shall provide technical support to each ISP of MediaComm and all their
customers, in consideration for which MediaComm agrees to pay a monthly
technical support fee to IHI at a rate of Two Dollars ($2.00) per user of
each ISP, which technical support fee is due and payable within five days
of the end of each month.
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<PAGE>
REVENUE
10. Any and all Revenue generated by the IHI Gateways, whether by way of
banners, advertising or otherwise shall be for the sole and exclusive
benefit of IHI.
ADVERTISING
11. MediaComm shall be entitled to the exclusive use of the header space/ad
banner on its customized website for the purposes of advertising, all of
which revenues shall be for the sole and exclusive benefit of MediaComm,
unless MediaComm request that IHI make arrangements for an advertiser, in
which case 50% of the revenues shall be for the benefit of MediaComm and
the balance of 50% of the revenues shall be for the benefit of IHI.
EXPENSES
12. Except as otherwise specifically provided in this Agreement, each party
shall be solely responsible for any expenses incurred by it in the
performance of its obligations pursuant to this Agreement.
AVAILABILITY OF IHI GATEWAY
13. The IHI Gateway shall be available to users 24 hours per day, 365 days per
year, except for routine maintenance, communication interruptions beyond
the control of IHI, and unscheduled downtime.
OWNERSHIP OF IHI GATEWAY
14. MediaComm acknowledges that IHI owns all right, title and interest in and
to material that is included in the IHI Gateway. Except as expressly
provided in this Agreement, MediaComm shall not sell, transfer, publish,
disclose, display, license or otherwise make available to others any part
of the IHI Gateway. All Intellectual Property Rights and all other property
rights of any nature in the IHI Gateway are, shall be and shall remain with
IHI. IHI shall have all authorship rights in the IHI Gateway. The IHI
Gateway is and shall remain the sole and exclusive property of IHI, with
IHI having the right to obtain and hold in its name, patents, copyright
registrations or trademark or service mark registrations or such other
protection as may be appropriate to the subject matter, and any extensions
and renewals thereof.
REPRESENTATIONS AND WARRANTIES OF IHI
15. IHI hereby represents and warrants to MediaComm, that:
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<PAGE>
(a) IHI has the full right and power to grant the License in the manner
set forth herein; and
(b) there are no outstanding agreements, assignments or encumbrances
inconsistent with the terms hereof.
INDEMNIFICATION
16. MediaComm shall indemnify and hold IHI harmless of nay claims in any way
connected with MediaComm's use of the IHI Gateway or for any loss or damage
arising out of the use and/or incorporation of the IHI Gateway in any
MediaComm Website or Website of MediaComm's ISP's. MediaComm agrees not to
bring suit against IHI, or its employees or agents and not to co-operate in
any way with a third party to bring suit against IHI, or its employees or
agents, based on any kind of copyright infringement relating to the IHI
Gateway.
DISCLAIMER
17. IHI makes no warranty or representation to MediaComm or to any third party
as to the performance or operation of IHI's computer and related hardware,
hardware configurations, operations systems and related firmware, the
database content of the IHI Gateway or related products or services, any
implied warranties (including without limitation the implied warranties of
merchantability, fitness for a particular purpose and good and workmanlike
manner) are hereby excluded. Both parties agree that IHI's liability (under
breach of contract, negligence, strict liability or otherwise), if any, for
any damages relating to any such product, service (or the malfunction
thereof) or this Agreement shall be limited to the lesser of (at IHI's sole
discretion);
(a) the actual amounts received by IHI for such product or service during
the three month period preceding the event causing such damages, or
(b) the cost of repair,
and will in no event include consequential, incidental, indirect, special
or other damages of any kind, including loss of profits, even if IHI has
been advised of the likelihood of the occurrence of such damages. In no
event shall IHI be liable to MediaComm, users of the IHI gateway or any
third party for any damages resulting from the content or nature of the
information and data contained on the IHI Gateway, or the results of any
search therefor. IHI may cause to be placed on the IHI Gateway any
disclaimers of warranties and liabilities it deems reasonable for its or
MediaComm's protection. There are no third party beneficiaries to this
Agreement.
TERMINATION
18. Unless terminated sooner as provided herein, this Agreement shall remain in
force for an initial term of two years from the Effective Data and can be
renewed for successive two year terms as set out in Section 4 herein.
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<PAGE>
19. Either party shall have the right to terminate this Agreement upon a breach
by the other party of any one of its obligations or covenants contained
herein and upon not less than ninety days prior written notice to the other
party specifying the nature of such breach, and a failure to remedy such
breach within such ninety days after receiving such written notification,
this Agreement shall then terminate at the close of business ninety days
after such notice or on the latter day specified in such notice.
20. IHI shall have the right, at its sole discretion, to terminate this
Agreement in the event that the License Fees are not paid within Ninety
(90) days of invoicing by IHI.
21. IHI or MediaComm shall have the right to terminate this Agreement forthwith
if the other shall sell its business and/or the bulk of its assets related
thereto, or if a substantial change of control of either shall occur, by
giving written notice after receiving notice of said sale or change or
notice of an irrevocable intention to make such a sale or change.
22. The expiration, non-renewal or termination in accordance with this
Agreement by either party for any reason shall not give rise to any
liability on the part of the terminating party for compensation,
reimbursement or damages on account of the loss of prospective profits or
anticipated sales or on account of expenditures, investments, leases,
property improvements or commitments in connection therewith, or otherwise,
and such expiration, non-renewal or termination shall not affect the
liability of one party to the other on account of business previously
consummated hereunder and final settlement thereof shall be on the same
basis as if this Agreement were continuing.
RELATIONSHIP OF THE PARTIES
23. Nothing in this Agreement shall be construed to created any franchise,
joint venture, trust or commercial partnership or any other partnership
between the parties hereto for any purpose whatsoever.
SUCCESSORS AND ASSIGNABILITY
24. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors.
25. MediaComm shall not assign, sublicense or otherwise grant to a third party
the License or any rights thereunder or under this Agreement without prior
written authorization from IHI.
SEVERABILITY
26. If any provision of this Agreement is held by a competent court to be
invalid, illegal or unenforceable for any reason or in any respect
whatsoever, such invalidity, illegality or unenforceability shall not
affect any other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein. IHI and MediaComm hereby agree, however, to
negotiate an equitable amendment of this Agreement if a material provision
is adversely affected.
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<PAGE>
WAIVER
27. The failure of either party to insist in any one or more instances upon the
strict performance of any one or more of the obligations of this Agreement
or to exercise any election herein contained, shall not be construed as a
waiver or relinquishment for the future of the performance of such one or
more obligations of this Agreement or of the right to exercise such
election, but the same shall continue and remain in full force and effect
with respect to any subsequent breach, act or omission.
ENTIRE AGREEMENT
28. This Agreement shall constitute the entire Agreement between the parties
hereto and all prior or collateral agreements, understandings or
representations of any kind are hereby terminated, except that existing
Confidentiality and Non-Disclosure Agreements shall remain in full force
and effect and are incorporated herein by reference as if fully set forth
herein.
MODIFICATION OF AGREEMENT
29. This Agreement and any modification or waiver of any provision hereof shall
be binding only if set forth in writing and signed by both parties hereto
and shall be effective only to the extent set forth in such modification or
waiver and for the particular occasion.
NOTICE
30. Any notice required or permitted under the terms of the Agreement will be
delivered in person or mailed or sent by courier service and will be deemed
given when either mailed or delivered by courier service or personally
delivered.
To MediaComm: Don Montague
MediaComm Broadcasting Systems, Inc.
925 W. Kenyon Ave., #15
Englewood, CO 80110
To IHI: John Robertson, President
Information Highway, Inc.
#185, 10751 Shellbridge Way
Richmond, B.C. V6X2W8
or such other address as either party shall give written notice to the
other party.
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<PAGE>
HEADINGS
31. Headings used herein are for convenience only and shall not be considered
as part of, or affect the construction or interpretation of any provision
of this Agreement.
GOVERNING LAW
32. This Agreement shall be construed, interpreted and applied in accordance
with the laws of the State of Washington and the United States of America,
and all matters shall be resolved solely in the United States of America.
IN WITNESS WHEREOF, the parties hereunder have executed this Agreement on the
1st day of January 1999.
INFORMATION HIGHWAY, INC. MEDIACOMM BROADCASTING SYSTEMS, INC.
/s/ J.G. Robertson /s/ Don Montague
- ------------------------------ ---------------------------------------
Authorized Signatory Authorized Signatory
John G. Robertson Don Montague
- ------------------------------ ---------------------------------------
Name Name
President President
- ------------------------------ ---------------------------------------
Title Title
EXHIBIT 10.10
MEDIACOMM BROADCASTING SYSTEMS, INC.
INTERNET SERVICE PROVIDER
PARTICIPATION AGREEMENT
THIS AGREEMENT, is made on this 23rd day of June, 1999 by and between MEDIACOMM
BROADCASTING SYSTEMS, INC., a Colorado Corporation with its principal place of
business at 925 West Kenyon Avenue, Suite 15, Englewood, Colorado, 80110,
(hereinafter referred to as "SHOPBIZ.COM"), and Image Net, Inc., with its
principal place of business as 100 E. 3rd St., Loveland, Colorado 80537,
(hereinafter referred to as "ISP").
Whereas, SHOPBIZ.COM wishes to provide Internet Content as described herein
which may or may include the development of marketing and the marketing of the
ISP's products or services.
Now therefore, in consideration of the mutual covenants contained herein, the
above parties agree as follows:
Section 1
MARKETING SERVICES
1.01 SHOPBIZ.COM shall use its Internet Content (denver.theexecutive.com) and
marketing ability to market ISP's product. ISP hereby grants to SHOPBIZ.COM the
non-exclusive right to market the product generally described as Internet
Services (Internet Access), (hereinafter referred to as the "PRODUCT").
SHOPBIZ.COM shall use a "best effort" attempt to market the PRODUCT on
shopbiz.com, denver.theexecutive.com, and/or other Web Sites that SHOPBIZ.COM
and ISP jointly determine are best suited for the marketing of the PRODUCT. As
compensation for the marketing efforts expended by SHOPBIZ.COM on behalf of the
ISP, ISP hereby agrees to pay SHOPBIZ.COM compensation as described in Section
3, Distribution of Proceeds, of this Agreement.
1.02 The compensation also included "Click Throughs" from the URL
denver.theexecutive.com that directs subscribers to IPS, and subscribers become
a paying member of ISP.
1.03 SHOPBIZ.COM hereby grants to ISP the non-exclusive right to use the
Internet Content Web Site, denver.theexecutive.com as its home page content.
1.04 ISP agrees to provide SHOPBIZ.COM with sales literature and marketing items
the ISP have developed, for use by SHOPBIZ.COM in its marketing efforts.
1.05 ISP agrees to update the Internet Content Home Page when necessary and at
no cost to SHOPBIZ.COM.
Section 2
Internet Marketing
2.01 ISP understands that all customer names generated as a result of
SHOPBIZ.COM'S total efforts shall always remain the property of SHOPBIZ.COM and
ISP. However, ISP may use such names for its own marketing program(s).
Agreement Page 1 of 4
<PAGE>
Section 3
Distribution of Proceeds
3.01 In consideration of the selling prices the distribution of proceeds shall
be as follows:
1) SHOPBIZ.COM will receive $17.95 for each sale of the PRODUCT per user.
2) SHOPBIZ.COM will receive $4.00 for each sale of the PRODUCT per user
per month as the user continues with ISP, after the first month.
3) SHOPBIZ.COM and ISP will share all future "Banner" ad revenue on the
URL denver.theexecutive.com equally (50% to SHOPBIZ.COM and 50% to
ISP).
Section 4
Processing and Fulfillment of Order
4.01 For each order received, ISP shall forward to SHOPBIZ.COM the following:
1) The date ISP received the order.
2) The name, address, phone number, and e-mail address of the customer.
3) The respective dollar amounts described in Section 3, on each Tuesday
for sales through the previous Monday through Friday sales week.
4.01 SHOPBIZ.COM reserves the right to audit the books of ISP to determine the
accuracy of the previous quarters sales. The audit may or may not take place one
month following the end of each quarter.
Section 5
Sales Tax
5.01 For each order received from a resident of the State of Colorado, ISP shall
have the responsibility to collect applicable sales tax, which represents such
States applicable sales tax. ISP shall then timely forward this amount of tax
collected to the appropriate State Agency of this State.
Section 6
General Terms
6.01 Termination. The term of this agreement shall commence upon the date of
execution of the AGREEMENT and shall continue for one (1) year, unless
terminated earlier by either party for just cause of breach of contract, by
written notice to the other party who must satisfactorily rectify said
information within fourteen (14) days of receipt of said modification, and if
not satisfactorily rectified, then contract shall become terminated. If not
terminated, and if notice of termination is not given within thirty (30) days
prior to the end of the one (1) year period, this AGREEMENT shall extend for
additional periods each of one (1) year consecutive, subject to termination by
written notice from either party to the other, no less than sixty (60) days
prior to the end of the then current term, subject to the same condition to
remedy breach as stated above.
6.02 Provisions of Termination. Upon the expiration or termination of the
AGREEMENT, the ISP shall process orders for the PRODUCT that were placed prior
to the effective date of expiration or termination. The proceeds from sales
processed following termination or expiration shall continue to be distributed
Agreement Page 2 of 4
<PAGE>
in the same manner as set forth in Sections 1 and 3. SHOPBIZ.COM and the ISP
agree to perform according to the terms and the spirit of this AGREEMENT until
all existing and pending orders for the PRODUCT placed through SHOPBIZ.COM are
filled and all requests for refunds and replacements (if applicable) have been
satisfactorily honored.
6.03 Warranty of Product. The ISP warrants that the quality of their product or
service complies with, meets or exceeds all governmental laws and regulations,
and that it shall additionally acquire or satisfy any and all governmental
licenses, inspections, and/or approvals that are now or may become during the
term of this AGREEMENT, a prerequisite for the offering for sale or sale of the
PRODUCT. Any cost increases as a result of any of the above changes shall be
applied to the purchase price.
6.04 Client Understanding. The ISP understand that digital representation of ISP
PRODUCT on the Internet may or may not be reproduced with or without the consent
of ISP and/or SHOPBIZ.COM. SHOPBIZ.COM cannot be held responsible for such
unauthorized reproductions.
6.05 Indemnification. In the event that the ISP or any of it nominees, in
pursuit of the obligations created under this or any other agreement between the
ISP and SHOPBIZ.COM, subjects SHOPBIZ.COM or any of its nominees, or both, to
possible regulatory action or sanction by governmental agency of any type or any
ligation concerning copyright, trademark/service mark/trade name infringement,
or product or professional liability actions, or any other action, the ISP shall
defend and indemnify in full SHOPBIZ.COM or any of its nominees, or both, for
all costs, fees, penalties, fines, settlements, and judgements incurred by
SHOPBIZ.COM or any of its nominees, or both, including reasonable attorney's
fees, arising as a direct or indirect result of such actions. In the event that
SHOPBIZ.COM or any of its agents or employees in the performance of obligations
under this contract or any other agreement between the ISP and SHOPBIZ.COM
subjects ISP or any of its agents or employees to possible regulatory action or
sanction by governmental agency of any type, or any ligation concerning
copyright, trademark, service mark, trade name infringement, or product or
professional liability actions, or any other action, SHOPBIZ.COM shall defend
and indemnify in full ISP or any its agents or employees, of all costs, fees,
penalties, fines, settlements, and judgements, incurred by ISP or any of its
agents or employees, including reasonable attorney's fees, arising as a direct
or indirect result of such actions or omissions.
6.06 Jurisdiction and Venue. The ISP and SHOPBIZ.COM hereby submit to the
jurisdiction of the State of Colorado and agree that the venue is proper in
Denver County, Colorado for all actions arising under this AGREEMENT.
6.07 Governmental Regulations. The ISP and SHOPBIZ.COM shall observe and comply
with all governmental regulations affecting the marketing program referred to in
this AGREEMENT, and the sale of the PRODUCT to the public. SHOPBIZ.COM and the
ISP indemnify and hold the other party harmless form their respective acts or
omissions to act which result in any violation of any applicable governmental
regulation. This indemnity shall cover all reasonable attorney's fees, costs,
damages, fines and judgement arising out of a violation or alleged violation
prosecuted by any governmental agency as a result of the marketing of the
PRODUCT and the sale or shipment of the PRODUCT to the public.
6.08 Governing Law. This AGREEMENT and all maters continued herein shall be
governed under the laws of the State of Colorado. In the event of any dispute
arising out of the terms and conditions of this AGREEMENT, the parties agree to
submit the matter to binding arbitration before the American Arbitration
Association in Denver, Colorado, pursuant to the rules of arbitration of such
organization.
Agreement Page 3 of 4
<PAGE>
6.09 Dispute Resolution. The parties hereby agree that all controversies,
claims, and matters of difference between the parties (collectively "disputes")
with respect to the matters covered by this AGREEMENT shall be subject to the
provisions of this paragraph. In the event a party believes a dispute exists,
such party shall notify the other party hereof. If the parties cannot agree on a
resolution of the disputed matter within fifteen (15) days of the party
receiving the aforementioned notice, the parties shall schedule a mediation
session before Judicial Arbitrator Group, Inc. or other mediation service
company approved by the parties, not less than thirty (30) days nor more than
sixty (60) days thereafter to discuss the disputed matter and possible solution.
At the mediation session, the parties should bring with them any evidence or
expert witnesses they deem appropriate to explain their position. If the parties
cannot agree on the mediation service company to conduct the mediation, the
dispute shall be submitted to arbitration in Denver, Colorado according to the
rules and practices of The American Arbitrators Association from time to time in
force, except that insofar such rules and practices are unenforceable under or
are directly supplemented by the Colorado Rules of Civil Procedure or any other
provision of Colorado law then in force such Colorado rules and provisions shall
govern. This submission and agreement to arbitrate shall be specifically
enforceable. Arbitration may proceed in the absence of any party if notice of
the proceedings has been given to such party. The parties agree to abide by all
awards rendered in such proceedings. Such awards shall be final and binding on
all parties to the extent and in the manner provided by Colorado Rules of Civil
Procedure. All awards may be filed with the clerk of one or more courts, State
or Federal, having jurisdiction over the parties against whom such award is
rendered or its property, as a basis of judgement and of the issuance for its
collection. No party shall be considered in default hereunder during the
pendency of dispute resolution, mediation, ro arbitration proceedings relating
to such default. Each party shall bear its own expenses of any dispute
resolution, mediation, or arbitration under this paragraph.
6.10 Fair Meaning Interpretation. This AGREEMENT shall be interpreted and
construed in accordance with the fair meaning thereof, and not strictly for or
against any of the parties hereto.
6.11 Entire Agreement. This writing constitutes the entire understanding between
the ISP and SHOPBIZ.COM and may not be altered or amended except by a written
agreement signed by both parties.
6.12 Binding Effect. The rights and obligations created under this AGREEMENT
shall inure to the benefit and be binding upon the respective successors, heirs
and assigned of the parties to the AGREEMENT.
6.13 No Agency. The parties acknowledge and agree that this AGREEMENT does not
create a partnership. Nor does this AGREEMENT in any way create the relationship
of principal and agent, or any similar relationship, between the parties.
/s/ Don E. Montague 6/23/99
- ------------------------------------ ------------------------------------
MediaComm Broadcasting Systems, Inc. Date
Don E. Montague/CEO
/s/ Neal Bronsert 6/23/99
- ------------------------------------ ------------------------------------
Image Net, Inc. Date
Neal Bronsert, President
Agreement Page 4 of 4
<PAGE>
Welcome to ImageNet's New Account Sign Up Page
Please fill in all fields in the form below, choose a USERNAME and PASSWORD,
then hit the "Submit" button below to start the activation process. In most
cases, the account should be activated within 24 to 36 hours after submitting
this form. Requests submitted on Saturday or Sunday will be processed the
following Monday. You may contact technical support during regular operating
hours (9am to 8pm) to set up accounts by phone on the weekends. If the USERNAME
you select is not available, you will be instructed to return to this page and
select a different USERNAME.
ImageNet Resellers:
If You are an ImageNet reseller, it is important you tell us who you are, and
which company you represent. It is important you provide this information for
proper crediting to you account. There is a place below to provide such
information.
First Name:
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Last name:
- --------------------------------------------------------------------------------
Address (please include a box number, if one exists):
- --------------------------------------------------------------------------------
City, State, Zip:
- --------------------------------------------------------------------------------
Home Phone
(include area code):
- --------------------------------------------------------------------------------
Daytime Phone
(include are code):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Credit Card "Credit Card" is the most effective way to pay for
How would you like account; choosing "E-mail" generates a statement arriving in
to be billed for your your e-mail which you'll need to send us payment. Please
account? note that in choosing "Pap Billing method incurs an additional $2.00
per invoice charge for handling mailing.
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Credit Card Number:
Credit Card Expiration:
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Name as it appears on
your Credit Card:
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$17.95 (monthly) Unlimited Unlimited access is condition
connections idle for 20 minutes will be disconnected. You will also be d
Choose your if you are on-line for ten consecutive hours. See our policy page for more
Account Type information. Additionally, 20 hour and 60 hour dial up accounts are available
Credit Card payments only, and incur a $1.00 per hour charge after meet limits.
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</TABLE>
<PAGE>
How did you
hear about us? Computer Store
- --------------------------------------------------------------------------------
Operating System your
computer runs: Windows 98
- --------------------------------------------------------------------------------
ImageNet also offers Electronic Funds Transfer as a form of payment. Please call
our office for additional information.
Not sure what Rate Plan is best for you? Please check our rate here. You can
also read about our most popular account here.
- --------------------------------------------------------------------------------
Select a Username:
6 to 8 alphanumeric (numbers and letters) characters only, (#) cannot start with
a number.
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Select a Password:
(6 to 8 characters only; can be numbers and letters)
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Are you an ImageNet reseller? If so, please tell us who you are, and which
company you represent.
- --------------------------------------------------------------------------------
(#) The username will become your e-mail address, for example:
Thank you for choosing ImageNet as your Internet Service Provider (ISP). Our
Support Staff is available to help with "Everything you need to know about the
Internet," Monday through Friday 8 am till 11 p.m. and Saturday and Sunday 9am
till 8pm.
Please review the information above, then click the submit button below to begin
the process. If you want to begin from scratch and clear all the fields above,
just click on the Clear button below.
If after hitting the "Submit" button, you realize you need to make changes,
please use one of the numbers below to reach our Support Staff who will be glad
to care for your needs.
Submit Reset
New customers will need additional dial-up settings and information to connect
to our service. Activation is only available upon receipt f payment, thus we
encourage you to send your payment as soon as possible. Credit Card payments are
activated the fastest. Please contact our support staff no sooner than 24 hours
after submitting this form. Our support staff will walk new customers through
all necessary settings to connect to our service.
Submit Payments to:
ImageNet., Inc.
100 East 3rd Street
Loveland, Colorado 80537
(970) 203-9200
(970) 593-0300 fax
<PAGE>
DIAL-UP ACCOUNTS
Dial-up Account Web Hosting Account Domain Accounts ISDN Sign-Up Online
Dial-up accounts are available in hourly programs or unlimited access plans.
Monthly Dial-up Plans:
Standard analog: Unlimited $17.95
60 Hours/Mo. $13.95
20 Hours/Mo. $9.95
* The prices shown here are for credit card payments, automatic withdrawal
payments, and e-mailed invoices only. All mailed invoices carry a $2.00 per
invoice charge. Additionally, the 60 and 20 hour per month dial-up plans are
only available by credit card.
Pay in advance and save $$$
Our dial-up accounts include the following:
Full PPP (Point to Point Protocol) Internet Access
1 POP email account for standard dialup plans.
Browser Software 6MB of server space on the Personal Web Server (for a web page)
Access to our CGI Scripts
Additional Costs are as follows:
Additional e-mail accounts available ($2.00 per email account per month)
Additional time available ($1.00 per hour)
Additional Traffic ($1.00 per 4MB)
IP Address ($10.00 per month)
1-800 Number Dial-up access (fifteen cents per minute)
Invoice by mail ($2.00 per invoice)
* Unlimited access does not allow you to be connected indefinitely.
Users must be at the keyboard. No auto-redial programs may be implemented.
Any violation of these policies will result in additional costs.
Exhibit 10.11
[Shopbiz.com graphic omitted]
925 West Kenyon Avenue #15 Englewood, CO 80110 Email: [email protected]
Phone (303) 762-6446 1-800-367-1275 Fax (303) 762-6448 www.shopbiz.com
Revenue Sharing Agreement
- -------------------------
This is a legal agreement between Shopbiz.com, "Company" and Information
Highway, "IH". By signing below, "Company" is agreeing that all the information
provided is accurate to be bound by all terms of this Agreement.
WHEREAS "Company" owns and operates Shopbiz.com which gathers, formats, stores
and distributes an ecommerce service that brings buyers and sellers together.
The "Company" Agrees to pay "IH" a calculated average sum of 50% of the net
profits of sales commissions generated through shopbiz.com. At the present time,
Shopbiz.com averages 11% total commissions on sales. "IH" will receive one half
of this commission or 5.5% of the total gross sales generated at Shopbiz.com
from buyers that originate or click-through from any sites owned, operated, or
licensed by "IH".
Tracking: The "Company" will track all applicable commissions through a third
party commission vendor by the name of Commission Junction (www.cj.com). This
vendor is responsible for paying all commissions to "IH" and will do so on an
ongoing basis or until a new vendor is selected. All monies are held in escrow
at the commission vendor's location until disbursement to "IH" on a monthly
basis. "IH" may log in at any time to track orders, amounts payable and
disbursements.
Sellers Responsibilities:
Description and Payments 1. ShopBiz.com has established a "virtual mall concept"
to sell and market products and services on the Internet. The form of payment
will be credit cards and payments will appear on the Buyer's invoice as a
Shopbiz.com charge. The credit card information is received over the Internet
via a secure server. At the present time a Buyer will order a product being sold
by Shopbiz.com directly from Shopbiz.com or from a Seller and will be billed by
Shopbiz.com. For a negotiable fee, Shopbiz.com will process the order and will
notify the Seller. The Seller will ship the Products. Shopbiz.com will remit
payment to Seller two times per month. 2.The Seller is responsible to
Shopbiz.com. All shipping statements made in the seller profile must be honored
by the Seller. All Seller products and practices will be monitored by
Shopbiz.com through a rating system and made available to the Buyers. All Seller
products must be guaranteed to Shopbiz.com for a period of 100 days after the
product is shipped. 3. Shopbiz.com will review all sales orders, shipments, and
Customer inquiries as soon as they are received. 4.Shopbiz.com can remove any
Product or Seller from the site at any time for any reason. 5.Seller will become
part of Shopbiz.com after careful review of the Seller Profile and the Company.
Approval will take approximately 24 hours. The Seller's Storefront will be
created upon signing up over the Shopbiz.com web site and reviewed by
Shopbiz.com before going live. 6. Sellers are admitted to the mall free of
charge. Shopbiz.com will charge commission on sales that are made. Sellers that
administer their own Storefronts on Shopbiz.com and require no setup assistance
are charged the minimum 9% commission for sales originating at ShopBiz.com. The
commission will be added to the order price and we will charge the Buyer. The
Seller is notified of the order and is required to ship based on the time the
Seller determines in the initial seller profile on Shopbiz.com. Shopbiz.com will
have an account with the Seller that the Seller can charge for the price listed
on Shopbiz.com less the determined commission. Shopbiz.com will issue checks two
times per month for the amount due to the Seller. 7. There will be no recurring
charges. 8. The Seller will be part of Shopbiz.com for two years from the date
of product approval. 9. If inventory is not available to the Buyer, then, the
Seller will notify Shopbiz. cam by e-mail within 2 business days or telephone if
E-mail is unavailable. Options will be discussed with the Buyer. If the Buyer
requests a refund then the Seller will notify Shopbiz.com immediately and
Shopbiz.com will credit the Buyer's credit card account in full within 24 hours.
The product will be shipped by the Seller unless other arrangements are made by
the Customers. lO. The Seller must offer a 90-day money back guarantee to
Shopbiz.com. The Buyer will pay for shopping the product back to the Seller.
Once the product is received by the Seller, then they will notify Shopbiz.com
and the Buyer's credit card will be credited for the applicable amount.
Shopbiz.com will keep the commission received from the Seller. 11. Shopbiz.com
can be reached at the Company's physical location is 925 W. Kenyon Ave, Suite
15, Englewood, CO 80110 1-800-367-1275 or (303) 762-6446. 12. The Seller will
have someone answering the phones from 9:00 AM to 5:00 PM local Time, Monday
through Friday and answering E-mail.
<PAGE>
13. There are no known local, national, or other legal requirements that are
specific to this web page. Claims and Complaints. 1. Each Seller is responsible
for the products it submits. Shopbiz.com will not accept material that is false
or misleading, defamatory, harassing, abusive or threatening (this includes but
is not limited to remarks about racial or religious groups), violates the law,
including but not limited to violations of copyright or trademark rights,
offering products or services that have been illegally obtained, illegal
materials of any kind, pornographic, distasteful or any materials that support
such actions. 2. Shopbiz.com reserves the right to reformat any data or images
provided by the Sellers to accommodate the format of the Shopbiz.com web site.
3. Shopbiz.com agrees to publish images and information provided by Sellers on
the Shopbiz.com web site during at least the term specified in this contract.
Sellers agree to the charges described above. 4.Sellers represent and warrant
that they have the right to publish the images and information supplied to
Shopbiz.com, and that such images and information do not infringe on any third
party's rights and are not otherwise unlawful. Sellers shall defend, indemnify
and hold harmless Shopbiz.com and its officers and directors from and against
any and all losses, damages, liabilities and claims, and all fees, costs and
expenses of any kind related thereto (including, without limitation, reasonable
attorneys' fees) arising out of, based upon or resulting from any claim of any
third party alleging infringement of any copyright, trademark, patent, trade
secret, right of privacy, right of publicity, unfair competition, false
advertising, libel, or any other statutory or common law proprietary or civil
right. 5. In the event of a complaint Shopbiz.com will talk with Customers
immediately when available or get back to them within 1 business day. Process
used by management to monitor the continuing effectiveness of its controls over
transaction integrity. 1. Shopbiz.com plans to use "Cookies" that will reside on
the Customers computers and verified by Shopbiz.com's network for identification
purposes only. 2. Sellers can review daily sales reports and determine whether
the e-commerce transactions are being processed and shipped according to the
Sellers Profile. If there is a noncompliance found in the system, Shopbiz.com
will investigate it immediately and change any future transactions so this
particular occurrence will not happen again. Shopbiz.com will be using a secure
server that will record Buyer information, such as name, address, Products
ordered, credit card information, total cost, etc. Shopbiz.com will receive
these orders on behalf of the Sellers. 3. Each Sellers information will have a
number and will be filed by number and alphabetically both physically and on
Shopbiz.com's secure network. Access to this information will be by authorized
personnel only. This information will be kept for a 1 year period and then
archived at Shopbiz.com's convenience. 4. Buyer's credit card information will
only be known by Shopbiz.com. All of the shipping information will be E-mailed
to the Seller. Shopbiz.com will keep this information on a secure server and in
a physically protected area.
IN WHITNESS WHEREEOF, The parties hereunder have experienced this Agreement on
the lst day of May, 1999,
Information Highway, Inc. MediaComm Broadcasting Systems, Inc.
/s/ John G. Robertson /s/ Don E. Montague
- -------------------------------- ---------------------------------------
Authorized Signature Authorized Signature
John G. Robertson Don E. Montague
President President
CORDOVANO AND HARVEY, P.C. Certified Public Accountants
- --------------------------------------------------------------------------------
201 Steele Street
Suite 300
Denver, Colorado 80206
(303) 329-0220 Phone
(303) 316-7493 Fax
- --------------------------------------------------------------------------------
November 2, 1999
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549-1004
Attn: Filing Desk, Stop 1-4
Dear Sir,
We consent to the use in this Registration Statement of MediaComm Broadcasting
Systems, Inc. on Form SB-2, of our report dated September 29, 1999, appearing in
the Prospectus, which is part of this Registration.
We also consent to the reference to us under the headings "Summary Financial
Information" and "Experts" in such Prospectus.
Sincerely,
/s/ Cordovano and Harvey, P.C.
- ------------------------------
Cordovano and Harvey, P.C.
Certified Public Accountants
November 2, 1999
