U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
AMENDMENT NO. 1
(Mark One)
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED] FOR FISCAL YEAR ENDED: SEPTEMBER 30, 1998
OR
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from ___________ to __________
Commission file number: 33-1599
MONSTERDAATA.COM, INC.
(formerly D-Vine, Ltd.)
(Exact name of small business issuer as specified in its charter)
DELAWARE 22-2732163
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
115 STEVENS AVENUE, VALHALLA, NEW YORK 10595
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (914) 747-9100
Securities registered under Section 12(b) of the Act: NONE
Securities registered under Section 12(g) of the Act: NONE
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|.
Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this form 10-KSB. |X|.
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State issuer's revenues for its most recent fiscal year. $ 1,966,713
The aggregate market value of the Registrant's voting stock held by
non-affiliates of the Registrant was approximately $14,270,000 computed by
reference to the closing sales price of Registrant's common stock on November
30, 1999.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE LAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes |_| No |_|.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of December 1, 1999, there were 7,660,948 shares of the Registrant's common
stock, par value $0.01, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"): NONE
Transitional Small Business Disclosure Format (check one): Yes |_|; No |X|.
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MonsterDaata.com, Inc.
Index to Form 10-KSB/A
PART I Page
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PLSRA Statement......................................................1
Item 1. Description of Business..............................................2
Item 2. Description of Property.............................................30
Item 3. Legal Proceedings...................................................30
Item 4. Submission of Matters to a Vote of Security Holders.................30
PART II
Item 5. Market for Common Equity and Related Stockholder Matters............31
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act...................33
Item 11. Security Ownership of Certain Beneficial Owners and Management......34
Item 13. Exhibits and Reports on Form 8-K....................................36
Signatures....................................................................37
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Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995. Certain written and oral statements
made or incorporated by reference by us or our representatives in this Report
and other reports and filings with the Securities and Exchange Commission (the
"SEC"), press releases, conferences or otherwise, are "forward looking
statements", within the meaning of the Private Securities Litigation Reform Act
of 1995 ("PSLRA") and Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking
statements include, without limitation, any statement that may predict,
forecast, indicate, or imply future results, performance, targets or
achievements, and may contain the words "estimate", "project", "intend",
"forecast", "anticipate", "plan", "planning", "expect", "believe", "will", "will
likely", "should", "could", "would", "may" or words or expressions of similar
meaning. In addition, except for historical matters, we may set forth certain
other statements in this Report and elsewhere from time to time, including,
without limitation, statements regarding our Internet activities, customers, Web
site and database development activities, product offerings, licensing and
co-branding prospects, user demographics and statistics, anticipated revenue
sources, sales force expansion efforts, and availability of financial and other
resources, which are forward-looking statements within the meaning of the PSLRA.
Such forward-looking statements are based upon our current belief as to the
outcome, occurrence and timing of future events or current expectations and
plans based upon, among other things, assumptions made by, and information
currently available to management, including management's own knowledge and
assessment of our industry, competition and current regulatory environment. All
such statements involve significant risks and uncertainties.
Many important factors affect our ability to achieve the stated outcomes and to
successfully commercialize our product offerings on the Internet, including the
ability to
o (1) obtain substantial additional funds as needed to fund
anticipated continuing operating losses and further development
activities,
o (2) obtain and maintain all necessary licenses, trademarks and other
intellectual property protections and contract rights and
restrictions for our business activities and data products,
o (3) compete successfully against other companies' products and
services,
o (4) maintain the integrity, reputation and reliability of our data,
o (5) form strategic alliances with other Internet companies,
o (6) manage growth and recruit and retain employees, and
o (7) market our data products and services in a profitable manner.
Although we believe that our assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate and,
therefore, there also can be no assurance that the statements included in this
Report and elsewhere will prove to be accurate. In addition, such risks and
uncertainties included herein and elsewhere are not exhaustive. Other sections
of this Report and our other filings with the SEC from time to time, may include
additional factors which could adversely affect our business and other financial
performance. Moreover we operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is not possible
for management to predict all such risk factors, nor can it assess the impact of
all such factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Accordingly, in light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by us or any other person that our objectives and plans will be
achieved; in fact, actual results could differ materially from those
contemplated by such forward-looking statements. Given these risks,
uncertainties and limitations, investors should not rely upon forward-looking
statements as a predictor of actual results. We do not undertake any obligation
to release publicly any revisions to these forward-looking statements or to
reflect the occurrence of unanticipated events.
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ITEM 1. DESCRIPTION OF BUSINESS
New Developments - Acquisition of Taconic Data Corp.
On April 2, 1999, we acquired 99.2% of the outstanding capital stock of Taconic
Data Corp. ("TDC"), a privately-held New York corporation. TDC, which was formed
in 1992, provided real estate related database information services to
consumers, real estate professionals and other businesses primarily through
regional real estate multiple listing services ("MLSs") and, more recently, over
the Internet.
In connection with this acquisition, TDC became our majority owned subsidiary
and all of our directors and officers were replaced by TDC directors and
officers. See "Directors and Executive Officers" under Item 9 below.
The stockholders of TDC were issued 6,000,000 of our shares of common stock in
exchange for their shares, or approximately 85% of our total outstanding common
shares after giving effect to the acquisition. Accordingly, a change in control
of our company occurred in connection with the TDC acquisition, and the
acquisition was deemed a "reverse acquisition" for accounting purposes. Item 11
below sets forth current information regarding the ownership of our shares by
management and other large shareholders.
On April 5, 1999, we changed our corporate name to "MonsterDaata.com, Inc."
Effective June 15, 1999, we changed our fiscal year end date to December 31, to
conform to TDC's fiscal year, and TDC's independent auditors were appointed as
our independent auditors. A description of our company after giving effect to
the TDC acquisition is set forth below. Unless otherwise provided below, for
periods prior to April 2, 1999, the description below relates to TDC, on a
stand-alone basis, before giving effect to the TDC acquisition.
Company Overview
We are a leading provider of integrated real estate transaction facilitation,
due diligence and research content over the Internet. We currently develop,
license, co-brand, reformat, integrate, and enhance over 70 proprietary
databases that include real estate related business-to-business and consumer
information. Our proprietary compilation of community database sets provides
unique geographic precision and data matching capabilities that enable our
commercial customers to target end-users by offering highly interactive,
localized content, advertising and e-commerce services. Our data include school,
town and community, demographic, lifestyle characteristic, culture, crime,
environmental hazard, property ownership, tax and transaction information for
over 61,000 communities nationwide. We currently employ 35 full-time officers,
data managers, Web site developers, salespeople and support personnel.
We believe that our Internet Web site and related co-branded Web sites have the
potential to become key destination sites for low cost real estate due diligence
information, and that we can create and capture value for our business and
shareholders by linking real estate professionals - including brokers, lenders,
appraisers and insurers - with consumers, businesses and investors through our
Web site. We generate our revenues from licensing our content to other Internet
sites and MLSs, and we expect to generate further revenues from selling eReports
and subscriptions on our Web site, selling national and local advertising,
collecting fees for eLeads (in which we electronically match and link our users
with selected providers of services or products that we believe
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will be of interest to the users) and collecting fees for providing customized
information services, which are provided primarily to regional real estate MLSs.
Through our Web site we provide summary reports consisting of selected real
estate information to customers free of charge, and more detailed reports are
available on our Web sites for a small charge per report or on an annual
subscription basis. In addition to distributing our products and services
through our Web site www.MonsterDaata.com, we license portions of our databases
to selected Internet portals and real estate destination Web sites, including
Cendant's www.CompleteHome.com and Homestore's www.REALTOR.com, which are two of
the country's leading real estate services Internet businesses.
We also provide licensed or co-branded content to other popular Internet Web
sites, many of which provide links back to our Web site through their Web sites
(see "Major Customers" below). If users on these licensed or co-branded sites
desire further information beyond the summary or snapshot data we license or
co-brand, they may obtain detailed customized reports from our Web site, again
for a small charge per report or on an annual subscription basis, and we
generally share the revenues we earn from the sales of these detailed eReports
with the referring Web site owner.
The content we currently provide on our Web site includes (i) "Neighborhood
Place," which allows users to generate comparative analyses of several
neighborhoods with data of interest to potential home buyers, including crime
statistics, town and community profiles, census and demographic information,
neighborhood lifestyle characteristics and local school reports; (ii)
"Relocation Place," which provides a pre- and post-move resource center to help
users plan and estimate the cost of their relocation; (iii) public records
property data, which allows users to research properties for sale, foreclosures,
comparable sales and many other types of information; and (iv) risk hazard
assessment data, which allows users to obtain data regarding environmental
hazards and crime risk.
Revenue Sources
We classify our five intended sources of revenues as follows:
o Licensing. We currently license our information to several real
estate destination Web sites and Internet portals (see "Major
Customers" below), and we plan to license selected data products to
additional real estate destination Web sites and Internet portals.
o eCommerce. We generate revenue through the sale of over 40 types of
premium reports delivered via the Internet, including comprehensive
town, community, school, comparable sales, property tax and
environmental hazard reports. Typically, real estate professionals,
investors and consumers visiting our Web site (or third party sites
that have licensed some or all of our database offerings),
regardless of whether or not they are subscribers, will receive free
snapshot, summary or profile data reports. Viewers are then
encouraged, with regard to the data sets they are most interested
in, to purchase full eReports and/or annual eSubscriptions from our
Web site.
o Advertising Placement. We have defined the data categories in our
national databases into discrete subsections based on finely focused
geographic areas. As a result, through our content categories, we
are able to offer advertisers a highly targeted audience focused on
goods and services typically needed in the period six months before
and six months after a real estate transaction. This means, for
example,
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that we can customize ad banners to offer local businesses the
ability to advertise directly to potential home buyers researching
nearby neighborhoods or ZIP codes, and we can offer national
advertisers the ability to advertise on the higher traffic portions
of our Web site (such as our home page), or to tailor their ads to
the demographic profile of the specific neighborhood being viewed.
Given the demographics of our Web site viewers (primarily real
estate investors, brokers, sales people and potential home buyers)
and our ability to advertise (like local businesses) directly to
potential home buyers researching specific neighborhoods and
customize our ads on a local ZIP code and neighborhood basis, we
expect to be able to sell ad space on our Web site for a premium
over the general market price per page view for untargeted national
advertisements on the Internet. Ad sales will be coordinated by our
national sales force, which we are currently in the process of
recruiting and developing.
o eLead Generation. By offering free access to some of our content and
reports, we can collect registration leads and generate revenues
through the sale of those leads, with the consent of the registered
users. In addition, we plan to develop and sell Web-based lead
generator content and products to real estate professionals and to
providers of ancillary goods and services. In connection with our
eLead generation sales efforts and ad placement sales to date, we
have identified over 40 types of businesses (by SIC code) that would
have an interest in being referred active prospects who are
researching localized real estate information on our Web site.
Examples of businesses we will be marketing eLeads to range from
real estate brokerage firms to moving companies to local shopping
malls, dry cleaners and other localized businesses and service
providers.
o Custom Information Services. Finally, we provide customized
information and data-to-Web solutions, management and operation
services to real estate MLSs. Prior to the end of 1998, almost all
of TDC's total revenues were derived from MLSs under long-term (two
to five year) custom information services contracts. Through the use
of proprietary data standardization, clean up, and matching
procedures we developed, we have been able to decrease our costs and
increase our profit margins on this source of business revenues.
Some Significant Milestones
Since the completion of our acquisition of TDC in April 1999, we have
successfully completed a number of significant steps towards developing the
necessary infrastructure for the achievement of our goals, including the
following:
May 1999 o Opened our New York City sales office.
o Hired our first National Sales Executive.
o Launched 1.0 version of our Web site at the mid-year
convention of the National Association of Realtors.
June 1999 o Signed a data licensing agreement with Stewart Title's
Internet data affiliate.
o Hired managers for Sales, Finance and Operations
divisions.
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August 1999 o Signed a co-branding agreement with Virtual
Relocation.com, Inc.
September 1999 o Signed a co-branding agreement with iOwn, Inc.
o Retained Jefferies & Co. as financial advisor for a
planned private offering to institutional investors.
November 1999 o Signed a co-branding agreement with Network
Communications, the largest publisher and provider of
printed and online real estate advertising in North
America.
o Completed a private bridge financing raising
approximately $1.5 million through the issuance of
1,561.47 shares of our Series A Cumulative Convertible
Preferred Stock and warrants to purchase shares of
common stock at a price of $3.75 per share, subject to
adjustment.
o Completed a deal to place our licensed data on Cendant's
CompleteHome.com Web site.
o Signed a co-branding agreement with HomeInfoLink.com, a
leading comprehensive Internet Service Provider serving
real estate agents and business owners.
Our material near term objectives for the further development of our business
are as follows (but there can be no assurance that any of these near term
objectives will be achieved):
o Launch 2.0 version of our Web site;
o File an application for the listing of our shares of common stock
for trading on the National Association of Securities Dealers
Automated Quotation system ("NASDAQ");
o Strengthen our exposure and ties to licensed real estate brokers and
sales agents through targeted marketing and sponsoring affinity
programs;
o Continue to hire executives for professional licensing and
advertising sales positions;
o Raise additional capital to support operations, further Web site
development and marketing; and
o Begin to consider and search for opportunities to acquire existing
private companies in similar business lines to achieve synergies and
broaden our Internet product offerings and Web site audiences.
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Industry Overview
The Real Estate Industry
According to the United States Department of Commerce, in 1998 the U.S. real
estate industry accounted for approximately 15% of the gross domestic product of
the United States, and was therefore one of the largest sectors of the economy.
The real estate industry is commonly divided into the residential and commercial
sectors. The residential sector includes the purchase, sale, rental, remodeling
and new construction of homes and represented approximately $1.2 trillion of
commerce in 1998. The commercial sector includes the lease, resale, and new
construction of property for businesses and represented approximately $300
billion in 1998.
The Residential Real Estate Market
Buying a home is generally regarded as the largest financial decision and one of
the most difficult and complex processes most consumers will ever undertake. An
enormous network of support services and products exists to assist consumers in
finding or building a property, renting or buying a property, moving, owning a
property and selling a property.
Home buyers require an extensive amount of information and several decision
tools to help bolster confidence during the home buying process. To make an
informed decision, consumers need access to comprehensive information and rely
upon a series of professionals, including real estate agents, and ancillary
service providers, such as mortgage brokers, title agents, escrow agents,
attorneys, inspectors and appraisers. These professionals and ancillary service
providers offer products and services, such as mortgages, title insurance,
credit reports, appraisals, neighborhood and community profiles, and inspections
that generated in excess of $49 billion in transaction fees in 1998. In
addition, real estate transactions often lead to lifestyle changes for
consumers, including changing neighborhoods, schools, shopping malls, banks,
grocers, cleaners and other retail relationships.
Growth of the Internet
International Data Corporation estimates that the number of Internet users
worldwide exceeded 95 million in 1998, and will exceed 170 million by the end of
2000 and 319 million by the end of 2002. International Data Corporation also
estimates that commerce over the Internet will increase to more than $400
billion by 2002. Growth in Internet usage has been fueled by a number of
factors, including:
o A large and growing base of personal computers in the workplace and
home;
o Advances in the performance of personal computers and modems;
o Improvements in network systems and infrastructure;
o More readily available and lower cost access to the Internet;
o Increased awareness of the Internet among businesses and consumers;
o Increased volume of information and services offered on the
Internet; and
o Reduced security risks involved in conducting transactions on the
Internet.
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Growth in Internet usage is expected to continue as new technologies, such as
multimedia capabilities, are developed and adopted, as Internet access and
bandwidth increases, and as Internet content improves and becomes more
interactive.
The Internet and Real Estate
The emergence and acceptance of the Internet is fundamentally changing the way
that consumers and businesses communicate, obtain information, purchase goods
and services and transact business. We believe that the real estate information
industry is particularly well suited to benefit from the Internet because of its
size, fragmented nature and reliance on the exchange of information. The
Internet offers a compelling means for consumers, real estate professionals and
ancillary service providers to come together to improve the dissemination of
information and enhance communication.
Recognizing the commercial potential of the Internet, a number of residential
real estate-related Web businesses have been established, including Web sites
that aggregate data from real estate MLSs of different regions. These real
estate destination sites enable users to quickly access a wide range of real
estate listings to search for a home using specific criteria, including
location, size, price and neighborhood. As a result, these sites are
increasingly becoming an important part of the home buying process for many
consumers. Based on a 1999 study by the U.C. Berkeley Fisher Center for Real
Estate and Urban Economics, a significant portion of existing homes listed for
sale in the United States are listed online and the number of home buyers using
the Internet to shop for a home is increasing. A recent survey by the California
Association of Realtors showed that nearly 40% of home buyers used the Internet
as part of the home buying process.
The MonsterDaata Solution
We provide comprehensive real estate transaction facilitation, due diligence and
research content in one convenient location. With our products and services, we
allow our clients and users to bypass traditional expensive, fragmented real
estate information sources and intermediaries. We allow real estate
professionals, consumers and investors immediate centralized access to a broad
range of critical real estate information from their own homes or offices. In
addition, our services and products assist real estate agents, brokers and other
professionals to better market their services, become more productive and
compete more effectively for transactions. We believe that we are also well
positioned to provide services to ancillary service providers and consumers
buying or selling a home.
We have six primary data product and service categories that, according to our
research and experience over the past seven years, have shown to be critical
tools and services sought by professionals, and now, to a growing extent, by
consumers directly. These product and service categories are due diligence,
valuation, risk assessment, target marketing, data enhancement and ancillary
products and services. The information underlying these data products are
licensed, reformatted, integrated, and enhanced for over 70 data sets and for
over 61,000 communities nationwide. Such information includes crime, school,
life style characteristics, culture, town and community, affordability,
demographic, ownership information for more than 90 million residences, over 30
million sales transactions, environmental hazards and new construction and
permit data. This information is packaged and provided to real estate
professionals and consumers via our Web site and via Internet destination sites,
including:
o iOwn, Inc. - a leading mortgage and real estate listing portal;
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o HomeInfoLink.com - a leading comprehensive Internet Service Provider
serving real estate agents and business owners;
o Cendant's CompleteHome.com - a new real estate portal that will
carry listings from Cendant's franchise systems, which include three
(Century 21, Coldwell Banker and ERA) of the nation's five largest
national real estate brokerage franchise systems, as measured by
number of offices;
o VirtualRelocation.com - which promotes itself as the "Internet's
First Moving & Relocation Mega-Site"
o REALTOR.com - currently the country's largest real estate listings
portal, with approximately 1.3 million listings;
o Network Communications (ncinfo.net) - the largest publisher and
provider of printed and online real estate advertising in North
America;
o Landata.com - a Stewart Information Services site which is
affiliated with Stewart Title, a leading national title insurer;
o Signonsandiego.com - a San Diego Tribune site offering San Diego's
most comprehensive online community with seven million monthly page
views; and
o CityNews.com - a City News, Inc. company offering free online
classifieds generating over seven million monthly page views.
In addition, consumers require a variety of products and services throughout the
home and real estate purchase and sale cycle. The real estate transaction offers
service providers and retailers the opportunity to target consumers at a time
when they are shifting their buying patterns. Providers and retailers of
products or services that can be marketed to people who are buying property and
relocating to a new neighborhood need an effective mechanism to reach consumers
who are motivated prospects for their offerings. Ideally, these providers of
products and services would have a centralized location where they could
advertise their offerings to a target group of consumers who are engaged in a
real estate buying and relocation process. We believe that our Web site presents
such service providers and retailers with an effective medium to reach these
consumers through highly-customizable directed advertisements and through our
eLead generation business to consumer matching programs.
Our Products and Services
Our six primary data product and service categories currently include:
1. Neighborhood Place. This popular category allows consumers to see
comparative data analyses of several neighborhoods simultaneously,
including crime statistics, town and community profiles, census and
demographics, neighborhood lifestyle characteristics and school reports.
Real estate professionals also use this service to prepare customized
presentation packages for their clients. The presentation packages can be
personalized with the broker's name and contact information, which
provides the broker with a useful marketing tool and a potential
competitive advantage over brokers not using our Web site offerings under
this data category.
2. Public Records Data. This information tool is used to research a property,
discover sales prices of comparable properties, identify potential "good
buys" through listed foreclosures, or investigate a wide variety of
publicly recorded data about a person, property, or legal situation.
Records provided, which vary
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by jurisdiction, include: (i) property tax assessments; (ii) property
data; (iii) deed and mortgage recordings (property sales and financings);
(iv) comparable sales; (v) tax parcel maps (also known as assessor plat
maps); (vi) foreclosures and bank real estate offerings; (vii) Your Own
Private-Eye(TM), which covers liens, judgments and court documents; and
(viii) copies of original deeds and mortgage recordings.
3. Risk Hazards Assessment. We provide a complete resource risk library with
a compendium of data designed to help the user minimize risk and reduce or
eliminate liability in a real estate or financial transaction. Depending
upon the jurisdiction, data provided includes: (i) Environmental Hazards;
(ii) Crime Risk; (iii) Flood Reports; and (iv) Earthquake Epicenter,
Disclosure and Pollution Reports.
4. Target Marketing. We plan to offer a national center for customer
prospecting, marketing and list fulfillment services on our Web site that
is directed primarily at real estate professionals and ancillary service
providers. This information can be used to identify marketing prospects
within a given geographic area and to provide residential and business
addresses and phone numbers of prospects. Data and services will include
the following: (i) eLead Generation Program; (ii) Reverse Telephone
Directory; (iii) Mailing List and Label Services; and (iv) Mail House and
List Fulfillment Services.
5. Data Enhancement. We plan to offer value-added tools to help business
users build and enhance, correct, standardize, and clean their own
prospects and other databases. These tools are designed, among other
things, to transform lists such as for-sale inventory, public record data,
and internal mailing lists, into useful marketing databases. Our data
enhancement services will include: (i) Geocoding, (ii) Electronic Street
Mapping; (iii) List Clean Up, Standardization, and Postal Coding; (iv)
National Change of Address Cleansing; (v) Phone Append; (vi) Property and
Real Estate Listing Data Clean-up and Standardization; and (vii) Postal
Discounts.
6. Other Professional Resources. We will offer a wide variety of ancillary
products and services of interest directed to real estate professionals,
including Virtual Realtor(R) Store, an online catalogue of the principal
goods and services routinely used by Realtors in the course of their
business.
In addition, we currently provide the consumer and professional user with a
number of useful and entertaining features to attract and keep viewers on our
Web sites:
o Compare Neighborhoods Snapshot. Users can see a comparative snapshot
analysis of up to five neighborhoods at once containing: school
profiles, crime statistics, town and community profiles, census and
demographics, and neighborhood lifestyle characteristics.
o Evaluate Properties. Users can identify and find a specific property
and obtain a detailed description from building and other public
records data, then find up to 15 comparable sales, review the last
recorded sales price, and obtain property valuation reports for the
property.
o Pre- and Post-Move Resource Center. This feature provides a
budgeting calculator function and moving resources, including
information about homes and apartments for sale or rent, new homes,
classified job listings, and mortgage comparison information.
o Links. The links feature permits users to link to other sites in
order to conduct checks on nannies, pre-school facilities, sex
offenders and other items of interest to people considering a new
neighborhood.
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o Professional Services. We plan to add a professional services
feature to assist buyers and sellers in finding real estate
transaction-related services such as Realtors, mortgage companies,
home inspectors, title companies, insurance companies and attorneys.
o Identify Best Prospects. We plan to develop this feature for real
estate professionals in order to help them discover the best target
marketing tools available, generate qualified prospecting leads on a
daily basis, and continually purge and enhance their own prospect
databases.
o Top Ten Lists. We plan to offer new nationwide top ten lists every
two days, including information categories such as best schools,
places to live, quality of life, most expensive, least expensive,
worst and best crime areas, lifestyle characteristics, and fastest
growing communities.
Marketing and Sales Strategy
Our primary marketing objective is to grow our user base and brand, and thereby
expand our Web site traffic and our Internet related revenue sources.
Historically, our marketing activities have been generally limited to making
sales calls on MLS prospects for the customized information services we provide.
During the past several quarters, as we have refocused our business on Internet
based revenue sources, we have been recruiting and developing a proactive,
centralized marketing group responsible for positioning our expanded service
offerings and ensuring that each of our Internet services is competitive and
appealing to a mass audience. If we have sufficient financial resources
available to us, we intend to commit significant additional capital to expanding
our distribution through portal and related business-to-business Internet
companies, and to initiate an advertising campaign targeted primarily at
selected vertical business segments.
We plan to enhance our brand identity through a variety of marketing methods,
including: (i) brand development; (ii) publication of our domain name; (iii)
enhancement of the look, tone and attitude of our Web site; (iv) establishment
of a brand personality that appeals to our target market; (v) development of a
dialogue with customers and real estate professionals through special promotions
and affinity programs; (vi) frequent emails; (vii) customer care programs;
(viii) development of strategic alliances; (ix) direct mail and (x)
participation in trade shows.
Additional planned marketing and sales strategies include:
o Licensing and Strategic Alliances. Licensing our technology to
potential strategic partners including popular portals and real
estate related destination Web sites.
o Advertising and Sponsorship Opportunities. Distinguishing ourselves
from our competition through the creation of unique advertising and
sponsorship opportunities that are designed to build brand loyalty
for our corporate sponsors as well as for ourselves. We plan to
offer an assortment of advertising options to our clients, allowing
them to select the means by which they present themselves to our Web
site users.
o Increased Sales Force. Subject to our financial resource
limitations, we are seeking to continue with an aggressive expansion
of our sales force. Our Chief Executive Officer currently takes a
direct role in servicing our key national accounts, and we recently
hired two national accounts managers who operate out of our New York
City sales office, and one from a Virginia sales office. Several
additional junior
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salespeople and lead generation researchers are being hired. Sales
groups will be broken into sales specialist teams, focusing on
specific industry and consumer sites where we believe that we have
the strongest sales opportunities.
o Public Relations. We plan to launch an enhanced public relations
campaign geared at real estate business and technology writers.
Press releases will be issued and press conferences will be held in
order to generate coverage of our activities. In addition,
management will seek opportunities to participate in Internet and
real estate industry forums.
o Viral Marketing. We expect that many of our Web site users may
themselves be part of one of the 40 major business groups we have
identified with an interest in reaching consumers during the period
six months before or after a real estate transaction. We will enable
those users to purchase local and regional advertising sponsorships
online, without leaving our Web site, on a fully automated basis,
and will encourage those users to provide a link to our Web site on
any Web sites they may maintain, again on a fully automated basis.
o Foster MonsterDaata Community Affinity. We plan to develop an
affinity program with strategic partners to provide free and/or
discounted products and services for our users.
Major Customers
We provide licensed, custom applications or co-branded content to the following
customers:
o iOwn, Inc., a leading Internet mortgage company that helps consumers
find both a home and low-cost mortgages online;
o HomeInfoLink.com, a leading comprehensive Internet Service Provider
serving real estate agents and business owners;
o Cendant's CompleteHome.com - a new real estate portal that will
carry listings from Cendant's franchise systems, which include three
(Century 21, Coldwell Banker and ERA) of the nation's five largest
national real estate brokerage franchise systems, as measured by
number of offices;
o VirtualRelocation.com, which promotes itself as the "Internet's
First Moving & Relocation Mega-Site" containing over 150,000 links
to relocation services and related informational pages;
o REALTOR.com, currently the country's leading real estate listing Web
site with 1.3 million residential listings;
o Network Communications, (ncinfo.net), the largest publisher and
provider of printed and online real estate advertising in North
America;
o Landata.com, the data integration Web site affiliated with Stewart
Title, a leading national title insurer;
o Signonsandiego.com, a San Diego Union Tribune company, offering San
Diego's most comprehensive online community with seven million
monthly page views;
o CityNews.com, a City News, Inc. company offering free online
classifieds generating over seven million monthly page views; and
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o six regional real estate MLSs, including the MLS of Long Island, NY
serving over 12,000 customers, the Greater New Jersey MLS, serving
5,000 members, and Metro Listing Service in Atlanta, serving over
11,000 users.
Our customer base is diverse enough that we would expect the loss of any one of
our major client relationships to not by itself have a material adverse effect
on our business.
Our Proprietary Databases
With over 61,000 communities under coverage, we believe that we are the nation's
largest and most sophisticated online information system covering real estate
property and transaction due diligence information. Our proprietary database of
key ownership, sales and demographic information is the product of over seven
years of our research and development efforts. In combination with other
databases which we have licensed the right to use, we cover over 90% of U.S.
households with approximately 30 million real estate transactions and nearly 90
million property ownership records, as well as neighborhood, crime, demographic
and school information.
We have developed a robust data collection and confirmation system supported by
our trained research staff and our proven computer and communications hardware
and software systems. Many of our researchers have prior experience in the
residential real estate, fact checking, and data analysis industries. We
currently provide selected data coverage for all major property types, including
residential, commercial, office, industrial, retail, specialty, multi-family,
hotel/motel and land. These property types are further categorized by nearly 150
specific use codes. Our software allows users to search the database efficiently
and quickly and to view specific detailed and comprehensive data coverage of
property information in all covered markets.
We also have developed expertise in the transcription of data from microfilms of
non-standardized deeds, ownership records, assessment files, and other public
records. We can collect data carried in multiple source electronic formats and
convert it into a single, standardized format, and much of the data conversion
work we do follows rules and procedures we have developed for our proprietary
use. Further, we have developed our own in-house capabilities to display data
sets geographically, as points or areas on a map.
Competition
The market for Internet data services is relatively new, intensely competitive
and rapidly changing. In the on-line real estate industry, the principal
competitive factors we have identified are:
o Quality and depth of the underlying databases;
o Proprietary methodologies, databases and technical resources;
o The usefulness of the data and reports that can be generated;
o Effectiveness of the provider's marketing and sales efforts;
o Customer service and support;
o Compatibility with key customer's existing information systems;
o Reputation for reliability;
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o Price;
o Timeliness; and
o Brand loyalty.
We compete directly and indirectly for customers and content providers with the
following categories of companies:
o Online services or Web sites targeted to real estate brokers, buyers
and sellers of real estate properties, insurance companies, mortgage
brokers and lenders, such as eNeighborhoods.com, Homefair.com,
SmartHomeBuy.com, NearMyHome.com, TheSchoolReport.com, Public
Priority Systems (School Match), 2001Beyond.com, CAP Index (Crime
Check), Claritas, Inc., National Decision Systems,
AMSHomefinder.com, Comps.com, Homestore.com, HomeSeekers.com,
LoopNet.com, Commrex.com, Commercial Search, American Real Estate
Exchange, Association of Industrial Realtors, Property Line,
Property First, First Realty Advisors, and numerous specialized
sites with limited coverage and local sites.
o Publishers and distributors of traditional information services,
such as national provider Realty Information Group, regional
providers such as Realty Information Tracking Services, Databank,
Dressco, Inc., Revac, Baca Landata and several smaller local
providers, many of which have or may establish Web sites.
o Public record providers such as Experian, Acxiom DataQuick, Factual
Data Corp., Vista Information Solutions and TransAmerica.
We believe that our national comprehensive coverage, the broad range of our
integrated real estate data products, and the structure of our database-to-Web
content delivery system provide us with a competitive advantage in the
marketplace. However, many of our existing competitors, as well as a number of
potential new competitors, have longer operating histories in the Internet
market, greater name recognition, larger customer bases, greater user traffic
and significantly greater financial, technical and marketing resources. In order
to gain market acceptance, we may elect to provide products at reduced prices or
at no cost. The competitors may be able to undertake more extensive marketing
campaigns, adopt more aggressive pricing policies, make more attractive offers
to potential employees, subscribers, distribution partners and content providers
and may be able to respond more quickly to new or emerging technologies and
changes in Internet user requirements.
We have identified the following potential competitive advantages of our product
offerings and Web site from which both real estate professionals and consumers
can possibly benefit:
o more precision in searching data for specific neighborhoods (rather
than simply for ZIP codes or metropolitan areas);
o full national or more expansive coverage of many of our available
datasets;
o timely data for the current year, as well as projections for many
datasets indicating future trends;
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o visual presentations and neighborhood mapping; and
o property valuation data.
Our Content Providers and Suppliers
Our principal supply of information comes from a variety of content partners,
public record databases and deed and mortgage recordings. As we have expanded
our business over the Internet, our content supply sources have diversified to
include national demographic, culture, community, crime and school data. Other
important suppliers include:
o Applied Geographic Systems, Inc., one of the leading providers of
demographic, crime and neighborhood profile data;
o Mailers Software, Inc., one of the leading providers of PC-based
mailing list clean-up, appending, postal savings and management
tools;
o International Data Management, a leading real property data
conversion company with facilities in the Philippines; and
o 2001 Beyond, Inc., a leading provider of public, private, parochial,
charter and magnet school data.
Protection of Our Intellectual Property
We rely on a combination of copyrights, trademarks, trade secret laws and
contractual arrangements to protect our intellectual property rights. We do not
own or license any patents.
With respect to our databases, copyright protection is available for the
selection and arrangement of the data included therein and we have obtained
copyright registrations from the United States Copyright Office for some of our
databases. Copyright protection does not, however, extend to the facts included
in any of the databases.
The proprietary applications we use in connection with the compilation of our
databases are also protected by copyrights we own. Copyrights in our software
protect the source code and "look and feel" of the program from plagiarism.
Nevertheless, other programs which could perform the same functions can exist
without violating our copyrights.
We obtain much of the information for our databases through license agreements
with third parties such as private commercial data providers and governmental or
quasi-governmental agencies. These license agreements typically permit us to
resell or re-license the information as part of a larger database. Some of these
agreements impose restrictions upon resale, which, in turn, are imposed upon our
customers through contracts and the terms of our Web site User Agreement.
We believe that our proprietary know-how, and the technical and creative skills
of our personnel and principals, are critical factors in establishing and
maintaining our business. Therefore, we enter into confidentiality agreements
with our key employees and consultants, and seek to control access to and
distribution of our proprietary information. There can be no assurance that
these precautions will prevent misappropriation,
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infringement or other violations of our intellectual property. It is also
possible that third parties who are not bound to any agreements with us will
copy or otherwise use the content on our Web sites without authorization.
We use and have registered with Network Solutions, Inc., the following names as
Web site addresses:
o MonsterDaata.com
o Big-Decisions-Made-Easy.com
o One-Stop-Daata-Shop.com
o Make-My-Daata.com
o Neighborhood-Place.com
o Relocation-Place.com
o Personal-Private-Eye.com
At present, all our Web site addresses automatically direct the user to our main
Web site at MonsterDaata.com. In the future, we may decide to use our other Web
site addresses for specialized Web sites, powered by our servers.
Applications have been filed in the U.S. Patent and Trademark Office to register
our rights in certain trademarks, namely, DAATA SUPERSTORE, MAKE MY DAATA,
NEIGHBORHOOD PLACE, PERSONAL PRIVATE EYE, and RELOCATION PLACE. We are preparing
to file for registration of the trademark MONSTERDAATA.COM in a distinctive logo
form. No assurance can be given regarding the registration of the trademarks
that are the subject of the applications we have filed (or are intending to
file), and even if we are successful in obtaining trademark registrations from
all these filings there can be no assurance that our rights to these trademarks
will be free from challenges in the future.
Governmental Regulations Affecting our Business
Our operations are not currently subject to direct regulation by any
governmental agency in the United States beyond the typical regulations
applicable to businesses generally. A number of legislative and regulatory
proposals under consideration by federal, state, local and foreign governmental
organizations may lead to laws or regulations concerning various aspects of the
Internet, including:
o on-line content;
o user privacy;
o taxation;
o access charges; and
o jurisdiction.
The adoption of new laws or the unfavorable application of existing laws may
decrease the use of the Internet, which would stifle our growth and decrease
anticipated demand for our services. New laws or changes in the application of
existing laws could also increase our cost of doing business or otherwise have
an adverse effect on our business and growth strategy. Such laws may address one
or more of the following:
o On-line Content and User Privacy. The growth in on-line commerce
could result in more stringent consumer protection laws and
regulations covering such topics as permissible on-line content and
user
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privacy, including the collection, use, retention and transmission
of personal information provided by on-line users. Such consumer
protection laws could result in substantial compliance costs and
could interfere with the conduct and growth of our business.
o Taxation. The tax treatment of the Internet and electronic commerce
is currently unsettled. A number of proposals have been made that
could impose taxes on the sale of goods and services and certain
other Internet activities. Previously, the Internet Tax Information
Act was signed into law placing a three-year moratorium on new state
and local taxes on Internet commerce. This moratorium is expected to
end on October 21, 2001. Nonetheless, we cannot assure you that
future laws imposing taxes or other regulations would not
substantially impair the growth of our business and our financial
condition.
o Access Charges. The Federal Communications Commission recently
characterized dial-up Internet traffic bound for Internet service
providers as jurisdictionally mixed but largely interstate in
nature. However, the Federal Communications Commission has made it
clear that its position does not affect its long-standing rule that
Internet and other information services are exempt from interstate
access charges, and it does not change the manner in which consumers
obtain and pay for access to the Internet, nor does it transform the
nature of traffic routed through Internet service providers. Certain
local telephone carriers claim that the increasing popularity of the
Internet has burdened the existing telecommunications infrastructure
and that many areas with high Internet use are experiencing
interruptions in telephone service. These carriers have petitioned
the Federal Communications Commission to impose access fees on
Internet service providers, but not consumers. If these access fees
are imposed on the Internet service providers, the cost of
communicating on the Internet could increase, which could decrease
demand for our developing Internet services.
o Jurisdiction. Our on-line services are available over the Internet
throughout the country, and as a result, we expect to sell to
numerous consumers resident in multiple states and even potentially
outside the United States. Such jurisdictions may claim in the
future that we are required to qualify to do business as a foreign
corporation in their states or obtain other qualifications in each
such states or countries. Our failure in the future to qualify as a
foreign corporation in a jurisdiction where we may be required to do
so could subject us to taxes and penalties for the failure to so
qualify, and could limit our ability to conduct litigation to
enforce our rights and protect our intellectual property in such
states. Our Internet operations could also provide a jurisdictional
basis for lawsuits against us in distant or inconvenient forums, and
it could be difficult or costly for us to defend ourselves in any
such lawsuits.
Our collection of data from primary sources is often subject to Federal Freedom
of Information Act laws and regulations and local, county and state
interpretations of that Act. A change in these laws, regulations or
interpretations, or additional laws and regulations, could have an adverse
effect on our business by limiting our ability to collect certain of our data
sets.
Certain Risk Factors Affecting Our Business
An investment in our stock involves a high degree of risk. The achievement of
our business objectives is subject to a number of market and other factors
beyond our control, and our future prospects are speculative.
If we make any forward-looking statements or assumptions concerning our future
business activities, revenues, profits or financial condition, or if we make any
forward-looking statements concerning our industry, the
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economy, technological changes or our competitors, you should recognize that our
predictions and assumptions are subject to a great deal of uncertainty. Actual
results could differ materially from our predictions and assumptions,
particularly given the highly speculative nature of our business and that of
other Internet-related businesses in our industry. If our predictions prove to
be too optimistic, the value of our business could be adversely impacted and our
shareholders will probably lose money.
Our shareholders could find that there is nobody willing to purchase their
shares when they want to sell, and it is possible that our shareholders could
lose their entire investment in our stock.
Our stock should only be purchased by speculators who understand the high level
of risk that a purchase of our stock entails and who are willing and able if
necessary to hold our stock for an extended period of time, or indefinitely, and
to risk the loss of their entire investment in our stock. If you are a suitable
investor for MonsterDaata.com, you should fully understand the following
material risk factors:
If the Internet proves not to be a viable commercial marketplace, it could have
a material adverse effect on our business.
We expect a substantial portion of our future revenue to come from the continued
development of our products and services to be distributed over Internet. We
began offering our services via the Internet in September 1998. During the nine
months ended September 30, 1999, 88% of our revenues were derived from our
traditional non-Internet services and products, and only 12% were from products
and services distributed via the Internet. During the three month period ended
September 30, 1999, our Internet revenues increased to 25% of total revenues. We
intend to further increase our reliance on the Internet for delivery of our
services and products. As a result, future cash flows and future results of
operations will continue to rely increasingly upon the use of information
services and transaction support products on the Internet.
However, the business use of the Internet is still in its infancy, and it is
possible that the Internet may not prove to be a viable commercial marketplace.
Known issues in this regard include inadequate development of Internet
infrastructure to date, competing technology, delays in the development of new
standards and protocols required to handle increased Internet activity, and the
possibility of significant government regulation (locally, nationally and
internationally). Moreover, concerns over the security of Internet transactions
and the privacy of users may inhibit the growth of the Internet, particularly as
a means of conducting commercial transactions. To the extent that our activities
involve the storage and transmission of proprietary information, such as credit
card numbers, security breaches could expose us to a risk of loss or litigation
and possible liability. We cannot assure you that contractual provisions
attempting to limit our liability in such areas will be adequately implemented
or enforceable, or that other parties will accept such contractual provisions as
part of our agreements.
We have not fully resolved some other critical issues concerning our use of the
Internet, including reliability, cost, ease of deployment, administration and
quality of service. This may affect our ability to maintain our business, expand
product marketing, improve communications and increase business efficiencies.
If we do not successfully develop new and enhanced Internet services and
products, our revenues could be adversely impacted.
Business on the Internet is characterized by:
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o rapid technological change;
o frequent changes in user requirements and preferences;
o frequent new product and service introductions embodying new
processes and technologies; and
o evolving industry standards and practices that could render our
information delivery practices obsolete.
Our success will depend partly on our ability to improve our existing services,
develop new product offerings and respond to technological advances, emerging
industry standards and competitive offerings. We cannot assure you that we will
be successful in these endeavors.
Evolving Internet technology and standards increase the risk that system
interruptions will occur. Our Internet operations are also vulnerable to
interruption by fire, power loss, telecommunications failure and other events
beyond our control. System interruptions that result in the unavailability of
our Web site, or slower response times for users, could reduce the number of
advertisements delivered, revenues earned from advertisers, as well as the
eReport and eLead fees we collect from consumers and businesses using our
database information products over the Internet. We have experienced periodic
system interruptions in the past and such interruptions could continue to occur
from time to time in the future.
Additionally, any substantial increase in traffic on our Web site could require
us to expand and adapt our network infrastructure. However, we cannot assure you
that we will be able to expand our network infrastructure on a timely basis to
meet any increased demands.
Intense competition may render our services and products uncompetitive or
obsolete, and we expect the competition to intensify even further.
The market for Internet data services is relatively new, intensely competitive
and rapidly evolving. Our Internet operations compete against a variety of firms
that provide information products through one or more media, including print,
broadcast, television and the Internet. Within our currently targeted niche of
real estate information products and the Internet, we compete with Homefair.com,
SmartHomeBuy.com, eNeighborhoods.com, NearMyHome.com, TheSchoolReport.com,
Public Priority Systems (School Match), 2001Beyond.com, CAP Index (Crime Check),
Claritas, Inc., National Decision Systems, AMSHomefinder.com, Comps.com,
Homestore.com, HomeSeekers.com, LoopNet.com, Commrex.com, Commercial Search,
American Real Estate Exchange, Association of Industrial Realtors, Property
Line, Property First, First Realty Advisors, and numerous specialized sites with
limited coverage and local sites. We also compete with Realty Information Group,
Realty Information Tracking Service, Databank, Dressco, Revac, Baca Landata,
Experian, Acxion, DataQuick, Factual Data Corp., Vista Information Solutions and
TransAmerica. Many of these competitors offer one or more Internet sites with
information products similar to items we provide over the Internet; and many of
these competitors may have significantly greater financial resources than we do.
These financial resources could be deployed to more aggressively compete on the
Internet or through more traditional media, to our disadvantage, at any time.
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We expect competition to persist and intensify. There are relatively low
barriers to entry into our business, and competitors using other media to
deliver information products could adapt their businesses to include the
Internet as a medium for delivering their products. Competitors could develop or
offer services that provide significant performance, price, creative or other
advantages over those offered by us, and any competitor or group of competitors
could have a material adverse effect on our business.
The accuracy, availability and integrity of our data is critical to our
business.
Substantially all of the information in our databases is obtained from third
parties, including public records offices and other governmental sources. We
cannot ensure that the information in our databases will be comprehensive,
accurate or timely, particularly as we seek to expand our business. Our ability
to attract and retain customers and to generate revenues is highly dependent on
customer confidence in the comprehensiveness, accuracy and timeliness of our
database. Establishing and maintaining such comprehensiveness, accuracy and
timeliness will require substantial effort and resources. Although we disclaim
financial responsibility for inaccuracies in the data on our Web site, such
disclaimers may not be effective to shield us from all possible liability.
Further, our business is based on establishing our reputation as a trustworthy
and dependable provider of information, and allegations of unreliable or
outdated data, even if unfounded, could have a material adverse effect on our
business.
We also license and use data from third-party providers, but we cannot assure
you that our license agreements will continue to allow us to do so, nor can we
assure you that, in cases where these providers can no longer serve us,
alternative sources of comparable data will be available.
We have experienced significant net losses in the past, and will need to raise
additional funds in the future.
We have incurred significant net losses since transitioning to our Internet
focused business plan in 1998. As of September 30, 1999, we had an accumulated
deficit of $4.7 million. We have incurred substantial costs to expand
distribution, develop new services and products, and create, introduce and
enhance our Web site. We expect operating losses and negative cash flows to
continue for the foreseeable future as we continue to incur significant
expenses. As a result, we will need future financings to fund our operations and
the failure to raise additional funds may prevent us from implementing our
business strategy. If revenues grow more slowly than anticipated, or if
operating expenses exceed expectations or cannot be adjusted in response to
slower revenue growth, it could have a material adverse effect on our business.
We anticipate a need to raise additional funds in order to conduct our
operations and take advantage of acquisition and expansion opportunities. Our
liquidity and capital requirements will depend on numerous factors, including
the success of our new product offerings, the growth of our Internet-related
revenues, and competing technological and market developments. We will be
required to raise additional funds through public or private financing,
strategic relationships or other arrangements, particularly if and when our
acquisition strategy matures. We cannot assure you that such additional funding,
if needed, will be available on terms acceptable to us, or at all.
Any additional equity financing may be on terms that dilute the value of our
company for our existing shareholders. In addition, new shares that are issued
may have rights, preferences or privileges senior to those of existing
shareholders. Debt financing, if available, may involve restrictive covenants
which limit our operating flexibility. Strategic arrangements, if necessary, may
require us to relinquish our rights to some of our intellectual property or some
business opportunities.
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Many of our licensing and other agreements are short-term and expose us to
termination and non-renewal risks. We are dependent on our relationships with
many of these contracting parties.
We are currently a party to a limited number of revenue producing licensing
agreements or comparable agreements with third parties. One of these agreements
terminates in December 1999, three expire on or before August 2000, three expire
on or before March 2001, two expire on or before March 2002, and two expire on
or before June 2003. About half of these agreements are currently with MLSs,
rather than Web site operators or other Internet related businesses, and the
agreements with MLSs currently account for a significant majority of our
revenues. In general, the expiring contracts will automatically renew for
successive terms if we do not give or receive a notice of non-renewal within a
specified period ranging from 30 days to six months before the scheduled
termination date. While we believe that such relatively short-term agreements
are typical in our industry, our ability to maintain and grow our business
depends significantly upon our ability to enter into and maintain licensing and
comparable relationships. There is no guarantee that we will be able to renew or
extend these agreements upon their expiration at all or on terms as favorable to
us as we currently enjoy. In fact, we expect our recurring revenues from
existing agreements with MLSs to decline as these agreements expire and we make
our data available to more users, including MLSs and their clients, at
substantially lower costs over the Internet.
We are party to a licensing agreement with Homestore.com, under which our data
is currently made available on the REALTOR.com Web site, a Web site operated by
Homestore.com. The agreement is scheduled to terminate in July 2000, and will
automatically renew for a two-year period unless written notice of termination
is received in January 2000. Homestore.com recently announced an agreement to
acquire Homebuyer's Fair, Inc., owners of Homefair.com, which is one of our
direct competitors. There can be no assurance that we will be able to renew or
extend this agreement, and the loss of the relationship we have with
Homestore.com may have a material adverse effect on the transition of our
business to the Internet. On a licensed basis that identifies MonsterDaata.com
as the source of the data, we provide data to the REALTOR.com Web site that
currently powers their popular "Find a Neighborhood" feature. According to
Homestore.com, approximately one-fourth of all visitors to the REALTOR.com Web
site click through to our licensed data in the "Find a Neighborhood" section.
The exposure to Internet users that we gain through our relationships with key
Web site operators like Homestore.com is important and material to our Internet
transition strategy.
We need to develop further strategic alliances with others.
Our business strategy is dependent on strategic alliances with other Internet
companies. We are currently evaluating several potential co-branding ventures
and other strategic opportunities; however, we do not have any present
commitments or agreements with respect to any material strategic alliances or
related efforts. Any future strategic alliances or related efforts will be
accompanied by risks such as:
o the difficulty of identifying appropriate joint venture parties or
opportunities;
o the time our senior management must spend negotiating agreements and
monitoring joint venture activities;
o the possibility that some or all of our Internet joint venture
activities never become profitable;
o the possibility that our management may fail to capitalize on the
growth opportunities presented by some or all of our joint ventures;
and
o the possible future insolvency of Internet companies we select as
our Internet joint venturers.
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No assurance can be given that we will be successful in overcoming these risks
or any other problems encountered with such strategic alliances or related
efforts. In addition, there can be no assurance that significant spending on
these relationships will increase our revenues substantially or at all, or that
online companies with which we may have a strategic alliance will be able to
deliver a sufficient number of customer visits or page views to make the
relationships profitable.
We need to retain and recruit key managers, employees and outsource vendors, and
to manage our growth effectively.
Our success depends heavily on the continued service of our executive officers
and our managers. Should one or more of these individuals leave before
acceptable replacements are found, that could have a material adverse effect on
our business. We do not presently have employment agreements or maintain key-man
life insurance on any of our executives or employees.
We believe that further expansion of our operations will be required in order
for us to address potential market opportunities and produce meaningful profits.
Such expansion may place a significant strain on our management, operations and
financial resources. An increase in the number of our employees, our market
penetration and our product and service development activities would result in
increased responsibility for our management. Our management will be required to
successfully maintain relationships with various data and advertising customers,
other Internet sites and services, Internet service providers and other third
parties and to maintain control over our strategic direction in a rapidly
changing environment. There can be no assurance that our current personnel,
systems, procedures and controls will be adequate to support our future
operations, that management will be able to identify, hire, train, motivate or
manage required personnel or that management will be able to successfully
identify and exploit existing and potential market opportunities. Our failure to
effectively manage growth and address these growth related issues could have a
material adverse effect on our business.
We also depend on outsource vendors, including the services of a data entry and
data conversion facility in the Philippines, a CD-ROM software company, and
Internet site development and hosting companies. Should the services of those
facilities become unavailable or unreasonably priced, we may experience an
interruption in some of our business activities until we identify other suitable
outsource vendors.
Our intellectual property rights may be difficult to protect and we may find
that we infringe on the intellectual property rights of others.
It is uncertain how intellectual property laws will apply to the Internet, and
we cannot assure you that existing laws will provide adequate protection for our
proprietary database offerings or our Internet domain names. Our success and
ability to compete partly depends on the protection of our proprietary database
offerings on the Internet and on the goodwill associated with our trademarks,
trade names, and Internet domain names.
We rely on copyright laws to protect the original content that we develop for
the Internet, and we rely on contract restrictions and copyright laws to protect
the proprietary technologies that we have developed to manage and improve our
Web site and database offerings. We cannot assure you, however, that these laws
will sufficiently protect us, that others will not develop technologies similar
or superior ours, or that others will not obtain or use our technologies without
our authorization. With respect to our databases, copyright protection is
available for the selection and arrangement of the data included therein and we
have obtained copyright
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registrations from the United States Copyright Office for some of our databases.
Copyright protection does not, however, extend to the facts included in any of
the databases.
In addition, we rely on certain technology licensed from others, and we may be
required to license additional technology, for use in managing our Web site and
providing related services to users and advertising customers. Our ability to
generate revenues from Internet commerce may also depend on data encryption and
authentication technologies that we may be required to license from others. We
cannot assure you that these third party technology licenses will be available
to us on acceptable commercial terms, or at all. The inability to enter into and
maintain any of these technology licenses could have a material adverse effect
on our business.
We also cannot assure you that others will not bring claims of copyright or
trademark infringement against us or claim that our use of certain technologies
or data violates the intellectual property rights of others. Any claims of
infringement could be time consuming to defend, result in costly litigation,
divert management attention, require us to enter into costly royalty or
licensing arrangements or prevent us from using important technologies or data.
Any of these could have a material adverse effect on our business. If we cease
to use certain intellectual property as a result of third party claims, we may
not be able to develop or acquire alternative technologies or obtain such
licenses on commercially acceptable terms.
We have not yet obtained registrations for any of our trademarks, including our
name MonsterDaata.com. In view of the number of other users of the word
"monster" in their names or trademarks, including companies doing business on
the Internet, there can be no assurance that our attempt to register the mark
"MonsterDaata.com" will be successful or that our use of this mark will not be
challenged by another user. Although we believe that we have a reasonable
position in favor of our right to use and register the mark, defending such
rights may be costly and an adverse determination or settlement could require
that we change our name.
We have a limited number of principal customers.
Although we have a relatively diversified base of customers and we are shifting
our business focus from individual MLS customers to the much broader, low-cost
distribution capabilities of the Internet, our business could be materially and
adversely affected if we lost a number of our large MLS customers before we more
fully complete the transition of our business to the Internet. Our top MLS
customers accounted for more than 80% of our total revenues in 1998.
If we are unable to identify suitable acquisition targets or if we do not
successfully integrate acquired businesses with our business, it could have a
material adverse effect on our business.
We intend to explore the possible acquisition of businesses complementary to
ours in order to expand our services, diversify our business and participate in
the consolidation trend among Internet information products providers. We cannot
assure you that we will be able to make any acquisitions in the future on
favorable terms or that such acquisitions will ultimately prove advantageous to
us. We may encounter substantial costs, delays or other problems as we integrate
any acquisitions. Such costs could include severance payments to employees of
acquired companies, systems integration costs, restructuring charges and other
expenses associated with a change of control, as well as non-recurring
acquisition costs including accounting, legal and investment banking fees and
transaction-related obligations.
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Increased competition for the finite number of suitable acquisition candidates
may develop in our targeted industries, in which case there may be fewer
acquisition opportunities available to us and higher acquisition costs for the
opportunities that are available. Moreover, it is possible that neither our
management nor management of any of the acquired companies will have the
necessary skills to manage a company with substantial internal growth
opportunities and plans for further growth through acquisitions or strategic
alliances. We may seek to recruit additional managers to supplement the
management of the acquired companies, but we may not have the ability to recruit
additional managers with the skills necessary to enhance the management of the
acquired companies.
Adoption of new laws and government regulations relating to the Internet or
Internet domain names could harm our business.
Due to the increasing popularity and use of the Internet and other online
services, it is possible that a number of laws and regulations may be adopted
with respect to the Internet or other online services. These laws would cover
issues such as user privacy, freedom of expression, content, copyrights,
distribution, quality and pricing of products and services, taxation,
advertising, intellectual property rights, information security and the
convergence of traditional communication services with Internet communications.
Furthermore, the growth and development of the market for online commerce may
prompt more stringent consumer protection laws that may impose additional
burdens on those companies conducting business online. The adoption of any
additional laws or regulations may decrease the growth of the Internet or other
online services, which could, in turn, decrease the demand for our products and
services and increase our cost of doing business, or otherwise have an adverse
effect on our business.
Moreover, the applicability to the Internet and other online services of
existing laws in various jurisdictions governing issues such as property
ownership, sales and other taxes and personal privacy is uncertain and may take
years to resolve. In addition, as we begin to sell to numerous consumers
residing in such states and foreign countries, such jurisdictions may claim that
we are required to qualify to do business as a foreign corporation in each such
state and foreign country. Our failure to qualify as a foreign corporation in a
jurisdiction where we are required to do so could subject us to taxes and
penalties for the failure to qualify. Any such new legislation or regulation,
the application of laws and regulations from jurisdictions whose laws do not
currently apply to our business, or the application of existing laws and
regulations to the Internet and other online services could have a material
adverse effect on our business.
In addition, we currently hold various Web domain names, including
www.MonsterDaata.com relating to our brand and sites. The acquisition and
maintenance of domain names generally is regulated by governmental agencies and
their designees. For example, in the United States, the National Science
Foundation has appointed Network Solutions, Inc. as the current exclusive
registrar for the ".com," ".net" and ".org" generic top-level domains and our
arrangements for our important domain names with Network Solutions are believed
to be satisfactory and secure. However, the regulation of domain names in the
United States and in foreign countries is subject to change. Governing bodies
may establish additional top-level domains, appoint additional domain name
registrars or modify the requirements for holding domain names. As a result,
there can be no assurance that we will be able to acquire or maintain relevant
domain names in all countries in which we may wish to conduct our business.
Furthermore, the relationship between regulations governing domain names and
laws protecting trademarks and similar proprietary rights is unclear. We,
therefore, may be unable to prevent third parties from acquiring
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domain names that are similar to, or infringe upon or otherwise decrease the
value of our trademarks and other proprietary rights. Any such inability could
have a material adverse effect on our business.
Shares eligible for future sale could reduce the market price of our stock.
As of December 1, 1999, 7,660,948 shares of our common stock were issued and
outstanding. Of these shares, 6,385,685 are "restricted securities" which under
certain circumstances may be sold in compliance with Rule 144 or other
exemptions under the Securities Act. Assuming that Rule 144 is available, we
believe that, subject to certain volume limitations and "manner of sale"
requirements, 6,000,000 of these "restricted securities" would become eligible
for resale in April 2000.
We also have 991,400 shares of common stock subject to options outstanding as of
October 31, 1999 under our option plan (exercisable at prices ranging from $1.00
to $3.02 per share). Of these options, 725,000 have been granted to directors
and executive officers, and 266,400 have been granted to other employees and
consultants. The common stock that is delivered when options are exercised by
directors and executive officers will be "restricted securities"; however, when
options are exercised by other employees or consultants, the common stock we
deliver upon exercise will be freely tradable. Most of the options we have
granted under our option plan are subject to vesting over a three year period,
and prior to vesting the options are not exercisable. Of the 150,000 outstanding
options that are currently exercisable, 145,000 are held by directors or
executive officers and 5,000 are held by other employees or consultants.
On March 31, 1999, in consideration for the modification of the exercise price
of a previously issued warrant, we issued to Ocean Strategic Holdings Limited a
warrant to purchase 500,000 shares of our common stock at an exercise price of
$3.00 per share. The warrant expires on March 31, 2004, and is not exercisable
until March 31, 2000. Shares of our common stock issuable upon the exercise of
this warrant will be "restricted securities."
No prediction can be made regarding the effect that the availability of these
"restricted securities" will have on the market prices of our shares from time
to time. The possibility that substantial amounts of our shares may be sold in
the public market may adversely effect the prevailing market prices for shares
and could impair our ability to raise capital in the future by selling new
shares.
In November, 1999, we issued 1,561.47 shares of preferred stock and related
warrants to purchase shares of our common stock at a warrant exercise price of
$3.75 per share, subject to adjustment. As of December 1, 1999, warrants to
purchase up to 193,894 shares of our common stock that were issued in connection
with the sale of our preferred stock were outstanding. Each share of our
outstanding preferred stock is generally convertible into 300 shares of common
stock; however, in certain circumstances the conversion increases to 450 shares
of common stock. In accordance with our obligations to the purchasers of these
shares, we undertook to file a registration statement with the SEC to make the
common shares issuable upon conversion of the preferred stock and upon exercise
of the warrants eligible for public resale.
An investment in our common stock may be very illiquid, and we have never paid
cash dividends.
Although our shares trade on the Over-The-Counter Bulletin Board (the "OTC
Bulletin Board") of the National Association of Securities Dealers ("NASD"),
there is currently no broadly followed "established trading market" for our
shares, and we cannot assure you that any such market will ever develop or be
maintained. The absence of an active trading market would reduce the liquidity
of an investment in our shares.
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To the extent that brokerage firms act as market makers for our shares on the
OTC Bulletin Board, they may be a dominating influence in any market that might
develop, and the degree of participation by such firms may significantly affect
the price and liquidity of our shares. These firms may discontinue their market
making activities at any time. The prices at which our shares are traded in the
market will be determined by these firms and by the purchasers and sellers of
our shares, but such prices may not necessarily relate to our assets, book
value, results of operations or other established and quantifiable criteria of
value.
Any market price for our shares is likely to be very volatile, and numerous
factors beyond our control may have a significant adverse effect on prices.
We have never paid cash dividends on our capital stock and do not anticipate
paying any cash dividends for the foreseeable future.
We intend to file an application for the listing of our common stock on the
NASDAQ Small Cap or the NASDAQ National Market. While we believe that we will
meet the NASDAQ Small Cap eligibility requirements by the time the review of our
application is completed, we do not currently meet the applicable listing
requirements and there can be no assurance that we will be successful in our
efforts to obtain this listing.
The application of the "penny stock" rules could adversely affect the market for
our stock.
The Securities and Exchange Act of 1934 requires additional disclosure relating
to the market for "penny stocks." A penny stock is generally defined to be any
equity security not listed on NASDAQ or a national securities exchange that has
a market price of less than $5.00 per share, subject to certain exceptions.
Among these exceptions are shares issued by companies that have:
o net tangible assets of at least $2 million, if the issuer has been
in continuous operation for three years;
o net tangible assets of at least $5 million, if the issuer has been
in continuous operation for less than three years; or
o average annual revenue of at least $6 million for each of the last
three years.
We do not currently meet the requirements of these exceptions and, therefore,
our shares would be deemed penny stocks for purposes of the Exchange Act if and
at any time while our common stock trades below $5.00 per share. In such case,
trading in our shares would be regulated pursuant to Rules 15-g-1 through 15-g-6
and 15-g-9 of the Exchange Act. Under these rules, brokers or dealers
recommending our shares to prospective buyers would be required, unless an
exemption is available, to:
o deliver a lengthy disclosure statement in a form designated by the
SEC relating to the penny stock market to any potential buyers, and
obtain a written acknowledgement from each buyer that such
disclosure statement has been received by the buyer prior to any
transaction involving our shares;
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o provide detailed written disclosure to buyers of current price
quotations for our shares, and of any sales commissions or other
compensation payable to any broker or dealer, or any other related
person, involved in the transaction;
o send monthly statements to buyers disclosing updated price
information for any penny stocks held in their accounts, and these
monthly statements must include specified information on the limited
market for penny stocks.
In addition, if we are subject to the penny stock rules, all brokers or dealers
involved in a transaction in which our shares are sold to any buyer, other than
an established customer or "accredited investor," must make a special written
determination that our shares would be a suitable investment for the buyer, and
the brokers or dealers must receive the buyer's written agreement to purchase
our shares, as well as the buyer's written acknowledgement that the suitability
determination made by the broker or dealer accurately reflects the buyer's
financial situation, investment experience and investment objectives, prior to
completing any transaction in our shares.
These Exchange Act rules may limit the ability or willingness of brokers and
other market participants to make a market in our shares and may limit the
ability of our shareholders to sell in the secondary market, through brokers,
dealers or otherwise. We also understand that many brokerage firms will
discourage their customers from trading in shares falling within the "penny
stock" definition due to the added regulatory and disclosure burdens imposed by
these Exchange Act rules.
The SEC from time to time may propose and implement even more stringent
regulatory or disclosure requirements on shares not listed on NASDAQ or on a
national securities exchange. The adoption of the proposed changes that may be
made in the future could have an adverse effect on the trading market for our
shares.
As set forth above, we intend to file an application for the listing of our
common stock on the NASDAQ Small Cap or the NASDAQ National Market; however,
there can be no assurance that we will be successful in obtaining such listing.
You may not be able to recover damages from our directors and officers for
actions taken by them not in your best interest.
Our certificate of incorporation includes provisions which eliminate the
personal liability of directors of our company to the extent permitted by
applicable law. As a result, stockholders may be unable to recover damages
against our directors for actions taken by them which constitute negligence or a
violation of certain of their fiduciary duties.
We are controlled by our principal stockholders, and there are other reasons
that we may be unattractive to potential acquirors.
As of December 1, 1999, Mitchell Deutsch, together with his children, owned
about 42.2% of our outstanding common stock, and James Garfinkel, together with
his child, owned about 17.4% of our outstanding common stock. As a result,
Mitchell Deutsch, James Garfinkel and their families together are able to elect
a majority of our board of directors and otherwise continue to influence our
policies and any other matter requiring
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shareholder approval (including mergers, consolidations and the sale of all or
substantially all of our assets). They can also, together or with others,
prevent or cause a change in control in our company.
Our certificate of incorporation authorizes the issuance of up to 10,000,000
shares of "blank check" preferred stock with designation, rights and preferences
as may be determined from time to time by our board of directors. Accordingly,
our board of directors is empowered, without stockholder approval, to issue a
new series of preferred stock with dividend, liquidation, conversion, voting or
other rights which could hamper the voting power of our common stockholders. The
issuance of a new series of preferred stock could be used in certain
circumstances as a method of discouraging, delaying or preventing a change in
control in our company. Although we do not presently intend to issue any
additional shares of preferred stock, we cannot assure you that we will not do
so in the future.
We are subject to Section 203 of the General Corporation Law of the State of
Delaware. Subject to certain exceptions, Section 203 prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such stockholder
became an interested stockholder unless the proposed business combination was
approved by our board of directors before the stockholder became an interested
stockholder. In general, Section 203 defines an interested stockholder as any
shareholder directly or indirectly owning 15% or more of the outstanding voting
stock of a Delaware corporation. Section 203 could have the effect of
discouraging others from making tender offers for our shares, and also may have
the effect of preventing changes in our management.
The Year 2000 problem could cause our software products and those of our
suppliers to malfunction.
Many computer chips and computer software programs use two digits rather than
four to define the applicable year and, as a result, are incapable of properly
recognizing or processing information with dates beyond December 31, 1999. Upon
arrival of the year 2000, any computer programs that have date sensitive
software may:
o interpret the year 2000 as "00" and refuse to accept any date entry
for years past 1999;
o interpret "00" as connoting the year 1900; and/or
o erroneously assume that the year 2000 is not a leap year.
We have made an assessment of the year 2000 readiness of our information
technology systems, including the hardware and software that operate our Web
site, and our non-information technology systems. We are not currently aware of
any year 2000 compliance problems relating to our proprietary software,
information technology, or non-information technology systems that would have a
material adverse effect on our business. We cannot ensure that we will not
discover year 2000 compliance problems in our proprietary software that will
require substantial revisions. We have requested of all our key suppliers
information on their state of year 2000 readiness. We have received assurances
from substantially all our material suppliers that they are year 2000 compliant.
Notwithstanding the responses received from our suppliers, though, we cannot
ensure that third-party software, hardware or services incorporated into our
material information technology and non-information technology systems will not
need to be revised or replaced, all of which could be time consuming and
expensive. If efforts to address year 2000 risks are not successful, or if
suppliers or other third parties with
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whom we conduct business do not successfully address such risks, it could have a
material adverse effect on our business.
ITEM 2. DESCRIPTION OF PROPERTY
We lease office space at 115 Stevens Avenue Valhalla, NY 10595, under a five
year noncancelable lease expiring December 31, 2000. We pay property taxes,
insurance, and other related expenses to the leased properties. Our rent expense
was $87,575 and $68,054 for the years ended December 31, 1998 and 1997,
respectively. Additionally, we signed a lease for our New York City sales office
this year. The New York City lease expires June 30, 2004, and provides for an
annual aggregate rent of $37,178.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we are a party to litigation arising in the ordinary course
of our business. We are not currently a party to any litigation that, if
determined adversely to us, we believe would have a material adverse effect on
our business.
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Prior to July 29, 1999, our common stock had been quoted under the symbol "DVNL"
on the OTC Bulletin Board, and the last reported activity in our common stock
prior to that date had occurred on February 16, 1995. No market existed for our
securities and, to the best of our knowledge, there was no other trading of our
shares during the two years prior to 1995, except as reported on our Form 8-K
filed with the SEC on September 25, 1996.
On July 29, 1999, and subsequent to our acquisition of TDC (which had taken
place on April 2, 1999), our common stock began to trade on the OTC Bulletin
Board under the symbol "MDDC." The range of high and low trading prices for our
common stock since July 29, 1999 is shown below. Prices are inter-dealer
quotations as reported by the NASD and do not reflect retail markups, mark downs
or commissions.
Month ended: High Low
----------- ---- ---
November 30, 1999 5.625 3.25
October 31, 1999 4.5625 2.875
September 30, 1999 5.50 3.00
August 31, 1999 8.00 4.00
July 30, 1999 8.00 6.25
Prior to July 29, 1999 N/A N/A
The last reported sale price of our common stock on the OTC Bulletin Board on
November 30, 1999 was $5.00 per share. At December 1, 1999, there were 7,660,948
shares of common stock outstanding, which were held by approximately 490
stockholders of record. We have not paid any cash dividends on our common stock
since our formation. The payment of dividends, if any, in the future, is within
the discretion of our board of directors and will depend on our earnings,
capital requirements, financial condition and other relevant factors. Our board
of directors does not presently intend to declare any dividends on our common
stock in the foreseeable future. We anticipate that all of our earnings and
other resources, if any, will be retained by us for investment in our business.
We are not subject to any material contractual restrictions limiting, or that
are likely to limit, our ability to pay dividends on our common stock.
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding the members of our
board of directors and our executive officers:
NAME AGE POSITION
---- --- --------
Mitchell Deutsch 42 Chief Executive Officer and President,
Chairman of the Board
John Evans 38 Chief Financial Officer and Executive
Vice-President - Corporate Development
James Garfinkel 42 Secretary, Treasurer, Vice President,
Director
Thomas Ingegneri 54 Director
MITCHELL DEUTSCH has been a member of our board of directors and our Chief
Executive Officer and President since April 2, 1999. He assumed these positions
in connection with our acquisition of TDC. Mr. Deutsch is also the Chairman of
the Board of Directors and the President and Chief Executive Officer of TDC,
positions which he held since 1992. Mr. Deutsch has developed and marketed
information products and services to the real estate industry since 1987, when
he was a partner in Real Estate Resources Corp. and responsible for new business
development, sales and marketing. In this position Mr. Deutsch sold database
products and services to the commercial and residential real estate markets. Mr.
Deutsch's background in technology and information began in 1980 at Sony Corp.
where as Advertising Director for the Consumer Audio Division, he introduced the
Sony Walkman and over 100 other consumer audio products to the U.S. market.
Between 1983 and 1987, Mr. Deutsch co-developed Warner Audio Publishing, a large
books on tape company which was subsequently sold to Warner Communications. Mr.
Deutsch is a graduate of Rutgers College, with a Bachelor of Arts degree in
Communications.
JOHN EVANS was promoted November 30, 1999, to Chief Financial Officer and
Executive Vice President - Corporate Development. He previously served as our
Senior Vice President Corporate Development, Finance and Mergers and
Acquisitions since April 1999. Prior to joining us, Mr. Evans was President of
Asia Media Inc., a management consulting firm founded in 1993 that supported
Asian and U.S. new media, broadcasting and cable communications companies with
their expansion needs in areas that included mergers, acquisitions, direct
investments, financial planning, joint ventures, licensing and royalty
agreements, and strategic alliances. Clients included NBC, China Online, and
Landmark Communications. Prior to 1993, Mr. Evans served as a Vice President for
The Bank of New York. Mr. Evans is a graduate of The University of Michigan with
a bachelor of arts degree in International Relations and English Literature. Mr.
Evans is also a Strauss Fellow and earned a masters degree in international
banking, business and finance from Columbia University's School of International
and Public Affairs.
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JAMES GARFINKEL has been a member of our board of directors and our Secretary,
Treasurer and a Vice-President since April 2, 1999. He assumed these positions
in connection with our acquisition of TDC. Mr. Garfinkel is also a Director and
the Secretary, Treasurer and Vice President of Product Development at TDC,
positions which he has held since 1992. From 1987 to 1990, Mr. Garfinkel was a
manager in Real Estate Resources Corp. Mr. Garfinkel is a graduate of Hamilton
College, with a bachelor of arts degree in Economics.
THOMAS INGEGNERI has been a member of our board of directors since April 2,
1999. He assumed this position in connection with our acquisition of TDC. Mr.
Ingegneri is also a Director of TDC, a position which he held since 1995. Since
1990, Mr. Ingegneri has been the senior partner at Thomas & Associates,
providing consulting services to publishing and information companies. Mr.
Ingegneri has previously served in a number of management positions in
publishing and information companies, including H.W. Wilson, Springer-Verlag,
and McGraw-Hill. Mr. Ingegneri is a graduate of Franklin & Marshall College,
with a bachelor of arts degree in Business.
Our board of directors is elected at each annual meeting of our stockholders.
Each director holds office until his or her successor is duly elected and
qualified or until his or her earlier resignation or removal, with or without
cause, at any duly noticed special meeting of our stockholders by the
affirmative vote of the holders of a majority of the shares of our common stock
present in person or represented by proxy and entitled to vote at an election of
directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of our common stock by
o each person or entity known by us to be the beneficial owner of more
than 5% of our common stock;
o each of our directors who beneficially owns any shares of our common
stock;
o each of our named executive officers who beneficially owns any
shares of our common stock; and
o all of our directors and named executive officers as a group.
For purposes of this table, information as to the shares of common stock is
calculated based on 7,660,948 shares of common stock outstanding on December 1,
1999.
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For purposes of this table, "beneficial ownership" is determined in accordance
with the Instructions to Item 403 of Regulation S-B under the Securities Act of
1933, pursuant to which a person or group of persons is deemed to have
"beneficial ownership" of any shares of common stock that such person has the
right to acquire within 60 days. For purposes of computing the percentage of
outstanding shares of common stock held by each person or group of persons named
above, any shares which such person or persons have the right to acquire within
60 days are deemed to be outstanding and beneficially owned by such person or
persons but are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
Name Amount Percent
---- ------ -------
Directors and named
executive officers
Mitchell Deutsch(1) 3,231,374 42.2%
c/o MonsterDaata.com, Inc.
115 Stevens Avenue
Valhalla, NY 10595
John Evans 139,300 1.8%
c/o MonsterDaata.com, Inc.
115 Stevens Avenue
Valhalla, NY 10595
James Garfinkel(2) 1,335,781 17.4%
c/o MonsterDaata.com, Inc.
115 Stevens Avenue
Valhalla, NY 10595
Thomas Ingegneri(3) 99,764 1.3%
54 South Main St.
Cranbury, NJ 08512
Directors and named
executive officers as
a group 4,806,219 62.7%
5% Shareholders
Marc Siden(4) 488,229 6.3%
200 Mercer St., #2D
New York, NY 10003
Barry Garfinkel(5) 390,922 5.1%
919 Third Ave.
New York, NY 10022
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(1) Includes 103,104 shares owned by Mitchell Deutch's dependent children and
98,000 shares issuable under options exercisable within 60 days.
(2) Includes 23,040 shares owned by James Garfinkel's dependent child and
42,000 shares issuable under options exercisable within 60 days.
(3) These shares are held in the name of Thomas Associates.
(4) These shares are held in the name of What About Me, Inc., an entity owned
by Marc Siden. Marc Siden has been working with us since April 1999 as a
sales consultant with the title "Senior Vice-President - Business
Development." In 1998, Mr. Siden served as President of New Beginnings
Venture Group, a venture capital firm that provided bridge funding to TDC.
In 1993, Mr. Siden was employed as a Managing Director of Biltmore
Securities, a small regional brokerage firm. In August 1997, Mr. Siden
consented to the entry of an order by the SEC in connection with his prior
association with Biltmore Securities, without admitting or denying the
facts or findings contained in such order, which suspended him from
associating with any broker, dealer, municipal securities dealer,
investment company or investment advisor for a period of 12 months and
ordered him to cease and desist from engaging in specified violations of
U.S. federal securities laws.
(5) Includes 30,800 shares of common stock issuable within 60 days upon the
conversion of 102.67 shares of Series A Cumulative Convertible Preferred
Stock held by Barry Garfinkel. Barry Garfinkel is James Garfinkel's
father.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit No. Description
2.1 Acquisition Agreement and Plan of Reorganization, dated March 26,
1999, between the registrant (formerly known as D-Vine, Ltd.),
certain stockholders of registrant, TDC and certain stockholders of
TDC (incorporated by reference to our Current Report on Form 8-K
filed with the SEC April 16, 1999, Exhibit (c)(1), file No.
033-01599).
3.1 Amended and Restated Certificate of Incorporation.
3.2 By-laws.
4.1 Certificate of Designations, Preferences and Rights of Series A
Cumulative Convertible Preferred Stock.
10.1 1999 MonsterDaata.com, Inc. Stock Option Plan (incorporated by
reference to our Registration Statement on Form S-8 filed with the
SEC June 18, 1999, Exhibit 99.1, file No. 333-81097).
21.1 List of our subsidiaries.
(b) REPORTS ON FORM 8-K
N/A
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SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Exchange Act, the
registrant has duly caused this amended report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MONSTERDAATA.COM, INC.
By: /s/ Mitchell F. Deutsch
-------------------------------------
Mitchell F. Deutsch
President and Chief Executive Officer
Pursuant to the requirements of section 13 or 15(d) of the Exchange Act, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Mitchell Deutsch President and Chief Executive December 2, 1999
- -------------------- Officer, Director
Mitchell Deutsch (Principal Executive Officer)
/s/ John Evans Chief Financial Officer and December 2, 1999
- -------------------- Executive Vice President -
John Evans Corporate Development
(Principal Financial and
Accounting Officer)
/s/ James Garfinkel Secretary, Treasurer, December 2, 1999
- -------------------- Vice-President, Director
James Garfinkel
/s/ Thomas Ingegneri Director December 2, 1999
- --------------------
Thomas Ingegneri
34
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
MONSTERDAATA.COM., INC.
MonsterDaata.com, Inc., a corporation organized and existing under the
laws of the State of Delaware, does hereby certify as follows:
1. The name of the corporation is MonsterDaata.com, Inc. The date of
filing of its original Certificate of Incorporation with the Secretary of State
was July 22, 1985, under the name of "Trans West, Inc." The name was then
changed to "D-Vine, Ltd." pursuant to a Certificate of Amendment to the
Certificate of Incorporation, filed on February 13, 1996, and was again changed
to "MonsterDaata.com, Inc." pursuant to a Certificate of Amendment to the
Certificate of Incorporation, filed on April 5, 1999.
2. This Amended and Restated Certificate of Incorporation restates and
integrates previous filings into a single document, and amends certain restated
articles of the Certificate of Incorporation to read as set forth herein.
3. The text of the Certificate of Incorporation is hereby amended and
restated to read as herein set forth in full:
ARTICLE I
NAME
The name of the corporation is MonsterDaata.com, Inc. (hereinafter, the
"Corporation").
ARTICLE II
DURATION
The Corporation shall continue in existence perpetually unless sooner
dissolved according to law.
ARTICLE III
PURPOSES
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware.
<PAGE>
ARTICLE IV
CAPITALIZATION
(a) The Corporation shall have the authority to issue 60,000,000
shares of which 50,000,000 shares shall be common stock having a $0.01 par value
each (the "Common Stock"), and 10,000,000 shares shall be preferred stock having
a $0.01 par value each (the "Preferred Stock").
(b) Each 150 shares of Common Stock outstanding on February 20,
1996, shall be deemed on and after such date to be one share of Common Stock of
the Corporation, par value $0.01 per share. Additionally, each share of Common
Stock outstanding on March 26, 1999, shall be reclassified as, and become, one
one-thousandth (1/1000) of a share of Common Stock of the Corporation and the
number of shares of Common Stock of the Corporation represented by each stock
certificate representing Common Stock of the Corporation outstanding on March
26, 1999 shall be proportionally adjusted by dividing such number by one
thousand (1000). No fractional shares will be issued pursuant to this
reclassification and in lieu of fractional shares, registered holders will be
entitled to receive the appropriate number of shares they are entitled to,
rounded up for any fractional share to the next whole share of Common Stock.
Notwithstanding the foregoing, the authorized capital of the Corporation shall
remain as 60,000,000 shares, of which 50,000,000 shares shall be common stock
having a $0.01 par value each, and 10,000,000 shares shall be preferred stock
having a $0.01 par value each.
ARTICLE V
CLASSES OF STOCK
A statement of the designations and the powers, preferences, and rights,
and the qualifications, limitations, or restrictions thereof, of the shares of
stock of each class and series which the Corporation shall be authorized to
issue, is as follows:
(a) Preferred Stock. Shares of preferred stock may be issued from
time to time in one or more series as may from time to time be determined by the
board of directors. Each series shall be distinctly designated. All shares of
any one series of the Preferred Stock shall be alike in every particular, except
that there may be different dates from which dividends thereon, if any, shall be
cumulative, if made cumulative. The powers, preferences, participating, optional
and other rights of each such series and qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other series
at any time outstanding. Subject to the provisions of subparagraph (iv) of
Paragraph (c) of this Article V, the board of directors of this Corporation is
hereby expressly granted authority to fix by resolution or resolutions adopted
prior to the issuance of any shares of each particular series of Preferred
Stock, the designation, powers, preferences and relative, participating,
optional and other rights and the qualifications, limitations and restrictions
thereof, if any, of such series, including, without limiting the generality of
the foregoing the following:
(i) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute, the series, which number may be
increased (except at otherwise fixed by the board of directors) or decreased
(but not below the number of shares thereof outstanding) from time to time by
action of the board of directors;
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<PAGE>
(ii) The rate and time at which, and the terms and conditions
upon which, dividends, if any, on shares of the series shall be paid, the extent
of preferences or relation, if any, of such dividends to the dividends payable
on any other class or classes of stock of this Corporation, or on any series of
Preferred Stock, and whether such dividends shall be cumulative or
non-cumulative;
(iii) The right, if any, of the holders of shares of the
series to convert the same into, or exchange the same for, any other class or
classes of stock of this Corporation, and the terms and conditions of such
conversion or exchange;
(iv) Whether shares of the series shall be subject to
redemption, and the redemption price or prices, including, without limitation, a
redemption price or prices payable in shares of the Common Stock, cash or other
property and the time or times at which, and the terms and conditions upon
which, shares of the series may be redeemed;
(v) The rights, if any, of the holders of shares of the series
upon voluntary or involuntary liquidation, merger, consolidation, distribution
or sale of assets, dissolution or winding up of this Corporation;
(vi) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for shares of the series; and
(vii) The voting powers, if any, of the holders of shares of
the series which may, without limiting the generality of the foregoing, include
(A) the right to more or less than one vote per share on any or all matters
voted upon by the shareholders and (B) the right to vote as a series by itself
or together with other series of Preferred Stock or together with all series of
Preferred Stock as a class, upon such matters, under such circumstances and upon
such conditions as the board of directors may fix, including, without
limitation, the right, voting as a series by itself or together with all series
of Preferred Stock as a class, to elect one or more directors of this
Corporation in the event there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such other
circumstances and upon such conditions as the board may determine.
(b) Common Stock. The Common Stock shall be non-assessable and shall
not have cumulative voting rights or pre-emptive rights. In addition, the Common
Stock shall have the following powers, preferences, rights, qualifications,
limitations and restrictions:
(i) After the requirements with respect to preferential
dividends of Preferred Stock (fixed in accordance with the provisions of
Paragraph (a) of this Article V), if any, shall have been met and after this
Corporation shall comply with all the requirements, if any, with respect to the
setting aside of fund as sinking funds or redemption or purchase accounts (fixed
in accordance with provisions of Paragraph (a) of this Article V) and subject
further to any other conditions which may be fixed in accordance with the
provisions of Paragraph (a) of this Article V, then, but not otherwise, the
holders of Common Stock shall be entitled to receive such dividends, if any, as
may be declared from time to time by the board of directors without distinction
as to series.
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<PAGE>
(ii) After distribution in full of the preferential amount
(fixed in accordance with the provisions of Paragraph (a) of this Article V), if
any, to be distributed to the holders of Preferred Stock in the event of a
voluntary or involuntary liquidation, distribution or sale of assets,
dissolution or winding up of this Corporation, the holders of the Common Stock
shall be entitled to receive all the remaining assets of this Corporation,
tangible and intangible, of whatever kind available for distribution to
stockholders, ratably in proportion to the number of shares of the Common Stock
held by each without distinction as to series.
(iii) Except as may otherwise be required by law, this
Certificate of Incorporation or the provisions of the resolution or resolutions
as may be adopted by the board of directors pursuant to Paragraph (a) of this
Article V, in all matters as to which the vote or consent of stockholders of the
Corporation shall be required or be taken, including, any vote to amend this
Certificate of Incorporation, to increase or decrease the par value of any class
of stock, effect a stock split or combination of shares, or alter or chance the
powers, preferences, or special rights of any class or series of stock, the
holders of the Common Stock shall have one vote per share of Common Stock;
(c) Other Provisions.
(i) The relative powers, preferences and rights of each series
of Preferred Stock in relation to the powers, preferences and rights of each
other series of Preferred Stock shall, in each case, be as fixed from time to
time by the board of directors in the resolution or resolutions adopted pursuant
to authority granted in Paragraph (a) of this Article V, and the consent by
class or series vote or otherwise, of the holders of the Preferred Stock of such
of the series of Preferred Stock as are from time to time outstanding shall not
be required for the issuance by the board of directors of any other series of
Preferred Stock whether the powers, preferences and rights of such other series
shall be fixed by the board of directors as senior to, or on a parity with the
powers, preferences and rights of such outstanding series, or any of them;
provided, however, that the board of directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of the holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
(ii) Subject to the provisions of subparagraph (i) of this
Paragraph, shares of any series of Preferred Stock may be issued from time to
time as the board of directors shall determine and on such terms and for such
consideration as shall be fixed by the board of directors.
(iii) Shares of the Common Stock or any series thereof may be
issued from time to time as the board of directors shall determine and on such
terms and for such consideration as shall be fixed by the board of directors.
(iv) No holder of any of the shares of any class or series of
stock or of options, warrants or other rights or purchased shares of any class
or series of stock or of other securities of the Corporation shall have any
pre-emptive right to purchase or subscribe for any unissued stock of any class
or series or any additional shares of any class or series to be issued by reason
of any increase of the authorized capital stock of the Corporation of any class
or series, or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the Corporation of any
class or series, or carrying any rights to purchase stock of any class or
series, but any such unissued stock, additional authorized issue of shares of
any class or series of stock or securities convertible into or exchangeable for
stock, or carrying any right to
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<PAGE>
purchase stock, may be issued and disposed of pursuant to resolution of the
board of directors to such persons, firms, corporations or associations, whether
such holders or others and upon such terms as may be deemed advisable by the
board of directors in the exercise of its sole discretion.
ARTICLE VI
BYLAWS
In furtherance and not in limitation of the powers conferred by statute,
the board of directors is expressly authorized to make, alter, or repeal the
bylaws of the Corporation.
ARTICLE VII
MEETINGS AND RECORDS
Meetings of stockholders may be held within or without the state of
Delaware, as the bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the state of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the bylaws of the Corporation. Elections of directors
need not be by written ballot unless the bylaws of the Corporation shall so
provide.
ARTICLE VIII
PROTECTION FOR OFFICERS AND DIRECTORS
(a) Except as otherwise provided by the General Corporation Law of
the State of Delaware, no director or officer of the Corporation shall be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director or officer.
(b) The Corporation shall indemnify any and all persons who may
serve or who have served at any time as directors or officers, or who, at the
request of the board of directors of the Corporation, may serve, or at any time
have served as directors or officers of another Corporation in which the
Corporation at such time owned or may own shares of stock, or which it was or
may be a creditor, and the respective heirs, administrators, successors, and
assigns, against any and all expenses, including amounts paid upon judgment,
counsel fees, and amounts paid in settlement (before or after suit is
commenced), actually or necessarily incurred by such persons in connection with
the defense or settlement or any claim, action, suit, or proceeding in which
they, or any of them, are made parties, or a party, or which may be assessed
against them or any of them, by reason of being or having been directors or
officers of the Corporation, or such other corporation, except in relation to
matters as to which any such director or officer of the Corporation, or such
other corporation, or former director or officer shall be adjudged in any
action, suit, or proceeding to be liable for his own willful misconduct in the
performance of his duties. Such indemnification shall be in addition to any
other rights to which those indemnified may be entitled under any law, bylaw,
agreement, vote of stockholders, or otherwise.
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<PAGE>
(c) Any repeal or modification of this Article VIII by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director or officer of the Corporation existing at the time of
such repeal or modification.
ARTICLE IX
OFFICERS' AND DIRECTORS' CONTRACTS
No contract or other transaction between this Corporation and any other
firm or corporation shall be affected by the fact that a director or officer of
this Corporation has an interest in, or is a director or officer of this
Corporation or any other corporation. Any officer or director individually or
with others, may be a party to, or may have an interest in, any transaction of
this Corporation, or any transaction in which this Corporation is a party or has
an interest. Each person who is now or may become an officer or director of this
Corporation is hereby relieved from liability he might otherwise obtain in the
event such officer or director contracts with this Corporation for the benefit
of himself or any firm or other corporation in which he may have an interest,
provided such officer or director acts in good faith.
ARTICLE X
REGISTERED OFFICE AND AGENT
The address of the Corporation's registered office in the state of
Delaware and the name of its registered agent at such address is as follows:
Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805,
County of New Castle.
ARTICLE XI
AMENDMENT
The Corporation reserves the right to amend, alter, change, or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
4. This Amended and Restated Certificate of Incorporation was duly adopted
by written consent of the stockholders in accordance with the applicable
provisions of Sections 245, 242, and 228 of the General Corporation Law of the
State of Delaware, and written notice of the adoption of this Amended and
Restated Certificate of Incorporation has been given as provided by Section 228
of the General Corporation Law of the State of Delaware to every stockholder
entitled to such notice.
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<PAGE>
IN WITNESS WHEREOF, the undersigned, being the President and Chief
Executive Officer of MonsterDaata.com, Inc., executes, signs and acknowledges
this Amended and Restated Certificate of Incorporation on this 19th day of July,
1999, and affirms the statements contained herein as true under penalty of
perjury.
MONSTERDAATA.COM, INC.
/s/ Mitchell Deutsch
------------------------------------
Name: Mitchell Deutsch
Title: President and Chief Executive
Officer
ATTEST:
By: /s/ James Garfkinel
-------------------------------
Name: James Garfinkel
Title: Vice-President, Secretary and Treasurer
7
Exhibit 3.2
MONSTERDAATA.COM, INC.
BY-LAWS
Effective as of:
June 15, 1999
2
<PAGE>
BY-LAWS
TABLE OF CONTENTS
Page
----
ARTICLE I OFFICES............................................... 1
SECTION 1. Registered Office..................................... 1
SECTION 2. Principal Office...................................... 1
SECTION 3. Other Offices......................................... 1
ARTICLE II MEETINGS OF STOCKHOLDERS.............................. 1
SECTION 1. Annual Meetings....................................... 1
SECTION 2. Special Meetings...................................... 1
SECTION 3. Notice of Meetings.................................... 2
SECTION 4. List of Stockholders.................................. 2
SECTION 5. Quorum................................................ 3
SECTION 6. Organization.......................................... 3
SECTION 7. Order of Business..................................... 3
SECTION 8. Voting................................................ 4
SECTION 9. Action by Written Consent............................. 5
ARTICLE III BOARD OF DIRECTORS.................................... 5
SECTION 1. General Powers........................................ 5
SECTION 2. Number and Term of Office............................. 5
SECTION 3. Election.............................................. 6
SECTION 4. Resignation, Removal and Vacancies.................... 6
SECTION 5. Meetings ............................................. 6
SECTION 6. Compensation.......................................... 7
ARTICLE IV COMMITTEES............................................ 8
ARTICLE V OFFICERS.............................................. 8
SECTION 1. Election, Appointment and Term of Office.............. 8
SECTION 2. Resignation, Removal and Vacancies.................... 9
SECTION 3. Duties and Functions.................................. 9
1
<PAGE>
ARTICLE VI CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, PROXIES,
ETC ................................................. 11
SECTION 1. Execution of Documents................................ 11
SECTION 2. Deposits.............................................. 11
SECTION 3. Proxies in Respect of Stock or
Other Securities of Other Corporations ............... 11
SECTION 4. General and Special Bank Accounts..................... 11
SECTION 5. Fiscal Year........................................... 12
SECTION 6. Dividends............................................. 12
ARTICLE VII BOOKS AND RECORDS..................................... 12
ARTICLE VIII SHARES AND THEIR TRANSFER; FIXING RECORD DATE......... 12
SECTION 1. Stock Certificates.................................... 12
SECTION 2. Record; Restrictions on Transfer...................... 12
SECTION 3. Lost, Stolen, Destroyed or Mutilated Certificates..... 13
SECTION 4. Fixing Date for Determination of Stockholders of Record 13
ARTICLE IX SEAL.................................................. 14
ARTICLE X FISCAL YEAR........................................... 14
ARTICLE XI INDEMNIFICATION....................................... 14
SECTION 1. Scope of Indemnification.............................. 14
SECTION 2. Advancing Expenses.................................... 15
SECTION 3. Securing of Indemnification Obligations............... 15
SECTION 4. Payment of Indemnification............................ 16
SECTION 5. Contribution.......................................... 16
SECTION 6. Contract Rights; Amendment or Repeal.................. 16
SECTION 7. Scope of Article...................................... 16
SECTION 8. Reliance on Provisions................................ 16
ARTICLE XII AMENDMENTS............................................ 16
ARTICLE XIII MISCELLANEOUS......................................... 17
SECTION 1. Interested Directors.................................. 17
SECTION 2. Ratification.......................................... 17
2
<PAGE>
BY-LAWS
OF
MONSTERDAATA.COM, INC.
a Delaware Corporation
adopted June 15, 1999
ARTICLE I
OFFICES
SECTION 1. Registered Agent and Office. The name of the registered
agent of the Corporation and the address of its registered office in the State
of Delaware is Corporation Service Company, 1013 Centre Road, City of
Wilmington, County of New Castle, zip code 19805, or at such other registered
name and address as shall from time to time be designated by the Board of
Directors (hereinafter called the "Board").
SECTION 2. Principal Office. The principal office for the
transaction of the business of the Corporation shall be at such location, within
or without the State of Delaware, as shall be designated by the Board.
SECTION 3. Other Offices. The Corporation may also have offices at
other places, either within or without the State of Delaware, as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Annual Meetings. The annual meeting of the stockholders
for the election of directors and for the transaction of such other business as
may properly come before the meeting shall be held at such time, date and place
as shall be designated in the notice thereof, except that no annual meeting need
be held if all actions, including the election of directors, required by the
General Corporation Law of Delaware to be taken at a stockholders' annual
meeting are taken by written consent in lieu of a meeting pursuant to Section 9
of this Article II.
SECTION 2. Special Meetings. Special meetings of the stockholders,
for any purpose or purposes (unless otherwise prescribed by law), may be called
at any time by the Board or the Chairman of the Board or the Chief Executive
Officer or the President, or by a committee of the Board which has been duly
designated by the Board and whose powers and authority as provided in a
resolution of the Board or in the By-laws, include the power to call such
meetings. The Board of Directors shall call a special meeting of the
stockholders when requested in writing by stockholders holding not less than 51%
of the outstanding stock of the Corporation. Such written request shall state
the purpose or purposes of the meeting proposed to be held.
<PAGE>
SECTION 3. Notice of Meetings. Except as otherwise expressly
required by law, notice of each meeting of the stockholders shall be given not
less than 10 nor more than 60 calendar days before the date of the meeting to
each stockholder entitled to vote at such meeting by mailing such notice first
class, postage prepaid, directed to each stockholder at the address of such
stockholder as it appears on the records of the Corporation.
Every such notice shall state the place, date and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called. Except as provided in the immediately succeeding sentence
or as otherwise expressly required by law, notice of any adjourned meeting of
the stockholders need not be given if the time and place thereof are announced
at the meeting at which the adjournment is taken. If the adjournment is for more
than 30 calendar days, or if after the adjournment a new record date is fixed
for the adjourned meeting, notice of the adjourned meeting shall be given to
each stockholder entitled to vote at such adjourned meeting.
A written waiver of notice, signed by a stockholder entitled to
notice, whether signed before, at or after the time set for a given meeting,
shall be deemed to satisfy the notice requirements set forth in the preceding
paragraph for such stockholder with respect to such meeting. Attendance of a
stockholder in person or by proxy at a stockholders' meeting shall constitute
the equivalent of a written waiver of notice by such stockholder for such
meeting, except when such stockholder attends the meeting for the express
purpose of objecting at the beginning of the meeting to the transaction of any
business because the meeting is not lawfully called or convened.
Whenever notice is required to be given to any stockholder to whom
(i) notice of two consecutive annual meetings, and all notices of meetings or of
the taking of action by written consent without a meeting to such stockholder
during the period between such two consecutive annual meetings or (ii) payments
(if sent by first class mail) of dividends or interest on securities during a
twelve month period, have been mailed addressed to such stockholder at his or
her address as shown on the records of the corporation and have been returned
undeliverable, the giving of such notice to such stockholder shall not be
required. Any action or meeting which shall have been taken or held without
notice to such stockholder shall have the same force and effect as if such
notice had been duly given. If any such stockholder shall deliver to the
corporation a written notice setting forth his or her then current address, the
requirement that notice be given to such stockholder shall be reinstated. No
notice need be given to any stockholder with whom communication is unlawful, nor
shall there be any duty to apply for any permit or license to give notice to any
such stockholder.
SECTION 4. List of Stockholders. It shall be the duty of the
Secretary or other officer of the Corporation who shall have charge of its stock
ledger to prepare and make, at least 10 calendar days before every meeting of
the stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to examination by any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 calendar days prior to the meeting either at a place specified in the notice
of the meeting within the city where the meeting is to be held, or, if not so
specified, at the place where the meeting is to be held. Such list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
SECTION 5. Quorum. At each meeting of the stockholders, except as
otherwise expressly required by law, stockholders holding a majority of the
shares of stock of the Corporation issued, outstanding and entitled to vote at
the meeting shall be present in person or by proxy in order to constitute a
quorum for the
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<PAGE>
transaction of business. In the absence of a quorum at any such meeting or any
adjournment or adjournments thereof, a majority in voting interest of those
present in person or by proxy and entitled to vote thereat, or, in the absence
therefrom of all the stockholders, any officer entitled to preside at, or to act
as secretary of, such meeting may adjourn such meeting from time to time until
stockholders holding the amount of stock requisite for a quorum shall be present
in person or by proxy. At any such adjourned meeting at which a quorum may be
present, any business may be transacted that might have been transacted at the
meeting as originally called.
SECTION 6. Organization. At each meeting of the stockholders, one of
the following shall act as chairman of the meeting and preside thereat, in the
following order of precedence:
(a) the Chairman of the Board;
(b) if there is no Chairman of the Board or if the Chairman of the
Board shall be absent from such meeting, the President;
(c) if the Chairman of the Board and the President shall be absent
from such meeting, any other officer or director of the Corporation
designated by the Board or the Executive Committee to act as chairman of
such meeting and to preside thereat; or
(d) a stockholder of record of the Corporation who shall be chosen
chairman of such meeting by a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote thereat.
The Secretary or, if he or she shall be presiding over the meeting in accordance
with the provisions of this Section or if he or she shall be absent from such
meeting, the person (who shall be an Assistant Secretary, if an Assistant
Secretary shall be present thereat) whom the chairman of such meeting shall
appoint, shall act as secretary of such meeting and keep the minutes thereof.
SECTION 7. Order of Business. The order of business at each meeting
of the stockholders shall be determined by the chairman of such meeting, but
such order of business may be changed by a majority in voting interest of those
present or by proxy at such meeting and entitled to vote thereat.
SECTION 8. Voting. Each holder of voting stock of the Corporation
shall, at each meeting of the stockholders, be entitled to one vote in person or
by proxy for each share of stock of the Corporation held by him or her and
registered in his or her name on the books of the Corporation.
(a) on the date fixed pursuant to the provisions of Section 4 of
Article VIII of these By-laws as the record date for the
determination of stockholders who shall be entitled to receive
notice of and to vote at such meeting;
(b) if no record date shall have been so fixed, then at the close of
business on the day next preceding the day on which notice of the
meeting shall be given or, if notice shall be waived, at the close
of business on the day next preceding the day on which the meeting
shall be held;
(c) Any such voting rights may be exercised by the stockholder
entitled thereto in person or by his or her proxy appointed by an
instrument in writing, subscribed by such stockholder or by his
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<PAGE>
or her attorney thereunto authorized and delivered to the secretary
of the meeting; provided, however, that no proxy shall be voted or
acted upon after three years from its date unless said proxy shall
provide for a longer period. The attendance at any meeting of a
stockholder who may theretofore have given a proxy shall not have
the effect of revoking the same unless such stockholder shall in
writing so notify the secretary of the meeting prior to the voting
of the proxy. At any meeting of the stockholders all matters, except
as otherwise provided in the Certificate of Incorporation, in these
By-laws or by law, shall be decided by the vote of a majority in
voting interest of the stockholders present in person or by proxy
and entitled to vote thereat and thereon. The stockholders present
at a duly called or held meeting at which a quorum is present may
continue to do business until adjournment, notwithstanding the
withdrawal during such meeting of enough stockholders to leave less
than a quorum. Except as otherwise expressly provided by law, the
vote at any meeting of the stockholders on any question need not be
by ballot, unless so directed by the chairman of the meeting. On a
vote by ballot, each ballot shall be signed by the stockholder
voting, or by his or her proxy if there be such proxy, and it shall
state the number of shares voted.
Shares of the Corporation's own stock belonging to the Corporation
or to another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held by the Corporation,
shall neither be entitled to vote nor be counted for quorum purposes. Any vote
of stock of the Corporation may be given at any meeting of the stockholders by
the stockholders entitled to vote thereon either in person or by proxy appointed
by an instrument in writing delivered to the Secretary or an Assistant Secretary
of the Corporation or the secretary of the meeting. The attendance at any
meeting of a stockholder who may previously have given a proxy shall not have
the effect of revoking the same unless he shall in writing so notify the
secretary of the meeting prior to the voting of the proxy. At all meetings of
the stockholders, all matters, except as otherwise provided by law or in these
By-laws, shall be decided by the vote of a majority of the votes cast by
stockholders present in person or by proxy and entitled to vote thereat, a
quorum being present. Except as otherwise expressly required by law, the vote at
any meeting of the stockholders on any question need not be by ballot, unless so
directed by the chairman of the meeting. On a vote by ballot, each ballot shall
be signed by the stockholder voting, or by his or her proxy, if there be such
proxy, and shall state the number of shares voted. Persons holding stock of the
Corporation in a fiduciary capacity shall be entitled to vote such stock.
Stockholders whose stock is pledged shall be entitled to vote, unless in the
transfer by the pledgor on the books of the corporation such stockholder shall
have expressly empowered the pledgee to vote thereon, in which case only the
pledgee, or his or her proxy, may represent such stock and vote thereon. Stock
having voting power standing of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants-in-common,
tenants-by-the-entirety or otherwise, or with respect to which two or more
persons have the same fiduciary relationship, shall be voted in accordance with
the provisions of the General Corporation Law of Delaware.
SECTION 9. Action by Written Consent. Except as otherwise provided
by law or by the Certificate of Incorporation, any action required or permitted
to be taken at any annual or special meeting of the stockholders may be taken
without a meeting, without prior notice and without a vote if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock of the Corporation having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares of stock of the Corporation entitled to vote thereon
were present and voted, provided, however, that prompt notice (in the manner
provided in Section 3 of this Article II) of the taking of
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the action without a meeting by less than unanimous written consent shall be
given to those stockholders who have not consented in writing.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. The property business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
which may exercise all of the powers of the Corporation, except such powers as
are, by the Certificate of Incorporation, by these By-laws or by law, conferred
upon or reserved to the stockholders.
SECTION 2. Number and Term of Office. The Board shall initially
consist of three members, but the number of members constituting the board may
be increased or decreased from time to time thereafter by resolution adopted by
a majority of the whole Board. Each of the directors of the Corporation shall
hold office until the annual meeting of the stockholders held next after his or
her election at which his or her term expires and until his or her successor is
elected and qualified or until his or her earlier death, resignation or removal
in the manner hereinafter provided.
SECTION 3. Election. At each meeting of the stockholders for the
election of directors at which a quorum is present, the person or persons
receiving the greatest number of votes, up to the number of directors to be
elected, shall be the directors.
SECTION 4. Resignation, Removal and Vacancies. Any director of the
Corporation may resign at any time by giving written notice of his or her
resignation to the Chairman of the Board, the President or the Secretary of the
Corporation. Any such resignation shall take effect after the giving of such
notice at the time specified therein, or, if the time when it shall become
effective shall not be specified therein, when accepted by action of the Board.
Except as aforesaid, the acceptance of such resignation shall not be necessary
to make it effective.
A director may be removed, either with or without cause, at any time
by the written action of holders of not less than a majority in voting interest
of the stockholders or upon the [unanimous] vote at a duly held meeting of the
stockholders entitled to vote thereat.
Any vacancy occurring on the Board for any reason may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director. Any director elected to fill any vacancy shall hold
office until his or her successor shall have been elected and qualified or until
such director shall earlier resign or be removed. No reduction of the authorized
number of directors shall have the effect of removing any director prior to the
expiration of his or her term of office.
SECTION 5. Meetings. (a) Annual Meetings. As soon as practicable
after each annual election of directors, the Board shall meet for the purpose of
organization and the transaction of other business.
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(b) Regular Meetings. Regular meetings of the Board shall be held at
such times and places as the Board shall from time to time by resolution
determine. If any day fixed for a meeting shall be a legal holiday at the place
where the meeting is to be held, then the meeting shall be held at the same hour
and place on the next succeeding business day which is not a legal holiday.
Except as provided by law, notice of regular meetings need not be given.
(c) Special Meetings. Special meetings of the Board shall be held
whenever called by the Chairman of the Board, the President or a majority of the
directors then in office. Any and all business may be transacted at a special
meeting that may be transacted at a regular meeting of the Board.
(d) Place of Meeting. The Board may hold its meetings at such place
or places within or without the State of Delaware as the Board may from time to
time by resolution determine or as shall be designated in the respective notices
or waivers of notice thereof.
(e) Notice of Meetings. Notices of regular meetings of the Board or
of any adjourned meeting need not be given.
Notices of special meetings of the Board, or of any meeting of any
committee of the Board, in which the time and place of such special meeting has
not been fixed in advance by such committee, shall be mailed by the Secretary or
an Assistant Secretary to each director or member of such committee, addressed
to him or her at his or her residence or usual place of business, so as to be
received at least two calendar days before the day on which such meeting is to
be held, or shall be sent to him or her by telegraph, cable or other form of
recorded communication or delivered personally or by telephone not later than
one calendar day before the day on which such meeting is to be held. Such notice
shall include the time and place of such meeting. However, notice of any such
meeting need not be given to any director or member of any committee if such
notice is waived by him or her in writing or by telegraph, cable or other form
of recorded communication, whether before, at or after the time at which such
meeting is held, or if he or she shall be present at such meeting.
(f) Quorum and Action. Except as otherwise provided in these By-laws
or by law, a majority of the authorized number of directors shall be present in
person at any meeting of the Board in order to constitute a quorum for the
transaction of business at such meeting. In each case the vote of a majority of
those directors present at any such meeting at which a quorum is present shall
be necessary for the passage of any resolution or any act of the Board, except
as otherwise expressly required by law or these By-laws. Notice of any adjourned
meeting need not be given. The directors shall act only as a Board, and the
individual directors shall have no power individually.
(g) Action by Communication Equipment. The directors, or the members
of any committee of the Board, may participate in a meeting of the Board, or of
such committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation shall constitute presence in person at such
meeting.
(h) Action by Consent. Any action required or permitted to be taken
at any meeting of the Board, or of any committee thereof, may be taken without a
meeting if all members of the Board or committee, as the case may be, consent
thereto in writing and such writing is filed with the minutes of the proceedings
of
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the Board or such committee. Such action by written consent shall have the same
force and effect as the unanimous vote of such directors.
(i) Organization. At each meeting of the Board, one of the following
shall act as chairman of the meeting and preside thereat, in the following order
of precedence: (a) the Chairman of the Board; (b) the President; or (c) any
director chosen by a majority of the directors present thereat. The Secretary
or, in case of his or her absence, any person (who shall be an Assistant
Secretary, if an Assistant Secretary shall be present thereat) whom the chairman
shall appoint, shall act as secretary of such meeting and keep the minutes
thereof.
SECTION 6. Compensation. Directors, as such, shall not receive any
stated salary for their services, but by resolution of the Board may receive a
fixed sum and compensation for expenses incurred in performing the functions of
director and member of any committee of the Board. Nothing herein contained
shall be construed so as to preclude any director from serving the Corporation
in any other capacity and receiving compensation therefor.
ARTICLE IV
COMMITTEES
(a) The Board may, by resolution passed by a majority of the whole
Board, designate one or more committees. Each such committee shall consist of
two or more directors of the Corporation. The Board may designate one or more
directors as alternate members of any committee, which alternate members may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member of the committee, the member or
members of such committee present at any meeting and not disqualified from
voting, whether or not the number of such members constitutes a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and provided in the resolution of the Board,
shall have and may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it. Each
committee shall keep minutes of its proceedings and shall report such minutes to
the Board when required. All such proceedings shall be subject to revision or
alteration by the Board; provided, however, that third parties shall not be
prejudiced by such revision or alteration.
(b) Unless the Board otherwise provides, each committee designated
by the Board may make, alter and repeal rules for conducting its business. In
the absence of such rules each committee shall conduct its business in the same
manner as the Board conducts its business pursuant to these By-laws.
ARTICLE V
OFFICERS
SECTION 1. Election, Appointment and Term of Office. The officers of
the Corporation shall include a Chief Executive Officer, a President, such
number of Vice Presidents as the Board may determine from time to time, a
Secretary and a Treasurer. The Corporation may also have, at the discretion of
the Board, a
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Chairman of the Board, a President, Vice Presidents, a Corporate General Counsel
and one or more Associate or Assistant Corporate General Counsels, a Treasurer,
Assistant Treasurers, a Controller, Assistant Controllers, a Secretary and
Assistant Secretaries. Officers shall be elected or appointed as required from
time to time by the Board or any Committee appointed by the Board and each such
officer shall hold office until his or her successor is elected and qualified or
until his or her earlier death, resignation or removal in the manner hereinafter
provided. Each such officer shall have such authority and shall perform such
duties as may be provided herein or as the Board or any Committee appointed by
the Board may prescribe. Any two or more offices may be held by the same person
except for the office of President and Secretary. Officers need not be
stockholders of the Corporation or citizens or residents of the United States of
America.
SECTION 2. Resignation, Removal and Vacancies. Any officer may
resign at any time by giving written notice to the President or the Secretary of
the Corporation, and such resignation shall take effect after the giving of such
notice at the time specified therein or, if the time when it shall become
effective shall not be specified therein, when accepted by action of the Board
or any Committee appointed by the Board. Except as aforesaid, the acceptance of
such resignation shall not be necessary to make it effective.
All officers and agents elected or appointed by the Board or any
Committee appointed by the Board shall be subject to removal at any time by the
Board or any Committee appointed by the Board, as the case may be, with or
without cause.
A vacancy in any office may be filled for the unexpired portion of
the term in the same manner as provided for election or appointment to such
office, set forth in Article III, Section 3 herein.
SECTION 3. Duties and Functions. (a) Chairman of the Board. The
Chairman of the Board, if any, shall be a member of the Board and shall preside
at all meetings of the Board and of the stockholders at which he or she shall be
present, and shall perform such other duties and exercise such powers as may
from time to time be prescribed by the Board or any Committee appointed by the
Board.
(b) President. The President shall be a member of the Board and
shall perform such duties and exercise such powers as are incident to the office
of the president and chief operating officer of the Corporation, and shall
perform such other duties and exercise such other powers as may from time to
time be prescribed by the Board or any Committee appointed by the Board. The
President shall perform the duties of the Chairman of the Board in the absence
of the Chairman of the Board.
(c) Vice President. The Vice President(s), if any, shall exercise
and perform such powers and duties with respect to the administration of the
business and affairs of the Corporation as from time to time may be assigned to
each of them by the President, by the Chairman of the Board, if any, by the
Board or as is prescribed by the By-laws. In the absence or disability of the
President, the Vice President(s), in order of their rank as fixed by the Board,
or if not ranked, the Vice President designated by the Board, shall perform all
of the duties of the President and when so acting shall have all the powers of,
and be subject to all the restrictions placed upon the President.
(d) Treasurer. The Treasurer, if any, shall have charge and custody
of, and be responsible for, all funds and securities of the Corporation and
shall deposit all such funds to the credit of the Corporation in such banks,
trust companies or other depositaries as shall be selected in accordance with
the provisions of these By-laws. The Treasurer shall disburse the funds of the
Corporation as may be ordered by
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the Board or any Committee appointed by the Board, making proper vouchers for
such disbursements and in general, shall perform all of the duties incident to
the office of Treasurer and such other duties as from time to time may be
assigned to him or her by the Board, any Committee or the President. The duties
of the Treasurer may be performed by one or more assistants, to be appointed by
the Board or a Committee appointed by the Board, as the case may be.
(e) Secretary. The Secretary shall keep or cause to be kept, the
records of all meetings of the stockholders, the Board and committees of the
Board. The Secretary shall affix the seal of the Corporation to all instruments
requiring the corporate seal when the same shall have been signed on behalf of
the Corporation by a duly authorized officer. The Secretary shall be the
custodian of all contracts, deeds, documents and all other indicia of title to
properties owned by the Corporation and of its other corporate records and in
general shall perform all duties and have all powers incident to the office of
Secretary and shall perform such other duties and exercise such other powers as
may from time to time be prescribed by the Board or Committee of the Board. The
duties of the Secretary may be performed by one or more assistants, to be
appointed by the Board or Committee appointed by the Board, as the case may be.
(f) Corporate General Counsel. The Corporate General Counsel, if
any, shall have supervision of such legal matters concerning the Corporation and
shall perform such duties as from time to time may be assigned to him or her by
the Board, any Committee appointed by the Board, the President or the Secretary.
(g) Chief Executive Officer/Chief Operating Officer/Office of the
Chief Executive. In the event the Board of Directors elects a Chief Executive
Officer and/or a Chief Operating Officer, or establishes an Office of the Chief
Executive, the person or persons so elected or the members of such office shall
individually or jointly, as the case may be, have general and active management
of the property, business and affairs of the Corporation, subject to the
supervision and control of the Board. The Chief Executive Officer, Chief
Operating Officer or members of the Office of the Chief Executive, as the case
may be, also shall have such powers and perform such other duties as prescribed
from time to time by the Board of Directors.
(h) Assistant Secretaries. Except as may be otherwise provided in
these By-laws, Assistant Secretaries, if any, shall perform such duties and have
such powers as from time to time may be assigned to them by the Board of
Directors, the President, the Vice President(s), if any or the Secretary, and in
the absence of the Secretary, and when so acting, shall have all the powers of,
and be subject to all the restrictions placed upon the Secretary.
(i) Assistant Treasurers. Assistant Treasurers, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, the Vice
President(s), if any, or the Treasurer, and in the absence of the Treasurer or
in the event of his or her disability or refusal to act, shall perform the
duties of the Treasurer, and when so acting, shall have all the powers of and be
subject to all the restrictions placed upon the Treasurer. If required by the
Board of Directors, an Assistant Treasurer shall give the Corporation a bond in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of his or her office and
for the restoration to the Corporation, in case of his or her death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his or her possession or under his
or her control belonging to the Corporation.
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(j) Other Officers. Such other officers as the Board of Directors
may choose shall perform such duties and have such powers as from time to time
may be assigned to them by the Board of Directors. The Board of Directors may
delegate to any other officer of the Corporation the power to choose such other
officers and to prescribe their respective duties and powers.
ARTICLE VI
CONTRACTS, CHECKS, DRAFTS,
BANK ACCOUNTS, PROXIES, ETC.
SECTION 1. Execution of Documents. The President (and the Chief
Executive Officer, if any) or any other officer, employee or agent of the
Corporation designated by the Board, or designated in accordance with corporate
policy as approved by the Board, shall have the power to execute and deliver
deeds, leases, contracts, mortgages, bonds, debentures, checks, drafts and other
orders for the payment of money and other documents for and in the name of the
Corporation, and such power may be delegated (including the power to redelegate)
by written instrument to other officers, employees or agents of the Corporation.
SECTION 2. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise in accordance with corporate policy as approved by the Board.
SECTION 3. Proxies in Respect of Stock or Other Securities of Other
Corporations. The President or any other officer of the Corporation designated
by the Board shall have the authority (a) to exercise or appoint from time to
time an agent or agents of the Corporation to exercise in the name and on behalf
of the Corporation the powers and rights which the Corporation may have as the
holder of stock or other securities in any other corporation, (b) to vote or
consent in respect of such stock or securities in any other corporation and (c)
to execute or cause to be executed in the name and on behalf of the Corporation
and under its corporate seal, or otherwise, such written proxies, powers of
attorney or other instruments as he or she may deem necessary or proper in order
that the Corporation may exercise such powers and rights. The President or any
such designated officer may instruct any person or persons appointed as
aforesaid as to the manner of exercising such powers and rights.
SECTION 4. General and Special Bank Accounts. The Board from time to
time may authorize the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositories as the Board may select
or as may be selected by an officer or officers, assistant or assistants, agent
or agents, or attorney or attorneys of the corporation to whom such power shall
have been delegated by the Board. The Board may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of these By-laws, as it may deem expedient.
SECTION 5. Fiscal Year. The fiscal year of the Corporation shall end
on the last day of each calendar year.
SECTION 6. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the Corporation's
capital stock. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends
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such sum or sums as the Board of Directors from time to time, in its sole and
absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for preparing or maintaining any
property of the Corporation, or for any proper purpose. The Board of Directors
may modify or abolish any reserve created pursuant to this Section 6.
ARTICLE VII
BOOKS AND RECORDS
The books and records of the Corporation may be kept at such places
within or without the State of Delaware as the Board may from time to time
determine.
ARTICLE VIII
SHARES AND THEIR TRANSFER; FIXING RECORD DATE
SECTION 1. Stock Certificates. Every owner of stock of the
Corporation shall be entitled to have a certificate certifying the number of
shares owned by him or her in the Corporation and designating the class of stock
to which such shares belong, which shall otherwise be in such form as the Board
shall prescribe. Each such certificate shall be signed by, or be in the name of
the Corporation by (i) the Chairman of the Board, the President or a Vice
President and (ii) the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Corporation. In case any officer who has signed or
whose facsimile signature has been placed upon a certificate shall thereafter
cease to be such officer, transfer agent or registrar before such certificate is
issued, such certificate may nevertheless be issued by the Corporation with the
same effect as if he or she were such officer on the date of issuance.
SECTION 2. Record; Restrictions on Transfer. A record shall be kept
of the name of the person, firm or corporation owning the stock represented by
each certificate for stock of the Corporation issued, the number of shares
represented by each such certificate and the date of issuance thereof, and, in
the case of cancellation, the date of cancellation. Except as otherwise
expressly required by law, the person in whose name shares of stock are
represented on the books of the Corporation shall be deemed the owner thereof
for all purposes as regards the Corporation.
SECTION 3. Lost, Stolen, Destroyed or Mutilated Certificates. The
holder of any stock of the Corporation shall immediately notify the Corporation
of any loss, theft, destruction or mutilation of the certificate therefor. The
Corporation may issue a new certificate for stock in the place of any
certificate theretofore issued by it and alleged to have been lost, stolen,
destroyed or mutilated, and the Board or the President or the Secretary may, in
its or his or her discretion, require the owner of the lost, stolen, mutilated
or destroyed certificate or his or her legal representatives to give the
Corporation a bond in such sum, limited or unlimited, in such form and with such
surety or sureties as the Board or the President or the Secretary shall in its
or his or her discretion determine, to indemnify the Corporation against any
claim that may be made against it on account of the alleged loss, theft,
mutilation or destruction of any such certificate or the issuance of any such
new certificate.
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SECTION 4. Fixing Date for Determination of Stockholders of Record.
(a) In order that the Corporation may determine the stockholders entitled to
notice of, or entitled to vote at, any meeting of stockholders or any
adjournment thereof, the Board may fix a record date, which shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board, and which shall not be more than 60 nor less than 10 calendar days before
the date of such meeting. If no record date is fixed by the Board, the record
date for determining stockholders are entitled to notice of, or entitled to vote
at, any meeting of stockholders shall be set at the close of business on the day
next preceding the day on which notice of such meeting is given, or, if no
notice is given, at the close of business on the day next preceding the day on
which the meeting is held. A determination of which stockholders of record are
entitled to notice of, or entitled to vote at, a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board, in
its sole and absolute discretion, may fix a new record date for the adjourned
meeting if it so elects to do so.
(b) In order that the Corporation may determine which stockholders
are entitled to consent to corporate action in writing without a meeting, the
Board may fix a record date, which record date shall not precede the date upon
which the resolution fixing the record date is adopted by the Board and which
date shall not be more than 10 calendar days after the date upon which the
resolution fixing the record date is adopted by the Board. If no record date has
been fixed by the Board, the record date for determining which stockholders are
entitled to consent to corporate action in writing without a meeting, when no
prior action by the Board is otherwise required, shall be the first date on
which a signed written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the Corporation having custody of the book in which proceedings of the
meetings of stockholders are recorded. Delivery made to the registered office of
the Corporation shall be by hand or by certified or registered mail, return
receipt requested. If no record date has been fixed by the Board and prior
action by the Board is required, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board adopts the resolution taking
such prior action.
(c) In order that the Corporation may determine which stockholders
are entitled to receive payment of any dividend or other distribution or
allotment of any rights or the stockholders entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than 60 calendar days prior to
such action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be set at the close of business on the
day on which the Board adopts the resolution relating thereto.
ARTICLE IX
SEAL
The Board shall provide a corporate seal, which shall be in the form of a
circle and shall bear the full name of the Corporation, the words "Corporate
Seal Delaware" and figures showing that the Corporation was incorporated in the
State of its Delaware and showing the year of incorporation.
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ARTICLE X
FISCAL YEAR
The fiscal year of the Corporation shall end on December 31 of each
year, or on such other date as the Board of Directors shall determine.
ARTICLE XI
INDEMNIFICATION OF OFFICERS,
DIRECTORS AND OTHER AUTHORIZED REPRESENTATIVES
SECTION 1. Scope of Indemnification. (a) General Rule. To the
fullest extent permitted by law, the Corporation shall indemnify each
indemnified representative on an after-tax basis against any liability incurred
in connection with any proceeding in which the indemnified representative may be
involved as a party or otherwise by reason of the fact that such person is or
was serving in an indemnified capacity or was otherwise involved in the
direction and conduct of the business of the Corporation, including liabilities
resulting from any actual or alleged breach or neglect of duty, law, or legal
requirement, or any actual or alleged error, misstatement or misleading
statement, negligence, gross negligence or act giving rise to strict liability.
(b) Partial Payment. If an indemnified representative is entitled to
indemnification in respect of a portion, but not all, of any liabilities to
which such indemnified representative may be subject, the Corporation shall
indemnify such indemnified representative to the maximum extent legally
permissible for such liabilities.
(c) Presumption. The termination of a proceeding by judgment, order,
settlement or conviction or upon a plea of nolo contendere or its equivalent
shall not of itself create a presumption that the indemnified representative is
not entitled to indemnification under this Section 1.
(d) Definitions. For purposes of this Article: (i) "indemnified
capacity" means any and all past, present and future service by an indemnified
representative in one or more capacities as a direct or indirect stockholder,
officer, employee, director or agent of the Corporation, or, at the request of
the Corporation, as a stockholder, officer, employee, director, agent, fiduciary
or trustee of another limited liability company, corporation, partnership, joint
venture, trust, employee benefit plan or other entity or enterprise, (ii)
"indemnified representative" means any and all direct or indirect stockholders,
officers and directors of the Corporation and any other person designated as an
indemnified representative by the Board of Directors (which may, but need not,
include any person serving at the request of the Corporation, as a stockholder,
director, officer, employee, agent, fiduciary or trustee of another limited
liability company, corporation, partnership, joint venture, trust, employee
benefit plan or other entity or enterprise), (iii) "liability" means any damage,
judgment, amount paid in settlement, fine, penalty, punitive damages, excise tax
assessed with respect to any employee benefit plan, response or remediation
obligation or cost or expense of any nature (including attorneys' fees and
disbursements) and (iv) "proceeding" means any threatened, pending or completed
action, suit, appeal or other proceeding of any nature, whether civil, criminal,
administrative or investigative, whether formal or informal, and whether brought
by or in the right of the Corporation, its stockholders, a governmental
authority, a third party or otherwise.
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SECTION 2. Advancing Expenses. To the fullest extent permitted by
law, the Corporation shall pay the expenses (including attorneys' fees and
disbursements) incurred in good faith by an indemnified representative in
advance of the final disposition of a proceeding upon receipt of an undertaking
by or on behalf of the indemnified representative to repay the amount if it is
ultimately determined that such Person is not entitled to be indemnified by the
Corporation pursuant to this Article XI. The financial ability of an indemnified
representative to repay an advance shall not be a prerequisite to the making of
such advance.
SECTION 3. Securing of Indemnification Obligations. To further
effect, satisfy or secure the indemnification obligations provided in this
Article XI or otherwise, the Corporation may maintain insurance, obtain a letter
of credit, act as self-insurer, create a reserve, trust, escrow, cash collateral
or other fund or account, enter into indemnification agreements, pledge or grant
a security interest in any assets or properties of the Corporation, or use any
other mechanism or arrangement whatsoever in such amounts, at such costs, and
upon such other terms and conditions as the Board of Directors shall deem
appropriate.
SECTION 4. Payment of Indemnification. An indemnified representative
entitled to indemnification under this Article shall be paid or reimbursed by
the Corporation within 30 days after a written request for indemnification has
been delivered to the Secretary of the Corporation.
SECTION 5. Contribution. If the indemnification provided for in this
Article is unavailable for any reason in respect of any liability or portion
thereof, the Corporation shall contribute to payment of the liabilities to which
the indemnified representative may be subject in such proportion as is deemed
appropriate by the Board to reflect the intent of this Article.
SECTION 6. Contract Rights; Amendment or Repeal. All rights under
this Article shall be deemed a contract between the Corporation and the
indemnified representative pursuant to which the Corporation and each
indemnified representative intend to be legally bound. Any repeal, amendment or
modification hereof shall be prospective only and shall not affect any rights or
obligations then existing.
SECTION 7. Scope of Article. The rights granted by this Article
shall not be deemed exclusive of any other rights to which those seeking
indemnification, contribution or advancement of expenses may be entitled under
any statute, agreement, vote of the stockholders, whether disinterested or
otherwise, both as to action in an indemnified capacity and as to action in any
other capacity. The indemnification, contribution and advancement of expenses
provided by or granted pursuant to this Article shall continue as to a person
who has ceased to be an indemnified representative in respect of matters arising
prior to such time, such indemnified representative ceased being and indemnified
representative, and shall inure to the benefit of the successors, heirs,
executors, administrators and personal representatives of such a person.
SECTION 8. Reliance on Provisions. Each person who shall act as an
indemnified representative of the Corporation shall be deemed to be doing so in
reliance upon the rights of indemnification, contribution and advancement of
expenses provided in this Article.
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ARTICLE XII
AMENDMENTS
These By-laws may be rescinded, altered, amended or repealed
(subject to the restrictions, if any, contained herein) and new By-laws may be
made by the Board at any regular or special meeting thereof or by consent in
accordance with the provisions of Section 5(h) of Article III of these By-laws,
subject to the power of the holders of a majority of the outstanding stock of
the Corporation entitled to vote in respect thereof, by their vote given at an
annual meeting or at any special meeting, to amend or repeal any By-law.
ARTICLE XIII
MISCELLANEOUS
SECTION 1. Interested directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely by
reason of such financial interest, or solely because the director or officer is
present at or participates in the meeting of the Board of Directors or committee
thereof, as the case may be, which authorizes the contract or transaction or
solely because his or her votes are counted for such purpose, so long as (i) the
material facts as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the Board of Directors or the
committee, and the Board of Directors or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the directors,
even though the number of disinterested directors be less than a quorum; or (ii)
the material facts as to his or her or their relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified, by the Board of Directors, a committee thereof or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
SECTION 2. Ratification. Any transaction questioned in any
stockholders' derivative suit on the grounds of lack of authority, defective or
irregular execution, adverse interest of director, officer or stockholder,
nondisclosure, miscomputation or the application of improper principles or
practices of accounting, may be ratified before or after judgment, by the Board
of Directors or by the stockholders in case less than a quorum of directors are
qualified, and, if so ratified, shall have the same force and effect as if such
questioned transaction had been originally duly authorized, and said
ratification shall be binding upon the Corporation and its stockholders, and
shall constitute a bar to any claim or execution of any judgment in respect of
such questioned transaction.
15
Exhibit 4.1
MONSTERDAATA.COM, INC.
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
MONSTERDAATA.COM, INC., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), does hereby certify that,
pursuant to the authority conferred on the Board of Directors of the Corporation
by the Certificate of Incorporation of the Corporation and in accordance with
Section 151 of the General Corporation Law of the State of Delaware, the Board
of Directors of the Corporation adopted the following resolution establishing a
series of Preferred Stock of the Corporation designated as "Series A Cumulative
Convertible Preferred Stock":
RESOLVED, that pursuant to the authority conferred on the
Board of Directors of this Corporation by the Certificate of
Incorporation, as amended, a series of Preferred Stock, par value
$.01 per share, of the Corporation is hereby established and
created, and that the designation and number of shares thereof and
the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such series
and the qualifications, limitations and restrictions thereof are as
follows:
Series A Convertible Preferred Stock
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Cumulative Convertible Preferred Stock" (the "Series
A Preferred Stock") and the number of shares constituting such series shall be
2,000.
Section 2. Issuance of Additional Shares. The number of authorized
shares of the Series A Preferred Stock may be reduced or eliminated by the Board
of Directors of the Corporation or a duly-authorized committee thereof in
compliance with the General Corporation Law of the State of Delaware stating
that such reduction has been authorized, but the number of authorized shares of
Series A Preferred Stock shall not be increased.
Section 3. Certain Definitions. For purposes hereof the following
definitions shall apply:
"Board" shall mean the Board of Directors of the Corporation.
"Business Day" shall mean any day excluding Saturday, Sunday and any
day which shall be in the State of New York a legal holiday or a day on which
banking institutions in the State of New York are authorized by law to close.
"Common Stock" shall mean the Common Stock, par value $.01 per
share, of the Corporation.
<PAGE>
"Conversion Adjustment Condition" shall mean the receipt by the
Corporation of net proceeds of at least $5,000,000 from the private or public
sale of Junior Stock issued on terms which fairly value the Corporation's Common
Stock at a price in excess of $3.50 per share (or, if applicable, the adjusted
value per share that proportionally reflects any stock split, combination,
dividend, reclassification or similar event involving the Corporation's Common
Stock, in each case in accordance with the principles set forth in Section 7).
"Corporation" shall mean MonsterDaata.com, Inc., a Delaware
corporation.
"Issuance Date" shall mean the date of original issuance of the
Series A Preferred Stock.
"Junior Stock" shall mean the Common Stock and any shares of
Preferred Stock of any series or class of the Corporation, whether presently
outstanding or hereafter issued, which are by their terms expressly made junior
to the shares of Series A Preferred Stock at the time outstanding as to the
distribution of assets on any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation and are not subject to mandatory redemption or
repurchase prior to the date on which no shares of Series A Preferred Stock are
outstanding.
"Majority of the Series A Preferred Stock" shall mean more than 50%
of the outstanding shares of Series A Preferred Stock.
"Preferred Stock" shall mean the unclassified Preferred Stock, par
value $.01 per share, of the Corporation.
"Redemption Date" shall have the meaning assigned to such term in
Section 6(b) hereof.
"Redemption Price" shall have the meaning assigned to such term in
Section 6(c) hereof.
"Redemption Notice" shall have the meaning assigned to such term in
Section 6(d) hereof.
"Series A Conversion Ratio" shall have the meaning assigned to such
term in Section 8(b) hereof.
"Series A Preferred Stock" shall mean the Series A Convertible
Preferred Stock, par value $.01 per share, of the Corporation.
"Supermajority of the Series A Preferred Stock" shall mean more than
90% of the outstanding shares of Series A Preferred Stock.
"Voting Stock" shall mean any shares having general voting power in
electing the Board (irrespective of whether or not at the time stock of any
other class or classes has or might have voting power by reason of the
occurrence of any contingency). The Common Stock is Voting Stock.
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<PAGE>
Section 4. Dividends.
(a) Dividends and Distributions. Subject to the prior and superior
rights of the holders of any shares of any series or class of capital stock
ranking prior and superior to the shares of Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock shall be
entitled to receive out of assets legally available for that purpose, a
quarterly cumulative dividend equal to 1.5% of the then applicable liquidation
preference (i.e., 6% per annum, compounded quarterly).
(b) All dividends or distributions declared upon the Series A
Preferred Stock shall be declared pro rata per share.
Section 5. Liquidation Rights of Series A Preferred Stock. In the
event of a liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary (a "Liquidation Event"), after payment or provision for
payment of debts and other liabilities of the Corporation, the holders of the
Series A Preferred Stock then outstanding shall first be entitled to be paid out
of the assets of the Corporation available for distribution to its shareholders,
whether such assets are capital, surplus, or earnings, before any payment or
declaration and setting apart for payment of any amount shall be made in respect
of Junior Stock, an amount equal to $1,000 per share (subject to appropriate
adjustment to reflect any stock split, combination, reclassification or
reorganization of the Series A Preferred Stock) plus an amount equal to all
declared and unpaid dividends thereon. If upon any Liquidation Event, whether
voluntary or involuntary, the assets to be distributed to the holders of the
Series A Preferred Stock shall be insufficient to permit the payment to such
shareholders of the full preferential amounts aforesaid, then all of the assets
of the Corporation to be distributed shall be so distributed ratably to the
holders of the Series A Preferred Stock on the basis of the number of shares of
Series A Preferred Stock held. All shares of Series A Preferred Stock shall rank
as to payment, upon the occurrence of a Liquidation Event, senior to the Common
Stock as provided herein and, unless the terms of such series shall provide
otherwise, senior to all other series of the Corporation's preferred stock.
Section 6. Redemption.
(a) Restriction on Redemption and Purchase. Except as expressly
provided in this Section 6, the Corporation shall not have the right to
purchase, call, redeem or otherwise acquire for value any or all of the Series A
Preferred Stock.
(b) Optional Redemption. At any time after the first anniversary of
the Issuance Date, the Corporation may, at its option, redeem the Series A
Preferred Stock in whole, but not in part, at the Redemption Price hereinafter
specified; provided, however, that the Corporation shall not redeem Series A
Preferred Stock or give notice of any redemption unless the Corporation has
sufficient and lawful funds to redeem all of the then outstanding Series A
Preferred Stock. The date on which the Series A Preferred Stock is to be
redeemed pursuant to this Section 6(b) is herein called the "Redemption Date."
(c) Redemption Price. The Redemption Price of the Series A Preferred
Stock (the "Redemption Price") shall be an amount per share equal to $1,100
(subject to appropriate adjustment to reflect any stock split, combination,
reclassification or reorganization of the Series A Preferred Stock) plus all
declared and unpaid dividends thereon, to and including the Redemption Date.
3
<PAGE>
(d) Redemption Notice. The Corporation shall, not less than thirty
(30) days nor more than sixty (60) days prior to the Redemption Date, give
written notice ("Redemption Notice") to each holder of record of Series A
Preferred Stock to be redeemed. The Redemption Notice shall state:
(1) that all of the outstanding shares of Series A Preferred
Stock are to be redeemed and the total number of shares
being redeemed;
(2) the number of shares of Series A Preferred Stock held by
the holder which the Corporation intends to redeem;
(3) the Redemption Date and Redemption Price;
(4) that the holder's right to convert the Series A
Preferred Stock into shares of the Common Stock as
provided in Section 8 hereof will terminate on the
Redemption Date; and
(5) the time, place and manner in which the holder is to
surrender to the Corporation the certificate or
certificates representing the shares of Series A
Preferred Stock to be redeemed.
(e) Payment of Redemption Price and Surrender of Stock. On the
Redemption Date, the Redemption Price of the Series A Preferred Stock scheduled
to be redeemed or called for redemption shall be payable to the holders of the
Series A Preferred Stock. On or before the Redemption Date, each holder of
Series A Preferred Stock to be redeemed, unless the holder has exercised his
right to convert the shares as provided in Section 8 hereof, shall surrender the
certificate or certificates representing such shares to the Corporation, in the
manner and at the place designated in the Redemption Notice, and thereupon the
Redemption Price for such shares shall be payable to the order of the person or
entity whose name appears on such certificate or certificates as the owner
thereof, and each surrendered certificate shall be cancelled and retired.
(f) Termination of Rights. If the Redemption Notice is duly given,
and, if at least ten (10) days prior to the Redemption Date, the Redemption
Price is either paid or made available for payment through the arrangement
specified in subsection (g) below, then notwithstanding that the certificates
evidencing any of the shares of Series A Preferred Stock so called or scheduled
for redemption have not been surrendered, all rights with respect to such shares
shall forthwith after the Redemption Date cease and terminate, except only (i)
the right of the holders to receive the Redemption Price without interest upon
surrender of their certificates therefor or (ii) the right to receive shares of
Common Stock upon exercise of the conversion rights provided in Section 8 hereof
on or before the Redemption Date.
(g) Deposit of Funds. At least ten (10) days prior to the Redemption
Date, the Corporation shall deposit with any bank or trust company in New York,
New York, a sum equal to the aggregate Redemption Price of all shares of the
Series A Preferred Stock scheduled to be redeemed or called for redemption and
not yet redeemed, with irrevocable instructions and authority to the bank or
trust company to pay the Redemption Price to the respective holders upon the
surrender of their share certificates. The deposit shall constitute full payment
for the shares of Series A Preferred Stock to the holders thereof, and from and
after the later of the date of such deposit and the Redemption Date, the shares
of Series A Preferred Stock shall be deemed to be
4
<PAGE>
redeemed and no longer outstanding, and the holders thereof shall cease to be
shareholders with respect to such shares of Series A Preferred Stock and shall
have no rights with respect thereto, except the right to receive from the back
or trust company payment of the Redemption Price of the shares of Series A
Preferred Stock, without interest, upon surrender of their certificates therefor
and the right, prior to the Redemption Date, to convert such shares of Series A
Preferred Stock into shares of Common Stock as provided in Section 8 hereof. Any
monies so deposited and unclaimed at the end of one year from the Redemption
Date shall be released or repaid to the Corporation, after which time the holder
of shares of Series A Preferred Stock called for redemption shall be entitled to
receive payment of the Redemption Price only from the Corporation.
Section 7. Voting Rights.
(a) Series A Preferred Stock. Except as set forth in paragraph (b)
of this Section, the holders of Series A Preferred Stock shall have no voting
rights on any matters.
(b) Amendment of Certificate of Incorporation. Any amendment to the
Certificate of Incorporation of the Corporation that adversely affects the
conversion terms or other economic rights or preferences of the Series A
Preferred Stock shall require the approval of the holders of a Supermajority of
the Series A Preferred Stock. The adoption of a Certificate of Designations for
a senior class of Preferred Stock by itself shall be deemed to not constitute an
amendment to the Certificate of Incorporation of the Corporation for the
purposes of this Section.
Section 8. Conversion. The holders of Series A Preferred Stock shall
have the following conversion rights:
(a) Right to Convert. Each share of Series A Preferred Stock shall
be convertible, at any time at the option of the holder thereof, into validly
issued, fully paid and nonassessable shares of Common Stock.
(b) Series A Conversion Ratio. Each share of Series A Preferred
Stock shall be convertible into shares of Common Stock at a ratio (the "Series A
Conversion Ratio") equal to 300 shares of Common Stock for each share of Series
A Preferred Stock, subject to adjustment as hereinafter provided; provided,
however, that if the Conversion Adjustment Condition has not been satisfied on
or prior to February 28, 2000, the Series A Conversion Ratio shall be equal to
450 shares of Common Stock for each outstanding share of Series A Preferred
Stock from and after such February 28, 2000 date, subject to adjustment as
hereinafter provided.
(c) Dividends Upon Conversion. Upon conversion, all accrued and
unpaid dividends (whether or not declared), if any, on the Series A Preferred
Stock shall be canceled.
(d) Automatic Conversion.
(1) The Series A Preferred Stock will be automatically
converted into shares of Common Stock (i) in the event of (A) any consolidation
or merger of the Corporation with or into any other unrelated corporation or
other entity in which the Corporation is not the surviving entity, or any other
corporate reorganization or transaction or series of related transactions by the
Corporation in which in excess of 75% of the Corporation's voting power is
transferred to an unrelated person or entity, or (B) a sale or other disposition
of all or substantially all of the assets of the Corporation (any such event in
(A) or (B), a "Merger Transaction")
5
<PAGE>
or (ii) upon receipt by the Corporation of a written notice from the holders of
a Supermajority of the Series A Preferred Stock electing to convert their shares
of Series A Preferred Stock.
(2) Upon the occurrence of any of the events specified in
paragraph (d)(1) above, the outstanding shares of Series A Preferred Stock shall
be converted automatically without any further action by the holders of such
shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided, however, that
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless the certificates
evidencing such shares of Series A Preferred Stock are either delivered to the
Corporation or its transfer agent as provided below, or the holder thereof
notifies the Corporation or its transfer agent that such certificates have been
lost, stolen, mutilated or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. Upon the occurrence of such automatic
conversion of the Series A Preferred Stock, the holders of Series A Preferred
Stock shall surrender the certificates representing such shares at the office of
the Corporation or any transfer agent for the Series A Preferred Stock.
Thereupon, there shall be issued and delivered to such holder promptly at such
office and in its name as shown on such surrendered certificate or certificates,
a certificate or certificates for the number of shares of Common Stock into
which the share of Series A Preferred Stock surrendered were convertible on the
date on which such automatic conversion occurred.
(e) Mechanics of Conversion. Each holder of Series A Preferred Stock
that desires to convert its shares of Series A Preferred Stock into shares of
Common Stock shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for the
Series A Preferred Stock or Common Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert the same and shall
state therein the number of shares of Series A Preferred Stock being converted.
Thereupon the Corporation shall promptly issue and deliver to such holder a
certificate or certificates for the number of shares of Common Stock to which
such holder is entitled. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
certificate or certificates representing the shares of Series A Preferred Stock
to be converted, and the person or entity entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder of such shares of Common Stock on such date. In the event that
a notice to convert is given following a Redemption Notice and such redemption
is not consummated, the conversion shall, at the option of the holder of the
Series A Preferred Stock who tendered for conversion, be voidable and such
holder shall have the right to maintain ownership of the shares of Series A
Preferred Stock tendered for conversion.
(f) Adjustment for Stock Splits and Combinations. If the Corporation
at any time or from time to time after the Issuance Date effects a subdivision
of the outstanding Common Stock, the Series A Conversion Ratio then in effect
immediately before that subdivision shall be proportionately increased (and the
Series A Conversion Ratio that would apply after February 28, 2000, if the
Conversion Adjustment Condition is not satisfied, shall be proportionately
increased), and conversely, if the Corporation at any time or from time to time
after the Issuance Date combines the outstanding shares of Common Stock into a
smaller number of shares, the Series A Conversion Ratio then in effect
immediately before the combination shall be proportionately decreased (and the
Series A Conversion Ratio that would apply after February 28, 2000, if the
Conversion Adjustment Condition is not satisfied, shall be proportionately
decreased). Any adjustment under this subsection (f) shall become effective at
the close of business on the date the subdivision or combination becomes
effective.
(g) Adjustment for Certain Dividends and Distributions. If the
Corporation at any time or from time to time after the Issuance Date makes, or
fixes a record date for the determination of holders of Common
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<PAGE>
Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Series A
Conversion Ratio then in effect shall be increased (and the Series A Conversion
Ratio that would apply after February 28, 2000, if the Conversion Adjustment
Condition is not satisfied, shall be proportionately increased) as of the time
of such issuance or, in the event such record date is fixed, as of the close of
business on such record date, by multiplying the Series A Conversion Ratio then
in effect by a fraction (1) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution, and
(2) the denominator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date; provided, however, that, if such record
date is fixed and such dividend is not fully paid or if such distribution is not
fully made on the date fixed therefor, the Series A Conversion Ratio shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Series A Conversion Ratio shall be adjusted pursuant to this
subsection (g) as of the time of actual payment of such dividends or
distributions.
(h) Adjustment for Reclassification, Exchange and Substitution. In
the event that at any time or from time to time after the Issuance Date, the
Common Stock issuable upon the conversion of the Series A Preferred Stock is
changed into the same or a different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares of stock dividend or a reorganization,
merger, consolidation or sale or assets, provided for elsewhere in this Section
8), then and in any such event each holder of Series A Preferred Stock shall
have the right thereafter to convert such Series A Preferred Stock into the kind
and amount of stock and other securities and property receivable upon such
recapitalization, reclassification or other change, by holders of the maximum
number of shares of Common Stock into which such shares of Series A Preferred
Stock could have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as provided
herein.
(i) Certificate of Adjustment. In each case of an adjustment or
readjustment of the Series A Conversion Ratio, the Corporation, at its expense,
shall cause its Chief Financial Officer or Chief Accounting Officer to compute
such adjustment or readjustment in accordance with the provisions hereof and
prepare a certificate showing such adjustment or readjustment, and shall mail
such certificate, by certified mail, return receipt requested, postage prepaid,
to cash registered holder of Series A Preferred Stock at the holder's address as
shown in the Corporation's books. The certificate shall set forth such
adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (1) the Series A
Conversion Ratio at the time in effect and (2) the type and amount, if any, of
other property which at the time would be received upon conversion of the Series
A Preferred Stock.
(j) Fractional Shares. No fractional shares of Common Stock shall be
issuable upon conversion of the Series A Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to the product of such fraction multiplied by
the fair market value of one share of Common Stock on the date of conversion, as
determined in good faith by the Board.
(k) Reservation of Common Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A Preferred Stock, such number of its
shares of
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<PAGE>
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Series A Preferred Stock.
(l) Notices. Any notice required or permitted by this Section 8 or
any other provision hereof to be given shall be deemed sufficient and effective
when received if in writing and sent by hand delivery, overnight courier or
certified or registered mail, return receipt requested, postage prepaid, and
addressed (x) to a holder of record of Series A Preferred Stock at the address
of such holder appearing on the books of the Corporation, or (y) to the
Corporation at 115 Stevens Avenue, Valhalla, NY, 10595 or (z) to the Corporation
or any such holder, at any other address for the giving of notice specified in a
written notice given to the other.
(m) Payment of Taxes and Other Charges. The Corporation will pay all
taxes (other than taxes based upon income) and other governmental or third party
charges that may be imposed with respect to the issue or delivery of shares of
Common Stock upon conversion of shares of Series A Preferred Stock, including,
without limitation, any tax or other charge imposed in connection with any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that in which the shares of Series A Preferred Stock so converted
were registered.
Section 9. No Amendment or Impairment. The Corporation shall not
amend its Certificate of Incorporation or participate in any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, for the purpose of avoiding or seeking
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation.
Section 10. No Reissuance of Series A Preferred Stock. No share or
shares of Series A Preferred Stock acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise shall be reissued.
Section 11. Outstanding Shares. For the purpose of this Certificate
of Designations, all shares of Series A Preferred Stock issued shall be deemed
outstanding except (i) from the date, or the deemed date, of surrender of
certificates evidencing shares of Series A Preferred Stock, all shares of Series
A Preferred Stock converted into Common Stock, (ii) from the date of
registration of transfer, all shares of Series A Preferred Stock held of record
by the Corporation or any subsidiary of the Corporation and (iii) any and all
shares of Series A Preferred Stock held (in escrow or otherwise) prior to
delivery of such stock by the Corporation to the initial beneficial owners
thereof.
Section 12. Status of Acquired Shares. Shares of Series A Preferred
Stock received upon redemption, purchase, conversion or otherwise acquired by
the Corporation will be restored to the status of authorized but unissued shares
of Preferred Stock, without designation as to class, and may thereafter be
issued, but not as shares of Series A Preferred Stock.
Section 13. Preemptive Rights. The Series A Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Corporation.
Section 14. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law , such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof.
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<PAGE>
If a court of competent jurisdiction should determine that a provision hereof
would be valid or enforceable if a period of time were extended or shortened or
a particular percentage were increased or decreased, then such court may make
such change as shall be necessary to render the provision in question effective
and valid under applicable law.
IN WITNESS WHEREOF, MonsterDaata.com, Inc. has caused this
certificate to be signed on its behalf by James Garfinkel, its Chief Financial
Officer, this 22nd day of October, 1999.
MONSTERDAATA.COM, INC.
By: /s/ James Garfinkel
------------------------
Name: James Garfinkel
Title: Chief Financial Officer
9
Exhibit 21.1
MonsterDaata.com, Inc. subsidiary
Taconic Data Corp., a New York corporation.
