UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB/A
1ST AMENDMENT
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS
ISSUERS (UNDER SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934)
RADIOTOWER.COM, INC.
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(Name of Small Business Issuer in its charter)
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Incorporated in the State of Nevada 91-1921581
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
322 - 425 Carrall Street, Vancouver, British Columbia V6B 6E3
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(Address of principal executive offices) (Zip Code)
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Issuer's telephone number (604) 605-1357
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Securities to be registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
None N/A
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Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock - $0.001 par value
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(Title of Class)
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RADIOTOWER.COM, INC.
TABLE OF CONTENTS
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PART I PAGE
Item 1. Description of Business...........................................................................3
(a) Business Development.........................................................................3
(b) Business of RadioTower.......................................................................3
Item 2. Plan of Operation.................................................................................7
Item 3. Description of Property...........................................................................8
Item 4. Security Ownership of Certain Beneficial Owners and Management....................................9
(a) Security Ownership of Certain beneficial Owners..............................................9
(b) Security Ownership of Management.............................................................9
(c) Changes in Control...........................................................................9
Item 5. Directors, Executive Officers, Promoters and Control Persons.....................................10
(a) Identify Directors and Executive Officers...................................................10
(b) Identify Significant Employees..............................................................10
(c) Family Relationships........................................................................11
(d) Involvement in Certain Legal Proceedings....................................................11
Item 6. Executive Compensation...........................................................................11
Item 7. Certain Relationships and Related Transactions...................................................12
(a) Relationships with Insiders.................................................................12
(b) Transactions with Promoters.................................................................12
Item 8. Description of Securities........................................................................13
(a) Common or Preferred Stock...................................................................13
(b) Debt Securities.............................................................................13
(c) Other Securities to be Registered...........................................................13
PART II
Item 1. Market Price of and Dividends on RadioTower's Common Equity and Related Stockholder Matters......13
(a) Market Information..........................................................................13
(b) Holders.....................................................................................14
(c) Dividends...................................................................................14
Item 2. Legal Proceedings................................................................................14
Item 3. Changes in and Disagreements with Accountants....................................................14
Item 4. Recent Sale of Unregistered Securities...........................................................14
Item 5. Indemnification of Directors and Officers........................................................15
PART F/S........................................................................................................16
PART III
Items 1 and 2. Index to and Description of Exhibits.......................................................16
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
(A) BUSINESS DEVELOPMENT
RadioTower.com, Inc. ("RADIOTOWER") was incorporated under the laws of the State
of Nevada on May 5, 1998 under the original name "Magnum Ventures Inc."
RadioTower changed its name on May 18, 1999 to "RadioTower.com, Inc."
Initially, RadioTower was in the mining business and on June 4, 1998, acquired
the right to purchase some mineral claims. However, this was the extent of
RadioTower's operation as a mining company. RadioTower did not do any testing on
or developing of the mineral claims. This was the extent of RadioTower's
involvement in the mining industry. See Note #4 of the December 31, 1999
financial statements for more information.
In March 1999, the board of directors decided to abandon its rights to the
mineral claims and not to make any further option payments, resulting in the
termination of the option. RadioTower ceased all mining industry activities at
this time, and the board of directors decided to enter into the radio Internet
business.
RadioTower has not been involved in any bankruptcy, receivership or similar
proceedings. There has been no material reclassification, merger, consolidation
or purchase or sale of a significant amount of assets not in the ordinary course
of RadioTower's business with the exception of the acquisition of the domain
asset of Radiotower.com from Paul Valkama and Henry Valkama. See "Item 7.
Certain Relationships and Related Transactions" and Exhibit 6.1 - Purchase
Agreement for more details.
At the completion of the acquisition of the domain asset of Radiotower.com
Anthony England subsequently resigned as a director and as the sole officer of
RadioTower on August 9, 1999. Alan Brown was elected a director on April 23,
1999, and appointed the sole officer of RadioTower on August 9, 1999. Mr.
Brown's affiliation with RadioTower began in March 1999, when he was first
introduced to Paul Valkama and Henry Valkama. As a result of Mr. Brown's
considerable experience in preparing financial statements, in corporate tax, and
the administration of corporate records, the Valkama brothers offered Mr. Brown
a position on the Board of Directors.
Prior to the acquisition of the assets and goodwill of RadioTower from the
Valkama brothers, RadioTower was doing business as a sole proprietorship under
the name SoftAd Communications. They operated the radiotower.com site as a hobby
business from which no revenues were generated. They also provided web design
work, under contract, for various small businesses. The first version of the
RadioTower site was launched in June 1996 and has been online since. New station
listings were constantly added as they became available. The site was marketed
online through various free channels. At this point, an advertising agent (Burst
Media) was contracted to solicit advertising on RadioTower's behalf. Version 3.0
of RadioTower's site also involved an interface change along with adding
database backend. An agreement with Global Media Corp. was reached and
RadioTower launched the RadioTower Store in September 1999. See Exhibit 6.2 -
Licensing Agreement with Global for additional information. RadioTower put in
place partnerships with Pronet Enterprises Ltd. (see Exhibit #6.5) and Destiny
Media Technologies Inc. (see Exhibit #6.4) to begin development of the AudioAd
service. Version 4.0 of the site, launched on December 20, 1999, included a new
interface and operated on an in-house Linux Server. RadioTower is constantly
adding new stations to the database with development of new features ongoing.
(B) BUSINESS OF RADIOTOWER
RadioTower is an Internet company (www. radiotower.com). RadioTower is a pioneer
of Internet audio, being one of the first companies online with a live radio
directory and audio portal. The directory is a free television guide-like
listing of over 1,000 radio stations worldwide. With the use of existing
technology, such as RealPlayer, RadioTower allows listeners to link to and
listen to these radio stations.
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For each listing, RadioTower supplies a direct audio link, whereby the user can
listen to the radio station directly from RadioTower's site, and a link to the
station's own website. RadioTower also lists the station's name, call letters,
category and location, and provides a brief description of the radio station.
Site users must have a multi-media computer with a free downloadable copy of
RealPlayer installed. Audio quality depends on speed of Internet connection,
computer speed and quality of a particular station's host server. Users can
search for a station by name, country, category or keyword search. Once a
station is located, the user simply clicks on the play button beside each
station to listen. The user is free to continue to browse RadioTower's site,
surf other websites and work at home or in the office while listening to the
radio station. New stations are constantly being added to the RadioTower's
database.
RadioTower only contains listings for those radio stations that already
broadcast their signals over the Internet using Real Audio.
Transition Capital Management was hired in March 1999 to handle management,
filing and accounting for RadioTower. These services were terminated in July
1999 and all invoices and promissory notes were paid up to date.
Principal Products or Services and their Markets
RadioTower is a free online directory of Internet audio sites. The directory
currently provides information and easy access to over 1,000 radio stations from
around the world. RadioTower has built a steady user base of 20,000 monthly
listeners with no marketing budget and receives 100,000 page views a month due
to: Positive word-of-mouth, high listings on all major search engines, links
from 100's of other sites to RadioTower's website, favourable reviews (L.A.
Times, HotWired, Vancouver Sun etc.) and numerous awards (Yahoo Picks, Windows
Magazine Site of the Day etc.).
According to the latest statistics from Burst Media, RadioTower's banner and ad
placement agency, RadioTower's current average ad views is 5,800 per day or
174,000 per month. According to RadioTower's ISP server statistics provided by
Eline Technologies Inc., RadioTower's website has an average of 645 site
visitors per day or 20,000 visitors per month.
Search engines such as Yahoo and Altavista are the #1 way that Internet users
find web sites. A high listing on these search engines (on the first page of
results) is a very important marketing tool. According to Positionagent.com, and
actually using the search engines, RadioTower appears at or near the top of the
search listings for keywords relevant to RadioTower such as "Internet Radio" and
"Radio Stations".
Link popularity is the total number of web sites that link to RadioTower's
website. Good link popularity can dramatically increase traffic to RadioTower's
website. According to linkpopularity.com there are 929 websites that currently
have links to RadioTower.
In a typical Internet session a user will go to RadioTower's site and select the
radio station of their preference by name, place and/or genre. The station's
audio signal will be broadcast continually as the user surfs other stations or
sites, works in the office or home, or until they select another station.
A user must have a multi-media computer and a free downloadable copy of the
RealPlayer installed. Audio quality depends on speed of Internet connection and
computer and quality of a particular station's host server. A 28k modem and a
486 computer will provide acceptable results.
RadioTower did not have any revenues generated from its business operations
during its last two fiscal years. RadioTower is in the early stages of operation
and just beginning to generate business revenues. Since June 30, 1999,
RadioTower has generated revenues from the sale of advertising.
Revenue is derived from the sale of onsite advertising and affiliated ecommerce
programs. RadioTower has an affiliate e-commerce agreement with Global Media
Inc. See Exhibit 6.2 - Licensing Agreement with Global. Global Media supplies an
e-commerce store that sells CD's, videos and books and takes care of all order
fulfilment. The
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store is branded as RadioTower. For any visitors to RadioTower's site who visit
the e-commerce store and purchase products, RadioTower will earn 40-60% of the
net profit on each sale. The store is open for business, but needs to be
effectively promoted to build customer awareness and trust.
Our advertisers have included Rolling Stone Magazine and Gillette. RadioTower's
ecommerce affiliates have included: Music Previews, Audio Book Club, Beyond.com
(software), IQ (audio software) and Wall Street Journal. Currently, RadioTower's
ecommerce affiliates include only Global Media Corp. See Exhibit 6.2 - Licensing
Agreement with Global Media. Specific RadioTower Web pages will be targeted
towards particular audiences. Users can browse the site by 20 different
categories such as Rock, Classical, Sports or Business. Users who select a
certain category can be targeted on the main page for that category. For
example, visitors to RadioTower's Rock pages will see advertisements and be able
to click directly to the Rock section of RadioTower's e-commerce store.
The target for RadioTower's products is the individual listener with a personal
computer. Historically, radio stations have targeted precise listeners with
unique profiles. According to the National Association of Broadcasters, online
radio stations plan to acquire a share of the $13.6 billion/year radio business
by tapping into this marketing source. It is management's belief that by
providing individual listeners with what they want in a radio station's web
site, such as information and shopping, radio stations will attract listeners,
which in turn will attract advertisers.
According to Arbitron/Edison Research Study II from July 1998 to January 1999,
Americans who listened to Internet radio spent approximately 1.5 hours listening
to the radio online and online radio listeners increased by 6% to 13%. According
to a BRS Media report dated December 7, 1999, there were 2,934 radio stations
that made there programming available over the Internet with another 5,932
stations that had a web site but did not webcast.
Listeners can bookmark their favourite radio station's web sites and may not
need to return to RadioTower once having done so. However, users will initially
find RadioTower of service in finding these stations. Also, RadioTower will soon
offer a My-Audio feature whereby site users can make as many of their own
presets as they want. This customisation feature will impact on RadioTower's
plan to attract advertisers and revenues from operations by increasing customer
loyalty and page view with a corresponding increase in revenue.
Distribution Methods
RadioTower will distribute its products and services over the Internet and will
advertise through medium such as newspapers, television and radio. The main
product, RadioTower.com, is distributed over the Internet. AudioAds are
available for online purchase and delivery on the Internet.
RadioTower does sell products on-line through its e-commerce store. RadioTower
has an affiliate e-commerce agreement with Global Media Corp. See Exhibit 6.2 -
Licensing Agreement with Global. Global Media supplies an e-commerce store that
sells CD's, videos, books and magazines, and takes care of all order fulfilment.
The store is branded as RadioTower. For any visitors to RadioTower's site who
visit the e-commerce store and purchase products, RadioTower will earn 40-60% of
the net profit on each sale. RadioTower will receive a referral fee of 40-60% of
net sales that result from a referral to Global Media based on a sliding scale
beginning at 40% for sales of less than $5,000 up to 60% of sales over $25,000.
The store is open for business, but needs to be effectively promoted to build
customer awareness and trust.
Global Media can ship RadioTower's items anywhere in the world via RadioTower's
network of shipping companies. These companies include DHL, UPS, and USPS.
Shipping charges will depend the type of item being shipped, where the item is
being shipped and the priority of the order. When the order is placed, Global
Media examines the shipping order and offers the customer several shipping
options according to the shipping address.
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Each region has different costs and options such as Standard Shipping USPS,
Second and Next Day Air UPS, and International Priority DHL.
Status of Publicly Announced New Product or Service
RadioTower' site is constantly under development. RadioTower will work with
other Internet development firms to create more powerful software. RadioTower
will partner with content providers and other Internet sites to maximize the
reach and ability of its offerings. Some features RadioTower plans to offer
include:
o highly targeted rich media ads (audio banners) that increase the
value of our partners content.
o customizable one-click access to an array of preselected audio
reports and audio updates on specific topics, such as NFL reports
or OTC-BB reports.
o information about the song and artist which is currently playing,
relevant links and one-click album purchase.
o Internet audio hosting services
Competition
Even though the Internet radio market is large enough to support several
directories, RadioTower still competes with many companies possessing greater
financial resources and technical facilities than itself in the Internet radio
market as well as for the recruitment and retention of qualified personnel. Many
of RadioTower's competitors have a very diverse portfolio and have not confined
their market to one industry, product or service, but offer a wide array of
multi-layered businesses consisting of may different customers and industry
partners.
RadioTower's has differentiated itself from its large competitors by offering an
international directory that includes all types of radio stations. These
competitors, while better financed and more popular, list certain stations only:
Stations that use a particular streaming audio technology (Real Guide, Windows
Media Guide), or use a particular streaming audio service provider (Yahoo
Broadcast). While RadioTower can host stations, it is not a prerequisite to be
listed on the site. It makes no difference to audio quality where the person
links from.
Other competitive directories do exist: Internet Radio List, BRS Web Radio
Directory, Seek Radio, Earth Tuner, On The Air, vTuner, Atomic Global Radio,
Sunset Radio, Broadcastmusic.com, Virtual Tuner and MIT List of Radio Stations.
All these sites offer the same basic information - RadioTower differs from them
in a qualitative way rather than quantitative. It is management's belief that
RadioTower's site provides a better experience for its users than its
competitors - it is visually more appealing, runs faster and is easier to use.
With adequate financing, management believes it can distinguish itself from
these competitors by developing an even better site (offering more information,
easier to use and more powerful graphic features) and through superior
marketing.
RadioTower's policy is to link to all audio providers regardless of technology
or proprietary interests. Key advantages that RadioTower has over its
competitors are an in-depth knowledge of the Internet industry and Internet
audio, a functional Web site with regular users, and site recognition and
strategic alliances with important industry players, such as:
o Burst Media LLC. - advertising placement agency that resells
RadioTower's ad inventory (See Exhibit 6.3 - Site Contract);
o Destiny Media Technologies Inc. (formerly Destiny Software
Productions Inc. - developer of audio streaming technology that
is used in RadioTower's AudioAd Player (See Exhibit 6.4 - Interim
Licence Agreement);
o Pronet Enterprises Ltd. - operates an Internet business directory
and a marketing partner for AudioAds; and
o Global Media Corp. - operates an e-commerce affiliation program,
which RadioTower uses for order taking and fulfilment (See
Exhibit 6.2 - Licensing Agreement with Global).
Sources, Raw Materials and Principal Suppliers
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The RadioTower site is developed and maintained by RadioTower personnel and then
delivered, via Internet, to Vancouver-based Eline Technologies Inc. for serving.
See Exhibit 6.6 - Contract with Eline Technologies Inc. for more information.
This site can serve over 200,000 customers per hour. Station data is researched
on the Internet, then added to the database on a monthly basis. As a courtesy,
RadioTower notifies each radio station of its inclusion and asks if any changes
are required. To date, only one station has requested removal. Many stations
also contact RadioTower to request a listing or to compliment management on
RadioTower's service.
Dependence on One or a Few Major Customers
RadioTower does not have any major customers that it depends on. However,
RadioTower's advertising revenue depends on the selling of ad inventory by its
advertising agent, Burst Media, and RadioTower's main e-commerce revenue depends
on order taking and fulfilment by Global Media.
Patents/Trade Marks/Licences/Franchises/Concessions/Royalty Agreements or Labour
Contracts
RadioTower currently does not own any patents or trade marks and is not a party
to any licence or franchise agreements, concessions, royalty agreements or
labour contracts.
The Internet site is copyrighted upon uploading. radiotower.com is a registered
domain name of RadioTower. RadioTower will seek trademark protection for
RadioTower as it refers to an internet service and further trademark protection
for the slogans "The Internet Radio Receiver", which RadioTower has used online
since June of 1996, and for "Transmitting YOUR message to the world!", which
RadioTower has used since June of 1997.
Requirement for Government Approval of Principal Products or Services
Currently, there is no requirement for RadioTower to obtain any governmental
approval on any of its products or services.
Effect of Existing or Probable Governmental Regulations on RadioTower's Business
RadioTower is a portal, distribution of radio. There are no existing or probable
government regulations on RadioTower's business. However, there are unforeseen
uncertainties in the future of the Internet radio and audio. As a result of a
lack of regulation, the music industry has a problem with pirating (copying) of
music with the MP3 comparison technologies available over the Internet. As MP3
has no copyright protection built in, Internet users can technically copy
material and distribute it without paying royalties. Although illegal, this
bypasses the music industry and threatens their revenue stream. However, the
technology used by RadioTower does not allow for unauthorized copying. If a
format does appear which satisfies both the music industry and the consumers,
downloadable music can become a vital method of distribution and have a major
impact. While the effect of MP3 is sorted out, the use of streaming audio will
continue to grow, unencumbered by the objections of the music industry. Once an
agreed upon standard appears for downloadable audio, RadioTower can easily
migrate into this market.
Expenditures on Research and Development During the Last Two Fiscal Years
In 1999 $34,000 was spent on research and development activities. None of these
costs were borne directly by the customers of RadioTower.
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Number of Total Employees and Number of Full Time Employees
RadioTower has four employees, all of which are fulltime employees. RadioTower
is in the process of hiring programmers and designers on a consultant basis and
will continue to do so as the need arises.
ITEM 2. PLAN OF OPERATION.
RadioTower did not have any revenues generated from its business operations
during its last two fiscal years. RadioTower is in the early stages of operation
and just beginning to generate business revenues. Revenue generating programs
include:
o Advertising - Burst Media currently acts as an agent to place ads
on the RadioTower site;
o RadioTower Store - currently operating, it allows visitors to
make online purchases of CD's, videos, DVD's and books; and
o AudioAds - beta site available, full launch set of February 2000
and provides turn-key solution for business' to put audio on
their web site. The final stage of beta testing is currently
under way.
RadioTower's twelve-month plan of operation is to (i) improve the quality and
quantity of content on its website in order to provide the best online directory
connecting listeners to stations worldwide, (ii) increase site traffic, and
(iii) develop more revenue-generating programs. RadioTower will improve its site
by developing a more dynamic interface and making the site easier to navigate
and more graphically exciting. RadioTower will utilize new technologies and
software such as Flash with Vector graphics to improve the quality of the
website. RadioTower's strategy is to enhance the product design while increasing
brand awareness and loyalty among its listeners.
It is management's intent to continue to add as many stations as possible to its
directory and will also continue to add more contextual and specific information
to RadioTower's website. As technology improves, management plans to provide
more customized features and a much more interactive interface so that the
website will have a user-friendly design and a quick download time and will have
cross-reference capabilities. The site will provide users with more information
on their searches such as better station descriptions, and will highlight
special events, concerts and regularly scheduled features. Management intends to
improve RadioTower's website so that it will also provide a multiple of dynamic
ways for visitors to interact in the site. These developments are currently in
progress and will be released on an ongoing basis.
RadioTower will attempt to generate more revenue by (i) acquiring exclusive
rights to radio personalities and content, and (ii) expanding its e-commerce
store. RadioTower will pursue exclusive arrangements with radio stations to
rebroadcast their content. RadioTower will endeavour to make arrangements with
various radio personalities and shows and recording artists to broadcast their
material on the RadioTower site. This will create exposure for the content
provider and a marketing opportunity for RadioTower to drive traffic to the
site.
The RadioTower Store will be redesigned to integrate better with RadioTower's
new site, offering a better shopping experience. The store is currently up and
running and fully operational. It will be expanded by adding new products as
they become available and providing multiple links throughout the site to
specific store pages. For example, listeners to rock stations will be encouraged
to visit the rock section of the store and will have links to rock content areas
of the store.
In order to increase site traffic, RadioTower will launch an extensive sales and
marketing campaign to promote its website. The campaign will include banner and
audio advertising on the Internet, print ads in relevant print media and spot
ads on radio stations. RadioTower will participate in trade shows that have an
Internet, technology and/or radio focus.
RadioTower cannot satisfy its cash requirements for the next 12 months without
having to raise additional funds. RadioTower's expected cash requirement for the
next 12 months is $180,000. As RadioTower's monthly user base grows, management
expects advertising and e-commerce revenues to grow significantly. RadioTower
also expects to raise any required additional funds by way of equity and/or debt
financing. However, RadioTower may not be
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able to raise the required funds from such financings. In that case RadioTower
will proceed by approaching current shareholders for loans to cover operating
costs.
RadioTower will not be purchasing any plant or significant equipment. RadioTower
will continue with its research or development by conducting continuous
perceptual studies to monitor what listeners want from its website and by
continuing to explore various e-commerce models to ensure its store and website
continue to meet the listeners' needs.
RadioTower will continue to hire employees as the need arises and finances
allow. Positions will include web programmers, graphic artists, web masters,
multimedia designers, web writers, marketing representatives, sales
representatives and administrators.
ITEM 3. DESCRIPTION OF PROPERTY.
RadioTower's sole assets are its copyrighted site and its registered domain name
"radiotower.com".
As discussed in Item 1(a), RadioTower abandoned all of its interests in mineral
claims in March 1999, and no longer has any right, title or interest in any
mineral claim.
RadioTower operates from its principal executive offices at 322 - 425 Carrall
Street, Vancouver, British Columbia, Canada. RadioTower has leased this premise
for one year renewable on a month to month basis. In the opinion of the
management of RadioTower, this office space will meet the needs of RadioTower
for the foreseeable future. See Note #6 of the audited financial statements for
December 31, 1999 for more details.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security Ownership of Certain Beneficial Owners (more than 5%)
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(1) (2) (3) (4)
TITLE OF CLASS NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNER [1] OF CLASS [3]
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Common Stock Paul Valkama 6,500,000 [2] 42%
#18 - 4106 Albert Street
Burnaby, B.C.
and
Henry Valkama
108 - 7361 Halifax Street
Burnaby, B.C.,
as joint tenants
======================= =============================== ============================= ===============
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[1] The listed beneficial owner has no right to acquire any shares within 60
days of the date of this Form 10-SB from options, warrants, rights,
conversion privileges or similar obligations.
[2] These shares are beneficially owned 66.67% by Paul Valkama and 33.33% by
Henry Valkama.
[3] Based on 15,500,000 shares of common stock issued and outstanding as of
February 29, 2000.
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(B) SECURITY OWNERSHIP OF MANAGEMENT
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(1) (2) (3) (4)
TITLE OF CLASS NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNER [1] OF CLASS [4]
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Common Stock Alan Brown 600,000 3.2%
2838 Neyland Road
Nanaimo, B.C.
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Common Stock Paul Valkama 6,500,000 [2] 42%
----------------------- ------------------------------- ----------------------------- --------------
Common Stock Jeff Cocks 515,000 [3] 3.3%
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Common Stock Directors and Executive 7,515,000 48.5%
Officers (as a group)
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[1] The listed beneficial owner has no right to acquire any shares within 60
days of the date of this Form 10-SB from options, warrants, rights,
conversion privileges or similar obligations.
[2] These shares are beneficially owned 66.67% by Paul Valkama and 33.33% by
Henry Valkama.
[3] 15,000 of these shares are registered in the name of West Isle Ventures
Ltd., of which Jeff Cocks is the sole shareholder.
[4] Based on 15,500,000 shares of common stock issued and outstanding as of
February 29, 2000.
(C) CHANGES IN CONTROL
RadioTower is not aware of any arrangement that may result in a change in
control of RadioTower.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
(A) IDENTIFY DIRECTORS AND EXECUTIVE OFFICERS
Mr. Alan Brown and Mr. Paul Valkama have been directors of RadioTower since
April 23, 1999. Mr. Jeff Cocks has been a director of RadioTower since September
15, 1999. Each director holds office until (i) the next annual meeting of the
stockholders, (ii) his successor has been elected and qualified, or (iii) the
director resigns.
Mr. Brown has also been the president, secretary and treasurer of RadioTower
since August 9, 1999.
With the exception of Mr. Cocks, none of the other directors of RadioTower hold
any other directorships in any other reporting company. Mr. Cocks is a director
of Maracote International Resources Inc. and Oromin Exploration Ltd.
Alan Brown o Mr. Brown (33 years old) is a fifth level Certified General
Accountant and belongs to the Certified General Accountant's Association of
Canada. Mr. Brown is knowledgeable in all aspects of corporate finance. Mr.
Brown attended Malaspina University College. In the past five years, Mr. Brown
has worked for Hazelwood Group as a controller (May-95 to April-99) and for
Purtzki Carle Thiesson, Chartered Accountants as a public accountant
(November-93 to April-95).
Paul Valkama o Mr. Valkama (35) has been envisioning interactive solutions for
over 12 years while working with a variety of clients. Mr. Valkama has created a
13 web sites - nine for clients, one for demonstration
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(SoftAd Communications) and three versions of RadioTower's site. For each client
site, Mr. Valkama was responsible for consulting with the client and
designing/developing the site and marketing them on the Internet. These sites
were promotional sites for the following clients: Mountain Shadow Pub, Design
Sportswear Ltd., Smart-Text Solutions Inc., Sundance Trampolines, Donovan Sales,
777 Online, Trimseal Plastics, Reef RV Rentals, and Pacific Coach Lines. Mr.
Valkama also has a broad range understanding of all aspects of the Internet,
including design, graphics, scripting, serving, testing and marketing. Mr.
Valkama has been the President of SoftAd Communications Inc., a web site design
firm in Vancouver, British Columbia, since 1996. His educational background
includes a BA in Communications from Simon Fraser University and a Diploma in
Information Technology from Capilano College, both located in British Columbia.
From 1994 to 1996 Mr. Valkama worked as an independent owner-operator in the
courier industry, under contract to Loomis Rush Messengers.
Jeff Cocks o Mr. Cocks (37) has an extensive financial and administrative
background. He presently serves as a private financial consultant for a number
of publicly traded companies and serves as a director for two CDNX listed
companies - Maracote International Resources Ltd. and Oromin Explorations Ltd.
Mr. Cocks completed the Canadian Securities Course in 1985. In the last five
years, Mr. Cocks has worked for Madison Enterprises as a financial consultant.
(B) IDENTIFY SIGNIFICANT EMPLOYEES
RadioTower has four significant employees, Alan Brown, Paul Valkama, Henry
Valkama, and Emanuel Hajek, all of which are full time employees.
Henry Valkama o Mr. Valkama (38) received his degree in Business Administration
from Simon Fraser University in 1986. Mr. Valkama has an extensive background in
computers and the Internet. Mr. Valkama began working for RadioTower full time
as of January 1998, primarily focusing on marketing and product development.
Previous to that, Mr. Valkama worked as an independent small business consultant
in marketing, promotion and sales with numerous firms such as Komodo Electric
Ltd., Blue Steel Ltd., and Accidentaly Bent Collision Repairs Ltd.
Emanuel Hajek o Mr. Hajek (30) began working at RadioTower in September 1999 as
Vice President of Corporate Development. In the previous five years he worked
extensively in the film and music industry. Mr. Hajek served as the Vice
President of Corporate Affairs for Adam Records (March 1995 to February 1997)
and for International Entertainment Group ("IEG") (March 1997 to June 1999). He
also served as producer and production manager of two independent short films
for IEG. In 1987, Mr Hajek attended Capilano College for the first year of a two
year marketing program.
(C) FAMILY RELATIONSHIPS
With the exception of Paul Valkama and Henry Valkama, who are brothers, there
are no family relationships among the directors, executive officers or persons
nominated or chosen by RadioTower to become directors or executive officers.
(D) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
(1) No bankruptcy petition has been filed by or against any
business of which any director was a general partner or
executive officer either at the time of the bankruptcy or
within two years prior to that time.
(2) No director has been convicted in a criminal proceeding and is
not subject to a pending criminal proceeding (excluding
traffic violations and other minor offences).
(3) No director has been subject to any order, judgement, or
decree, not subsequently reversed, suspended or vacated, of
any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities
or banking activities.
11
<PAGE>
(4) No director has been found by a court of competent
jurisdiction (in a civil action), the Securities Exchange
Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law,
that has not been reversed, suspended, or vacated.
ITEM 6. EXECUTIVE COMPENSATION.
RadioTower paid an aggregate CDN$27,000 and accrued an aggregate $20,000 to its
named executive officers during its 1999 fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term compensation
==================================================
Annual compensation Awards Payouts
Other Securities
annual Restricted underlying All other
compensation stock options/ LTIP compensation
Name and principal Salary Bonus ($) awards SARs Payouts ($)
position Year ($) ($) (e) ($) (#) ($) (i)
(a) (b) (c) (d) (f) (g) (h)
- -------------------------- ------- --------- --------- ---------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Anthony England, CEO 1998 none none none none none none none
May 1998-Aug 1999 1999 none none none none none none none
2000 n/a n/a n/a n/a n/a n/a n/a
- -------------------------- ------- --------- --------- ---------- ------------ -------------- ---------- -----------
Alan Brown, CEO 1999 none none none none none none
Aug 1999-Feb 2000 20,000
(1)
2000 8,000 none none none none none none
(1)
- -------------------------- ------- --------- --------- ---------- ------------ -------------- ---------- -----------
Paul Valkama, Director 1999 none none none none none none
Apr 1999 - Feb 2000 27,000
2000 6,000 none none none none none none
- -------------------------- ------- --------- --------- ---------- ------------ -------------- ---------- -----------
</TABLE>
(1) These amounts have accrued and Mr. Brown has received 600,000 shares at
$0.01 per share as partial payment of his salary.
See "Item 4. Recent Sale of Unregistered Securities" for more details.
Since RadioTower's incorporation, no stock options, stock appreciation rights,
or long-term incentive plans have been granted, exercised or repriced.
Currently, there are no arrangements between RadioTower and any of its directors
whereby such directors are compensated for any services provided as directors
other than the oral arrangement between RadioTower and each of Alan Brown and
Jeffs Cocks. In September 1999, RadioTower agreed to pay Mr. Brown a monthly
salary of $4,000 and to pay Mr. Cocks a monthly salary of $1,000 for acting as a
director of the Company. The parties agreed that the salaries would accrue at no
interest and be payable in the future when the funds are available. There is no
term to these agreements as they were oral agreements and can be terminated at
any time. As of the end of February 2000, Mr. Brown has accrued an aggregate
$28,000, of which $6,000 has been paid by the issuance of 600,000 shares at
$0.01 per share. As for Mr. Cocks, he has accrued an aggregate $7,000, of which
$5,000 has been paid by the issuance of 500,000 shares at $0.01 per share. See
Note #3 and Note #5 of the audited financial statements for December 31, 1999
for more details.
In April 1999, RadioTower agreed with each of Paul Valkama and Henry Valkama to
retain them as employees and to pay each of them CDN$3,000 per month. There is
no term to these agreements as they were oral agreements and can be terminated
at any time.
Except for the oral agreements with each of Paul Valkama and Henry Valkama,
there are no other employment agreements between RadioTower and any named
executive officer, and there are no employment agreements or other
12
<PAGE>
compensating plans or arrangements with regard to any named executive officer
which provide for specific compensation in the event of resignation, retirement,
other termination of employment or from a change of control of RadioTower or
from a change in a named executive officer's responsibilities following a change
in control.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(A) RELATIONSHIPS WITH INSIDERS
One material transaction undertaken by RadioTower since its incorporation is its
acquisition of the domain asset of Radiotower.com from Paul Valkama and Henry
Valkama pursuant to a Purchase Agreement among RadioTower, Paul Valkama and
Henry Valkama dated March 12, 1999. The assets included the domain name, a
database of radio stations and a website, which RadioTower has completely
redeveloped since the acquisition. As full consideration for the domain asset,
RadioTower issued an aggregate 6,500,000 shares of common stock at $0.001 per
share to Paul Valkama and Henry Valkama, as joint tenants. See Exhibit 6.1 -
Purchase Agreement for more details.
Another material transaction between RadioTower and its insiders involved cash
advances made to RadioTower. In December 1998, two shareholders lent RadioTower
$64,975. The loan was evidenced by a non-interest bearing promissory note
payable on December 31, 2000. See Note #5 of the audited financial statements
for December 31, 1999 for more information.
Also, in December 1998, B-Mac Trading Inc., Barry Clemiss, Thomas Gardner,
Leslie Rutledge and Sharon Ivancoe advanced an aggregate $15,000 to RadioTower
to pay management fees, a legal retainer and to reduce a payable to a related
party. RadioTower repaid the advances in full by issuing an aggregate 1,500,000
shares to the lenders at $0.01 per share. See "Item 4. Recent Sale of
Unregistered Securities" and Notes #3 and #5 of the audited financial statements
for December 31, 1999 for more information.
Except as stated above or as stated elsewhere, no member of management,
executive officer or security holder had any direct or indirect interest in any
other transaction with RadioTower.
(B) TRANSACTIONS WITH PROMOTERS
Alan Brown and Jeffs Cocks are the promoters of RadioTower. The promoters have
provided and continue to provide services for the organization of RadioTower and
for the development of RadioTower's website. To date, there have been no
transactions with either promoter.
ITEM 8. DESCRIPTION OF SECURITIES.
(A) COMMON OR PREFERRED STOCK
The authorized common stock of RadioTower is 50,000,000 shares of common stock
with a par value of $0.001 per share, of which 15,500,000 shares are issued and
outstanding as of the date of this filing, and 1,000,000 shares of preferred
stock with a par value of $0.01 per share, of which no shares have been issued.
All of the issued and outstanding shares of common stock are fully paid and
non-assessable.
All shares of both common stock and preferred stock have equal voting rights
and, when validly issued, are entitled to one vote per share in all matters to
be vote upon by the stockholders. The shares have no pre-emptive, subscription,
conversion or redemption rights and may be issued only as fully paid and
non-assessable shares. Cumulative voting in the election of directors is not
permitted, which means that the holders of a majority of the issued and
outstanding shares of common stock represented at any stockholder meeting at
which a quorum is present, will be able to elect the entire Board of Directors
if they so choose and, in such event, the holders of the remaining shares of
common stock will not be able to elect any directors. Holders of shares of
common stock are entitled to share rateable in distributions, as may be declared
from time to time by the Board of Directors in its discretion, from funds
legally available for distribution.
13
<PAGE>
There is no provision in RadioTower's Articles of Incorporation or By-laws that
would delay, defer or prevent a change in control of RadioTower with the
exception of Article II of the Articles of Incorporation. Article II provides
that the Board of Directors of RadioTower may fix and determine the
designations, rights, preferences or other variations of each class or series
within each class of capital stock of RadioTower. If the Board of Directors
exercised this ability, it may have the potential to defer or prevent a change
of control of RadioTower.
(B) DEBT SECURITIES
RadioTower is not offering any debt securities.
(C) OTHER SECURITIES TO BE REGISTERED
RadioTower is not registering any other securities of its capital at this time
other than its common stock.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON RADIOTOWER'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
(A) MARKET INFORMATION
RadioTower's common stock is quoted on the pink sheets under the symbol "RTOW".
<TABLE>
<CAPTION>
- --------------------------------- ------------------- --------------------- ----------------------------
QUARTER PERIOD HIGH BID LOW BID SOURCE
- --------------------------------- ------------------- --------------------- ----------------------------
<S> <C> <C> <C>
July - September 1998 $0.01 $0.01 Quicken.com
- --------------------------------- ------------------- --------------------- ----------------------------
October - December 1998 $0.01 $0.01 Quicken.com
- --------------------------------- ------------------- --------------------- ----------------------------
January - March 1999 [1] $0.01 $0.01 Quicken.com
- --------------------------------- ------------------- --------------------- ----------------------------
April - June 1999 $4.38 $0.02 Quicken.com
- --------------------------------- ------------------- --------------------- ----------------------------
July - September 1999 $1.75 $0.375 Quicken.com
- --------------------------------- ------------------- --------------------- ----------------------------
October - December 1999 $0.27 $0.02 Quicken.com
- --------------------------------- ------------------- --------------------- ----------------------------
January - February 2000 $1.84 $0.17 Stockwatch.com
- --------------------------------- ------------------- --------------------- ----------------------------
</TABLE>
[1] Any stock prices reflected prior to March 12, 1999 are those of Magnum
Ventures Inc. and are not representative of the current business
activities reflected throughout this Form 10-SB.
Quotations for RadioTower's common shares reflect inter-dealer prices, without
retail markup, markdown or commission and may not represent actual transactions.
(B) HOLDERS
RadioTower has approximately 12 holders of record of common stock as of the date
of this filing.
(C) DIVIDENDS
No dividends have been declared on RadioTower's common stock.
Except for the lack of funds, there are no restrictions that limit the ability
of RadioTower to pay dividends on RadioTower's common stock.
ITEM 2. LEGAL PROCEEDINGS.
RadioTower is not a party to any pending legal proceedings, and to the best of
RadioTower's knowledge, none of RadioTower's assets are the subject of any
pending legal proceedings.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
14
<PAGE>
RadioTower's principal independent accountant, Stark Tinter & Associates, LLC,
has not changed since the date of incorporation and there have been no
disagreements with RadioTower's principal independent accountant.
ITEM 4. RECENT SALE OF UNREGISTERED SECURITIES.
On May 5, 1998, the Board of Directors authorized the issuance of an aggregate
3,500,000 shares of common stock at $0.01 for a total offering price of $35,000
for investments purposes in a private transaction. The offering was fully
subscribed for. However, RadioTower only received $20,000 in cash. The remaining
$15,000 was used to repay advances made to RadioTower. RadioTower repaid these
advances by issuing an aggregate 1,500,000 shares to B-Mac Trading Inc., Barry
Clemiss, Thomas Gardner, Leslie Rutledge and Sharon Ivancoe. See Notes #3 and #5
of the audited financial statements for more details. These shares were sold in
July 1998 and issued in December 1998. RadioTower relied upon Sections 3(b) and
4(2) of the Securities Act of 1933 and Rule 504 of Regulation D. This offering
was not accompanied by any general advertisement or any general solicitation.
The subscribers were provided with and acknowledged receipt of RadioTower's
private placement offering memorandum. RadioTower also received from each
subscriber a completed and signed subscription agreement containing certain
representations and warranties, including, among others, that the subscribers
had bought the shares for their own investment accounts.
The following is a list of the subscribers that subscribed for shares in the May
5, 1998 private placement.
NAME OF SUBSCRIBERS
<TABLE>
<CAPTION>
<S> <C> <C>
Heather Alexander Annandale Investment Corporation B-Mac Trading Inc.
Leah Balderson Shane Barber William Bowker
Barry Clemiss Candiss Cox Michael dePfyffer
Dresden Investments S.A. Chris England Tim England
Christine Ferguson Randy Fraser Thomas Gardner
Rob Griffis Danielle Halls Shane Ivancoe
Debbie Jackson Scd Jackson Maxine Knight
Timothy S. Kravjanski Marcella Lamdureux Fred McDonald
Julie Pearson Philip Rooyakkers Leslie Rutledge
Kerry Semple Andrew Smart Richard Strachan
Gerry Vipond Douglass Wallace Daniel J. Walsh
Jason Walsh Damerka Ward
</TABLE>
On March 5, 1999, the Board of Directors authorized the issuance of 6,500,000
shares of common stock at $0.001 per share as consideration to be paid to Paul
Valkama and Henry Valkama for the purchase of the RadioTower Interactive
business. These share were issued on March 31, 1999. RadioTower relied upon
Sections 3(b) and 4(2) of the Securities Act of 1933 for this private
transaction. See Exhibit #6.1 - Purchase Agreement for more details.
On March 12, 1999, the Board of Directors authorized the issuance of an
aggregate 2,500,000 shares of common stock at $0.01 for a total offering price
of $25,000. The offering was fully subscribed and RadioTower received $25,000 in
cash. These share were sold and issued on March 31, 1999. RadioTower relied upon
Section 4(2) of the Securities Act of 1933 and Rule 504 of Regulation D for this
private transaction. This offering was not accompanied by any general
advertisement or any general solicitation. The subscribers were provided with
and acknowledged receipt of RadioTower's private placement offering memorandum.
RadioTower also received from each subscriber a completed and signed
subscription agreement containing certain representations and warranties,
including, among others, that the subscribers had bought the shares for their
own investment accounts.
The following is a list of the subscribers that subscribed for shares in the
March 12, 1999 private placement.
15
<PAGE>
NAME OF SUBSCRIBERS
<TABLE>
<CAPTION>
<S> <C> <C>
Dorothy McNabb Lisa McNabb Tracy Rehmke
Coleen Panchinski Larry McNabb Kandice Keith
Jason Walsh Valerie Greer Pacific Rim Capital
</TABLE>
On September 29, 1999, the Board of Directors authorized the issuance of an
aggregate 3,000,000 shares of common stock at $0.01 for a total offering price
of $30,000. The offering was fully subscribed for. However, RadioTower only
received $19,000 in cash. The remaining $11,000 was received by RadioTower as
past consideration in the form of accrued management wages - $6,000 owed to Alan
Brown and $5,000 owed to Jeff Cocks. RadioTower paid these accrued wages by
issuing 600,000 shares to Alan Brown and 500,000 shares to Jeff Cocks. See "Item
6. Executive Compensation" and Notes #3 and #5 of the audited financial
statements for more information. These shares were sold on September 29, 1999
and issued on February 8, 2000. RadioTower relied upon Section 4(2) of the
Securities Act of 1933 and Regulation S for this private transaction. This
offering was not accompanied by any general advertisement or any general
solicitation. RadioTower received from each subscriber a completed and signed
subscription agreement containing certain representations and warranties,
including, among others, that the subscribers had bought the shares for their
own investment accounts and that they were not a U.S. person. These shares are
restricted securities and are subject to resale restrictions under Regulation S
and Rule 144.
The following is a list of the subscribers that subscribed for shares in the
September 29, 1999 private placement.
NAME OF SUBSCRIBERS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Alan Brown Emanuel Hajek Escape Enterprises Ltd.
Jeff Cocks Suzanne Kemp Tech Equities Ltd. Skyline Properties Ltd.
</TABLE>
RadioTower paid no underwriting discounts or commissions in connection with any
of its share offerings.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Articles V and VI of the Articles of Incorporation and Article VI of the By-Laws
of RadioTower set forth certain indemnification rights. The By-Laws of
RadioTower provide that RadioTower will indemnify its directors and officers
from any action, suit or proceeding, whether civil, criminal, administrative, or
investigative to the fullest extent that indemnification is legally permissible
under the laws of Nevada. The By-laws further provide that any expenses of the
directors and officers incurred in defending an action, suit, or proceeding must
be paid by RadioTower as these expenses are incurred and in advance of the final
disposition of the action, suit, or proceeding.
RadioTower may also purchase and maintain insurance or make other financial
arrangements for the benefit of any director or officer who is or was a director
or officer of RadioTower and such insurance may cover claims for which
RadioTower could not indemnify such director or officer. Currently, RadioTower
has not purchased any such insurance or made any such financial arrangements.
The Articles of RadioTower provide that no director or officer is personally
liable to RadioTower or its stockholders for damages for breach of fiduciary
duty as a director or officer.
The Nevada Private Corporations Act provides that RadioTower may indemnify its
directors and officers if the directors and officers acted in good faith and in
a manner the directors and officers believed to be in the best interest of
RadioTower and had no reasonable cause to believe the conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to officers, directors or persons controlling RadioTower
pursuant to the foregoing, such indemnification may be against public policy as
expressed in the Securities Act of 1933, and would therefore be unenforceable.
Except as referred to above, no controlling person, director or officer of
RadioTower is insured or indemnified by any statute, charter provisions,
by-laws, contract or other arrangement.
16
<PAGE>
PART F/S
The audited financial statements of RadioTower and related notes which are
included in this registration statement have been examined by Stark Tinter &
Associates, LLC, and have been included in reliance upon the opinion of such
accountants given upon their authority as an expert in auditing and accounting.
PART III
ITEMS 1 AND 2. INDEX TO AND DESCRIPTION OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
<S> <C> <C>
Exhibit A 1. Audited Financial Statements as of December 31, 1998 for the period Filed
May 5, 1998 (inception) to December 31, 1998
2. Interim financial statements as of June 30, 1999 for
the period May 5, Filed 1998 (inception) to June 30, 1999.
3. Audited Financial Statements as of December 31, 1999 for the period Included
December 31, 1998 to December 31, 1999
Exhibit 2.1 Corporate Charter Filed
Exhibit 2.2 Articles of Incorporation Filed
Exhibit 2.3 Certificate of Amendment of Articles of Incorporation Filed
Exhibit 2.4 By-Laws Filed
Exhibit 3 Instruments defining the rights of security holders None
Exhibit 5 Voting Trust Agreement None
Exhibit 6.1 Purchase Agreement Filed
Exhibit 6.2 Licensing Agreement with Global Media Included
Exhibit 6.3 Site Contract with Burst Media Included
Exhibit 6.4 Interim Licensing Agreement with Destiny Media Technologies Inc. Included
Exhibit 6.5 Master Distributor Agreement with Pronet Enterprises Ltd. Included
Exhibit 6.6 Contract with Eline Technologies Inc. Included
Exhibit 7 Material Foreign Patents None
Exhibit 12 Additional Exhibits None
Exhibit 27 Financial Data Schedule Included
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, RadioTower has duly caused this registration statement to be signed on its
behalf by the undersigned, who is duly authorized.
17
<PAGE>
RADIOTOWER.COM, INC.
Dated MARCH 7, 2000 By: /S/ ALAN BROWN
------------------------------
ALAN BROWN - PRESIDENT
18
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
As of and for the year ended
December 31, 1999,
the period May 5, 1998 (inception)
to December 31, 1998 and
the period May 5, 1998 (inception)
to December 31, 1999
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Table of Contents
<TABLE>
<CAPTION>
Page
------
<S> <C>
Report of Independent Auditors F-2
Balance Sheet F-3
Statements of Operations F-4
Statement of Changes in Stockholders' Equity F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7 - F-12
</TABLE>
<PAGE>
[GRAPHIC OMITTED]STARK TINTER & ASSOCIATES, LLC
---------------------------------------------------------------
Certified Public Accountants
Financial Consultants
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
RadioTower.com, Inc.
322 - 425 Carrall Street
Vancouver, British Columbia V6B 6E3
We have audited the accompanying balance sheet of RadioTower.com, Inc. (a
development stage company) fka Magnum Ventures Inc. as of December 31, 1999, and
the related statements of operations, changes in stockholders' equity, and cash
flows for the year ended December 31, 1999, the period from May 5, 1998
(inception) to December 31, 1998 and the period from May 5, 1998 (inception) to
December 31, 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 audits 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 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 RadioTower.com, Inc. (a
development stage company) fka Magnum Ventures Inc. as of December 31, 1999, and
the results of its operations, and its cash flows for the year ended December
31, 1999, the period from May 5, 1998 (inception) to December 31, 1998 and the
period from May 5, 1998 (inception) to December 31, 1999, in conformity with
generally accepted accounting principles.
Stark Tinter & Associates, LLC
Denver, Colorado
February 4, 2000
7535 East Hampden Avenue, Suite 109 o Denver, Colorado 80231 o
(303)694-6700 Fax (303) 694-6761
F-2
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Balance Sheet
December 31, 1999
ASSETS
Current assets:
Cash $ 1,762
Other assets:
Domain asset, net 54,167
Property, plant & equipment 4,079
--------
$ 60,008
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 29,289
--------
Other liabilities:
Loans payable - stockholders 64,975
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value,
1,000,000 shares authorized, none outstanding --
Common stock, $0.001 par value,
50,000,000 shares authorized,
12,500,000 shares issued 12,500
Additional paid in capital 110,618
Common stock subscriptions 30,000
Deficit accumulated during the
development stage (187,107)
Accumulated other comprehensive income:
Cumulative translation adjustment (267)
--------
(34,256)
--------
$ 60,008
========
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
For the Period For the Period
May 5, 1998 May 5, 1998
For the Year Ended (inception) to (inception) to
December 31, 1999 December 31, 1998 December 31, 1999
------------------ ----------------- ------------------
<S> <C> <C> <C>
Revenue $ 848 $ -- $ 848
Costs and expenses:
Selling, general and administrative 143,680 25,956 169,636
Amortization 11,536 109 11,645
Loss on investment in mineral property -- 5,000 5,000
------------ ----------- -----------
Total operating expenses 155,216 31,065 186,281
------------ ----------- -----------
Operating (loss) (154,368) (31,065) (185,433)
Other income (expense)
Interest expense (327) -- (327)
Other expense (1,347) -- (1,347)
------------ ----------- -----------
Net (loss) (156,042) (31,065) (187,107)
Other comprehensive income:
Foreign currency translation adjustment (267) -- (267)
------------ ----------- -----------
Comprehensive (loss) $ (156,309) $ (31,065) $ (187,374)
============ =========== ===========
Per share information:
Weighted average number
of common shares outstanding - basic and diluted 9,452,055 2,362,500 6,628,713
============ =========== ===========
Net (loss) per common share - basic and diluted $ (0.02) $ (0.01) $ (0.03)
============ =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
Radio Tower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
May 5, 1998 (inception) through December 31, 1999
<TABLE>
<CAPTION>
Deficit
Common Stock Commone Accumulated Cumulative
------------------------- Additional Stock During the Translation
Shares Amount Paid in Capital Subscriptions Development Stage Adjustment Total
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of stock for
cash at $0.01 per share
(net of issuance costs) 2,000,000 $ 2,000 $ 16,118 $ -- $ -- $ -- $ 18,118
Issuance of stock for
repayment of advances
at $0.01 per share 1,500,000 1,500 13,500 -- -- -- 15,000
Net (loss) for the period -- -- -- -- (31,065) -- (31,065)
--------------------------------------------------------------------------------------------------
Balance at December 31, 1998 3,500,000 3,500 29,618 -- (31,065) -- 2,053
--------------------------------------------------------------------------------------------------
Issuance of stock for
purchase of goodwill 6,500,000 6,500 58,500 -- -- -- 65,000
Issuance of stock for
cash at $0.01 per share 2,500,000 2,500 22,500 -- -- -- 25,000
Issuance of stock subscriptions
for cash at $0.01 per share -- -- -- 19,000 -- -- 19,000
Issuance of stock subscriptions
as payment of accrued wages -- -- -- 11,000 -- -- 11,000
Foreign currency translation
adjustment -- -- -- -- -- (267) (267)
Net (loss) for the year -- -- -- -- (156,042) -- (156,042)
--------------------------------------------------------------------------------------------------
Balance at December 31, 1999 12,500,000 $ 12,500 $ 110,618 $30,000 $(187,107) $(267) $ (34,256)
==================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
RadioTower.com
fka Magnum Ventures Inc.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
For the Period For the Period
May 5, 1998 May 5, 1998
For the Year Ended (inception) to (inception) to
December 31, 1999 December 31, 1998 December 31, 1999
------------------ ----------------- -----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $(156,042) $ (31,065) $(187,107)
Adjustments to reconcile net (loss) to net
cash used in operating activities:
Amortization 11,536 109 11,645
Increase in accounts payable and accrued liabilities 35,850 4,439 40,289
Loss on investment -- 5,000 5,000
Cumulative translation adjustment (267) -- (267)
--------- --------- ---------
Net cash (used in) operating activities (108,923) (21,517) (130,440)
--------- --------- ---------
Cash flows from investing activities:
Purchase of fixed assets (4,079) -- (4,079)
Organization costs -- (812) (812)
Investment in mineral claims -- (5,000) (5,000)
--------- --------- ---------
Net cash (used in) investing activities (4,079) (5,812) (9,891)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from loans payable - shareholders 64,975 -- 64,975
Proceeds from related party advances -- 15,000 15,000
Proceeds from stock sales, net of issuance costs 25,000 18,118 43,118
Proceeds from stock subscriptions 19,000 -- 19,000
--------- --------- ---------
Net cash provided by financing activities 108,975 33,118 142,093
--------- --------- ---------
Increase in cash (4,027) 5,789 1,762
Beginning cash 5,789 -- --
--------- --------- ---------
Ending cash $ 1,762 $ 5,789 $ 1,762
========= ========= =========
Supplemental cash flow information:
Cash paid for interest $ (327) $ -- $ (327)
Noncash transactions:
Issuance of stock for repayment of advances $ -- $ (15,000) $ (15,000)
Issuance of stock for purchase of goodwill $ (65,000) $ -- $ (65,000)
Issuance of stock subscriptions in repayment of
accrued wages $ (11,000) $ -- $ (11,000)
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Notes to Financial Statements
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was incorporated on May 5, 1998, in the State of Nevada as
Magnum Ventures Inc. On May 18, 1999 the Company changed its name to
RadioTower.com, Inc. The Company is in the development stage. During
the period, the Company purchased a domain asset, the domain name
RadioTower.com, and will utilize the website as its own internet portal
which provides free online directories of live radio stations.
Estimates
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the amounts
reported in these financial statements and accompanying notes. Actual
results could differ from those estimates.
Cash and Cash Equivalents
For purposes of balance sheet classification and the statements of cash
flows, the Company considers all highly liquid investments purchased
with an original maturity of three months or less to be cash
equivalents.
Financial Instruments
The carrying amounts for the company's cash and cash equivalents,
accounts payable and loans payable - stockholders approximate fair
value.
Property and Equipment
Property and equipment are being depreciated by the straight-line
method over lives of five years. The depreciation methods are designed
to expense the cost of the assets over their estimated useful lives.
Research and Development Costs
Research and development costs are charged to operations when incurred
and are included in selling, general and administrative expenses. The
amounts charged to operations for the year ended December 31, 1999, the
period May 5, 1998 (inception) to December 31, 1998 and the period May
5, 1998 (inception) to December 31, 1999, were approximately $34,000,
nil and $34,000 respectively.
F-7
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Notes to Financial Statements
Foreign Currency Exchange and Translation
The functional currency of the Company is the U.S. dollar. The Company
also has a Canadian dollar bank account it uses for some operations.
For reporting purposes, the financial statements are presented in U.S.
dollars in accordance with Statement of Financial Accounting Standard
No. 52, Foreign Currency Translation. The balance sheet is translated
into U.S. dollars at the exchange rates prevailing at the balance sheet
date and the statement of operations and cash flows at the average
rates for the relevant periods. The Company does not use foreign
exchange contracts, interest rate swaps, or option contracts.
Translation gains and losses are not included in operations but are
accumulated in a separate component of shareholders' equity. Foreign
currency transaction gains and losses, which for the year ended
December 31, 1999 and the period May 5, 1998 (inception) to December
31, 1999 were nil, are included in the results of operations.
Intangibles
The domain asset represents the cost of a domain name acquired and is
being amortized using the straight-line method over five years.
Amortization of the domain asset expensed to operations for the year
ended December 31, 1999 and the period May 5, 1998 (inception) to
December 31, 1999 was $10,833.
Product and website development costs incurred in developing the
Company's website are accounted for in accordance with SOP 98-1.
Product and website development costs include amounts incurred by the
Company to develop, enhance, manage, monitor and operate the Company's
website. Product development costs, preliminary project and past
implementation product costs are expensed as incurred.
Net loss per common share
The Company follows Statement of Financial Accounting Standards No.
128, "Earnings Per Share" ("SFAS No. 128"). Basic earnings per common
share ("EPS") calculations are determined by dividing net income by the
weighted average number of shares of common stock outstanding during
the year. Diluted earnings per common share calculations are determined
by dividing net income by the weighted average number of common shares
and dilutive common share equivalents outstanding.
Comprehensive income
The Company follows Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income." SFAS 130 establishes standards
for reporting and displaying comprehensive income, its components and
accumulated balances. SFAS 130 is effective for periods beginning after
December 15, 1997. The Company adopted SFAS 130 in 1998.
F-8
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Notes to Financial Statements
Impairment of long-lived assets
The Company periodically reviews the carrying amount of property, plant
and equipment and its identifiable intangible assets to determine
whether current events or circumstances warrant adjustments to such
carrying amounts. If an impairment adjustment is deemed necessary, such
loss is measured by the amount that the carrying value of such assets
exceeds their fair value. Considerable management judgement is
necessary to estimate the fair value of assets, accordingly, actual
results could vary significantly from such estimates. Assets to be
disposed of are carried at the lower of their financial statement
carrying amount or fair value less costs to sell. As of December 31,
1999, management does not believe there is any impairment of the
carrying amounts of assets.
Revenue Recognition
The Company's revenue is primarily related to advertising and
electronic commerce transaction revenues. Advertising revenues
represent sales of online advertising. Electronic commerce transaction
revenues consist of referrals to an advertiser's website where an
individual may conduct an electronic commerce transaction. The Company
recognizes advertising revenues over the period the ads are displayed
on the website. The Company recognizes electronic commerce transaction
revenues upon notification from the advertiser of revenues earned by
the Company.
Advertising Costs
The cost of advertising is expensed as incurred. For the year ended
December 31, 1999, the period May 5, 1998 (inception) to December 31,
1998 and the period May 5, 1998 (inception) to December 31, 1999, the
Company incurred advertising expense of $11,316, nil and $11,316,
respectively, which is included in selling, general and administrative
expenses.
Segment Information
Effective in 1999, the Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." Certain information
is disclosed, per SFAS No. 131, based on the way management organizes
financial information for making operating decisions and assessing
performance. The Company currently operates in a single segment and
will evaluate additional segment disclosure requirements as it expands
its operations.
F-9
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Notes to Financial Statements
Recent Pronouncements
The FASB recently issued Statement No 137, "Accounting for Derivative
Instruments and Hedging Activities-Deferral of Effective Date of FASB
Statement No. 133". The Statement defers for one year the effective
date of FASB Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities". The rule now will apply to all fiscal quarters
of all fiscal years beginning after June 15, 2000. In June 1998, the
FASB issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which is required to be adopted in years beginning
after June 15, 1999. The Statement permits early adoption as of the
beginning of any fiscal quarter after its issuance. The Statement will
require the Company to recognize all derivatives on the balance sheet
at fair value. Derivatives that are not hedges must be adjusted to fair
value through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of derivatives will
either be offset against the change in fair value of the hedged assets,
liabilities, or firm commitments through earnings or recognized in
other comprehensive income until the hedged item is recognized in
earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings. The Company has not
yet determined if it will early adopt and what the effect of SFAS No.
133 will be on the earnings and financial position of the Company.
SOP 98-9, "Modification of SOP 97-2, Software Revenue Recognition, With
Respect to Certain Transactions" was issued in December 1998 and
addresses software revenue recognition as it applies to certain
multiple-element arrangements. SOP 98-9 also amends SOP 98-4, "Deferral
of the Effective Date of a Provision of SOP 97-2", to extend the
deferral of application of certain passages of SOP 97-2 through fiscal
years beginning on or before March 15, 1999. All other provisions of
SOP 98-9 are effective for transactions entered into in fiscal years
beginning after March 15, 1999. The Company will comply with the
requirements of this SOP as they become effective and this is not
expected to have a material effect on the Company's revenues and
earnings.
Note 2. DOMAIN ASSET
On March 12, 1999, the Company entered into an agreement to purchase
the domain name RadioTower.com in exchange for 6,500,000 shares of
restricted common stock at a fair value of $0.01 per share. The Company
has utilized the domain name for its own internet portal which provides
free online directories of live radio stations. This transaction will
be accounted for as the purchase of a domain asset. The Company will
conduct business under the name Radiotower.com.
The following is a summary of the domain asset as of December 31, 1999,
less accumulated amortization:
<TABLE>
<S> <C>
Domain asset $ 65,000
Less accumulated amortization (10,833)
---------
Net domain asset $ 54,167
=========
</TABLE>
F-10
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Notes to Financial Statements
Note 3. STOCKHOLDERS' EQUITY
During the period May 5, 1998 (inception) to December 31, 1998,
2,000,000 shares of common stock $0.001 par value were issued to
various investors for cash of $20,000 in a private placement pursuant
to Regulation D, Rule 504. Issuance costs were $1,882.
During the period May 5, 1998 (inception) to December 31, 1998,
1,500,000 shares of common stock $0.001 par value were issued in
exchange for repayment of advances aggregating $15,000.
During the year ended December 31, 1999, 6,500,000 shares of common
stock $0.001 par value were issued in consideration for the domain
asset and domain name RadioTower.com.
During 1999, 2,500,000 shares of common stock $0.001 par value were
issued to various investors for cash of $25,000 in a private placement
pursuant to Regulation D, Rule 504.
In 1999, stock subscriptions for 1,900,000 shares of common stock were
issued for cash of $19,000. Common stock was issued in February, 2000
pursuant to Regulation S, Rule 144.
Also in 1999, stock subscriptions for 1,100,000 shares of common stock
were issued in exchange for payment of accrued wages of $11,000. Common
stock was issued in February, 2000 pursuant to Regulation S, Rule 144.
Note 4. LOSS ON INVESTMENT IN MINERAL PROPERTY
The Company entered into an Option to Purchase agreement on June 4,
1998, to acquire the rights to mineral property claims located in the
Liard Mining Division, British Columbia. The agreement was made with an
unrelated party. The terms of the agreement required the Company to
make an initial cash payment to the party in the amount of $5,000,
which it made during the period. Further required payments were not
made and during the period, the agreement was voided. Therefore, the
initial cash investment was charged to expense as a loss on investment.
Note 5. RELATED PARTY TRANSACTIONS
During the period from May 5, 1998 (inception) to December 31, 1998,
business associates of the sole officer and director of the Company
("sole officer"), advanced to the Company $15,000. The funds were used
to pay for management fees, a legal retainer and to reduce the other
payable to a related party. The sole officer's associates were repaid
through the issuance of 1,500,000 shares.
During the year ended December 31, 1999, shareholders of the Company
loaned to the Company $64,975 in exchange for promissory notes. The
notes bear no interest and are due at various dates through May 2000.
F-11
<PAGE>
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Notes to Financial Statements
Note 6. OPERATING LEASE
The Company leases office space under an operating lease, which expires
in June 2000.
Minimum future rental payments under this non-cancelable operating
lease which has a remaining term of six months is $8,400 at December
31, 1999. Rent expense was $4,914 for the year ended December 31, 1999
and the period May 5, 1998 (inception) to December 31, 1999.
Note 7. INCOME TAXES
The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109 (FAS 109), `Accounting for Income Taxes",
which requires use of the liability method. FAS 109 provides that
deferred tax assets and liabilities are recorded based on the
differences between the tax basis of assets and liabilities and their
carrying amounts for financial reporting purposes, referred to as
temporary differences. Deferred tax assets and liabilities at the end
of each period are determined using the currently enacted tax rates
applied to taxable income in the periods in which the deferred tax
assets and liabilities are expected to be settled or realized.
The provision for income taxes differs from the amount computed by
applying the statutory federal income tax rate to income before
provision for income taxes. The sources and tax effects of the
differences are as follows:
<TABLE>
<S> <C>
Income tax provision at
the federal statutory rate 35%
Effect of operating losses (35)%
----
--
====
</TABLE>
As of December 31, 1999, the Company has a net operating loss
carryforward of approximately $176,000 for tax purposes which will be
available to offset future taxable income. If not used, these
carryforwards will expire in 2019. The tax benefit of these net
operating and capital losses has been offset by a full allowance for
realization. This carryforward may be limited upon the consummation of
a business combination under IRC Section 381.
F-12
EXHIBIT 6.2
LICENSEE AGREEMENT
THIS AGREEMENT dated as of the 20th day of April, 1999 ( the "AGREEMENT")
between Global Media Corp. ("US", "WE" and "OUR"), a duly incorporated company
under the laws of the State of Nevada, and RadioTower.com ("YOU" and "YOUR").
WHEREAS:
A. We operate a server on the internet which allows for the digital delivery,
distribution, transmission and telecommunication of information via the
internet, including, without limitation, audio information and visual
information, and which allows for the secure ordering of, and for the secure
payment for, such information and other products and services via the internet,
including, without limitation, compact discs, digital video discs, videotapes
and books; and
B. Each of the parties desires to enter into a relationship whereby you refer
persons to us via a visit by such persons to or within your web site or channel
and via our server (a "REFERRAL"), so that
(i) we may sell products or services to those persons in consideration of
you receiving a referral fee (the "REFERRAL FEE"), and
(ii) we provide you with the means for persons who visit you at your web
site or channel, seamlessly, to order products or services from us, to
receive such products or services from us via the internet or other
means and to pay us for those products or services while maintaining
the overall look and feel of your web site or channel (the "BASIC
BENEFITS");
THEREFORE, IN CONSIDERATION of the premises, representations, warranties,
covenants and agreements contained in this Agreement and other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged by
each party), the parties agree as follows:
1. BECOMING A LICENSEE
(a) DEFINITION OF "LICENSEE": "Licensee" means an independent contractor who
refers persons to us via a visit by such persons to or within its web site or
channel and via our server, so that we may seamlessly sell products or services
to those persons.
(b) CONDITIONS FOR ACCEPTANCE: To become a Licensee, you shall submit a complete
Licensee application via our web site. We will evaluate your application in good
faith and will notify you of your acceptance or rejection. We may reject your
application if we determine (in our sole discretion) that your web site or
channel, actual or proposed, is unsuitable. Unsuitable web sites or channels
include those that:
Licensee: Henry Valkama
Initial: HV
-------------
1
<PAGE>
(i) promote sexually explicit materials;
(ii) promote violence;
(iii) promote discrimination based on race, sex, religion, nationality,
disability, sexual orientation or age;
(iv) promote illegal activities; or
(v) violate intellectual property rights.
(b) IF YOU ARE NOT ACCEPTED: If we do not accept your application, you are
welcome to re-apply to become a Licensee at any time.
(c) IF YOU ARE ACCEPTED: If we do accept your application, you will become a
Licensee and we agree to provide you with the Basic Benefits.
3. PAYMENT AND INVOICING
(a) FEE STRUCTURE: There are no licensing fees to you for the Basic Benefits.
However, there will be a one time set up fee of $1,500.00 USD and we reserve the
right introduce a charge and thereafter to change the charges to you in respect
of the Benefits and to change the Referral Fee rate. Any such charge or change
shall become effective within thirty (30) days of its posting on our web site.
(b) ADDITIONAL FEATURES: Notwithstanding the $1,500.00 set up fee for the Basic
Benefits, you may request that additional features, such as audio samples and
video samples, ("ADDITIONAL FEATURES") be made available to you in order to
enhance your web site or channel, and we may charge you a fee for making those
Additional Features available to you. You agree that we have no obligation to
make any Additional Features available to you.
(c) PAYMENT: If money is owned to us by virtue of any Additional Features made
available to you, you shall pay monthly in advance for such Additional Features.
You agree that failure to pay such charges is grounds for termination of all
such Additional Features.
(d) FAILURE TO PAY: We may suspend the Basic Benefits or any Additional Feature
to you under this Agreement at anytime for failure to pay, however, the
following schedule may also be followed: if your account is two (2) months past
due, the Basic Benefits or any Additional Feature may be suspended; and when
your account becomes three (3) or more months past due the Basic Benefits or any
Additional Feature may be cancelled and all data may be removed.
Licensee: Henry Valkama
Initial:
----------------
2
<PAGE>
4. REFERRAL FEES
(a) RATE: Subject to the limitations below, we will pay to you a Referral Fee
between Forty and Eighty percent (40%-80%) of Net Sales (the "REFERRAL RATE")
that resulted from a Referral to us by you. In this Agreement,
(i) "NET SALES" means Gross Sales minus Sales Costs and Delivery Charges
to us,
(ii) "GROSS SALES" means the money actually received by us for products
or services purchased from us by persons on the basis of a Referral
to us by you,
(iii) "SALES COST" means the cost of a product or service sold as a result
of a Referral to us by you, which shall be the sale cost listed in
our catalogue (under the "our cost" column) or in any prior notice
from us to you, and
(iv) "DELIVERY CHARGE" means any amount charged to us by a third party in
connection with our fulfillment of a Referral to us by you,
including applicable sales taxes and duties, shipping, handling,
gift wrapping and similar charges, credit card fraud, bad debts and
returned goods charges, and any fees owing, by operation of law or
otherwise, to an artists' collective society for the digital
delivery, distribution, transmission or telecommunication, in whole
or in part, of musical, artistic, dramatic or literary works or
sound recordings, cinematographic works or other subject-matter.
(b) PAYMENT RECEIVED BEFORE REFERRAL FEE PAID: Only products or services that
are sold by us, on the basis of a Referral by you, and that are provided,
shipped or digitally delivery, distributed, transmitted or telecommunicated
using our online ordering system, and for which we have actually received full
payment, will qualify for a Referral Fee.
(c) PRICES: The prices for products and services which are sold by us on the
basis of a Referral from you shall be set exclusively by Global Media Corp. If
you sell a product or service for less than its Sales Cost, then we will deduct
the corresponding proportion of the Sales Cost and all applicable Delivery
Charges from your next monthly Referral Fee payment. If there is no subsequent
payment from which to make such a deduction on the month in which it is due, we
will send you a bill for that amount, which bill must be paid immediately upon
receipt.
5. REFERRAL FEE PAYMENT
We will pay you Referral Fees on a monthly basis. Approximately thirty (30) days
following the end of each month, we will credit your bank account or issue you a
cheque for the Referral Fee earned on products or services that we provided,
shipped or digitally delivered, distributed, transmitted or telecommunicated
during that month, less any taxes that we are required by law to withhold. If
products that generated a Referral Fee are returned by the customer, we will
deduct the corresponding Referral Fee from your next monthly payment. If there
is no subsequent payment from which to make such a deduction on the month in
which it is due, we will send you a bill for that amount, which bill must be
paid immediately upon receipt.
Licensee: Henry Valkama
Initial: HV
----------------
3
<PAGE>
(a) OUR POLICIES APPLY: Our rules, policies and operating procedures concerning
customer orders, customer service, product sales and product returns will apply
to Referral to us by you. We may change such rules, policies and operating
procedures at any time.
(b) We Process Orders: We will process product and service orders placed by
customers who place orders via your web site or channel. We reserve the right to
reject orders that do not comply with any requirements that we periodically may
establish. We will be responsible for all aspects of order processing and
fulfilment. Among other things, we will prepare order forms, process payments,
cancellations and returns and handle customer service. We will track sales made
to customers who purchase products or services via your web site or channel to
our web site and will send you reports summarizing this sales activity. The
form, content and frequency of the reports may vary from time to time in our
discretion.
7. CONTENT
(a) ADVERTISING: Any image which we make available to you must be displayed on
your web site or channel at no cost to us and in a place and on a web page to be
determined by us (the "PAGE"). Such image shall have a maximum size of 468 x 60
pixels. If multiple images are made available to you by us, then they shall be
displayed simultaneously by web browsers accessing the Page, or channel viewers
viewing your channel, in such a manner that some web browsers or channel
viewers, as the case may be, may display one image and others may display a
different image and the proportion of the images so displayed shall be
determined by us. Such image or parts thereof shall (at our sole discretion) be
linked to the web pages of our choice. You shall not solicit or derive revenue
in connection with the display of any image that we make available to you and
you hereby acknowledge that we have the exclusive right to solicit and receive
revenue for the display of the same.
(b) NETWORK IDENTIFICATION: You also must display the phrase "Global Media
Network" at the bottom or your homepage or channel transmission which hyperlinks
to a description of the Network on our web site. We may modify the text or
graphic image of such phrase and of such description from time to time.
(c) LIMITED LICENSE: We grant you a non-exclusive, non-transferrable, revocable
right to use the images and phrases referred to in this section, and such other
images and phrases for which we grant express permission, solely for the purpose
set out in this section. You may not modify any such image or phrase in any way
and you must comply with our usage requirements, if any. We reserve all of our
rights and interests in such images and phrases, including all trade names,
trade-marks, copyrights and other intellectual property rights. We may revoke
this license at any time by giving you written notice.
Licensee: Henry Valkama
Initial: HV
-----------------
4
<PAGE>
8. RESPONSIBILITY FOR YOUR SITE
(a) DEVELOPMENT, OPERATION AND MAINTENANCE: You will be solely responsible for
the development, operation and maintenance of your web site or channel, and for
all content that appears on your web site or channel. Such responsibility shall
include, but not be limited to:
(i) creating and posting or transmitting product descriptions on your web
site or channel;
(ii) the accuracy and appropriateness of content on your web site or
channel (including, among other things, all product-related content);
(iii) ensuring that content on your web site or channel does not violate or
infringe upon the rights of any third party (including copyrights,
trademarks, privacy or other personal or proprietary rights); and
(iv) ensuring that content on your web site or channel is not libellous or
otherwise illegal.
We disclaim all liability for these matters. Further, you will indemnify and
hold us harmless from all claims, damages and expenses (including reasonable
legal fees) relating to the development, operation, maintenance and content of
your web site or channel.
(b) SITE MONITORING: We have the right at any and all times to monitor your web
site or channel in order to determine if you are in compliance with the terms of
this Agreement. We shall have no obligations with respect to the content
available on your web site or channel, including, but not limited to, any duty
to review or monitor any such content. We reserve the right to discontinue the
Basic Benefits or any Additional Features if we determine (in our sole
discretion) that your web site or channel violates any of the above-stated terms
or is objectionable, offensive or otherwise violates a law or our policy.
(c) EXCLUSIVITY: At all times during the term of this Agreement, we shall be the
exclusive entity to whom a Referral is made by you and the exclusive entity who
sells, distributes or makes available products and services on, within or via
your web site or channel in respect of those products and services which we
sell. You agree that you will not (directly or indirectly) allow any other
person to sell, distribute or make available our products or services (or any
products or services which we determine, in our sole discretion, to be direct
competitors thereto) on, within or via your web site or channel, including by
way of links to other web sites or channels. The foregoing does not preclude you
from offering for sale your own products or services from your web site or
channel, provided that we determine (in our sole discretion) that such products
or services are not direct competitors to any products or services which we
sell. In the event that other products or services are added to our catalogue,
it may be a condition of you being allowed to refer to such products or services
that we be the exclusive seller of such products or services from your web site
or channel.
(d) LICENSE TO USE LICENSEE MARKS: You grant us a non-exclusive license to use
your names, titles, logos and trade-marks (collectively, the "LICENSEE MARKS")
in connection with advertising, marketing, promoting and publicizing in any
manner our rights hereunder. Notwithstanding anything herein to the contrary, we
shall not be required to advertise, market, promote or publicize your status as
a Licensee. You hereby represent and warrant that you are the
Licensee: Henry Valkama
Initial: HV
----------------
5
<PAGE>
sole and exclusive owner of the Licensee Marks and have the right and power to
grant to us the license to use same in the manner contemplated herein, and that
such grant does not or will not (i) breach, conflict with or constitute a
default under any agreement or other instrument applicable to you or binding
upon you, or (ii) infringe upon any trade-mark, trade name, service mark,
copyright or other proprietary right of any other person or entity. This license
shall terminate upon the effective date of the expiration or termination of this
Agreement.
(e) THIRD PARTY RIGHTS: Third party works, subject-matter, inventions and marks
licensed by us to Licensees may be governed by separate end-user licenses. You
agree to be bound by the terms of such end-user licenses regarding the
applicable works, subject-matter, inventions and marks.
9. RELATIONSHIP OF PARTIES
You and we are independent contractors, and nothing in this Agreement will
create any partnership, joint venture, agency, franchise, sales representative,
principal-agent or employment relationship between you and us. You shall have no
authority to make or accept any offers or representations on our behalf. You
shall not make any statement, whether on your web site, channel or otherwise,
that reasonably would contradict anything in this Section.
10. TERMS OF THIS AGREEMENT
The term of this Agreement will begin upon our acceptance of your Licensee
application and shall continue for the following three (3) years. This Agreement
is automatically renewable for subsequent one-year periods, unless you give
written notice of termination to us thirty (30) days prior to the renewal date.
Upon delivery of such notice of termination, we shall have the full thirty-day
period to cease the Basic Benefits and any Additional Features. We may terminate
this Agreement at any time by giving you written notice of termination. You are
only eligible to earn Referral Fees on our sales of products or services
occurring during the term, and fees earned up to the date of termination will
remain payable only if the related orders are not cancelled or returned. We may
withhold your final payment for a reasonable time to ensure that the correct
amount is paid. Upon termination of this Agreement, we shall have the right to
contact persons referred to us by you.
11. MODIFICATION OF THIS AGREEMENT
We may modify any of the terms and conditions contained in this Agreement, at
any time and in our sole discretion, by posting a change notice or a new
agreement on our web site. Modifications may include, for example, modification
of products or services, changes in the scope of available Referral Fees, fee
schedules and payment procedures. If any modification is unacceptable to you,
you may terminate this Agreement by giving us written notice of termination
within thirty (30) days of our posting a change notice or a new agreement on our
web site. Upon delivery of such notice of termination, we shall have thirty (30)
days to cease the Basic Benefits and any Additional Features. You continued
status as a Licensee following the thirty-day period after our posting of a
change notice or a new agreement on our web site will constitute binding
acceptance of the change.
Licensee: Henry Valkama
Initial: HV
------------------
6
<PAGE>
12. GENERAL TERMS AND CONDITIONS
(a) INDEMNIFICATION: You hereby agree to indemnify, defend and hold harmless us
and our shareholders, officers, directors, employees, agents, associates,
successors and assigns from and against any and all claims, losses, liabilities,
damages or expenses (including reasonable legal fees) of any nature whatsoever
incurred or suffered by us (collectively, the "LOSSES"), in so far as such
Losses (or actions in respect thereof) arise out of or are based on (i) any
claim or threatened claim that our use of the Licensee Marks infringes on the
rights of any third party, (ii) the breach of any representation, warranty,
covenant or agreement made by you herein, or (iii) any claim related to your web
site or channel.
(b) LIMITATION OF LIABILITY: We will not be liable for indirect, special or
consequential damages (or any loss of revenue, profits or data) arising in
connection with this Agreement, even if we have been advised of the possibility
of such damages. Further, our aggregate liability arising with respect to this
Agreement will not exceed the total Referral Fees paid or payable to you under
this Agreement.
(c) DISCLAIMERS: We make no express or implied warranties or representations
with respect to the Basic Benefits or any Additional Features to you or any
products or services sold by us (including, without limitation, warranties of
fitness, merchantability, non-infringement or any implied warranties arising out
of a course of performance, dealing or trade usage). In addition, we make no
representation that the operation of your web site or channel or our web site
will be uninterrupted or error-free, and will not be liable for the consequences
of any interruptions or errors. You agree to use the Referral, the Basic
Benefits and any Additional Features at your own risk. In no event shall we be
liable for any loss of data, email or files or for any virus infection delays or
performance problems due to power outages, acts of God, telecommunications
failures, theft or destruction of property. Further, in no event shall we be
liable for any delay, failure, claim, liability, loss or damage caused, whether
directly or indirectly, by your, our or any third party's compliance with any
enactment, regulatory order or request of any government authority or agency.
(d) CONFIDENTIALITY: We may disclose to you certain information as a Licensee,
which information we consider to be confidential (herein referred to as
"CONFIDENTIAL INFORMATION"). For purposes of this Agreement, the term
"Confidential Information" shall include, but not be limited to (i) any
modifications to the terms and provisions of this Agreement made specifically
for your web site or channel and not generally available to other Licensees or
affiliates, (ii) web site, channel, business and financial information relating
to us or our Licensees or affiliates, (iii) customer and vendor lists relating
to us or our Licensees or affiliates, and (iv) our or Licensees' pricing and
sales information, and shall also include any information that we designate as
confidential during the term of this Agreement. You agree not to disclose any
Confidential Information and that such Confidential Information shall remain
strictly confidential and secret and shall not be utilized, directly or
indirectly, by you for your own business purposes or for any other purpose
except and solely to the extent that any such information is generally known or
available to the public or if same is required by law or legal process.
Notwithstanding the
Licensee: Henry Valkama
Initial: HV
------------------
7
<PAGE>
foregoing, each party is hereby authorized to deliver a copy of any such
information (i) to any person pursuant to an order issued by any court or
administrative agency, (ii) to its accountants, lawyers or other professional
advisors on a confidential basis, and (iii) otherwise as required by applicable
law. We make no warranty, expressed or implied, with respect to any Confidential
Information delivered hereunder, including implied warranties of
merchantability, fitness for a particular purpose or freedom from patent,
trade-mark or copyright infringements, whether arising by law, custom or
conduct, or as to the accuracy or completeness of such information and we shall
not have any liability to you or to any other person resulting from your or such
third person's use of such information.
(e) INDEPENDENT INVESTIGATION: You acknowledge that you have read this
Agreement, understand it in its entirety and agree to all of its terms and
conditions. You understand that we may at any time (directly or indirectly)
solicit customer referrals on terms that may differ from those contained in this
Agreement or operate web sites, channels or services that are similar to or
compete with your web site, channel or services. You have independently
evaluated the desirability of becoming a Licensee and are not relying on any
representation, guarantee or statement other than as set forth in this
Agreement.
(f) ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between
you and us and supersedes all prior communications, representations,
understandings and agreements whether verbal or written between you and us with
respect to the subject-matter hereof.
(g) REPRESENTATIONS AND WARRANTIES: You hereby represent and warrant to us that
(i) you are free to enter into this Agreement and are not subject to any
obligation or disability which will or might interfere with your ability to
comply with any of the material terms and conditions hereof, and (ii) you have
not made, and will not make, any agreement, assignment or licence which will
conflict with or impair the complete enjoyment of the rights granted to us
herein.
(h) FURTHER ASSURANCES: You agree to take all such actions and execute all such
documents within your power as may be necessary or desirable to carry out or
implement and give full effect to the provisions and intent of this Agreement.
(i) NOTICES: All notices, requests and other communications between you and us
will be deemed to have been delivered if made in writing and either mailed by
registered mail and received within seven (7) days or actually delivered, faxed
or electronically mailed to the other party at the applicable address or fax
number provided below.
(j) ASSIGNMENT AND BENEFIT: We may assign this Agreement or any portion hereof
to any other person, corporation or organization without your consent. You may
not assign this Agreement or any portion hereof, by operation of law or
otherwise, without our prior written consent. This Agreement will enure to the
benefit of and be binding upon the parties and their respective heirs,
executors, administrators, successors and assignees, as applicable.
(k) SEVERABILITY: If any provision of this Agreement is determined at any time
by a court of competent jurisdiction to be invalid, illegal or unenforceable,
such provision or part thereof shall
Licensee: Henry Valkama
Initial: HV
------------------
8
<PAGE>
be severable from this Agreement and the remainder of this Agreement will be
construed as if such invalid, illegal or unenforceable provision or part thereof
had been deleted herefrom.
(l) NUMBER: Words importing the singular include the plural and vice versa in
this Agreement.
(m) DISPUTE SETTLEMENT: Any and all disputes, claims or controversies arising
out of or in connection with this Agreement, or in respect of any defined legal
relationship associated therewith or derived therefrom, will be referred to and
finally resolved by arbitration.
(n) GOVERNING LAW: This Agreement and all matters arising hereunder shall be
governed by and construed in accordance with the laws of British Columbia and
the laws of Canada applicable therein.
By signing in the spaces provided below, you and we accept and agree to all of
the terms and conditions of this Agreement as of the date first written above.
Per: /s/ Illegible /s/ Henry Valkama
---------------------- ---------------------------------
DATE: April 20, 1999 DATE: April 20, 1999
--------------------- ----------------------------
GLOBAL MEDIA CORP LICENSEE
83 Victoria Crescent Henry Valkama
Nanaimo, British Columbia RadioTower.com
Canada V9R 5B9 #108 - 7361 Halifax St.
www.gmcorp.net Burnaby, BC
fax 250-716-0502 Canada V5A 4H3
Phone: 604.420.0971
E-Mail: [email protected]
Licensee: Henry Valkama
Initial: HV
------------------
9
<PAGE>
GLOBAL MEDIA NETWORK ASSOCIATE
SCHEDULE OF ADDITIONAL TERMS SCHEDULE A
Provided in the Global Media Basic Benefits will be the following products and
services:
1. Five hours of back end integration.
2. Five hours of front end web site template implementation.
3. Network Associates will be able to offer any combination of the
following products:
o books
o videos
o music (including CDs, cassettes and DVDs, when you choose music, you
automatically get all three of these products, you cannot
selectively offer just CDs)
4. Content
o entertainment news, reviews and feature articles from Billboard
o music charts from Billboard
o entertainment news, reviews and feature articles from S.W. Networks
(a subsidiary of Launch Media)
o music, video and book reviews from Muze Inc., one of the worlds
largest entertainment information services
o music and video reviews, artist and actor profiles, discography's and
filmography's from the Encyclopedia of Popular Music
o book charts and reviews from Bookreporter
o author features including interviews and biographies from a major
literary information provider (source not named for confidentiality
purposes)
o feature articles, interviews and reviews in the areas of film, music
and literature from Global Media's network of freelance writers and
in-house editorial staff
o ** GMNetwork Radio ** note: this is the only content element, which
Network Associates can currently choose whether or not to have on
their site. ALL other content elements are automatically present
o Audible music sampling provided by Muze and Liquid Audio.
**NOTE** There may be an additional charge to change, alter or
substitute content products or services.
5. Graphics
o There will be a selection complete graphical templates to choose
from.
o Network Associates will be able to choose their own background color.
o Network Associates must provide their own web ready logo in
electronic format.
o Upon request, Global Media will provide this specs for all web site
graphics including navigation buttons and bars. Network Associates
will then have the ability to provide their own graphics as per the
specs. Global Media reserves final approval on ALL graphics
(including logos) submitted by Network Associates.
Global Media Co-marketing and Sales Agreement Schedule "A"
Initial: HV
------------------
Date: May 15, 1999
------------------
<PAGE>
6. Secure on-line transaction processing.
7. Sales reports.
o Global Media will offer a secure area where Network Associates will
be able to view their sales, updated daily. This feature is expected
to be available sometime in 1999.
o Global Media will provide a monthly data dump of Network Associates
customers and the information these customers have provided in the
registration process. Network Associates may only use this
information in accordance with Global Media's privacy policy.
Accessible information in the near future may include:
i. Names
ii. Addresses
iii. Postal or Zip codes
iv. Telephone numbers
v. How customer accessed your site
vi. How the customer heard about your site
vii. Age
viii. Gender
ix. ISP
x. E-mail address
xi. Time on site
xii. Server
xiii. Search words
xiv. Portal
* This information will not include credit card numbers.
8. Call center - toll free access to technical support and customer
inquiry resolution.
9. Access to personal internet marketing manager.
The Network Associate will receive commissions based on the following sliding
scale:
Monthly Sales % of Gross Margin
Under $5,000.00 40%
Over $5,000.00 45%
Over $10,000.00 50%
Over $15,000.00 55%
Over $25,000.00 60%
Global Media Co-marketing and Sales Agreement Schedule "A"
Initial: HV
------------------
Date: May 15, 1999
------------------
<PAGE>
GLOBAL MEDIA ASSOCIATE SCHEDULE "D"
Promotional Commitments
1. The Network Associate reserves the rights to all advertising space within
their existing webpages.
2. Global Media reserves the rights to all advertising space within the
Network Associates storefront pages and on the broadcast media player(s).
Global Media will split the Net advertising revenue 50-50 of that
advertising space allocated to Network Associate on the Global Media
Storefront page(s) but Global Media retains 100% of the revenue from all
other advertising. Global Media also retains the right to change the
structure of how the ads are placed within the storefront pages. Global
Media agrees to provide 30 days written notice of the changes to the
Network Associate. Net advertising revenue shall be defined as the revenue
actually received by Global Media from the sale and placement of
advertisements for third parties run on the Global Media Storefront. Net
shall mean any advertising revenue less any taxes and third party
advertising fees and commissions, provided that such fees and commissions
will not exceed twenty percent (20%) of the revenue received. Revenue
attributable to or imputed from self-promotional advertisements on the
Global Media Storefront or from advertisements on third party sites
bartered for the purpose of promoting Global Media shall not be within the
meaning of Net advertising revenue.
3. Any image which we make available to you must be displayed on your web site
or channel at no cost to us and in a place and on a web page to be
determined by us (the "PAGE"). Such image shall have a maximum size of 468
x 60 pixels. If multiple images are made available to you by us, then they
shall be displayed simultaneously by web browers accessing the Page, or
channel viewers viewing your channel, in such a manner that some web
browsers or channel viewers, as the case may be, may display one image and
others may display a different image and the proportion of the images so
displayed shall be determined by us. Such image or parts thereof shall (at
our sole discretion) be linked to the web pages of our choice. You shall
not solicit or derive revenue in connection with the display of any image
that we make available to you and you hereby acknowledge that we have the
exclusive right to solicit and receive revenue for the display of the same.
4. The Network Associate agrees to place their storefront URL on all of their
letterhead and mass distributed corporate promotional media.
5. Throughout the term of the agreement, the Network Associate shall promote
the use of their storefront site as follows:
i. Once a month from the date the Network Associates site is launched,
the Network Associate shall conduct a contest or other give-away
program reasonably designed to cause increased traffic to the
e-commerce site.
ii. Twice per month the Network Associate agrees to promote their website
via handouts, mailings, television, radio, newspapers, magazines,
billboards advertisements or targeted marketing campaign.
Initial: HV
------------------
Date: May 15, 1999
------------------
EXHIBIT 6.3
SITE CONTRACT
YOUR BURST! AGREEMENT
AGREEMENT
Thank you for joining BURST! By singing below, you appoint BURST! MEDIA, LLC, a
New York limited liability company ("BURST!") as your sales representative and
agreement that the Web site(s) with the address(es) listed on Exhibit A attached
hereto will be included in the BURST! Network on the terms and conditions
contained herein. All subsidiary Web sites or Web pages under the Web sites
listed on Exhibit A are subject to this Agreement as well.
1. SALES
Advertising sales is not difficult, just laborious. Our sales strategy reflects
this: "the more you sell, the more you sell." BURST! will make a lot of sales
calls on potential advertisers. To substantiate our efforts we will make a
report available each month with a summary of our activity, specifically:
a) Who we called on;
b) What was sold.
c) What was proposed
Our formula for success depends on offering the advertiser flexible buying
options according to the kind of people they want to reach. This means that
advertisers may often choose to buy only certain segments of the network--travel
sites if the advertiser is in the travel business; food & gourmet sites if the
advertiser is an upscale lifestyle marketer, etc. There are plenty of potential
advertisers for every category of business, and many more "general advertisers"
(e.g. AT&T, MasterCard, General Motors) that will buy the network across many
different categories, so each network member should benefit from this sales,
formula, but perhaps not at the same time and in equal quantity.
2. RATES & REVENUES
BURST! will have responsibility and final approval for all advertising rates in
the network and may change the rates without notice depending on the
circumstances affecting an order. Lots of things can affect the rate; the most
important and obvious of which is the affect the cost can have on an
advertiser's decision to buy. We are not keen to negotiate, but we may in the
interest of the business.
You are free to set advertising rates for any local, or non-network business
that you, personally, or members of your staff, may sell. We will be glad to
offer our expertise to help you set those rates, but the final rate charged will
be up to you.
BURST! will publish its rate card. The actual price to advertisers may vary from
the published rates (see above) and that information must remain confidential
between the client, BURST! and you. It may not be shared with other advertisers
or third parties.
You will never be required to accept advertising on your site for free. We may
occasionally bring you an offer from an account that wants to test response on
your site at no cost, or a non-profit public service ad, but the decision to
accept that advertising will be yours. If you do accept a free ad for testing,
or public service reasons, you pay us nothing.
In addition, BURST! may sometimes request to place ads for BURST! and research
questionnaires on your site. There will be no fee payable to you or us for these
ads or questionnaires. Per our agreement (section #4), you may refuse to carry
these ads.
<PAGE>
Page 2 of 5
3. BILLING & PAYMENT
BURST! will handle all accounting arrangements for the network and provide
online monthly details to each member of activity on their site. We will provide
a summary of your account status upon request.
BURST! will also be responsible for sending checks to you for the net portion of
the revenue to which you are due. The net amount will equal gross billing minus
advertising agency commissions (if any), and our commissions. [Note: Advertising
agency commission is a holdover from the days when agencies were paid a
percentage of the total cost of the media bought by their clients--usually 15%.
Nobody does business that way anymore, but the agency commission rule lives on.
So, when you look at the rates on the rate card automatically subtract 15%. The
money doesn't go to anybody-including the agency or us-it's just like an
automatic deduction on the price. Makes no sense, we know, but that's how the
business gets done.] Our commission will be calculated on the amount actually
paid to us by the advertiser, net of any agency commission.
BURST! pays Web sites for advertising on a weekly basis. However, if you are
owed less than twenty dollars, the balance will carry over until such times as
you have a balance of twenty dollars or more. But in no event will you be paid
less frequently than quarterly.
Importantly, BURST! can only remit amounts due to you once we've been paid.
Although we make commercially reasonable efforts to collect amounts owned by
advertisers, we do not guarantee payment by the advertisers. We do however,
promise to pay you your share of all collections during the current payment
cycle (as discussed above) at the end of the payment cycle (allowing 5 business
days for checks to clear). Any third party costs incurred by us to collect fees
from advertisers will be deducted from the amount collected purposes of
calculating commissions and your share of the fee.
4. ADVERTISING ACCEPTANCE POLICIES
You may reject any advertising we bring you for any reason. It is your Web site.
Just follow these simple guidelines: We will use commercially reasonable efforts
to give you advance notice of an advertising purchase prior to launching it on
your site. The notice will be in the form of an Insertion Order which will
include (a) the name of the advertiser, (b) how long the ad will run, (c) the
cost of the ad (which must remain confidential), (d) what you will earn and (e)
the commission payable to BURST! It is important to recognize, however, that
because of the fast pace of the Internet we often receive advertising orders
from clients less than 24 hours before the effective start-date of a campaign.
In these instances, BURST! may post advertising on your site prior to sending
out Insertion Orders in the interest of delivering quick turn-around to
advertisers and-as importantly-in the interest of maximizing your revenue
potential. In all cases where advertising is scheduled on your site, you will be
responsible for terms and conditions in the Insertion Orders, unless you notify
us in writing or by E-mail within 24 hours that you reject the ad. If you wish
to see a copy of the ad prior to making your decision we will do our best to
have it available for you review, but we cannot guarantee it.
Please note that if you reject an ad in a particular cycle it may affect our
ability to run other approved advertising in that cycle scheduled for your site
(this is due to the technical aspects of rotating and placing ads on Web sites).
We will not be liable for any revenues lost as a result of a decision on your
part not to accept advertising.
5. ADVERTISING POSITION
(a) BURST! adopted as of March 1, 1997 IAB standard advertising unit sizes,
which are typically 468 x 60 pixels. Sizes may eventually vary, as advertisers
become more adept at developing creative material for the Web--a good thing--and
we will seek your approval for unique sizes that exceed or dramatically differ
from the 468 x 60 unit. In some cases, the different size may require that you
modify your Web site if the ad is to run on your Web site.
(b) All BURST! advertising must appear without the need to scroll down a page
unless we specify, otherwise. this is critical.
(c) As a part of BURST! you agree to give our network advertising priority on
all positions on your site. BURST! advertising must appear first, and on top of
any other advertising that may run along with it on a page unless, again, we
specify otherwise.
(d) BURST! will support its positioning objectives with an automated process
that verifies positions as advertising appears on each site.
(e) After we have received the signed agreement back from you, you can retrieve
the necessary html code with the address to our server. To facilitate proper
rotation and ease handling, advertising will be controlled from the central
point. This is basically the one key thing you will have to do: load the code as
prescribed and do not alter it without our consent or knowledge.
<PAGE>
Page 3 of 5
6. LIABILITY
(a) Because the html code that allows us to place the advertisng resides on our
server, if our server goes down, the advertising may no load or operate properly
on your Web site. Removing the code from your Web site should allow your Web
site to operate while our server is down. In any event, you agree not to hold us
liable for any damages that may result from our server not operating properly.
(b) If you do something on you Web site that causes you to be sued (like run a
picture of Mickey Mouse alongside pornography, or deface the advertising, etc.)
you agree to indemnify and defend us against any lawsuits or claims made against
us as a result of your actions.
(c) If for any reason the advertising contains bad code that harms the network,
your Web site, or your server, you will not seek damages from us. Furthermore,
BURST! is not liable for the content of the advertising supplied by advertisers.
You agree to look solely to the advertiser for any damages that may result from
the content of their advertising or its code.
(d) We are not a party to and have no liability for other problems of your own
cause in connection with your Web site.
(e) Although security is a high priority for us, we are not liable for the acts
of others, including the use of our code or server and any resulting damages to
the network, your Web site, or your server.
7. TERMS AND COMMISSION
Our commission will be based on the term you selected for this Agreement.
BURST!
Term Commission Rate
THREE YEARS (EXCLUSIVE) 20%
If you accept advertising without signing this Agreement, then this Agreement
will be deemed to have a month-to-month term and the corresponding BURST!
Commission Rate.
We do not anticipate that this Agreement is to be terminated during its term.
However, the reality is you can terminate the agreement by removing our code
from your Web site or you may terminate your Web site. In such event, you will
own us additional commission based upon the highest applicable Commission Rate
for the actual time the Agreement is in effect. For example, if you choose a 3
year term and terminate the Agreement after 2 years, you will owe us the
difference between the 35% (1 year rate) and 20% (3 year rate) commissions for
all advertising placed on your Web site during the term of the Agreement, and if
you terminate after 10 months, you will owe us the difference between the 50%
(month-to-month rate) and 20% commissions. You will also owe us commissions for
advertising scheduled to run on your Web site pursuant to an approved Insertion
Order.
If you appoint BURST! as your exclusive representative (by selecting a one or
three year term) BURST! will be entitled to commissions on all advertising that
runs on your site except for (i) any exclusions we agree to now (list attached
as Exhibit C) or (ii) advertising sold by employees of your Web site.
8. RENEWAL
If written or E-mail notice is not delivered to the other party at least 30 days
prior to this Agreement's expiration or the expiration of subsequent renewal
terms, this Agreement will automatically renew for an additional term of the
same length. All other terms and conditions will be as specified in this
Agreement.
9. GOVERNING LAW
Notwithstanding that you, your Web site or your server may reside outside the
State of New York, including outside of the United States of America, you agree
that this Agreement shall be governed by the laws of the State of New York,
including specifically, but not limited to, the laws of the State of New York
limiting the liability of members of a limited liability company.
10. SUCCESSORS AND ASSIGNS
This Agreement shall be binding on the undersigned, its successors and assigns.
<PAGE>
Page 4 of 5
11. SETOFF
In the event BURST! is owned any sums due under the terms of this Agreement,
BURST! may collect such amounts from payments due to you for advertising run on
your Web site.
12. SIGNATURE
Once again, thank you for joining the BURST! network. Please indicate your
agreement to these terms and conditions by signing below.
The Undersigned is legally empowered to enter into this agreement and agrees to
be bound by the terms and conditions as reflected below.
NOTE: IF YOU ARE UNDER 21, A PRINTED COPY WITH THE SIGNATURE OF A PARENT OR
GUARDIAN IS REQUIRED. PLEASE SEND THE SIGNED COPY BY FAX OR POSTAL MAIL.
BURST! MEDIA, LLC
a New York limited liability company
10 New England Executive Park
Burlington, MA 01803
(781) 272-5544
(800) 876-4352
fax: (781) 272-0897
AGREED AND ACCEPTED
this day of March 31, 1997
Name: Paul Valkama
EXHIBIT A
- ---------
WEB SITE NAME AND PRIMARY URL:
Radio Tower
www.radiotower.com
EXHIBIT B
- ---------
TAX STATUS
NON-UNITED STATES BASED WEB SITE:
OPTION 3
If the Web site is foreign based and has no affiliation with a U.S. tax filing
company or individual:
a. Checks will be made payable to the owner: Paul Valkama
b. Checks will mailed to the following address:
#8 - 4106 Albert Street,
Burnaby, BC V5C 2E6 Canada
EXHIBIT C
- ---------
EXCLUSIONS:
NONE:
Please contact [email protected] if you need to create an addendum to this
contract.
EXHIBIT 6.4
INTERIM LICENSE AGREEMENT
-Between-
DESTINY SOFTWARE PRODUCTIONS INC.(LICENSOR)
- -and-
RADIOTOWER.COM INC.(LICENSOR)
September 13, 1999
Paul:
Further to our discussions, here outlined are the terms and conditions for the
License Agreement between Radio Tower and Destiny Software Productions. Note
that this is an interim agreement until such time as a full and formal license
and/or reseller agreement can be drawn up.
OBJECTIVE & USE:
1. To License a Commercial version of Destiny's Web Clip Audio Software
("Software") for use in and as Radio Tower's AudioAds software product
("end use") only. The Software will be branded with the AudioAds name
and provide a link back to AudioAds.com.
TERMS
1. The software will be used only for the end use application for AudioAds
as indicated above.
2. This agreement permits the use of the software to AudioAds customers,
upon registration pursuant to a soon to be created registration form.
It is for use on a single server for use only in connection with a
Single Home Page or Micro Page, on a Single Web Site (or URL).
3. You may not make unauthorized copies of the Software, except that you
may either make one copy of the Software solely for back up or archival
purposes. You may not permit other individuals or companies to use the
software except under the terms of this agreement. You may not modify,
rent, lease, sublicense or use the software for other service bureau
purposes.
4. License fees will be paid to Destiny at a rate of $10 per user, per
page, per site or microsite. Payments will be calculated and payable
monthly from monies received by the Licensee and will be paid on the
30th of the month following the end of the reporting period.
5. You may not reverse engineer, decompile or disassemble the Software.
The software will not be modified in any way whatsoever, once it is
provided to RadioTower, AudioAds, or any other company.
6. This is a license agreement only and does not imply any sale or
transfer of
<PAGE>
ownership. RadioTower will not resell the software, other than the use
and relicense of the software for end user web pages and domains.
7. Any and every end user will agree to a license agreement governing the
use of the software.
8. Destiny will receive appropriate logo identification, credits and links
in any explanation pages and "about" files. This indemnification will
not be greater than that of RadioTower or AudioAds.com.
9. This agreement will remain in effect:
a) For one year from the sigining date. The contract will be
automatically renewed every year unless either party gives
30 day notice, prior to year end, of their desire to
terminate.
b) unless it is terminated due to a breach of its terms.
Upon termination the licensee will cease all use of the Software, other
than for those installed on any and user's web pages provided the
royalties are paid in full, and destroy, or return to Destiny, all
materials and copies of the Software.
10. Destiny may also cancel this agreement with 60 days notice for lack of
performance. Lack of performance is defined as less than 500 units sold
within 6 months of the software being delivered and available for use.
However, the agreement will not be canceled for those end customers who
have paid in full and which Destiny has received payment. Destiny may
also cancel the agreement without notice days if the monthly license
payment is more than 30 days past due.
11. Destiny will have the right to full access to the financial records of
RadioTower related to AudioAds, provided 7 days notice is provided.
12. If any disagreements arise between the two parties, it will be settled
through commercial arbitration in British Columbia and the costs will
be borne by the party who has breached the agreement.
13. This is a License Agreement only and does not imply and employment or
partnership relationship between the parties.
14. AudioAds is a Trademark of RadioTower.com Inc. and can only be used by
the Licensor if agreed to in writing by them. Upon termination the
licensor will cease all use of the Mark.
Agreed,
/s/ Ed Kolic
- -----------------------------
Ed Kolic, Destiny Software Date: 9/15/99
/s/ Paul Valkama
- -----------------------------
Paul Valkama, Radio Tower Date: 9/15/99
EXHIBIT 6.5
MASTER DISTRIBUTOR AGREEMENT
BETWEEN
PRONET ENTERPRISES LTD
AND
PAUL VALKAMA
(DBA RADIOTOWER INTERACTIVE)
This Distributor Agreement (the "Agreement") is made and entered into as of the
21st day of August, 1997 (the "Effective Date").
by and between
PRONET ENTERPRISES LTD. a properly registered corporation of British Columbia,
Canada, located at 502-150 Alexander Street, Vancouver, BC, V6A 1B5
("DISTRIBUTOR").
and
Paul Valkama, dba RadioTower Interactive, a sole proprietorship with principal
offices at 8-4106 Albert Street, Burnaby, BC ("RTI").
WHEREAS, Distributor maintains and operates an internationally accessed
Internet commercial database along with certain Inernet promotion
products and services.
WHEREAS, RTI has proprietary and/or marketing rights to design, produce, host
and deliver audio sound clips for the Internet.
WHEREAS, RTI wishes to grant to Distributor and Distributor desires to obtain
certain rights to such audio services, more particularly described
below, in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, and in consideration of the mutual covenants contained herein,
the parties hereto agree to the following terms and conditions, which set forth
the rights, duties, and obligations of the parties hereto.
1. DEFINITIONS
For the purposes of this Agreement, the following terms shall have the following
meanings:
<PAGE>
2
1.1 "CUSTOMERS" means those persons and entities who purchase the Products
from the Distributor in compliance with the provisions of this Agreement.
1.2 "DOCUMENTATION" means the support materials and user guide in electronic
or printed form which supplement and support the Products.
1.3. "SERVICES" means the capability provided to Distributor by RTI to design,
create, host and produce audio sound clips for use on the Internet as an
advertising medium.
1.4. "AGENT" means that the Distributor shall be permitted to promote the RTI
opportunity to other Internet sites and enter into re-seller agreements
with them for which the Distributor shall be entitled to management and
processing fees as set forth int his agreement.
1.5. "BASE RETAIL PRICING" means the minimum price used to compute the minimum
compensation package for seller, Distributor and RTI.
1.6. "RETAIL PRICE" means the current retail price.
1.7. "MARKET AND SELL" means the right to sell and or promote the Products as
described in Attachments B and C or in subsequent Attachments as may
created and mutually approved or amended from time to time by mutual
agreement between RTI and Distributor.
1.8. "PRODUCTS" means those products listed in Attachments B and C.
1.9 "OPPORTUNITY" means the opportunity for other Companies to sell Products
through the RadioTower and Pronet Enterprises Ltd. co-branded web page.
2. APPOINTMENT AS DISTRIBUTOR AND AGENT
2.1. GRANT TO DISTRIBUTE. RTI hereby grants, and the Distributor hereby
accepts, an exclusive right, notwithstanding the right of RTI to continue
to sell its products and services and, subject to the terms and
conditions of this Agreement, to market and sell the Products and to
market and promote the Opportunity to other Internet distributors.
2.2. SERVICE MARK LICENSE. Distributor is authorized to use the RTI name and
service mark only in conjunction with its marketing of the Products to
Customers. The authorization shall terminate immediately upon any
termination of this Agreement.
PRONET ENTERPRISES LTD. 08/21/97
Master Distributor Agreement CONFIDENTIAL
<PAGE>
3
3. DISTRIBUTOR AND RTI DUTIES
3.1. COMMERCIALLY REASONABLE EFFORTS. Distributor shall use commercially
reasonable efforts to market, promote and sell the Products, and
Opportunities in accordance with the terms of this Agreement.
3.2. PRESS ANNOUNCEMENTS. The Distributor and RTI may elect to issue separate
or joint press releases announcing the relationship. Such releases shall
be subject to the other party's review and approval of content prior to
distribution.
3.3. SALES PROMOTION MATERIALS. both parties shall provide sales promotion
information, either electronically or hard copy, to the other, which may
use to crease Web site pages or literature relating to the Products and
Opportunities. Both parties shall submit to the other within a reasonable
time, prior to their commercial use, promotion materials utilizing any of
the other party's service marks, trademarks and/or trade names. Both
parties agree not to use promotional materials in the event the other
party objects to said use in writing within ten (10) days after
submission to the other party.
3.4. AUDIO CLIP SALES SUPPORT WEB PAGE. RTI and Distributor will jointly and
equally create and maintain an audio clip sales support Web page for
distribution and use by sales reps and sales channels. The page(s) will
include frequently asked questions, service brochures and other
information agreed to by the parties to this agreement. Such pages and
information shall be accessible from all related sites.
3.5. SALES SUPPORT. Pronet Enterprises Ltd. shall take orders online using
established credit card or cash payment systems, for RTI products.
3.6. RTI/DISTRIBUTOR WEB PAGE. RTI and Distributor shall jointly and euqally
create a co-branded web page. The co-branded Web page will include each
other's logo, company and services description, and link to the other's
Web site. The web page shall include a demonstration audio clip and
relevent sales presentations and order forms. The page shall be the only
approved interface for taking orders on ine. The page(s) shall be subject
to mutual review and approval for content prior to being published.
3.7. CUSTOMER SUPPORT. RTI will provide technical support to Distributor for
the purpose of integrating the sound clips into Distributors advertising
packages and technology and into customer home pages.
PRONET ENTERPRISES LTD. 08/21/97
Master Distributor Agreement CONFIDENTIAL
<PAGE>
4
3.8. HOSTING. RTI shall host all sound clips sold by Distributor and its
re-sellers on its own commercial quality server, in such manner as to
make th esound clips available when accessed from a remote site.
3.9. TECHNOLOGY. RTI shall make the sound clips in such manner and quality as
to represent state of the art production in keeping with commercial
requirements.
3.10. CUSTOMER RELATIONS. Each party to this agreement shall treat customers in
accordance with the highest standards of respect and service, recognizing
that customer dissatisfaction reflects on all parties associated with the
audio sound clip program. This shall be a condition of any reseller
agreement.
4. CUSTOMER INFORMATION AND REPORTING
4.1. CUSTOMER INFORMATION sufficient to identify customer initial requirements
and communications options shall be passed to RTI by Distributor, but
shall not include financial information, by e-mail. RTI shall notify
Distributor when the customer needs have been met by entering the
Customer information into an Audio Enhanced Listing Page provided by
Distributor on Distributor web site. Customer shall signify acceptance of
the audio product to Distributor by return e-mail intiated by
Distributor. Distributor shall notify RTI when customer on line service
is no longer to be available.
5. TERM AND TERMINATION
5.1. TERM. This Agreement shall be for a term of one (1) year from the
Effective Date and shall automatically renew each year thereafter unless
either party shall elect by notice sixty (60) days in advance of the
renewal date not to renew.
5.2. TERMINATION. This Agreement may be terminated by either party upon a
material breach by the other party and a failure to cure such brach after
thirty (30) days' written notice and an opportunity to cure. The parties
also may mutually agree to terminate this Agreement by giving sixty (60)
days notice prior to the expiration of each year if they mutually agree
that it no longer serves their mutual business interest to continue the
Agreement. Within 30 days of such termination, all Fees owed to RTI will
be paid by Distributor to RTI.
PRONET ENTERPRISES LTD. 08/21/97
Master Distributor Agreement CONFIDENTIAL
<PAGE>
5
6. WARRANTY
6.1. WARRANTY. RTI and Distributor warrants that their Services will conform
in all material respects to the Documentation as delivered by each
respectively and that the Documentation accurately describes the
features, capabilities and designs of the Services of each, except as
specifically stated otherwise. Each acknowledges that it has had
sufficient opportunity to review the Services and the Documentation of
the other prior to execution of this Agreement and that each fully
understands the capabilities of the services and the Documentation as
represented.
7. INDEMNIFICATION
7.1. INDEMNIFICATION RTI and Distributor hereby agree to mutually indemnify
defend and hold harmless the other, and each of the other's officers,
directors, employees and agents, from and against all and any actions,
proceedings, costs, expenses, losses, claims, demands and liabilities
whatsoever, including reasonable attorneys' fees, which any of them may
sustain or incur as a result of, arising out of or in connection with a
breach by either of any representation or warranty made by ech in this
Agreement. Any such indemnification shall be limited to the amount paid
by Distributor to RTI less fees paid to Distributor in the twelve (12)
months preceding notice of any such claim for indemnification.
8. PAYMENT
8.1 PAYMENT. Distributor shall make payments due to RTI within 5 working days
of the month end for orders placed in the previous month. Distributor
shall make payments due to re-sellers within 5 working days of the end of
each calendar quarter commencing September 1 for the previous quarter.
All payments shall be made by cheque in Canadian or US funds as
applicable.
9. GENERAL
9.1. ASSIGNMENT. Neither this Agreement nor any rights granted hereby may be
assigned by the Distributor voluntarily or by operation of law without
RTI's prior written consent, which shall not be unreasonably withheld.
This Agreement shall inure to the benefit of and be binding upon any
successor or assignee of RTI and Distributor alike.
9.2. GOVERNING LAW. This Agreement is entered into in the Province of British
Columbia, Canada, and this Agreement shall be governed by and construed
in accordance with the laws of the Province of British Columbia
PRONET ENTERPRISES LTD. 08/21/97
Master Distributor Agreement CONFIDENTIAL
<PAGE>
6
without reference to its conflicts of law provisions. Any dispute
regarding this Agreement shall be subject to mediation as provided for in
the Province of British Columbia and thereafter, if no agreement can be
reached, in the Provincial courts, and the parties agree to submit to the
personal and exclusive jurisdiction and venue of these courts.
9.3. RELATIONSHIP OF THE PARTIES. Neither Distributor nor its agents have any
authority of any kind to bind RTI in any respect whatsoever.
9.4. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement between
RTI and the Distributor, with respect to the subject matter hereof, and
supersedes all prior oral and written agreements. This Agreement shall
not be amended, altered or changed except by a written agreement dated
subsequent to the date of this Agreement and signed by the parties
hereto.
9.5. CONFIDENTIALITY. Distributor and RTI agree that the terms of this
Agreement are confidential, and shall not be disclosed to any third party
without the prior written consent of the other party.
IN WITNESS WHEREOF, this Agreement has been executed as of the Effective Date.
PRONET ENTERPRISES LTD. Paul Valkama dba
RadioTower Interactive
By: /s/ Finn A. Knutsen By: /s/ Paul Valkama
----------------------------- -------------------------------
Name Name
Finn A. Knutsen Paul Valkama
----------------------------- -------------------------------
Title: Title:
President Owner
PRONET ENTERPRISES LTD. 08/21/97
Master Distributor Agreement CONFIDENTIAL
<PAGE>
7
ATTACHMENT A
RETAIL, COMMISSION AND RESIDUAL PRICING, RADIOTOWER
PRODUCTS
A1. BASE RETAIL PRICING. PRODUCT 1. Defined as the minimum retail price set by
RadioTower shall be as follows
INITIAL SETUP - $279.95 (CDN)
MONTHLY FEE $34.95 (CDN) if paid on a month to month basis
ANNUAL FEE (if paid in advance) $335 (CDN)
A2. RETAIL PRICE. Retail price as set from time to time by RadioTower.
A3. SELLER COMPENSATION. Compensation to the seller of RTI sound clips shall be
computed at 15% of the Retail Price Initial setup and 10.0% of the Retail
Price Monthly fee or Annual fee.
A4 SALES PROCESSING FEE. Pronet Enterprises shall be entitled to a sales
processing fee for each sale processed through its system equal to 5.0%
of any Retail Price.
A5. MANAGEMENT FEE. Pronet Enterprises shall be entitled to a management fee
equal to 10% of any Retail Price. To process purchase orders, pay
re-sellers on at least a quarterly basis, pay RadioTower no more
frequently than monthly.
A6. RESIDUAL PAYMENT (SETUP) RadioTower shall be entitled to a residual payment
equal to ($195.97 CDN) adjusted for foreign exchange for customer sales
outside Canada.
A7 RESIDUAL PAYMENT (MONTHLY) RadioTower shall be entitled to a residual payment
equal to ($26.20 CDN) adjusted for foreign exchange for customer sales
outside Canada.
A8 RESIDUAL PAYMENT (ANNUAL) RadioTower shall be entitled to a residual payment
equal to ($243.75 CDN) adjusted for foreign exchange for customer sales
outside Canada
A9 BONUS PAYMENT RadioTower and Pronet Enterprises Ltd. shall share equally
(50/50 each) of the difference between
(RETAIL PRICE) MINUS (SELLER COMPENSATION plus SALES PROCESSING FEE plus
MANAGEMENT FEE) MINUS (RESIDUAL PAYMENT FROM APPLICABLE CATEGORY)
PRONET ENTERPRISES LTD. 08/21/97
Master Distributor Agreement CONFIDENTIAL
<PAGE>
8
ATTACHMENT B
RADIOTOWER PRODUCT LIST
The following products shall be sold at all outlets under this agreement.
Product 1 a. A sound clip of up to 30 second duration, the script shall be the
copyright property of the customer, the sound clip shall be the
copyright property of the customer, the sound clip shall be the
copyright property of RadioTower, and includes
i. A basic enhanced audio listing in the Pronet Database
ii. An automatic activation link between the enhanced
listing when depressed and the sound clip.
iii. software for the customer to install on his own home
page that allows the sound clip to be either
automatically or manually activated at the customer home
page
iv. a guaranteed maximum of 2500 plays per 28 days
Option 1 a. As per option 1
b. Plus tied to an advertising banner purchased at Pronet, or at any
other site, with an automatic link to the sound clip whenever the
banner is displayed.
PRONET ENTERPRISES LTD. 08/21/97
Master Distributor Agreement CONFIDENTIAL
<PAGE>
9
ATTACHEMENT C
RETAIL, COMMISSION AND RESIDUAL PRICING OF PRONET
PRODUCTS
A1. BASE RETAIL PRICING. ADVERTISING BANNERS.
BANNER CREATION (IF BANNER DOES NOT EXIST) - $85 (CDN)
BASIC MONTHLY FEE FOR ONE COUNTRY ONE CATEGORY $19.95 (CDN) if paid on a
month to month basis
QUARTERLY FEE FOR ONE COUNTRY ONE CATEGORY (if paid in advance) $50
(CDN))
Each additional country / category adds $7.50 per month to a
maximum of $50 CDN per month for global coverage.
A2. RETAIL PRICE. Retail price as set from time to time by Pronet.
A3. SELLER COMPENSATION. Compensation to the seller of Pronet Banners shall be
computed at 15% of the Retail Price Initial setup and 15.0% of the Retail
Price Monthly fee or Annual fee.
A9 BONUS PAYMENT RadioTower and Pronet Enterprises Ltd. shall share equally
(50/50 each) of
(0.85 X RETAIL PRICE) MINUS (0.85 X BASE RETAIL PRICE)
PRONET ENTERPRISES LTD. 08/21/97
Master Distributor Agreement CONFIDENTIAL
<PAGE>
10
ATTACHMENT D
RADIOTOWER PRODUCT 2
D1. PRODUCT 2 DESCRIPTION
a. A sound clip of up to 25 words, the script shall be the copyright
property of the customer, the sound clip shall be the copyright property
of RadioTower, and includes
i. A basic enhanced listing in the Pronet Database.
ii. An automatic activation link between the enhanced listing
when depressed and the sound clip
iii. Software for the customer to install on his own home page
that allows the sould clip to be either automatically or
manually activated at the customer home page.
iv. Customer will be responsible for hosting of all sound
clips.
D2. BASE RETAIL PRICE. One-time fee of $149.95 USD.
D3. SELLER COMPENSATION. Compensation to the seller of RTI sound clips shall be
computed at 15% of the Base Retail Price. A reseller program will be
developed by Pronet after 1000 units are sold.
D4. SALES PROCESSING/MANAGEMENT FEE. Pronet Enterprises shall be entitled to 15%
of the Base Retail Price for each unit sold.
D5. NAME & ADDRESS CHANGE. RTI has changed their legal name to the following:
RadioTower.com Inc. and now has their working offices at: #322-425
Carrall st. Vancouver B.C. Canada V6B 6E3.
D6. TRADEMARK. Pronet acknowledges the Word Marks "AudioAds" and "AudioAd" are
Trademarks of RTI
and that both are RTI products.
D7. DOMAIN. RTI acknowledges that the Internet domains "audioads.com" and
"audioad.com" are the sole property of Pronet.
D8. ENTIRE AGREEMENT. Both parties acknowledge that this attachment supersedes
previous [FK][PV] attachments A & B. [FK][PV]
By: PRONET By: RadioTower.com Inc.
---------------------------- --------------------------------
Name: /s/ Finn A. Knutsen Name: /s/ Paul Valkama
---------------------------- --------------------------------
Title: President Title: Founder, Director
---------------------------- --------------------------------
Date: 1 Sept 99 Date: Sept 1/99
---------------------------- --------------------------------
EXHIBIT 6.6
ELINE TECHNOLOGIES SERVICE AGREEMENT
THE CUSTOMER AND ELINE TECHNOLOGIES INC., AGREE THAT ELINE TECHNOLOGIES WILL
PERFORM OR OFFER, FOLLOWING RECEIPT OF APPROPRIATE CREDIT APPROVAL FOR CUSTOMER,
CERTAIN SERVICES FOR THE CUSTOMER, ALL IN ACCORDANCE WITH THIS SERVICE AGREEMENT
AND THE TERMS AND CONDITIONS THAT FOLLOW:
BILLING INFORMATION
RADIOTOWER.COM INC.
- --------------------------------------------------------------------------------
Corporate Legal Name
VANCOUVER BC V6B 6E3
- --------------------------------------------------------------------------------
City Province Postal Code
PAUL VALKAMA
- --------------------------------------------------------------------------------
Contact Name
(604) 605-1357 (604) 605-1358
- --------------------------------------------------------------------------------
Telephone Fax
ORDER SPECIFICATIONS
SERVICE:
100 mbps Ethernet Feed to Radio Tower and the Internet
- --------------------------------------------------------------------------------
Website hosting of Radio Tower.com $150.00 (5 GB/month traffic)
- --------------------------------------------------------------------------------
Additional site traffic will be charged at $30.00/1 GB or portion of
- --------------------------------------------------------------------------------
TERMS:
12 Months service contract
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS:
Radiotower.com office IP traffic will be billed as per Exhibit 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
<PAGE>
THE TERMS AND CONDITIONS BELOW AND ALL ATTACHED SCHEDULES ARE AN INTEGRAL PART
OF THEIS SERVICES AGREEMENT, ARE ENFORCEABLE AND BINDING, AS BETWEEN ELINE
TECHNOLOGIES AND THE CUSTOMER HAVE BEEN READ BY THE CUSTOMER PRIOR TO EXECUTION
OF THEIS SERVICES AGREEMENT.
ELINE TECHNOLOGIES INC.
BABAK MAGHFOURIAN PRESIDENT
- --------------------------------------------------------------------------------
Sales Representative Title
/s/ B. Maghfourian Feb 1/2000
- ------------------------- ----------
Authorized Signature Date
CUSTOMER
PAUL VALKAMA FOUNDER
- --------------------------------------------------------------------------------
Sales Representative Title
/s/ Paul Valkama Feb 1/2000
- ------------------------- ----------
Authorized Signature Date
2
<PAGE>
WHEREAS, eLine Technologies INc. is a carrier connected to the Internet. eLine
Technologies Inc. offers data transfer services and connectivity to the
Internet.
WHEREAS, Client seeks to utilize the eLine Technologies Inc. network for its own
purposes;
WHEREAS, the parties acknowledge that the Internet is neither owned nor
controlled by any one entity; therefore, eLine Technologies Inc. can came no
guarantee that any given user shall be able to access the eLine Technologies
network at any given time. eLine Technologies represents that it shall make
every good faith effort to ensure its network is available as widely as possible
and with as little service interruption as possible.
NOW THEREFORE, in consideration of the mutual promises contained herein, the
parties agree as follows:
1. SERVICE
1.1 Supplier agrees to supply the Services in accordance with and subject
to the terms of this agreement. Client subscribes to receive such
services form Supplier and agrees to comply with the terms and
conditions contained in this agreement.
1.2 Throughout the term of this agreement, Client may request in writing
that services be made available at an additional Client site or may
request that additional access feeds or upgraded access feeds to be
provided at an existing Client site. To the extent Supplier can
reasonably accommodate such requests, it shall provide a quote
respecting the fees applicable for such request and specify targeted
start date to Client.
2. DATA TRANSMISSION
2.1 Client may only use Suppliers service for lawful purpose. Transmission
of any material in violation of federal, provincial or local
regulation is prohibited. This may include, but is not limited to
copyrighted material, material legally judge to be threatening or
obscene and material protected by trade secrets.
2.2 Violations of system of system network security are prohibited, and
may result in criminal and civil liability. eLine Technologies will
investigate incidents involving such violations and may involve and
will cooperate with law enforcement if a criminal violation is
suspected. System or network security violations include, but are not
limited to, the following:
o Unauthorized access to or use of data, systems or networks,
including any attempt to probe, scan or test the vulnerability of
a system or network or to breach security or authentication
measures without express authorization of the owner of the system
or network.
o Unauthorized monitoring of data or traffic on any network or
system without express authorization of the owner of the system
or network
o Interference with service to any user, host or network including,
without limitation, mailbombing, flooding, deliberate attempts to
overload a system and broadcast attacks.
o Forging of any TCP-IP packet header or any part of the header
information in an email or a newsgroup posting.
2.3 Sending unsolicited mail messages, including, without limitations,
commercial advertising and informational announcements, is explicitly
prohibited. A user shall not use another site' mail server to relay
mail without the express permissions of the site.
3
<PAGE>
2.4 Posting the same or similar message to multiple newsgroups (excessive
cross-posting or multiple posting, also known as "SPAM") is explicitly
prohibited.
2.5 Supplier makes no warranties or representations of any kind, whether
expressed or implied for the service it is providing. Supplier also
disclaims any warranty of merchantability or fitness for particular
purpose and will not be responsible for any damages that may be
suffered by the Client, including loss of data resulting from delays,
non-deliveries or service interruptions by any cause or errors. Use of
any information obtained by way of Supplier is the Client's own risk,
and eLine Technologies Inc. specifically denies any responsibility for
accuracy or quality of information obtained through its services.
Connection speed represents the speed of connection and does not
represent guarantees of available end to end bandwidth.
2.6 eLine Technologies Inc. specifically limits its damages to the Client
for any non-accessibility time or other down time to the prorated
monthly charge during the system unavailability. eLine Technologies
Inc. specifically denies any responsibilities for any damages arising
as a consequence of such unavailability.
3. SERVICE PERFORMANCE:
3.1 Each of the services has been designed for the respective performance
targets, including target availability, set out in the relevant
service exhibit. These targets do not include maintenance windows
reserved to allow installation, system upgrades an to add or
reconfigure Clients end users and other customers. The scheduled
maintenance will be arranged based on Client information to minimize
the interference with the Client's use of the services.
3.2 In supplying the services, Supplier shall use all reasonable efforts
to achieve the performance objects in respect of each Service. The
performance objectives apply only to that portion of Services provided
on the Supplier communication system and do not apply to any services
utilizing or interconnecting with facilities provided by other service
carriers.
3.3 If in any full calendar month after service activation and during the
term of this agreement, the Supplier fails to achieve the performance
objectives for a service, the fees for such month shall be reduced to
the pro-rata portion that the actual performance for that month is of
the performance objective for such service.
4. FEES
4.1 Unless otherwise specified, Client agrees to pay all fees as
specified.
5. CUSTOMER OBLIGATIONS
5.1 Client shall ensure that every item of equipment utilized by client
(if not Supplier owned) is technically and operationally compatible
with Supplier equipment and the supplier communication system and
complies with all governmental rules and regulation. Supplier shall
not be obligated to link any Supplier equipment to any customer owned
equipment which does not comply with these regulations and which the
Supplier has not approved.
5.2 Client, in utilizing the services, shall be responsible for ensuring
that no such use adversely affects operation of Supplier communication
systems.
4
<PAGE>
6. TERMINATION AND SUSPENSION OF SERVICE:
6.1 Supplier may terminate, restrict or suspend the provisioning of serve
to Client forthwith if any fees payable here under are not paid within
ten (10) days of the due date, without notice; and if, 20 days after
written notice has been received.
6.2 Supplier may terminate, restrict or suspend the provisioning of serve
to Client fails to comply with any of its obligations set forth under
this agreement.
7. RENEWAL OF TERM
7.1 Unless otherwise specified the length of the contract shall be as
specified in Exhibit 1.
7.2 No later than 30 days prior to the end of the term, Supplier shall
provide in writing to Client the terms upon which it is prepared to
renew this Agreement for a further term and if Client indicates in
writing to Supplier no later than 15 days to the end of such initial
terms that it wishes to renew the agreement on the terms and
conditions so specified by Supplier, this agreement, subject to all
amendments thereto contained in the renewal notice from Supplier,
shall renew for the further period set out in Supplier's original
renewal notice. If Client fails to indicate its wish to renew upon
such terms and within the time specified, this agreement shall
terminate upon expiry of the initial term with no further rights of
renewal.
7.3 in the event that both parties are agreeable, this contract may be
further renewed on an annual basis under the same or different
conditions and prices.
8. LIMITATION OF LIABILITY
8.1 Where there are omissions, interruptions, delays, errors or defects in
transmission or failures or defects in Supplier's facilities,
Supplier's liability is limited to a refund of charges, on request,
proportionate to the length of time the problem existed, commencing
from the Supplier is advised of the problem. Supplier's entire
liability for any claim arising from any cause whatsoever shall in no
event exceed the monthly fees for the Services which give rise to the
claim.
8.2 The remedies set out in the agreement are in lieu of all other
warranties, representations, conditions, guarantees and remedies
regarding the services and the maintenance thereof and there are no
other warranties, representation, conditions, guarantees or remedies
of any kind whatsoever, either expressed or implied by law or
customer, including but not limited to those regarding
merchantability, fitness for purpose, design, condition or quality.
8.3 Without in any manner limiting the express limitation contained in
section 8, Supplier shall note liable to Client or any of its
servants, agents, contractors, representatives or any third partied
for:
8.3.1 any act of omission of telecommunications carrier whose
facilities are used in establishing connection to points which
Supplier does not directly serve;
8.3.2 defamation or copyright infringement arising from material
transmitted or received over Supplier's facilities;
8.3.3 infringement of patents arising from combining or using Client
provided facilities with Supplier's service; or
8.3.4 any damages, loss of profits, loss of earnings, loss of
business opportunities, real or personal property damage,
personal injury or other loss or special or consequential
damages arising directly or indirectly out of or in connection
with the subject matter of this agreement, including, without
limitations those arising form acknowledge delays or
interruptions in service.
5
<PAGE>
8.3.5 The foregoing limitation shall apply to all acts or omissions
of Suppliers whether negligent or otherwise which would, but
for this section, give rise to a cause of action in contract.
8.3.6 Supplier does not assume any liability in connection with a
breach by Client of the foregoing obligation or for acts or
omissions of Client which occasion direct, indirect,
incidental or consequential damages to Suppliers communication
system or to other third parties and Client shall indemnify
and hold harmless Supplier for any and all such breaches, act
or omissions.
9. GENERAL
9.1 This agreement forms the entire agreement between the parties
concerning the subject matter hereof and supersedes all prior written
and oral agreements between the parties. Any modification of this
agreement, other than the modifications imposed by any government or
regulatory authority, shall not be valid unless reduced to writing and
agreed to by all parties.
9.2 All rights remedies hereunder are cumulative and not alternative an in
particular Supplier shall be entitled to pursue all of its respective
rights hereunder and a law either consecutively or concurrently and no
rights or interests shall be extinguished or merged by the taking of
judgement for all monies which are or may become due owing pursuant to
this agreement or pursuant to any extension of subsequent agreement
made between Supplier and Client.
9.3 Client shall pay in addition to the fees specified herein, all taxes,
assessments and government charges including but not limited to Social
Service Tax, Excise taxes, Good and Services Tax and any other
applicable tax now or hereafter imposed under the authority of
federal, provincial or municipal; taxing jurisdiction, except taxes on
the income of Supplier.
9.4 Notwithstanding any other terms of this agreement, neither party shall
be liable for any delay, interruption, or fault in the performance of
its obligations hereunder if caused by acts of God, war declared or
undeclared, fire, flood, storm, slide, earthquake, power failure,
inability to obtain equipment, supplies or other facilities not caused
by failure to pay the then prevailing prices, labor disputes or any
similar event beyond the control of the party affected which may
prevent or delay such performance. If any such act or event occurs or
is likely to occur, the party affected shall promptly notify the other
party, giving particulars of the event.
9.5 These parties hereto represent that they have full authority to enter
into the agreement and that no further act or approval is required to
make this agreement binding upon the respective parties should any
portion of this agreement for any reason be held to be void in law,
this agreement should be construed, so far as is possible, as if such
portion had never been contained herein.
9.6 Any notice, payment or other communication required or permitted to be
given or served pursuant to this agreement shall be in writing and
shall be delivered personally or forwarded by first class mail to the
party concerned at the address first set out above and such notice
will be deemed to be received on the day of delivery, if delivery
personally, or three days after posting if mailed.
9.7 This agreement shall be construed and the powers and provisions herein
contained shall be administered, exercised and given effect to
according to the laws of the Province of British Columbia.
9.8 The parties will not reveal divulge or make known the terms and
conditions of this agreement or any document or agreement now or
hereafter execute in connection herewith, other than disclosure that
is required by law or agreed to by the other party.
6
<PAGE>
EXHIBIT 1
SERVICE SUBSCRIPTION PRICING
TOTAL USAGE CHARGE
<2 Gigabytes/Month $200.00
- --------------------------------------------------------------------------------
<5 Gigabytes/Month $300.00
- --------------------------------------------------------------------------------
<10 Gigabytes/Month $400.00
- --------------------------------------------------------------------------------
<20 Gigabytes/Month $550.00
- --------------------------------------------------------------------------------
<30 Gigabytes/Month $700.00
- --------------------------------------------------------------------------------
<40 Gigabytes/Month $850.00
- --------------------------------------------------------------------------------
<60 Gigabytes/Month $1,000.00
- --------------------------------------------------------------------------------
<80 Gigabytes/Month $1,150.00
- --------------------------------------------------------------------------------
<100 Gigabytes/Month $1,300.00
- --------------------------------------------------------------------------------
<140 Gigabytes/Month $1,500.00
- --------------------------------------------------------------------------------
<180 Gigabytes/Month $1,700.00
- --------------------------------------------------------------------------------
<220 Gigabytes/Month $1,855.00
- --------------------------------------------------------------------------------
<260 Gigabytes/Month $2,030.00
- --------------------------------------------------------------------------------
<300 Gigabytes/Month $2,205.00
- --------------------------------------------------------------------------------
<340 Gigabytes/Month $2,380.00
- --------------------------------------------------------------------------------
<380 Gigabytes/Month $2,555.00
- --------------------------------------------------------------------------------
<420 Gigabytes/Month $2,730.00
- --------------------------------------------------------------------------------
<460 Gigabytes/Month $2,905.00
- --------------------------------------------------------------------------------
<500 Gigabytes/Month $3,080.00
- --------------------------------------------------------------------------------
<540 Gigabytes/Month $3,255.00
- --------------------------------------------------------------------------------
<580 Gigabytes/Month $3,430.00
- --------------------------------------------------------------------------------
<620 Gigabytes/Month $3,605.00
- --------------------------------------------------------------------------------
<660 Gigabytes/Month $3,780.00
- --------------------------------------------------------------------------------
<700 Gigabytes/Month $3,995.00
- --------------------------------------------------------------------------------
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27
Financial Data Schedule
Article 5 - Commercial & Industrial Companies
RADIOTOWER.COM, INC.
This exhibit contains summary financial
information extracted from the audited financial
statements for the period ended December 31, 1999
and is qualified by reference to such financial statements
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,762
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,762
<PP&E> 4,079
<DEPRECIATION> 0
<TOTAL-ASSETS> 60,008
<CURRENT-LIABILITIES> 29,289
<BONDS> 0
0
0
<COMMON> 12,500
<OTHER-SE> (46,756)
<TOTAL-LIABILITY-AND-EQUITY> 60,008
<SALES> 0
<TOTAL-REVENUES> 848
<CGS> 0
<TOTAL-COSTS> 155,216
<OTHER-EXPENSES> 1,674
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (156,042)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
