Datamuse Corporation

Board of Directors Meeting

A board of directors meeting was convened at the DeCordova Museum in Lincoln, MA at 11:00a.m. on Saturday, June 17, 2000. All directors, Doug Beeferman, Rob Raisch and Harvey Beeferman were present.

Doug Beeferman acted as chairman and provided an agenda for the meeting as follows:

  1. RhymeZone Review- Doug reported that a co-brand agreement had been entered into with Lycos on May 16, 2000. A copy of the agreement has been posted on the Datamuse web site at . Doug also reported that links to rhymezone.com were incorporated on the LycosZone FunZone and HomeZone pages. Page views are being tracked and have recently been averaging over 20,000 per day. Doug pointed out that a significant upturn in page views could be expected in September when school begins.
  1. RhymeZone revenue assignment- the verbal agreement between Doug Beeferman and Rob Raisch regarding revenue sharing was briefly discussed. It was agreed that going forward Datamuse would pay the greater of $350/month or 20% of revenue/month to Rob Raisch in return for hosting Datamuse sites on his server. This agreement will be reviewed periodically to insure fairness to each of the parties. Should traffic grow beyond the capability of the existing server the parties will need to negotiate a new agreement.
  1. Financial Report - Harvey Beeferman, acting as startup CFO, reported on a number of financial matters. A business checking account has been opened at the Bank of America. At the current time there is $3000 in the account supplied as a loan to the company by Doug Beeferman. Harvey will receive monthly statements from the bank and will issue checks on behalf of the company. A Bank of America check card was issued to Doug Beeferman so that he may expend funds on behalf of the company. An Employer Identification Number (EIN) has been applied for and should be received in a few weeks. Harvey also discussed the advantages of sub chapter S status for the company and it was agreed that he would make application for such status. Sub chapter S status avoids double taxation, and essentially will pass through to the stockholders income (or losses), prorated by share ownership, that they will apply to their personal tax returns. The instrument used to pass through income will be a K-1 form supplied by the I.R.S. Harvey further recommended, and the all directors agreed, that Datamuse would use a calendar year for accounting purposes, with the first year ending December 31, 2000. Monthly financial statements will be forthcoming to all directors.
  1. Revenue Projection- Doug Beeferman provided the board a projection of quarterly revenue and has posted the spreadsheet on the Datamuse Internal web site

Doug also discussed expenses for the company’s first operational quarter.

He estimated that $10, 000 might be sufficient to cover anticipated expenses

until September. The two interns and other development expenses will give first priority to technical support. Significant revenue will not

be received until after the end of Lycos’s quarter in November.

  1. Share Allocation It was agreed by all that the company would issue 500 of the 1500 authorized shares as follows: Doug Beeferman 390 shares, Rob Raisch 100 shares, Harvey Beeferman 5 shares and Bonnie Beeferman 5 shares. Rob suggested that all current shareholders enter into an agreement which will limit the sale of shares to the company, and not outside entities. It was further agreed that share allocations would be reexamined at the next stage of company development when the roles and participation of directors, employees and possibly investors may change.
  1. Future PlansThere was considerable discussion about the future of Datamuse beyond the initial stage where income would be derived from language related web sites. Rob and Doug both believe there is a substantial market opportunity for tools and services related to datamining. It was agreed that for the next few months Doug and the interns should concentrate on ideas that will increase revenue through the RhymeZone/Lycos agreement. However, by late September a business plan should be developed that addresses the datamining related opportunity. Such a plan may be the starting point to seek outside investors, including, but not limited to, Lycos Labs.

The meeting was adjourned at approximately 2p.m.

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Harvey Beeferman

Acting Secretary