Exhibit 10.31
TERM SHEET AGREEMENT
Lycos, Inc. & GlobeComm, Inc.
1. Definitions. "Lycos Service" means the World Wide Web site located at
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇. "Licensed Service" is a Lycos-branded version of
GlobeComm's electronic mail services, including the forwarding service,
automated POP service, personalized electronic mail service, and web-based
electronic mail. "Net Advertising Revenues" are the monies received by
Lycos from advertising revenues, minus advertising sales expenses payable
to Lycos or Lycos' designated sales agent (not to exceed 20%), from the
Licensed Service and any other revenue derived by Lycos from the Licensed
Service. "Net Subscription Revenues" are the monies received by GlobeComm
from subscription revenues from the Licensed Service and any other revenue
derived by GlobeComm from the Licensed Service less any applicable third
party commissions, broker fees, and user/advertiser credits or refunds.
2. Grant of License. GlobeComm will license to Lycos the Licensed Service for
inclusion in the Lycos Service. Lycos will have the right to provide
online access to the Licensed Service to licensees or partners of the
Lycos Service, subject to adjustments of business terms if such
arrangements will require the production of additional sites by GlobeComm.
Additional services and functionality to be developed by GlobeComm in
order to keep the Licensed Service competitive with other offerings will
be provided by GlobeComm at no cost to Lycos.
3. Exclusivity. GlobeComm will not establish a business or other relationship
for the Licensed Service with the following direct Lycos competitors:
WebCrawler, AOL Netfind (but not ▇▇▇.▇▇▇, to which GlobeComm may provide
e-mail services), ▇▇▇▇▇▇.▇▇▇, CMP NetGuide, Yahoo!, AltaVista, Infoseek,
or Excite. During the term of this agreement, Lycos will not contract for
the provision of e-mail services on the Lycos Service with the following
direct GlobeComm competitors: Hotmail, Four11, Whowhere, Infospace,
Oracle, USANet, and ProntoMail. Nothing in the foregoing precludes either
party from entering into usual advertising sales or purchasing
arrangements with the above mentioned parties. If Lycos acquires a company
that provides e-mail as part of that company's service, Lycos will not be
prohibited from maintaining that company's e-mail service provided that
Lycos continues to use GlobeComm as the exclusive e-mail provider of
Lycos-branded versions of e-mail services, including the forwarding
service, automated POP service, personalized electronic mail service, and
web-based e-mail on the Lycos Service.
4. Branding. The Licensed Service will be branded Lycos, with the appropriate
GlobeComm logo and copyrights displayed at the bottom of each page. The
page URL will be masked by GlobeComm and branded Lycos, in a form ending
in ▇▇▇▇▇▇▇▇▇▇.▇▇▇. Each page of the Licensed Service will have the Lycos
look and feel as defined by Lycos and any other branding opportunities
resulting from the Licensed Service will also be branded Lycos. The
default free electronic mail address choice for users of the Licensed
Service will be a domain of Lycos' choice. Lycos will have the right to
offer to users of the Licensed Service any domain names provided by
GlobeComm to the public through other services, subject to any contractual
restrictions and shall have the right to approve other free name choices
which shall include at least ▇▇▇▇▇.▇▇▇.
Lycos-GlobeComm Confidential
5. Royalties. Lycos and GlobeComm will split all Net Advertising Revenues
from Licensed Service pages 50% to Lycos and 50% to GlobeComm. Unsold
banner inventory will be bartered by Lycos outside of the Lycos network to
drive traffic back to the Licensed Service. Lycos and GlobeComm will split
all Net Subscription Revenues from Licensed Service pages 50% to Lycos and
50% to GlobeComm.
6 Responsibilities. Lycos will be responsible for: providing links to the
Licensed Service from the Lycos Service; making all advertising sales on
Licensed Service pages; and promoting the Licensed Service from the Lycos
Service. GlobeComm will be responsible for: serving the Licensed Service;
procuring system operation software; operating the Licensed Service;
procuring all hardware and assuming all hardware costs; assuming all
network costs; tagging Licensed Service pages for Lycos-served
advertisements; generating daily traffic reports; and auditing traffic
with the ABVS software or equivalent service. GlobeComm will have three
months to incorporate such auditing service. The Licensed Service's pro
rata share of the cost of such service will be subtracted from Net
Subscription Revenues before revenue sharing as outlined in paragraph 5
above. GlobeComm will furnish Lycos with monthly reports in electronic
format of any user information gathered from users of the Licensed
Service, including whether the users registered from the Lycos Service, if
and when such technology is made available to other GlobeComm licensees.
Both parties will use reasonable efforts to track referrals from Lycos and
bartered banners and include such information in monthly reports. During
the term of this agreement, GlobeComm shall not use any information
obtained from Lycos users for any purpose other than to service Lycos
users.
7. Performance. The Licensed Service will meet response performance standards
for Lycos users similar to that of other comparable web based email sites.
Except for force majeure events, and the initial launch period through
October 20, 1997, the Licensed Service will be available an average of not
less than 95% of the time in any given thirty (30) day period. If the
Licensed Service is not available an average of 95% of the time in any
given thirty (30) day period, Lycos will have the right to cancel this
agreement upon written notice to GlobeComm unless GlobeComm takes adequate
corrective measures (a "Cure") within ten (10) calendar days after failing
to achieve an average of 95% availability; provided, however, that
GlobeComm will have the right to only one Cure in any given six (6) month
period.
8. Term. The term of this agreement shall be one (1) year with automatic
successive one year renewals. Either party may cancel this agreement with
written notice 60 days prior to the start of any new term.
9. User Ownership. Upon cancellation of this agreement for any reason, Lycos
will retain at no cost the Lycos-branded domain name and those users
currently using the Lycos-branded domain name for their email address,
provided Lycos continues to provide comparable email services to the users
and supports services provided to such users. Lycos will pay all ongoing
costs and fees associated with the continued provision and use of the
Lycos-branded domain name. GlobeComm will incur no migration, integration
or other costs in connection therewith.
10. Lycos Options: GlobeComm will grant to Lycos the right, excerciseable
through February 7, 1998, to purchase 1,000,000 shares of GlobeComm Class
A Common stock at $4.OO per share.
11. Lycos Board Rights : During the term of this agreement, a Lycos senior
executive (a "representative") will receive all of the rights, except the
right to vote, of a member of
Lycos & GlobeComm Confidential
GlobeComm's Board of Directors. In the event Lycos exercises it's
investment option described above, a Lycos representative will be elected
to the GlobeComm Board. Such board rights must be relinquished as soon as
Lycos commences preparation to provide e-mail services competitive to
those offered by GlobeComm. The GlobeComm Board members may ask the Lycos
representative to temporarily be absented from the board meeting if it
reasonably concludes that a certain disussion in front of the Lycos
representative could have a negative effect on GlobeComm's business
prospects.
12. GlobeComm will provide a copy of source code for the version of all
software products that are deployed by Lycos, to be maintained via an
Escrow Agreement. GlobeComm will choose the escrow agent, which must be
reasonably acceptable to Lycos. The escrow agreement will provide that the
source code will be released from escrow upon GlobeComm's bankruptcy; if
GlobeComm ceases business operations; or if GlobeComm ceases to support
the Licensed Service. GlobeComm will update the escrowed source code twice
a year.
This term sheet constitutes a binding agreement between the parties hereto
with respect to the contents hereof. Faxed signatures constitute original
signatures for all purposes. The parties agree to proceed in good faith to
confirm the terms of this agreement in a definitive document or documents
within a reasonable amount of time.
ACCEPTED:
Signature /s/ [ILLEGIBLE] Signature /s/ [ILLEGIBLE]
---------------- ----------------
Date 10/8/97 Date 10/8/97
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Lycos, Inc. GlobeComm, Inc.
Lycos & GlobeComm Confidential
Second Amendment in the Agreement between Lycos, Inc. and GlobeComm, Inc.
Lycos and GlobeComm agree to the following amendments to the Term Sheet
Agreement between Lycos and GlobeComm dated October 8, 1997, (the "Agreement").
1. Lycos Options. Lycos' option to purchase 1,000,000 shares of
GlobeComm Class A Common stock $4.00 per share is hereby converted into an
option to purchase 1,000,000 shares of GlobeComm Class A Preferred Stock
at $4.00 per share. The GlobeComm Class A Preferred stock shall have the
same rights of ownership as the GlobeComm Class A Common stock and,
in addition a cash preference in the event of sale or dissolution.
Sale option may be exercised on or before March 9, 1998.
2. Except as expressly modified hereby and by the First Amendment to
the Agreement (executed by Lycos on February 2, 1998 and by GlobeComm on
February 3, 1998), all other terms of the Agreement shall remain in full
force and effect.
ACCEPTED;
LYCOS, INC. GLOBECOMM, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------ -------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name ▇▇▇▇ ▇▇▇▇▇▇
Date 3/9/98 Date 3/9/98
The President
March 9, 1998
GlobeComm, Inc.
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Warrant Exercise
Gentlemen:
Reference is hereby made to that certain Term Sheet Agreement by and
between Lycos, Inc. (" Lycos") and GlobeComm, Inc.("GlobeComm"), dated as of
Octobeer 8, 1997, as amended by that certain First Amendment to the agreement
between Lycos, Inc. and GlobeComm, Inc., executed by Lycos and GlobeComm on
February 2, 1998 and February 3, 1998, respectively, and that certain Second
Agreement to the Amendment between Lycos, Inc. and GlobeComm, Inc., executed by
Lycos and GlobeComm on March 9, 1998 (the "Amended Agreement".)
1. For good and valuable considerations, we hereby agree with you as
follows:
(a) The parties agree that the option referred to in the Amended Agreemdnt
represents and option to purchase one million (1,000,000) shares of GlobeComm
Class A Preferred Stock at an exercise price of $4.00 per share (the "GlobeComm
Stock"). Lycos has elected to exercise its option to purchase the GlobeComm
Stock. The GlobeComm Stock shall have the same rights of ownership as the
GlobeComm Class A Common Stock and, in addition, a cash preference in the event
of sale, liquidation or dissolution. The GlobeComm Stock shall represent
approximately 9.85% of the 10,155,062 shares of GlobeComm's Common Stock
outstanding on a fully-diluted basis on the date hereof (after giving effect to
the exercise or conversion of all options, warrants and other convertible
securities outstanding on the date hereof) and shall have the rights, terms and
privileges set forth in GlobeComm's Certificate of Incorporation, as amended,
attached hereto as Exhibit A.
(b) Except as provided below, GlobeComm agrees to accept payment in full
for the exercise of such option by the delivery at 100,062 shares of
newly-issued Lycos common stock (the "Lycos Shares"), valued at the exchange of
the last quoted sale price for shares of Lycos common stock on the Nasdaq
National Market for each of the ten trading days preceding the date hereof.
2. GlobeComm hereby represents to Lycos as Follows:
(a) GlobeComm is acquiring the Lycos Shares for investment only and not
with a view towards, intention of, or in connection with, any resale or
distribution of such shares or any interest therein.
(b) GlobeComm understands that the Lycos Shares to be issued to it will
not have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities law by reason of specific exemptions
under the provisions thereof which depend in part upon the other representations
and warranties made by GlobeComm in this Agreement. GlobeComm understands that
Lycos is relying upon GlobeComm's representation and warranties contained in
this Section 2 for the purpose of determining whether this transaction meets the
requirements for such exemptions. GlobeCommm is an "accredited investor" as
detailed in Rule 501 promulgated under the Securities Act.
(c) GlobeComm has made, either alone or together with its advisors, such
independent investigation of Lycos, its management and related matters as
GlobeComm deems to be, or such advisors have advised to be, necessary or
advisable in connection with an investment in the Lycos shares through the
transactions contemplated by this Agreement; and GlobeComm and advisors have
received all information and data that GlobeComm and such advisors believe to be
necessary in order to reach an informed decision as to the advisability of an
investment in the Lycos Shares pursuant to the transaction contemplated by this
Agreement.
(d) GlobeComm understands that the Lycos Shares to be received by
GlobeComm in the transactions contemplated hereby will be "restricted
securities" under applicable federal securities laws and that the Securities Act
and the rules of the Securities and Exchange Commission promulgated thereunder
provides in substance that GlobeComm may dispose of such shares only pursuant to
an effective registration statement under the Securities Act or an exemption
from registration if available. GlobeComm further understands that, except as
provided in Section 4, Lycos has no obligation or intention to register the sale
of the shares of the Lycos Shares to be received by GlobeComm in the
transactions contemplated hereby, or take any other action so as to permit sales
pursuant to, the Securities Act. Accordingly, except as provided in Section 4,
GlobeComm understands that GlobeComm may dispose of such shares only in
transactions which are of a type except from registration under the Securities
Act, including, without limitation a "private placement", in which event the
transferee will acquire such shares as "restricted securities" and subject to
the same
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limitations as in the hands of GlobeComm. GlobeComm further understands that
applicable state securities laws may impose additional restrictions upon the
sale of securities. As a consequence, GlobeComm understands that GlobeComm may
have to bear the economic risk of an investment in the Lycos Shares to be
received by GlobeComm pursuant to the transactions contemplated hereby for an
indefinite period of time.
(e) The certificate(s) evidencing the Lycos Shares to be issued pursuant
to the transactions contemplated hereby shall bear the following legend
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, or any state securities laws and
may not be sold or transferred in the absence of such registration or an
exemption therefrom under the Securities of 1933, as amended, and
applicable state securities laws."
(f) There is no (f).
(g) The authorized capital stock of GlobeComm consists of 27,000,000
shares, consisting of 16,000,000 shares of Class A Common Stock of which
2,048,750 shares are issued and outstanding, 5,000,000 shares of Class B Common
Stock of which 5,000,000 shares are issued and outstanding, and 6,000,000
shares of Class A Preferred Stock, of which 2,057,500 shares are issued and
outstanding. Schedule 2(g) sets forth a complete and correct list of the
record ownership of the issued and outstanding shares of capital stock. All of
the issued and outstanding shares of capital stock were duly authorized and
validly issued and are fully paid and nonassessable, and were not issued in
violation of any preemptive rights or Federal or state securities laws. Except
as set forth in Schedule 2(g), there are no outstanding options, warrants or
other rights to purchase, or any securities convertible into or exchangable
for, shares of the capital stock of GlobeComm, and there are no agreements,
arrangements or understandings to which GlobeComm is or may be required to issue
additional shares of its capital stock.
(h) Attached hereto as Schedule 2(h) is the balance sheet of GlobeComm as
of September 30, 1997 and the statements of income and statements of cash flows
of GlobeComm for the first nine months of the fiscal year, including the notes
thereto (hereinafter collectively referred to as the "Financial Statements").
The Financial Statements (i) have been prepared from the books and records of
GlobeComm, (ii) have been prepared in accordance with generally accepted
accounting principles consistently applied (except as may be expressly indicated
therein or on the face of the schedules or notes to such Financial
Statements) during the periods covered thereby and (iii) present fairly in all
material respects the financial condition, results of operations and cash flows
of GlobeComm as at the dates, and for the periods, stated therein, except
that the Financial Statements are subject to normal end of quarter adjustments
when audited
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which will not be individually or in the aggregate material in amount or
effect and do not include footnotes.
(i) Except (i) as set forth or reserved against in the balance sheet of
GlobeComm as of September 30, 1997, included in the Financial Statements (the
"Balance Sheets"), (ii) for obligations incurred since September 30, 1997 in the
ordinary course of business, which are not individually or in the aggregate,
material amount, and (iii) as set forth in Schedule 2(i), GlobeComm does not
have any liablilities or obligations of any nature, whether accrued, absolute,
contingent, or otherwise.
(j) There are no suits, actions, claims, proceedings (including, without
limitation, arbitral or administrative proceedings) or investigations pending
or, to the best knowledge of GlobeComm, threatened against GobeComm or its
properties, assets or business or, to the best knowledge of GlobeComm, pending
or, to the best Knowledge of GlobeComm, threatened challenging tyhe validity of
threatened against any of the officers, directors, employees, agents or
consultants of GlobeComm in connection with the business of GlobeComm. There are
no such suits, actions, claims, proceedings or investigations pending, or
to the best knowledge of GlobeComm, threatened challenging the validity or
propriety of the transactions contemplated by this Agreement. There is no
judgment, order, injunction, decree or award (whether issued by a court, and
arbitrator or an administrative agency) to which GlobeComm is a party, or
involving GlobeComm's properties, assets or business, which is threatened or
which requires continuing compliance therewith by GlobeComm.
(k) The Company has disclosed in Schedule 2(k) all material registered
copyrights, copyright registrations and copyright applications, trademark
registrations and applications for registration, patents and patent
applications, trademarks, service marks, trade names, or Internet domain names
(collectively, "Intellectual Property Rights") used by Globecomm in GlobeComm's
business as presently conducted, including all intellectual Property Rights used
in connection with or contained in all versions of GlobeComm's World Wide Web
sites and all licenses, assignments and releases of Intellectual Property Rights
of others in material works embodied in its products. All Intellectual Property
Rights purported to be owned by GlobeComm held by any employee, officer or
consultant are owned by GlobeComm by operaton of law or have been validly
assigned to GlobeComm. The Intellectual Property Rights are sufficient to carry
on the business of GlobeComm as presently conducted. GlobeComm has exclusive
ownership of or license to use all Intellectual Property Rights identified in
Schedule 2(k) or has obtained any licenses, releases of assignments reasonably
necessary to use all third parties' Intellectual Property Rights in works
embodied in its products. The present business activities or products of
GlobeComm do not infringe any Intellectual Property Rights of others. GlobeComm
has not received any notice or other claim from any person asserting that any of
GlobeComm's present activities infringe or may infringe any Intellectual
Property Rights of such period.
GlobeComm has the right to use all trade secrets, customer lists, hardware
designs, programming processes, software and other information required for or
incident
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to its products or its business as presently conducted or contemplated.
GlobeComm has taken all reasonable measures to protect and preserve the security
and confidentiality of its trade secrets and other confidential information.
GlobeComm is the exclusive owner of all material right, title and interest in
its Intellectual Property Rights as purported to be owned by GlobeComm, and to
GlobeComm's best knowledge, such Intellectual Property Rights are valid and in
full force and effect. No university government agency (whether federal or
state) or other organization which sponsored research and development conducted
by GlobeComm or has any claim of right to or ownership of or other encumbrance
upon the Intellectual Property Rights of GlobeComm. GlobeComm is not aware of
any infringement by others of its copyright or other Intellectual Proprietary
Rights in any of its products, technology or services, or any violation of the
confidentiality of any of its propieratary information. To GlobeComm's
knowledge, GlobeComm is not making unlawful use of any confidential information
or trade secrets of any past or present employees of GlobeComm. For the purposes
of this Section 3.11. Intellectual Property Rights also includes any and all
intellectual property rights, licenses, databases, computer programs and other
computer software user interfaces, know-how, trade secrets, customer lists,
proprietary technology, processes and formulae, source code, object code,
algorithms, architecture, structure, display screens, layouts, development
tools, instructions, templates, marketing materials created by GlobeComm,
inventions, trade dress, logos and designs.
(l) GlobeComm is not in violation in any material respect of any
applicable safety, health, environmental or other law, statute, ordinance, code,
rule, regulation, judgment, order, injunction, writ or decree of any Federal,
state, local or foreign court or governmental or regulatory body, agency or
authority having, asserting or claiming jurisdiction over it or over any part of
its business, operations, properties or assets.
(m) No representation or warranty by GlobeComm contained in this
Agreement and no statement contained in any certificate or other document or
instrument delivered or to be delivered pursuant to this Agreement by GlobeComm
or its representatives contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact necessary to make
the statements contained therein not misleading.
(n) The execution and delivery of this Letter Agreement does not,
and the performance of GlobeComm's obligations under this Letter Agreement will
not, (i) conflict with or violate the Certificate of Incorporation or By-Laws of
GlobeComm; or (ii) conflict with or violate any laws applicable to GlobeComm or
by which GlobeComm or its assets are bound or affected; or (iii) result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under any contract, agreement or other
instrument to which GlobeComm is a party or by which GlobeComm or its assets are
bound or effected, except for any breach or default that would not have,
individually or in the aggregate, a material adverse effect upon GlobeComm.
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(o) Except for the representations and warranties contained herein,
GlobeComm makes no express or implied representations or warranties.
3. Lycos hereby represents to GlobeComm as follows:
(a) The Lycos Shares are duly authorized, validly issued, fully paid
and non assessable.
(b) The execution and delivery of the Letter Agreement does not, and
the performance of Lycos' obligations under this Letter Agreement will not, (i)
conflict with or violate the Certificate of Incorporation or By-Laws of Lycos;
or (ii) conflict with or violate any laws applicable to Lycos or by which Lycos
or its assets are bound or affected; or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under any contract, agreement or other instrument to
which Lycos is a part or by which Lycos or its assets are bound or effected,
except for any breach or default that would not have individuality or in the
aggregated, a material adverse effect upon Lycos.
(c) Lycos is acquiring the GlobeComm Stock for investment only and
not with a view towards, intention of, or in connection with any resale or
distribution of such shares or any interest therein.
(d) Lycos understand that the GlobeComm Stock to be issued to it
will not have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities law by reason of specific exemptions
under the provisions thereof which depend in part upon the other representations
and warranties made by Lycos in this Agreement. Lycos understands that GlobeComm
is relying upon Lycos' representation and warranties contained in this Section 3
for the purpose of determining whether this transaction meets the requirements
for such exemptions. Lycos is an "accredited investor" as defined in Rule 501
promulgated under the Securities Act.
(e) Lycos has made, either alone or together with its advisors, such
independent investigation of GlobeComm, its management and related matters as
Lycos deems to be, or such advisors have advised to be, necessary or advisable
in connection with an investment in the GlobeComm Stock through the transactions
contemplated by this Agreement; and Lycos and advisors have received all
information and date that Lycos and such advisors believe to be necessary in
order to reach an informed decision as to the advisability of an investment in
the GlobeComm Stock pursuant to the transactions contemplated by this Agreement.
(f) Lycos understands that the Lycos Shares to be received by GlobeComm in
the transactions contemplated hereby will be "restricted securities" under
applicable federal securities laws and that the Securities Act and the rules of
the Securities and Exchange Commission promulgated thereunder provide in
substance that Lycos may dispose of such shares only pursuant to an effective
registration statement
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under the Securities Act or an exemption from registration if available. Lycos
further understands that, except as provided in Section 11, GlobeComm has no
obligation or intention to register the sale of any of the shares of the
GlobeComm Stock to be received by Lycos in the transactions contemplated hereby,
or take any other action so as to permit sales pursuant to the Securities
Act. Accordingly, except as provided in Section 11, Lycos understands that Lycos
may dispose of such shares only in transactions which are of a type exempt from
registration under the Securities Act, including, without limitation, a "private
placement," in which event the transferee will acquire such shares as
"restricted securities" and subject to the same limitations as in the hand of
Lycos. Lycos further understands that the applicable state securities laws may
impose additional constraints upon the sale of securities. As a consequence,
Lycos understands that Lycos may have to bear the economic risk of an investment
in the GlobeComm Stock to be received by Lycos pursuant to the transactions
contemplated hereby for an indefinite period of time.
(g) The certificate(s) evidencing the GlobeComm Stock to be issued
pursuant to the transactions contemplated hereby shall bear the following
legend.
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or any state
securities laws and may not be sold or transferred in the absence of
such registration or an exemption therefrom under the Securities Act
of 1933, as amended, and applicable state securities laws."
(h) Except for the representations and warranties contained herein,
Lycos makes no express or implied representations or warranties.
4. (a) Lycos further agrees that it shall file promptly but in no event in
more than 10 business days after the date hereof (the "Option Exercise Date")
with the U.S. Securities and Exchange Commission (the "SEC") a registration
statement on Form S-3 (or any successor form to Form S-3) for a public resale
offering of the Lycos Shares and shall use commercially reasonable efforts to
cause such registration statement, and any necessary amendments thereto, to
become and remain effective for the period ending on the first to occur of (x)
the date of the resale of all Lycos Shares registered thereunder is complete or
(y) the first anniversary of the effective date of such registration statement.
If for any reason Lycos is not eligible to file such registration on Form S-3
(or any successor form to Form S-3), Lycos shall effect such registration using
such form as Lycos is then eligible to use. Lycos shall keep GlobeComm advised
of the initiation and completion of any registration pursuant to this paragraph.
If for any reason Lycos has not successfully registered the Lycos Shares for
resale within 60 days after the Option Exercise Date, GlobeComm shall have the
right, exercisable by written notice to Lycos, to put the Lycos Shares issued
hereunder back to Lycos in exchange for $4,000,000 in cash, which Lycos shall
pay by wire transfer within seven (7) days after the written notice of exercise
is received by Lycos. Other than the obligations described in the previous
sentence (which shall terminate sooner), Lycos' obligation pursuant to this
Paragraph 4 shall terminate upon the first anniversary of the Option Exercise
Date. Lycos and
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GlobeComm agree that the rights set forth in this Paragraph 4 are not assignable
or transferable. Lycos agrees to execute and deliver such further instruments or
documents and to take such further action reasonably requested by GlobeComm or
its underwriter/broker or dealer in connection with the resale offering of the
Lycos Shares.
(b) Lycos agrees to indemnify and hold harmless, to the extent permitted
by law, GlobeComm and its underwriter/broker or dealer against all damages
caused by any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are caused by or contained in
any information furnished in writing to Lycos by such GlobeComm expressly for
use therein or by GlobeComm's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after Lycos has
furnished such holder with a sufficient number of copies of the same. If the
foregoing indemnity is not available for any reason, then the Parties agree to
contribute to the damages of each other in proportion to their relative fault.
(c) In connection with any registration statement in which it is
participating, GlobeComm agrees to furnish to Lycos in writing such information
and affidavits as Lycos reasonably requests for use in connection with any such
registration statement or prospectus and, to the extent permitted by law, will
indemnify and hold harmless Lycos, its directors and officers and each Person
who controls Lycos (within the meaning of the Securities Act) against all
damages resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only in the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by GlobeComm specifically for use in such registration statement.
(d) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not
be subject to any liability for any consent to the entry of any judgment or any
settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
-8-
5. GlobeComm agrees to provide Lycos with all necessary and reasonable
assistance in the preparation and filing of the registration statement required
to be prepared and filed by Lycos and all other obligations of Lycos under this
Letter Agreement. Lycos' obligations under this Letter Agreement are conditioned
in all respects on the provision of all necessary and reasonable assistance to
Lycos by GlobeComm. Lycos agrees to pay the expenses incurred as if in complying
with its obligations under Paragraph 4, including all registration and filing
fees, exchange listing fees, fees and expenses of counsel for Lycos, and fees
and expenses of accountants for Lycos.
6. Lycos shall have the right, upon the advice of the Board of Directors
of Lycos (the "Board"), upon giving written notice to GlobeComm of the exercise
of such right, to require GlobeComm not to sell any shares pursuant to the
registration statement filed pursuant to Paragraph 4 for a reasonable period (as
determined in good faith by the Board) from the date on which such notice is
given (a "blackout period"). If (i)(A) Lycos is engaged in or proposes to engage
within ten days in discussions or negotiations with respect to, or has proposed
or taken a substantial step to commence, or there otherwise is pending, any
merger, acquisition, other form of business combination, divestiture, tender
offer, financing or other transaction, or there is an event or state of facts
relating to Lycos, in each case which is material to Lycos (as reasonably
determined by the Board) (any such negotiation, step, event or state of facts
being herein called "Material Activity"), (B) in the reasonable judgments of the
Board, after consultation with and acting upon the written advice of outside
counsel, disclosure of such Material Activity would be necessary or advisable
under applicable securities laws and (C) such disclosure would, in the
reasonable judgment of the Board, the adverse to the interest of Lycos, or (ii)
the Board, in its reasonable judgment, deems it necessary to file a
post-effective amendment to such registration statement or to prepare a
supplement to, or otherwise amend, the form of prospectus contained therein.
During any such black-out period, GlobeComm agrees not to sell any Lycos Shares
under such registration statement for such period of time as the Board, acting
on the written advice of outside counsel, may in good ▇▇▇▇▇ ▇▇▇▇ advisable;
provided, however, that no single black-out period will be longer than thirty
(30) calendar days and, in the aggregate all black-out periods in any twelve
(12) month period shall not include more than ninety (90) calendar days.
7. GlobeComm and the Majority Stockholders listed on the signature pages
hereto (the "Majority Stockholders") hereby agree to alert, within 15 days of
the date on which the Lycos Shares are registered pursuant to Paragraph 4 above,
and continue to elect until the earlier of (i) GlobeComm's completion of an
initial public offering, (ii) Lycos' ownership reducing to less than 50% of the
GlobeComm Stock, or (iii) Lycos' offering email services at the ▇▇▇▇▇.▇▇▇ site
competitive to those offered by GlobeComm, a representative of Lycos (as
designated by Lycos in writing) to the GlobeComm Board of Directors by written
consent or otherwise. If such action requires any amendment to the GlobeComm
By-Laws, the Majority Stockholders agree to take any actions required to effect
the intent of this paragraph, including voting to so amend such By-laws. At each
annual meeting of the shareholders of GlobeComm, and at each special meeting of
the
-9-
shareholders of GlobeComm called for the purpose of electing directors of
GlobeComm, and at any time at which shareholders of GlobeComm shall have the
rights to, or shall, vote for directors of GlobeComm, then, and in each event,
the Majority Shareholders shall vote all shares of GlobeComm capital stock held
by them for the election of the Lycos designee to the GlobeComm Board of
Directors.
8. Until such time as GlobeComm has completed an initial public offering,
if any of the Majority Stockholders, either individually or collectively
(referred to herein as the "Take-Along Group"), determine to sell or exchange
(in a business combination or otherwise) 100% of the then outstanding shares of
GlobeComm, in one or a series of bona fide arms-length transactions to a third
party, for a per share twice greater than $4.00 per share of Class A Preferred
Stock (on an as-converted basis and as adjusted for any stock splits, stock
dividends or similar transactions), then upon five (5) days written notice by
the Take Along Group to Lycos, which notice shall include reasonable details of
the proposed sale or exchange including the proposed time and place of closing
and the consideration to be received by the Take Along Group (such notice being
referred to as the "Sale Request"), then Lycos shall be obligated to, and shall,
sell, transfer and deliver, or cause to be sold, transferred and delivered, to
such third party on the same terms as the Take Along Group, all (but not less
than all) the Class A Preferred Stock then held by Lycos. Lycos shall (i)
deliver certificates for such GlobeComm shares at the closing of the proposed
transfer, free and clear of all claims, liens and encumbrances and (ii) if
stockholder approval of the transaction is required, vote its GlobeComm shares
in favor thereof.
9. Until such time as GlobeComm has completed an initial public offering,
no Majority Stockholder shall transfer more than 1% of the outstanding shares of
GlobeComm to a third party without complying with the terms and conditions set
forth below:
(a) If any Majority Stockholder declares to transfer shares (the
"Transferor"), such Majority Stockholder shall give Lycos not less than fifteen
(15) days prior written notice of such intended transfer. Such notice (the
"Participation Notice") shall set forth the terms and conditions of such
proposed transfer, including the name of the prospective transferee, the number
of GlobeComm shares proposed to be transferred (the "Participation Securities")
by the Transferor, the purchase price per share proposed to be paid therefor and
the payment terms and type of transfer to be effectuated. Within ten (10) days
following the delivery of the Participation Notice by the Transferor to Lycos,
Lycos may indicate its desire to participate in such proposed transfer, by
written notice to the Transferor, and shall have the opportunity, and right to
sell to the purchasers in such proposed transfer (upon the same terms and
conditions as the Transferor) up to that number of common stock equivalents
owned by Lycos as shall equal the product of (i) a fraction, the numerator of
which is the number of common stock equivalents owned by Lycos as of the date of
such proposed transfer and the denominator of which is the number of common
stock equivalents actually owned as of the date of such Participation Notice by
the Transferor and Lycos multiplied by (ii) the number of Participation
-10-
Securities. The amount of Participation Securities to be sold by the Transferor
shall be reduced to the extent necessary to provide for such sale of shares by
Lycos.
(b) At the closing of any proposed transfer is respect of which a
Participation Notice has been delivered, the Transferor, together with Lycos,
shall deliver to the proposed transferee certificates evidencing the shares to
be sold thereto duly endorsed with stock powers and shall receive in exchange
therefor the consideration to be paid or delivered by the proposed transferee in
respect of such shares as described in the Participation Notice.
(c) The provisions of this Paragraph shall not apply to any transfer
pursuant to Paragraph 8.
10. (a) GlobeComm will maintain true books and records of account in which
full and correct entries will be made of all its business transactions pursuant
to a system of accounting established and administered in accordance with
generally accepted accounting principles consistently applied and will set aside
on its books all such proper accruals and reserves as shall be required under
generally accepted accounting principles consistently applied.
(b) As soon as practicable after the end of each fiscal year of GlobeComm,
and in any event within one hundred and twenty (120) days thereafter, GlobeComm
will furnish to Lycos a balance share of GlobeComm, as at the end of such fiscal
year, and a statement of income and a statement of cash flows of GlobeComm, for
such year, all prepared in accordance with generally accepted accounting
principles consistently applied and setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail. Such
financial statements shall be accompanied by a report and opinion thereon by
independent public accountants of national standing selected by GlobeComm's
Board of Directors.
(c) GlobeComm will furnish Lycos, as soon as practicable after the end of
the first, second and third quarterly accounting periods in each fiscal year of
GlobeComm, and in any event within sixty (60) days thereafter, a balance sheet
of GlobeComm as of the end of each such quarterly period, and a statement of
income and a statement of cash flows of GlobeComm for such period, and for the
current fiscal year to date, prepared in accordance with generally accepted
accounting principles, with the exception that no notes need be attached to such
statements and year-end audit adjustments may not have been made.
(d) Deleted
(e) Lycos shall have the right to visit and inspect any of the properties
of GlobeComm or any of its subsidiaries, and in discuss the affairs, finances
and accounts of GlobeComm or any of its subsidiaries with its officers, and to
review such information as is reasonably requested all at such reasonable times
and as often as
-11-
may be reasonably requested provided that GlobeComm shall not be required to
disclose information that it reasonably deems proprietary.
(f) All information furnished to Lycos, in accordance with this Section 10
shall be deemed confidential (the "Confidential Information"). Lycos
acknowledges that the Confidential Information is a valuable asset of GlobeComm
and shall not disclose any Confidential Information to any person or use any
Confidential Information for its benefit or the benefit of any other person,
except with the prior written approval of GlobeComm or as required by law.
11. (a) GlobeComm agrees that if at any time after the date hereof it
and/or any of its subsidiaries and/or one or more of its officers, directors or
holders of 5% of its outstanding Common Stock intend to offer equity securities
of GlobeComm to the public for cash pursuant to any type of registration under
the Securities Act, GlobeComm will notify Lycos in writing at least forty-five
(45) days prior to the initial filing of a registration statement relating to
such offering with the Securities and Exchange Commission ("Registration
Statement"). Thereafter, GlobeComm will, at its sole cost and expense, use its
best efforts to include in such registration statement, in accordance with the
Securities Act, such shares of GlobeComm Common Stock as Lycos shall request
within thirty (30) days of receipt of notification from GlobeComm of its
intention to file such registration statement; provided, that the inclusion
thereof will not preclude GlobeComm's use of the registration form intended to
be utilized by GlobeComm; and further provided that the foregoing requirements
shall not apply in the event that GlobeComm proposes to file a registration
statement in connection with (i) any issuance of securities pursuant to any
stock option, stock purchase or other employee benefit plan; or (ii) any
issuance of securities in connection with any business combination, whether by
way of merger, consolidation, purchase of stock or assets or otherwise. If the
proposed registration statement is initiated by GlobeComm for an underwritten
public offering of equity securities for such account and, in the opinion of the
managing underwriter, the inclusion of more than a specified amount of such
equity securities proposed to be registered by Lycos and such other holders to
the extent, if any, that the number of equity securities proposed to be offered
by GlobeComm is less than such specified number. If the proposed registration
statement is initiated by other holders of equity securities of GlobeComm
pursuant to registration rights provided for in agreement with GlobeComm and, in
the opinion of the managing underwriter of any underwritten public offering of
such equity securities, the inclusion of more than a specified number of units
of equity securities in such registration statement might adversely affect such
offering, then the initiating holders, Lycos and other holders having
registration rights may include equity securities in such registration statement
pro rata according to the respective numbers of all equity securities proposed
to be
-12-
registered by such initiating holders, Lycos and such other holders. Any opinion
of a managing underwriter referred to in this Section 11 shall be evidenced in a
writing delivered to Lycos.
(b) GlobeComm agrees to use its best efforts to the end that each
registration of the shares required to be made by GlobeComm pursuant to this
Section 11 shall become effective as promptly as practicable and shall remain
effective until Lycos has disposed of the equity securities registered
thereunder. Each registration and blue sky qualification hereunder shall be at
the sole cost and expense of GlobeComm provided, however, that GlobeComm shall
not be obligated to bear the expense of any underwriting discounts or
commissions with respect to the shares covered by the Registration Statement.
(c) In connection with each registration hereunder, GlobeComm agrees (i)
to supply Lycos with such number of copies of preliminary and final prospectuses
as such holders shall reasonably request and (ii) to use its best efforts to
qualify the securities being registered under the securities or blue sky laws of
such states as Lycos may reasonably request. Lycos agrees to furnish to
GlobeComm such information in connection with such registration statement as
GlobeComm may reasonably request.
(d) GlobeComm shall indemnify and hold harmless Lycos, and each
underwriter, within the meaning of the Securities Act, who may purchase from or
sell for any such holder any Warrants and/or Warrant Shares from and against any
and all loses, claims, damages and liabilities caused by any licensed statement
or alleged or untrue statement of material fact contained in the Registration
Statement or any post-effective amendment thereto or any Registration Statement
under the Act or any prospectus included therein required to be filed or
furnished by reason of this Section 11 or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements thereof not misleading, except insofar as such
loses, claims, damages or liabilities are caused by any such untrue statement or
alleged untrue statement or omission or alleged omission based upon information
furnished or required to be furnished in writing to GlobeComm by such holder or
each person, if any, who controls any such holder and underwriter within the
meaning of such Act or by Lycos' failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after GlobeComm
furnished such holder with a sufficient number of copies of the same; provided,
however, that GlobeComm shall not be obligated to so indemnify any such holder
or underwriter or controlling person unless such holder or underwriter shall at
the same time indemnify GlobeComm, its directors, each officer signing the
registration statement and each persons, if any, who controls GlobeComm within
the meaning of such Act from and against any and all loses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of
material fact contained in any Registration Statement or any prospectus required
to be filed or furnished by reason of this Section 11 or caused by any omission
-13-
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, insofar as such loses, claims,
damages or liabilities are caused by any untrue statement or alleged untrue
statement or omission based upon information furnished in writing to GlobeComm
by any such holder or underwriter expressly for use therein by Lycos' failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after GlobeComm has furnished such holder with a sufficient
number of copies of the same.
Agreed to and accepted:
LYCOS, INC. GLOBECOMM, INC.
By: \s\ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: \s\ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------- -------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: COO/CFO Title President
Date: 3/9/98 Date: 3/9/98
Majority Stockholder
By: \s\▇▇▇▇▇▇ ▇▇▇▇▇▇ Mar 9/1998
---------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-14-
Schedule 2G ...........GlobeComm Capital Structure .......................3/6/98
Class B Class A Exercisable
Name Preferred Preferred Common Options Total % of Total
---- --------- --------- ------ ------- ----- ----------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000,000 546,250 142,736 5,688,986 56.0%
▇▇▇▇ ▇▇▇▇▇▇ 40,000 610,000 157,601 807,601 8.0%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 50,000 525,000 44,272 619,272 6.1%
▇▇▇▇ ▇▇▇▇▇▇▇▇ 62,500 312,500 106,789 481,789 4.7%
▇▇▇ ▇▇▇▇▇▇▇ 52,189 52,189 0.5%
▇▇▇▇▇▇ 1,250 1,250 0.0%
Other Employee Stock 10,000 5,000 464,253 479,253 4.7%
Other Stock 165,000 50,000 -- 215,000 2.1%
▇▇▇▇ ▇▇▇▇▇▇▇ 39,861 39,861 0.4%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 39,861 39,861 0.4%
First Closing-Outside Investors(1) 1,225,000 1,225,000 12.1%
Second Closing-Outside Investors(2) 505,000 505,000 5.0%
---------------------------------------------------------------------------------------------------------------------------
Total 5,000,000 2,057,500 2,048,750 1,048,812 10,155,062 100%
---------------------------------------------------------------------------------------------------------------------------
First Closing - Outside Investors(1)
▇▇▇▇ ▇▇▇▇▇▇▇▇ 87,500
▇▇▇▇ ▇▇▇▇▇▇▇▇ 50,000
▇▇▇▇▇ ▇▇▇▇▇▇ 87,500
lhsan Essaid 10,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 50,000
▇▇▇ ▇▇▇▇▇▇▇ 150,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 200,000
▇▇▇▇ ▇▇▇▇▇ 50,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 112,500
▇▇▇▇ ▇▇▇ 2,500
▇▇▇ ▇▇▇ 42,500
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 125,000
▇▇▇▇▇▇ ▇▇▇▇ 20,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 25,000
▇▇▇ ▇▇▇▇▇▇ 25,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 37,500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 50,000
▇▇▇▇ ▇▇▇▇▇▇▇ 50,000
▇▇▇▇▇ ▇▇▇▇▇ 25,000
▇▇▇▇ ▇▇▇▇▇▇▇ 12,500
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 12,500
------------------ ---------
Total 1,225,000
Second Closing - Outside Investors(2)
▇▇▇▇ ▇▇▇▇▇▇▇ 125,000
▇▇▇ ▇▇▇▇ 100,000
▇▇▇▇▇ ▇▇▇ 50,000
▇▇▇ ▇▇▇▇▇▇ 30,000
lhsan Essaid 5,000
▇▇▇▇ ▇▇▇▇▇▇ 37,500
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 75,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 12,500
Imag Partners 25,000
▇▇▇▇▇ ▇▇▇▇▇▇ 10,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ 5,000
▇▇▇▇ ▇▇▇▇▇▇▇ 5,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ 5,000
------------- -------
Total 505,000
Notes:
1. Unvested Options - 1,141,878 options have not been vested. The vesting
period for employee options is four years with limited exceptions.
2. Contingent and Unvested Options - 287,360 options that are contingent on
meeting milestones and are unvested. Key managers have the ability to earn
these options upon meeting milestones and these vest over a 3-4 year
period at an exercise price between $4 and $8.
3. Anti-dilution /Ratchets - The investment terms for the Outside Investors
provide for the grant of additional shares in the event GlobeComm should
fail to meet milestone return requirements or should subsequently issue
shares at less than $2 per share.
Schedule 2H ..............GlobeComm Balance Sheet .......................9/30/98
.........................GlobeComm Income Statement ....................9/30/98
03/06/98 Globe Comm, Inc.
Balance Sheet
As of September 30, 1997
Sep 30, '97
------------
ASSETS
Current Assets
Checking/Savings
105-0-0 . Current Assets 1,233,645.82
------------
Total Checking/Savings 1,233,645.82
Accounts Receivable
113-0-0 . Misc. A/R 300.00
115-0-0 . S/H Call Receivable -499.90
------------
Total Accounts Receivable -199.90
------------
Total Current Assets 1,233,445.92
Fixed Assets
125-0-0 . Property & Equipment
297,155.20
------------
Total Fixed Assets 297,155.20
Other Assets
118-0-0 . Minority Investments 10,000.00
119-0-0 . Domains Assets 565,565.51
140-0-0 . Accum. Depr. & Amort -39,125.71
------------
Total Other Assets 536,439.80
------------
TOTAL ASSETS 2,067,040.92
============
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Other Current Liabilities
201-0-0 . Accounts Payable 33,553.77
------------
Total Other Current Liabilities 33,553.77
------------
Total Current Liabilities 33,553.77
Long Term Liabilities
251-0-0 . Long-Term Liabilities 110,232.00
------------
Total Long Term Liabilities 110,232.00
------------
Total Liabilities 143,785.77
Equity
300-0-0 . Retained Earnings -438,119.88
Net Income -1,353,624.97
301 -0 . Capital Stock 1,365,000.00
302-0-0 . Paid-in-Capital 2,350,000.00
------------
Total Equity 1,923,255.15
------------
TOTAL LIABILITIES & EQUITY 2,067,040.92
============
Page 1
Globe Comm, Inc.
03/06/98 Profit and Loss
January through September 1997
Jan - Sep `97
-------------
Ordinary Income/Expense
Income
401-0-1 . NAME Subscript-Revenues 233,654.64
401-0-2 . Name-Advertising 316.29
401-0-3 . Name Custom Domains 14,841.93
403-0-2 . Best Dom. Revenues 23,881.10
404-0-3 . Vanity Mail Revenues -363.73
------------
Total Income 272,330.23
Expense
500-0-0 . General & Administrative 120,981.63
508-0-0 . Employee Comp/Benefits 918,132.45
520-0-0 . Sales/Marketing 381,205.18
555-0-0 . Technology/Leases/Repairs 128,261.58
565-0-0 . Travel& Entertainment 49,862.99
575-0-0 . Depreciation & Amortization 17,322.36
590-0-0 . Domains 17,276.79
------------
Total Expense 1,633,042.98
------------
Net Ordinary Income -1,360,712.75
Other Income/Expense
Other Income
420-0-0 . Interest Income 3,711.83
421-0-0 . Other Income 2,982.20
422-0-0 . Interest from Loans 393.75
------------
Total Other Income 7,087.78
------------
Net Other Income 7,087.78
------------
Net Income -1,353,624.97
============
Page 1
Schedule 21 .................GlobeComm Liabilities .......................3/6/98
GLOBECOMM INC.
ASSETS UNDER LEASE:
Operating Leases:
Vendor Start Date Rate Term Yearly Payments
------ ---------- ---- ---- ---------------
1 GNP 7/1/96 6.50% 36 Mos. $ 7,224.00
2 Anixter 9/1/96 7.30% 35 Mos. $ 1,332.00
3 Interactive Futures 11/1/96 5.70% 48 Mos. $ 24,720.00
4 DNA 10/1/96 6.50% 48 Mos. $ 14,820.00
5 Consan/DV 10/1/96 7.70% 48 Mos. $ 2,904.00
6 Sun/Toshiba 3/1/97 7.90% 48 Mos. $ 18,960.00
7 Oracle 11/1/96 11.00% 36 Mos. $ 14,616.00
8 Oracle 3/1/97 10.00% 36 Mos. $ 20,160.00
9 Various Vendors 3/1/97 8.50% 48 Mos. $ 13,536.00
10 Oracle 6/1/97 10.50% 36 Mos. $ 20,340.00
11 Various Vendors 6/1/97 5.60% 48 Mos. $ 42,060.00
12 Oracle 9/1/97 10.30% 36 Mos. $ 20,280.00
13 Various Vendors 9/1/97 8.80% 48 Mos. $ 32,940.00
14 Various Vendors 10/1/97 7.50% 48 Mos. $ 25,140.00
15 Various Vendors 12/1/97 8.20% 48 Mos. $ 27,960.00
16 Computer Connection 12/1/97 8.40% 48 Mos. $ 6,636.00
17 Interactive Futures 12/1/97 8.50% 48 Mos. $ 4,644.00
18 US Tech 12/1/97 9.10% 48 Mos. $ 5,160.00
19 Computer Connection 2/1/98 7.80% 48 Mos. $ 3,420.00
20 CCNY/Interactive 3/1/98 6.60% 48 Mos. $ 17,220.00
21 Computer Connection 1/1/98 -- 48 Mos. $ 19,711.92
22 Interactive Futures 1/1/98 -- 48 Mos. $ 6,649.68
Total $ 350,433.60
================
(Items 1 through 6 and 8 to 20 are leased under Leasetec Systems Credit. Item 7
is leased under Bankvest Capital Corp. Items 21 and 22 are leased under Colonial
Pacific Leasing.)
Schedule 21 ...............GlobeComm Intellectual Property ...............3/6/98
...............Trademark
...............Domain Names
[LETTERHEAD OF ▇▇▇ ▇▇▇▇▇▇▇▇▇▇]
March 6, 1998
▇▇▇▇ ▇▇▇▇▇▇, President
GlobeComm, Inc.
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: iName Trademark, Serial No. 75/082557
Dear ▇▇▇▇:
Attached is the latest correspondence received from the U.S. Patent
and Trademark Office regarding the iName trademark application. I contacted the
Patent and Trademark Office today and received confirmation that they have
received GlobeComm's Statement of Use and that the trademark registration will
be issued shortly.
Sincerely,
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
UNITED STATES DEPARTMENT OF COMMERCE
ASSISTANT COMMISSIONER FOR TRADEMARKS
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-3513
Nov 22, 1997
NOTICE OF APPROVAL OF EXTENSION REQUEST
ATTORNEY
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TM1O4 REFERENCE NUMBER:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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SERIAL NUMBER: 75/082557
▇▇▇▇: INAME
OWNER: Globecomm, Inc.
EXTENSION REQUEST NUMBER: 1 NOTICE OF ALLOWANCE DATE: Apr 22, 1997
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THE ABOVE NUMBERED EXTENSION REQUEST FOR FILING A STATEMENT OF USE HAS
BEEN APPROVED BY THIS OFFICE.
THE APPLICANT HAS 12 MONTHS FROM THE MAILING DATE OF THE NOTICE OF
ALLOWANCE TO FILE A STATEMENT OF USE. THE STATEMENT OF USE SHOULD BE CLEARLY
MARKED TO THE ATTENTION OF "ITU" AND MAILED TO THE ABOVE ADDRESS.
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