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EXHIBIT 10.36
Advertising and Media Agreement by and
between the Registrant and Marketing Direct
Concepts, Inc., dated April 1, 1997
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EXHIBIT 10.36
ADVERTISING AND MEDIA AGREEMENT
This ADVERTISING AND MEDIA AGREEMENT ("Agreement") is entered into as of
April 1, 1997, by and between Marketing Direct Concepts, a Nevada Corporation
located at 000 X. Xxxxxx Xxxxx 000 Xxx Xxxxx, XX 00000 (hereinafter referred to
as "MDC") and China Resources Development, Inc. a Nevada Corporation located at
23 F, Office Tower, Xxxxxxxxxx Xxxxx, 0 Xxxxxxx Xx, Xxx Xxxx, Xxxx Xxxx
(hereinafter referred to as the "Company").
1. PUBLIC RELATIONS CAMPAIGN.
The company hereby engages MDC to design and perform a national financial
public relations campaign for the benefit of the Company which shall be
comprised of the following two components (collectively, the "Campaign"):
(a) Advertisement in regional and/or national periodical publications
including: (i) inclusion in MDC's proprietary in-flight magazine series
which includes the in-flight magazines of United, Delta, Northwest,
U.S. Air, American and South West; (ii) nationally published magazines
such as Smart Money, Financial World, Golf, Inc., and Worth; (iii)
periodic inclusion of the Company in the MDC Stock Report, a monthly
newsletter authored by MDC focusing upon emerging growth public
companies (collectively, the "Print Media"). The Company shall not
appear in all of the foregoing magazines and MDC reserves the right,
subject to the restrictions set forth in this Agreement, to select in
consultation with the Company the proper combination of Print Media to
be utilized in the Campaign.
(b) MDC will maintain an Internet Web site with current information on the
Company which will be updated upon a written request of the Company
(which shall be no more than twice every 30 days) (the "Internet
Media") This Internet service shall be provided for two years from date
here of, and as compensation MDC will receive the Restricted Securities
as set forth in Exhibit B.
It is agreed that the term of the Campaign shall commence upon execution of
this Agreement and shall terminate once the full value of the Campaign is
reached as set forth in Exhibit A hereto. However, the term of this Agreement is
one year from the date of execution.
In connection with the Campaign, MDC shall provide Company management,
distribution, follow-up, and tracking data regarding inquiries from prospective
investors to the financial community, including stockbrokers, financial
consultants, financial advisors or any other person or persons who are part of
MDC's database, who may directly or indirectly want to participate in contacting
said prospective investors on behalf of the Company. MDC shall provide the toll
free phone number 0-000-XXXXXXX (000-000-0000) to prospective investors for
inquiries on the Company. The Company shall be responsible for the expense of
the inbound telemarketing service; (telephone service only not to exceed
$1000.00 per month) MDC shall provide a detailed invoice to the Company monthly,
and the Company shall reimburse MDC for the expense of answering incoming calls
within 10 days of receipt of such invoice at the rate of $.30 per minute.
Attached hereto as Exhibit A is a description of the financial scope of the
Campaign. Attached hereto as Exhibit B is a calculation of the compensation due
MDC under this Agreement. Attached hereto as Exhibit C are guidelines for
providing material on behalf of Company's advertisements. Attached hereto as
Exhibit D is the price list used for calculating the cost of services and
advertising provided by MDC on behalf of the Company. Attached hereto as Exhibit
E is the description of the Demand Registration Rights provided to MDC by the
Company pursuant to paragraph 2 (b) (i)
While the Campaign shall constitute the sole obligation of MDC under this
Agreement, the parties understand that MDC may become involved, with the consent
of the Company and in the sole discretion of
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MDC, with other components of the Company's financial operations including an
introduction to an asset recovery and barter specialist to potentially improve
the Company's cash flow. MDC reserves the right to seek separate compensation
for this additional service.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) MDC. MDC hereby represents, warrants and/or covenants to the
Company as follows:
(i) MDC shall utilize its best efforts to design the Campaign in a
manner most beneficial to the Company, however, it is understood
that MDC makes no representations or warranties regarding the
eventual impact of the Campaign upon the market and price for the
Company's securities.
(ii) MDC shall, at the direction of the Company, prepare copy for
publication based on information provided by the Company. MDC
shall provide the Company with a copy of all Print Media it
intends to utilize; the Company shall have three (3) business
days to approve such Print Media. After the expiration of
(3)three business days, MDC will make a second request for
approval for response due in (24) twenty-four hours. If no
response is received to the second request within (24)
twenty-four hours, then the Company shall be deemed to have
approved such Print Media. It is understood that MDC shall not be
obligated to make an independent investigation of any information
provided by the Company and that MDC shall have the right to rely
exclusively upon the accuracy of statements and documents
provided by the Company to MDC.
(iii) MDC's activities at all times will comply with all applicable
laws.
(iv) MDC has all necessary licenses, permits, etc., to conduct its
affairs and to receive compensation.
(v) MDC is aware of restrictions on the use and publication of
material non-public information.
(b) THE COMPANY. The Company hereby represents, warrants and/or
covenants to MDC that:
(i) The Company agrees that it shall make all payments due under
this Agreement promptly as required by this Agreement. If, during
the term of this Agreement, the Company falls 30 or more days in
arrears on its payments to MDC, then MDC reserves the right to:
(i) immediately suspend the Campaign and (ii) withhold all
prospective investor leads pending timely payment by the Company.
Nothing contained herein shall require MDC to suspend the
Campaign or release the Company to pay its financial obligations
due hereunder. If the Company falls 60 or more days in arrears on
its payments to MDC, then in addition to any and all other rights
granted under applicable laws, MDC shall have the right to demand
registration of the Restricted Securities (or the securities into
which the Restricted Securities may be exercised/converted)
("Demand Registration Rights") as set forth in Exhibit E.
(ii) All information provided by the Company to MDC: (a) shall be
true, complete and accurate in all material respects and (b)
shall not omit information material to the operations of the
Company which is relevant to the advertorial pieces and shall be
disseminated pursuant to a press release provided to the Dow
Xxxxx wire service prior to appearing in any MDC media. (ii) MDC
shall provide a series of guidelines, set forth in Exhibit C
hereto, regarding public disclosure of information and the
Company agrees to comply with such guidelines, as long as such
guidelines do not conflict with any of those provided by the
NASD, SEC or any other regulatory agency. In the event the
Company fails to comply with any of the foregoing
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requirements, then MDC's obligation to conduct the Campaign and
to provide potential investor leads shall be suspended until the
Company is in full compliance. Upon execution of this agreement
the Company shall appoint a company representative who shall be
the sole point of contact with MDC, brokers introduced by MDC and
prospective investors. The Company further represents that the
Company shall provide MDC with an immediate written update in the
event circumstances change causing information provided to MDC to
be materially inaccurate. The Company represents that it shall at
all times, commencing upon the date of this Agreement and
terminating upon the sale of all Restricted Securities by MDC,
comply in all material respects with applicable state and federal
securities laws including, but not limited to (i ) complying with
all notice and filing requirements and (ii) with certification
that the Company is listed in good standings with S & P. It is
understood that the design and implementation of a national media
campaign is an expensive endeavor requiring many months of
advanced planning, thus in the event the Company breaches this
subsection, and such breach shall continue for ten (10) business
days after Company's receipt of written notice of such breach of
MDC, then MDC shall have the following remedies: (a) Demand
Registration Rights; (b) immediate termination of the Campaign;
and (c ) immediate demand for all amounts due under this
Agreement.
(iii) During the first thirty days of this Agreement, at all times
during regular business hours, upon reasonable notice,
representative(s) from MDC will have full access to the books and
records of the Company, provided such documents are "public"
information, in order to insure that the Company is a suitable
client, such determination as to suitability to be made by MDC in
its sole discretion. In the event MDC determines that the Company
is not a suitable client, MDC shall return to the Company all
cash, shares and options issued by the Company to MDC hereunder,
with the exception of reasonable expenses. After the period of
thirty days has expired, the Company will, upon reasonable
notice, allow representative(s) of MDC access to books and
records, provided such documents are public information, for
ongoing consulting purposes. Should, during the term of this
Agreement, MDC determine in its sole discretion that the Company
is an unsuitable client, the Campaign may be immediately
terminated by MDC pursuant to a written notice to the Company. In
the event MDC elects to terminate the Campaign under this
subsection, then: (i) it shall be obligated to return all
unearned cash compensation; (ii) it shall be obligated to return
all unearned Restricted Securities and warrants, on a pro rata
basis calculated by dividing the total number of dollars spent
into the amount designated to be spent as stated in Exhibit A
hereto attached. The amount spent will be determined by adding up
all media, advertising, or other services provided as designated
in Exhibit D hereto attached. Company recognizes all media or
services that have been reserved for placement will also apply
against dollars spent. Upon cancellation MDC will provide proof
of all media and/or services both that have run, and that are
scheduled to run.
(iv) The Company agrees to indemnify and hold harmless MDC and each
of its officers, directors, and agents, employees and controlling
persons (collectively "Indemnified Persons") to the fullest
extent permitted by law, from any and all losses, claims,
damages, expenses (including reasonable fees, disbursements, and
other charges of counsel), actions, proceedings or investigations
(whether formal or informal), or threats thereof (all of the
foregoing being hereinafter referred to as "Liabilities"),
actually incurred by MDC as the proximate result of the Company
providing MDC inaccurate and false information. In connection
with the Company's obligation to indemnify for expenses as set
forth above the Company further agrees to reimburse each
Indemnified Person for all expenses (including reasonable fees,
disbursements and charges of counsel) as they are incurred by
such Indemnified Person. In order to provide for just and
equitable contribution in any case in which any person entitled
to indemnification hereunder makes claim for indemnification
pursuant hereto but it is judicially determined (by the entry of
a final judgment or decree by a court of competent jurisdiction
and expiration of time to appeal or the denial of the last right
of appeal) that such
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indemnification may not be enforced in such case notwithstanding
the fact that this Section provided for indemnification, then and
in each such case the Company and MDC shall contribute to the
aggregate losses, claims, damages or liabilities to which they
may be subject (after any contribution from others) in such
proportion taking into consideration the relative benefits
received by each party in connection with this Agreement, the
parties' relative knowledge and access to information concerning
the matter with respect to which the claim was assessed, the
opportunity to correct and present any statement or omission and
other equitable considerations appropriate under the
circumstances; and provided, that, in any such case, no person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities and Exchange Act of 1934) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(v) The Company agrees to the following: (i) MDC shall be notified
(30) thirty business days prior to the commencement of any equity
or debt raised by the Company; provided, however, the Company
shall not sell any securities pursuant to Regulation S of the
Securities Act of 1933 without the express written consent of
MDC, which consent may be withheld in MDC's sole and absolute
discretion. (ii) the Company agrees that during MDC's awareness
program the Company shall not, subsequent to the date of this
agreement, issue or provide any exempt shares from registration
under Rule S-8, unless consent is granted from MDC prior to
issuance; (iii) MDC shall be provided copies of all filings by
the Company with the Securities & Exchange Commission within
three (3) business days of such filing; (iv) the Company shall
notify MDC of any other activities it becomes aware of which
might materially and adversely impact upon the market for the
Company's securities, including, but not limited to: trading
lock-up agreements and expirations, pending registration rights
and communications with the brokerage community and market-makers
for the Company's securities. In the event the Company shall
breach this subsection, and such breach shall continue for ten
(10) business days after Company receipt of written notice of
such breach from MDC, MDC shall have the right to: (i) terminate
or delay the Campaign; (ii) retain all Restricted Securities and
(iii) obtain reimbursement for all unreimbursed out-of-pocket
costs.
3. COOPERATION.
To the fullest extent possible, the Company will furnish MDC with all
financial and other information and data as MDC believes appropriate in
connection with its activities on the Company's behalf, and shall provide MDC
full access to its officers, directors, and professional advisors.
4. CONFIDENTIALITY.
MDC agrees that during and after the term of its relationship with the
Company, MDC will not, directly or indirectly, disclose to any third party, or
use or authorize any third party to use, any information relating to the
business or interests of the Company that MDC knows or has reason to know is
regarded as confidential and valuable to the Company. The parties acknowledge
and agree that in determining whether information is confidential information
and/or a trade secret, the fact that such information is not marked
"confidential" shall not adversely affect the confidentiality or trade secret
status of the same. MDC agrees that if its relationship or the discussions with
the Company are terminated for any reason, MDC will immediately return to the
Company all records and papers and all matter of whatever nature to the Company
(including without limitation business plans, customer lists, marketing
information and all other information). MDC shall, however, have the right to
disclose trade secrets or confidential information of the Company in either of
the following events: (1) with the Company's prior express written permission;
or (2) under order of a judicial or administrative process in connection with
any action, suit, proceeding, or claim.
5. MDC'S SERVICES TO OTHERS.
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The company acknowledges that MDC or its affiliates are in the business of
providing financial public relations services to others. Nothing herein
contained shall be construed to limit or restrict MDC in conducting such
business with respect to others, or in rendering such advice to others. MDC
shall perform its services hereunder as an independent contractor and not as an
employee of the Company or affiliate thereof. It is expressly understood and
agreed to by the parties hereto that MDC shall have no authority to act for,
represent or bind the Company or any affiliate thereof in any manner, except as
may be agreed to expressly by the Company in writing from time to time.
6. MISCELLANEOUS.
(a) Further Actions. At any time and from time to time, each party agrees,
at its expense, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of
this Agreement.
(b) Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested (or by the most nearly comparable method
if mailed from or to a location outside of the United States), or
delivered against receipt to the party to whom it is to be given at the
address if such party set forth in the preamble to this Agreement (or
to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section). Any notice given to
any corporate party shall be addressed to the attention of the
Corporation President. Any notice or other communication given by
certified mail (or by such comparable method) shall be deemed given at
the earlier of five (5) business days after certification or at the
time of receipt thereof.
(c) Early Termination or Interruption of Contract.
(i) Should the Company wish to terminate the services of MDC, without
cause, during the term of this Agreement, MDC will allow such
termination under the following terms and conditions.
(A) All Restricted Securities due MDC in this Agreement shall
have been issued and shall be non-refundable and
non-cancelable, except as set forth in section 2, (b)
(iii) above and section 6,(c ) (ii) below.
(B) The Company shall be required to give thirty (30) days
written notice to MDC. The Company shall pay MDC the
monthly fee specified in this Agreement that is due during
the month of cancellation, and the monthly fee due during
the subsequent month to cancellation. MDC's services
during said subsequent month will be limited to winding
down Campaign and providing all leads to Company.
(ii) The Company shall have the right to immediately terminate this
Agreement for "Cause" as hereinafter defined. "Cause" shall exist in
the event of MDC's: (i) malfeasance; (ii) willful refusal to perform
its duties under this Agreement; (iii) purposeful and willful breach of
the covenants contained in this Agreement; and/or (iv) acts of
dishonesty or the commission of any misdemeanor, felony, or other crime
involving moral turpitude. In the event this Agreement is terminated
for Cause as set forth in this section, MDC shall be; (1) obligated to
return all unearned cash compensation; and (2) shall be obligated to
return all unearned Restricted securities, options, and/or warrants on
a pro rata basis calculated by dividing the total number of dollars
spent into the amount designated to be spent as stated in Exhibit A
attached hereto. The amount spent will be determined by adding all
media, advertising, or other services provided as designated in Exhibit
D attached hereto. Company recognizes all media or services that have
been reserved for placement will also apply against dollars spent. Upon
cancellation MDC will provide proof of all media and/or services both
that have run, and are scheduled to run.
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(d) Waiver. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any
other breach of that provision or any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence
to any term of this Agreement on one or more occasions will not be
considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement.
(e) Binding Effect. The Provisions of this Agreement shall be binding upon
and inure to the benefit of the company and MDC and their respective
successors and assigns, provided, however, that any assignment by any
party of its rights under this Agreement without the written consent of
the other party shall be void.
(f) Damages. In the event any covenant, representation, warranty or
other term of this Agreement is breached by either party and such
breach shall continue for a period of ten (10) business days after
receipt of written notice from the other party, the non-breaching party
shall be relieved of any obligations it may have hereunder, and the
non-breaching party, in addition to the rights and remedies granted
hereunder, shall be entitled to all other recourse provided by
applicable law.
(g) Severability. If any provision of this Agreement is invalid,
illegal or unenforceable, the balance of this Agreement shall remain in
effect, and any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to any other
persons and circumstances.
(h) Headings. The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
(i) Counterparts: Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed original, but all
of which together shall constitute one and the same instrument. It
shall be governed by and construed in accordance with the laws of the
State of Nevada, without giving effect to conflict laws.
(j) Dispute Resolution. In the event of a dispute with respect to this
Agreement: (i) such dispute shall be arbitrated in accordance with the
rules of the State of Nevada and (ii) the prevailing party shall be
entitled to its reasonable attorney's fees and other costs and expenses
incurred in litigating or otherwise resolving or settling such dispute.
(E) Facsimile Copy. Both parties agree that upon receipt of signatures
via facsimile this Agreement can be deemed as an original and is
binding.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.
China Resources Development, Inc.
a Nevada Corporation
By: /s/ Li Shunxing
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Li Shunxing, President
MARKETING DIRECT CONCEPTS, INC.
a Nevada Corporation
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------
Xxxxxxx Xxxxxxxxx, CEO,
President
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EXHIBIT A
FINANCIAL SCOPE OF CAMPAIGN
MDC agrees to provide a national advertising recognition campaign with
the minimum value of $500,000, calculated as set forth below. This represents
the value the Company shall receive. There are no additional charges for these
items other than the telephone charges set forth in paragraph one of the
Agreement and those set forth in Exhibit B.
1. All Print Media shall be valued at the particular magazine's
published open rate (see attached Exhibit D) upon the date of this
Agreement. Inclusion of the Company in the MDC Stock Report shall
be valued at $75,000 per issue with a minimum mailing of 75,000 to
MDC subscribers (see attached Exhibit D). It is agreed that a
minimum of 70% of the financial value of the Campaign shall be in
the form of Print Media.
2. Internet Media shall be provided at the cost of $10,000 per month
as shown in Exhibit D hereto attached.
3. MDC represents that during the term of the Campaign it shall
provide at least 75,000 leads regarding prospective investors
during the term of the contract and in which time the Campaign is
in effect. In the event that the Campaign does not generate, or
MDC can not provide, the required number of names or leads, MDC
shall be required to continue the Campaign without additional
compensation or expense to the Company until the required number
of leads has been provided.
4. All other media including radio shows, teleconference services,
marketing fact piece and other services shall be provided at the
cost indicated in Exhibit D hereto attached.
5. The term of the advertising and media program shall be nine (9)
months subject to extension as provided in paragraph three (3)
herein above.
MDC agrees that it shall expend the aggregate financial value of the Campaign
during the term of this Agreement.
/s/ L /s/ MC
-------------- -----------
Client Initial MDC Initial
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EXHIBIT B
MDC COMPENSATION
In consideration for the services rendered by MDC pursuant to the
Agreement to which this is Exhibit B, the Company shall pay MDC as set forth
below. There is no other compensation payable under the Agreement except for the
telephone expenses set forth in paragraph one of the Agreement and this Exhibit
B.
1. The Company shall make an initial payment of $125,000., due within seven
(7) days upon execution of this Agreement, payable in verifiable funds.
2. As additional compensation for the Internet services provided, the Company
shall remit to MDC, upon execution of this Agreement the following
securities of the Company: 150,000 shares of the Company's Restricted
Securities (the "Restricted Securities"). It is understood that the
Restricted Securities shall not have any rights of registration, unless
expressly set forth herein. MDC understands that the Restricted Securities
named herein are at risk of forfeiture if sold or are attempted to be
registered prior to the expiration of the applicable waiting period, or
pursuant to paragraph 6 ( c) (ii) of the Agreement. The Company agrees that
it will take all actions and execute all documents necessary to remove
restrictive trading legend contained on any Restricted Security upon
expiration of any applicable waiting period/registration of the subject
Restricted Securities.
3. As additional compensation hereunder, the Company shall remit to MDC upon
execution of this agreement 125,000 warrants at the strike price determined
by the closing bid price of the execution date on this Agreement, 125,000
warrants at the strike price of $4.50 per share and 100,000 warrants at the
strike price of $5.50 per share. All warrants shall have a term of (3)
three years. It is understood the shares underlying these warrants will
have piggy back registration rights, however such shares will not be
tradable until the Campaign is terminated.
/s/ L /s/ MC
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Client Initial MDC Initial
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EXHIBIT C
MARKETING DIRECT CONCEPTS, INC.
GUIDELINES FOR PROVIDING MATERIAL ON BEHALF OF YOUR COMPANY'S ADVERTORIAL.
Marketing Direct Concepts, Inc. (MDC)can not review all documents
provided by the Company, so it is important to provide MDC with information
about your Company using the following guidelines. MDC's staff writer will
construct an advertorial piece (to be used in all regional and national media)
based on the information provided by the Company.
The basic prohibitive in all of the important statutes and rules that
will create a liability under the Federal SEC laws is directed against making
false and misleading statements. The following are general guidelines to be used
when providing MDC with material for the purposes of writing Company advertorial
pieces.
1. The best information to use will be all materials that will
provide factual and truthful information on the Company" history,
operations, technology, research and development and products.
2. Financial information which is audited and public.
- Example: "For fiscal year end 1995 the Company revenues
were $XXXX.XX."
3. Names of outside persons, companies or products may not be used
without the express, written permission of the "entity". This
involves providing the "entity" with a copy of the proposed
statement specifying where it will be printed and obtaining
written consent of the "entity".
4. All references must have verifiable sources.
- Example: "The market of this technology has been
estimated to be in excess of $50 million. (See Forbes
Magazine pg. xx, Aug., 1996.)
5. Projections, whether of financials, sales, or otherwise are
dangerous as they may be relied upon as fact. If not met, they can
be the basis of law suits. All projections must be pre-released in
a Company press release prior to any MDC publishing.
6. Exaggerations, exclamations and (puffing) are to be avoided at
all times.
7. An omission of material fact is also considered misleading if
not fully disclosed.
- Example: "The Company received a large order for their
product - however, the Company failed to state the order
was given at a 60% discount off the Company's regular
prices. The statement could then be fraudulent and
misleading.
Follow the above guidelines and you will build a more loyal shareholder base. At
Marketing Direct Concepts, Inc. we believe if you UNDER PROMISE and OVER DELIVER
THE SKY IS THE LIMIT
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EXHIBIT D
MARKETING DIRECT CONCEPTS, INC.
PRICE LIST FOR PURCHASING MEDIA & SERVICES
There are no additional charges for these items other than the telephone charges
set forth in paragraph one of the Agreement and those set forth in Exhibit B.
PRINT MEDIA (Prices are for full page, full-color ads unless otherwise
specified):
Readership in most of magazines listed below is at least 3x circulation
MAGAZINE CIRCULATION RETAIL COST
United Airlines Hemisphere 525,000 $42,360.00
Delta Sky 525,000 $42,360.00
US Airways (Attache) 442,000 $31,865.00
North West Traveler 350,000 $23,820.00
American Way 600,000 $38,244.00
South West Spirit 375,000 $20,000.00
Xxxx Report 220,000 $10,400.00
Worth 550,000 $32,400.00
Financial World 560,000 $23,000.00
Golf 1,500,000 $77,000.00
Registered Representative 90,000 $15,000.00
THERE IS A $400 CHARGE WITH EVERY CHANGE IN AN ADVERTORIAL PIECE, FOR FILM AND
MATCH PRINTS.
DESIGN:
Creation, Design and Layout of Full-Color $50,000.00
Corporate Marketing Fact Piece
(Includes risk and upside potential all graphics, pictures ,text, printing of
35,000 and mailing to brokers.)
(All information must be gathered and compiled by an independent analyst group)
INTERNET:
Web Site 40,000 - 50,000 $10,000/mo
hits per day*
1,350,000
hits per month*
RADIO:
StockUp Radio Network 1,200,000* est. $15,000.00 per each 6
Listeners per show min. corporate segment
TELECONFERENCES:
Line Set Up Cost $1500.00
800 Service/active or non-active listeners Up to 550 people $.50/min. per listener
STOCKUP REPORT:
(Includes Production of StockUp Report and Tri-Fold High Gloss Brochure.)
Note: MDC does a Maximum mailing to subscribers every 2 months to avoid
saturation
Mailings to Subscribers 75,000 $75,000.00
Additional Mailings per 10,000 $6,000.00
*Both Hits and Listeners are increasing weekly
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EXHIBIT E
DEMAND REGISTRATION RIGHTS
As set forth in Section 2.(b)(i) of the Agreement, if the Company falls
sixty days or more in arrears on its payments to MDC as set forth in the
Agreement, then, in addition to any and all other rights granted under the
Agreement and under applicable laws, MDC shall have the right to demand
registration of the Restricted Securities (including the securities into which
the Restricted Securities may be exercised/converted) (the "Demand Registration
Right"). This Exhibit E sets forth in detail the terms of such Demand
Registration Right.
(a) At any time beginning sixty days after the date the Company
falls into arrears on its payments to MDC under the Agreement,
MDC shall have the right, exercisable by written notice to the
Company, to have the Company prepare, file, and use its best
efforts to have declared effective by the Securities and
Exchange Commission (the "SEC"), a registration statement and
such other documents, including a prospectus, as may be
necessary in the opinion of both counsel for the Company and
counsel for MDC, if any, in order to comply with the provisions
of the Securities Act of 1933 (the "Act"), so as to permit a
public offering and sale of all shares of the Company issued to
MDC, including shares underlying options and/or warrants.
(b) In connection with any registration of securities pursuant to
this Agreement, the Company and MDC covenant and agree as
follows (all references to the terms "Registration Statement"
herein shall include, as the case may be, the registration
statement with respect to the Demand Registration Right):
(i) The Company shall use its best efforts to cause the
Registration Statement to be declared effective at the
earliest possible time, and shall furnish MDC such
number of prospectuses as MDC shall reasonably request.
The Company shall cause the Registration Statement to
remain effective, and shall file all post-effective
amendments necessary, to cause the Registration
Statement to remain effective nine months following the
effective date of such registration.
(ii) The Company shall pay all costs, fees and expenses
incurred by the Company and MDC in connection with the
Registration Statement and the offering thereunder
including, without limitation, the Company's legal and
accounting fees, fees and expenses of MDC's counsel,
printing expenses, and blue sky fees and expenses (but
excluding discounts or selling commissions of any
underwriter or broker-dealer acting on behalf of MDC).
(iii) The Company shall take all necessary action which may be
reasonably required in qualifying or registering the
securities included in the Registration Statement for
offering and sale under the securities or blue sky laws
of all states reasonably requested by holder, provided
that the Company shall not be obligated to execute or
file any general consent to service of process or to
qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
(iv) The Company shall indemnify MDC and each person, if any,
who controls MDC within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, against all
loss, claims, damage, expense, or liability (including
all expenses reasonably incurred in investigating,
preparing, or defending against any claim whatsoever) to
which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from the Registration
Statement.
(v) MDC shall indemnify the Company, its officers and
directors, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against all loss,
claim, damage, expense, or liability (including all
expenses reasonably incurred in investigation,
preparing, or defending against a claim) to which they
may become subject under the Act, the Exchange Act, or
otherwise, arising from information furnished by or on
behalf of MDC for specific inclusion in the Registration
Statement.
(vi) The Company shall, as soon as practicable after the
effective date of the Registration Statement, and in any
event within fifteen (15) months thereafter, make
"generally available to its security holders" (within
the meaning of Rule 158 under the Act) an earnings
statement (which need not be audited) complying with
Section 11(a) of the Act and covering a period of at
least twelve (12) consecutive months beginning after the
effective date of the Registration Statement.
(vii) The Company shall (A) deliver promptly to any managing
underwriter upon request, copies of all correspondence
between the SEC and the Company, its counsel or auditors
and all memoranda relating to discussions with the SEC
or its staff with respect to the Registration Statement
and (B) permit any managing underwriter to perform such
investigation, upon reasonable advance notice, with
respect to information contained in or omitted from the
Registration Statement, as it deems reasonably necessary
to comply with applicable securities laws or rules of
the National Association of Securities Dealers, Inc.
("NASD"). Such investigation shall include, but not be
limited to, access to financial and accounting
information and opportunities to discuss the business of
the Company with the Company's officers and independent
auditors, all to such reasonable extent, at such
reasonable time and as often as any managing underwriter
shall reasonably request.
(viii) The Company shall furnish to any managing underwriter a
signed counterpart, addressed to MDC, of (A) the opinion
of counsel to the Company, dated the closing date with
respect to the Registration Statement, and (B) the "cold
comfort" letter, dated the closing date with respect to
the Registration Statement, in each case, delivered to
any underwriter(s) in connection with the offering.
(ix) The Company shall cause all securities (including,
without limitation, the Common Stock) of MDC registered
pursuant to a Registration Statement to be listed on any
national securities exchange or quoted on any automated
quotation system on which similar securities of the
Company are then listed or quoted.
