-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mfg83nFGLgbsQvBaF3V0cnVc3/UHzrVSyqfdesi6sp+Au3BdfmPKNR+d4b/jNYZB OOKOg7jBAWM6vUNlfGXh/w== 0000909012-01-500518.txt : 20020410 0000909012-01-500518.hdr.sgml : 20020410 ACCESSION NUMBER: 0000909012-01-500518 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 8 REFERENCES 429: gov.sec.edgar.dataobjects.object.PDSubFN429Data@7ba889b0 FILED AS OF DATE: 20011114 EFFECTIVENESS DATE: 20011114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN MEDIA GROUP CORP CENTRAL INDEX KEY: 0000225501 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 411311718 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-73308 FILM NUMBER: 1788809 BUSINESS ADDRESS: STREET 1: 11900 WAYZATA BLVD STREET 2: SUITE 100 CITY: HOPKINS STATE: MN ZIP: 55305 BUSINESS PHONE: 6125121851 MAIL ADDRESS: STREET 1: 11900 WAYZATA BLVD STREET 2: SUITE 100 CITY: HOPKINS STATE: MN ZIP: 55305 FORMER COMPANY: FORMER CONFORMED NAME: IONIC CONTROLS INC DATE OF NAME CHANGE: 19890402 S-8 1 t23379.txt REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on November 14, 2001 Registration No. 333- U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 WESTERN MEDIA GROUP CORPORATION ----------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Minnesota 41-1311718 - -------------------------------------------------------------------------------- (State or Other (I.R.S. Employer Jurisdiction of Identification No.) 69 Mall Drive, Commack, New York 11725 ----------------------------------------------------- Address of Principal Executive Offices) (Zip Code) 917-626-6516 ---------------------------------------------------- (Registrant's Telephone Number, Including Area Code) 7,420,000 Shares of Common Stock Issuable Under Consulting Agreements and Options Which May be Granted Thereunder ---------------------------------------------------------------- Munish K. Rametra, Esq., Western Media Group Corporation 69 Mall Drive, Commack, New York 11725 (917) 626-6516 ----------------------------------------------- (Name, address and telephone number, including area code of agent for service of process) Copy to: Darren L. Ofsink, Esq. Guzov, Steckman & Ofsink, LLC 600 Madison Avenue, 22nd Floor New York, New York 10022 (212) 371-8008
CALCULATION OF REGISTRATION FEE Title of each Proposed maximum Proposed maximum Amount of class of securities Amount to be offering price aggregate offering registration to be registered registered (1) per share (4) price (4) fee (6) - ----------------------------------------------------------------------------------------------- Common Stock, $.001 2,640,000 (2) $ .02 $52,800 $ 13.20 par value Common Stock, $.001 1,380,000 (3) $ .05 $69,000 $ 17.25 par value Common Stock, $.001 2,200,000 (2) $ .02 $44,000 $ 11.00 par value Common Stock, $.001 1,200,000 (3) $ .05 $60,000 $ 15.00 par value TOTALS 7,420,000 $ 56.45 - ---------------------------------------------------------------------------------------------- (1) This filing registers up to 7,420,000 shares of our common stock, reserved for issuance under consulting agreements, between us and certain individuals. We are also registering additional shares which may be issued if a stock dividend, stock split, recapitalization or other similar event affects our Common Stock. (2) 1,440,000 shares are issuable to Munish K. Rametra, pursuant to a consulting agreement agreed to when the Common Stock was $.02 per share. Mr. Rametra will also receive an option to purchase 1,200,000 shares of Common Stock. The option has an exercise price of $.02 per share and will vest eight months after the commencement of the consulting agreement. 1,200,000 shares are issuable to James Rose, pursuant to a consulting agreement agreed to when the Common Stock was $.02 per share. Mr. Rose will receive an option to purchase 1,000,000 shares of Common Stock, with an exercise price of $.02 per share. The option will vest eight months after the consulting agreement's effective date. (3) 1,380,000 shares are issuable to Ray Vuono, pursuant to a consulting agreement agreed to when the Common Stock was $.05 per share. Mr. Vuono will also receive an option to purchase 1,200,000 shares of Common Stock. The option will have an exercise price of $.05 per share and will vest eight months after the commencement of the consulting agreement's effective date. (4) This calculation is made solely for the purpose of determining the registration fee pursuant to the provisions of Rule 457(h) under the Securities Act. (5) We are also registering the same 7,420,000 shares for reoffering by the recipients of our Common Stock under the consulting agreements. (6) Pursuant to Rule 457(h)(3), no additional fee is required to be paid with respect to the shares offered pursuant to the consulting agreements. These shares shall be offered for resale under the reoffer prospectus in this Registration Statement.
Approximate Date of Commencement of Proposed Sales Under the Consulting Agreements ------------------------------------------------------------------------------- As soon as practicable after the effective date of this Registration Statement. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The following reoffer prospectus, filed as part of our registration statement, has been prepared in accordance with the requirements of Part I of Form S-3. Pursuant to General Instruction C of Form S-8, it may be used for reofferings and resales of Western Media Group Corporation Common Stock which has been, or which will be issued, or which will be subject to issuance upon the exercise of options to be granted under consulting agreements between us and certain individuals. REOFFER PROSPECTUS WESTERN MEDIA GROUP CORPORATION 69 Mall Drive Commack, New York 11725 (917) 626-6516 THE OFFERING This prospectus relates to an aggregate of up to 7,420,000 shares of our $.001 par value Common Stock issued or issuable under consulting agreements between us an certain individuals. This prospectus addresses the reoffer and resale of those shares by the Selling Securityholders, listed on page 11, some of whom may be deemed affiliates, as that term is defined in Rule 405 of the Securities Act of 1933, as amended. We will not receive any proceeds from the sale of Common Stock. We will, however, receive funds upon the exercise of options, should they be issued and exercised. Shares of Common Stock offered by Selling Securityholders..................... Up to 7,420,000 Offering price................................... The selling securityholders may offer the shares for sale in the over-the-counter market. They may also be offered at prices and at terms then prevailing or at prices related to the then current market price. They may also be offered in privately negotiated transactions. On November 7, 2001, the closing sales price of our Common Stock on the over-the-counter Bulletin Board was $.15. Over-the-counter Bulletin Board Symbol............. Our Common Stock trades on the over-the- counter Bulletin Board under the symbol "WMGC." PURCHASE OF THESE SECURITIES INVOLVES MATERIAL RISKS. SEE "RISK FACTORS" SET FORTH ON PAGE 6. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is November 14, 2001 -2- TABLE OF CONTENTS Prospectus Summary.............................................................4 The Company....................................................................4 Incorporation of Certain Documents by Reference................................5 Risk Factors...................................................................6 WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO EVALUATE OUR CURRENT PROSPECTS.................................................................6 WE MAY HAVE OUTSTANDING LIABILITIES ABOUT WHICH OUR PRESENT MANAGEMENT IS UNAWARE...................................................................6 SUCCESS OF OUR BUSINESS PLAN DEPENDS IN LARGE PART UPON THE CONSUMMATION OF ACQUISITIONS..............................................................6 WE MAY BE SUBJECT TO UNCERTAINTY IN THE COMPETITIVE ENVIRONMENT OF ACQUISITION TARGETS.......................................................7 WE HAVE LIMITED RESOURCES AND ONLY ONE PRESENT SOURCE OF LIMITED REVENUES..................................................................7 OUR AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 CONTAIN "GOING CONCERN" LANGUAGE.....................................7 WE MAY NEED ADDITIONAL FINANCING IN ORDER TO EXECUTE OUR BUSINESS PLAN......................................................................7 ADDITIONAL FINANCING MAY NOT BE AVAILABLE TO US IF NEEDED.................7 WE ARE UNABLE TO ASCERTAIN RISKS RELATING TO THE INDUSTRY AND NATURE OF UNIDENTIFIED ACQUISITION TARGETS..........................................8 WE MAY PURSUE A MERGER WITH AN ACQUISITION TARGET OPERATING OUTSIDE THE UNITED STATES: SPECIAL ADDITIONAL RISKS RELATING TO DOING BUSINESS IN A FOREIGN COUNTRY...........................................................8 REGULATORY AND STATUTORY OBSTACLES MAY HINDER OUR ATTRACTIVENESS TO ACQUISITION CANDIDATES THE UNCERTAIN STRUCTURE OF ACQUISITIONS MAY RESULT IN RISKS RELATING TO THE MARKET FOR OUR COMMON STOCK......................8 TAXATION CONSIDERATIONS MAY IMPACT THE STRUCTURE OF AN ACQUISITION AND POST-ACQUISITION LIABILITIES..............................................8 WE CURRENTLY DEPEND UPON A SINGLE DIRECTOR AND TWO EXECUTIVE OFFICERS..................................................................9 OUR TWO EXECUTIVE OFFICERS AND DIRECTOR HAVE LIMITED EXPERIENCE...........9 ONE STOCKHOLDER CURRENTLY OWNS A MAJORITY OF OUR COMMON STOCK.............9 WE DO NOT EXPECT TO PAY CASH DIVIDENDS....................................9 LISTING ON OTC BULLETIN BOARD; LIMITED TRADING MARKET.....................9 THERE EXIST RISKS TO STOCKHOLDERS RELATING TO DILUTION: AUTHORIZATION OF ADDITIONAL SECURITIES AND REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING AN ACQUISITION............................................................9 WE ARE AUTHORIZED TO ISSUE FIVE MILLION SHARES OF AN "UNDESIGNATED" CLASS OF STOCK.................................................................10 Use of Proceeds...............................................................10 Determination of Offering Price...............................................10 Dilution......................................................................10 Selling Securityholders.......................................................11 Plan of Distribution..........................................................12 Description of Securities to be Registered....................................12 Legal Matters.................................................................12 Experts.......................................................................12 THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT WESTERN MEDIA GROUP CORPORATION THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS. YOU MAY REQUEST A COPY OF ALL DOCUMENTS THAT ARE INCORPORATED BY REFERENCE IN THIS PROSPECTUS BY WRITING OR TELEPHONING US AT THE FOLLOWING ADDRESS: WESTERN MEDIA GROUP CORPORATION, ATTENTION: MUNISH RAMETRA, ESQ., 69 MALL DRIVE, COMMACK, NEW YORK 11725, 917-626-6516. COPIES OF ALL DOCUMENTS REQUESTED WILL BE PROVIDED WITHOUT CHARGE (NOT INCLUDING THE EXHIBITS TO THOSE DOCUMENTS, UNLESS THE EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THOSE DOCUMENTS OR THIS PROSPECTUS). -3- PROSPECTUS SUMMARY The following summary is qualified in its entirety by the more detailed information appearing elsewhere in this prospectus. It is also qualified by the more detailed information appearing in the documents and information incorporated herein by reference. This prospectus contains forward-looking statements which involved risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. Some of the factors which could cause such variance are set forth under "Risk Factors" in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our Common Stock. In this prospectus, references to the "Company," "Western Media," "we," "our" and "us" refer to Western Media Group Corporation. THE COMPANY Western Media is a Minnesota company. In the past, it has operated in different businesses. Those business were liquidated by 1992, leaving us with no operating businesses. Recently, we have begun to seek to acquire privately held operating businesses in exchange for our Common Stock. Given general economic conditions and shortages of available capital, we believe there are numerous entities seeking the benefits of being a public corporation. Such perceived benefits include: facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for the principals of a business and creating a means for providing incentive stock options or similar benefits to key employees. In October, 2000, we acquired 100% of K-Rad Konsulting, LLC, which became our wholly owned subsidiary. K-Rad is in the business of providing computer network and software system consulting, installation and maintenance services. K-Rad began doing business in February, 2000 and, to date, has had limited revenues. Other than the K-Rad acquisition, our activities have been limited to maintaining the corporation and seeking potential acquisition candidates. We have entered into letters of intent with two other acquisition candidates: WhyldWeb Productions, Inc. and Med-Link USA, Inc. Notwithstanding our letters of intent, there is no guarantee these acquisitions will be consummated. WhyldWeb is a holding company for three other companies. Together, these companies offer information technology solutions to small and medium sized businesses, including, but not limited to technology consulting services, development and licensing of Internet applications, custom -4- programming, Internet marketing strategies and software and electronic components. While our sole Director and President has experience in the businesses of computer network and software systems consulting, installation and maintenance, he does not have extensive experiences in all the areas in which WhyldWeb operates. Therefore, we will be dependent upon WhyldWeb's management. As proposed, when our acquisition of WhyldWeb is complete, its management will assume management of Western Media. At that time, it will appoint its own designees to our Board of Directors. Med-Link provides a full service communication network to physicians, hospitals and labs, including a Virtual Private Network, Voice-mail and Answering Service. The Virtual Private Network is an Internet based application that allows physicians, from any location with a computer and Internet service, to obtain information, from other physicians, hospitals and laboratories, concerning their patients. This allows a better flow of information between the relevant components of the health system and, importantly, faster reaction times for patient care. Med-Link's voice-mail system allows patients multiple options, including call forwarding, forwarding to an operator at a call center or simply leaving their physician a message. Med- Link's answering service offers a messaging center with trained and medically knowledgeable personnel. These persons are able to locate physicians using e-mail, fax, alpha paging or telephone. Med-Link's services utilize fiber optic communication technologies offered by Cablevision Lightpath. We may pursue additional acquisition targets in the future. Potential acquisition targets may exist in many different industries and companies may be at various stages of development. These factors may make comparative analysis of acquisition targets difficult. We also have insufficient capital with which to provide the owners of acquisition targets significant cash or other assets. We believe, however, that we will be able to offer acquisition target owners an opportunity to acquire an ownership interest in a public company at substantially lower cost than a initial public offering. We have not conducted market research and are not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for the owners of an acquisition target. It is impossible to predict the business prospects for the businesses in which we might choose to become engaged. Such business may need to seek additional capital, may desire to have their shares publicly traded, or may seek other perceived advantages which we may offer. This registration statement registers up to 7,420,000 shares. While certain consultants and officers will be entitled, in aggregate, to 4,020,000 shares of Western Media Common Stock, these shares will not all be issued at once. Seventy five percent of these shares will be issued to these individuals upon approval of their compensation agreements by Western Media's Board of Directors and the filing of this registration statement. Eight months after the commencement of the term of their consulting agreements, they will receive the additional twenty five percent of these shares, along with options to purchase additional shares, unless their agreements are terminated, by Western Media, prior to that date. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE This prospectus is part of a registration statement on Form S-8 that we filed with the SEC in accordance with the requirements of Part I of Form S-3 and General Instruction C of the Instructions to Form S-8. The SEC allows this filing to "incorporate by reference" information we previously filed. This means we can disclose important information to you by referring you to other documents filed with the SEC. Information incorporated by reference is considered part of this prospectus. Information we file later will automatically update and (may) supercede this information. For further information about Western Media Group Corporation and the securities being offered, refer to the registration statement and following documents incorporated by reference: . Our annual report on Form 10-KSB for the fiscal year ended December 31, 2000; . Our quarterly report on Form 10-QSB for the period ended June 30, 2001. . Our quarterly report on Form 10-QSB for the period ended March 31, 2001. . Our quarterly report on Form 10-QSB for the period ended September 30, 2001. . All documents that we file pursuant to Section 15(d) of the Exchange Act after the date of this prospectus, and prior to the filing of a post-effective amendment that indicate all securities offered hereby have been sold, or that deregisters all securities then remaining unsold. We will provide, without charge, to each person to whom a copy of this prospectus is delivered, on written or oral request, a copy of any and all of the information that has been incorporated by reference into the registration statement (other than exhibits to such information unless such exhibits are specifically incorporated by reference into the information that the registration statement incorporates). Written or oral requests for such information should be directed to: Munish K. Rametra, Esq., 69 Mall Drive, Commack, New York 11725, 917-626-6516. We have not authorized any person to give any information or to make any representations in connection with the sale of the shares by the Selling Securityholders other than those in this prospectus. You should not rely on any information or representations in connection with such -5- sales other than the information or representations in this prospectus. You should not assume that there has been no change in our affairs since the date of this prospectus or that the information in this prospectus is correct as of any time after its date. This prospectus is not an offer to sell or a solicitation of an offer to buy shares, in any state, or under any circumstances in which such an offer or solicitation is unlawful. Western Media Group Corporation is subject to the information requirements of the Securities Exchange Act of 1934, as amended. In accordance with the Exchange Act, we file annual, quarterly and special reports. We are not required to file proxy statements. You may inspect and copy any document we file at the SEC's public rooms at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Midwest Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60621. You may also purchase copies of our filings by writing to the Public Reference Section of the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Information on the operation of the SEC'sPublic Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available on the SEC's website at http://www.sec.gov. RISK FACTORS RISK FACTORS In addition to other information in this prospectus, the following should be carefully considered in evaluating Western Media Group Corporation and its business, before purchasing the Common Stock offered herein. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties presently unknown to us may impair our operations. Any of the following risks could materially and adversely affect our business, our financial condition or the results of our operations. WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO EVALUATE OUR CURRENT PROSPECTS We were incorporated in July, 1977. The businesses we previously operated were liquidated in the late 1980s and early 1990s. We became a corporate shell in 1991 and remained a corporate shell through October 31, 2000. On October 31, we acquired K-Rad Consulting, LLC. K- Rad is in the business of providing computer network and software system consulting, installation and maintenance services. K-Rad began doing business in February, 2000 and, to date, has had limited revenues. Other than the acquisition of K-Rad, our activities have been very limited. Essentially, we have been maintaining the corporation and seeking potential acquisition candidates. WE MAY HAVE OUTSTANDING LIABILITIES ABOUT WHICH OUR PRESENT MANAGEMENT IS UNAWARE Until 1991, we operated in several business lines through at least five different subsidiaries. Our records are not complete with respect to all transactions between 1977 and 1991, and very few corporate records exist for the period 1992 through 1999. We understand that during the period 1992 - October, 2000, the company was dormant and did not engage in any business activity. While we do not believe any material liabilities exist, it is possible such liabilities do exist. For example, there may be presently unknown obligations by us to pay monies, issue stock or perform specific actions under a contract. While we do not believe any such liabilities exist, the incomplete record of transactions makes assurance that none exist impossible. SUCCESS OF OUR BUSINESS PLAN DEPENDS IN LARGE PART UPON THE CONSUMMATION OF ACQUISITIONS The success of our proposed plan of operation will depend, to a great extent, on locating and consummating acquisitions. In these transactions, we intend to exchange our Common Stock for all or part of the stock of a privately held company or companies. These companies will become our wholly owned subsidiary (or subsidiaries). After we have completed an acquisition, our success will depend on a number of factors, particularly, the operations, financial condition, and management of the acquired entity or entities. Our management intends to seek companies with established operating histories. We cannot assure we will successfully locate candidates with an established operating history. In addition, if we complete an acquisition, our success will largely depend on the skills of our acquired entity's management. We have entered into letters of intent with two acquisition targets, WhyldWeb Productions, Inc. and Med-Link USA, Inc. Notwithstanding our letters of intent, there is no guarantee these acquisitions will be consummated. WhyldWeb is a holding company for three other companies. Together, they offer information technology solutions to small and medium sized businesses, including, but not limited to technology consulting services, development and licensing of Internet applications, custom programming, Internet marketing strategies and software and electronic components. While our sole Director and President has experience in the businesses of computer network and software systems consulting, and installation and maintenance, he does not have extensive experiences in all the -6- areas in which WhyldWeb operates. Therefore, we will be dependent upon WhyldWeb's management. As proposed, when our acquisition of WhyldWeb is complete, its management will assume management of Western Media. At that time, it will appoint its own designees to our Board of Directors. Med-Link provides a full service communication network to physicians, hospitals and labs including a Virtual Private Network, Voice-mail and Answering Service. The Virtual Private Network is an Internet based application that allows physicians, from any location with a computer and Internet service, to obtain information, from other physicians, hospitals and labs concerning their patients. This allows a better flow of information between the relevant components of the health system and, importantly, faster reaction times for patient care. Med- Link's voice-mail system allows patients multiple options, including call forwarding, forwarding to an operator at a call center or simply leaving their physician a message. Med-Link's answering service offers a messaging center with trained and medically knowledgeable personnel. These persons are able to locate physicians using e-mail, fax, alpha paging or telephone. Med- Link's services utilize fiber optic communication technologies offered by Cablevision Lightpath. Neither our sole Director and President, nor any of WhyldWeb's current management, has relevant experience servicing the medical industry. We will be dependent on the skill of Med- Link's management for our business success. As proposed, Med-Link would be entitled to appoint members to our Board of Directors. WE MAY BE SUBJECT TO UNCERTAINTY IN THE COMPETITIVE ENVIRONMENT OF ACQUISITION TARGETS If we succeed in making acquisitions, we will probably become subject to intense competition in the business areas of our acquired companies. Many industries have experienced rapid growth and have frequently attracted competitors with substantial resources. In many cases, competitors seeking to enter a particular segment of the market may have even greater financial, marketing, technical, human and other resource capabilities than initial industry participants. There can be no assurance that after an acquisition, we will have the resources to compete effectively in the acquired company's industry. This would be especially true if the acquired company were involved in a high-growth industry, such as WhyldWeb's Internet and computer based businesses. WE HAVE LIMITED RESOURCES AND ONLY ONE PRESENT SOURCE OF LIMITED REVENUES We have limited resources. At the present time, our only source of revenues is K-Rad. We do not expect to earn any significant revenues until, at the earliest, the acquisition of one or more companies. Moreover, there can be no assurance that even if we are successful in acquiring a company, that material revenues from its operations will result. There is no assurance, moreover, that such company will be able to operate on a profitable basis. We intend to avoid becoming an "Investment Company," under the Investment Company Act of 1940. Therefore, we intend to only invest in a manner which will not trigger Investment Company status. There can be no assurance that determinations we will ultimately make will allow us to avoid Investment Company status. OUR AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 CONTAIN "GOING CONCERN" LANGUAGE Our independent auditor prepared a report for our financial statements for the year ended December 31, 2000. The report states we have been dependent upon the support of certain stockholders for the maintenance of our corporate status and that these stockholders have provided all our working capital. The independent auditor's report, therefore, concluded that if K-Rad were not profitable and certain stockholders did not fund our necessary expenses, we might not be able to continue as a going concern. A "going-concern" opinion indicates that the financial statements are prepared assuming the business will continue as a going-concern. Management is addressing the going concern opinion with its business plan to seek profitable acquisition targets. WE MAY NEED ADDITIONAL FINANCING IN ORDER TO EXECUTE OUR BUSINESS PLAN We have had limited revenues to date. We will be entirely dependent on our limited financial resources to implement our business objectives. While we have executed two letters of intent, for two acquisitions, we will be paying for these acquisitions with our Common Stock. There can be no guarantee that these acquisitions will close. Moreover, there can be no assurance that other potential acquisition candidates will not require our payment, in cash. We cannot, therefore, ascertain, with any certainty, what will be the precise capital requirements for successful execution of our business plan. If our limited resources prove insufficient to implement our plan, due, for example, to the size of the acquisition, we may have to seek additional financing. And even if we are successful in completing an acquisition, we may require additional financing for operations or our business growth. ADDITIONAL FINANCING MAY NOT BE AVAILABLE TO US IF NEEDED There can be no assurance additional financing, if needed, will be available on acceptable terms. It may not be available at all. If additional financing is necessary, but unavailable when needed, we may be have to abandon certain of our plans. Any failure to secure necessary, -7- additional financing would have a material adverse effect on continued development and/or growth of our businesses. There are no current limitations on our ability to borrow funds to increase our capital to effect acquisition(s). However, our limited resources and lack of operating history will make it difficult to borrow funds. The amount and nature of our borrowings will depend on, among other things, our capital requirements, perceived ability to meet debt service on borrowings and prevailing financial market and economic conditions. There can be no assurance that debt financing, if sought, would be available on commercially acceptable terms, given the best interests of our business. Our inability to borrow funds to acquire companies or to generate funds for our businesses could have a material, adverse effect on our financial condition and future prospects. Even if debt financing is ultimately available, borrowings may subject us to risks associated with indebtedness. These risks would include, among other things, interest rate fluctuations and insufficiency of cash flow to pay principal and interest. If these risks were realized, they could lead to a default. Moreover, if a company we acquired already had borrowings, we might become liable for them. WE ARE UNABLE TO ASCERTAIN RISKS RELATING TO THE INDUSTRY AND NATURE OF UNIDENTIFIED ACQUISITION TARGETS There is no guarantee either of the companies with which we have signed letters of intent will ultimately be acquired. While we expect to consider other potential acquisitions in the future, we cannot, at this point, evaluate the merits or risks of future acquisitions. We can neither predict the industry in which an acquisition candidate might operate or risks of particular companies. Although we will try to carefully evaluate risks inherent in a particular company or industry, there can be no assurance we will properly ascertain or assess all such risks. WE MAY PURSUE AN ACQUISITION WITH AN ACQUISITION TARGET OPERATING OUTSIDE THE UNITED STATES: SPECIAL ADDITIONAL RISKS RELATING TO DOING BUSINESS IN A FOREIGN COUNTRY We may acquire a company whose business operations, headquarters, place of formation or primary place of business are outside the United States. If we do so, we may face significant additional risks associated with doing business in a foreign country. Language barriers, different presentations of financial information, different business practices, cultural differences may make it difficult to evaluate such a candidate. Moreover, business risks may result from internal political situations, unfamiliar legal systems and/or unclear applications of law. Prejudice against foreigners and corrupt practices may heighten investment risks. Political and economic instability or shifts in policies may exacerbate investment risks in foreign businesses. REGULATORY AND STATUTORY OBSTACLES MAY HINDER OUR ATTRACTIVENESS TO ACQUISITION CANDIDATES We seek out companies desiring to become public companies which wish to provide liquidity to their shareholders. Frequently, these companies wish to enhance their future ability to access the capital markets, without the risk and expense of an initial public offering. Acquisitions, however, do not immediately provide significant capital. An acquisition may create a surviving public company which owns the assets and business of the acquisition target, usually in a subsidiary. The acquisition target's shareholders end up with stock in the public company. We believe our company will be attractive to potential acquisition targets if our Common Stock is being quoted by dealers. Regulatory and rule-making authorities have, however, taken steps to make it difficult to enable shell corporations, i.e., those without substantial current business to have dealer quotations for their securities. Regulatory authorities could take action to block quotation by a dealer of our Common Stock. THE UNCERTAIN STRUCTURE OF ACQUISITIONS MAY RESULT IN RISKS RELATING TO THE MARKET FOR OUR COMMON STOCK We may form one or more subsidiaries to help acquire a company. Under certain circumstances, we may distribute the securities of subsidiaries to our stockholders. There can be no assurance, however, that a market will develop for the securities of any subsidiary distributed to stockholders. Moreover, there can be no assurance as to what prices such securities might trade, if a market does develop. TAXATION CONSIDERATIONS MAY IMPACT THE STRUCTURE OF AN ACQUISITION AND POST-ACQUISITION LIABILITIES Federal and state tax consequences will, in all likelihood, be major considerations in any acquisition we consider. The structure of an acquisition or the distribution of securities to stockholders may determine whether and how we, the target or our shareholders will be taxed. We will endeavor to structure any transactions in which we engage to result in tax-free treatment, -8- under applicable federal and state tax provisions, or, to at least minimize federal and state tax consequences. We cannot, however, assure that an acquisition will meet statutory requirements for a tax-free reorganization, or that the parties will obtain a tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes, which may have an adverse effect on both parties to the transaction. WE CURRENTLY DEPEND UPON A SINGLE DIRECTOR AND TWO OFFICERS Our ability to successfully complete an acquisition depends on the efforts of our two Officers and our sole Director, who also serves as an Officer. We have not obtained "key man" life insurance on our Officers or our Director. If we were to lose the services of either Officer, this could have a material, adverse effect on our ability to achieve our business objectives. One of our Officers, and our sole director, Konrad Kim, is also President of K- Rad. Therefore, he has conflicts of interest in allocating management time between us and K-Rad. We will rely on Mr. Kim's and our other Officer's expertise. We do not anticipate hiring additional personnel to assist in consummating acquisitions. However, if additional personnel are required, there can be no assurance we will be able to retain necessary, additional personnel. OUR TWO OFFICERS AND DIRECTOR HAVE LIMITED EXPERIENCE Neither of our Officers has experience in buying and selling businesses. While Western Media may be described as a "blind pool" or "blank check" company, neither has extensive experience as a Director or Officer of such a company. ONE STOCKHOLDER CURRENTLY OWNS A MAJORITY OF OUR COMMON STOCK DDR, Ltd. owns, in the aggregate, 78.3% of our outstanding Common Stock. DDR, Ltd., therefore, has control over the outcome of all matters submitted to the stockholders for approval. This includes not only election of Directors, but also the decision whether to attempt to effect a merger or acquisition. WE DO NOT EXPECT TO PAY CASH DIVIDENDS We do not expect to pay dividends, prior to completing an acquisition. Payment of dividends, if any, will depend on our revenues and earnings. It will also depend on capital requirements and our general, post-acquisition financial condition. Payment of dividends, if any, will be within the Board of Directors' discretion. We presently intend to retain all earnings, if any, for use in our business operations. Accordingly, our Board does not anticipate declaring dividends in the foreseeable future. LISTING ON OTC BULLETIN BOARD; LIMITED TRADING MARKET Our Common Stock is quoted on the over-the-counter Bulletin Board. It has only a limited trading market. There can be no assurance that a more active trading market will develop or, if it does develop, that it will be maintained. No prediction can be made as to the effect, if any, that the sale of shares of Common Stock or the availability of such securities for sale will have on the market price of our Common Stock. The trading price of our Common Stock is presently less than $5.00 per share. Therefore, trading in our Common Stock is subject to the requirements of Rule 15g-9 promulgated under the Exchange Act. Under this rule, broker-dealers who recommend such low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements. These requirement include the broker making an individualized written suitability determination for the purchase. The broker must also receive the purchaser's written consent prior to the transaction. Our Common Stock is also subject to the Securities Enforcement Remedies and Penny Stock Reform Act of 1990, which requires additional disclosure in connection with any trades involving a stock defined as a "penny stock." Penny stocks are, generally, any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share, subject to certain exceptions. Trading requires the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the associated risks. Such requirements could severely limit the market liquidity of our Common Stock and the ability of purchasers in this offering to sell their securities in the market. THERE EXIST RISKS TO STOCKHOLDERS RELATING TO DILUTION: AUTHORIZATION OF ADDITIONAL SECURITIES AND REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING AN ACQUISITION Our certificate of incorporation authorizes the issuance of 95,000,000 shares of Common Stock. There are currently 83,500,690 authorized but unissued shares of Common Stock available for issuance. We expect to issue a substantial number of additional shares in connection with or following acquisition transactions. The proposed transaction with WhyldWeb, for example, calls for the issuance of 7,000,000 shares of our Common Stock. The proposed transaction with Med-Link -9- calls for the issuance of 2,000,000 shares of our Common Stock. If additional shares of Common Stock are issued, our stockholders would experience dilution of their respective ownership interests. If we issue a substantial number of shares of Common Stock in connection with, or following, an acquisition, a change in control may occur. This could affect, among other things, our ability to utilize net operating loss carry forwards, if we have any. The issuance of a substantial number of shares of our Common Stock may adversely affect the prevailing market price, if any, for our Common Stock. It could also impair our ability to raise additional capital through the sale of our equity securities. We intend to use consultants and third parties to provide services. Some consultants or third parties will be paid in cash, stock, options or other of our securities. This could result in a substantial, additional dilution to investors. WE ARE AUTHORIZED TO ISSUE FIVE MILLION SHARES OF AN "UNDESIGNATED" CLASS OF STOCK Our certificate of incorporation authorizes us to issue of 5,000,000 shares of an undesignated class of stock. With respect to these shares, our Board of Directors may make designations and define various powers, preferences, rights, qualifications, limitations and restrictions, consistent with Minnesota law. The Board of Directors is empowered, without stockholder approval, to issue this stock with rights that could adversely affect the voting power or other rights of the holders of Common Stock. In addition, the undesignated stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control. We do not presently intend to issue any shares of undesignated stock. Nevertheless, there can be no assurance we will not do so in the future. As of this date, no shares of the undesignated stock, are outstanding and no designation has been made as to any characteristics these shares may have in the future. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Some statements in this prospectus are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to the safe harbor provisions of the Reform Act. Forward-looking statements may be identified by the use of terminology such as may, will, expect, anticipate, intend, believe, estimate, should, or continue or the negatives of these terms or other variations on these words or comparable terminology. To the extent this prospectus contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of our company, our actual financial condition, operating results and business performance may differ materially from that projected or estimated by us in the forward-looking statements. We have attempted to identify, in context, some of the factors that we believe may cause actual future experience and results to differ from current expectations. Some of these include adverse economic conditions, intense competition, including entry of new competitors, the ability to obtain sufficient financing to support our operations, and variations in costs, beyond our control. In addition, differences may be caused by changes in capital expenditure budgets, inadequate capital, unexpected costs, lower sales and net income, or higher net losses than forecasted. Changes in financial condition, our potential inability to carry out our marketing and sales plans, the possible loss of key executives, and other risks discussed in or alluded to in this prospectus, may also cause actual results to vary from projections. USE OF PROCEEDS We will not receive any proceeds of the sale of Common Stock being registered. We will receive proceeds from the exercise of stock options issued to consultants if those options vest and are exercised. The proceeds will be used for working capital and general corporate purposes. DETERMINATION OF OFFERING PRICE We will not sell the shares being registered herein. They will be sold by the Selling Securityholders. Therefore, these securities will be sold at the market price, as of the date of sale, or such other price as may be negotiated in a private sale. Our Common Stock is traded on the over-the-counter Bulletin Board under the symbol "WMGC." On November 7, 2001 the reported closing price for our Common Stock on the over-the-counter Bulletin Board was $.15. DILUTION Purchasers of Common Stock offered hereby will suffer an immediate and substantial dilution in net tangible book value per share. Dilution is the amount by which the offering price paid by the purchasers of the shares of Common Stock will exceed the net tangible book value per share of Common Stock after the offering. The net tangible book value per share of Common Stock is determined by subtracting total liabilities from the total book value of the tangible assets and dividing the difference by the number of shares of Common Stock deemed to be outstanding on the date the book value is determined. As of September 30, 2001, we had 11,499,310 shares of Common Stock issued and outstanding with a net tangible book value of $41,231.00, or .0036 per -10- share. The following table sets forth the dilution (excess of assumed purchase price per share over net tangible book value per share) to be incurred by investors acquiring Common Stock. This dilution effect will not be reflected in our financial statements. Assumed Purchase Price (1) $ .15 Net tangible book value per share at $ .0036 September 30, 2000 Increase to net tangible book value (2) $0.00 per share attributable to the cash payments made by purchasers of the shares being offered Dilution to Purchasers of Common Stock $ .1464 Dilution to Purchasers as Percentage 97.6% of Purchase Price (1) Assumes a purchase price of $.15. The closing price of our common stock on the over-the- counter Bulletin Board on November 7, 2001 was $.15. (2) No increase to the net tangible book value of our shares will result from this offering because we will not receive any proceeds from sales of the securities registered under this statement. SELLING SECURITYHOLDERS The following table sets forth (1) the name and principal position with Western Media of each selling securityholder, (2) the number of shares of Common Stock each selling securityholder owned as of November 7, 2001, (3) the number of shares of Common Stock acquired by each selling securityholder pursuant to consulting agreements and being registered under this registration statement, some or all of which shares may be sold pursuant to this prospectus, and (4) the number of shares of Common Stock and the percentage of the total shares of Common Stock outstanding to be owned by each selling securityholder following this offering, assuming the sale pursuant to this offering of all shares acquired by such selling securityholder pursuant to the consulting agreements and registered under this registration statement. The persons listed as selling shareholders may not have a present intention of selling shares or, may offer less than the number of shares indicated.
Shares Owned as of Shares Covered by Shares Owned After This Offering Name and Position November 7, 2001 This Prospectus (2) Number Percentage (1) - ----------------------- ------------------ ----------------- ---------- ---------- Munish K. Rametra, Esq. 1,080,000 (3) 2,640,000 1,080,000 9.4% Consultant Ray Vuono 1,035,000 (4) 2,580,000 1,035,000 9.0% Consultant James Rose 900,000 (5) 2,200,000 900,000 7.8% Consultant (1) Based upon 11,499,310 shares outstanding on November 7, 2001. (2) Includes shares to be issued pursuant to options under consulting agreements which have not yet vested and will not vest in the next sixty days. (3) Pursuant to an October 1, 2001 Consulting Agreement, Mr. Rametra is to receive 1,440,000 shares of Common Stock. Seventy-five percent of those shares are issuable upon the filing of this registration statement, and twenty five percent are issuable on the eight month anniversary of the Consulting Agreement, unless it is terminated prior to that date. (4) Pursuant to an October 18, 2001 Consulting Agreement, Mr. Vuono is to receive 1,380,000 shares of Common Stock. Seventy-five percent of those shares are issuable upon the filing of this registration statement, and twenty five percent are issuable on the eight month anniversary of the Consulting Agreement, unless it is terminated prior to that date. (5) Pursuant to an October 1, 2001 Consulting Agreement, Mr. Rose is to receive 1,200,000 shares of Common Stock. Seventy-five percent of those shares are issuable upon the filing of this registration statement, and twenty five percent are issuable on the eight month anniversary of the Consulting Agreement, unless it is terminated prior to that date.
-11- PLAN OF DISTRIBUTION The Common Stock may be sold from time to time by the selling securityholders or by pledgees, donees, transferees or other successors in interest. Such sales may be made on the over-the-counter Bulletin Board or otherwise at prices and on terms then prevailing or at prices related to the then current market price, or in negotiated transactions. The Common Stock may be sold by one or more of the following methods: (a) a block trade in which the broker or dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this prospectus; (c) ordinary brokerage transactions and transactions in which the broker solicits purchases; and (d) face-to-face transactions between sellers and purchasers without a broker-dealer. In effecting sales, brokers or dealers engaged by the selling securityholders may arrange for other brokers or dealers to participate. Brokers or dealers will receive commissions or discounts from selling securityholders in amounts to be negotiated immediately prior to the sale. Such brokers or dealers, and any other participating brokers or dealers, may be deemed to be 'underwriters' within the meaning of the Securities Act, in connection with such sales. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144, rather than pursuant to this prospectus. Western Media will not receive any of the proceeds from the sale of these shares, although we have paid the expenses of preparing this prospectus and the related registration statement. The selling securityholders have been advised they are subject to applicable provisions of the Securities Exchange Act of 1934, including, without limitation, Rules 10b-5, 10b-6 and 10b-7, thereunder. DESCRIPTION OF SECURITIES TO BE REGISTERED The Common Stock is one of two classes of capital stock that we are authorized to issue. We are currently authorized to issue a maximum of 95,000,000 shares of Common Stock. $.001 par value per share, and a maximum of 5,000,000 shares of stock currently "undesignated" as to its characteristics, rights and preferences. None of the "undesignated" stock has been issued or assigned any characteristics, rights or preferences to date. The shares of Common Stock are equal, in all respects, and there are 11,499,310 shares outstanding, as of November 7, 2001. Each holder of Common Stock is entitled to one vote for each share held. There is no right to cumulate votes for the election of directors. This means that the holders of 50% of the shares voting for the election of Directors can elect 100% of the directors, if they choose to do so. The holders of the remaining shares voting for the election of directors will not be able to elect any person to our Board of Directors. The holders of our Common Stock have no preemptive rights. Shares of Common Stock are not redeemable and do not have conversion rights. The shares of Common Stock to be issued and sold pursuant to this prospectus, will be, when issued, fully paid and non-assessable. In the event of dissolution, liquidation or winding up of Western Media, the assets then legally available for distribution to the holders of our Common Stock will be issued ratably among them. Issuance will be in proportion to the holders' shareholdings, unless, at that time, another class of stock has been issued with superior rights. Holders of our Common Stock are entitled to dividends, when and if declared by our Board of Directors, out of legally available funds. We have no present intention to pay any dividends in the forseeable future. See "Risk Factors." LEGAL MATTERS The validity of the Common Stock being offered hereby will be passed on by Guzov, Steckman & Ofsink, LLC, New York, New York. EXPERTS Callahan, Johnston & Associates, LLC, independent auditors, has audited our consolidated financial statements as of December 31, 2000 and 1999 and for the years then ended, included in our Annual Reports on Form 10-KSB for the year ended June 30, 2000, as set forth in their report, which are incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements and schedule are incorporated by reference in reliance on Callahan, Johnston & Associates, LLC's report, given on their authority as experts in accounting and auditing. -12- PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT In accordance with the General Instructions to Form S-8, as amended, registrant has provided the following information required in this registration statement, pursuant to which shares of registrant's Common Stock shall be registered, including the necessary opinion and consents, which are attached hereto as Exhibits 5, 23.1. and 23.2. Registrant will deliver a prospectus meeting the requirements of Part I of Form S-8 and Rule 428 to all persons who have consulting agreements with it which grant stock or options to the consultant, in accordance with the requirements of Rule 428(b). Item 3. Incorporation of Documents By Reference - ------- --------------------------------------- The following documents are incorporated by reference in this registration statement, as of their respective dates: (a) Registrant's annual report on Form 10-KSB for the fiscal year ended December 31, 2000; (b) Registrant's quarterly report on Form 10-QSB for the period ended March 31, 2001; (c) Registrant's quarterly report on Form 10-QSB for the period ended June 30, 2001. (d) Registrant's quarterly report on Form 10-QSB for the period ended September 30, 2001. (e) All documents that registrant files pursuant to Section 15(d) of the Exchange Act, after the effective date of this registration statement, and prior to the filing of a post- effective amendment that indicates all securities offered hereby have been sold, or that deregisters all securities then remaining unsold. Any statement herein, or in a document incorporated or deemed incorporated by reference, shall be deemed modified or superseded, for purposes of this registration statement, to the extent that a statement contained herein, or in any other subsequently filed document which also is or is deemed incorporated by reference, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part hereof. Item 4. Description of Securities - ------- -------------------------- The Common Stock is one of two classes of capital stock we are authorized to issue. We are currently authorized to issue a maximum of 95,000,000 shares of Common Stock, $.001 par value per share, and a maximum of 5,000,000 shares of stock currently "undesignated" as to its characteristics, rights and preferences. None of the "undesignated" stock has been issued. None has been assigned any characteristics, rights or preferences to date. The shares of Common Stock are equal in all respects and there are 11,499,310 shares outstanding as of November 7, 2001. Each holder of Common Stock is entitled to one vote for each share held. There is no right to cumulate votes for the election of directors. This means the holders of 50% of the shares voting for the election of Directors can elect 100% of the directors, if they choose to do so. The holders of the remaining shares voting for the election of directors will not be able to elect any person to our Board of Directors. The holders of our Common Stock have no preemptive rights. Shares of Common Stock are not redeemable and do not have conversion rights. The shares of Common Stock to be issued and sold pursuant to this prospectus, will be, when issued, fully paid and non-assessable. If Western Media is dissolved, liquidated or wound up, our assets then available for distribution to the holders of our Common Stock will be issued ratably among them. Issuance will be in proportion to the holders' shareholdings, unless, at that time, another class of stock has been issued with superior rights. -13- Holders of our Common Stock are entitled to dividends when and if declared by our Board of Directors, out of legally available funds. We have no present intention to pay any dividends in the forseeable future. See "Risk Factors." Item 5. Interests of Named Experts and Counsel - ------- -------------------------------------- Not applicable. Item 6. Indemnification of Directors and Officers. - ------- ----------------------------------------- Registrant is subject to Minnesota Statutes Chapter 302A. Minnesota Statutes Section 302A.521 provides that a corporation may indemnify any person made or threatened to be made a party to any proceeding by reason of the former or present official capacity of such person against judgments, penalties, fines, including, without limitation, excise taxes assessed against such person with respect to an employee benefit plan, settlements and reasonable expenses, including attorneys' fees and disbursements, incurred by such person in connection with the proceeding, if, with respect to the acts or omissions of such person complained of in the proceeding, such person has not been indemnified by another organization or employee benefit plan for the same expenses with respect to the same acts or omissions; acted in good faith; received no improper personal benefit and Section 302A.255, if applicable, has been satisfied; in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful; and in the case of acts or omissions by persons in their official capacity for the corporation, reasonably believed that the conduct was in the best interests of the corporation; or in the case of acts or omissions by persons in their capacity for other organizations, reasonably believed that the conduct was not opposed to the best interests of the corporation. As permitted by Section 302A.251 of the Minnesota Statutes, Article X of registrant's articles of incorporation provides that we may indemnify any person to the fullest extent permitted by law. Article VIII of registrant's by-laws confers upon registrant the discretion to indemnify any person, who is or was a director, officer, employee or agent of the registrant, or any person who serves or who has served in any capacity with any other enterprise at the request of the registrant. If the Board so orders, registrant may indemnify such persons, in the manner and to the extent determined by the Board, against expenses and liabilities reasonably incurred by or imposed on them in connection with any proceedings to which they have been or may be made parties, or any proceedings in which they may become involved by reason of being or having been a director or officer of registrant, or by reason of serving or having served another enterprise at the request of registrant, whether or not in the capacities of directors or officers of registrant at the time the expenses or liabilities are incurred. Registrant may only indemnify persons who acted in good faith and in a manner they believe to be in, or not opposed to, the best interests of registrant, except that, with respect to criminal actions or proceedings, registrant may only indemnify persons who had no reasonable cause to believe their conduct was unlawful. Registrant's by-laws provide that it may not indemnify persons who have been adjudged to be liable for negligence or misconduct in the performance of their duties to registrant unless a court determines that, in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnification. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of registrant pursuant to the foregoing provisions, or otherwise, registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy, as expressed in the Securities Act, and is, therefore, unenforceable. If a claim for indemnification against such liabilities (other than the payment by registrant of expenses incurred or paid by a director, officer or controlling person of registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act, and will be governed by the final adjudication of such issue. -14- Item 7. Exemption from Registration Claimed - ------- ----------------------------------- This item is not applicable to shares of Common Stock issuable under options granted under consulting agreements not exercised as of the date hereof. Restricted securities acquired under consulting agreements are being reoffered or resold pursuant to this registration statement by certain selling stockholders. These restricted securities were acquired by those selling shareholders pursuant to exemptions from registration under Section 4(2) of the Securities Act. The consultants receiving the Common Stock are intimately familiar with registrant and its operations and have had access to all registrant's Securities Act filings, books and records. Item 8. Exhibits - ------- -------- 4.1 Consulting Agreement dated as of October 1, 2001 between the registrant and Munish K. Rametra. 4.2 Consulting Agreement dated as of October 18, 2001 between the registrant and Ray Vuono. 4.3 Consulting Agreement dated as of October 1, 2001 between the registrant and James Rose. 4.4 Form of Stock Option under Consulting Agreements. 5.1 Opinion of Guzov, Steckman & Ofsink, LLC regarding the legality of the Common Stock. 23.1 Consent of Callahan, Johnston & Associates, LLC. 23.2 Consent of Counsel. Item 9. Undertakings - ------- ------------ The undersigned registrant hereby undertakes: (1) To file, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to (i) include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information set forth in the Registration Statement; and (iii) include any additional or changed material information on the plan of distribution; (2) that, for determining liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) to remove from registration, by means of a post-effective amendment, any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein. The offering of such securities, at that time, shall be deemed the initial offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy, as expressed in the Act, and is, therefore, unenforceable. If a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel, the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification, by it, is against public policy, as expressed in the Act. The registrant will be governed by the final adjudication of such issue. -15- SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S- 8/S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Countyof Nassau in the State of New York on the 9th day of November, 2001. WESTERN MEDIA GROUP CORPORATION By: /s/ Konrad S. Kim ------------------------------------ Konrad S. Kim, President and Sole Director Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the date indicated. Date: November 13, 2001 /s/ Konrad S. Kim ------------------------------------ Konrad S. Kim, President and Sole Director -16- EX-4.1 3 exh4-1.txt CONSULTING AGREE. WMGC AND RAMETRA CONSULTING AGREEMENT THIS AGREEMENT is made and entered into as of October 1, 2001 (the "Agreement"), by and between Western Media Group Corporation, a Minnesota corporation, ("WMGC"), and Munish K. Rametra ("Rametra"). WHEREAS, WMGC is currently a development stage company, with one subsidiary, K-Rad Konsulting, LLC ("K-Rad"), which has been seeking merger or acquisition opportunities; WHEREAS, WMGC is currently in discussions with several companies concerning merger or acquisition opportunities; and WHEREAS, WMGC currently has only a single director, no employees, and limited funds; and WHEREAS, WMGC seeks assistance, in view of foregoing merger transactions, from a consultant to provide services in assisting WMGC with legal and regulatory issues in exchange for WMGC $.01 par value per share common stock ("Common Stock"); and WHEREAS, Rametra, a securities and corporate attorney wishes to provide such services to WMGC in exchange for Common Stock as set forth herein; NOW, THEREFORE the parties agree as follows: 1 TERM OF AGREEMENT. This Agreement shall commence as of October 1, 2001and shall continue for twelve (12) months thereafter. This Agreement shall be renewable for an additional twelve (12) months at the option of WMGC. WMGC may terminate this Agreement upon thirty (30) days written notice to Rametra. 2 SERVICES TO BE PROVIDED. 2.1 Rametra shall perform the functions of a corporate general counsel to WMGC and shall perform the following principal duties and responsibilities: 2.1.1 providing assistance to WMGC in complying with applicable legal and regulatory requirements imposed by the federal securities laws, the Securities and Exchange Commission and Minnesota, New York and Delaware law, including, but not limited to, providing advice with respect to restricted stock issues and issues arising under Section 16 of the Securities Exchange Act of 1934, as amended; -1- 2.1.2 assistance with structuring and administration of employee benefit arrangements; 2.1.3 assistance in the preparation of, and review of all SEC filings, including, but not limited to, filings on forms 8-K, 10-K and 10-Q; 2.1.4 providing advice to WMGC with respect to corporate governance issues under Federal, Minnesota and New York law; 2.1.5 assistance in preparation and analysis of all contracts entered into in the ordinary course of WMGC's business; and 2.1.6 providing assistance to WMGC's outside counsel with respect to litigation or corporate matters as may be reasonably requested. 2.2 Rametra understands that he is not an employee of WMGC, that WMGC is not required to provide him with workers' compensation or health insurance, and that Rametra is responsible for payment of all taxes relating to payments made to him hereunder by WMGC. 2.3 EXCLUSIVITY. This Agreement shall not be exclusive; provided, however, that Rametra shall devote most of his business time to WMGC. In the event that Rametra wishes to devote more than five hours per week to performing services to another entity or person, whether or not such services are similar to those to be performed hereunder, Rametra shall first seek WMGC's wriiten consent, which consent shall not be withheld unless: (i) the services will interefere with the services to be performed hereunder or (ii) the provision of services will, or create the substantial likelihood of a violation of this Agreement. 2.4 WORK SCHEDULE. Rametra shall provide services to WMGC Monday through Friday, exclusive of legal holidays. 2.5 PLACE OF PERFORMANCE OF SERVICES. Services shall be performed by Rametra (i) at WMGC's offices when necessary or requested by WMGC, (ii) wherever a current or potential client or strategic partner of a WMGC subsidiary is located when necessary or requested by WMGC and (iii) when not required or requested to perform services elsewhere, at such place as Rametra may choose with access by both telephone and facsimile service. -2- 3 COMPENSATION. As compensation for the services to be provided hereunder, WMGC agrees to pay Rametra a total of one million four hundred forty thousand (1,440,000) shares of its Common Stock which shall be issuable as follows: (1) seventy five percent (75%) upon approval of this Agreement by the WMGC Board of Directors and filing of a registration statement on Form S-8 as set forth below and (2) twenty five percent (25%) eight months after the date of commencement of the Term of this Agreement, unless this Agreement shall be terminated pursuant to its terms prior to that date. Rametra shall also receive an option to purchase one million two hundred thousand (1,200,000) shares of Common Stock at $.02 per share which shall vest eight (8) months after the commencement of the term of this Agreement (the "Option"), unless this Agreement shall be terminated pursuant to its terms prior to that date. In the event that WMGC is unable to register the Common Stock on Form S-8 within three (3) months of the date of this Agreement, it shall be issued with the following restrictive legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE 1933 ACT AND AN EFFECTIVE REGISTRATION OR QUALIFICATION OF SUCH SECURITIES FOR SALE UNDER ANY APPLICABLE STATE SECURITIES LAW; OR (II) AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED. In the event that WMGC exercises its option to extend the Term of this Agreement for an additional twelve (12) months, WMGC shall pay Rametra (1) $10,000 per month either (i) in cash or (ii) in Common Stock at a 20% discount to the prevailing market value on the last business day of each month and (2) an option to purchase 1.2 million shares of Common Stock at fair market value on October 1, 2002. 4 REGISTRATION OF THE COMMON STOCK. 4.1 OBLIGATION TO REGISTER. WMGC shall use its best efforts to register the Common Stock to be issued hereunder, and the Common Stock issuable upon exercise of the Option, on Form S-8 to permit the resale of the Common Stock by Rametra (the "Registration Statement"). In addition, WMGC shall: -3- 4.1.1 furnish to Rametra, without charge, as many copies of the Registration Statement, the Prospectus and any amendment or supplement thereto as they may reasonably request; 4.1.2 use its best efforts to comply with all applicable Federal and state regulations, and take such other action as may be reasonably necessary or advisable to enable Rametra to consummate the sale or disposition in such jurisdictions or jurisdictions in which Rametra shall have requested that the Common Stock be sold; PROVIDED that WMGC shall not be required (i) to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not otherwise be obligated to be so qualified, (ii) to subject itself to taxation in any such jurisdiction solely by reason of such registration or qualification or (iii) to consent to general service of process in any jurisdiction. 4.1.3 Except as otherwise provided in this Agreement, WMGC shall have sole control in connection with the preparation, filing, withdrawal, amendment or supplementing of the Registration Statement, and may include within the coverage thereof additional shares of Common Stock or other securities for the account of one or more of its other security holders. 4.1.4 Rametra shall furnish to WMGC such information regarding the distribution of the Common Stock and such other information as may otherwise be required by the Securities Act to be included in the Registration Statement. 4.2 INDEMNIFICATION. 4.2.1 INDEMNIFICATION BY WMGC. In connection with the Registration Statement relating to disposition of the Common Stock, WMGC shall indemnify and hold harmless Rametra against any and all losses, claims, damages and liabilities, joint or several (including any reasonable investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of any action, suit or proceeding or any claim asserted), to which he may become subject under the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934 (the "Exchange Act"), as amended or other Federal or state law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or such amendment or supplement thereto, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that such indemnity shall not inure to the benefit of Rametra on account of any losses, claims, damages or liabilities arising from the sale of the Common Stock if such untrue statement or omission or alleged untrue statement or omission was made in such Registration Statement, Prospectus or such amendment or supplement, in reliance upon and in conformity with information furnished in writing to WMGC by Rametra specifically for use therein. This indemnity agreement shall be in addition to any liability that the WMGC may otherwise have. -4- 4.2.2 INDEMNIFICATION BY RAMETRA. In connection with the Registration Statement, Rametra shall indemnify, to the same extent as the indemnification provided by WMGC in Section 4.2.1. Rametra will indemnify WMGC, its directors and each officer who signs the Registration Statement and each person who controls WMGC (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), only insofar as such losses, claims, damages and liabilities arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement, the Prospectus or any amendment thereof or supplement thereto, in reliance upon and in conformity with information furnished by Rametra in writing to WMGC, specifically for use therein. Rametra's liability shall not be greater than the dollar amount of the net proceeds Rametra receives upon the sale of the Common Stock giving rise to such indemnification obligation. 4.2.3 CONDUCT OF INDEMNIFICATION PROCEDURE. Any party that proposes to assert the right to be indemnified hereunder will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section, notify each such indemnifying party of the commencement of such action, suit or proceeding, enclosing a copy of all papers served. No indemnification provided for in Section 4.2.1 or 4.2.2 shall be available to any party who shall fail to give notice as provided in this Section 4.2.3 if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was prejudiced by the failure to give such notice, but the omission so to notify such indemnifying party of any such action, suit or proceeding shall not relieve it from liability that it may have to any indemnified party for contribution or otherwise than under this Section. In case any such action, suit or proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and the approval by the indemnified party of such counsel, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses, except as provided below and except for the reasonable costs of -5- investigation previously incurred by such indemnified party in connection with the defense thereof. The indemnified party shall have the right to employ its counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified party has been authorized in writing by the indemnifying parties, (ii) the indemnified party shall have reasonably concluded, based on advice of counsel, that there may be a conflict of interest between the indemnifying parties and the indemnified party in the conduct of the defense of such action (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party) or (iii) the indemnifying parties shall not have employed counsel to assume the defense of such action within a reasonable time after notice of the commencement thereof, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying parties. An indemnifying party shall not be liable for any settlement of any action, suit, proceeding or claim effected without its written consent. 4.2.4 CONTRIBUTION. In connection with the Registration Statement relating to the disposition of the Common Stock, if the indemnification provided for in subsection 4.2.1 hereof is unavailable to an indemnified party thereunder in respect of any losses, claims, damages or liabilities referred to therein, then WMGC shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities. The amount to be contributed by WMGC hereunder shall be no greater than the proceeds of the same of the Common Stock by Rametra. 4.2.5 SPECIFIC PERFORMANCE. WMGC and Rametra acknowledge that remedies at law for the enforcement of Sections 4.2.1 through 4.2.4 may be inadequate and intend that those Sections shall be specifically enforceable. 5 INDEPENDENT CONTRACTOR STATUS. Both WMGC and Rametra agree that Rametra shall be acting as an independent contractor and not as an employee, servant or agent of WMGC. Accordingly, it is agreed that Rametra shall not have any authority to act for or on behalf of WMGC or to bind WMGC without its express consent. Rametra shall not be considered as having employee status for the purpose of any employee benefit plan applicable to WMGC's employees generally. Rametra is responsible for the payment of any taxes relating to payments made to him hereunder by WMGC. 6 RAMETRA'S REPRESENTATIONS AND WARRANTIES.Rametra hereby represents and warrants to WMGC as follows: 6.1 AUTHORITY. Rametra has full power and authority to execute and deliver, to perform his obligations under, and to consummate the transactions contemplated by this Agreement. This Agreement is a valid and legally binding obligation of Rametra, enforceable against him in accordance with its terms. Rametra is not restricted or prohibited, contractually, by court order, agreement or otherwise, from entering into and performing this Agreement, and the services to be performed hereunder, and Rametra's's execution and performance of this Agreement is not a violation or breach of any agreement between Rametra and any other person or entity. 7 WMGC'S REPRESENTATION AND WARRANTIES. WMGC hereby represents and warrants to Rametra as follows: 7.1 ORGANIZATION. WMGC is a corporation duly organized, validly existing and in good standing under the laws of Minnesota, and has full corporate power and authority to conduct its business as and to the extent now conducted and to own, use and lease its assets and properties. WMGC has full corporate power and authority to execute and deliver this Agreement and the Common Stock and to perform its obligations hereunder and to consummate the transactions contemplated hereby. -6- 7.2 AUTHORITY; DUE AUTHORIZATION. The execution and delivery by WMGC of this Agreement and the Common Stock, and the performance by WMGC of its obligations hereunder, have been duly and validly authorized by the WMGC Board of Directors, no other corporate action on the part of WMGC or its respective shareholders being necessary. This Agreement has been duly and validly executed and delivered by WMGC and constitutes legal, valid and binding obligations of WMGC enforceable against WMGC in accordance with its terms. 7.3 NO CONFLICTS. The execution and delivery by WMGC of this Agreement does not, and the consummation of the transactions contemplated hereby will not: 7.3.1 conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate of incorporation or by-laws (or other comparable corporate charter document) of WMGC; 7.3.2 conflict with or result in a violation or breach of any term or provision of any law or order applicable to WMGC or any of its assets and properties; or 7.3.3 (a) conflict with or result in a violation or breach of, (b) constitute (with or without notice or lapse of time or both) a default under, (c) require WMGC or any other person or entity to obtain any consent, approval or action of, make any filing with or give any notice to any person or entity as a result or under the terms of, or (d) result in the creation or imposition of any lien upon WMGC or any of its assets or properties under, any contract or license to which WMGC is a party or by which any of its assets and properties is bound. 8 TERMINATION. Either party may terminate this Agreement upon thirty (30) days notice to the other. However, in the event of a termination by Rametra, he shall be obligated to return the pro rata portion of the Common Stock represented by the number of months remaining to be performed under this Agreement, divided by twelve (12). In the event of termination of this Agreement by Rametra, all provisions of Section 9 shall remain in effect. -7- 9 NON-DISCLOSURE AND NON-SOLICITATION. ----------------------------------- 9.1 CONFIDENTIAL INFORMATION. Rametra shall not, during the term of this Agreement, directly or indirectly, divulge, disclose or communicate to any person, firm, or corporation, any Confidential Information (as defined herein), except as may be required by law or valid legal process. If Rametra is served with formal legal process requesting any Confidential Information, Rametra shall notify WMGC within three (3) business days of receipt of the request and provide WMGC with a copy of the request. "Confidential Information" shall mean any matters affecting or relating to the business of WMGC which derives economic value, actual or potential, from not being generally known to the public or trade, including, but not limited to, all customer lists, names and addresses of customers, contact persons at customers, agreements or arrangements with customers, items usually purchased by customers, supplier lists, names and addresses of suppliers, contact persons at suppliers, agreements or arrangements with suppliers, sales techniques, pricing and prices, and marketing information or strategies. "Confidential Information" shall not include matters generally known to the public or trade. Rametra has been advised by WMGC that said Confidential Information is proprietary to WMGC, and constitutes a trade secret owned exclusively by WMGC, the disclosure of which would be harmful and damaging to WMGC's business. 9.2 EXCEPTIONS CONCERNING CONFIDENTIAL INFORMATION. Notwithstanding the foregoing provisions, use of Confidential Information shall not violate Section 9.1 if used by Rametra in connection with the provision of services hereunder. 9.3 WMGC MATERIALS. All reports and analysis, contracts, contractual arrangements, proposed and actual pricing arrangements, specifications, computer software, computer records and data stored in WMGC's computers, computer printouts, computer disks, documents, memoranda, notebooks, correspondence, files, lists and other records, and the like, and all photocopies or other reproductions thereof, affecting or relating to the business of WMGC which Rametra shall prepare, use, construct, observe, possess or control ("WMGC Materials"), shall be and remain the sole property of WMGC. Upon termination of this Agreement, Rametra shall deliver promptly to WMGC all such WMGC Materials and any copies or excerpts thereof. 9.4 SOLICITATION OF CUSTOMERS. Rametra shall not, at any time during the term of this Agreement, directly or indirectly, either for himself or for any other person, firm, or corporation, compete for, solicit, divert, or take away, or attempt to divert or take away, any of the customers of WMGC who are customers during the term of this Agreement or who were customers at the time of termination of this Agreement. -8- 9.5 SOLICITATION OF EMPLOYEES, ETC. Rametra shall not, at any time during the term of this Agreement, directly or indirectly, either for himself or for any other person, firm, or corporation, solicit (or seek to solicit) any person who is engaged (as an employee, agent, independent contractor or someone similarly situated) by WMGC to terminate his or her employment or engagement. 10 MERGER, ETC., OF WMGC. In the event of a future disposition of the properties and business of WMGC, substantially or in its entirety, by merger, consolidation, sale of assets, or otherwise, then WMGC may assign this Agreement and all of the rights and obligations of WMGC under this Agreement to the acquiring or surviving corporation; provided, that such acquiring or surviving corporation shall assume in writing all of the obligations under this Agreement. However, if the acquiring or surviving corporation declines to accept assignment of this Agreement it shall be terminated and all payments to be made hereunder. 11 GENERAL PROVISIONS. ------------------ 11.1 SEVERABLE PROVISIONS. The provisions of this Agreement are severable, and if any one or more provisions may be determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. 11.2 ASSIGNMENT. This Agreement may not be assigned by WMGC or Rametra, except as set forth in Section 10. 11.3 WAIVER. Either party's failure to enforce any provision or provisions of this Agreement shall not be construed as a waiver of any such provision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement. 11.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement between WMGC and Rametra supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the consulting arrangement between Rametra and WMGC and contains all of the covenants and agreements between the parties with respect to the consulting arrangement between Rametra and WMGC. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement or promise not contained in this Agreement will be effective unless it is in writing signed by the party to be charged. -9- 11.5 TITLES AND HEADINGS.Titles and headings to sections of this Agreement are for the purpose of reference only and shall in no way limit, define or otherwise affect the interpretation or construction of such provisions. 11.6 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute a single agreement. 11.7 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 11.8 NOTICES. Any notice to be given to WMGC under the terms of this Agreement shall be addressed to WMGC at the address of WMGC's principal place of business, with a copy to Guzov, Steckman & Ofsink, LLC, 600 Madison Avenue, 22nd Floor, New York, New York 10022, and any notice to be given to Rametra shall be addressed to Rametra at 69 Mall Drive, Commack, New York 11725, or at such other address as either party may hereafter designate in writing to the other. Any notice required or permitted under this Agreement shall be in writing, shall be sent by certified mail, return receipt requested, or by hand, and shall be deemed effective: (i) upon receipt in the event of delivery by hand, including delivery made by private delivery or overnight mail service where either the recipient or delivery agent executes a written receipt or confirmation of delivery; or (ii) 48 hours after deposited in the United States mail, registered or certified mail, return receipt requested, postage prepaid. -10- IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. Munish K. Rametra WESTERN MEDIA GROUP CORPORATION a Minnesota corporation By:_________________________ Title: ---------------------------------- -11- EX-4.2 4 exh4-2.txt VUONO CONSULTING AGREE. CONSULTING AGREEMENT THIS AGREEMENT is made and entered into as of October 18, 2001 (the "Agreement"), by and between Western Media Group Corporation, a Minnesota corporation, ("WMGC"), and Raymond Vuono ("Vuono"). WHEREAS, WMGC is currently a development stage company, with one subsidiary, K-Rad Konsulting, LLC ("K-Rad"), which has been seeking merger or acquisition opportunities; WHEREAS, on October 2, 2001, WMGC entered into a letter of intent with Whyldweb Productions, Inc. ("Whyldweb") for a merger transaction in which Whyldweb will become a wholly owned subsidiary of WMGC; and WHEREAS, on October17, 2001, WMGC entered into a letter of intent with Med-Link USA, Inc. ("Med-Link") for a merger transaction in which Med-Link will become a wholly owned subsidiary of WMGC; and WHEREAS, WMGC currently has only a single director, no employees, and limited funds; and WHEREAS, WMGC seeks assistance, in view of foregoing merger transactions, from a management consultant to provide services in assisting WMGC in running and managing the businesses of Whyldweb, Med-Link and K-Rad in exchange for WMGC $.01 par value per share common stock ("Common Stock"); and WHEREAS, Vuono has varied experience in running companies in several industries and wishes to provide management consulting services to WMGC in exchange for Common Stock as set forth herein; NOW, THEREFORE the parties agree as follows: 1 TERM OF AGREEMENT. This Agreement shall commence as of October 18, 2001and shall continue for twelve (12) months thereafter. This Agreement shall be renewable for an additional twelve (12) months at the option of WMGC. WMGC may terminate this Agreement at any time upon thirty (30) days written notice to Vuono. 2 SERVICES TO BE PROVIDED. 2.1 Vuono shall provide management consulting services to WMGC. Specifically, Vuono shall have the following principal duties and responsibilities: 2.1.1 providing assistance to WGMC with respect to analysis of management performance and hiring and firing of management employees; 2.1.2 assistance in the formulation of overall business strategies for Whyldweb's internet and electronics based businesses as well as Med-Link's business; 2.1.3 1.1.1 assistance in the formulation of marketing and brand strategies for Whyldweb which focus on small and mid-sized business, and for Med-Link which focus on the medical community; 2.1.4 identification of strategic partners for Whyldweb, K-Rad and Med-Link; 2.1.5 assistance to Whyldweb and Med-Link in extending and reinforcing existing client relationships, and attracting new clients; and 2.1.6 identification of inefficiencies in the businesses of Whyldweb, Med-Link and K-Rad and reports to management as to solutions for such inefficiencies. 2.2 Vuono understands that he is not an employee of WMGC, that WMGC is not required to provide him with workers' compensation or health insurance, and that Vuono is responsible for payment of all taxes relating to payments made to him hereunder by WMGC. 2.3 EXCLUSIVITY. This Agreement shall not be exclusive; provided, however, that Vuono shall devote most of his business time to WMGC. 2.4 WORK SCHEDULE. Vuono shall provide services to WMGC Monday through Friday, exclusive of legal holidays. 2.5 PLACE OF PERFORMANCE OF SERVICES. Services shall be performed by Vuono (i) at WMGC's offices when necessary or requested by WMGC, (ii) wherever a current or potential client or strategic partner of a WMGC subsidiary is located when necessary or requested by WMGC and (iii) when not required or requested to perform services elsewhere, at such place as Vuono may choose with access by both telephone and facsimile service. 3 COMPENSATION. As compensation for the services to be provided hereunder, WMGC agrees to pay Vuono a total of one million three hundred eighty thousand (1,380,000) shares of its Common Stock which shall be issuable as follows: (1) seventy five percent (75%) upon approval of this Agreement by the WMGC Board of Directors and filing of a registration statement on Form S-8 as set forth below and (2) twenty five percent (25%) eight months after the date of commencement of the Term of this Agreement, unless this Agreement shall be terminated pursuant to its terms prior to that date. Vuono shall also receive an option to purchase one million two hundred thousand (1,200,000) shares of Common Stock at $.02 per share which shall vest eight (8) months after the commencement of the term of this Agreement (the "Option"), -2- unless this Agreement shall be terminated pursuant to its terms prior to that date. In the event that WMGC is unable to register the Common Stock on Form S-8 within three (3) months of the date of this Agreement, it shall be issued with the following restrictive legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE 1933 ACT AND AN EFFECTIVE REGISTRATION OR QUALIFICATION OF SUCH SECURITIES FOR SALE UNDER ANY APPLICABLE STATE SECURITIES LAW; OR (II) AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED. In the event that WMGC exercises its option to extend the Term of this Agreement for an additional twelve (12) months, WMGC shall pay Vuono (1) $5,750 per month either (i) in cash or (ii) in Common Stock at a 20% discount to the prevailing market value on the last business day of each month and (2) an option to purchase 1.2 million shares of Common Stock at fair market value on October 1, 2002. 4 REGISTRATION OF THE COMMON STOCK. -------------------------------- 4.1 OBLIGATION TO REGISTER. WMGC shall use its best efforts to register the Common Stock to be issued hereunder, and the Common Stock issuable upon exercise of the Option, on Form S-8 to permit the resale of the Common Stock by Vuono (the "Registration Statement"). In addition, WMGC shall: 4.1.1 furnish to Vuono, without charge, as many copies of the Registration Statement, the Prospectus and any amendment or supplement thereto as they may reasonably request; -3- 4.1.2 use its best efforts to comply with all applicable Federal and state regulations, and take such other action as may be reasonably necessary or advisable to enable Vuono to consummate the sale or disposition in such jurisdictions or jurisdictions in which Vuono shall have requested that the Common Stock be sold; PROVIDED that WMGC shall not be required (i) to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not otherwise be obligated to be so qualified, (ii) to subject itself to taxation in any such jurisdiction solely by reason of such registration or qualification or (iii) to consent to general service of process in any jurisdiction. 4.1.3 Except as otherwise provided in this Agreement, WMGC shall have sole control in connection with the preparation, filing, withdrawal, amendment or supplementing of the Registration Statement, and may include within the coverage thereof additional shares of Common Stock or other securities for the account of one or more of its other security holders. 4.1.4 Vuono shall furnish to WMGC such information regarding the distribution of the Common Stock and such other information as may otherwise be required by the Securities Act to be included in the Registration Statement. 4.2 INDEMNIFICATION. --------------- 4.2.1 INDEMNIFICATION BY WMGC. In connection with the Registration Statement relating to disposition of the Common Stock, WMGC shall indemnify and hold harmless Vuono against any and all losses, claims, damages and liabilities, joint or several (including any reasonable investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of any action, suit or proceeding or any claim asserted), to which he may become subject under the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934 (the "Exchange Act"), as amended or other Federal or state law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or such amendment or supplement thereto, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that such indemnity shall not inure to the benefit of Vuono on account of any losses, claims, damages or liabilities arising from the sale of the Common Stock if such untrue statement or omission or alleged untrue statement or omission was made in such Registration Statement, Prospectus or such amendment or supplement, in reliance upon and in conformity with information furnished in writing to WMGC by Vuono specifically for use therein. This indemnity agreement shall be in addition to any liability that the WMGC may otherwise have. -4- 4.2.2 INDEMNIFICATION BY VUONO. In connection with the Registration Statement, Vuono shall indemnify, to the same extent as the indemnification provided by WMGC in Section 4.2.1. Vuono will indemnify WMGC, its directors and each officer who signs the Registration Statement and each person who controls WMGC (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), only insofar as such losses, claims, damages and liabilities arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement, the Prospectus or any amendment thereof or supplement thereto, in reliance upon and in conformity with information furnished by Vuono in writing to WMGC, specifically for use therein. Vuono's liability shall not be greater in amount than the dollar amount of the net proceeds Vuono receives upon the sale of the Common Stock giving rise to such indemnification obligation. 4.2.3 CONDUCT OF INDEMNIFICATION PROCEDURE. Any party that proposes to assert the right to be indemnified hereunder will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section, notify each such indemnifying party of the commencement of such action, suit or proceeding, enclosing a copy of all papers served. No indemnification provided for in Section 4.2.1 or 4.2.2 shall be available to any party who shall fail to give notice as provided in this Section 4.2.3 if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was prejudiced by the failure to give such notice, but the omission so to notify such indemnifying party of any such action, suit or proceeding shall not relieve it from liability that it may have to any indemnified party for contribution or otherwise than under this Section. In case any such action, suit or proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and the approval by the indemnified party of such counsel, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses, except as provided below and except for the reasonable costs of investigation previously incurred by such indemnified party in connection with the defense thereof. The indemnified party shall have the right to employ its counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified party has been authorized in writing by the indemnifying parties, (ii) the indemnified party shall have reasonably concluded, based on advice of counsel, that there may be a conflict of interest between the indemnifying parties and the indemnified party in the conduct of the defense of such action (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party) or (iii) the indemnifying parties shall not have employed counsel to assume the defense of such action within a reasonable time after notice of the commencement thereof, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying parties. An indemnifying party shall not be liable for any settlement of any action, suit, proceeding or claim effected without its written consent. -5- 4.2.4 CONTRIBUTION. In connection with the Registration Statement relating to the disposition of the Common Stock, if the indemnification provided for in subsection 4.2.1 hereof is unavailable to an indemnified party thereunder in respect of any losses, claims, damages or liabilities referred to therein, then WMGC shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities. The amount to be contributed by WMGC hereunder shall be no greater than the proceeds of the same of the Common Stock by Vuono. 4.2.5 SPECIFIC PERFORMANCE. WMGC and Vuono acknowledge that remedies at law for the enforcement of Sections 4.2.1 through 4.2.4 may be inadequate and intend that those Sections shall be specifically enforceable. 5 INDEPENDENT CONTRACTOR STATUS. Both WMGC and Vuono agree that Vuono shall be acting as an independent contractor and not as an employee, servant or agent of WMGC. Accordingly, it is agreed that Vuono shall not have any authority to act for or on behalf of WMGC or to bind WMGC without its express consent. Vuono shall not be considered as having employee status for the purpose of any employee benefit plan applicable to WMGC's employees generally. Vuono is responsible for the payment of any taxes relating to payments made to him hereunder by WMGC. 6 VUONO'S REPRESENTATIONS AND WARRANTIES. Vuono hereby represents and warrants to WMGC as follows: 6.1 AUTHORITY. Vuono has full power and authority to execute and deliver, to perform his obligations under, and to consummate the transactions contemplated by this Agreement. This Agreement is a valid and legally binding obligation of Vuono, enforceable against him in accordance with its terms. Vuono is not restricted or prohibited, contractually, by court order, agreement or otherwise, from entering into and performing this Agreement, and the services to be performed hereunder, and Vuono's's execution and performance of this Agreement is not a violation or breach of any agreement between Vuono and any other person or entity. 7 WMGC'S REPRESENTATION AND WARRANTIES. WMGC hereby represents and warrants to Vuono as follows: 7.1 ORGANIZATION. WMGC is a corporation duly organized, validly existing and in good standing under the laws of Minnesota, and has full corporate power and authority to conduct its business as and to the extent now conducted and to own, use and lease its assets and properties. WMGC has full corporate power and authority to execute and deliver this Agreement and the Common Stock and to perform its obligations hereunder and to consummate the transactions contemplated hereby. 7.2 AUTHORITY; DUE AUTHORIZATION. The execution and delivery by WMGC of this Agreement and the Common Stock, and the performance by WMGC of its obligations hereunder, have been duly and validly authorized by the WMGC Board of Directors, no other corporate action on the part of WMGC or its respective shareholders being necessary. This Agreement has been duly and validly executed and delivered by WMGC and constitutes legal, valid and binding obligations of WMGC enforceable against WMGC in accordance with its terms. -6- 7.3 NO CONFLICTS. The execution and delivery by WMGC of this Agreement does not, and the consummation of the transactions contemplated hereby will not: 7.3.1 conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate of incorporation or by-laws (or other comparable corporate charter document) of WMGC; 7.3.2 conflict with or result in a violation or breach of any term or provision of any law or order applicable to WMGC or any of its assets and properties; or 7.3.3 (a) conflict with or result in a violation or breach of, (b) constitute (with or without notice or lapse of time or both) a default under, (c) require WMGC or any other person or entity to obtain any consent, approval or action of, make any filing with or give any notice to any person or entity as a result or under the terms of, or (d) result in the creation or imposition of any lien upon WMGC or any of its assets or properties under, any contract or license to which WMGC is a party or by which any of its assets and properties is bound. 8 TERMINATION. Either party may terminate this Agreement upon thirty (30) days notice to the other. However, in the event of a termination by Vuono, he shall be obligated to return the pro rata portion of the Common Stock represented by the number of months remaining to be performed under this Agreement, divided by twelve (12). In the event of termination of this Agreement by Vuono, all provisions of Section 9 shall remain in effect. 9 NON-DISCLOSURE AND NON-SOLICITATION. ----------------------------------- 9.1 CONFIDENTIAL INFORMATION. Vuono shall not, during the term of this Agreement, directly or indirectly, divulge, disclose or communicate to any person, firm, or corporation, any Confidential Information (as defined herein), except as may be required by law or valid legal process. If Vuono is served with formal legal process requesting any Confidential Information, Vuono shall notify WMGC within three (3) business days of receipt of the request and provide WMGC with a copy of the request. "Confidential Information" shall mean any matters affecting or relating to the business of WMGC which derives economic value, actual or potential, from not being generally known to the public or trade, including, but not limited to, all customer lists, names and addresses of customers, contact persons at customers, agreements or arrangements with customers, items usually purchased by customers, supplier lists, names and addresses of suppliers, contact persons at suppliers, agreements or arrangements with suppliers, sales techniques, pricing and prices, and marketing information or strategies. "Confidential Information" shall not include matters generally known to the public or trade. Vuono has been advised by WMGC that said Confidential Information is proprietary to WMGC, and constitutes a trade secret owned exclusively by WMGC, the disclosure of which would be harmful and damaging to WMGC's business. -7- 9.2 EXCEPTIONS CONCERNING CONFIDENTIAL INFORMATION. Notwithstanding the foregoing provisions, use of Confidential Information shall not violate Section 9.1 if used by Vuono in connection with the provision of services hereunder. 9.3 WMGC MATERIALS. All reports and analysis, contracts, contractual arrangements, proposed and actual pricing arrangements, specifications, computer software, computer records and data stored in WMGC's computers, computer printouts, computer disks, documents, memoranda, notebooks, correspondence, files, lists and other records, and the like, and all photocopies or other reproductions thereof, affecting or relating to the business of WMGC which Vuono shall prepare, use, construct, observe, possess or control ("WMGC Materials"), shall be and remain the sole property of WMGC. Upon termination of this Agreement, Vuono shall deliver promptly to WMGC all such WMGC Materials and any copies or excerpts thereof. 9.4 SOLICITATION OF CUSTOMERS. Vuono shall not, at any time during the term of this Agreement, directly or indirectly, either for himself or for any other person, firm, or corporation, compete for, solicit, divert, or take away, or attempt to divert or take away, any of the customers of WMGC who are customers during the term of this Agreement or who were customers at the time of termination of this Agreement. 9.5 SOLICITATION OF EMPLOYEES, ETC. Vuono shall not, at any time during the term of this Agreement, directly or indirectly, either for himself or for any other person, firm, or corporation, solicit (or seek to solicit) any person who is engaged (as an employee, agent, independent contractor or someone similarly situated) by WMGC to terminate his or her employment or engagement. -8- 10 MERGER, ETC., OF WMGC. In the event of a future disposition of the properties and business of WMGC, substantially or in its entirety, by merger, consolidation, sale of assets, or otherwise, then WMGC may assign this Agreement and all of the rights and obligations of WMGC under this Agreement to the acquiring or surviving corporation; provided, that such acquiring or surviving corporation shall assume in writing all of the obligations under this Agreement. However, if the acquiring or surviving corporation declines to accept assignment of this Agreement it shall be terminated and all payments to be made hereunder. 11 GENERAL PROVISIONS. ------------------ 11.1 SEVERABLE PROVISIONS. The provisions of this Agreement are severable, and if any one or more provisions may be determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. 11.2 ASSIGNMENT. This Agreement may not be assigned by WMGC or Vuono, except as set forth in Section 10. 11.3 WAIVER. Either party's failure to enforce any provision or provisions of this Agreement shall not be construed as a waiver of any such provision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement. 11.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement between WMGC and Vuono supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the consulting arrangement between Vuono and WMGC and contains all of the covenants and agreements between the parties with respect to the consulting arrangement between Vuono and WMGC. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement or promise not contained in this Agreement will be effective unless it is in writing signed by the party to be charged. -9- 11.5 TITLES AND HEADINGS.Titles and headings to sections of this Agreement are for the purpose of reference only and shall in no way limit, define or otherwise affect the interpretation or construction of such provisions. 11.6 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute a single agreement. 11.7 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 11.8 NOTICES. Any notice to be given to WMGC under the terms of this Agreement shall be addressed to WMGC at the address of WMGC's principal place of business, with a copy to Guzov, Steckman & Ofsink, LLC, 600 Madison Avenue, 22nd Floor, New York, New York 10022, and any notice to be given to Vuono shall be addressed to Vuono at 69 Mall Drive, Commack, New York 11725, or at such other address as either party may hereafter designate in writing to the other. Any notice required or permitted under this Agreement shall be in writing, shall be sent by certified mail, return receipt requested, or by hand, and shall be deemed effective: (i) upon receipt in the event of delivery by hand, including delivery made by private delivery or overnight mail service where either the recipient or delivery agent executes a written receipt or confirmation of delivery; or (ii) 48 hours after deposited in the United States mail, registered or certified mail, return receipt requested, postage prepaid. -10- IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. ___________________________ Raymond. Vuono WESTERN MEDIA GROUP CORPORATION a Minnesota corporation By:_________________________ Title: --------------------------- -11- EX-4.3 5 exh4-3.txt ROSE CONSULTING AGREE. CONSULTING AGREEMENT THIS AGREEMENT is made and entered into as of October 1, 2001 (the "Agreement"), by and between Western Media Group Corporation, a Minnesota corporation, ("WMGC"), and James Rose ("Rose"). WHEREAS, WMGC is currently a development stage company, with one subsidiary, K-Rad Konsulting, LLC ("K-Rad"), which has been seeking merger or acquisition opportunities; WHEREAS, is currently in discussions with several companies concerning merger or acquisition opportunities; and WHEREAS, WMGC currently has only a single director, no employees, and limited funds; and WHEREAS, WMGC seeks assistance, in view of foregoing merger transactions, from a consultant to provide services in assisting WMGC as a Vice President to perform day to day business functions and responsibilities in exchange for WMGC $.01 par value per share common stock ("Common Stock"); and WHEREAS, Rose, wishes to provide such services to WMGC in exchange for Common Stock as set forth herein; NOW, THEREFORE the parties agree as follows: 1 TERM OF AGREEMENT. This Agreement shall commence as of October 1, 2001and shall continue for twelve (12) months thereafter. This Agreement shall be renewable for an additional twelve (12) months at the option of WMGC. WMGC may terminate this Agreement at any time upon thirty (30) days written notice to Rose. 1 2 SERVICES TO BE PROVIDED. ----------------------- 2.1 Rose shall perform the functions of a Vice President of WMGC. Specifically, Rose shall assist in managing WMGC's business and the businesses of its subsidiaries, perform all necessary administrative functions in maintaining WMGC, its businesses and records, manage WMGC's internal financial reporting, assist WMGC's outside auditors in their reviews and audits of WMGC's financial statements and provide and other services which may be reasonably necessary to WMGC or any WMGC subsidiary. 2.2 Rose understands that he is not an employee of WMGC, that WMGC is not required to provide him with workers' compensation or health insurance, and that Rose is responsible for payment of all taxes relating to payments made to him hereunder by WMGC. 2.3 EXCLUSIVITY. This Agreement shall not be exclusive; provided, however, that Rose shall devote most of his business time to WMGC. In the event that Rose wishes to devote more than five hours per week to performing services to another entity or person, whether or not such services are similar to those to be performed hereunder, Rose shall first seek WMGC's wriiten consent, which consent shall not be withheld unless: (i) the services will interefere with the services to be performed hereunder or (ii) the provision of services will, or create the substantial likelihood of a violation of this Agreement. 2.4 WORK SCHEDULE. Rose shall provide services to WMGC Monday through Friday, exclusive of legal holidays. 2.5 PLACE OF PERFORMANCE OF SERVICES. Services shall be performed by Rose (i) at WMGC's offices when necessary or requested by WMGC, (ii) wherever a current or potential client or strategic partner of a WMGC subsidiary is located when necessary or requested by WMGC and (iii) when not required or requested to perform services elsewhere, at such place as Rose may choose with access by both telephone and facsimile service. 3 COMPENSATION. As compensation for the services to be provided hereunder, WMGC agrees to pay Rose a total of one million two hundred thousand (1,200,000) shares of its Common Stock which shall be issuable as follows: (1) seventy five percent (75%) upon approval of this Agreement by the WMGC Board of Directors and filing of a registration statement on Form S-8 as set forth below and (2) twenty five percent (25%) eight months after the date of commencement of the Term of this Agreement, unless this Agreement shall be terminated pursuant to its terms prior to that date. Rose shall also receive an option to purchase one million (1,000,000) shares of Common Stock at $.02 per share which shall vest eight (8) months after the commencement of the term of this Agreement (the "Option"), unless this Agreement shall be terminated pursuant to its terms prior to that date. In the event that WMGC is unable to register the Common Stock on Form S-8 within three (3) months of the date of this Agreement, it shall be issued with the following restrictive legend: -2- THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE 1933 ACT AND AN EFFECTIVE REGISTRATION OR QUALIFICATION OF SUCH SECURITIES FOR SALE UNDER ANY APPLICABLE STATE SECURITIES LAW; OR (II) AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED. In the event that WMGC exercises its option to extend the Term of this Agreement for an additional twelve (12) months, WMGC shall pay Rose (1) $2,000 per month either (i) in cash or (ii) in Common Stock at a 20% discount to the prevailing market value on the last business day of each month and (2) an option to purchase 1.0 million shares of Common Stock at fair market value on October 1, 2002. 4 REGISTRATION OF THE COMMON STOCK. -------------------------------- 4.1 OBLIGATION TO REGISTER. WMGC shall use its best efforts to register the Common Stock to be issued hereunder, and the Common Stock issuable upon exercise of the Option, on Form S-8 to permit the resale of the Common Stock by Rose (the "Registration Statement"). In addition, WMGC shall: 4.1.1 furnish to Rose, without charge, as many copies of the Registration Statement, the Prospectus and any amendment or supplement thereto as they may reasonably request; 4.1.2 use its best efforts to comply with all applicable Federal and state regulations, and take such other action as may be reasonably necessary or advisable to enable Rose to consummate the sale or disposition in such jurisdictions or jurisdictions in which Rose shall have requested that the Common Stock be sold; PROVIDED that WMGC shall not be required (i) to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not otherwise be obligated to be so qualified, (ii) to subject itself to taxation in any such jurisdiction solely by reason of such registration or qualification or (iii) to consent to general service of process in any jurisdiction. -3- 4.1.3 Except as otherwise provided in this Agreement, WMGC shall have sole control in connection with the preparation, filing, withdrawal, amendment or supplementing of the Registration Statement, and may include within the coverage thereof additional shares of Common Stock or other securities for the account of one or more of its other security holders. 4.1.4 Rose shall furnish to WMGC such information regarding the distribution of the Common Stock and such other information as may otherwise be required by the Securities Act to be included in the Registration Statement. 4.2 INDEMNIFICATION. --------------- 4.2.1 INDEMNIFICATION BY WMGC. In connection with the Registration Statement relating to disposition of the Common Stock, WMGC shall indemnify and hold harmless Rose against any and all losses, claims, damages and liabilities, joint or several (including any reasonable investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of any action, suit or proceeding or any claim asserted), to which he may become subject under the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934 (the "Exchange Act"), as amended or other Federal or state law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or such amendment or supplement thereto, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that such indemnity shall not inure to the benefit of Rose on account of any losses, claims, damages or liabilities arising from the sale of the Common Stock if such untrue statement or omission or alleged untrue statement or omission was made in such Registration Statement, Prospectus or such amendment or supplement, in reliance upon and in conformity with information furnished in writing to WMGC by Rose specifically for use therein. This indemnity agreement shall be in addition to any liability that the WMGC may otherwise have. -4- 4.2.2 INDEMNIFICATION BY ROSE. In connection with the Registration Statement, Rose shall indemnify, to the same extent as the indemnification provided by WMGC in Section 4.2.1. Rose will indemnify WMGC, its directors and each officer who signs the Registration Statement and each person who controls WMGC (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), only insofar as such losses, claims, damages and liabilities arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement, the Prospectus or any amendment thereof or supplement thereto, in reliance upon and in conformity with information furnished by Rose in writing to WMGC, specifically for use therein. Rose's liability shall not be greater than the dollar amount of the net proceeds Rose receives upon the sale of the Common Stock giving rise to such indemnification obligation. 4.2.3 CONDUCT OF INDEMNIFICATION PROCEDURE. Any party that proposes to assert the right to be indemnified hereunder will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section, notify each such indemnifying party of the commencement of such action, suit or proceeding, enclosing a copy of all papers served. No indemnification provided for in Section 4.2.1 or 4.2.2 shall be available to any party who shall fail to give notice as provided in this Section 4.2.3 if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was prejudiced by the failure to give such notice, but the omission so to notify such indemnifying party of any such action, suit or proceeding shall not relieve it from liability that it may have to any indemnified party for contribution or otherwise than under this Section. In case any such action, suit or proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and the approval by the indemnified party of such counsel, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses, except as provided below and except for the reasonable costs of investigation previously incurred by such indemnified party in connection with the defense thereof. The indemnified party shall have the right to employ its counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified party has been authorized in writing by the -5- indemnifying parties, (ii) the indemnified party shall have reasonably concluded, based on advice of counsel, that there may be a conflict of interest between the indemnifying parties and the indemnified party in the conduct of the defense of such action (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party) or (iii) the indemnifying parties shall not have employed counsel to assume the defense of such action within a reasonable time after notice of the commencement thereof, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying parties. An indemnifying party shall not be liable for any settlement of any action, suit, proceeding or claim effected without its written consent. 4.2.4 CONTRIBUTION. In connection with the Registration Statement relating to the disposition of the Common Stock, if the indemnification provided for in subsection 4.2.1 hereof is unavailable to an indemnified party thereunder in respect of any losses, claims, damages or liabilities referred to therein, then WMGC shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities. The amount to be contributed by WMGC hereunder shall be no greater than the proceeds of the same of the Common Stock by Rose. 4.2.5 SPECIFIC PERFORMANCE. WMGC and Rose acknowledge that remedies at law for the enforcement of Sections 4.2.1 through 4.2.4 may be inadequate and intend that those Sections shall be specifically enforceable. 5 INDEPENDENT CONTRACTOR STATUS. Both WMGC and Rose agree that Rose shall be acting as an independent contractor and not as an employee, servant or agent of WMGC. Accordingly, it is agreed that Rose shall not have any authority to act for or on behalf of WMGC or to bind WMGC without its express consent. Rose shall not be considered as having employee status for the purpose of any employee benefit plan applicable to WMGC's employees generally. Rose is responsible for the payment of any taxes relating to payments made to him hereunder by WMGC. 6 ROSE'S REPRESENTATIONS AND WARRANTIES. Rose hereby represents and warrants to WMGC as follows: -6- 6.1 AUTHORITY. Rose has full power and authority to execute and deliver, to perform his obligations under, and to consummate the transactions contemplated by this Agreement. This Agreement is a valid and legally binding obligation of Rose, enforceable against him in accordance with its terms. Rose is not restricted or prohibited, contractually, by court order, agreement or otherwise, from entering into and performing this Agreement, and the services to be performed hereunder, and Rose's's execution and performance of this Agreement is not a violation or breach of any agreement between Rose and any other person or entity. 7 WMGC'S REPRESENTATION AND WARRANTIES. WMGC hereby represents and warrants to Rose as follows: 7.1 ORGANIZATION. WMGC is a corporation duly organized, validly existing and in good standing under the laws of Minnesota, and has full corporate power and authority to conduct its business as and to the extent now conducted and to own, use and lease its assets and properties. WMGC has full corporate power and authority to execute and deliver this Agreement and the Common Stock and to perform its obligations hereunder and to consummate the transactions contemplated hereby. 7.2 AUTHORITY; DUE AUTHORIZATION. The execution and delivery by WMGC of this Agreement and the Common Stock, and the performance by WMGC of its obligations hereunder, have been duly and validly authorized by the WMGC Board of Directors, no other corporate action on the part of WMGC or its respective shareholders being necessary. This Agreement has been duly and validly executed and delivered by WMGC and constitutes legal, valid and binding obligations of WMGC enforceable against WMGC in accordance with its terms. 7.3 NO CONFLICTS. The execution and delivery by WMGC of this Agreement does not, and the consummation of the transactions contemplated hereby will not: 7.3.1 conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate of incorporation or by-laws (or other comparable corporate charter document) of WMGC; 7.3.2 conflict with or result in a violation or breach of any term or provision of any law or order applicable to WMGC or any of its assets and properties; or -7- 7.3.3 (a) conflict with or result in a violation or breach of, (b) constitute (with or without notice or lapse of time or both) a default under, (c) require WMGC or any other person or entity to obtain any consent, approval or action of, make any filing with or give any notice to any person or entity as a result or under the terms of, or (d) result in the creation or imposition of any lien upon WMGC or any of its assets or properties under, any contract or license to which WMGC is a party or by which any of its assets and properties is bound. 8 TERMINATION. Either party may terminate this Agreement upon thirty (30) days notice to the other. However, in the event of a termination by Rose, he shall be obligated to return the pro rata portion of the Common Stock represented by the number of months remaining to be performed under this Agreement, divided by twelve (12). In the event of termination of this Agreement by Rose, all provisions of Section 9 shall remain in effect. 9 NON-DISCLOSURE AND NON-SOLICITATION. ----------------------------------- 9.1 CONFIDENTIAL INFORMATION. Rose shall not, during the term of this Agreement, directly or indirectly, divulge, disclose or communicate to any person, firm, or corporation, any Confidential Information (as defined herein), except as may be required by law or valid legal process. If Rose is served with formal legal process requesting any Confidential Information, Rose shall notify WMGC within three (3) business days of receipt of the request and provide WMGC with a copy of the request. "Confidential Information" shall mean any matters affecting or relating to the business of WMGC which derives economic value, actual or potential, from not being generally known to the public or trade, including, but not limited to, all customer lists, names and addresses of customers, contact persons at customers, agreements or arrangements with customers, items usually purchased by customers, supplier lists, names and addresses of suppliers, contact persons at suppliers, agreements or arrangements with suppliers, sales techniques, pricing and prices, and marketing information or strategies. "Confidential Information" shall not include matters generally known to the public or trade. Rose has been advised by WMGC that said Confidential Information is proprietary to WMGC, and constitutes a trade secret owned exclusively by WMGC, the disclosure of which would be harmful and damaging to WMGC's business. 9.2 EXCEPTIONS CONCERNING CONFIDENTIAL INFORMATION. Notwithstanding the foregoing provisions, use of Confidential Information shall not violate Section 9.1 if used by Rose in connection with the provision of services hereunder. -8- 9.3 WMGC MATERIALS. All reports and analysis, contracts, contractual arrangements, proposed and actual pricing arrangements, specifications, computer software, computer records and data stored in WMGC's computers, computer printouts, computer disks, documents, memoranda, notebooks, correspondence, files, lists and other records, and the like, and all photocopies or other reproductions thereof, affecting or relating to the business of WMGC which Rose shall prepare, use, construct, observe, possess or control ("WMGC Materials"), shall be and remain the sole property of WMGC. Upon termination of this Agreement, Rose shall deliver promptly to WMGC all such WMGC Materials and any copies or excerpts thereof. 9.4 SOLICITATION OF CUSTOMERS. Rose shall not, at any time during the term of this Agreement, directly or indirectly, either for himself or for any other person, firm, or corporation, compete for, solicit, divert, or take away, or attempt to divert or take away, any of the customers of WMGC who are customers during the term of this Agreement or who were customers at the time of termination of this Agreement. 9.5 SOLICITATION OF EMPLOYEES, ETC. Rose shall not, at any time during the term of this Agreement, directly or indirectly, either for himself or for any other person, firm, or corporation, solicit (or seek to solicit) any person who is engaged (as an employee, agent, independent contractor or someone similarly situated) by WMGC to terminate his or her employment or engagement. 10 MERGER, ETC., OF WMGC. In the event of a future disposition of the properties and business of WMGC, substantially or in its entirety, by merger, consolidation, sale of assets, or otherwise, then WMGC may assign this Agreement and all of the rights and obligations of WMGC under this Agreement to the acquiring or surviving corporation; provided, that such acquiring or surviving corporation shall assume in writing all of the obligations under this Agreement. However, if the acquiring or surviving corporation declines to accept assignment of this Agreement it shall be terminated and all payments to be made hereunder. 11 GENERAL PROVISIONS. ------------------ 11.1 SEVERABLE PROVISIONS. The provisions of this Agreement are severable, and if any one or more provisions may be determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. -9- 11.2 ASSIGNMENT. This Agreement may not be assigned by WMGC or Rose, except as set forth in Section 10. 11.3 WAIVER. Either party's failure to enforce any provision or provisions of this Agreement shall not be construed as a waiver of any such provision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement. 11.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement between WMGC and Rose supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the consulting arrangement between Rose and WMGC and contains all of the covenants and agreements between the parties with respect to the consulting arrangement between Rose and WMGC. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement or promise not contained in this Agreement will be effective unless it is in writing signed by the party to be charged. 11.5 TITLES AND HEADINGS.Titles and headings to sections of this Agreement are for the purpose of reference only and shall in no way limit, define or otherwise affect the interpretation or construction of such provisions. 11.6 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute a single agreement. 11.7 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 11.8 NOTICES. Any notice to be given to WMGC under the terms of this Agreement shall be addressed to WMGC at the address of WMGC's principal place of business, with a copy to Guzov, Steckman & Ofsink, LLC, 600 Madison Avenue, 22nd Floor, New York, New York 10022, and any notice to be given to Rose shall be addressed to Rose at 69 Mall Drive, Commack, New York 11725, or at such other address as either party may hereafter designate in writing to the other. Any notice required or permitted under this Agreement shall be in writing, shall be sent by certified mail, return receipt requested, or by hand, and shall be deemed effective: (i) upon receipt in the event of delivery by hand, including delivery made by private delivery or overnight mail service where either the recipient or delivery agent executes a written receipt or confirmation of delivery; or (ii) 48 hours after deposited in the United States mail, registered or certified mail, return receipt requested, postage prepaid. -10- IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. James Rose WESTERN MEDIA GROUP CORPORATION a Minnesota corporation By:_________________________ Title: ----------------------------- -11- EX-4.4 6 exh4-4.txt FORM OF OPTION AGREEMENT COMMON STOCK OPTION NEITHER THIS OPTION NOR THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR CANADIAN PROVINCE, OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS OPTION IS RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. Void after October 1, 2004 Right to Purchase 1,200,000 shares of Common Stock (subject to adjustment) PREAMBLE Western Media Group Corporation, a Minnesota corporation (the "Company"), hereby certifies that, for value received, ___, the holder hereof (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company at any time or from time to time before 5:00 P.M. New York time, on October 1, 2004, fully paid and nonassessable shares of the Company's $.001 par value per share common stock (the "Common Stock"). The purchase price per share (the "Purchase Price") shall be, in the event of a purchase at any time during the period commencing on the date hereof and ending on October 1, 2004, $.02. The number of shares of Common Stock and the amount of the Purchase Price are subject to adjustment as provided herein. This option is the "Option" (this "Option"), evidencing the right to purchase shares of Common Stock of the Company, issued pursuant to that certain Consulting Agreement dated as of October 1, 2001 (the "Consulting Agreement"), between the Company and the Holder. Capitalized terms used and not otherwise defined herein shall have the meanings set forth for such terms in the Consulting Agreement. This Option evidences the right to purchase an aggregate of 1,200,000 shares of Common Stock of the Company, subject to adjustment as provided in this Option. As used herein, the following terms, unless the context otherwise requires, have the following respective meanings: (a) The term "Company" includes any corporation which shall succeed to or assume the obligations of the Company hereunder. (b) The term "Common Stock" includes all stock of any class or classes (however designated) of the Company, authorized on or after the date hereof, the holders of which shall have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference, and the holders of which shall ordinarily, in the absence of contingencies, be entitled to vote for the election of a majority of directors of the Company (even though the right so to vote has been suspended by the happening of such a contingency). (c) The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the Holder of this Option at any time shall be entitled to receive, or shall have received, on the exercise of this Option, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 6 or otherwise. (d) The term "Registration Statement" means any registration statement of the Company filed or to be filed with the SEC which covers any of the Registrable Securities pursuant to the provisions of this Option, including all amendments (including post-effective amendments) and supplements thereto, all exhibits thereto and all material incorporated therein by reference. (e) The term "SEC," "Securities and Exchange Commission" or "Commission" refers to the Securities and Exchange Commission or any other federal agency then administering the Securities Act. (f) The term "Shares" means the Common Stock issued or issuable upon exercise of this Option. (g) The term "Securities Act" means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time. (h) The term "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time. 1. RESTRICTED STOCK. ---------------- 1.1 If, at the time of any transfer or exchange (other than a transfer or exchange not involving a change in the beneficial ownership of this Option or the Shares) of this Option or the Shares, this Option or the Shares shall not be registered under the Securities Act, the Company will require, as a condition of allowing such transfer or exchange, that the Holder or transferee of this Option or the Shares, as the case may be, furnish to the Company an opinion of counsel reasonably acceptable to the Company or a "no action" or similar letter from the Securities and Exchange Commission to the effect that such exercise transfer or exchange may be made without registration under the Securities Act. In the case of such transfer or exchange and in the case of an exercise of this Option if the Shares to be issued thereupon are not registered pursuant to the Securities Act, the Company will require a written statement that this Option or the Shares, as the case may be, are being acquired for investment and not with a view to the distribution thereof. The certificates evidencing the Shares issued on the exercise of this Option shall, if such Shares are being sold or transferred without registration under the Securities Act, bear a legend similar to the legend on the face page of this Common Stock Purchase Option. -2- 1.2 (a) The Company shall make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after 90 days following the effective date of the first registration of the Company under the Securities Act of an offering of its securities to the general public. (b) The Company shall file with the Commission in a timely manner all required reports and other documents as the Commission may prescribe under Section 13(a) or 15(d) of the Exchange Act. (c) The Company shall furnish to the Holder of this Option or the Shares designated by the Holder, forthwith upon request, (i) a written statement by the Company as to its compliance with the reporting requirements under the Securities Act (at any time from and after 90 days following the effective date of the first registration statement of the Company for an offering of its securities to the general public) and of the reporting requirements of the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company, (iii) any other reports and documents necessary to satisfy the information-furnishing condition to offers and sales under Rule 144A under the Securities Act, and (iv) such other reports and documents as the Holder of this Option or the Shares reasonably requests to avail itself of any rule or regulation of the Commission allowing the Holder to sell any such securities without registration. 2. EXERCISE OF OPTION. ------------------ 2.1 EXERCISE IN FULL. The Holder of this Option may exercise it in full by surrendering this Option, with the form of subscription at the end hereof duly executed by the Holder, to the Company at its principal office. The surrendered Option shall be accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock called for on the face of this Option by the applicable Purchase Price. 2.2 PARTIAL EXERCISE. This Option may be exercised in part by surrender of this Option in the manner and at the place provided in Subsection 2.1 except that the amount of Common Stock obtained through the exercise shall be calculated by multiplying (a) the number of shares of Common Stock called for on the face of this Option as shall be designated by the Holder in the subscription at the end hereof by (b) the Purchase Price. On any such partial exercise, subject to the provisions of Section 2 hereof, the Company at its expense will forthwith issue and deliver to, or upon the order of the Holder, a new Option or Options of like tenor, in the name of the Holder, calling in the aggregate on the face or faces thereof, for the number of shares of Common Stock equal to the number of such shares called for on the face of this Option minus the number of such shares designated by the Holder in the subscription at the end hereof. -3- 2.3 COMPANY ACKNOWLEDGMENT. The Company will, at the time of the exercise, exchange or transfer of this Option, upon the request of the Holder acknowledge in writing its continuing obligation to afford to the Holder any rights (including, without limitation, any right to registration of the Shares) to which the Holder shall continue to be entitled after such exercise or exchange in accordance with the provisions of this Option. If the Holder of this Option shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to the Holder any such rights. 3. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. As soon as practicable after the exercise of this Option, in full or in part, and in any event within ten business (10) days thereafter, the Company, at its expense, (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, a certificate or certificates for the number of fully paid and nonassessable Shares to which the Holder shall be entitled on such exercise. No fractional Share or scrip representing a fraction of a Share will be issued on exercise, but the number of Shares issuable shall be rounded to the nearest whole Share. 4. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. --------------------------------------------------------- 4.1 MERGER, ETC. If the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company (any such transaction being hereinafter sometimes referred to as a "Reorganization") then, in each such case, the Holder of this Option, on the exercise hereof as provided in Section 2 at any time after the consummation or effective date of such Reorganization (the "Effective Date"), shall receive, in lieu of the Shares issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which the Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if the Holder had so exercised this Option, immediately prior thereto. The successor corporation in any such Reorganization described in clause (b) or (c) above where the Company will not be the surviving entity (the "Acquiring Company") must agree prior to such Reorganization in a writing satisfactory in form and substance to the Holder that this Option shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on exercise after the consummation of such Reorganization, and shall be binding upon the issuer of any such stock or other securities (including, in the case of any transfer of properties or assets referred to above, the person acquiring all or substantially all of the properties or assets of the Company). If the Acquiring Company has not so agreed to continue this Option, then the Company shall give 30 days' prior written notice to the Holder of this Option of such Reorganization, during which 30-day period (the "Notice Period") the Holder at its option and upon written notice to the Company shall be able to (i) exercise this Option or any part thereof at an exercise price (the "Discounted Exercise Price") equal to the then prevailing purchase price hereunder discounted at the Discount Rate (as used herein the "Discount Rate" shall mean the then prevailing interest rate on U.S. Treasury Notes issued on (or immediately prior to) the -4- date of such 30-day notice and maturing on October 1, 2004 (or immediately prior thereto), such rate to be compounded annually through October 1, 2004, and in no event to be less than 10% annually); or (ii) on the Effective Date, the Holder of this Option shall be paid an amount (the "Merger Profit Amount") equal to the difference between the fair market value per share of Common Stock of the Company being purchased by the Acquiring Company in the Reorganization and the Discounted Exercise Price described in clause (i) above and the Option shall simultaneously expire. The Merger Profit Amount shall be payable in the same form as the common stockholders of the Company shall be paid by the Acquiring Company for their shares of common stock of the Company. The fair market value of any noncash property received from the Acquiring Company upon the Reorganization shall be determined in good faith by the Board of Directors of the Company, as approved by the Company's stockholders. 4.2 DISSOLUTION. Except as otherwise expressly provided in Subsection 5.1, in the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of this Option after the effective date of such dissolution pursuant to this Section 4 to a bank or trust company having its principal office in New York, New York, as trustee for the Holder of this Option. 4.3 CONTINUATION OF TERMS. Except as otherwise expressly provided in Subsection 4.1, upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 4, this Option shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on the exercise of this Option after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such stock or other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Option as provided in Section 4.1. 5. NO IMPAIRMENT. The Company will not, by amendment of its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Option, but will, at all times, in good faith, assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders of this Option against dilution or other impairment. Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of stock receivable on the exercise of this Option above the amount payable therefor on such exercise and (b) will at all times reserve and keep available out of its authorized capital stock, solely for the purpose of issue upon exercise of this Option as herein provided, such number of shares of Common Stock as shall then be issuable upon exercise of this Option in full and shall take all such action as may be necessary or appropriate in order that all shares of Common Stock that shall be so issuable shall be duly and validly issued and fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof. -5- 6. NO DILUTION. ----------- (a) In the event the Company shall pay a share dividend or other distribution payable in shares of Common Stock, or the issued shares of Common Stock shall be subdivided, combined or consolidated, by reclassification or otherwise, into a greater or lesser number of shares of Common Stock, the Purchase Price in effect immediately prior (and each Purchase Price in effect subsequent) to such subdivision or combination shall, concurrently with the effectiveness of such subdivision, combination or consolidation, be proportionately adjusted. In the case of a share dividend or other distribution payable in shares of Common Stock such adjustment shall occur as follows: the Purchase Price that is then in effect (and in effect at any time thereafter) shall be decreased or increased, as the case may be, as of the time of such issuance, or in the event a record date is fixed, as of the close of business on such record date, by multiplying or dividing the Purchase Price, as the case may be, then (and therefore) in effect by a fraction (1) the numerator of which is the total number of shares of issued Common Stock immediately prior to the time of such issuance or the close of business on such record date, as the case may be, and (2) the denominator of which is the total number of shares of issued Common Stock immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution; provided, however, that, if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Purchase Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Purchase Price shall be adjusted to reflect the actual payment of such dividend or distribution. (b) Upon the occurrence of each adjustment of the Purchase Price pursuant to this Section 6, the Company shall prepare a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based. (c) The form of this Option need not be changed because of any change in the Purchase Price pursuant to this Section 6 and any Option issued after such change may state the same Purchase Price and the same number of shares of Common Stock as are stated in this Option as initially issued. However, the Company may at any time in its sole discretion (which shall be conclusive) make any change in the form of this Option that it may deem appropriate and that does not affect the substance thereof. Any Option thereafter issued or countersigned, whether in exchange or substitution for an outstanding Option or otherwise, may be in the form as so changed. (d) In case at any time after the date of this Option: (i) The Company shall declare a dividend (or any other distribution) on its shares of Common Stock payable otherwise than in cash out of its earned surplus; or (ii) The Company shall authorize any reclassification of the shares of its Common Stock, or any consolidation or merger to which it is a party and for which approval of any shareholders of the Company is required, or the sale or transfer of all or substantially all of its assets or all or substantially all of its issued and outstanding stock; or -6- (iii) Events shall have occurred resulting in the voluntary and involuntary dissolution, liquidation or winding up of the Company; then the Company shall cause notice to be sent to the Holder at least twenty (20) days prior (or ten (10) day prior in any case specified in clause (i) above, or on the date of any case specified in clause (iii) above) to the applicable record date hereinafter specified, a notice stating (1) the date on which a record is to be taken or the purpose of such dividend, distribution or rights, or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record will be entitled to such dividend, distribution or rights are to be determined or (2) the date on which such reclassification, consolidation, merger, sale, transfer, initial public offering, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of shares of Common Stock or record shall be entitled to exchange their shares for securities or other property deliverable upon such reclassification, consolidation, merger, sale transfer, dissolution, liquidation or winding up. Failure to give any such notice of any defect therein shall not affect the validity of the proceedings referred to in clauses (i), (ii) and (iii) above. 7. REPORTING REQUIREMENTS. The Company shall provide written notice to Holder of any "Ineffective Period," as defined below, within two days of the commencement of any Ineffective Period. "Ineffective Period" shall mean any period of time after the effective date of a registration statement covering this Option or the Shares during the term hereof that such registration statement or any supplemental or amended registration statement becomes ineffective or unavailable for use for the sale or resale, as applicable, of any or all of the Shares for any reason (or in the event the prospectus is not current and deliverable). 8. REPLACEMENT OF OPTIONS. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Option and, in the case of any such loss, theft or destruction of this Option, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Option, the Company at its expense will execute and deliver, in lieu thereof, a new Option of like tenor. 9. EXPENSES. The Company agrees to pay any and all stamp, transfer and other similar taxes payable or determined to be payable in connection with the execution and delivery of this Option and the issuance of this Option. 10. OPTION AGENT. The Company may, by written notice to the Holder of this Option, appoint an agent having an office in New York, New York, or U.S. Stock Transfer Corp. for the purpose of issuing Shares on the exercise of this Options pursuant to Section 2, exchanging this Option pursuant to Section 6, and replacing this Option pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 11. REMEDIES. The Company stipulates that the remedies at law of the Holder of this Option, in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Option, are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. -7- 12. NEGOTIABILITY, ETC. This Option is issued upon the following terms, to all of which the Holder or owner hereof, by the taking hereof, consents and agrees: (a) title to this Option may be transferred by endorsement (by the Holder executing the form of assignment at the end hereof) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement and delivery; (b) any person in possession of this Option, properly endorsed, is authorized to represent himself as absolute owner hereof and is empowered to transfer absolute title hereto by endorsement and delivery hereof to a bona fide purchaser hereof for value; each prior taker or owner waives and renounces all of his equities or rights in this Option in favor of each such bona fide purchaser, and each such bona fide purchaser shall acquire absolute title hereto and to all rights represented hereby; and (c) until this Option is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 13. NOTICE, ETC. All notices and other communications from the Company to the Holder of this Option shall be mailed by first class registered or certified airmail, postage prepaid, at such address as may have been furnished to the Company in writing by the Holder. 14. MISCELLANEOUS. This Option and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Option is being delivered in the State of New York and shall be construed and enforced in accordance with and governed by its laws. The headings in this Option are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. This Option is being executed as an instrument under seal. All nouns and pronouns used herein shall be deemed to refer to the masculine, feminine or neuter, as the identity of the person or persons to whom reference is made herein may require. 15. EXPIRATION. The right to exercise this Option shall expire at 5:00 P.M., New York time, on October 1, 2004. Dated: October 1, 2001 WESTERN MEDIA GROUP CORPORATION By:________________________ Name: Konrad S. Kim Title: President and Sole Director ATTACHMENT A NOTICE OF EXERCISE (To be Executed by the Registered Holder in order to Exercise the Option) The undersigned holder hereby irrevocably elects to purchase ____ shares of Common Stock of Western Media Group Corporation (the "Company") pursuant to the Common Stock Option void after October 1, 2004 issued by the Company according to the conditions set forth in said warrant and as of the date set forth below.* Date of Exercise: Number of Shares be Purchased: __________________________________________ Applicable Purchase Price: Signature: [Name] Address: * This original Option must accompany this Notice of Exercise. -8- EX-5 7 exh5-1.txt OPINION OF GUZOV, STECKMAN & OFSINK, LLC Exhibit 5.1 Guzov, Steckman & Ofsink, LLC 600 Madison Avenue, 22nd Floor New York, New York 10022 November 13, 2001 Western Media Group Corporation 69 Mall Drive Commack, New York 11725 Gentlemen: We have acted as counsel for Western Media Group Corporation (the "Company") in connection with the (a) registration under the Securities Act of 1933, as amended (the "Act"), of up to 7,420,000 shares of the Company's $.001 par value per share Common Stock (the "Securities") which are issuable by the Company pursuant to certain consulting agreements between the Company and Munish K. Rametra, Ray Vuono and James Rose (the "Consulting Agreements") and option grants pursuant to the Consulting Agreements (the "Options") and (b)the registration under the Act for resale of up to 7,420,000 shares of such Securities (the "Selling Shareholders' Shares") which may be resold by or for the account of the individuals with whom the Company has entered into the Consulting Agreements (the "Selling Shareholders"). In connection with the opinions we express, we have examined the following documents (or true copies thereof): the Company's Certificate of Incorporation, the Company's By-Laws, the Consulting Agreements, the minutes of actions heretofore taken by the Company's stockholders and directors, the Registration Statement on SEC Form S-8 (the "Registration Statement") to be filed with the Securities and Exchange Commission and such other documents as we deemed necessary or appropriate under the circumstances. In rendering this opinion, we have (a) assumed (i) the genuineness of all signatures on all documents examined by us, (ii) the authenticity of all documents submitted to us as originals, and (iii) the conformity to original documents of all documents submitted to us as photostatic or conformed copies and the authenticity of the originals of such copies; and (b) relied on (i) certificates of public officials and (ii) as to matters of fact, statements and certificates of officers and representatives of the Company. Based upon the foregoing, we are of the opinion that: 1. The Securities, when issued pursuant to the Consulting Agreements or upon exercise of the Options, will be validly authorized and, when the pertinent provisions of the Securities Act of 1933 and such "blue sky" and securities laws as may be applicable have been complied with, such Securities will be validly issued, fully paid and nonassessable. 2. Subject to the provisos that (a) the Selling Shareholders make full payment for their respective Selling Shareholders' Shares in connection with the exercise of Options; and (b) the reoffer prospectus contained in the Registration Statement shall be timely delivered in connection with the reoffer and sale by or for the account of the Selling Shareholders, the shares of Common Stock to be sold by the Selling Stockholders shall be, when sold by the Selling Shareholders, validly issued, fully paid and non-assessable. We express no opinion as to compliance with the securities or "blue sky" laws of any state in which the Securities are proposed to be offered and sold or as to the effect, if any, which non-compliance with such laws might have on the validity of the issuance of the Securities. We hereby consent to the use of this opinion as an exhibit to the Registration Statement. In giving the foregoing consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder. Nothing herein shall be deemed to relate to or constitute an opinion concerning any matters not specifically set forth above. The foregoing opinions relate only to matters of the internal law of the State of Minnesota without reference to conflict of laws and to matters of federal law, and we do not purport to express any opinion on the laws of any other jurisdiction. We assume no obligation to supplement this opinion if, after the date hereof, any applicable laws change, or we become aware of any facts that might change our opinions, as expressed herein. The opinions expressed herein may be relied upon by the Company in connection with the registration of the Securities, as contemplated by, and in conformity with, the Registration Statement and the reoffer prospectus contained therein. With the exception of the foregoing, the opinions expressed herein may not be relied upon by any other person without our prior written consent. Very truly yours, /s/ Guzov, Steckman & Ofsink, LLC --------------------------------- Guzov, Steckman & Ofsink, LLC EX-23 8 exh23-1.txt CONSENT OF INDEPENDENT AUDITORS CALLAHAN, JOHNSTON & ASSOCIATES, LLC CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS - -------------------------------------------------------------------------------- CONSENT OF INDEPENDENT AUDITORS ------------------------------- We hereby consent to the use of the audited consolidated financial statements of Western Media Group Corporation (A Development Stage Company) for the years ended December 31, 2000 and 1999 and the period from reentrance into the development stage (August 1, 1991) to December 31, 2000 in the Form S-8 filing of Western Media Group Corporation. These consolidated financial statements were audited by us as indicated in our report dated April 4, 2001. /s/ Callahan, Johnston & Associates, LLC - ---------------------------------------- CALLAHAN, JOHNSTON & ASSOCIATES, LLC Minneapolis, Minnesota April 4, 2001 - -------------------------------------------------------------------------------- 7400 LYNDALE AVENUE SOUTH, SUITE 140, MINNEAPOLIS, MN 55423 TELEPHONE: (612)861-0970 FAX: (612)861-5827 EMAIL: CJACALLAHAN@QWEST.NET EX-23.2 9 exh23-2.txt CONSENT OF COUNSEL Exhibit 23.2 CONSENT OF COUNSEL We consent to use of our firm's name and to statements with respect to our firm, as they appear under the heading "Legal Matters" in the Prospectus which is included in Part I of this Registration Statement. /s/ Guzov, Steckman & Ofsink, LLC - --------------------------------- New York, New York November 13, 2001 -----END PRIVACY-ENHANCED MESSAGE-----