SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 14, 1999
Siti-Sites.com, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-15596 75-1940923
(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) File Number) Identification No.)
594 Broadway, Suite 1001, New York, NY 10012
(Address of principal executive offices)
Registrant's telephone number, including area code (212) 925-1181
Spectrum Information Technologies, Inc.
(Former name or former address, if changed since last report)
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Item 2 - Acquisition or Disposition of Assets
As described below in this Item 2, in recent months Siti-Sites.com, Inc.
(formerly known as Spectrum Information Technologies, Inc., and hereinafter
referred to as "SITI" or the "Company") has acquired the assets of a number of
other websites primarily in exchange for SITI common stock. SITI has also sold
additional shares of its common stock in the financings described below in "Item
5 - Other Events." As a result of all of these transactions, SITI currently has
approximately 10,000,000 shares of common stock outstanding.
(a) Description of Transactions
On January 3, 2000, Siti-Sites.com, Inc. (formerly known as Spectrum
Information Technologies, Inc., and hereinafter referred to as "SITI" or the
"Company"), acquired all of the assets and certain liabilities of (i)
HungryBands.com (www.hungrybands.com), an e-commerce website and business
promoting and selling music by independent artists, (ii) NewMediaMusic.com
(www.newmediamusic.com), an e-news/magazine business devoted to new Internet
music, news releases by artists and record labels, interviews and other
information useful to fans and artists, and (iii) NewYorkExpo.com
(www.newyorkexpo.com), a music and Internet conference business. The acquired
assets consist primarily of intangible assets.
HungryBands.com was acquired for 150,000 shares of SITI common stock,
payable in three installments through June, 2000 to its founder and owner Ted
Mazola, as certain operating goals are achieved. HungryBands.com currently has
some 1,600 bands signed-up or linked into its website, and continues to add new
bands. The operation is complementary to SITI's Tropia.com (www.tropia.com)
business, which now has some 250 bands from selected artists and record labels,
but will continue to be operated as a separate website as part of the SITI music
group.
SITI acquired NewMediaMusic.com from Mr. Mazola and Steve Zuckerman, and
NewYorkExpo.com from New York Music Expo, Inc., a New Jersey corporation which
is wholly-owned by Mr. Zuckerman, for a total of 60,000 shares of SITI common
stock. In addition, Mr. Zuckerman was granted a 15% interest for three years in
the operating profits of NewYorkExpo.com's music and Internet conference
business, after completing an upcoming March, 2000 Expo (in which he was granted
a 75% interest). Messrs. Mazola and Zuckerman recently joined SITI as
Vice-President/Technology and Vice-President/NewMedia Development, respectively.
The NewMediaMusic e-magazine is updated on a continuing basis and has
working relationships with many major firms and personalities in this emerging
niche of the overall music industry. The Internet conferences promoted by
NewYorkExpo.com attract sponsors from the music and computer software/equipment
world, and help participating sponsors and exhibitors build the personal and
business networks that are creating this emerging branch of the music industry.
Mr. Zuckerman, who has over 20 years experience in the music industry and many
contacts within the established labels, indie domains and among artists, will
continue to manage these conferences.
The information set forth above is a summary only and is qualified in its
entirety by reference to the Purchase Agreement dated January 3, 2000, between
Siti-Sites.com, Inc. and Theodore Mazola, the Purchase Agreement-2 dated January
3, 2000, among Siti-Sites.com, Inc., Theodore Mazola and Steven Zuckerman, and
the Letter Agreement dated January 3, 2000, executed by New York Music Expo,
Inc. in favor of Siti-Sites.com, Inc., copies of which are attached as Exhibits
10.1, 10.2 and 10.3, respectively, hereto and are incorporated herein by
reference. In addition, a copy of SITI's press release announcing the
acquisitions described above is attached as Exhibit 99.1 hereto and is
incorporated herein by reference.
Item 5 - Other Events
(a) EZCD.com
On December 23, 1999, SITI agreed to invest $500,000 in Volatile Media,
Inc., which does business as EZCD.com (www.ezcd.com) ("EZCD"), a premier custom
music compilation company. The terms of the SITI investment are subject to
negotiation and execution of final documents. In the interim, on December 23,
1999, SITI made a $500,000 bridge loan to EZCD, which comes due not later than
February 15, 2000, by which time final documents should be completed. Upon
closing of the investment, SITI will acquire convertible preferred
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stock and five-year warrants (exercisable at substantially higher prices)
totalling approximately 4% of EZCD's common stock equity, after conversion and
exercise.
EZCD.com, which targets the same college and youth markets as SITI's
existing websites, combines varied content with highly-useful services to
artists and labels. These include an easy-to-use e-commerce and royalty
reporting system, automated publishing software to disseminate tour-dates and
other artist generated news, and powerful e-mail and communication tools.
EZCD.com's services to consumers and fans include personalized music selections
and one-click registration for newsletters and fan clubs, all of which fit into
SITI's long-range plans for its growing content on several websites. Each of
these websites will be cross-linked for commerce purposes.
Concurrently with the investment commitment, SITI has entered into a
Content and Technology Sharing Agreement with EZCD, under which EZCD will make
its music content, and the software and related technology for all of its
services, available on a private-label basis to all of SITI's websites. This
Sharing Agreement further provides for linkage between all of EZCD's websites
with all of SITI's e-commerce websites (presently www.tropia.com,
www.hungrybands.com, www.newmediamusic.com and www.newyorkexpo.com) for shared
promotion and commerce.
A copy of SITI's press release announcing the committed investment and the
bridge loan described above is attached as Exhibit 99.2 hereto and is
incorporated herein by reference.
(b) Annual Meeting, Additional Investment and Stock Transfer
At SITI's Annual Meeting of Stockholders on December 14, 1999, the
stockholders of SITI approved SITI's previously announced second round of
financing with Lawrence M. Powers, the Chairman/CEO and a major stockholder of
SITI, with SITI receiving $1,250,000. The financing was accomplished through
Powers & Co., a sole proprietorship owned by Mr. Powers. In addition,
resolutions changing SITI's corporate name to Siti- Sites.com, Inc., revising
its Certificate of Incorporation, enacting employee/director stock option plans,
electing its board of directors and approving all other items described in its
proxy statement were also approved at the Annual Meeting. SITI's Amended and
Restated Certificate of Incorporation was filed with the Secretary of State of
the State of Delaware on December 15, 1999. A copy of SITI's Amended and
Restated Certificate of Incorporation is attached as Exhibit 3.1 hereto.
On December 21, 1999, Mr. Powers, through Powers & Co., purchased from
Maurice Schonfeld, a former Director of SITI, 166,666 shares of SITI common
stock, and an option to purchase 100,000 additional shares of common stock at
$0.15 per share, exercisable until December 11, 2003, for an aggregate purchase
price of $33,333, the price paid by Mr. Schonfeld. At that time, Mr. Schonfeld
sold his remaining shares of SITI common stock and his remaining options to John
DiNozzi, a business partner of Robert Ingenito, a Director of SITI, and another
individual at the price paid by Mr. Schonfeld for such common stock and options.
In addition, on December 23, 1999, Mr. Powers, through Powers & Co., Mr.
Ingenito, and Mr. DiNozzi purchased additional equity of SITI for an aggregate
of $500,000. They purchased an aggregate of 400,000 additional shares of SITI
common stock and options to purchase an aggregate of 200,000 additional shares
of SITI common stock at $2.50 per share, exercisable for five years. Lawrence
Powers has made a gift of one-half of the shares of SITI common stock and the
options he acquired in each of the transactions described above to his son,
Barclay Powers, a director of SITI.
A copy of SITI's press release announcing the results of SITI's Annual
Meeting and the additional $500,000 investment described above is attached as
Exhibit 99.3 hereto and is incorporated by reference.
This Current Report on Form 8-K contains statements that are
"forward-looking," which are based on management's current hopes and
expectations. There can be no guarantees as to SITI's or EZCD's future
performance, or that their plans or operations will prove successful. For a
discussion of the risks, capital needs and competition relating to SITI and its
business, see SITI's publicly filed quarterly reports (the latest is dated
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November 9, 1999), recent news releases, and its annual SEC report filed in
July, 1999, all of which are available on the Internet, and by request to SITI
at 594 Broadway, Suite 1001, New York, N.Y. 10012
Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
The Registrant is not required to file financial statements regarding the
acquisitions described above in "Item 2 - Acquisition or Disposition of Assets."
(b) Pro Forma Financial Information.
The Registrant is not required to file pro forma financial information
regarding the acquisitions described above in "Item 2 - Acquisition or
Disposition of Assets."
(c) Exhibits.
Exhibit No. Description
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3.1 Amended and Restated Certificate of Incorporation of Spectrum
Information Technologies, Inc.
10.1 Purchase Agreement dated January 3, 2000, between
Siti-Sites.com, Inc. and Theodore Mazola.
10.2 Purchase Agreement-2 dated January 3, 2000, among
Siti-Sites.com, Inc., Theodore Mazola and Steven Zuckerman.
10.3 Letter Agreement dated January 3, 2000, executed by New York
Music Expo, Inc. in favor of Siti-Sites.com, Inc.
99.1 Press release dated January 4, 2000
99.2 Press release dated January 11, 2000
99.3 Press release dated December 29, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
Dated: January 14, 2000.
SITI-SITES.COM, INC.
By /s/ Lawrence M. Powers
----------------------
Lawrence M. Powers
Chief Executive Officer and
Chairman of the Board of Directors
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Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SPECTRUM INFORMATION TECHNOLOGIES, INC.
(Pursuant to sections 242 and 245)
The undersigned, Lawrence M. Powers, Chairman of the Board and Chief
Executive Officer of Siti- Sites.com, Inc., a Delaware corporation (the
"Corporation"), hereby certifies that:
(c) The name of the Corporation is Spectrum Information
Technologies, Inc.
(d) The original Certificate of Incorporation was filed with the
Secretary of State of Delaware on April 1, 1987, under the name Spectrum
Cellular Corporation.
(e) This Amended and Restated Certificate of Incorporation was duly
adopted in accordance with Section 245 of the General Corporation Law of the
State of Delaware (the "GCL") and, upon filing with the Secretary of State in
accordance with Section 103 of the GCL, shall henceforth supersede the original
Certificate of Incorporation and shall, as it may thereafter be amended in
accordance with its terms and applicable law, be the Certificate of
Incorporation of the Corporation.
(f) The text of the Certificate of Incorporation of the Corporation
is hereby amended and restated to read in its entirety as follows:
ARTICLE I
Name
The name of the corporation (hereinafter referred to as the "Corporation")
is:
Siti-Sites.com, Inc.
ARTICLE II
Registered Agent
The name and address of the Corporation's registered agent in the State of
Delaware is:
Corporation Trust Company
1209 Orange Street
Wilmington, DE
County of New Castle
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ARTICLE III
Purpose
The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
the State of Delaware (the "GCL").
ARTICLE IV
Capital Stock
A. Authorized Stock. The total number of shares of all classes of stock
with the Corporation shall have authority to issue is 40,000,000 shares, of
which 35,000,000 shares, par value $.001 per share, shall be of a class designed
"Common Stock" and 5,000,000 shares, par value $.001 per share, shall be of a
class designed "Preferred Stock."
B. Preferred Stock. The Board of Directors is authorized, subject to the
limitations prescribed by law and the provisions of this Article IV, to provide
for the issuance from time to time in one or more series of any number of shares
of Preferred Stock and, by filing a certificate pursuant to the GCL (the
"Preferred Stock Designation"), to establish the number of shares to be included
in each series, and to fix the designation, relative rights, preferences,
qualifications and limitations of the shares of each such series. The authority
of the Board of Directors with respect to each series shall include, but not be
limited to, determination of the following:
1. The designation of the series, which may be by distinguishing
number, letter or title.
2. The number of shares of the series. Unless otherwise provided by
the Preferred Stock Designation, the Board of Directors may thereafter increase
or decrease the number of shares, but not below the number of shares then
outstanding.
3. The voting rights, if any, of the holders of shares of the
series.
4. Whether dividends, if any, shall be cumulative or noncumulative
and the dividend rate of the series and the preferences, if any, over any other
series (or of any other series over said series) with respect to dividends.
5. Dates at which the dividends, if any, shall be payable.
6. Whether dividends shall be payable in cash, securities of the
Corporation or another entity, or other property.
7. The redemption rights and price or prices, if any, for shares of
the series.
8. The amounts payable on, and the preferences, if any, of shares of
the series in the event of any voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the Corporation's affairs.
9. The terms and amount of any purchase, retirement or sinking fund
provided for the purchase or redemption of the series.
10. Whether the shares of the series shall be convertible into or
exchangeable for any shares of any other class or series, or any other security
of the Corporation or any other entity and, if so, the specification of such
other class or series of such other security, the conversion or exchange price
or prices or rate
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or rates, any adjustments thereof, the date or dates at which such shares shall
be convertible or exchangeable and all other terms and conditions upon which
such conversion or exchange may be made.
11. Whether the issuance of additional shares of Preferred Stock
shall be subject to restrictions as to issuance, or as to the powers,
preferences, or other rights of any other series.
12. The right of the shares of such series to the benefit of
conditions and restrictions upon the creation of indebtedness of the Corporation
or any subsidiary of the Corporation, upon the issue of any additional stock
(including any additional shares of such series or any other series) and upon
the payment of dividends or the making of other distributions on, and the
purchase, retention, redemption or other acquisition by the Corporation or any
subsidiary of, any outstanding stock of the Corporation.
13. Such other powers, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations and
restrictions thereof as the Board of Directors shall, determine.
The holders of Preferred Stock shall not have any preemptive rights except
to the extent such rights shall be specifically provided for in the resolution
or resolutions providing for the issuance thereof adopted by the Board of
Directors.
C. Common Stock. Common Stock shall be subject to the express terms of the
Preferred Stock, and any series thereof. Each share of Common Stock shall have
the right to cast one vote for the election of Directors and on all other
matters upon which stockholders are entitled to vote. Cumulative voting shall
not be permitted.
D. Record Holders. The Corporation shall be entitled to treat the person
in whose name any share of its stock is registered as the owner thereof for all
purposes and shall not be bound to recognize any equitable or other claim to, or
interest in, such share on the part of any other person, whether or not the
Corporation shall have notice thereof, except as expressly provided by
applicable law.
E. Quorum. The holders of a majority of all issued and outstanding shares
entitled to vote generally in the election of directors, present in person or
represented by proxy, will constitute a quorum for the transaction of any
business at any duly called meeting of stockholders.
F. Conversion of Class A Stock.
(i) On March 31, 1999, each outstanding share of the Corporation's
Class A Stock, par value $.001 per share (the "Class A Stock"),
automatically converted into one share of Common Stock. The Board of
Directors shall have the authority to make any determination of beneficial
ownership and changes thereof required to effectuate this Section F of
Article IV.
(ii) The Corporation shall not be obligated to issue to any holder
of Class A Stock certificates evidencing shares of Common Stock issuable
upon the conversion of Class A Stock into Common Stock until certificates
evidencing the shares of Class A Stock are delivered to either the
Corporation or any transfer agent of the Corporation. As promptly as
practicable thereafter (and after surrender of the certificate or
certificates representing shares of Class A Stock to the Corporation or
any transfer agent of the Corporation), the Corporation shall issue and
deliver to or upon the written order of such holder a certificate or
certificates for the number of full shares of Common Stock to which such
holder is entitled. The person in whose name the certificate or
certificates for Common Stock are to be issued shall be deemed to have
become a holder of record of such Common Stock effective on March 31,
1999.
(iii) The Corporation shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance or delivery of
shares of Common Stock upon conversion of any shares of Class A Stock;
provided, that the Corporation shall not be required to pay any taxes
which may be payable in respect of any transfer involved in the issuance
or delivery of any certificate for such shares in a name
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other than that of the registered holder of the Class A Stock in respect
of which such shares are being issued.
(iv) So long as there are any shares of Class A Stock outstanding,
the Corporation shall reserve at all times, free from preemptive rights,
out of its treasury stock or its authorized but unissued shares of Common
Stock, or both, solely for the purpose of effecting the conversion of the
shares of Class A Stock, sufficient shares of Common Stock to provide for
the conversion of all outstanding shares of Class A Stock.
G. Voting by Class Action Trustee.
(i) Certain shares of Class A Stock, which were automatically
converted to Common Stock on March 31, 1999 (such stock being hereafter
referred to as "Class Action Stock") were issued to the trustee (the
"Class Action Trustee") for the class action plaintiffs (the "Class Action
Plaintiffs") in securities class action litigation (the "Class Action
Suits") against the Corporation and certain of its former officers and
directors which pending before Judge Frederic Block in the Eastern
District of New York under the consolidated caption In Re Spectrum
Information Technologies Litigation, No. 93 Civ. 2295 (FB). The Class
Action Trustee shall be entitled to vote Class Action Stock that has not
yet been distributed to a Class Action Plaintiff pursuant to the
settlement of the Class Action Suits and the Corporation's Plan of
Reorganization, filed with the Bankruptcy Court on February 9, 1996, as
amended, and is held by the Class Action Trustee; however, the Class
Action Trustee shall be required to vote the Class Action Stock in the
same proportions and the same manner as the holders of shares of Common
Stock have voted.
ARTICLE V
Rights Agreements
The Board of Directors is hereby authorized to create and issue, whether
or not in connection with the issuance and sale of its stock or other securities
or property, rights entitling the holders thereof to purchase from the
Corporation shares of stock or other securities of the Corporation or any other
entity, recognizing that, under certain circumstances, the creation and issuance
of such rights could have the effect of discouraging third parties from seeking,
or impairing their ability to seek, to acquire a significant portion of the
outstanding securities of the Corporation, to engage in any transaction which
might result in a change of control of the Corporation or to enter into any
agreement, arrangement or understanding with another party to accomplish the
foregoing or for the purpose of acquiring, holding, voting or disposing of any
securities of the Corporation. The times at which and the specific terms upon
which such rights are to be issued will be determined by the Board of Directors
and set forth in the contracts or instruments that evidence such rights. The
authority of the Board of Directors with respect to such rights shall include,
but not be limited to, determination of the following:
A. The initial purchase price per share or other unit of stock or other
securities or property to be purchased upon the exercise of such rights.
B. Provisions relating to the times at which and the circumstances under
which such rights may be exercised or sold or otherwise transferred, either
together with or separately from, any other stock or other securities of the
Corporation.
C. Provisions which set forth the type and amount of stock for which such
rights are exercisable and provisions which adjust the number or exercise price
of such rights in the event of a combination, split or recapitalization of any
stock of the Corporation, a change in ownership of the Corporation's stock or
other securities or a reorganization, merger, consolidation, sale of assets or
other occurrence relating to the Corporation or any stock of the Corporation,
and provisions restricting the ability of the Corporation to enter into any
stock transaction absent an assumption by the other party or parties thereto of
the obligations of the Corporation under such rights.
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D. Provisions which deny the holder of a specified percentage of
outstanding stock or other securities of the Corporation the right to exercise
such rights and/or cause the rights held by such holder to become void.
E. Provisions which permit the Corporation to redeem or exchange such
rights, which redemption or exchange may be within the sole discretion of the
Board of Directors, if the Board of Directors reserves such right to itself.
F. The appointment of a rights agent with respect to such rights.
ARTICLE VI
Board of Directors
A. The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. Subject to the rights of the
holders of any series of Preferred Stock to elect additional directors under
specific circumstances, the Board of Directors shall consist of no more than 7
directors, the exact number of directors to be determined from time to time by
resolution adopted by the affirmative vote of a majority of the entire Board of
Directors. The directors, other than those who may be elected by the holders of
any series of Preferred Stock, shall be divided into three classes, designated
Class I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting the entire
Board of Directors. Initially, Class I directors shall be elected for a one-year
term, Class II directors for a two-year term, and Class III directors for a
three-year term. At each succeeding annual meeting of the stockholders,
successors to the class of directors whose terms expire at the annual meeting
shall be elected for a three-year term.
B. Subject to the rights of any series of Preferred Stock to elect
additional directors under specific circumstances, if the number of directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal as possible,
and any additional director of any class elected to fill a vacancy resulting
from an increase in such class shall hold office for a term that shall coincide
with the remaining term of that class, but in no case will a decrease in the
number of directors shorten the term of any incumbent director. A director shall
hold office until the annual meeting for the year in which his term expires and
until his successor shall be elected, subject, however, to prior death,
resignation, retirement or removal from office. Any vacancy on the Board of
Directors that results from an increase in the number of directors may be filled
by a majority of the directors then in office, provided that a quorum is
present, and any other vacancy occurring in the Board of Directors may be filled
by a majority of the directors then in office, even if less than a quorum, or by
a sole remaining director. Any director elected to fill a vacancy not resulting
from an increase in the number of directors shall have the same remaining term
as that of his predecessor or, if such director has no predecessor, as that of
the class of directors to which such director has been elected.
ARTICLE VII
Transactions with Related Persons
A. In addition to any affirmative vote required by law or this Certificate
of Incorporation or the Bylaws of the Corporation, and except as otherwise
expressly provided in Section C of this Article VII, a Business Combination (as
hereinafter defined) with, or proposed by or on behalf of, any Interested
Stockholder (as hereinafter defined) or any Affiliate (as hereinafter defined)
or Associate (as hereinafter defined) of, any Interested Stockholder or any
person who thereafter would be an Affiliate or Associate of such Interested
Stockholder shall require the affirmative vote of at least 66 2/3 percent of the
votes entitled to be cast by the holders of all the then outstanding shares
entitled to vote generally in the election of directors ("Voting Stock"), voting
together as a single class, excluding Voting Stock Beneficially Owned (as
hereinafter defined) by such Interested Stockholder. Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that a
lesser percentage or separate class vote may be specified, by law or in any
agreement with any national securities exchange or otherwise.
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B. The provisions of Section A of this Article VII shall not be applicable
to any particular Business Combination, and such Business Combination shall
require only such affirmative vote, if any, as is required by law or by any
other provision of this Certificate of Incorporation or the Bylaws of the
Corporation, or any agreement with any national securities exchange, if the
Business Combination shall have been approved, either specifically or as a
transaction which is within an approved category of transactions, by a majority
of the Board of Directors prior to the Acquisition Date (as hereinafter
defined).
C. The following definitions shall apply with respect to this Article VII:
(i) The terms "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under the
Exchange Act of 1934, as amended (the "Exchange Act") as in effect on the
date this Certificate of Incorporation became effective under the GCL (the
term "registrant" in said Rule 12b-2 meaning in this case the
Corporation).
(ii) The term "Acquisition Date" shall mean the date on which any
person becomes the Beneficial Owner of Voting Stock representing 10
percent or more of the votes entitled to be cast by the holders of all the
then outstanding shares of Voting Stock.
(iii) A person shall be deemed the "Beneficial Owner"of, and shall
be deemed to "Beneficially Own", shares of Capital Stock (as hereinafter
defined):
(a) which such person or any of such person's Affiliates or
Associates, directly or indirectly, has the sole or shared right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 promulgated under the Exchange Act or
pursuant to any successor provision), pursuant to any agreement,
arrangement or understanding, whether or not in writing; provided,
that a person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any security under this Subsection (a) as a
result of an agreement, arrangement or understanding to vote such
security that both (y) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the rules and
regulations promulgated under the Exchange Act and (z) is not
reportable by such person on Schedule 13D promulgated under the
Exchange Act (or any comparable or successor report) without giving
effect to any applicable waiting period; or
(b) which are Beneficially Owned, directly or indirectly, by
any other person (or any Affiliate or Associate thereof) with which
such person (or any of such person's Affiliates or Associates) has
any agreement, arrangement or understanding, whether or not in
writing, for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
Subsection (a) above) or disposing of any Capital Stock;
provided, that (y) no director or officer of the Corporation (nor any
Affiliate or Associate of any such director or officer) shall, solely by
reason of any or all of such officers acting in their capacities as such,
be deemed the "Beneficial Owner" of or to "Beneficially Own" any shares of
Capital Stock that are Beneficially Owned by any other such director or
officer, and (z) no person shall be deemed the "Beneficial Owner" of or to
"Beneficially Own" any shares of Voting Stock held in any voting trust,
any employee stock ownership plan or any similar plan or trust if such
person does not posses the right to vote, to direct the voting of or to be
consulted with respect to the voting of such shares.
(iv) The term "Business Combination" shall mean:
(a) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (y) any Interested
Stockholder or (z) any other company (whether or not itself an
Interested Stockholder) which is or after such merger or
consolidation would be an Affiliate or Associate of an Interested
Stockholder; or
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(b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition or security arrangement, investment, loan,
advance, guarantee, agreement to purchase, agreement to pay,
extension of credit, joint venture participation or other
arrangement (in one transaction or a series of transactions) with or
for the benefit of any Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder involving the Corporation or
any Subsidiary and any assets, securities or commitments of the
Corporation, any Subsidiary or any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder which (except
for any arrangement, whether as employee, consultant or otherwise,
other than as a director, pursuant to which any Interested
Stockholder or any Affiliate or Associate thereof shall, directly or
indirectly, have any control over or responsibility for the
management of any aspect of the business or affairs of the
Corporation, with respect to which arrangements the value tests set
forth below shall not apply), together with all other such
arrangements (including all contemplated future events), has an
aggregate Fair Market Value (as defined below) and/or involves
aggregate commitments of $5,000,000 or more or constitutes more than
5 percent of the book value of the total assets (in the case of
transactions involving assets or commitments other than Capital
Stock) or 5 percent of the stockholders' equity (in the case of
transactions in Capital Stock) of the entity in question (a
"Substantial Part"), as reflected in the most recent fiscal year-end
consolidated balance sheet of such entity existing at the time the
stockholders of the Corporation would be required to approve or
authorize the Business Combination involving the assets, securities
and/or commitments constituting any Substantial Part; or
(c) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation; or
(d) any reclassification of securities of the Corporation
(including any reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the Corporation with
any of its Subsidiaries or any other transaction (whether or not
with or otherwise involving an Interested Stockholder) that has the
effect, directly or indirectly, of increasing the proportionate
share of any class or series of Capital Stock, or any securities
convertible into Capital Stock or into equity securities of any
Subsidiary, that is Beneficially Owned by any Interested Stockholder
or any Affiliate or Associate of any Interested Stockholder; or
(e) any agreement, contract or other arrangement providing for
any one or more of the actions specified in the foregoing clauses
(a) to (d).
(v) The term "Capital Stock" shall mean all capital stock of the
Corporation authorized to be issued from time to time under Article IV of
this Certificate of Incorporation.
(vi) The term "Fair Market Value" shall mean (y) in the case of
stock, the highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the Composite
Tape for New York Stock Exchange listed stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange or, if such
stock is not listed on such exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934
on which such is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a share of
such stock during the 60-day period preceding the date in question on the
National Association of Securities Dealers, Inc. Automated Quotations
System or any system then in use in its stead, or if no such quotations
are available, the fair market value on the date in question of a share of
such stock as determined by the Board of Directors in accordance with
Subsection (i) of Section D of this Article VII, and (z) in the case of
property other than cash or stock, the fair market value of such property
on the date in question as determined by the Board of Directors in
accordance with Subsection (i) of Section D of this Article VII.
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(vii) The term "Interested Stockholder" shall mean any person (other
than the Corporation or any Subsidiary and other than any profit-sharing,
employee stock ownership or other employee benefit plan of the Corporation
or any Subsidiary or any trustee of or fiduciary with respect to any such
plan when acting in such capacity), who (a) is the Beneficial Owner of 10
percent or more of the then outstanding Voting Stock; or (b) is an
Affiliate or Associate of the Corporation and at any time within the two-
year period immediately prior to the date in question was the Beneficial
Owner of 10 percent or more of the then outstanding Voting Stock.
(viii) The term "person" shall mean any individual, firm,
corporation, partnership or other entity and shall include any group
comprised of any person and any other person with whom such person or any
Affiliate or Associate of such person has any agreement, arrangement or
understanding, directly or indirectly, for the purpose of acquiring,
holding, voting or disposing of Capital Stock.
(ix) The term "Subsidiary" means any company of which a majority of
any class of equity security is beneficially owned by the Corporation;
provided, however, for the purpose of the definition of Interested
Stockholder set forth in Subsection (vii) of this Section C, the term
"Subsidiary" shall mean only a company of which a majority of each class
of equity securities is Beneficially Owned by the Corporation.
D. (i) A majority of the Board of Directors shall have the power to
determine for the purpose of this Article VII, all questions arising under
this Article VII, including, without limitation, (a) whether a person is
an Interested Stockholder, (b) the number of shares of Capital Stock or
other securities Beneficially Owned by any person, (c) whether a person is
an Affiliate or Associate of another, (d) whether a Business Combination
is with, or proposed by, or on behalf of an Interested Stockholder or an
Affiliate or Associate of an Interested Stockholder, (e) whether the
assets that are the subject of any Business Combination have, or the
consideration to be received for the issuance or transfer of securities by
the Corporation or any Subsidiary in any Business Combination has, an
aggregate Fair Market Value of $5,000,000 or more or constitutes more than
5 percent of the book value of the total assets or 5 percent of the
stockholders' equity of the entity in question, (f) whether the assets or
securities that are the subject of any Business Combination constitute a
Substantial Part, (g) the date on which an Interested Stockholder became
an Interested Stockholder, (h) the date on which an Acquisition Date
occurred, (i) the Fair Market Value of stock or other property in
accordance with Subsection (vi) of Section C of this Article VII, and (j)
any other matter relating to the applicability or effect of this Article
VII. Any such determination shall be binding and conclusive on all
parties.
(ii) The Board of Directors shall have the right to demand that any
person who it believes is or may be an Interested Stockholder (or who
holds of record shares of Capital Stock that are Beneficially Owned by any
person that the Board of Directors believes is or may be an Interested
Stockholder) supply the Corporation with complete information as to: (a)
the record holders of all shares of Capital Stock that are Beneficially
Owned by such person; (b) the number of shares of each class or series of
Capital Stock that are Beneficially Owned by such person and held of
record by each such record holder and the numbers of the stock
certificates evidencing such shares; and (c) any other matter relating to
the applicability or effect of this Article VII as the Board of Directors
may reasonably request. Each such person shall furnish such information
within 10 days after the receipt of such demand.
E. Nothing contained in this Article VII shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law or to be in
derogation of any action, past or future, which has been or may be taken by the
Board of Directors or the stockholders with respect to the subject matter
contained herein.
F. For the purposes of this Article VII, a Business Combination is
presumed to have been proposed by, or on behalf of, an Interested Stockholder or
an Affiliate or Associate of an Interested Stockholder or a person who
thereafter would become such if such Interested Stockholder, Affiliate,
Associate or person votes for or consents to the adoption of any such Business
Combination, unless as to such Interested Stockholder, Affiliate,
8
<PAGE>
Associate or person a majority of the Board of Directors makes a determination
that such Business Combination is not proposed by or on behalf of such
Interested Stockholder, Affiliate, Associate or person.
ARTICLE VIII
Personal Liability of Directors
A. A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty as a director, except that this Section A of Article VIII shall not
eliminate or limit a director's liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 174 of the GCL, or (iv) for any
transaction from which such director derived an improper personal benefit. If
the GCL is amended after the date this Amended and Restated Certificate of
Incorporation became effective under the GCL to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the GCL, as so amended from time to time.
Without limiting the generality or the effect of the foregoing, the
Corporation may enter into one or more agreements with any person, which may
provide for indemnification greater or different than that provided in this
Article VIII.
Any repeal or modification of this Section A of Article VIII shall not
increase the personal liability of any director of this Corporation for any act
or occurrence taking place prior to such repeal or modification, or otherwise
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
The provisions of this Section A of Article VIII shall not be deemed to
limit or preclude indemnification of a director by the Corporation for any
liability of a director which has not been eliminated by the provisions of this
Section A of Article VIII.
B. The Corporation shall indemnify to the full extent authorized or
permitted by law (as now or hereafter in effect) any person made, or threatened
to be made a party or witness to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, a administrative or investigative
(other than an action by or in the right of the Corporation), by reason of the
fact that such person is or was a director, officer, employee or agent of the
Corporation or by reason of the fact that such person is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise. Nothing contained herein shall affect any rights to indemnification
to which employees other than directors and officers may be entitled by law. No
amendment or repeal of this Section B of Article VIII shall apply to or have any
effect on any right to indemnification provided hereunder with respect to any
acts or omissions occurring prior to such amendment or repeal.
C. The Corporation shall indemnify to the full extent authorized or
permitted by law (as now or hereafter in effect) any person made, or threatened
to be made a party or witness to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee or
agent of the Corporation or by reason of the fact that such person is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. Nothing contained herein shall affect any
rights to indemnification to which employees other than directors and officers
may be entitled by law. No amendment or repeal of this Section C of Article VIII
shall apply to or have any effect on any right to indemnification provided
hereunder with respect to any acts or omissions occurring prior to such
amendment or repeal.
9
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D. The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against any such expense, liability or loss, or against any
other expense, liability or loss, to the extent permitted under the GCL. The
Corporation may also create a trust fund, grant a security interest and/or use
other means (including but not limited to, letters of credit, surety bonds
and/or use other similar arrangements), as well as enter into contracts
providing indemnification to the full extent authorized or permitted by law and
including as part thereof provisions with respect to any or all of the
foregoing, to ensure the payment of such amounts as may become necessary to
effect indemnification as provided therein or elsewhere.
ARTICLE IX
Amendment to Bylaws
A. In furtherance and not in limitation of the powers conferred by
applicable law, the Board of Directors is expressly authorized and empowered to:
(1) adopt, alter, amend, change or repeal the Bylaws of the
Corporation; provided, however, that the Bylaws adopted by the Board of
Directors under the powers hereby conferred may be adopted, altered, amended,
changed or repealed by the Board of Directors subject to the provisions of this
Amended and Restated Certificate of Incorporation, or the stockholders having
voting power with respect thereto; provided, further, that, subject to the
provisions of Article VI of this Amended and Restated Certificate of
Incorporation, in the case of amendments by stockholders, the affirmative vote
of the holders of at least 80 percent of the voting power of the then
outstanding Voting Stock, voting together as a single class, shall be required
to alter, amend or repeal the Bylaws; and
(2) from time to time determine whether and to what extent, and at
what times and places, and under what conditions and regulations, the accounts
and books of the Corporation, or any of them, shall be open to inspection of
stockholders; and, except as so determined, or as expressly provided in this
Amended and Restated Certificate of Incorporation or in any Preferred Stock
Designation, no stockholder shall have any right to inspect any account, book or
document of the Corporation other than such rights as may be conferred by law.
B. The Corporation may in its Bylaws confer powers upon the Board of
Directors in addition to the foregoing and in addition to the powers and
authorities expressly conferred upon the Board of Directors in this Amended and
Restated Certificate of Incorporation or by law; provided, however, that no
Bylaws hereafter adopted by the stockholders or otherwise shall invalidate any
prior act of the directors which would have been valid if such Bylaws had not
been adopted.
ARTICLE X
Shareholder Consent
Notwithstanding any other provision of this Certificate of Incorporation
or the Bylaws of the Corporation to the contrary, no action required to be taken
or which may be taken at any annual or special meeting of stockholders of the
Corporation may be taken by written consent without such a meeting except any
action taken upon the signing of a consent in writing by all stockholders of the
Corporation having voting power of the then outstanding Voting Stock setting
forth the action to be taken. Subject to the rights of the holders of any class
or series of Preferred Stock, special meetings of stockholders of the
Corporation may be called only by the Board of Directors, the Chairman of the
Board, or the President of the Corporation.
10
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ARTICLE XI
Other Constituencies
The Board of Directors, when evaluating any (a) tender offer or invitation
for tenders or proposal to make a tender offer or request or invitation for
tenders, by another party, for any equity security of the Corporation or (b)
proposal or offer by another party to (i) merge or consolidate the Corporation
or any subsidiary with another corporation, (ii) purchase or otherwise acquire
all or a substantial portion of the properties or assets of the Corporation or
any subsidiary, or sell or otherwise dispose of to the Corporation or any
subsidiary all or a substantial portion of the properties or assets of such
other party or (iii) liquidate, dissolve, reclassify the securities of, declare
an extraordinary dividend or recapitalize or reorganize the Corporation, shall
be permitted (but not required) to take into account all factors which the Board
of Directors deems relevant, including, without limitation, to the extent so
deemed relevant the potential impact on employees, customers, suppliers,
partners, joint venturer and other constituents of the Corporation and the
communities in which the Corporation operates.
ARTICLE XII
Amendments to Certificate of Incorporation
Except as may be expressly provided in this Certificate of Incorporation,
the Corporation reserves the right at any time from time to time to amend,
alter, change or repeal any provision contained in this Certificate of
Incorporation, or a Preferred Stock Designation, and any other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner now or hereafter prescribed herein or by law;
and all rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant to this
Certificate of Incorporation in its present form or as hereafter amended are
granted subject to the right reserved in this Article XII; provided, however,
that any amendment or repeal of Article IX of this Certificate of Incorporation
shall not adversely affect any right or protection existing hereunder in respect
of any act or omission occurring prior to such amendment or repeal; provided
further, that no Preferred Stock Designation shall be amended after the issuance
of any shares of the series of Preferred Stock created thereby, except in
accordance with the terms of such Preferred Stock Designation and the
requirements of applicable law.
IN WITNESS HEREOF, the Corporation has caused this Amended and Restated
Certificate of Incorporation to be signed by its Chief Executive Officer and
Chairman of the Board and attested by its Secretary this 14th day of December,
1999.
SPECTRUM INFORMATION TECHNOLOGIES, INC.
By: /s/ Lawrence M. Powers
----------------------
Lawrence M. Powers,
Chief Executive Officer and
Chairman of the Board
Attest: /s/ Toni AnnTantillo
--------------------
11
Exhibit 10.1
PURCHASE AGREEMENT
This Agreement made this 3rd day of January, 2000 (the "Agreement") by and
between Spectrum Information Technologies, Inc. doing business as Siti-Sites.com
("SITI") and Theodore Mazola ("Ted") is intended to provide for the purchase of
an e-commerce business and website owned and operated by Ted, known as Hungry
Bands.com, and his employment thereafter as an executive of SITI, on the terms
and conditions hereinafter set forth.
Now Therefore, in consideration of the mutual covenants and understandings set
forth herein, the parties do hereby agree as follows:
1. Purchase of Business and Website. Ted hereby sells, assigns and transfers
the e-commerce business and website of Hungry Bands.com to SITI,
including, without limitation, all of their assets, properties, contracts,
client lists, artist contracts, inventories, service contracts,
receivables, proprietary information, website and related software,
servers, computer equipment, records and other properties and assets in
any form, subject to all existing liabilities, for future operation by
SITI. A current balance sheet for such business and website, including
HB.net, has been furnished to SITI and has been approved for this
transaction, annexed as exhibit A. Among other assets, Hungry Bands.com is
represented and warranted to include at least 1,500 bands under artist
contracts, although some 1,000 thereof have not yet been uploaded into the
website, and is currently attracting approximately 6,000 unique internet
"hits" per month to its website.
2. Payment in Shares of SITI. Ted shall be entitled to receive in payment
50,000 shares of SITI common stock, on January 15, 2000; after transfer
and ongoing operations of the website are secure and in working operation
by SITI ( expected by February of 2000), Ted shall receive an additional
50,000 shares of such common stock, and provided he has performed and
complied with all the terms and conditions hereof, an additional 50,000
shares thereof on June 30, 2000.
3. Services. SITI shall hereafter employ Ted as its Vice-President/Technical
Director to manage theHungry Bands.com website, and SITI's other websites,
supervising the day to day operation thereof under the direction and
control of SITI's management. Ted shall be employed at a salary of $68,000
annually the first year, with increases contemplated based on his
performance, along with bonuses and stock option or stock grants similarly
based, all reviewable by SITI's management each six months, in a format
further elaborated below.
SITI has advanced Ted $4,000 during the past weeks, and expects to advance
him $8,000 more within three months, to assist him in clearing personal
debts to his last employer, all repayable in one year from the date
hereof, unless SITI grants bonuses or other compensation to him which
satisfies such obligation earlier. After two months, Ted shall also be
included in SITI's insured medical/dental plan for employees and their
families. Ted manages other website ventures, but has represented he is a
full-time executive, and will devote all necessary time and attention to
SITI's business during his employment hereunder, to maximize results at
its several websites and other ventures.
Ted will join with SITI's management in developing a series of goals for
the coming year and each succeeding year, for all of SITI's websites for
which Ted shall be responsible, including number of unique hits,
integration of software from various sources, number of artists or similar
benchmarks added to each site, additions of technical personnel, revenues
and operating earnings or losses, acquisitions facilitated by Ted's
efforts, and other corporate objectives within his executive control and
attainment. An annual bonus in cash and/or stock shall be agreed upon by
weighting each objective, and distributed each six months based upon the
results achieved on such agreed goals at that point, by Ted and his team,
each member thereof to share therein based on their respective
contribution, as determined by Ted in conjunction with SITI management.
4. Confidentiality Covenant. Ted agrees that while employed by SITI, he will
not engage in any other business activity which, after his full disclosure
thereof, conflicts with his obligations to build SITI as Technical
Director of its websites. Any potentially competitive activities to SITI's
operations shall be reviewed with its management. Furthermore, Ted shall
keep confidential, and not use for his own account, all of the trade
<PAGE>
secrets, know-how, software, and other proprietary information and
materials of SITI and its subsidiary and affiliated operations, including
artists, promotions, customer or contact lists and other data which comes
into his purview as a result of his activities on behalf of SITI. Ted
acknowledges that the covenants set forth above are necessary for SITI's
protection and that the nature and scope thereof are reasonable.
5. Representations and Warranties. Ted makes the representations and
warranties to SITI set forth herein and in exhibit B annexed hereto, which
also contains representations and warranties by SITI to Ted as to its
common stock and other matters.
6. Piggy-Back Registration Rights. The shares being issued to Ted hereunder
are not registered under the Securities Act of 1933, and will bear a
legend restricting their marketability as set forth in exhibit C. SITI
will grant Ted customary registration rights, on a pro-rata basis, along
with other executives on all future SITI registered share offerings,
subject to any underwriters' restrictions or conditions imposed thereon.
7. Good Faith and Fair Dealings. The parties acknowledge that SITI's several
websites and business plans are all start-ups with high risks and growth
potential, and anticipate changes in focus or strategy. The parties
foresee a continuing requirement of good faith, fairness and full
disclosure in their dealings with each other , and each party agrees that
such standards shall apply to all of such dealings.
8. Miscellaneous. This Agreement and the exhibits annexed thereto contain the
entire understanding of the the parties with respect to the subject matter
hereof. No amendment or modification of this Agreement shall be valid or
binding unless in writing and executed by the parties. This Agreement
shall be governed by, construed and enforced in accordance with the laws
of New York. Ted shall not assign any of his rights or obligations
hereunder without the written consent of SITI.
In Witness Whereof, the parties have executed and delivered this Agreement as of
the day and year first above written.
Spectrum Information Technologies, Inc. Theodore Mazola
d/b/a Siti-Sites. com
By /s/ Lawrence M. Powers /s/ Theodore Mazola
- ------------------------------------ -----------------------------------
Lawrence M. Powers, Chairman/CEO 36 Fieldway Avenue
594 Broadway, Suite 1001, N.Y., N.Y.10012 Staten Island, N.Y. 10308
Exhibit 10.2
PURCHASE AGREEMENT-2
This Agreement made this 3rd day of January, 2000 (the "Agreement") by and among
Spectrum Information Technologies, Inc. doing business as Siti-Sites.com
("SITI"), and Theodore Mazola ("Ted") and his partner Steven Zuckerman ("Steve")
is intended to provide for the purchase of an e-news/magazine business and
website owned and operated by Ted and Steve as partners, known as New Media
Music.com, the further purchase of a conference/ exposition business described
below, devoted to music on the internet, separately owned and operated by Steve,
and the respective employment of Ted and Steve thereafter as executives of SITI,
on the terms and conditions hereinafter set forth.
Now Therefore, in consideration of the mutual covenants and understandings set
forth herein, the parties do hereby agree as follows:
1. Purchase of Business and Website. Ted and Steve hereby sell, assign and
transfer the e-news/magazine business and website of New Media Music.com
("Newmedia") to SITI, including, without limitation, all of their assets,
properties, archives, contracts, client lists, artist and sponsor
contracts and contact lists, articles and releases in process,
inventories, service contracts, receivables, proprietary information,
website and related software, servers, computer equipment, records and
other properties and assets in any form, subject to all existing
liabilities, for future operation by SITI. A current balance sheet for
such business and website has been furnished to SITI and has been approved
for this transaction, annexed as exhibit A. Among other assets, Newmedia
is represented and warranted to be currently attracting approximately
20,000 unique internet "hits" per month to its website.
2. Payment in Shares of SITI. Ted and Steve shall each be entitled to receive
in payment 15,000 shares of SITI common stock on January 15, 2000, and
after transfer and ongoing operations of the website are secure and in
working operation by SITI (expected by February of 2000 ), Ted and Steve
shall each receive an additional 15,000 shares of such common stock, for a
total of 60,000 shares in the transaction.
3. Services. SITI shall hereafter continue to employ Ted as its
Vice-President/Technical Director to manage the Newmedia.com website, and
SITI's other websites, supervising the day to day operation thereof under
the direction and control of SITI's management, with his existing
compensation plan in a related contract with SITI covering all Newmedia
and other services.
Steve shall hereafter be employed by SITI as its Vice-President/Business
Development, supervising all editorial and news content of Newmedia, and
also managing the New York Music & Internet Expo 2000 and all of its
continuing events hereafter across the country, described below. Steve
shall be employed at a salary of $65,000 annually the first year, with
increases contemplated based on his performance, along with bonuses and
stock option or stock grants similarly based, all reviewable by SITI's
management each six months. The performance of Newmedia under Ted and
Steve's continuing management shall be evaluated separately from their
services in other SITI ventures, with compensation directly related
thereto, as a part of their overall compensation as SITI executives, all
to be based on a bonus plan with annual goals agreed upon by each of them
with SITI's management, listing several corporate objectives, with each
goal weighted in the bonus computation.
Steve shall also be included in SITI's insured medical/dental plan for
employees and their families, and Ted's benefits date thereunder is
provided for in his related contract with SITI. Ted and Steve manage other
web-related ventures, but each has represented he will be a full-time
executive, and will devote all necessary time and attention to SITI's
business during his employment hereunder, to maximize results at its
several websites and other ventures.
4. Music & Internet Expos. Steve independently owns and operates a separate
business promoting Music and Internet conferences and expositions, in New
York, San Francisco and in other cities contemplated in discussions with
SITI (collectively, the "Expos"). In consideration of this Agreement, he
(by causing his Subchapter S corporation to assign its assets) is hereby
selling, assigning and transferring the Expos as an
<PAGE>
ongoing business to SITI, including, without limitation, all of their
assets, properties, contracts, client, artist and sponsor lists, archives,
inventories, banners, equipment, databases, website and related software,
records and other properties and assets in any form, subject to
liabilities shown on Exhibit A-1, for future operation by SITI. A current
balance sheet and preliminary expansion plan for such business has been
furnished to SITI and has been approved for this transaction, annexed as
exhibit B.
5. March 2000 Expo. The parties agree that Steve has financed and completed
three-fourths of the work necessary for the March 2000 Expo in New York
City, and that he shall be entitled to retain three-fourths of its net
earnings at the completion thereof, subject to SITI being repaid any cash
or other advances it is required to make for its completion, with interest
at 9% per annum until repaid, duly charged as overhead, and SITI shall be
entitled to receive the remaining one-fourth of any net earnings.
6. Future Expos Compensation to Steve. SITI and Steve have agreed that he has
sold the Expos business to SITI hereunder without additional compensation,
because continuation, and expansion thereof to other cities, will require
capital from SITI, and his employment under paragraph 3 preceding gives
him the regular income and office facilities necessary to build the Expos,
with incentive compensation for doing so on SITI's behalf.
Expos shall be operated as a separate division of SITI, with incentive
compensation to Steve directly related thereto, as a part of his overall
future compensation; provided, however, that for a three year period
commencing after the March 2000 Expo, Steve shall be entitled to receive
at least 15% of the operating income of Expos (revenues less operating
expenses, before interest and taxes, determined by generally accepted
accounting principles). Steve's interest in future Expos earnings for said
three years shall continue for such period, unless he voluntarily resigns
or is discharged for material and serious "just cause"; provided however,
that a"forced resignation" by other executives unreasonable behavior
towards him shall not be deemed a voluntary resignation by Steve, and
shall not deprive him of his interest in Expos earnings for the stated
period.
7. Confidentiality Covenant. Ted and Steve agree that while employed by SITI,
each of them will not engage in any other business activity which, after
their respective full disclosure thereof, conflicts with their respective
obligations to build SITI as executives thereof. Any potentially
competitive activities to SITI's operations shall be reviewed with its
management. Furthermore, Ted and Steve shall each keep confidential, and
not use for his own account, all of the trade secrets, know-how, software,
and other proprietary information and materials of SITI and its subsidiary
and affiliated operations, including artists, promotions, customer or
contact lists and other data which comes into their respective purview as
a result of their activities on behalf of SITI. Ted and Steve acknowledge
that the covenants set forth above are necessary for SITI's protection and
that the nature and scope thereof are reasonable.
8. Representations and Warranties. Ted and Steve each makes the
representations and warranties to SITI set forth herein and in exhibit C
annexed hereto, which also contains representations and warranties by SITI
to Ted and Steve as to its common stock and other matters.
9. Piggy-Back Registration Rights. The shares being issued to Ted and Steve
hereunder are not registered under the Securities Act of 1933, and will
bear a legend restricting their marketability as set forth in exhibit D.
SITI will grant Ted and Steve customary registration rights, on a pro-rata
basis, along with other executives on all future SITI registered share
offerings, subject to any underwriters' restrictions or conditions imposed
thereon.
10. Good Faith and Fair Dealings. The parties acknowledge that SITI's several
websites and business plans are all start-ups with high risks and growth
potential, and anticipate changes in focus or strategy. The parties
foresee a continuing requirement of good faith, fairness and full
disclosure in their dealings with each other , and each party agrees that
such standards shall apply to all of such dealings.
11. Miscellaneous. This Agreement and the exhibits annexed thereto contain the
entire understanding of the the parties with respect to the subject matter
hereof. No amendment or modification of this Agreement shall be valid or
binding unless in writing and executed by the parties. This Agreement
shall be governed by,
<PAGE>
construed and enforced in accordance with the laws of New York. Ted and
Steve each agrees not to assign any of their respective rights or
obligations hereunder without the written consent of SITI.
In Witness Whereof, the parties have executed and delivered this Agreement as of
the day and year first above written.
Spectrum Information Technologies, Inc. Theodore Mazola
d/b/a Siti-Sites. com
By /s/ Lawrence M. Powers /s/ Theodore Mazola
- ----------------------------------------- -----------------------------------
Lawrence M. Powers, Chairman/CEO 36 Fieldway Avenue
594 Broadway, Suite 1001, N.Y., N.Y.10012 Staten Island, N.Y. 10308
Steven Zuckerman
/s/ Steven Zuckerman
-----------------------------------
519 Bloomfield Avenue, Suite 6G
Caldwell, N.J. 07006
Exhibit 10.3
NEW YORK MUSIC EXPO, INC.
519 Bloomfield Avenue
Caldwell, New Jersey 07006
January 3, 2000
Siti-Sites.com, Inc.
594 Broadway, Suite 1001
New York, New York 10012
Re: Purchase Agreement
Gentlemen:
Steven Zuckerman ("Zuckerman") is the sole stockholder and the President
of New York Music Expo, Inc., a New Jersey corporation (the "Company"), which
operates a business promoting music and internet conferences and expositions in
New York, San Francisco and in other cities (the "Expos"). Pursuant to a
Purchase Agreement dated January 3, 2000 (the "Purchase Agreement"), Zuckerman
sold to Siti-Sites.com, Inc. ("SITI"), among other things, all of the assets and
certain of the liabilities of the Expos.
The Company hereby agrees to be bound by the terms and provisions of the
Purchase Agreement, including, without limitation, all representations and
warranties made by Zuckerman, to the extent they relate to the Expos, and hereby
confirms that it has sold, assigned and transferred the Expos as an ongoing
business to SITI, including, without limitation, all of their assets,
properties, contracts, client, artist and sponsor lists, archives, inventories,
banners, equipment, databases, website and related software, records and other
properties and assets in any form, subject only to existing liabilities set
forth on the balance sheet attached to the Purchase Agreement.
This letter shall be governed by, construed and enforced in accordance
with the laws of New York.
NEW YORK MUSIC EXPO, INC.
By: /s/ Steven Zuckerman
------------------------------
Name: Steven Zuckerman
Title: President
Exhibit 99.1
SITI-Sites.com Announces Acquisition of Two New Music Websites, And of New York
Music & Internet Expo Business, for SITI Common Stock
NEW YORK, Jan. 4 - SITI-Sites.com, Inc. (OTC Bulletin Board: SITI - news),
announced today that it had acquired Hungry Bands.com
(http://www.hungrybands.com), an e-commerce website and business, promoting and
selling music by independent artists. Hungry Bands.com currently has some 1,600
bands signed-up or linked into its website, and continues to add new bands. The
business was founded and owned by Ted Mazola, who recently joined SITI as a
Vice-President/Technology, and was acquired for 150,000 shares of SITI common
stock, payable in three installments to Mazola through June, 2000 as certain
operating goals are achieved. The operation is complementary to SITI's
Tropia.com (http://www.tropia.com) business, which now has some 250 bands from
selected artists and record labels, but will continue to be operated as a
separate website as part of the SITI music group. Each of these sites will be
cross-linked for commerce purposes.
SITI further announced that it had acquired NewMediaMusic.com
(http://www.newmediamusic.com), an e-news/magazine business devoted to new
Internet music, news releases by artists and record labels, interviews and other
information useful to fans and artists. This e-magazine is updated on a
continuing basis, and is expected to be at the fulcrum of Internet music
promotion and development; it has working relationships with many major firms
and personalities in this emerging niche of the overall music industry. The
business was founded by Ted Mazola and Steve Zuckerman this past year, and
enjoys some 30,000 "unique hits" per month to its popular website. This website
will be linked with the several thousand "unique hits" per month enjoyed by
SITI's Tropia and by its new HungryBands websites. SITI hopes to build linked
traffic to these three websites, while adding additional website linkages and
traffic, ultimately to generate advertising promotions and revenues.
The former owners of NewMediaMusic will receive a total of 60,000 shares of SITI
common stock for their business, and Steve Zuckerman has joined SITI as a
Vice-President/NewMedia Development.
In a third related acquisition, SITI purchased the Music and Internet Conference
business (http://www.newyorkexpo.com) of Steve Zuckerman, which is promoting its
March 2000 Expo in New York City, after a successful Expo in New York early in
1999. These Internet conferences attract sponsors from the music and computer
software/equipment world, and help participating sponsors and exhibitors build
the personal and business networks that are creating this emerging branch of the
music industry. Steve Zuckerman with over 20 years experience in the music
industry, and many contacts within the established labels, indie domains and
among artists, will continue to manage these trade shows. SITI intends to foster
follow-on relationships with participants to aid them in e-commerce, and
database marketing.
Mr. Zuckerman will be entitled to a 15% interest for three years in the
operating profits of the Music and Internet Conference business, after
completing the upcoming March, 2000 Expo (in which he will have a 75% interest).
The business showed a modest profit from its 1999 show and has already financed
its 2000 show. SITI hopes to expand this Music and Internet Expo to the West
Coast and to regional music venues, with increased local sponsorship.
SITI hopes that these three acquisitions will ultimately result in an increase
of its marketing databases, which can be made available to all its subsidiaries,
linked affiliates and future promotion and business partners.
This press release contains statements that are "forward-looking," which are
based on management's current hopes and expectations. There can be no guarantees
as to SITI's future performance, or that its plans or operations thereafter will
prove successful. For a discussion of the risks, capital needs and competition
relating to SITI and its business, see SITI's publicly filed quarterly reports
(the latest is dated November 9, 1999), recent news releases, and its annual SEC
report filed in July, 1999, all of which are available on the Internet, and by
request to SITI at 594 Broadway, Suite 1001, New York, N.Y. 10012.
Exhibit 99.2
SITI-Sites. com Agrees to Invest in EZCD.com; Content and Technology Sharing
Established Between SITI and EZCD
New York, N.Y., Tuesday, January 11, 2000----Siti-Sites.com, Inc. (OTC BB:
SITI), announced today that it had agreed to invest $500,000 in Volatile Media,
Inc., which does business as EZCD.com ( www.ezcd.com), a premier custom music
compilation company. Over 13,000 independent and unsigned artists and 450 labels
have adopted EZCD.com's e-commerce tools (patent pending) to promote and sell
their music.
The terms of the SITI investment are subject to negotiation and execution of
final documents. In the interim, SITI has made a bridge loan in such investment
amount, which comes due not later than February 15, 2000, by when documentation
should be completed. Upon closing of the investment, SITI will acquire
convertible preferred stock and five-year warrants (exercisable at substantially
higher prices) totalling approximately 4% of EZCD's common stock equity, after
conversion and exercise. A similar type investment is being made by another
investor, and the privately-held EZCD.com is in the process of raising equity
financing on a much larger scale.
Lawrence Powers and Robert Ingenito, the Chairman and Vice-Chairman of SITI,
stated that the investment was being made to enhance SITI's content, and also
its data management tools. EZCD combines varied content with highly-useful
services to artists and labels. These include an easy-to-use e-commerce and
royalty reporting system, automated publishing software to disseminate
tour-dates and other artist generated news, and powerful e-mail and
communication tools. EZCD's services to consumers and fans include personalized
music selections and one-click registration for newsletters and fan clubs, all
of which fit into SITI's long-range plans for its growing content on several
websites.
EZCD's participating labels include BMG, Beggars' Banquet, and The Orchard;
participating artists range from Bauhaus to Gilberto Gil, and from Professor
Griff to Louis Armstrong. Corporate partners, including Clairol, Liberty Travel
and Ziff-Davis, have been attracted to EZCD's focus on college-age consumers and
its diverse music catalog of rock, dance, hip-hop, latin and world genres, which
can be used for highly -targeted special promotions.
Concurrently with the investment commitment, SITI has entered into a Content and
Technology Sharing Agreement with EZCD, under which EZCD.com will make its music
content, and the software and related technology for all of its services,
available on a private-label basis to all of SITI's websites.
This Sharing Agreement further provides for linkage between all of EZCD's
websites with all of SITI's e-commerce websites ( presently www.tropia.com,
www.hungrybands.com, www.newmediamusic.com and www.newyorkexpo.com) for shared
promotion and commerce. Cross-promotional activities for CD giveaways, content
sharing, provision of services to artists and fans, and sharing of new
technology developed by SITI or EZCD, are contemplated. SITI's senior executives
will join EZCD's advisory panel.
EZCD.com aims at the same college and youth markets as SITI's existing sites.
EZCD.com has also developed several non-music marketing partners, who offer
custom CD's as part of their consumer product promotions. This type of tie-in
marketing using music giveaways or prizes, lends itself to the previously
announced data mining and management planned within SITI.
This press release contains statements that are "forward looking", which are
based on management's current hopes and expectations. There can be no guarantees
as to SITI's or EZCD's future performance, or that the plans or operations of
either of them will prove successful. For a discussion of the risks, capital
needs and competition relating to SITI and its business, see SITI's publicly
filed quarterly reports (the latest is dated November 9, 1999), recent news
releases, and its annual report publicly filed in July, 1999, all of which are
available on the Internet, and by request to SITI at 594 Broadway, Suite 1001,
New York, N.Y. 10012.
Exhibit 99.3
SITI-Sites.com Announces Corporate Name Change, Additional Equity Financing, and
Management Additions
NEW YORK, Dec. 29 -- SITI-Sites.com (OTC Bulletin Board: SITI - news) announced
today that its previously announced second round of financing with Lawrence M.
Powers, the Chairman/CEO and a major shareholder of SITI, had been approved by
shareholders at its annual meeting, with SITI receiving $1,250,000. The
additional financing was approved at SITI's Annual Meeting of Shareholders held
December 14, 1999, together with resolutions changing SITI's corporate name to
Siti-Sites.com, Inc., revising its corporate charter, enacting employee/director
stock option plans, electing its board of directors and approving all other
items described in its proxy statement.
Subsequently, Directors Powers and Robert Ingenito, along with Ingenito's
business partner John DiNozzi, agreed to purchase an additional bloc of equity
for $500,000 from SITI, on the same terms as shareholders had approved the
financing by Powers. The total equity purchases in December thus came to
$1,750,000 for 1,400,000 shares of Common Stock ($1.25 per share), together with
options to purchase an additional 700,000 shares at $2.50 per share, exercisable
for five years. The additional equity investment was funded on December 23,
1999, with Mr. Powers investing $250,000 and Messrs. Ingenito and DiNozzi each
investing $125,000.
Chairman/CEO Powers also announced that Director Robert Ingenito had been
appointed Vice-Chairman and President, in recognition of his ongoing management
contributions in building SITI's business. SITI's business is seeking to grow
within the music industry, with an emphasis on increased music content, and fan
and artist data aggregation, to be followed by extensive data-based marketing to
its artists and fan constituencies.
This new emphasis at SITI stems from Ingenito's long experience in direct
marketing and "data mining," including his work as President and large
shareholder in the formative 1977-85 period of Acxiom Corporation which has
grown to $750 million in current revenues from sophisticated management of
customer and marketing data. Ingenito, as the Founder/CEO of Access Direct
Systems, Inc. and his partner DiNozzi (who as Founder/President has managed
their privately-held business throughout its profitable growth) recently sold
another of their direct mail/e-service businesses, Access Communications, Inc.
to Acxiom Corporation. The business they sold was founded 8 years ago, and
handles promotional mailings on demand, and time-sensitive communications, in an
on-line data environment for over 100 companies. Such sale has given Mr.
Ingenito the time to make a deeper management/investor commitment to SITI.
SITI is presently in negotiations to acquire certain Internet commerce and
information sites in exchange for common stock, as well as to make an investment
in another Internet company. These types of investments are expected to provide
important technologies, and substantially increased artist and music content,
for SITI's planned grouping of music-related websites, emphasizing revenues from
services to artists and fans, as well as sales of music and related merchandise.
Their conclusion, with a description of these transactions, is expected to be
announced when negotiations are completed, and documents are finalized.
SITI has recently added Paul Marshall and Ted Mazola, both experienced website
developers and supervisors, to its core executive group, to help manage
technology in SITI's planned websites. Consulting relationships with the former
executive team at SITI's Tropia subsidiary have ended, with the new staff taking
over this continuing operation.
This press release contains statements that are "forward-looking," which are
based on management's current expectations. There can be no guarantees as to
SITI's future performance, that its pending negotiations will be completed, or
that operations thereafter will be successful. For discussion of the risks,
capital needs and competition related to SITI and its business, see SITI's
publicly filed quarterly reports (the latest having been filed November 9, 1999)
and annual report, which are available on the Internet, and by request from SITI
at 594 Broadway, Suite 1001, New York, N.Y. 10012.
