U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB
IPVoice.com, Inc.
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(Name of Small Business Issuer in its charter)
Nevada 65-0729900
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5050 No. 19th Avenue, Suite 416/417
Phoenix, Arizona 85015
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (602) 335-1231
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class to be registered
None None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of class)
Copies of Communications Sent to:
Mercedes Travis, Esq.
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696
Fax: (561) 659-5371
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TABLE OF CONTENTS Page No.
PART I
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Item 1 Description of Business. 4
Item 2 Management's Discussion and Analysis or Plan of
Operation. 48
Item 3 Description of Property. 55
Item 4 Security Ownership of Certain Beneficial Owners
and Management. 56
Item 5 Directors, Executive Officers, Promoters and
Control Persons. 59
Item 6 Executive Compensation. 61
Item 7 Certain Relationships and Related Transactions. 63
Item 8 Description of Securities. 68
PART II
Item 1 Market Price of and Dividends on the
Registrant's Common Equity and Other Shareholder
Matters. 70
Item 2 Legal Proceedings. 71
Item 3 Changes In and Disagreements With Accountants. 71
Item 4 Recent Sales of Unregistered Securities. 71
Item 5 Indemnification of Directors and Officers. 81
PART F/S
Financial Statements. 84
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PART III
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Item 1 Index to Exhibits. 85
Item 2 Description of Exhibits. 87
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PART I
Item 1: Description of Business:
(a) Business Development
IPVoice.com, Inc. (the "Company" or "IPVC") is incorporated in the State of
Nevada. The Company was originally incorporated as Nova Enterprises, Inc. on
February 19, 1997 ("Nova"). In March 1998, Nova acquired 100% of IPVoice
Communications, Inc., a Delaware corporation formed in December 1997 ("IPVCDE").
The Company subsequently changed its name to IPVC in May 1999. The Company is
quoted on the OTC Bulletin Board under the symbol "IPVC". Its executive offices
are presently located at 5050 No. 19th Avenue Suite 416/417, Phoenix, Arizona
85015. Its telephone number is (602) 335-1231 and its facsimile number is (602)
335-1577.
The Company is filing this Form 10-SB on a voluntary basis so that the
public will have access to the required periodic reports on NBM's current status
and financial condition. The Company will file periodic reports in the event its
obligation to file such reports is suspended under the Securities and Exchange
Act of 1934 (the "Exchange Act".)
Since inception the Company has been engaged in the business of developing
its MultiCom Business Management Software ("MultiCom") for use in internet
telephony applications (telephone, fax, data, images and video over the
internet). MultiCom is the business management system behind the Company's
TrueConnect Gateway product ("Gateway"), for which patent and trademark
protection is being sought. Gateway provides a mechanism for bridging the public
telephone system with the Internet. IPVC was founded on the premise that
traditional telephone systems wasted precious resources by assigning each call a
"nailed down" circuit. IPVC's Gateway allows a packet of information (voice,
video, e-mail, data, images, etc.) to cross multiple networks on its way to its
final destination. Thus, instead of having one dedicated circuit for a call, the
entire network is shared. The Company continues to research the availability of
additional innovative products in the internet telephony and related industries
for development, distribution or acquisition. See Part I, Item 1. "Description
of the Business - (b) Business of Issuer - Patents, Copyrights and Trademarks."
It is the Company's intention to (i) continue to market its Gateway
product; (ii) to conduct research to further develop its Gateway product and
(iii) to develop further "add-ons" which will enhance and expand the Gateway
product. See Part I, Item 1. "Description of the Business - (b) Business of
Issuer."
In February 1997, prior to its acquisition of IPVCDE, the Company sold
1,400,000 shares of its unrestricted Common Stock to sixty-nine (69) individuals
for $14,000. For such offering, the Company relied upon Section 3(b) of the
Securities Act of 1933, as amended (the "Act") and Rule 504 promulgated under
Regulation D of the Act ("Rule 504") and Section 517.061(11) of the Florida
Code, Section 4[5/4](G) of the Illinois Code, Section 90.530(11) of the Nevada
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Code, Section 78 A-17(9) of the North Carolina Code, Section 48-2-103(b)(4) of
the Tennessee Code and Section 5[581-5]I(c) of the Texas Code. No state
exemption was necessary for the sales made to Bahamian, Canadian or French
investors. See Part II, Item 4. "Recent Sales of Unregistered Securities."
In November 1997, prior to its acquisition by the Company, IPVCDE entered
into a consulting agreement with Condor Worldwide, Ltd., a Bahamian corporation
("Condor"), whereby Condor agreed to provide certain sales, marketing and public
relations services in exchange for 600,000 shares of IPVCDE's unrestricted
Common Stock to be issued upon listing of IPVCDE's stock on the OTC Bulletin
Board. Such shares were never issued and the agreement was amended in July 1998
deleting the issuance of such shares. The consulting agreement was modified in
July 1998 to 500,000 shares of the restricted Common Stock of the Company. The
term of the Agreement was for a period of six (6) years and is still in effect.
James K. Howson, the Company's Chairman and CEO, serves as the Chairman and CEO
of Condor and he is the beneficial owner of Condor. See Part I, Item 1.
"Description of Business - (b) Business of Issuer Employees and Consultants";
Part I, Item 4. "Security Ownership of Certain Beneficial Owners and
Management"; and Part I, Item 7. "Certain Relationships and Related
Transactions".
In March 1998, the Company's predecessor, Nova, entered into a share
exchange agreement with IPVCDE and its shareholders whereby Nova issued
9,000,000 shares of its restricted Common Stock valued at $9,000 to IPVCDE's
shareholders for all of the outstanding capital stock of IPVCDE, which then
became a wholly-owned subsidiary of Nova. In connection with the agreement, the
Company entered into employment agreements with Barbara Will, its current
Director, Chief Operating Officer and President and with Anthony Welch, designer
of the Company's proprietary software, who currently serves as the Senior
Vice-President of Research and Development. As part of the exchange, Ms. Will,
Mr. Welch and Condor each received 3,000,000 shares of the Company's restricted
common stock. Mr. Howson, the Company's Chairman and Chief Executive Officer, is
the beneficial owner of Condor. For such offering, the Company relied upon
Section 4(2) of the Act, Rule 506, Section 11-51-308(1)(j) of the Colorado Code,
Section 7309(b)(9) of the Delaware Code and Section 90.530(17) of the Nevada
code. The Company relied on no state exemption for the issuance to Condor, which
is a Bahamian corporation. See Part I, Item 1. "Description of Business - (b)
Business of Issuer - Employees and Consultants"; Part I, Item 4. "Security
Ownership of Certain Beneficial Owners and Management"; Part 1, Item 6.
"Executive Compensation - Employee Contracts and Agreements"; Part I, Item 7.
"Certain Relationships and Related Transactions"; and Part II, Item 4. "Recent
Sales of Unregistered Securities."
In April 1998, the Company sold 154,000 shares of its unrestricted Common
Stock to five (5) investors for $154,000. For such offering, the Company relied
upon Section 3(b) of the Act and Rule 504 and Section 517.061(11) of the Florida
Code and Section 359(f)(2)(d) of the New York Code. No state exemption was
necessary for the shares sold to a United Kingdom corporation. See Part II, Item
4. "Recent Sales of Unregistered Securities."
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In July 1998, the Company sold 53,333 shares of its unrestricted Common
Stock to one (1) investor for $40,000.75. For such offering, the Company relied
upon Section 3(b) of the Act and Rule 504 and Section 517.061(11) of the Florida
Code. See Part II, Item 4. "Recent Sales of Unregistered Securities."
In July 1998, the Company entered into a consulting agreement with Calpe,
Ltd., a Bahamian corporation ("Calpe"), to provide public relations consulting
services valued at $85,000 to the Company in exchange for 850,000 shares of the
Company's unrestricted Common Stock, of which 200,000 shares were given to The
Investor Communications Group, Inc., a Georgia corporation ("ICG") pursuant to
its consulting contract (as more fully described herein) and 23,000 shares were
given to Neil Rand d/b/a Corporate Imaging ("CI") pursuant to its consulting
contract (as more fully described herein). In consideration of its 627,000
shares, Calpe agreed to forego commissions equal to $62,700 from IPVC product
sales. The term of the Agreement was for a period of three (3) years and is
still in effect. For such offering, the Company relied upon Section 3(b) of the
Act and Rule 504. No state exemption was necessary for the Calpe shares, as
Calpe is a Bahamian corporation. However, the Company relied upon Section
10-5-9(13) of the Georgia Code for the ICG shares and Section 14-4-140 of the
Arizona Code for the CI shares. See Part I, Item 1. "Description of Business (b)
Business of Issuer Employees and Consultants"; Part I, Item 7. "Certain
Relationships and Related Transactions"; and Part II, Item 4. "Recent Sales of
Unregistered Securities."
In July, 1998, the Company entered into a consulting agreement with ICG to
provide financial public relations and direct marketing advertising and
consulting services to the Company. For such services, the Company agreed to pay
ICG $75,000 over the term of the Agreement and to issue 200,000 shares of the
unrestricted Common Stock of the Company, and to grant warrants to purchase
100,000 shares of the restricted Common Stock of the Company exercisable for a
period of two (2) years at an exercise price of $2.00 per share. Such warrants
have piggy-back registration rights. Such issuance of shares were valued at
$20,000, while the warrants were valued at $0. IPVC has a right of first refusal
to buy back any shares proposed to be sold by ICG to any third party. Of the
850,000 shares of its unrestricted Common Stock issued to Calpe, 200,000 shares
were given to ICG pursuant to its contract. The contract term was for a period
of six (6) months and has since terminated. For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504. The Company relied upon
Section 10-5-9(13) of the Georgia Code for the issuance of ICG shares. See Part
I, Item 1. "Description of Business - (b) Business of Issuer - Employees and
Consultants"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."
In July 1998, the Company entered into a consulting agreement with CI to
provide public and investor relations consulting services to the Company in
exchange for 23,000 shares of the Company's unrestricted Common Stock. The
Agreement was for a term of three (3) months and terminated automatically in
November 1998. Of the 850,000 shares of its unrestricted Common Stock issued to
Calpe, 23,000 shares were given to CI pursuant to its contract. The Company
relied upon Section 3(b) of the Act and Rule 504. The Company relied upon
Section 14-4-140 of the Arizona Code for the issuance of CI shares. See Part I,
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Item 1. "Description of Business - (b) Business of Issuer - Employees and
Consultants"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."
In July 1998, the Company entered into an agreement with The Armstrong
International Group, Inc. ("Armstrong") wherein the Company granted Armstrong
the non-exclusive right to market, advertise and sell the Company's domestic and
international calling services. As payment for these services, IPVC issued
Armstrong warrants to purchase 50,000 shares of the Company's Common Stock
exercisable at a price of $0.75 per share or, at the option of IPVC, for a total
sum of $37,500 as well as commissions on all sales of the Company's products and
services. The term of the agreement is for a period of three (3) years. For such
offering, the Company relied upon Section 4(2) of Act and Rule 506 and Section
517.061(11) of the Florida Code. See Part 1, Item 1. "Description of Business
Business of Issuer - Internet Telephony"; Part I, Item 7. "Certain Relationships
and Related Transactions"; and Part II, Item 4. "Recent Sales of Unregistered
Securities."
In September 1998, the Company entered into a consulting agreement for a
term of six (6) months with First Capital Partners, Inc. ("First Capital"), to
provide financial consulting services to the Company. In the event that First
Capital was successful in securing debt or equity financing for the Company,
First Capital would be granted warrants to purchase 125,000 shares of the
restricted Common Stock of the Company exercisable for a period of three (3)
years at an exercise price of $1.00 per share. Such warrants would have
piggy-back registration rights. See Part I, Item 1. "Description of Business (b)
Business of Issuer - Employees and Consultants"; Part I, Item 7. "Certain
Relationships and Related Transactions".
In September 1998, the Company sold 20,000 shares of its unrestricted
Common Stock to one (1) investor for $10,000. For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504 and Section 517.061(11) of the
Florida Code. See Part II, Item 4. "Recent Sales of Unregistered Securities."
In September 1998, the Company sold 100,000 shares of its unrestricted
Common Stock to one (1) investor for $25,000. For such offering, he Company
relied upon Section 3(b) of the Act and Rule 504 and Section 49:3-50(b)(9) of
the New Jersey Code. See Part II, Item 4. "Recent Sales of Unregistered
Securities."
In September 1998, the Company sold 80,000 shares of its unrestricted
Common Stock to one (1) investor for $15,000. For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504 and Section 517.061(11) of the
Florida Code. See Part II, Item 4. "Recent Sales of Unregistered Securities."
In September 1998, the Company issued 100,000 shares of its unrestricted
common stock in exchange for legal services valued at $10,000. For such
offering, the Company relied upon Section 3(b) of the Act, Rule 504 and Section
517.061(11) of the Florida Code. See Part II, Item 4. "Recent Sales of
Unregistered Securities."
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In October 1998, the Company entered into a consulting agreement with
International Investment Partners, Ltd., an Irish corporation ("IIP"),
memorializing an oral agreement made in July 1998, to provide financial,
consulting and advisory services valued at $35,000 in exchange for the issuance
of 350,000 shares, of which 243,760 are unrestricted Common Stock of the Company
and 106,240 are restricted Common Stock of the Company, the grant of warrants to
purchase an additional 1,600,000 shares of the unrestricted Common Stock of the
Company exercisable without time limitation at an exercise price of $0.06 per
share, the grant of warrants to purchase an additional 350,000 shares of the
restricted Common Stock of the Company exercisable without time limitation at an
exercise price of $3.90 per share and in consideration of $100 the grant of
warrants to purchase an 5% of the restricted Common Stock of the Company on a
fully-diluted basis at a price of $1.00 per share. IIP exercised its warrant to
purchase 1,600,000 shares in April 1999 at an exercise price of $26,000. The
Agreement is for a period of three (3) years and is still in effect. The Company
must also pay a monthly fee of $4,000 the first year, $6,000 the second year and
$8,000 the third year. For the unrestricted shares and warrants to purchase
unrestricted shares, the Company relied upon Section 3(b) of the Act and Rule
504. For the restricted shares and warrants to purchase restricted shares, the
Company relied upon Section 4(2) of the Act and Rule 506. No state exemption was
necessary, as IIP is an Irish corporation. See Part I, Item 1. "Description of
Business - (b) Business of Issuer - Employees and Consultants"; Part I, Item 7.
"Certain Relationships and Related Transactions"; and Part II, Item 4. "Recent
Sales of Unregistered Securities."
In October, 1998, the Company entered into a consulting agreement with
Insidestock.com, Inc., a Florida corporation ("Inside.com") to provide media
relations services and consulting advice to the Company valued at $41,250 in
exchange for the issuance of 275,000 shares of the unrestricted Common Stock of
the Company and the grant of warrants to purchase an additional 155,000 shares
of the unrestricted Common Stock of the Company exercisable for a period of one
(1) year at a price of $0.645 per share. Inside.com exercised its warrant to
purchase 155,000 shares in April 1999 at an exercise price of $100,000. The
Agreement is for a term of one (1) year and is still in effect. For such
issuance, the Company relied upon Section 3(b) of the Act and Rule 504 and
Section 517.061(11) of the Florida Code. See Part I, Item 1. "Description of
Business - (b) Business of Issuer - Employees and Consultants"; Part I, Item 7.
"Certain Relationships and Related Transactions"; and Part II, Item 4. "Recent
Sales of Unregistered Securities."
From December 1998 through January 1999, the Company sold 896,665 shares of
its unrestricted Common Stock to eight (8) investors for $134,500. For such
offering, the Company relied upon Section 3(b) of the Act and Rule 504 and
Section 11-51-308(1)(j) of the Colorado Code, Section 517.061(11) of the Florida
Code and Section 49:3-50(b)(9) of the New Jersey Code. No state exemption was
required for two (2) Bahamian investors. See Part II, Item 4. "Recent Sales of
Unregistered Securities."
From February 1999 through May 1999, the Company sold forty-six (46) units
to twenty-four (24) investors for $1,150,000. Each unit consisted of: (i) a note
payable in two (2) years with an option for the Company to extend it for an
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additional two (2) years in the principal amount of $24,900 bearing interest at
9% per annum payable quarterly in cash or, at the option of the Company, in
unrestricted shares of the Company's Common Stock; (ii) a warrant to purchase
18,750 shares of the Company's restricted Common Stock exercisable during the
period in which the note is outstanding at an exercise price equal to 125% of
the average closing price of the stock for the thirty (30) trading days
immediately prior to February 1, 1999, which warrants contain piggy-back
registration rights; and (iii) twenty-five (25) of the Company's Senior
Convertible Preferred shares. In the event of a default in repayment of the
notes, all outstanding Senior Convertible Preferred shares shall be converted
into Common Stock of the Company in an amount which will equal 51% of the issued
and outstanding shares, warrants and options of the Company. For such offering,
the Company relied upon Section 4(2) of the Act and Rule 506 and Section
14-4-126(f) of the Arizona Code, Section 25102(f) of the California Code,
Section 517.061(11) of the Florida Code, Section 130.293 of the Illinois Code,
Section 191-50.14(502) of the Iowa Code, Section 451.803.7 of the Michigan Code,
Section 359(f)(2)(d) of the New York Code and Section 70P.S.1-211 of the
Pennsylvania Code. See Part II, Item 4. "Recent Sales of Unregistered
Securities."
In March and April 1999, the Company sold 875,000 shares of its
unrestricted Common Stock to one (1) investor for $350,000. For such offering,
the Company relied upon Section 3(b) of the Act and Rule 504. No state exemption
was required, as the investor was a Bahamian corporation. See Part II, Item 4.
"Recent Sales of Unregistered Securities."
In March 1999, the Company entered into a consulting agreement with Buying
Power Network ("BPN") to provide financial public relations consulting services
to the Company for which the Company agreed to pay $40,000 for the first month,
and $30,000 for the second and third months, with subsequent months to be agreed
upon, each of which is payable in unrestricted shares of the Company's Common
Stock the number of which is determined by dividing the monthly payment by
$1.00. The contract term was through September 1999 and has expired without
renewal. In exchange for services rendered by BPN, the Company issued 100,000
shares of its unrestricted Common Stock valued at $106,200 to Joyce Research
Group, of which BPN is a division. For the fourth, fifth and sixth months of the
contract, the Company granted Joyce Research Group options to purchase 150,000
shares of the Company's restricted Common Stock at an exercise price equal to
60%, 65% and 70% of the market price respectively. For such offering, the
Company relied upon Section 3(b) of the Act and Rule 504 and Florida Code
Section 517.061(11). See Part I, Item 1. "Description of Business (b) Business
of Issuer Employees and Consultants"; Part I, Item 7. "Certain Relationships and
Related Transactions"; and Part II, Item 4. "Recent Sales of Unregistered
Securities."
In April 1999, the Company entered into a share exchange agreement with
SATLINK 3000, Inc. d/b/a Independent Network Services, a Nevada corporation
formed in April, 1998, ("INS") whereby the Company exchanged 250,000 shares of
its Redeemable Convertible Preferred stock valued at $500,000 for all of the
outstanding capital stock of INS. Such Redeemable Convertible Preferred stock
contains 1 for 1 conversion rights after one (1) year and is redeemable at $2.00
per share. The President of INS, Peter M. Stazzone, remained with the Company as
the President of the subsidiary. At the time of the exchange Mr. Stazzone became
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Secretary, Treasurer and Chief Financial Officer of the Company under an
employment agreement. Also at the time of the exchange, Mr. Stazzone received
50,000 shares of the Redeemable Convertible Preferred Stock of the Company.
Pursuant to the Employment Agreement, Mr. Stazzone received 200,000 shares of
the Company's Restricted Common Stock, a stock bonus of 100,000 shares of the
Restricted Common Stock deemed earned on the date of the Share Exchange
Agreement, but to be delivered on the earlier of (i) the first anniversary date
or (ii) Mr. Stazzone's termination and options to purchase an additional 200,000
shares of the restricted Common Stock of the Company exercisable for a period of
three (3) years at an exercise price of $1.00 per share. It was represented that
INS had acquired certain assets, including the rights to INS' name, from the
Bankruptcy Court in the Chapter 11 filing on behalf of Telsave Corporation
("Telsave"). Mr. Stazzone was the Chief Financial Officer of Telsave at the time
the bankruptcy was filed and the Bankruptcy Court was provided with disclosure
of his involvement with INS prior to the Court's approval of the sale of certain
Telsave assets to INS. In June 1998, Mr. Stazzone was loaned $100,000 by INS,
which loan bears no interest and has no stated repayment terms. At the time of
the acquisition of INS, the Company believed that it was acquiring the rights to
the carrier identification code 10-10-460 ("CIC Code"). The purchase price was
based in part upon an appraisal of the value of the CIC Code which is loaded in
approximately 60% of the domestic market. However, during the course of the
audit, it was discovered that clear title may not have passed to INS and
subsequently the Company as the owner of INS. Therefore, the Board resolved
that, in the event clear title had not passed to the Company, it would be in the
best interest of the shareholders to unwind the transaction. The Company sought
a legal opinion on the status of such title and just prior to filing this Form
10SB discovered that there was no clear link between the ownership of the CIC
Code and INS. Therefore the Company voted to unwind the transaction ab initio,
to rescind the issuances made under the acquisition and the employment
agreements and to terminate Mr. Stazzone's employment. For such offering, the
Company relied upon Section 4(2) of the Act and Rule 506, Section 14-4-126(f) of
the Arizona Code and Section 90.530(11) of the Nevada Code. See Part I, Item 1.
"Description of Business - (b) Business of Issuer - Employees and Consultants";
Part I, Item 4. "Security Ownership of Certain Beneficial Owners and
Management"; Part 1, Item 6. "Executive Compensation - Employee Contracts and
Agreements"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."
In April 1999, the Company entered into a marketing agreement with Benae
International, Inc., a Nevada Corporation ("Benae") to market the Company's
telephony services and to register a minimum of one hundred (100) customers in
the thirty (30) cities in which IPVC plans to offer telephony services within
twelve(12) months in exchange for 200,000 shares of the unrestricted Common
Stock of the Company valued at $206,200. The shares are to be returned to the
Company if the minimum is not met. For such offering, the Company relied upon
Section 3(b) of the Act and Rule 504 and Section 90.530(11) of the Nevada Code.
See Part 1, Item 1. "Description of Business - Business of Issuer - Internet
Telephony;" Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."
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In April, 1999, the Company entered into a marketing and advertising
agreement with Netgenie.com, Inc., an Arizona corporation ("NG") to provide
marketing services to a minimum of 75,000 customers in thirty (30) cities
designated by IPVC within a twelve (12) month period in exchange for 100,000
shares of the restricted Common Stock of the Company valued at $103,100, which
shares must be returned if NG fails to deliver a minimum of eight (8) cities
with a total of 75,000 customers before December 31, 1999. In addition, NG may
earn performance bonuses of: 50,000 restricted shares if eight (8) cities are
delivered within ninety (90) days of execution; 50,000 restricted shares if
fifteen (15) cities are delivered within one hundred fifty (150) days; and
10,000 restricted shares for each additional city thereafter before December 31,
1999 up to 30 cities. Further, NG will be granted warrants to purchase warrants
to purchase 30,000 shares of the Company's restricted Common Stock exercisable
for a period of two (2) years at an exercise price of $2.50 per share for every
block of 5,000 pre-registered customers up to 75,000 pre-registered customers in
a twelve (12) month period. For such offering, the Company relied upon Section
4(2) of the Act and Rule 506 and Section 14-4-126(F) of the Arizona Code. See
Part 1, Item 1. "Description of Business - Business of Issuer - Internet
Telephony"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."
In September 1999, the Company issued 100,000 shares of its unrestricted
Common Stock in exchange for legal services valued at $10,000. The shares were
issued pursuant to an obligation incurred in 1998. The Company relied upon
Section 3(b) of the Act, Rule 504 and Florida Code Section 517.061(11). See Part
II, Item 4. "Recent Sales of Unregistered Securities."
See (b) "Business of Issuer" immediately below for a description of the
Company's business.
(b) Business of Issuer.
Background of the Industry
The $88.6 billion U.S. long distance industry is dominated by the nation's
three largest long distance providers, AT&T, MCI/WorldCom and Sprint, which
together generated approximately 80.3% of the aggregate revenue of all U.S long
distance interexchange carriers in 1997. Other long distance companies, some
with national capabilities, accounted for the remainder of the market.
As published on the Federal Communications Commission ("FCC') Website located
at www.fcc.gov/Bureaus/Common_Carrier/Reports/FCC-State_Link/socc/97socc.pdf,
toll service revenues of U.S. long distance interexchange carriers have grown
from $38.8 billion in 1984 to $88.6 billion in 1997. While industry revenues
have grown at a compounded annual rate of 6.6% since 1984, the revenues of
carriers other than AT&T, MCI/WorldCom and Sprint have grown at a compounded
rate of 33.7% during the same period. As a result, the aggregate market share of
all interexchange carriers other than AT&T, MCI/WorldCom and Sprint has grown
from 2.6% in 1984 to 19.8% in 1997. During the same period, the market share of
share of AT&T declined from 90.1% to 44.5%.
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Prior to the Telecommunications Act (the "TC Act"), signed by President
Clinton on February 8, 1996, the long distance telecommunications industry had
been principally shaped by a court decree between AT&T and the United States
Department of Justice, known as the Modification of Final Judgment (the "Consent
Decree") that in 1984 required the divestiture by AT&T of its twenty-two (22)
Bell operating companies and divided the country into some two hundred (200)
Local Access and Transport Areas, or "LATAs." The twenty-two (22) operating
companies, which were combined into seven (7) Regional Bell Operating Companies,
or "RBOCs", were given the right to provide local telephone service, local
access service to long distance carriers and intraLATA toll service (service
within LATAs), but were prohibited from providing interLATA service (service
between LATAs). The right to provide interLATA service was maintained by AT&T
and the other carriers.
To encourage the development of competition in the long distance market,
the Consent Decree and the Federal Communications Commission ("FCC") require
most Local Exchange Carriers ("LECs") to provide all carriers with access to
local exchange services that is equal in type, quality and price to that
provided to AT&T and with the opportunity to be selected by customers as their
preferred long distance carrier. These so-called equal access and related
provisions are intended to prevent preferential treatment to AT&T.
On February 8, 1996, the President signed the TC Act, which is intended to
introduce more competition to the U.S. telecommunications markets. In addition
to codifying the provisions of the Consent Decree, the TC Act codifies LECs
equal access and non-discrimination obligations with respect to the local
services market by requiring LECs to permit interconnection to their networks
(i.e. customer's telephone or modem which connects to the service provider's
equipment) and establishing among other things, LECs obligations with respect to
access, resale, number portability (the capability of individuals, businesses,
and organizations to retain their existing telephone number(s) and the same
quality of service when switching to a new local service provider), dialing
parity (the duty to provide dialing parity to competing providers of telephone
exchange service and telephone toll service and the duty to permit all such
providers to have non-discriminatory access to telephone numbers, operator
services, directory assistance and directory listing, with no unreasonable
dialing delays), access to rights-of-way (the duty to afford access to the
poles, ducts, conduits and rights-of-way of a LECs to competing providers of
telecommunications services at the same rates and on the same terms afforded by
the LECs, and mutual compensation. In essence, the TC Act codifies the LECs duty
to provide to independent service providers (such as the Company) access to the
LECs network under the same terms and restrictions to which the LEC is subject.
The TC Act allows the Company to compete with previously established long
distance and local telephone providers under the same terms and conditions as
those to which the providers are subject.
Regulatory, judicial and technological factors have helped to create the
foundation for smaller companies to emerge as competitive alternatives to AT&T,
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MCI/WorldCom and Sprint for long distance telecommunications services. The FCC
requires that AT&T not restrict the resale of its services, and the Consent
Decree and regulatory proceedings have ensured that access to LECs networks are
in most cases, available to all long distance carriers.
General
The Company was formed in February 1997 and had little or no operations
until March 1998, when it acquired IPVCDE. At the time of the acquisition,
IPVCDE principally was involved in developing its MultiCom Business Management
Software. Such software was developed by Anthony Welch, the Senior Vice
President of the Company.
With the acquisition of INS in April 1999, the Company intended to gain
licenses to provide telecommunications services. INS is currently licensed in
thirty-one (31) states and the District of Columbia and is pending tariff
licensing in one other state. INS is a switchless reseller of long distance
telephone services. At the time of the acquisition of INS, the Company believed
that it was acquiring the CIC Code designated 10-10-460. As result of the audit,
there appeared to be a question of whether INS gained title to the CIC Code and,
in the event that it did not, the Company resolved to unwind the acquisition.
Just prior to filing this Form 10SB, it was determined that there was no clear
link between the ownership of the CIC Code and INS. Therefore the Company voted
to unwind the transaction ab initio and to rescind the issuances made under the
acquisition and the employment agreements. While such CIC Code is not
operational at this time, if such title issue had been resolved and if the
Company elected to make such service operational, it would have allowed the
Company to diversify into distinct segments of the long distance market not
currently provided by the Company. See Part I, Item 1. "Description of the
Business - (b) Business of the Issuer - Government Regulation - State."
Today, the Company focuses its attention on Internet telephony. In the fast
moving world of communications, especially Internet telephony, the companies
with systems in the market are currently establishing both open and closed
systems. IPVC has developed an open system which it believes will have an edge
on closed systems. In a closed system, the provider is limited to receiving
calls only. In an open system, the provider can both send and receive calls from
any other telephone carrier in the market.
With the meteoric rise of the Internet (which is predicted to continue at a
staggering rate), the Company believes that Internet telephony can provide cost
savings to the consumer when such telephony services are provided by a small
Internet telephone company providing this service. Smaller companies are able to
compete with large established telecommunications companies in this market
because it is easier for them to assimilate new technology and to adapt and make
changed as they are developed. The Company believes that its billing, management
network and marketing programs give it a competitive edge. AT&T and MCI
currently are not utilizing Internet telephony.
As the Internet telephony market continues to grow, which many industry
analysts predict it will, it is an area that the large traditional telephone
companies will certainly look to enter, probably through acquisitions. The
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Company believes that with its ever-growing installed client base, a network of
customers, its developing international presence and the software which it has
developed, tested and implemented, IPVoice could be viewed as a potentially
attractive buyout candidate.
Internet Telephony
Traditional telephone networks give every call a nailed-down circuit. This
means that a dedicated circuit must be utilized for the full time that the call
is connected. Such circuitry wastes expensive resources because only one person
can talk at a time and also because there are breaks in the conversation. In a
normal conversation, one person speaks while the other listens, using half of
the capacity of the dedicated circuit. At best, a traditional telephone network
uses 25% of capacity for each call. This significantly inflates the costs of
making telephone calls.
Internet Protocol ("IP") is the most significant of the communication
methods on which the Internet (and thus the World Wide Web) is based. It allows
a packet of information (voice, video, e-mail, data, images, etc.) to cross
multiple networks on its way to its final destination. Thus, instead of having
one dedicated circuit for a call, the entire network is shared. The
"conversation" (voice, data, images, video, etc.) is split into many small
packets and each packet is sent down whichever path is open at that time.
Packets are reassembled at the destination. Until recently, packet switching was
very slow. New technology can zip packets around networks at lightning speed.
Fast packet networks will make voice sound as good (and possibly better) than
the circuit-switched voice networks used currently.
Since its inception, the Company's MultiCom system has been installed and
run in a carrier- grade switching environment to interact with voice over the
internet applications. It is marketed under the product name of TrueConnect
Gateways ("Gateway"). By introducing carrier-grade business management into the
marketplace, IPVoice is poised to take advantage of the explosive potential in
Internet telephony. IPVoice is in the final stages of developing products which
allow companies and individuals to route their phone calls, faxes, and other
data across the Internet at substantial cost savings with limited sacrifice of
voice transmission quality.
IPVoice has proprietary rights in state-of-the-art software and hardware
solutions which it believes will bridge the gap between the telephone and the
Internet. The Company's technology includes billing, management network and
marketing programs.
The hardware technology to route calls over the Internet (Internet
Telephony) has existed since August 1998. It avoids traditional telephone
networks, and is faster, more direct and efficient. These factors ultimately
result in cheaper call cost than traditional telephone networks.
Currently, competition in the industry is presently focused on the software
applications necessary to operate an Internet Telephony network.
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The business of telephone companies is to sell minutes. Blocks of minutes
represent the commodity of the industry. The more minutes you can switch through
your network switches, the more money you make. Under traditional phone
networks, a call from a home to New York City will pass through switches
belonging to a local provider near the home, a regional provider, a national
provider, a second regional provider and the local provider on the other end.
Each provider benefits from the "per minute charge".
Internet Telephony provides the ability to leapfrog the middle men, thereby
creating a huge dollar savings to the customer, as well as allowing immediate
monitoring of telephone services which were not available prior to the new
technology.
The deregulation of the telephone industry which resulted from the Consent
Decree and the TC Act allowed independent companies access to the lucrative
telephone market. The Company's technology can achieve savings of 30% to 70%
over circuit-switched voice for both domestic and international calls.
The potential market for Internet telephony appears to be without limit.
Industry analysts have speculated that revenues could grow as much as
sixteen-fold from 1995 to the turn of the century and International Data
Corporation ("IDC") predicted that the IP Telephony market could be worth $560
million in 1999 and have a cumulative annual growth rate of over 382%
Products
The Company's products have been designed and produced at its research and
development site located in Denver, Colorado. Its products are made from
company-designed software and hardware, as well as materials purchased from a
few major suppliers. See Part I, Item 1. "Description of Business - (b) Business
of Issuer - Sources and Availability of Raw Materials." In the first quarter of
1999, the Company commenced operation of its first Gateway in Hong Kong and is
in the process of shipping its second Gateway for installation in London.
The launch of its Gateway product, follows three years of extensive
research and development, field-testing and trials of the MultiCom system, which
is the business management software behind the Gateway. The Gateway bridges the
public telephone system with the Internet and is able to conduct real-time, full
duplex, high quality two-way voice communications over the Internet. It is
anticipated that this method will produce substantial savings compared to
standard long distance services.
To support its Gateway product, the Company has developed several
proprietary products that allow the Company and its distributors to offer a full
solution in Internet Telephony. These products include: (i) MultiCom, which
offers a complete order entry, billing, customer service, agent management and
switching network management system for telecommunication businesses worldwide;
and (ii) AuditRite, a software module add-on for the MultiCom system, which
allows MultiCom to read and interpret carrier-supplied data-tapes. The AuditRite
system provides a powerful tool for analyzing call patterns and finding possible
errors in a vendor's billing. The Company also had developed 4Com, a switch
control software program for Summa Four switches and ICBConnect, a data
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interface software program for international callback for Harris switches,
however due to advances in technology, these products have been discontinued.
The Company also has developed TrueWeb, a Web interface to MultiCom, which the
Company believes will change the way businesses function, when introduced to the
world of IP Telephony. TrueWeb is a complete business management system
available over the Internet and is scheduled for release in the first quarter of
2000. See Part I, Item 1. "Description of Business - (b) Business of Issuer -
Patents, Trademarks and Copyrights."
With the new technology, software applications control everything from
routing to billing. Many companies entering the industry have concentrated on
software which simply switches the minutes across the network, without any
concern as to how they will manage the network, conduct billing and implement
feature functionality. The Company's MultiCom, AuditRite and TrueConnect
platforms were designed to handle the expansion of the manageability, billing,
design upgrades and service options as future technology develops. The Company
protects itself against pirating by randomly changing its source code on its
software, up to four times daily.
The company believes that it has a twelve (12) month advance on competing
companies. Lucent Technologies Inc. ("Lucent") has begun buying up companies
which it will use to develop Internet Telephony capabilities. Through the
efforts of its President, Barbara S. Will, a former MCI marketing executive, the
Company has established its network and has begun providing newer and better
services which it believes can compete even with major players such as Lucent in
the field.
IPVC software includes:
Real-Time Billing - Not currently offered by other telephone companies,
real-time billing provides a customer with the ability to secure reports on the
volume of calls, locations called, exact amount owed and it provides a host of
other features.
Full Feature Functionality - IPVC can add services to its software at will,
as a customer online or when requested. Traditional phone companies are saddled
with huge costs and implementation time, as they update each switch individually
across their network. IPVC can update its entire international network from its
home base.
Unrivaled Agent Control - A single agent can sit in front of a Gateway
terminal and control the entire operation. Moreover, IPVC can directly control
the entire network from its main office in the U.S. This has the capability to
add and service customers from its home base without the need of onsite
installation.
IPVC's software can switch through multiple networks, both Internet and
traditional, giving it a universal application. To the best of the Company's
knowledge, no other stand-alone switch can do this. The Company's Gateways
employ an open system, which means that the Gateways can both send and receive
calls from any other telephone carrier in the market. Other telephone companies
are limited to receiving calls only.
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IPVC's Gateway switches cost a partner from $55,000 for a domestic
installation and $65,000 for an international installation and up to $135,000
installed (with volume discounts for multiple units). In addition, cost to the
partner can be even less if it installs its unit or units itself. A single,
similar traditional switch, with all the attendant hardware and support for
services and billing functions, would cost anywhere from $500,000 to $5 million.
The MultiCom software allows for the use of prepaid debit card and travel
calling card functions which are already built into the system. The software
modules have been designed to work seamlessly and efficiently with each other,
to provide the most extensive and well thought out approach to the business end
of the technology.
Given its technology, IPVC's business plan is simple and flexible. It can
set up its own switches, or partner with a local switching business and take a
percentage of the minutes. Its Gateways can route calls over the Internet in
areas where its network is established, or use traditional phone lines when
desired or necessary and the Company can also procure bulk minutes at a lower
rate.
Contractual Relationships
In order to manufacture a Gateway, the Company currently relies upon an
arrangement commenced in February 1998 with Natural Microsystems Corporation
("NMS"). For each shipment ordered under an invoice, the Company is granted a
sixty (60) day evaluation period from the date it receives from NMS both
hardware and the operating software for the Gateways. After such sixty (60) day
period, the Company may purchase the product, or ship it back to NMS with no
further obligation.
Each of the Company's Gateways operates as a transporter between the
incoming carrier (access) and the outgoing termination (egress). The Gateways
can be installed in customer locations or under co-location agreements. The
Company may construct some of its own locations in the future.
Access/Egress Carriers (Local Providers): Carriers provide IPVC the ability
to originate and terminate calls across their traditional telephone networks. In
addition, the Company purchases wholesale minutes from them. The Company can
acquire such services from a Local Bell Company or from an independent.
In June 1999, the Company entered into an agreement with ICG Telecom Group,
Inc. ("ITG") for local exchange service. The term of the contract is a period of
three (3) years, although it is terminable by IPVC earlier in the event that ITG
raises its prices twenty (20%) above the amounts stated in the contract. In
addition, in the event IPVC wishes to purchase telecommunications services from
a third party in ITG's areas of service, IPVC must first offer to purchase like
services from ITG.
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In July 1999, the Company entered into an agreement with RSL Com U.S.A.,
Inc. ("RSL") for the purchase of wholesale long distance minutes for domestic
and international calls.. The term is for a period of twelve (12) months and may
be terminated by either party upon thirty (30) days written notice. The Company
is required to purchase a minimum of 100,000 minutes per month.
In August 1999, the Company entered into an agreement with Star
Telecommunications, Inc. for telephone communications between its locations in
New York and Los Angeles and the outbound to termination points around the
world. The initial term is for six (6) months and it is automatically renewable
on a month to month basis .
In August 1999, the Company entered into an agreement with ILD
Communications, Inc. ("IDL") for switching services and long distance wholesale
minutes. The agreement is for a term of one (1) year and is automatically
renewable.
Internet (Bandwidth): Internet bandwidth provides the Company with the
ability to transmit and receive information utilizing IP technology.
In June 1999, the Company entered into an agreement with Level 3
Communications, LLC ("Level 3") for wholesale bandwidths. The contract is for no
defined period of time and the terms of each order are governed by both a
separate Customer Order Form which is filled out for each individual order as
well as by the original agreement signed in June 1999.
In August, 1999, the Company entered into an agreement with MCI WorldCom
Technologies, Inc. for use of its UUNET network for wholesale bandwidths. The
contract is for a term of three (3) years. Gateway Locations.
The Company has entered into a series of agreements for customer locations
of its Gateways.
In March 1999, the Company entered into a TruePartner Agreement with Teleco
Service International, Inc. ("Teleco"), wherein the Company granted Teleco the
exclusive to market, advertise and sell the Company's products and services in
China, Nicaragua, El Salvador, Guatemala, Honduras and Panama. Teleco and IPVC
will share all revenues resulting from the proceeds of sales in the Teleco
territory. The term of the agreement is for a period of two (2) years. Due to
non-performance, Teleco lost the rights to China and Panama.
In March 1999, the Company entered into a TruePartner Agreement with
Billion Telecommunication Services, Ltd. ("Billion"), wherein the Company
granted Billion the exclusive right to market, advertise and sell the Company's
products and services in Hong Kong and Taiwan. As payment for these services,
IPVC must pay Billion commissions on all sales of the Company's products and
services. The term of the agreement is for a period of three (3) years. Billion
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has acquired the rights to China as well. The first Gateway was delivered to
Billion and is in the testing stage.
In May 1999, the Company entered into an agreement with FirstNet Telephony
Ltd. ("FirstNet"), wherein the Company granted FirstNet the exclusive right to
market, advertise and sell the Company's products and services in London and
Manchester, with a right of first refusal in the remainder of the United
Kingdom. As consideration for these services by FirstNet to the Company,
FirstNet is entitled to purchase Company products and services at a wholesale
rate. The term of the agreement is for a period of two (2) years. The FirstNet
Gateway is scheduled to be delivered in October 1999.
In July 1999, the Company entered into an agreement with MetroPlus
Communication Technology, Inc. ("MetroPlus"), wherein the Company granted
MetroPlus the exclusive right to market, advertise and sell the Company's
products and services in certain cities in Canada, Washington and Oregon. As
consideration for these services by MetroPlus to the Company, MetroPlus is
entitled to purchase Company products and service at a wholesale rate. The term
of the agreement is for a period of three (3) years. No date has been scheduled
for this installation.
IPVC is retaining the rights for New York, where it intends to install its
own Gateway as a site for sale of networks.
The Company has entered one agreement for co-location of its Gateways.
In February 1999, the Company entered into an agreement with BluegrassNet
("Bluegrass"), wherein the Company has located one of its Gateways. The
agreement is for a term of one (1) year. The Company pays $250 per month for
each server at the location. This site is operational currently is being used
for development testing. No production calls which would produce revenues are
being processed at this time.
The Company secures Gateway sales and sales of other products and services,
as well as assistance in the acquisition of wholesale minutes, co-locations and
carriers through a series of agency agreements.
In July 1998, the Company entered into an agreement with Armstrong wherein
the Company granted Armstrong the non-exclusive right to market, advertise and
sell the Company's domestic and international calling services. As payment for
these services, IPVC issued Armstrong warrants to purchase 50,000 shares of the
Company's Common Stock exercisable at a price of $0.75 per share or, at the
option of IPVC, for a total sum of $37,500 as well as commissions on sales of
the Company's products and services. The term of the agreement is for a period
of three (3) years. See Part I, Item 7. "Certain Relationships and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."
In February 1999, the Company entered into an agreement with IIP wherein
the Company granted IIP the non-exclusive right to market, advertise and sell
the Company's domestic and international calling services. As payment for these
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services, IPVC must pay IIP commissions on sales of the Company's products and
services. The term of the agreement is for a period of three (3) years.
In March 1999, the Company entered into an agreement with Kenneth M. Brown
("Brown"), wherein the Company granted Brown the non-exclusive right to market,
advertise and sell the Company's domestic and international calling services. As
payment for these services, IPVC must pay Brown commissions on sales of the
Company's products and services. The term of the agreement is for a period of
three (3) years.
In April, 1999, the Company entered into a marketing and advertising
agreement with NG to provide marketing services to a minimum of 75,000 customers
in thirty (30) cities designated by IPVC within a twelve (12) month period in
exchange for 100,000 shares of the restricted Common Stock of the Company valued
at $103,100, which shares must be returned if NG fails to deliver a minimum of
eight (8) cities each for a total of 75,000 customers before December 31, 1999.
In addition, NG may earn performance bonuses of: 50,000 restricted shares if
eight (8) cities are delivered within ninety (90) days of execution; 50,000
restricted shares if fifteen (15) cities are delivered within one hundred fifty
(150) days; and 10,000 restricted shares for each additional city thereafter
before December 31, 1999 up to 30 cities. Further, NG will be granted warrants
to purchase warrants to purchase 30,000 shares of the Company's restricted
Common Stock exercisable for a period of two (2) years at an exercise price of
$2.50 per share for every block of 5,000 pre-registered customers up to 75,000
pre-registered customers in a twelve (12) month period. For such offering, the
Company relied upon Section 4(2) of the Act and Rule 506 and Section 14-4-126(F)
of the Arizona Code. See Part I, Item 7. "Certain Relationships and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."
In April 1999, the Company entered into a marketing agreement with Benae to
market the Company's telephony services and to register a minimum of one hundred
(100) customers in the thirty (30) cities in which IPVC plans to offer telephony
services within twelve(12) months in exchange for 200,000 shares of the
unrestricted Common Stock of the Company valued at $206,200. The shares are to
be returned to the Company if the minimum is not met. For such offering, the
Company relied upon Section 3(b) of the Act and Rule 504 and Section 90.530(11)
of the Nevada Code. See Part 1, Item 7. "Certain Relationships and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."
Planned Additional Services
In addition to the sale of the Gateways and the licensing of its software,
the Company plans to derive its revenues from the sale of the following pre-paid
services:
- flat-rate calling plans
- wholesale long distance services for other international carriers
- prepaid long distance calling card services
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- corporate long distance, fax and data networking services
- e-commerce communications services for businesses selling products
and services over the internet
- other telecommunications applications and services
Flat25 - Flat-Rate Calling Plans
The Company is in the process of establishing a flat-rate calling plan
option to be marketed under the name Flat25 which will allow unlimited calling
between cities in which the Company's Gateways are installed for a single rate
per month of $25.
Wholesale Long Distance Services
The Company plans to market its Internet telephony services to other
international long distance carriers and wholesale customers which have a need
for large blocks of long distance telephone time between selected locations.
Although margins at the wholesale level are lower than retail margins, the sale
of blocks of long distance time to other carriers will enable the Company to
generate revenues with only a limited number of gateways installed. The Company
is in the process of pre-marketing its services and has identified several
potential wholesale sellers of block minutes.
Prepaid Calling Cards
The Company plans to market prepaid calling cards to persons traveling to
destinations such as Mexico, Central, and South America, Asia, Europe and other
countries where long distance telephone calls are substantially more expensive
than domestic long distance telephone calls. In September 1999, the Company
shipped cards for which it received $50,000 in revenue. Based upon expressions
of interest by the current buyer and others, the Company believes that this
market could produce as much as $500,000 in monthly revenue within the next six
(6) months.
A typical long distance telephone call from Mexico to Vancouver, British
Columbia, made from a public payphone in Mexico can cost more than $2.00 per
minute, and frequently surcharges are levied by third party credit card call
processing companies located outside of Mexico. However, due to competition in
North America, rates for calls from North America to Central and South America
are significantly less expensive than calls made from this area to North
America.
The pre-paid calling cards will be sold through travel agents, tourist
agencies, airline ticketing offices, tourist agencies, tour companies, car
rental agencies and hotel personnel in denominations of $10, $20, $30 and $50
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and an automated voice response system is planned to enable card holders to add
time to their calling cards by charging their credit card while on the phone.
The Company's calling card provides instructions for the use of the
Company's system. To place a long distance call to North America, the cardholder
dials a local access number (or an 800 number if an originating gateway does not
exist in the local calling area) and is then prompted to dial the destination
number as well as the cardholder's calling card number. The call is then routed
to the nearest originating gateway. After reaching the originating gateway the
call is transmitted over the Internet to the terminating gateway nearest the
destination number. Once the call reaches the terminating gateway the call is
then switched to the local telephone network and is routed to the destination
number.
Travelers making long distance calls from a local calling areas which do
not have originating gateways will nevertheless be able to use the Company's
calling cards. However, the Company's operating margin will be less since these
calls must be routed via an 800 number to a distant originating gateway.
By establishing gateways in North America and select foreign countries, the
Company believes it can service a large and identifiable market of travelers
with cost-effective prepaid calling cards to use in placing calls to North
America.
Corporate Services
The Company also plans to market its services on a selective basis to
small-to-mid sized corporate customers who need a cost-effective means of
combining long distance voice, fax and video communications between their
international offices. The Company plans to begin marketing its corporate
Internet Telephony services to medium sized US and Canadian corporations who
operate branch offices or subsidiaries in the foreign countries in which the
Company operates its Gateways.
E- Commerce Services
The Company's software also will support "web-to-phone" and "call-me"
services.
"Web-to-phone" connections enable the users of multimedia PCs to establish
a voice conversation with the owner of the website or their designated customer
service representative. The Company will introduce this new capability to
website owners and developers in those markets in which the Company has gateways
and demand for e-commerce services is increasing. The Company believes that this
service will contribute to the development of sales made through the Internet.
"Web-to-phone" provides new capabilities for customers to speak directly with
sales people and reservation agents while they are online and reviewing the
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content of a particular website. "Web-to-phone" personalizes the experience of
shopping over the Internet and provides a new level of customer service.
"Call-me" services enable the PC user to receive a telephone call from a
merchant with a website at any telephone number and time of day the user
designates by simply filling out an onscreen form. "Call-me" services offer
businesses the opportunity to provide customers with greater convenience and
more personalized service.
In addition to developing and marketing these communications applications,
the Company will also evaluate investing in or acquiring companies engaged in
the development of innovative IP software and network applications.
Business Strategy
The Company intends to attempt to corner the market with its products since
many are the first their kind and competitors will be required to spend years in
research to develop similar products. IPVC's technology is capable of
transforming competitors into customers, as IPVC's billing and management
software can communicate with other platforms due to its own open platform
design. Current competitors lack a critical component to their solutions:
effective datamanagement and billing. IPVC is capable of providing the following
unique features:
1. IP Telephony solutions and a mature, real-time billing system for ease
of use, affordability and quality.
2. Real-time remote access and manageability of information.
3. IP telephony technology, Internet remote-access technology and a
comprehensive order-entry and invoicing system which can instantly
address and secure new marketplaces and opportunities.
The Company has targeted international markets and supports its sales
efforts by participating in trade shows targeting the telecommunication industry
and large businesses. The Company also utilizes professional articles,
peer-reviewed studies, direct calls and a comprehensive marketing campaign in
its sales.
The Company has already executed TruePartner agreements for Gateway
installations in the following locations:
Billion: Hong Kong and Taiwan (China was originally granted to Teleco, but
has since been assigned to Billion.) The Billion Gateway is operational and
in the testing stage.
FirstNet: London and Manchester, England. This Gateway is scheduled for
shipment.
MetroPlus: certain major Canadian cities, Oregon and Washington. This
Gateway has not been scheduled for shipment.
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IPVC is retaining the rights for New York, where it intends to install its
own Gateway as a site for sale of networks.
In addition, the Company has entered into a series of agency agreements for
the sale of its Gateways and other products and for assistance in the
acquisition of wholesale minutes, co- locations and carriers. The Company
intends to seek associations with professional agents who will help promote
their products and services.
Marketing and Distribution
Marketing
According to industry sources, the global telecommunications market could
generate revenues in excess of $250 billion annually. According to IDC,
international switched telecommunications traffic grew from 28 billion minutes
of use in 1989 to 81.8 billion minutes in 1997 and is projected to reach between
approximately 128.7 and 158.6 billion minutes by 2001. Also according to IDC, in
the United States, residential long distance calls represent a $67 billion
dollar market. In its infancy today, the IP telephony services market is
estimated to increase to $1.8 billion by the year 2001. Due to deregulation,
competition has reduced rates for both business and residential calls placed
within North America. However this is not the case for international calls to
certain countries where higher per minute rates are common. The international
telecommunications industry is growing rapidly due to:
- deregulation
- privatization
- expansion of telecommunications infrastructure
- technological improvements
- globalization of the world's economies; and
- free trade
In addition to the growth in the telecommunications industry, significant
improvements have occurred in the compression and transmission of voice over the
Internet over the last several years. The quality of service of Internet
Telephony is now capable of being equivalent to that of a digital cellular phone
or a quality analog cell phone connection. Internet Telephony technology is
evolving continuously and it is expected that further improvements will allow it
to rival conventional telephony networks. The Gateway equipment being deployed
by the Company utilizes the newest digital signal processing and error
correction technologies for improved voice sampling and compression and reduced
latency. Latency is the time spent waiting for a signal to travel from one
Gateway to another and it is affected network conditions between the Gateways as
well as the processing time required to create the signal for transmission.
These technologies enable the Company to provide high quality, commercial voice
services with carrier class reliability (99.999% availability of service).
Carrier class reliability is determined by how often the system is operational.
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It is the Company's goal to have at least the same if not better reliability as
those systems commonly used by the large telecommunications companies such as
AT&T and MCI.
INS's telecommunication services are currently licensed by the FCC and has
tariffs in the states of Arizona, Arkansas, California, Colorado, Florida,
Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Massachusetts,
Minnesota, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio,
Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Washington and
Wisconsin. Additionally, INS is certified to do business in, but not required to
file tariffs for, the states of Iowa and Michigan and no filing is required in
Utah, Virginia and the District of Columbia. INS's tariff is pending in
Louisiana. The Company intends to unwind the INS acquisition ab initio.
The Company plans to market its products and services using four methods.
The first of those methods is to rely upon its agreements for marketing with NG,
Armstrong, IIP and Brown. There can be no assurances that such agreements will
continue, that the efforts of such parties will be successful or that the
Company will be able to develop additional agreements in the future. The second
method of marketing the Company's products and services is through outside
telemarketing agencies. These firms are paid on a commission only basis. The
Company has not engaged any such firm to date and there can be no assurance that
they will engage one, or that if engaged, that such firm would be successful.
The third method of marketing the Company's products and services utilizes its
own sales force. The sales force currently consists of Ms. Will and Mr. Stazzone
who both have extensive experience in the telecommunications business. There can
be no assurance that these endeavors will be successful. The fourth method of
marketing the Company's products and services utilizes the Internet. The Company
currently markets and distributes its products and services through the Internet
utilizing its IPVoice.com web page. There can be no assurances that such web
page will generate sufficient interest as a marketing tool.
The Company believes these four marketing methods will be adequate to
sustain the Company now and for the foreseeable future.
Distribution
The Company distributes its products through agreements for its Gateway
locations with Teleco, Billion, FirstNet and MetroPlus and through agency
agreements with Armstrong, IIP, Brown, NG and Benae. See Part I, Item 1.
"Description of Business - (b) Business of Issuer Internet Telephony -
Contractual Relationships."
The Company intends to seek other professional agents who wish to promote
its products.
Status of Publicly Announced New Products and Services
TrueConnect Gateways are the Company's in-house-produced telephony gateways
for the delivery of IP Telephony services. This system is based on Natural
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MicroSystems hardware and is controlled by the Company's in-house developed
software that controls the hardware as well as interfaces to MultiCom.
TrueConnect Gateways are being deployed now. Enhancements are made on an "as
needed" basis.
MultiCom is a complete telecommunications and network management system
addressing every aspect of operating and managing a telecommunications network
and operations which provides a complete "backoffice" solution. MultiCom
provides a low barrier of entry for partners and alliances of the Company as it
does not require special computers for access. The Company, as well as its
partners, can access MultiCom and manage their business operations from any
location at any time of day. The MultiCom Data Management platform is fully
functional and complete. Enhancements are made on an "as needed" basis.
AuditRite is a software module add-in for MultiCom that allows MultiCom to
read and interpret carrier-supplied data-tapes. AuditRite provides a tool for
analyzing call patterns and finding possible errors in a vendor's billing.
AuditRite system is fully active.
4Com for Summa Four Switches is a switch-control software program for Summa
Four switches. This software technology is no longer supported as it has been
made obsolete by changing technology.
ICB for Harris Switches ICBConnect, a data-interface software program for
International CallBack, for Harris switches. This software technology are no
longer supported as it has been made obsolete by changing technology.
TrueWeb is a soon-to-be-released web-browser interface to MultiCom.
Included within the functions of this interface is its ability to display and
interact with the user in his or her native language, including the native
alphabet. The Company believes the TrueWeb multi-lingual capability to be unique
to the Company. TrueWeb is currently in alpha-production. The Company expects to
release the initial version by the first quarter 2000.
Competition
Two significant barriers to entry in the traditional long distance
telephone market are size (minimum efficient scale of operations) and regulatory
constraints which preclude smaller companies from gaining significant market
share. Internet telephony effectively eliminates or reduces these barriers since
it is presently unregulated and enjoys economies of scope and scale by using the
Internet and private IP networks as a common voice video and data network.
Internet telephony will decrease barriers to entry and increase competition in
the long distance industry.
The Company believes that its ability to compete in the Internet Telephony
Industry successfully will depend upon a number of factors, including the
pricing policies of competitors and suppliers; the capacity, reliability,
availability and security of the Internet telephony infrastructure; marketing;
the timing of introductions of new products and services into the industry; the
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Company's ability to support existing and emerging industry standards; the
Company's ability to balance network demand with the fixed expenses associated
with network capacity; and industry and general economic trends.
The market for telecommunications services is extremely competitive and
there are a growing number of competitors in the Internet Telephony Industry.
There are many companies that offer business communications services and which
will compete with the Company at some level. These include large
telecommunications companies and carriers such as AT&T, MCI, and Sprint;
smaller, regional resellers of telephone line access; and other existing
Internet telephony companies. These companies, as well as others, including
manufacturers of hardware and software used in the business communications
industry such as Lucent, could in the future develop products and services that
could compete with those of the Company on a direct basis. Many of these
entities have far greater financial and organizational resources than the
Company and control significant market share in their respective industry
segments. There is no assurance that the Company will be able to successfully
compete in the Internet telephony Industry.
Certain large public telephone companies are positioning themselves to
enter the Internet telephony market to protect their dominant domestic market
from competition. Many of these companies are testing existing Internet
telephony gateway technology which at the present time has limited call volume
capabilities. A number of companies are waiting for gateway manufacturers to
introduce advanced gateways that will be able to handle larger call volumes and
provide better quality and service.
In North America considerable discounting has been experienced in recent
years as competition has increased. While in many countries outside of North
America local telephone companies have begun offering discounts to very large
business and government customers with high call volumes, there are few
discounts available for individuals or small and medium sized companies. It is
expected that competition in the United States will be led by carriers providing
low cost but high quality internet telephony services at rates of $0.05 to $0.09
per minute. Smaller Internet service providers and new carriers are expected to
focus primarily on international or niche markets.
International markets are attractive to smaller carriers and new entrants
while large carriers are still evaluating the technology and marketplace and
contending with competition and deregulation in their domestic markets. With
international long distance rates n many countries costing well in excess of
$0.50 per minute, the Company believes that it can earn attractive gross profit
margins while offering service at substantial discounts to currently available
long distance rates.
Although the Company anticipates that its primary competitors will be other
internet telephony companies which offer phone-to-phone services, none have as
of yet addressed the international market which the Company plans to continue to
pursue with Gateway installations and its pre-paid calling cards, nor has any
competitor introduced a full billing system or an integrated product offering
containing corporate and e-commerce communications services.
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Sources and Availability of Raw Materials
IPVoice products are made from company-designed software and company
designed hardware as well as materials purchased from a few major suppliers.
They include the following:
In February 1998, the Company entered into an agreement with NMS. Under the
terms of the contract, the Company acquires both hardware and software for its
Gateways. With regard to both hardware and software, the Company takes advantage
of free shipping and a no-risk sixty (60) day trial period, after which the
Company may purchase the product, or ship it back to NMS with no further
obligation.
Dependence on Major Customers
In March 1999, the Company entered into an agreement with Teleco for
installation of Gateways in China, Nicaragua, El Salvador, Guatemala, Honduras
and Panama. Teleco lost the rights to China and Panama due to non-performance.
In March 1999, the Company entered into an agreement with Billion for the
installation of a Gateway in Hong Kong. This unit is installed and in the
testing phase.
In May 1999, the Company entered into an agreement with FirstNet, wherein
the Company granted FirstNet the exclusive right to market, advertise and sell
the Company's products and services in London and Manchester, with a right of
first refusal in the remainder of the United Kingdom. This installation is
scheduled to begin in October 1999.
In July 1999, the Company entered into an agreement with MetroPlus ,
wherein the Company granted MetroPlus the exclusive right to market, advertise
and sell the Company's products and services in certain cities in Canada,
Washington and Oregon. The installation date has not been scheduled.
Patents, Trademarks and Copyrights
On August 18, 1998, the Company filed for service mark protection with the
United States Patent and Trademark Office ("USPTO") for IPVoice, MultiCom,
AuditRite, 4Com, ICB Connect, TrueConnect and IPJack Design.
In March 30, 1999, the USPTO issued Office Actions on MultiCom, 4Com and
TrueConnect, finding that MultiCom could be confused with an existing trademark;
finding that 4Com's identification of goods was unacceptable as indefinite; and
finding that TrueConnect could be confused with an existing trademark. The
Company's trademark attorney has been authorized to file responses to each of
these and did file the responses on September 30, 1999.
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On April 7 and 8, 1999, the USPTO issued Office Actions on AuditRite,
TruePartner and ICB Connect finding that AuditRite's identification of goods was
unacceptable as indefinite finding that TruePartner could be confused with an
exisiting trademark; and finding that ICB Connect's identification of goods was
unacceptable as indefinite. The Company's trademark attorney has been authorized
to file responses to each of these. Responses for AuditRite and TruePartner were
filed October 7, 1999 and a response for ICB Connect was filed October 8, 1999.
On April 23, 1999, the USPTO issued Office Actions on IPVOICE stylized and
design finding that IPVOICE design's recitation of services was unacceptable as
indefinite; and finding that IPVOICE stylized was an inappropriate mark since it
merely describes the applicant's services. The response was due October 14,
1999.
On September 4, 1998, the Company filed for service mark protection with
the USPTO for IPJack. On June 7, 1999, the USPTO issued an Office Action on
IPJACK finding the drawing unacceptable because the mark is not typed entirely
in capital letters. The Company's trademark attorney has been authorized to file
a response to this. The response is due December 7, 1999.
On October 16, 1998, the Company filed for service mark protection with the
USPTO for COMMUNICATIONS OUT OF THE BOX and COMMUNICATIONS OUT OF THE BOX
stylized. The filing receipt has been received.
The Company is in the process of filing for service mark protection with
the USPTO for IPVOICE.NET, IPVOICE.COM and FLAT25. The filing receipts have been
received.
Government Regulation
Federal
The Company has a current license with the FCC. The Company uses the
Internet for transmission of long distance telephone calls. Presently, the FCC
does not regulate companies that provide Internet Telephony services as common
carriers or telecommunications service providers. Notwithstanding the current
state of the rules, the FCC's potential jurisdiction over the Internet is broad
because the Internet relies on wire and radio communications facilities and
services over which these regulatory authorities have long-standing authority.
In Canada, the Canadian Radio-Television and Telecommunication Commission
("CRTC") determined in 1998 that Internet Telephony services providers must pay
local contribution charges for calls terminating on local telephone networks,
while those calls that originate and terminate on computers are not subject to
these charges. The possibility exists that regulatory authorities may one day
make a determination to apply international call termination fees or otherwise
tariff Internet telephony.
The Company also will be required to comply with the regulations regarding
the operation of its business in several foreign jurisdictions and will be
subject to compliance with the requirements of the authorities of these locales
regarding the establishment and operation of its business.
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Access charges are assessed by local telephone companies to long distance
companies for the use of the local telephone network to originate and terminate
long distance calls generally on a per minute basis. Access charges have long
been a source of dispute; with long distance companies arguing that the access
rates are substantially in excess of cost and local telephone companies arguing
that access rates are needed to subsidize lower local rates for end user and
other purposes. The FCC currently is considering whether subscriber calls to
Internet service providers should be classified as "local" or "interstate"
calls. Although the FCC to date has determined that Internet service providers
should not be required to pay interstate access charges to local telephone
companies, this decision may be reconsidered in the future if the FCC finds
these calls to be "interstate." The Company's costs for doing business would
increase if the Company were required to pay interstate access charges.
State
The Company is subject to varying levels of regulation in the states in
which it currently anticipates providing intrastate telecommunications services.
The vast majority of the states require the Company to apply for certification
to provide intrastate telecommunications services, or at least to register or to
be found exempt from regulation, before commencing intrastate service. The vast
majority of states also require the Company to file and maintain detailed
tariffs listing its rates for intrastate service.
Many states also impose various reporting requirements and/or require prior
approval for transfers of control of certified carriers, corporate
reorganizations, acquisitions of telecommunications operations, assignments of
carrier assets, including subscriber bases, carrier stock offerings and
incurrence by carriers of significant debt obligations. Certificates of
authority can generally be conditioned, modified, canceled, terminated or
revoked by state regulatory authorities for failure to comply with state law and
the rules, regulations and policies of the state regulatory authorities. Fines
and other penalties, including the return of all monies received for intrastate
traffic from residents of a state, may be imposed for such violations. In
certain states, prior regulatory approval may be required for acquisitions of
telecommunications operations.
As the Company expands its efforts to resell long distance services, the
Company will have to remain attentive to relevant federal and state regulations.
FCC rules prohibit switching a customer from one long distance carrier to
another without the customer's consent and specify how that consent can be
obtained. Most states have consumer protection laws that further define the
framework within which the Company's marketing activities must be conducted. The
Company intends to comply fully with all laws and regulations, and the
constraints of federal and state restrictions could impact the success of direct
marketing efforts.
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INS's telecommunication services are currently licensed by the FCC and has
tariffs in the states of Arizona, Arkansas, California, Colorado, Florida,
Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Massachusetts,
Minnesota, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio,
Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Washington and
Wisconsin. Additionally, INS is certified to do business in, but not required to
file tariffs for, the states of Iowa and Michigan and no filing is required in
Utah, Virginia and the District of Columbia. INS's tariff is pending in
Louisiana. The Company intends to unwind the INS acquisition ab initio.
The Company is not currently subject to any State regulation with respect
to its Internet related services. However, there can be no assurances that the
Company will not be subject to such regulations in the future. Additionally, the
Company is not aware of any pending legislation that would have a material
adverse effect on the Company's operations.
Effect of Existing or Probable Governmental Regulation on the Business
As the Company's services are available over the Internet in multiple
states and foreign countries, these jurisdictions may claim that the Company is
required to qualify to do business as a foreign corporation in each such state
and foreign country. New legislation or the application of laws and regulations
from jurisdictions in this area could have a detrimental effect upon the
Company's business.
In a report to Congress, the FCC has stated its intention to consider
whether to regulate voice and fax telephony services provided over the Internet
as "telecommunications" even though Internet access itself would not be
regulated. The FCC is also considering whether such Internet-based telephone
service should be subject to universal service support obligations, or pay
carrier access charges on the same basis as traditional telecommunications
companies.
A governmental body could impose sales and other taxes on the provision of
the Company's services, which could increase the costs of doing business. A
number of state and local government officials have asserted the right or
indicated a willingness to impose taxes on Internet-related services and
commerce, including sales, use and access taxes; however, no such laws have
become effective to date. The Company cannot accurately predict whether the
imposition of any such taxes would materially increase its costs of doing
business or limit the services which it provides, since it may be possible to
pass on some of these costs to the consumer and continue to remain competitive.
If, as the law in this area develops, the Company becomes liable for
information carried on, stored on, or disseminated through its Gateways, it may
be necessary for the Company to take steps to reduce its exposure to this type
of liability through alterations in its equipment, insurance or other methods.
This may require the Company to spend significant amounts of money for new
equipment or premiums and may also require it to discontinue offering certain of
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its products or services.
Due to the increasing popularity and use of the Internet, it is possible
that additional laws and regulations may be adopted with respect to the
Internet, covering issues such as content, privacy, access to adult content by
minors, pricing, bulk e-mail (spam), encryption standards, consumer protection,
electronic commerce, taxation, copyright infringement and other intellectual
property issues. IPVC cannot predict the impact, if any, that future regulatory
changes or developments may have on the Company's business, financial condition,
or results of operation. Changes in the regulatory environment relating to the
Internet access industry, including regulatory changes that directly or
indirectly affect telecommunication costs or increase the likelihood or scope of
competition from regional telephone companies or others, could increase the
Company's operating costs, limit its ability to offer services and reduce the
demand for its services.
Local telephone companies assess access charges to long distance companies
for the use of the local telephone network to originate and terminate long
distance calls, generally on a per-minute basis. Access charges have been a
matter of continuing dispute, with long distance companies complaining that the
rates are substantially in excess of cost, and local telephone companies arguing
that access rates are justified to subsidize lower local rates for end users and
other purposes. Both local and long distance companies, however, contend that
Internet-based telephony should be subject to these charges. Since the Company
has current plans to install its Gateways and to offer telephony, it would be
directly affected by these developments. However, IPVC cannot predict whether
these debates will cause the FCC to reconsider its current policy of not
regulating Internet service providers.
Cost of Research and Development
All research and development was completed prior to the formation of IPVCDE
and its acquisition by the Company.
At the current time, there are no costs associated with research and
development, and accordingly, none will be bourne directly or indirectly by the
customer; however there is no guarantee that such costs will not be bourne by
customers in the future and, at the current time, the Company does not know the
extent to which such costs will be bourne by the customer, if at all.
Cost and Effects of Compliance with Environmental Laws
The Company's business is not subject to regulation under the state and
Federal laws regarding environmental protection and hazardous substances
control, including the Occupational Safety and Health Act, the Environmental
Protection Act, and Toxic Substance Control Act. The Company is unaware of any
bills currently pending in Congress which could change the application of such
laws so that they would affect the Company.
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Employees and Consultants
At September 30, 1999, the Company employed seven (7) persons all of whom
are employed on a full-time basis. None of these employees are represented by a
labor union for purposes of collective bargaining. The Company considers its
relations with its employees to be excellent.
The Company has employment agreements with Barbara Will, Anthony Welch and
Peter Stazzone, who respectively act as the President, Senior Vice President and
Secretary/Treasurer of the Company. The Board has voted to unwind the INS
acquisition ab initio, rescind the issuances under the acquisition and
employment agreement and to terminate Mr. Stazzone's employment. See Part I,
Item 6. "Executive Compensation - Employee Contracts and Agreements."
In November 1997, prior to its acquisition by the Company, IPVCDE entered
into a consulting agreement with Condor, whereby Condor agreed to provide
certain sales, marketing and public relations services in exchange for 600,000
shares of IPVCDE's unrestricted Common Stock to be issued upon listing of
IPVCDE's stock on the OTC Bulletin Board. Such shares were never issued and the
agreement was amended in July 1998 deleting the issuance of such shares. The
consulting agreement was modified in July 1998 to 500,000 shares of the
restricted Common Stock of the Company. The term of the Agreement was for a
period of six (6) years and is still in effect. James K. Howson, the Company's
Chairman and CEO, serves as the Chairman and CEO of Condor and he is the
beneficial owner of Condor. See Part I, Item 4. "Security Ownership of Certain
Beneficial Owners and Management"; and Part I, Item 7. "Certain Relationships
and Related Transactions".
In March 1998, the Company's predecessor, Nova, entered into a share
exchange agreement with IPVCDE and its shareholders whereby Nova issued
9,000,000 shares of its restricted Common Stock valued at $9,000 to IPVCDE's
shareholders for all of the outstanding capital stock of IPVCDE, which then
became a wholly-owned subsidiary of Nova. In connection with the agreement, the
Company entered into employment agreements with Barbara Will, its current
Director, Chief Operating Officer and President and with Anthony Welch, designer
of the Company's proprietary software, who currently serves as the Senior
Vice-President of Research and Development. As part of the exchange, Ms. Will,
Mr. Welch and Condor each received 3,000,000 shares of the Company's restricted
common stock. Mr. Howson, the Company's Chairman and Chief Executive Officer, is
the beneficial owner of Condor. For such offering, the Company relied upon
Section 4(2) of the Act, Rule 506, Section 11-51-308(1)(j) of the Colorado Code,
Section 7309(b)(9) of the Delaware Code and Section 90.530(17) of the Nevada
code. The Company relied on no state exemption for the issuance to Condor, which
is a Bahamian corporation. See Part I, Item 4. "Security Ownership of Certain
Beneficial Owners and Management"; Part 1, Item 6. "Executive Compensation -
Employee Contracts and Agreements"; Part I, Item 7. "Certain Relationships and
Related Transactions"; and Part II, Item 4. "Recent Sales of Unregistered
Securities."
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In July 1998, the Company entered into a consulting agreement with Calpe,
to provide public relations consulting services valued at $85,000 to the Company
in exchange for 850,000 shares of the Company's unrestricted Common Stock, of
which 200,000 shares were given to ICG pursuant to its consulting contract (as
more fully described herein) and 23,000 shares were given to CI pursuant to its
consulting contract (as more fully described herein). In consideration of its
627,000 shares, Calpe agreed to forego commissions equal to $62,700 from IPVC
product sales. The term of the Agreement was for a period of three (3) years and
is still in effect. For such offering, the Company relied upon Section 3(b) of
the Act and Rule 504. No state exemption was necessary for the Calpe shares, as
Calpe is a Bahamian corporation. However, the Company relied upon Section
10-5-9(13) of the Georgia Code for the ICG shares and Section 14-4-140 of the
Arizona Code for the CI shares. See Part I, Item 7. "Certain Relationships and
Related Transactions"; and Part II, Item 4. "Recent Sales of Unregistered
Securities."
In July, 1998, the Company entered into a consulting agreement with ICG to
provide financial public relations and direct marketing advertising and
consulting services to the Company. For such services, the Company agreed to pay
ICG $75,000 over the term of the Agreement and to issue 200,000 shares of the
unrestricted Common Stock of the Company, and to grant warrants to purchase
100,000 shares of the restricted Common Stock of the Company exercisable for a
period of two (2) years at an exercise price of $2.00 per share. Such warrants
have piggy-back registration rights. Such issuance of shares were valued at
$20,000, while the warrants were valued at $0. IPVC has a right of first refusal
to buy back any shares proposed to be sold by ICG to any third party. Of the
850,000 shares of its unrestricted Common Stock issued to Calpe, 200,000 shares
were given to ICG pursuant to its contract. The contract term was for a period
of six (6) months and has since terminated. For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504. The Company relied upon
Section 10-5-9(13) of the Georgia Code for the issuance of ICG shares. See Part
I, Item 7. "Certain Relationships and Related Transactions"; and Part II, Item
4. "Recent Sales of Unregistered Securities."
In July 1998, the Company entered into a consulting agreement with CI to
provide public and investor relations consulting services to the Company in
exchange for 23,000 shares of the Company's unrestricted Common Stock. The
Agreement was for a term of three (3) months and terminated automatically in
November 1998. Of the 850,000 shares of its unrestricted Common Stock issued to
Calpe, 23,000 shares were given to CI pursuant to its contract. The Company
relied upon Section 3(b) of the Act and Rule 504. The Company relied upon
Section 14-4-140 of the Arizona Code for the issuance of CI shares. See Part I,
Item 7. "Certain Relationships and Related Transactions"; and Part II, Item 4.
"Recent Sales of Unregistered Securities."
In September 1998, the Company entered into a consulting agreement for a
term of six (6) months with First Capital, to provide financial consulting
services to the Company. In the event that First Capital was successful in
securing debt or equity financing for the Company, First Capital would be
granted warrants to purchase 125,000 shares of the restricted Common Stock of
the Company exercisable for a period of three (3) years at an exercise price of
$1.00 per share. Such warrants would have piggy-back registration rights. See
Part I, Item 7. "Certain Relationships and Related Transactions"
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In October 1998, the Company entered into a consulting agreement with IIP,
memorializing an oral agreement made in July 1998, to provide financial,
consulting and advisory services valued at $35,000 in exchange for the issuance
of 350,000 shares, of which 243,760 are unrestricted Common Stock of the Company
and 106,240 are restricted Common Stock of the Company, the grant of warrants to
purchase an additional 1,600,000 shares of the unrestricted Common Stock of the
Company exercisable without time limitation at an exercise price of $0.06 per
share, the grant of warrants to purchase an additional 350,000 shares of the
restricted Common Stock of the Company exercisable without time limitation at an
exercise price of $3.90 per share and in consideration of $100 the grant of
warrants to purchase an 5% of the restricted Common Stock of the Company on a
fully-diluted basis at a price of $1.00 per share. IIP exercised its warrant to
purchase 1,600,000 shares in April 1999 at an exercise price of $26,000. The
Agreement is for a period of three (3) years and is still in effect. The Company
must also pay a monthly fee of $4,000 the first year, $6,000 the second year and
$8,000 the third year. For the unrestricted shares and warrants to purchase
unrestricted shares, the Company relied upon Section 3(b) of the Act and Rule
504. For the restricted shares and warrants to purchase restricted shares, the
Company relied upon Section 4(2) of the Act and Rule 506. No state exemption was
necessary, as IIP is an Irish corporation. See Part I, Item 7. "Certain
Relationships and Related Transactions"; and Part II, Item 4. "Recent Sales of
Unregistered Securities."
In October, 1998, the Company entered into a consulting agreement with
Inside.com to provide media relations services and consulting advice to the
Company valued at $41,250 in exchange for the issuance of 275,000 shares of the
unrestricted Common Stock of the Company and the grant of warrants to purchase
an additional 155,000 shares of the unrestricted Common Stock of the Company
exercisable for a period of one (1) year at a price of $0.645 per share.
Inside.com exercised its warrant to purchase 155,000 shares in April 1999 at an
exercise price of $100,000. The Agreement is for a term of one (1) year and is
still in effect. For such issuance, the Company relied upon Section 3(b) of the
Act and Rule 504 and Section 517.061(11) of the Florida Code. See Part I, Item
7. "Certain Relationships and Related Transactions"; and Part II, Item 4.
"Recent Sales of Unregistered Securities."
In March 1999, the Company entered into a consulting agreement with BPN to
provide financial public relations consulting services to the Company for which
the Company agreed to pay $40,000 for the first month, and $30,000 for the
second and third months, with subsequent months to be agreed upon, each of which
is payable in unrestricted shares of the Company's Common Stock the number of
which is determined by dividing the monthly payment by $1.00. The contract term
was through September 1999 and has expired without renewal. In exchange for
services rendered by BPN, the Company issued 100,000 shares of its unrestricted
Common Stock valued at $106,200 to Joyce Research Group, of which BPN is a
division. For the fourth, fifth and sixth months of the contract, the Company
granted Joyce Research Group options to purchase 150,000 shares of the Company's
restricted Common Stock at an exercise price equal to 60%, 65% and 70% of the
market price respectively. For such offering, the Company relied upon Section
3(b) of the Act and Rule 504 and Florida Code Section 517.061(11). See Part I,
Item 7. "Certain Relationships and Related Transactions"; and Part II, Item 4.
"Recent Sales of
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Unregistered Securities."
In April 1999, the Company entered into a share exchange agreement with INS
whereby the Company exchanged 250,000 shares of its Redeemable Convertible
Preferred stock valued at $500,000 for all of the outstanding capital stock of
INS. Such Redeemable Convertible Preferred stock contains 1 for 1 conversion
rights after one (1) year and is redeemable at $2.00 per share. The President of
INS, Peter M. Stazzone, remained with the Company as the President of the
subsidiary. At the time of the exchange Mr. Stazzone became Secretary, Treasurer
and Chief Financial Officer of the Company under an employment agreement. Also
at the time of the exchange, Mr. Stazzone received 50,000 shares of the
Redeemable Convertible Preferred Stock of the Company. Pursuant to the
Employment Agreement, Mr. Stazzone received 200,000 shares of the Company's
Restricted Common Stock, a stock bonus of 100,000 shares of the Restricted
Common Stock deemed earned on the date of the Share Exchange Agreement, but to
be delivered on the earlier of (i) the first anniversary date or (ii) Mr.
Stazzone's termination and options to purchase an additional 200,000 shares of
the restricted Common Stock of the Company exercisable for a period of three (3)
years at an exercise price of $1.00 per share. It was represented that INS had
acquired certain assets, including the rights to INS' name, from the Bankruptcy
Court in the Chapter 11 filing of Telsave. Mr. Stazzone was the Chief Financial
Officer of Telsave at the time the bankruptcy was filed and the Bankruptcy Court
was provided with disclosure of his involvement with INS prior to the Court's
approval of the sale of certain Telsave assets to INS. In June 1998, Mr.
Stazzone was loaned $50,000 by INS, which loan bears no interest and has no
stated repayment terms. At the time of the acquistion of INS, the Company
believed that it was acquiring the rights to the CIC Code. The purchase price
was based in part upon an appraisal of the value of the CIC Code which is loaded
in approximately 60% of the domestic market. However, during the course of the
audit, it was discovered that clear title may not have passed to INS and
subsequently the Company. Therefore, the Board resolved that, in the event clear
title had not passed to the Company, it would be in the best interest of the
shareholders to unwind the transaction. The Company sought a legal opinion on
the status of such title and just prior to filing this Form 10SB discovered that
there was no clear link between the ownership of the CIC Code and INS. Therefore
the Company voted to unwind the transaction ab initio, to rescind the issuances
made under the acquisition and the employment agreements and to terminate Mr.
Stazzone's employment. For such offering, the Company relied upon Section 4(2)
of the Act and Rule 506, Section 14-4-126(f) of the Arizona Code and Section
90.530(11) of the Nevada Code. See Part I, Item 4. "Security Ownership of
Certain Beneficial Owners and Management"; Part 1, Item 6. "Executive
Compensation - Employee Contracts and Agreements"; Part I, Item 7. "Certain
Relationships and Related Transactions"; and Part II, Item 4. "Recent Sales of
Unregistered Securities."
Facilities
The Company maintains its executive offices at 5050 No. 19th Avenue, Suite
416/417, Phoenix, Arizona 85015. Its telephone number is (602) 335-1231 and its
facsimile number is (602) 335-1577 which serves as its executive offices.
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The Company leases approximately three thousand five hundred sixty-five
(3,565) square feet of office space. This space is also occupied by INS, and
replaces INS' existing lease at the same location. The lease is for a term of
one (1) year commencing August 1, 1999 and ending July 31, 2000. The Company
pays monthly rent in the amount of $3,862.08 plus a ratable cost adjustment and
taxes. See Part I, Item 3. "Description of Property."
Risk Factors
Before making an investment decision, prospective investors in the
Company's Common Stock should carefully consider, along with other matters
referred to herein, the following risk factors inherent in and affecting the
business of the Company.
1. History of Losses. Although the Company has been in business since
February, 1997, it is mostly recently starting to exit the development stage as
it is beginning to deploy its network. As of December 31, 1998, the Company had
total assets of $191,513, a net loss of $507,685 on revenues of $41,254 and
stockholders deficit of $530,666. As of December 31, 1997, the Company had total
assets of $1,745, a net loss of $22,981 with no revenues and stockholders
deficit of $12,255. Due to the Company's operating history and limited
resources, among other factors, there can be no assurance that profitability or
significant revenue will occur in the future. Moreover, the Company expects to
continue to incur operating losses through at least the second quarter 2000, and
there can be no assurance that losses will not continue thereafter. The ability
of the Company to establish itself as a going concern is dependent upon the
receipt of additional funds from operations or other sources to continue those
activities. The Company is subject to all of the risks inherent in the operation
of a development stage business and there can be no assurance that the Company
will be able to successfully address these risks. See Part I, Item 1.
"Description of Business."
2. Minimal Assets. Working Capital and Net Worth. As of December 31, 1998,
the Company's total assets in the amount of $191,513, consisted, principally, of
the sum of $908 in cash, $152,980 in inventory and $37,625 in property and
equipment. As a result of its minimal assets and a net loss from operations, in
the amount of $507,685, as of December 31, 1998, the Company had a negative net
worth of $115,616. Further, there can be no assurance that the Company's
financial condition will improve. Even though management believes, without
assurance, that it will obtain sufficient capital with which to implement its
expansion plan, the Company is not expected to proceed with its expansion
without an infusion of capital. In order to obtain additional equity financing,
management may be required to dilute the interest of existing shareholders or
forego a substantial interest of its revenues, if any. See Part I, Item 1.
"Description of Business"
3. Need for Additional Capital. Without an infusion of capital or profits
from operations, the Company is not expected to proceed with its expansion as
planned. Accordingly, the Company is not expected to overcome its history of
losses unless sales exceed the current levels and/or additional equity and/or
debt financing is obtained. While the Company anticipates the receipt of
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increased operating revenues, such increased revenues cannot be assured.
Further, the Company may incur significant unanticipated expenditures which
deplete its capital at a more rapid rate because of among other things, the
stage of its business, its limited personnel and other resources and its lack of
a widespread client base and market recognition. Because of these and other
factors, management is presently unable to predict what additional costs might
be incurred by the Company beyond those currently contemplated. The Company has
no identified sources of additional capital funds, and there can be no assurance
that resources will be available to the Company when needed. See Part I, Item 1.
"Description of Business (b) Business of Issuer."
4. Dependence on Management. The possible success of the Company is
expected to be largely dependent on the continued services of its President ,
Barbara S. Will and its Senior Vice President, Anthony Welch. Virtually all
decisions concerning the marketing, distribution and sales of the Company's
products and services will be made or significantly influenced by the Company's
officers. These officers are expected to devote only such time and effort to the
business and affairs of the Company as may be necessary to perform their
responsibilities as executive officers. The loss of the services of any of these
officers would adversely affect the conduct of the Company's business and its
prospects for the future. The Company presently has no employment agreements
with any of its officers. See Part I, Item 1. "Description of Business - (b)
Business of Issuer and Part I, Item 5. "Directors, Executive Officers, Promoters
and Control Persons."
5. Limited Distribution Capability. The Company's success depends in large
part upon its ability to distribute its products and services. As compared to
the Company, which lacks the financial, personnel and other resources required
to compete with its larger, better-financed competitors, virtually all of the
Company's competitors or potential competitors have much larger budgets for
securing customers. Although the Company has entered into TruePartner
agreements, these have produced only limited revenues to date. Depending upon
the level of operating capital or funding obtained by the Company, management
believes, without assurance, that it will be possible for the Company to attract
additional customers for its products and services. However, in the event that
only limited funds are available from operations or obtained, the Company
anticipates that its limited finances and other resources may be a determinative
factor in the decision to go forward with planned expansion. Until such time, if
ever, as the Company is successful in generating sufficient cash flow from
operations or securing additional capital, of which there is no assurance, it
intends to continue marketing its products through its current distribution
arrangement. However, the fact that these arrangement have not thus far produced
significant revenue may adversely impact the Company's chances for success. See
Part I, Item 1. "Description of Business," (b) "Business of Issuer - Sales and
Marketing- Distribution of Products."
6. Inability to expand its IP Telephony Infrastructure. The Company may be
required to expand and adapt its IP Telephony infrastructure as the number of
users and the amount of information they wish to transfer increases. The
expansion and adaptation of the Company's infrastructure will require
substantial financial, operational and management resources. There can be no
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assurance, however, that the Company will be able to expand or adapt its
infrastructure to meet additional demand or subscribers' changing requirements
on a timely basis, at a commercially reasonable cost, or at all, or that the
Company will be able to deploy successfully any necessary infrastructure
expansion. Any failure of the Company to expand its infrastructure, as needed,
on a timely basis or to adapt to changing subscriber requirements or evolving
industry standards could have a material adverse effect on the Company's overall
business, financial condition and results of operations. See Part I, Item 1.
"Description of Business," (b) "Business of Issuer."
7. High Risks and Unforeseen Costs Associated with the Company's Expanded
Entry into the IP Telephony Industry. There can be no assurance that the costs
for the establishment of TruePartner arrangements and creation of a client base
for its products and services will not be significantly greater than those
estimated by Company management. Therefore, the Company may expend significant
unanticipated funds or significant funds may be expended by the Company without
development of additional markets for its products. There can be no assurance
that cost overruns will not occur or that such cost overruns will not adversely
affect the Company. Further, unfavorable general economic conditions and/or a
downturn in customer confidence could have an adverse affect on the Company's
business. Additionally, competitive pressures and changes in customer mix, among
other things, which management expects the Company to experience in the
uncertain event that it achieves commercial viability, could reduce the
Company's gross profit margin from time to time. Accordingly, there can be no
assurance that the Company will be capable of establishing itself in a
commercially viable position in local, state, nationwide and international IP
Telephony markets. See Part I, Item 1. "Description of Business," (b) "Business
of Issuer."
8. Significant Customer and Product Concentration. To date, a limited
number of customers and distributors have accounted for substantially all of the
Company's revenues with respect to product sales. Although the company entered
into TruePartner agreements, there is no assurance that the Company will be able
to obtain adequate distribution of its products to the intended end user. The
Company's ability to achieve revenues in the future will depend in significant
part upon its ability to obtain additional Gateway outlets, maintain
relationships with and provide support to, existing and new distributors, as
well as the condition of its distributors. As a result, any cancellation,
reduction or delay may materially adversely affect the Company's business,
financial condition and results of operations. There can be no assurance that
the Company's revenues will increase in the future or that the Company will be
able to support or attract customers. See "Part I, Item. 1. "Description of
Business - (b) Business of Issuer Marketing and Distribution- Distribution; and
- - Dependence on Major Customers" and Part I, Item 2. Management's Discussion and
Analysis of Financial Condition or Plan of Operation Revenues."
9. Fluctuations in Results of Operations. The Company has experienced and
may in the future experience significant fluctuations in revenues, gross margins
and operating results. As with many developing businesses, the Company expects
that some orders may not materialize or delivery schedules may have to be
deferred as a result of changes in customer requirements, among other factors.
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As a result, the Company's operating results for a particular period to date
have been and may in the future be materially adversely affected by a delay,
rescheduling or cancellation of even one purchase order. Moreover, purchase
orders are often received and accepted substantially in advance of shipment, and
the failure to reduce actual costs to the extent anticipated or an increase in
anticipated costs before shipment could materially, adversely affect the gross
margins for such order, and as a result, the Company's results of operations. A
delay in a shipment near the end of a particular quarter, due, for example, to
an unanticipated shipment rescheduling, to cancellations or deferrals by
customers or to unexpected manufacturing difficulties, may cause net revenues in
a particular quarter to fall significantly below the company's expectations and
may materially adversely affect the Company's operating results for such
quarter.
A large portion of the Company's expenses are fixed and difficult to reduce
should revenues not meet the Company's expectations, thus magnifying the
material adverse effect of any revenue shortfall. Furthermore, announcements by
the Company or its competitors of new products and technologies could cause
customers to defer purchases of the Company's products or a reevaluation of
products under development, which would materially adversely affect the
Company's business, financial condition and results of operations. Additional
factors that may cause the Company's revenues, gross margins and results of
operations to vary significantly from period to period include: product
development, patent processing, manufacturing efficiencies, costs and capacity
and the timing of availability of new products by the Company or its customers,
usage of different distribution and sales channels; customization of systems;
and general economic and political conditions. In addition, the Company's
results of operations are influenced by competitive factors, including the
pricing and availability of and demand for, competitive products. All of the
above factors are difficult for the company to forecast, and these or other
factors could materially adversely affect the Company's business, financial
condition and results of operations. As a result, the Company believes that
period-to-period comparisons are not necessarily meaningful and should not be
relied upon as indications of future performance. See Part I, Item. 2.
"Management's Discussion and Analysis of Financial Condition or Plan of
Operation."
10. Potential for Changes or Unfavorable Interpretation of Government
Regulation. In the event the government were to regulate the IP Telephony or
telephone industry, as it has in the past, would have a material adverse effect
on the sale of such products by the Company to such customers.
The Company uses the Internet and private I.P networks for the transmission
of long distance telephone, fax and data signals. Presently, the Federal
Communication Commission in the United States ("FCC") does not regulate
companies that provide Internet Telephony services as common carriers or
telecommunications service providers. Notwithstanding the current state of the
rules, the FCC's potential jurisdiction over the Internet is broad because the
Internet relies on wire and radio communications facilities and services over
which this regulatory authority has long-standing authority.
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The regulatory environment in which the Company operates is subject to
change. Regulatory changes, which are affected by political, economic and
technical factors, could significantly impact the Company's operations by
restricting development efforts by the Company and its customers, making current
products obsolete, making the delivery of telephonic services more costly or
increasing the opportunity for additional competition. Any such regulatory
changes could have a material adverse effect on the Company's business,
financial condition and results of operations. The Company might deem it
necessary or advisable to alter or modify its products to operate in compliance
with such regulations. Such modifications could be extremely expensive and,
especially if subject to regulatory review and approval, time-consuming. See
Part I, Item 1. "Description of Business," (b) "Business of Issuer Governmental
Regulation."
11. No Assurance of Product Quality. Performance and Reliability. The
Company expects that its distributor and their customers will continue to
establish demanding specifications for quality, performance and reliability.
Although the Company attempts to only deal with manufacturers who adhere to good
manufacturing practice standards, there can be no assurance that problems will
not occur in the future with respect to quality, performance, reliability and
price. If such problems occur, the Company could experience increased costs,
delays in or cancellations or rescheduling of orders or shipments and product
returns and discounts, any of which would have a material adverse effect on the
Company's business, financial condition or results of operations.
12. Future Capital Requirements. The Company's future capital requirements
will depend upon many factors, including the development of new medical and
health products, requirements to maintain adequate manufacturing facilities, the
progress of the Company's research and development efforts, expansion of the
Company's marketing and sales efforts and the status of competitive products and
services. The Company believes that it will require additional funding in order
to fully exploit its plan for operations. There can be no assurance, however,
that the Company will secure such additional financing. There can be no
assurance that any additional financing will be available to the Company on
acceptable terms, or at all. If additional funds are raised by issuing equity
securities, further dilution to the existing stockholders will result. If
adequate funds are not available, the Company may be required to delay, scale
back or eliminate its research and development or manufacturing programs or
obtain funds through arrangements with partners or others that may require the
Company to relinquish rights to certain of its existing or potential products or
other assets. Accordingly, the inability to obtain such financing could have a
material adverse effect on the Company's business, financial condition and
results of operations. See Part I, Item 2. "Management's Discussion and Analysis
of Financial Condition or Plan of Operation."
13. Uncertainty Regarding Protection of Proprietary Rights. The Company
attempts to protect its intellectual property rights through patents,
trademarks, secrecy agreements, trade secrets and a variety of other measures.
However, there can be no assurance that such measures will provide adequate
protection for the Company's trade secrets or other proprietary information,
that additional disputes with respect to the ownership of its intellectual
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property rights will not arise, that the Company's trade secrets or proprietary
technology will not otherwise become known or be independently developed by
competitors or that the Company can otherwise meaningfully protect its
intellectual property rights. There can be no assurance that any patent owned by
the Company will not be invalidated, circumvented or challenged, that the rights
granted thereunder will provide competitive advantages to the Company or that
any of the Company's pending or future patent applications will be issued with
the scope of the claims sought by the Company, if at all. Furthermore, there can
be no assurance that others will not develop similar products, duplicate the
Company's products or design around the patents owned by the Company or that
third parties will not assert intellectual property infringement claims against
the Company. In addition, there can be no assurance that foreign intellectual
property laws will adequately protect the Company's intellectual property rights
abroad. The failure of the Company to protect its proprietary rights could have
a material adverse effect on its business, financial condition and results of
operations.
Litigation may be necessary to protect the Company's intellectual property
rights and trade secrets, to determine the validity of and scope of the
proprietary rights of others or to defend against claims of infringement or
invalidity. Such litigation could result in substantial costs and diversion of
resources and could have a material adverse effect on the Company's business,
financial condition and results of operations. There can be no assurance that
infringement, invalidity, right to use or ownership claims by third parties or
claims for indemnification resulting from infringement claims will not be
asserted in the future. If any claims or actions are asserted against the
Company, the Company may seek to obtain a license under a third party's
intellectual property rights. There can be no assurance, however, that a license
will be available under reasonable terms or at all. In addition, should the
Company decide to litigate such claims, such litigation could be extremely
expensive and time consuming and could materially adversely affect the Company's
business, financial condition and results of operations, regardless of the
outcome of the litigation. See Part I, Item 1. Description of Business - (b)
Business of Issuer - Patents, Trademarks and Copyrights."
14. Ability to Grow. The Company expects to grow through acquisitions,
internal growth and by expansion of its TruePartner relationships. There can be
no assurance that the Company will be able to create a greater market presence,
or if such market is created, to expand its market presence or successfully
enter other markets. The ability of the Company to grow will depend on a number
of factors, including the availability of working capital to support such
growth, existing and emerging competition, one or more qualified strategic
alliances and the Company's ability to maintain sufficient profit margins in the
face of pricing pressures. The Company must also manage costs in a changing
regulatory environment, adapt its infrastructure and systems to accommodate
growth within the niche market which it has created.
The Company also plans to expand its business, in part, through
acquisitions. Although the Company will continuously review potential
acquisition candidates, it has not entered into any agreement, understanding or
commitment with respect to any additional acquisitions at this time. There can
be no assurance that the Company will be able to successfully identify suitable
acquisition candidates, complete acquisitions on favorable terms, or at all, or
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integrate acquired businesses into its operations. Moreover, there can be no
assurance that acquisitions will not have a material adverse effect on the
Company's operating results, particularly in the fiscal quarters immediately
following the consummation of such transactions, while the operations of the
acquired business are being integrated into the Company's operations. Once
integrated, acquisitions may not achieve comparable levels of revenues,
profitability or productivity as at then existing Company products or otherwise
perform as expected. The Company is unable to predict whether or when any
prospective acquisition candidate will become available or the likelihood that
any acquisitions will be completed. The Company will be competing for
acquisition and expansion opportunities with entities that have substantially
greater resources than the Company. In addition, acquisitions involve a number
of special risks, such as diversion of management's attention, difficulties in
the integration of acquired operations and retention of personnel, unanticipated
problems or legal liabilities, and tax and accounting issues, some or all of
which could have a material adverse effect on the Company's results of
operations and financial condition. See Part I, Item 1. "Description of Business
(b) "Business Issuer."
15. Competition. Telephone, Internet and software industries are highly
competitive, with several major companies involved, including AT&T, MCI and
Sprint, . The Company will be competing with these larger competitors in
international, national, regional and local markets. In addition, the Company
may encounter substantial competition from new market entrants. Many of the
Company's competitors or potential competitors have significantly greater name
recognition and have greater marketing, financial and other resources than the
Company. There can be no assurance that the Company will be able to complete
effectively against such competitors in the future. See Part I. Item 1.
"Description of Business," (b) "Business of IssuerCompetition."
16. Requirement for Response to Rapid Technological Change and Requirement
for Frequent New Product Introductions. The markets for telephone, Internet and
software products and services are subject to rapid technological change,
frequent new product introductions and enhancements, product obsolescence and
changes in end-user requirements. The Company's ability to be competitive in
this market will depend in significant part upon its ability to successfully
develop, introduce and sell new innovative proprietary products, services and
enhancements thereof on a timely and cost-effective basis that respond to
changing customer requirements. Any success of the Company in developing new and
enhanced products and services will depend upon a variety of factors, including
new product selection, timely and efficient completion of design, timely and
efficient implementation of manufacturing and assembly process, a cost reduction
program and the development, completion, performance, quality and reliability
and development of competitive products and services by competitors. The Company
may experience delays from time to time in completing development and
introduction of new products and services. Moreover, there can be no assurance
that the Company will be successful in selecting, developing, manufacturing and
marketing new products and services. There can be no assurance that defects will
not be found in the Company's products and services after commencement of
commercial shipments, which could result in the loss of or delay in market
acceptance. The inability of the Company to introduce in a timely manner new
products and services that contribute to revenues could have a material adverse
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effect on the Company's business, financial condition and results of operations.
See "Part I, Item. 1. "Description of Business (b) Business of Issuer -
Competition."
17. Possible Adverse Affect of Fluctuations in the General Economy and
Business of Customers. Historically, the general level of economic activity has
significantly affected the demand for new, technology products. As demands for
cost reduction in telephone calling costs have increased, alternative services
has seen a high degree of demand. There can be no assurance that an economic
downturn would not adversely affect the demand for the Company's products and
services.
18. Lack of Working Capital Funding Source. Other than revenues from the
sale of its products, which revenues have yet to produce a significant net
profit, the Company has no current source of working capital funds, and should
the Company be unable to secure additional financing on acceptable terms, its
business, financial condition, results of operations and liquidity would be
materially adversely affected.
19. Uncertainty of Market Acceptance. The future operating results of the
Company depend to a significant extent upon the continued development of
products and services deemed necessary, useful, convenient, affordable and
competitive. There can be no assurance that the Company has the ability to
continuously introduce propriety products and services into the marketplace
which will achieve the market penetration and acceptance necessary for the
Company to grow and become profitable on a sustained basis, especially given the
fierce competition that exists from companies more established and well financed
than the Company. See "Part I, Item 1. "Description of Business -(b) Business of
Issuer - Competition."
To date, substantially all of the Company's product sales have been to a
limited number of TruePartners. The Company's future results of operations will
be dependent in significant part on its ability to penetrate markets in the
United States and foreign countries in which the Company has not yet established
a meaningful presence. There can be no assurance that the Company will be
successful in penetration these additional markets.
20. International Operations; Risks of Doing Business in Developing
Countries. The Company anticipates that international sales will, as a result of
various TruePartner distribution agreements entered into, account for more of
its revenues from product sales for the foreseeable future. The Company's
international sales may be denominated in foreign or United States currencies.
The Company does not currently engage in foreign currency hedging transactions.
As a result, a decrease in the value of foreign currencies relative to the
United States dollar could result in losses from transactions denominated in
foreign currencies. With respect to the Company's international sales that are
United States dollar-denominated, such a decrease could make the Company's
products less price-competitive. Additional risks inherent in the Company's
international business activities include changes in regulatory requirements,
costs and risks of local customers in foreign countries, availability of
suitable export financing, timing and availability of export licenses, tariffs
and other trade barriers, political and economic instability, difficulties in
staffing and managing foreign operations, difficulties in managing distributors,
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potentially adverse tax consequences, foreign currency exchange fluctuations,
the burden of complying with a wide variety of complex foreign laws and treaties
and the possibility of difficulty in accounts receivable collections. Some of
the Company's customer purchase agreements may be governed by foreign laws,
which may differ significantly from U.S. laws. Therefore, the Company may be
limited in its ability to enforce its rights under such agreements and to
collect damages, if awarded. There can be no assurance that any of these factors
will not have a material adverse effect on the Company's business, financial
condition and results of operations. See "Part I, Item 1. "Description of
Business - (b) Business of Issuer - Sales and Marketing - Distribution of
Products."
21. Effects of the Reduction of Traditional Long Distance Services. The
Company's rates for long distance telephone calls are generally less than the
telephone charges for the same long-distance service that the customer would pay
to a primary seller of such services. The Company's ability to undersell such
primary seller arises as a result of the use of the Internet to transmit long
distance telephone calls. Therefore, narrowing of the differential between the
rates charged to Company's customers and the cost of long distance
telecommunications services provided by competitors or traditional long distance
carrier's customers would have a significant adverse effect on the Company. See
"Part I, Item 1. "Description of Business - (b) Business of Issuer."
22. Potential Year 2000 Problems. The "Year 2000" issue affects the
Company's installed computer systems, network elements, software applications,
and other business systems that have time-sensitive programs that may not
properly reflect or recognize the year 2000. Because many computers and computer
applications define dates by the last two digits of the year, "00" may not be
properly identified as the year 2000. This error could result in miscalculations
or system failures. The Year 2000 issue may also affect the systems and
applications of the Company's suppliers. There can be no assurance that systems
operated by third parties providing services to the Company will be Year 2000
compliant. See Part I, Item 2. "Management's Discussion and Analysis or Plan of
Operation - Impact of the Year 2000 Issue."
23. No Dividends. While payments of dividends on the Common Stock rests
with the discretion of the Board of Directors, there can be no assurance that
dividends can or will ever be paid. Payment of dividends is contingent upon,
among other things, future earnings, if any, and the financial condition of the
Company, capital requirements, general business conditions and other factors
which cannot now be predicted. It is highly unlikely that cash dividends on the
Common Stock will be paid by the Company in the foreseeable future. See Part I,
Item 8. "Description of Securities - Description of Common Stock - Dividend
Policy."
24. No Cumulative Voting. The election of directors and other questions
will be decided by a majority vote. Since cumulative voting is not permitted and
a majority of the Company's outstanding Common Stock constitute a quorum,
investors who purchase shares of the Company's Common Stock may not have the
power to elect even a single director and, as a practical matter, the current
management will continue to effectively control the Company. See Part I, Item 8.
"Description of Securities - Description of Common Stock."
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25. Control by Present Shareholders. The present shareholders of the
Company's Common Stock will, by virtue of their percentage share ownership and
the lack of cumulative voting, be able to elect the entire Board of Directors,
establish the Company's policies and generally direct its affairs. Accordingly,
persons investing in the Company's Common Stock will have no significant voice
in Company management, and cannot be assured of ever having representation on
the Board of Directors. See Part I, Item 4. "Security Ownership of Certain
Beneficial Owners and Management."
26. Potential Anti-Takeover and Other Effects of Issuance of Preferred
Stock May Be Detrimental to Common Shareholders. Potential Anti-Takeover and
Other Effects of Issuance of Preferred Stock May Be Detrimental to Common
Shareholders. The Company is authorized to issue shares of preferred stock.
("Preferred Stock"). The issuance of Preferred Stock does not require approval
by the shareholders of the Company's Common Stock. The Board of Directors, in
its sole discretion, has the power to issue shares of Preferred Stock in one or
more series and to establish the dividend rates and preferences, liquidation
preferences, voting rights, redemption and conversion terms and conditions and
any other relative rights and preferences with respect to any series of
Preferred Stock. Holders of Preferred Stock may have the right to receive
dividends, certain preferences in liquidation and conversion and other rights;
any of which rights and preferences may operate to the detriment of the
shareholders of the Company's Common Stock. Further, the issuance of any shares
of Preferred Stock having rights superior to those of the Company's Common Stock
may result in a decrease in the value of market price of the Common Stock
provided a market exists, and additionally, could be used by the Board of
Directors as an anti-takeover measure or device to prevent a change in control
of the Company. See Part I, Item 1. "Description of Securities - Description of
Preferred Stock."
27. No Secondary Trading Exemption. Secondary trading in the Common Stock
will not be possible in each state until the shares of Common Stock are
qualified for sale under the applicable securities laws of the state or the
Company verifies that an exemption, such as listing in certain recognized
securities manuals, is available for secondary trading in the state. There can
be no assurance that the Company will be successful in registering or qualifying
the Common Stock for secondary trading, or availing itself of an exemption for
secondary trading in the Common Stock, in any state. If the Company fails to
register or qualify, or to obtain or verify an exemption for the secondary
trading of, the Common Stock in any particular state, the shares of Common Stock
could not be offered or sold to, or purchased by, a resident of that state. In
the event that a significant number of states refuse to permit secondary trading
in the Company's Common Stock, a public market for the Common Stock will fail to
develop and the shares could be deprived of any value. The Company was listed in
Standard and Poor's Standard Corporation Records on July 29, 1998.
28. Possible Adverse Effect of Penny Stock Regulations on Liquidity of
Common Stock in any Secondary Market. Although trading volume indicates that a
secondary trading market has developed to a certain extent for the shares of
Common Stock of the Company, the Common Stock is expected to come within the
meaning of the term "penny stock" under 17 CAR 240.3a51-1 because such shares
are issued by a small company; are low-priced (under five dollars); and are not
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<PAGE>
traded on NASDAQ or on a national stock exchange. The SEC has established risk
disclosure requirements for broker-dealers participating in penny stock
transactions as part of a system of disclosure and regulatory oversight for the
operation of the penny stock market. Rule 15g-9 under the Securities Exchange
Act of 1934, as amended, obligates a broker-dealer to satisfy special sales
practice requirements, including a requirement that it make an individualized
written suitability determination of the purchaser and receive the purchaser's
written consent prior to the transaction. Further, the Securities Enforcement
Remedies and Penny Stock Reform Act of 1990 require a broker-dealer, prior to a
transaction in a penny stock, to deliver a standardized risk disclosure
instrument that provides information about penny stocks and the risks in the
penny stock market. Additionally, the customer must be provided by the
broker-dealer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and the salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. For so long as the Company's Common Stock is considered
penny stock, the penny stock regulations can be expected to have an adverse
effect on the liquidity of the Common Stock in the secondary market, if any,
which develops.
Item 2. Management's Discussion and Analysis or Plan of Operation
The following discussion contains certain forward-looking statements that
are subject to business and economic risks and uncertainties, and the Company's
actual results could differ materially from those forward-looking statements.
The following discussion regarding the financial statements of the Company
should be read in conjunction with the financial statements and notes thereto.
Discussion and Analysis
The Company, IPVoice Communications, Inc. is a Nevada chartered development
stage corporation which conducted business from its headquarters in Denver,
Colorado until August 1999 when it relocated to Phoenix, Arizona. The Company
was incorporated on February 19,1997, as Nova Enterprises, Inc. and changed its
name to IPVoice Communications in March, 1998.
The Company is principally involved in the internet telephony industry.
Current activities include software and hardware development, raising additional
equity, and negotiating with key personnel and facilities.
Inventory consists mainly of computer parts to be used in the assembly of
units to be sold to customers, or utilized by the Company in its operations.
Once the assembly is complete, the respective computer part costs are charged to
operations or reclassified to property and equipment based on the nature of the
transaction. Inventory is valued at the lower of cost or market. Cost is
determined using the first-in, first-out (FIFO) method.
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<PAGE>
In March 1998, IPVoice Communications, Inc., a Nevada corporation, acquired
100% of the issued and outstanding shares of the common stock of IPVoice
Communications, Inc., a Delaware corporation, in a reverse merger, which was
accounted for as a reorganization of the Delaware company.
The Company is in the development stage, it is acquiring the necessary
operating assets and it is beginning its proposed business. While the Company is
developing tools necessary to enter the internet telephony market, there is no
assurance that any benefit will result from such activities. The Company will
receive limited operating revenues and will continue to incur expenses during
its development, possibly in excess of revenue.
The ability of the Company to continue as a going concern is dependent upon
increasing sales and obtaining additional capital and financing. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern. The Company is currently seeking
financing to allow it to begin its planned operations.
On April 7, 1999, the Company acquired all of the issued and outstanding
common stock of INS. The Company issued 250,000 shares of redeemable convertible
preferred shares, each convertible on or after one (1) year after Closing into
one share of the Company's common stock or, at the sellers' option, redeemable
by the Company at a redemption price of $2.00 per share. The Company rescinded
this transaction ab initio just prior to filing this Form 10SB after finding
that there was no clear link between the ownership of the CIC Code and INS.
The purchase was done to acquire FCC tariffs, corporate certification in
over 30 states in the United States, and the INS name. At the time of the
acquisition, the Company believed that it was acquiring the CIC. The Company
also obtained all cash, furniture and equipment, staff and office space in
Arizona. An independent business valuation solely of the intangible assets,
which are comprised of the CIC code and state certifications and tariffs,
concluded a fair market value at the date of acquisition of $460,000. During the
course of the audit, it was discovered that clear title may not have passed to
INS and subsequently the Company. The Company believed that the acquisition of
INS would provide the Company with an operational and marketing advantage in the
United States, by being tariffed and, provided clear title had passed to the
Company, by having the CIC.
The acquisition was subject to IPVC entering into agreements with the
Company's President and Chief Executive Officer, including but not limited to,
an employment agreement, consulting agreement, compensation agreement, stock
option agreement, and stock grant agreement. The Employment/Compensation
Agreement provides compensation for services performed in the capacity of
Director and Chief Financial Officer of the Company. In addition, certain stock
incentives were provided. The Board has voted to unwind the transaction ab
initio, to rescind the issuances made under the acquisition and employment
agreements and to terminate Mr. Stazzone's employment.
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<PAGE>
During the second quarter of 1999, the Company raised $1,150,000 through
the issuance of forty-six (46) investment units in the amount of $25,000. Each
unit consisted of a two-year note in the principal amount of $24,900 including
interest payable quarterly in cash at 9% per annum; a warrant for the purchase
of 18,750 shares of restricted stock of the Company; and twenty five (25) Senior
Convertible Preferred shares. Management anticipates the net proceeds, less
initial expenses payable, will provide sufficient working capital to meet the
Company's capital needs through the first quarter of 2000 and anticipates that
it may generate sufficient revenue and/or be required to raise additional
capital in order to meet its needs through calendar year 2000. However, there
can be no assurance that sufficient revenues will be generated or that
additional capital can be raised, if needed.
On May 24, 1999 the Company formally changed its name to IPVoice.com, Inc.
Results of Operations - Full Fiscal Years - December 31, 1998 and December 31,
1997
Revenues
Revenues for the twelve month period ended December 31, 1998 was $41,254
and no revenue was generated during calendar year 1997. The Company rendered
consulting services which resulted in revenues for the twelve months ended
December 31, 1998.
Operating Expenses
Operating Expenses for the twelve months of calendar year 1998 were
$548,939 versus $23,000 in the comparable period in calendar year 1997. Net loss
was $507,685 and $22,981 for the twelve months ended December 31,1998 and 1997,
respectively.
During 1998, consulting fees of $35,000 were paid to an officer and $25,000
in professional fees were paid to a shareholder of the Company. There were no
outstanding amounts owed in respect to these fees as of December 31, 1998.
Assets and Liabilities
Assets were $191,513 as of December 31, 1998, and $1,745 as of December 31,
1997. As of December 31, 1997,assets consisted of cash of $1,745. As of December
31, 1998, assets consisted primarily of inventory of $152,980 and equipment with
a net book value of $37,625. Liabilities were $307,129 and $14,000 as of
December 31, 1998 and December 31, 1997 respectively. As of December 31, 1998,
liabilities consisted primarily of accounts payable of $191,817, payroll and
payroll related liabilities of $35,730, and advances and payables to officers
and shareholders of $79,582.
During 1997, the Company incurred certain organization expenses totaling
$14,000, which were paid for by a company under common control. The balance owed
to this related party at December 31, 1997 was paid in full during 1998.
49
<PAGE>
At December 31, 1998, the Company owed one of its officers $34,268 for
reimbursement of expenses paid on behalf of the Company.
During the year ended December 31, 1998, the Company owed two of its
shareholders $20,564 for consulting services performed on behalf of the Company.
Total consulting fees incurred to these shareholders during the year amounted to
$31,096. Also during the year ended December 31, 1998, one of the Company's
shareholders advanced funds totaling $24,750 for payment of general operating
expenses.
Stockholders' Equity
Stockholders' equity was ($115,616) as of December 31, 1998 and ($12,255)
as of December 31, 1997. The Company had 12,578,999 and 10,400,000 shares of
common stock issued and outstanding at December 31, 1998 and 1997, respectively.
In February 1997, the Company issued 9,000,000 shares to its founders for
services rendered to the Company valued at par value, or $9,000. In March 1998,
a majority shareholder donated 9,000,000 shares of common stock to the Company.
These shares were simultaneously issued for the acquisition of IPVoice
Communications, Inc., a Delaware corporation. In the fourth quarter of 1998, the
Company issued 275,000 shares of common stock for services rendered, valued at
the current market rate of $41,250.
As of December 31,1998, stockholders' equity consisted primarily of
$477,750 raised in the Company's offering of its Common Stock, offset primarily
by the accumulated deficit at December 31, 1998 of $530,666.
Financial Condition, Liquidity and Capital Resources
At December 31,1998 the Company had cash of $908 as compared to $1,745 at
December 31, 1997. In March 1997, the Company completed a Regulation D Rule 504
Placement for 1,400,000 shares in exchange for $14,000 cash.
During 1997, the Company incurred certain organization expenses totaling
$14,000, which were paid for by a company under common control. The balance owed
to this related party at December 31, 1997 was paid in full during 1998.
During the second quarter of 1998, the Company issued 144,000 shares of
common stock for $144,000 in cash. During the third quarter, the Company issued
183,333 shares of common stock for $85,000 in cash, and 627,000 shares of common
stock for a subscription receivable of $62,700. In the fourth quarter of 1998,
476,666 shares of common stock were issued for $74,500 in cash.
During the year ended December 31, 1998, one of the Company's shareholders
advanced funds totaling $24,750 for payment of general operating expenses. At
December 31, 1998, the Company owed one of its officers $34,268 for
reimbursement of expenses paid on behalf of the Company.
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<PAGE>
During the second quarter of 1999, the Company raised $1,150,000 through
the issuance of forty-six (46) investment units in the amount of $25,000. Each
unit consisted of a two-year note in the principal amount of $24,900 including
interest payable quarterly in cash at 9% per annum; a warrant for the purchase
of 18,750 shares of restricted stock of the Company; and twenty five (25) Senior
Convertible Preferred shares. Management anticipates the net proceeds, less
initial expenses payable, will provide working capital for the Company through
the first quarter of 2000.
The Company may raise additional capital through private and/or public
sales of securities in the future but has no definite commitments at this time.
Results of Operations for the Six Months Ended June 30, 1999 and June 30, 1998
Revenues
No revenue was generated during the six month period ending June 30, 1999.
Revenues for the six month period ended June 30, 1998 was $40,384. The Company
rendered consulting services which resulted in revenues for the six month period
ended June 30, 1998
The Company continues to concentrate on developing its voice-over-IP
network and expanding its customer base and distributors. The Company is
currently working on several new projects which it anticipates will diversify
its customer base and increase revenues in both the near and long-term. While
the certainty of these efforts becoming future revenues for the Company cannot
be measured at this point in time, and the Company has not yet realized the
anticipated product sales, the management of the Company continues to be
encouraged by the inquiries it is receiving concerning its products and services
and the contracts which it has executed.
Operating Expenses
Operating Expenses for the six months of calendar year 1999 were $796,028
versus $114,616 in the comparable period in calendar year 1998. Net loss was
$806,189 and $74,232 for the six months ended June 30,1999 and 1998,
respectively. Interest expense was $11,547 for the six months ended June 30,
1999 reflecting interest on the financing completed in the second quarter of
1999, offset by $6,386 of interest income earned during the same period for
monies on deposit.
Assets and Liabilities
Assets were $1,291,909 as of June 30, 1999, and $112,773 as of June 30,
1998. As of June 30, 1999, assets consisted primarily of cash of $1,069,856;
inventory of $168,771 and equipment with a net book value of $48,912. As of June
30, 1998, assets consisted primarily of cash of $22,932; inventory of $36,030;
accounts receivable of $28,686; and equipment with a net book value of $25,125.
Liabilities were $1,268,550 and $42,986 as of June 30, 1999 and June 30, 1998
respectively. As of June 30, 1999, liabilities consisted primarily of accounts
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<PAGE>
payable of $111,603, accrued expenses of $11,547; and notes payable of
$1,145,400. As of June 30, 1998, liabilities were comprised of accounts payable
of $42, 986.
Stockholders' Equity
Stockholders' equity was $23,359 as of June 30, 1999 and $69,787 as of June
30, 1998. The Company had 1,150 of Senior Convertible Preferred issued and
outstanding as of June 30, 1999 and no shares of preferred stock issued and
outstanding at June 30, 1998. The Company had 16,202,758 and 10,544,000 shares
of common stock issued and outstanding at June 30, 1999 and 1998, respectively.
As of June 30,1999, stockholders' equity consisted primarily of $1,350,614
from the Company's offering of its Common Stock and issued for services
rendered, offset primarily by the accumulated deficit at June 30, 1999 of
$1,331,855. As of June 30,1998, stockholders' equity consisted primarily of
$167,000 raised in the Company's offering of its Common Stock, offset primarily
by the accumulated deficit at June 30, 1998 of $97,213.
In the first half of 1999, the Company issued 493,760 shares of common
stock for services rendered, valued at the current market rate of $429,564.
During the second quarter of 1999, the Company raised $1,150,000 through
the issuance of forty-six (46) investment units in the amount of $25,000. Each
unit consisted of a two-year note in the principal amount of $24,900 including
interest payable quarterly in cash at 9% per annum; a warrant for the purchase
of 18,750 shares of restricted stock of the Company; and twenty five (25) Senior
Convertible Preferred shares. Management anticipates the net proceeds, less
initial expenses payable, will provide working capital for the Company through
the first quarter of 2000.
Financial Condition, Liquidity and Capital Resources
At June 30,1999 the Company had cash of $1,069,856 as compared to $22,932
at June 30, 1998.
During the second quarter of 1998, the Company issued 144,000 shares of
common stock for $144,000 in cash. During the third quarter, the Company issued
183,333 shares of common stock for $85,000 in cash, and 627,000 shares of common
stock for a subscription receivable of $62,700. In the fourth quarter of 1998,
476,666 shares of common stock were issued for $121,800 in cash.
During the first six months of 1999, the Company issued 3,129,999 shares of
common stock for $446,000 in cash and a subscription receivable of $175,000.
During the second quarter of 1999, the Company raised $1,150,000 through
the issuance of forty-six (46) investment units in the amount of $25,000. Each
unit consisted of a two-year note in the principal amount of $24,900 including
interest payable quarterly in cash at 9% per annum; a warrant to purchase 18,750
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<PAGE>
shares of restricted stock of the Company; and twenty five (25) Senior
Convertible Preferred shares. Management anticipates the net proceeds, less
initial expenses payable, will provide working capital for the Company through
the first quarter of 2000.
The Company believes that its anticipated funds from operations, funds from
the prior sale of equity interests, and funds from the sale of its recent
offering of investment units, may be insufficient to fund its capital
expenditures, working capital, and other cash requirements for the next twelve
(12) months. In that event, the Company will be required to seek additional
funds to finance its long term operations; however, it has no definite
commitments for such funds at this time. Should the Company fail to raise any
additional funds, the Company will have insufficient funds for the Company's
intended operations and capital expenditures for the next twelve (12) months and
will have a material adverse effect on the Company's long-term results of
operations.
Impact of the Year 2000 Issue
The Year 2000 Issue is the result of potential problems with computer
systems or any equipment with computer chips that use dates where the date has
been stored as just two digits (e.g. 98 for 1998). On January 1, 2000, any clock
or date recording mechanism including date sensitive software which uses only
two digits to represent the year, may recognize the date using 00 as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruption of operations, including among other things,
a temporary inability to process transactions, send invoices, or engage in
similar activities.
The Company is aware of the issues associated with the programming code in
existing computer systems as the millennium (Year 2000) approaches. All software
used for the Company's systems is supplied by software vendors or outside
service providers. The Company has confirmed with such providers that its
present software is Year 2000 Compliant.
The Company believes, after investigation, that all software and hardware
products that it is currently in the process of developing (directly or through
vendors) are Year 2000 compliant. The Company believes, after investigation,
that its own software operating systems are Year 2000 compliant.
The Company believes that it has disclosed all required information
relative to Year 2000 issues relating to its business and operations. However,
there can be no assurance that the systems of other companies on which the
Company's systems rely also will be timely converted or that any such failure to
convert by another company would not have an adverse affect on the Company's
systems.
Forward-Looking Statements
This Form 10-SB includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
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Form 10-SB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof), demand
for the Company's products and services, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
or developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, general economic market and
business conditions; the business opportunities (or lack thereof) that may be
presented to and pursued by the Company; changes in laws or regulation; and
other factors, most of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Form 10-SB are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequence to
or effects on the Company or its business or operations. The Company assumes no
obligations to update any such forward-looking statements.
Item 3. Description of Property
The Company maintains its executive offices at 5050 No. 19th Avenue, Suite
416/417, Phoenix, Arizona 85015. Its telephone number is (602) 335-1231 and its
facsimile number is (602) 335-1577.
The Company leases approximately three thousand five hundred sixty-five
(3,565) square feet of office space in Phoenix, Arizona which now serve as its
executive offices. This space is also occupied by INS, and this lease replaces
INS' previous lease at the same location. The lease is for a term of one (1)
year commencing August 1, 1999 and ending July 31, 2000. The Company pays
monthly rent in the amount of $3,862.08 plus a ratable cost adjustment and
taxes.
The Company owns no real property and its personal property consists of
hardware, inventory, software, furniture, fixtures and equipment, prototype
molds and leasehold improvements with an original cost of $41,968 on December
31, 1998.
INS acquired phone system equipment under the provisions of two long-term
leases from the Telesave bankruptcy. These leases expire in August 2003. The
lease property had an original equipment cost of $61,010. The Company has not
resolved how this equipment will be effected by the unwinding of the transaction
or whether such equipment is necessary for its operation.
The Company currently employs its capital reserves in a sweep account.
Activity is monitored on a daily basis.
Item 4. Security Ownership of Certain Beneficial Owners and Management:
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The following table sets forth information as of September 30, 1999,
regarding the ownership of the Company's Common Stock by each shareholder known
by the Company to be the beneficial owner of more than five percent (5%) of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group. Except as otherwise indicated, each of the shareholders
has sole voting and investment power with respect to the share of Common Stock
beneficially owned.
<TABLE>
<CAPTION>
Name and Address of Title of Amount and Nature of Percent of
- -------------------------------------------------------------------------------------------
Beneficial Owner Class Beneficial Owner (1) Class
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James Howson (2)(3) Common 0 0.0%
7553 South Mount Zirkel
Littleton, CO 80127
Barbara S. Will(3) Common 3,000,000 18.052%
8027 East La Junta Road
Scottsdale, AZ 85255
Anthony K. Welch(3) Common 2,856,523 17.188%
6554 South Olympian Road
Evergreen, CO 80439
Peter M. Stazzone(4) Common 300,000 1.805%
800 West Funt Street
Chandler, AZ 85224
Russell Watson Common 0 0.0%
105 Leader Heights Road
York, PA 17403
John Raycraft Common 0 0.0%
7776 South Pointe Parkway West
Phoenix, AZ 85044
Condor Worldwide, Ltd. (3) Common 3,000,000 18.052%
328 Bay Street
Nassau, The Bahamas
All Executive Officers and
Directors as a Group
(Six (6) persons) 6,156,823 37.045%
- ----------
</TABLE>
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<PAGE>
(1) The percentages are based upon 16,618,998 shares of Common Stock
outstanding as of September 30, 1999. In addition to the shares owned
by the Executive Officers and Directors, said officers and directors
own (including those beneficially held) options to purchase zero (0)
shares of the Company's Common Stock. In the event all such options to
purchase were exercised, this group would own a total of 9,156,823
shares of the Company's Common Stock which would represent 37.045% of
the total shares of Common Stock outstanding. None of these options may
be exercised within 60 days.
(2) In November 1997, prior to its acquisition by the Company, IPVCDE
entered into a consulting agreement with Condor, whereby Condor agreed
to provide certain sales, marketing and public relations services in
exchange for 600,000 shares of IPVCDE's unrestricted Common Stock to be
issued upon listing of IPVCDE's stock on the OTC Bulletin Board. Such
shares were never issued and the agreement was amended in July 1998
deleting the issuance of such shares. The consulting agreement was
modified in July 1998 to 500,000 shares of the restricted Common Stock
of the Company. The term of the Agreement was for a period of six (6)
years and is still in effect. James K. Howson, the Company's Chairman
and CEO, serves as the Chairman and CEO of Condor and he is the
beneficial owner of Condor. See Part I, Item 7. "Certain Relationships
and Related Transactions".
(3) In March 1998, the Company's predecessor, Nova, entered into a share
exchange agreement with IPVCDE and its shareholders whereby Nova issued
9,000,000 shares of its restricted Common Stock valued at $9,000 to
IPVCDE's shareholders for all of the outstanding capital stock of
IPVCDE, which then became a wholly-owned subsidiary of Nova. In
connection with the agreement, the Company entered into employment
agreements with Barbara Will, its current Director, Chief Operating
Officer and President and with Anthony Welch, designer of the Company's
proprietary software, who currently serves as the Senior VicePresident
of Research and Development. As part of the exchange, Ms. Will, Mr.
Welch and Condor each received 3,000,000 shares of the Company's
restricted common stock. Mr. Howson, the Company's Chairman and Chief
Executive Officer, is the beneficial owner of Condor. For such
offering, the Company relied upon Section 4(2) of the Act, Rule 506,
Section 11-51-308(1)(j) of the Colorado Code, Section 7309(b)(9) of the
Delaware Code and Section 90.530(17) of the Nevada code. The Company
relied on no state exemption for the issuance to Condor, which is a
Bahamian corporation. See Part I, Item 6. "Executive Compensation -
Employee Contracts and Agreements"; Part I, Item 7. "Certain
Relationships and Related Transactions"; and Part II, Item 4. "Recent
Sales of Unregistered Securities."
(4) In April 1999, the Company entered into a share exchange agreement with
INS whereby the Company exchanged 250,000 shares of its Redeemable
Convertible Preferred stock valued at $500,000 for all of the
outstanding capital stock of INS. Such Redeemable Convertible Preferred
stock contains 1 for 1 conversion rights after one (1) year and is
redeemable at $2.00 per share. The President of INS, Peter M. Stazzone,
remained with the Company as the President of the subsidiary. At the
time of the exchange Mr. Stazzone became Secretary,
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<PAGE>
Treasurer and Chief Financial Officer of the Company under an
employment agreement. Also at the time of the exchange, Mr. Stazzone
received 50,000 shares of the Redeemable Convertible Preferred Stock of
the Company. Pursuant to the Employment Agreement, Mr. Stazzone
received 200,000 shares of the Company's Restricted Common Stock, a
stock bonus of 100,000 shares of the Restricted Common Stock deemed
earned on the date of the Share Exchange Agreement, but to be delivered
on the earlier of (i) the first anniversary date or (ii) Mr. Stazzone's
termination and options to purchase an additional 200,000 shares of the
restricted Common Stock of the Company exercisable for a period of
three (3) years at an exercise price of $1.00 per share. It was
represented that INS had acquired certain assets, including the rights
to INS' name, from the Bankruptcy Court in the Chapter 11 filing of
Telsave. Mr. Stazzone was the Chief Financial Officer of Telsave at the
time the bankruptcy was filed and the Bankruptcy Court was provided
with disclosure of his involvement with INS prior to the Court's
approval of the sale of certain Telsave assets to INS. In June 1998,
Mr. Stazzone was loaned $50,000 by INS, which loan bears no interest
and has no stated repayment terms. At the time of the acquistion of
INS, the Company believed that it was acquiring the rights to the CIC
Code. The purchase price was based in part upon an appraisal of the
value of the CIC Code which is loaded in approximately 60% of the
domestic market. However, during the course of the audit, it was
discovered that clear title may not have passed to INS and subsequently
the Company. Therefore, the Board resolved that, in the event clear
title had not passed to the Company, it would be in the best interest
of the shareholders to unwind the transaction. The Company sought a
legal opinion on the status of such title and just prior to filing this
Form 10SB discovered that there was no clear link between the ownership
of the CIC Code and INS. Therefore the Company voted to unwind the
transaction ab initio, to rescind the issuances made under the
acquisition and the employment agreements and to terminate Mr.
Stazzone's employment. For such offering, the Company relied upon
Section 4(2) of the Act and Rule 506, Section 14-4-126(f) of the
Arizona Code and Section 90.530(11) of the Nevada Code. See Part I,
Item 6. "Executive Compensation - Employee Contracts and Agreements";
Part I, Item 7. "Certain Relationships and Related Transactions"; and
Part II, Item 4. "Recent Sales of Unregistered Securities."
There are no arrangements which may result in the change of control of
the Company by such certain beneficial owners and management.
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Item 5. Directors, Executive Officers, Promoters and Control Persons:
Executive Officers and Directors
Set forth below are the names, ages, positions, with the Company and
business experiences of the executive officers and directors of the Company.
<TABLE>
<CAPTION>
Name Age Position(s) with Company
- -------------- --- --------------------------------------------
<S> <C> <C>
Barbara S. Will 46 Director, President and Chief Operating
Officer
Anthony Welch 31 Director, Senior Vice President of Research
and Development
James L. DeSalle 53 Acting Chief Financial Officer
James K. Howson 57 Chairman, Chief Executive Officer
Russell Watson 50 Director
John Raycraft 52 Director
</TABLE>
All directors hold office until the next annual meeting of the
Company's shareholders and until their successors have been elected and qualify.
Officers serve at the pleasure of the Board of Directors. The officers and
directors will devote such time and effort to the business and affairs of the
Company as may be necessary to perform their responsibilities as executive
officers and/or directors of the Company.
Family Relationships
There are no family relationships between or among the executive
officers and directors of the Company.
Business Experience
Barbara S. Will, age 46, currently serves as Director, President and
COO. She has served as a Director, President and COO since March 1998. She
previously served as Chairman between March 1998 to June 1999. Ms. Will has over
twenty (20) years of experience in all areas of telecommunications, both
domestic and international. Prior to joining IPVC, from 1984 to 1997, Ms. Will
was in a senior capacity with MCI and was responsible for signing some of the
largest contracts with a carrier/reseller in MCI's history. Her vast industry
experience includes international and international private line; International
800; data; DSO, DSI, DSC, OC3; dedicated in and outbound; One-Plus; calling and
debit cards; Operator Assistance; Internet; Enhanced Services; and Enhanced
Network. During her time at MCI, she received numerous awards for her
outstanding performance. Ms. Will attended Colorado State University and
graduated in 1972 with a B.A.
degree in Communications and Business Administration.
Anthony K. Welch, age 31, current serves as a Director and the Senior
Vice-President. He has served as a Director and Senior Vice President since
March, 1998 and as Senior Vice President of Research and Development since
August 1999. Anthony Welch is the original designer of the MultiCom, AuditRite,
and TrueConnect platforms and has served as Special Consultant to various
telecommunications organizations. From 1997 to 1998, Mr. Welch was involved in
58
<PAGE>
the formation of the Company and the development of the MultiCom Business
Management Software. From 1991 to 1997, Mr. Welch served as Special Consultant
and Project Design Leader for such organizations as Nation's Bank CS
Headquarters, Frito-Lay Worldwide Headquarters, NEC America Mobile
Radio/Cellular/Pager Division Headquarters, and Southwestern Bell Mobile
(Cellular/Pager) Systems Headquarters. Mr. Welch has received numerous awards
and recognition for his work in Artificial Intelligence - both in Military and
Academic circles - and has applied this experience to creating technology
solutions that are both intelligent and flexible. The technology behind the
MultiCom system has received recognition from several telecom trade magazines
("Computer Telephony" and "Telephony" magazines). Mr. Welch obtained first place
in the International Science competition for Artificial Intelligence at the age
of 17. Mr. Welch attended the University of Mississippi and was the first
freshman in the history of the college to be admitted into the artificial
intelligence Ph.D. Program.
James L. DeSalle, age 53, currently serves as Acting Chief Financial
Officer. He has served as Acting Chief Financial Officer since October 29, 1999.
Since March 1999, Mr. DeSalle has been a consultant to IIP. From 1997 to March
1999, he was a self employed as a consultant. From 1988 to 1997, Mr. DeSalle was
employed by Phico Group, initially serving as the Controller and then as Vice
President and Treasurer of Phico Services Co. Mr. DeSalle received a B.S degree
in Accounting from LaSalle University, Philadelphia, Pennsylvania in 1968. He is
licensed as a Certified Public Accountant in Pennsylvania.
James K. Howson, age 57, currently serves as Chairman and Chief Executive
Officer. He has served as Chairman since June1999 and as Chief Executive Officer
since September 1999. Mr. Howson is an entrepreneur and has been an investor for
thirty (30) years in small businesses and start-up companies in Europe, Latin
American and the United States. From 1991 to 1996, Mr. Howson was an investor in
and consultant to Mid-America Venture Capital Partners, Inc., a privately held
company that provided seed capital to promising young businesses. Mr. Howson was
also an investor in Environmental Systems, Inc. located in Lancaster,
Pennsylvania. Mr. Howson attended Roan College in London England in 1959.
Russell Watson, age 50, currently serves as a Director. He has served as a
Director since September, 1999. Currently, Mr. Watson is the Business Manager
for Behrwood Capital Service, Inc., an investment management company which he
joined in 1998. Also, he is the Vice President of Operations for Venison
America, Inc., a meat processor and distributor which he joined in 1998. From
1994 to 1998, Mr. Watson was Operations Manager for Mid-Atlantic Snack, Inc., a
snack food distributor. Mr. Watson owned and operated a snack food marketing
business from 1993 to 1994. From 1974 to 1993, Mr. Watson was CFO and Operations
Manager for Weyerhauser Company, Hardwood Division. Mr. Watson received a B.S.
degree from Indiana University of Pennsylvania in 1971.
John Raycraft, age 52, currently serves as a Director. He has served as a
Director since July, 1999. Mr. Raycraft is Chief Executive Officer and a
director of First American Health Concepts, Inc., an optical insurance company
which he joined in 1991. From 1981 to 1991, Mr.Raycraft was associated with
California Vision Services Plan and AVP Vision Plan. Mr. Raycraft received a
B.S. degree in Economics from the California State University in Sacremento in
1972.
59
<PAGE>
<TABLE>
<CAPTION>
Item 6. Executive Compensation
Name and Year Annual Annual Annual LT LT LTIP All
Post Comp Comp Comp Comp Comp Payouts Other
Salary Bonus Other Rest Options (1)
($) Stock
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Barbara 1997 $ -0- $ -0- $-0-
S. Will, 1998 $48,000 $ -0- $-0-
Director, 1999 $51,996 $ -0- $-0-
President and
COO
- -----------------------------------------------------------------------------------------------------
Anthony 1997 $ -0- $ -0- $-0-
K. Welch, 1998 $48,000 $ -0- $-0-
Director and 1999 $51,996 $ -0- $-0-
Senior Vice-
President of
Research and
Development
- -----------------------------------------------------------------------------------------------------
Peter M. 1997 $ -0- $ -0- $-0-
Stazzone, 1998 $ -0- $ -0- $-0-
Director, 1999 $ 3,834 $ -0- $-0-
Secretary,
Treasurer and
Chief Financial
Officer and
President of INS (3)
- ------------------------------------------------------------------------------------------------------
James K. 1997 $ -0- $-0-
Howson, 1998 $35,000 $-0-
Chairman and 1999 $ -0- $-0-
Chief (2)
Executive
Officer
- ------------------------------------------------------------------------------------------------------
Michael 1997 $ -0- $-0-
McKim, Vice 1998 $44,076 $-0-
President of 1999 $39,583 $-0-
Research and
Development
(3)
- ------------------------------------------------------------------------------------------------------
</TABLE>
60
<PAGE>
(1) All other compensation includes certain health and life insurance benefits
paid by the Company on behalf of its employee.
(2) Mr. Howson was a consultant to the Company prior to becoming the Chief
Executive Officer in June 1999.
(3) Mr. Stazzone was terminated on October 29, 1999. Mr. DeSalle, who replaced
Mr. Stazzone, is retained as the Acting Chief Financial Officer on a
consulting basis and has received no compensation to date. Mr. McKim
resigned in September 1999.
Employee Contracts and Agreements
In April 1998, the Company entered into an employment agreement with
Barbara S. Will, the Company's President and COO for a term of three (3) years
at a salary of $150,000 per year. Ms. Will received 3,000,000 shares of the
Company's Common Stock at the time of the share exchange agreement between the
Company and IPVCDE. See Part I, Item 7. "Certain Relationships and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."
In April 1998, the Company entered into an employment agreement with
Anthony K. Welch, the Company's Senior Vice President of Research and
Development for a term of three (3) years at a salary of $150,000 per year. Mr.
Welch received 3,000,000 shares of the Company's Common Stock at the time of the
share exchange agreement between the Company and IPVCDE in consideration of all
of his rights, title and interest in the Company's proprietary software. See
Part I, Item 7. "Certain Relationships and Related Transactions"; and Part II,
Item 4. "Recent Sales of Unregistered Securities."
In April 1999, the Company entered into an employment/compensation
agreement with Peter M. Stazzone, the President of INS and Chief Financial
Officer, Treasurer an Secretary of the Company for term of three (3) years at a
base annual salary of $140,000 commencing August 1999. Pursuant to the
Employment Agreement, Mr. Stazzone received 200,000 shares of the Company's
Restricted Common Stock, a stock bonus of 100,000 shares of the Restricted
Common Stock deemed earned on the date of the Share Exchange Agreement, but to
be delivered on the earlier of (i) the first anniversary date or (ii) Mr.
Stazzone's termination and options to purchase an additional 200,000 shares of
the restricted Common Stock of the Company exercisable for a period of three (3)
years at an exercise price of $1.00 per share. The Company voted to unwind the
INS transaction ab initio, to rescind the issuances made under the acquisition
and the employment agreements and to terminate Mr. Stazzone's employment. See
Part I, Item 7. "Certain Relationships and Related Transactions"; and Part II,
Item 4. "Recent Sales of Unregistered Securities."
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<PAGE>
Key Man Life Insurance
The Company does not have nor does it intend to apply for Key Man Life
Insurance.
Employee and Consultants Stock Purchase and Stock Option Plans
There is currently no employee or consultant stock purchase or stock
option plan in place, although the Company plans to adopt such plans and to
submit such plans to the shareholders within a twelve (12) month period.
Compensation of Directors
The Company has no standard arrangements for compensating the Directors
of the Company for their attendance at meetings of the Board of Directors.
Item 7. Certain Relationships and Related Transactions
In November 1997, prior to its acquisition by the Company, IPVCDE
entered into a consulting agreement with Condor, whereby Condor agreed to
provide certain sales, marketing and public relations services in exchange for
600,000 shares of IPVCDE's unrestricted Common Stock to be issued upon listing
of IPVCDE's stock on the OTC Bulletin Board. Such shares were never issued and
the agreement was amended in July 1998 deleting the issuance of such shares. The
consulting agreement was modified in July 1998 to 500,000 shares of the
restricted Common Stock of the Company. The term of the Agreement was for a
period of six (6) years and is still in effect. James K. Howson, the Company's
Chairman and CEO, serves as the Chairman and CEO of Condor and he is the
beneficial owner of Condor.
During 1997, the Company incurred certain organizational expenses
totalling $14,000 which were paid for by a company under common control. The
balance owed to this related party at December 31, 1997 was paid in full during
1998.
In March 1998, the Company's predecessor, Nova, entered into a share
exchange agreement with IPVCDE and its shareholders whereby Nova issued
9,000,000 shares of its restricted Common Stock valued at $9,000 to IPVCDE's
shareholders for all of the outstanding capital stock of IPVCDE, which then
became a wholly-owned subsidiary of Nova. In connection with the agreement, the
Company entered into employment agreements with Barbara Will, its current
Director, Chief Operating Officer and President and with Anthony Welch, designer
of the Company's proprietary software, who currently serves as the Senior
Vice-President of Research and Development. As part of the exchange, Ms. Will,
Mr. Welch and Condor each received 3,000,000 shares of the Company's restricted
common stock. Mr. Howson, the Company's Chairman and Chief Executive Officer, is
the beneficial owner of Condor. For such offering, the Company relied upon
62
<PAGE>
Section 4(2) of the Act, Rule 506, Section 11-51-308(1)(j) of the Colorado Code,
Section 7309(b)(9) of the Delaware Code and Section 90.530(17) of the Nevada
code. The Company relied on no state exemption for the issuance to Condor, which
is a Bahamian corporation. See Part II, Item 4. "Recent Sales of Unregistered
Securities."
In July 1998, the Company entered into a consulting agreement with Calpe,
to provide public relations consulting services valued at $85,000 to the Company
in exchange for 850,000 shares of the Company's unrestricted Common Stock, of
which 200,000 shares were given to ICG pursuant to its consulting contract (as
more fully described herein) and 23,000 shares were given to CI pursuant to its
consulting contract (as more fully described herein). In consideration of its
627,000 shares, Calpe agreed to forego commissions equal to $62,700 from IPVC
product sales. The term of the Agreement was for a period of three (3) years and
is still in effect. For such offering, the Company relied upon Section 3(b) of
the Act and Rule 504. No state exemption was necessary for the Calpe shares, as
Calpe is a Bahamian corporation. However, the Company relied upon Section
10-5-9(13) of the Georgia Code for the ICG shares and Section 14-4-140 of the
Arizona Code for the CI shares. See Part II, Item 4. "Recent Sales of
Unregistered Securities."
In July, 1998, the Company entered into a consulting agreement with ICG to
provide financial public relations and direct marketing advertising and
consulting services to the Company. For such services, the Company agreed to pay
ICG $75,000 over the term of the Agreement and to issue 200,000 shares of the
unrestricted Common Stock of the Company, and to grant warrants to purchase
100,000 shares of the restricted Common Stock of the Company exercisable for a
period of two (2) years at an exercise price of $2.00 per share. Such warrants
have piggy-back registration rights. Such issuance of shares were valued at
$20,000, while the warrants were valued at $0. IPVC has a right of first refusal
to buy back any shares proposed to be sold by ICG to any third party. Of the
850,000 shares of its unrestricted Common Stock issued to Calpe, 200,000 shares
were given to ICG pursuant to its contract. The contract term was for a period
of six (6) months and has since terminated. For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504. The Company relied upon
Section 10-5-9(13) of the Georgia Code for the issuance of ICG shares. See Part
II, Item 4. "Recent Sales of Unregistered Securities."
In July 1998, the Company entered into a consulting agreement with CI to
provide public and investor relations consulting services to the Company in
exchange for 23,000 shares of the Company's unrestricted Common Stock. The
Agreement was for a term of three (3) months and terminated automatically in
November 1998. Of the 850,000 shares of its unrestricted Common Stock issued to
Calpe, 23,000 shares were given to CI pursuant to its contract. The Company
relied upon Section 3(b) of the Act and Rule 504. The Company relied upon
Section 14-4-140 of the Arizona Code for the issuance of CI shares. See Part II,
Item 4. "Recent Sales of Unregistered Securities."
In July 1998, the Company entered into an agreement with Armstrong wherein
the Company granted Armstrong the non-exclusive right to market, advertise and
sell the Company's domestic and international calling services. As payment for
these services, IPVC issued Armstrong warrants to purchase 50,000 shares of the
Company's Common Stock exercisable at a price of $0.75 per share or, at the
63
<PAGE>
option of IPVC, for a total sum of $37,500 as well as commissions on sales of
the Company's products and services. The term of the agreement is for a period
of three (3) years. See Part II, Item 4. "Recent Sales of Unregistered
Securities."
In September 1998, the Company entered into a consulting agreement for a
term of six (6) months with First Capital, to provide financial consulting
services to the Company. In the event that First Capital was successful in
securing debt or equity financing for the Company, First Capital would be
granted warrants to purchase 125,000 shares of the restricted Common Stock of
the Company exercisable for a period of three (3) years at an exercise price of
$1.00 per share. Such warrants would have piggy-back registration rights.
In October 1998, the Company entered into a consulting agreement with IIP,
memorializing an oral agreement made in July 1998, to provide financial,
consulting and advisory services valued at $35,000 in exchange for the issuance
of 350,000 shares, of which 243,760 are unrestricted Common Stock of the Company
and 106,240 are restricted Common Stock of the Company, the grant of warrants to
purchase an additional 1,600,000 shares of the unrestricted Common Stock of the
Company exercisable without time limitation at an exercise price of $0.06 per
share, the grant of warrants to purchase an additional 350,000 shares of the
restricted Common Stock of the Company exercisable without time limitation at an
exercise price of $3.90 per share and in consideration of $100 the grant of
warrants to purchase an 5% of the restricted Common Stock of the Company on a
fully-diluted basis at a price of $1.00 per share. IIP exercised its warrant to
purchase 1,600,000 shares in April 1999 at an exercise price of $26,000. The
Agreement is for a period of three (3) years and is still in effect. The Company
must also pay a monthly fee of $4,000 the first year, $6,000 the second year and
$8,000 the third year. For the unrestricted shares and warrants to purchase
unrestricted shares, the Company relied upon Section 3(b) of the Act and Rule
504. For the restricted shares and warrants to purchase restricted shares, the
Company relied upon Section 4(2) of the Act and Rule 506. No state exemption was
necessary, as IIP is an Irish corporation. See Part II, Item 4. "Recent Sales of
Unregistered Securities."
In October, 1998, the Company entered into a consulting agreement with
Inside.com to provide media relations services and consulting advice to the
Company valued at $41,250 in exchange for the issuance of 275,000 shares of the
unrestricted Common Stock of the Company and the grant of warrants to purchase
an additional 155,000 shares of the unrestricted Common Stock of the Company
exercisable for a period of one (1) year at a price of $0.645 per share.
Inside.com exercised its warrant to purchase 155,000 shares in April 1999 at an
exercise price of $100,000. The Agreement is for a term of one (1) year and is
still in effect. For such issuance, the Company relied upon Section 3(b) of the
Act and Rule 504 and Section 517.061(11) of the Florida Code. See Part II, Item
4. "Recent Sales of Unregistered Securities."
At December 31, 1998, the Company owed Ms. Will $34,268 for reimbursement
of expenses paid on behalf of the Company of which $6,338 remained outstanding
on June 30, 1999. During the year ended December 31, 1998, the Company owed two
of its shareholders, Condor and IIP, $20,564 for consulting services performed
on behalf of the Company of which $14,912 remained outstanding on June 30, 1999.
Total consulting fees incurred to these shareholders during the year ended
64
<PAGE>
December 31, 1998 amounted to $31,096 and for the six month period ended June
30, 1999 amounted to $41,824. During 1998, additional consulting fees of $35,000
were paid to Mr. Howson and $25,000 in professional fees were paid to ICG, a
shareholder in the Company. There were no outstanding amounts owed respective to
these fees as of December 31, 1998. For the six month period ended June 30, 1999
additional consulting fees of $35,693 were paid to Mr. Howson and professional
fees in the amount of $-0- were paid to ICG. During the year ended December 31,
1998, IIP advanced funds totally $24,750 for payment of general operating
expenses of which $-0- remained outstanding on June 30, 1999.
During the period ended December 31, 1998, one of the shareholder's who
received a portion of the Company's Redeemable Convertible Preferred Stock at
the acquisition of INS paid consulting fees in the amount of $5,000 on behalf of
INS. This amount was outstanding at December 31, 1998 and was paid in March
1999.
In March 1999, the Company entered into a consulting agreement with BPN to
provide financial public relations consulting services to the Company for which
the Company agreed to pay $40,000 for the first month, and $30,000 for the
second and third months, with subsequent months to be agreed upon, each of which
is payable in unrestricted shares of the Company's Common Stock the number of
which is determined by dividing the monthly payment by $1.00. The contract term
was through September 1999 and has expired without renewal. In exchange for
services rendered by BPN, the Company issued 100,000 shares of its unrestricted
Common Stock valued at $106,200 to Joyce Research Group, of which BPN is a
division. For the fourth, fifth and sixth months of the contract, the Company
granted Joyce Research Group options to purchase 150,000 shares of the Company's
restricted Common Stock at an exercise price equal to 60%, 65% and 70% of the
market price respectively. For such offering, the Company relied upon Section
3(b) of the Act and Rule 504 and Florida Code Section 517.061(11). See Part II,
Item 4. "Recent Sales of Unregistered Securities."
In April 1999, the Company entered into a share exchange agreement with INS
whereby the Company exchanged 250,000 shares of its Redeemable Convertible
Preferred stock valued at $500,000 for all of the outstanding capital stock of
INS. Such Redeemable Convertible Preferred stock contains 1 for 1 conversion
rights after one (1) year and is redeemable at $2.00 per share. The President of
INS, Peter M. Stazzone, remained with the Company as the President of the
subsidiary. At the time of the exchange Mr. Stazzone became Secretary, Treasurer
and Chief Financial Officer of the Company under an employment agreement. Also
at the time of the exchange, Mr. Stazzone received 50,000 shares of the
Redeemable Convertible Preferred Stock of the Company. Pursuant to the
Employment Agreement, Mr. Stazzone received 200,000 shares of the Company's
Restricted Common Stock, a stock bonus of 100,000 shares of the Restricted
Common Stock deemed earned on the date of the Share Exchange Agreement, but to
be delivered on the earlier of (i) the first anniversary date or (ii) Mr.
Stazzone's termination and options to purchase an additional 200,000 shares of
the restricted Common Stock of the Company exercisable for a period of three (3)
years at an exercise price of $1.00 per share. It was represented that INS had
acquired certain assets, including the rights to INS' name, from the Bankruptcy
Court in the Chapter 11 filing of Telsave. Mr. Stazzone was the Chief Financial
Officer of Telsave at the time the bankruptcy was filed and the Bankruptcy Court
65
<PAGE>
was provided with disclosure of his involvement with INS prior to the Court's
approval of the sale of certain Telsave assets to INS. In June 1998, Mr.
Stazzone was loaned $50,000 by INS, which loan bears no interest and has no
stated repayment terms. At the time of the acquistion of INS, the Company
believed that it was acquiring the rights to the CIC Code. The purchase price
was based in part upon an appraisal of the value of the CIC Code which is loaded
in approximately 60% of the domestic market. However, during the course of the
audit, it was discovered that clear title may not have passed to INS and
subsequently the Company. Therefore, the Board resolved that, in the event clear
title had not passed to the Company, it would be in the best interest of the
shareholders to unwind the transaction. The Company sought a legal opinion on
the status of such title and just prior to filing this Form 10SB discovered that
there was no clear link between the ownership of the CIC Code and INS. Therefore
the Company voted to unwind the transaction ab initio, to rescind the issuances
made under the acquisition and the employment agreements and to terminate Mr.
Stazzone's employment. For such offering, the Company relied upon Section 4(2)
of the Act and Rule 506, Section 14-4-126(f) of the Arizona Code and Section
90.530(11) of the Nevada Code. See Part II, Item 4. "Recent Sales of
Unregistered Securities."
In April 1999, the Company entered into a marketing agreement with Benae to
market the Company's telephony services and to register a minimum of one hundred
(100) customers in the thirty (30) cities in which IPVC plans to offer telephony
services within twelve(12) months in exchange for 200,000 shares of the
unrestricted Common Stock of the Company valued at $206,200. The shares are to
be returned to the Company if the minimum is not met. For such offering, the
Company relied upon Section 3(b) of the Act and Rule 504 and Section 90.530(11)
of the Nevada Code. See Part II, Item 4. "Recent Sales of Unregistered
Securities."
In April, 1999, the Company entered into a marketing and advertising
agreement with NG to provide marketing services to a minimum of 75,000 customers
in thirty (30) cities designated by IPVC within a twelve (12) month period in
exchange for 100,000 shares of the restricted Common Stock of the Company valued
at $103,100, which shares must be returned if NG fails to deliver a minimum of
eight (8) cities for a total of 75,000 customers before December 31, 1999. In
addition, NG may earn performance bonuses of: 50,000 restricted shares if eight
(8) cities are delivered within ninety (90) days of execution; 50,000 restricted
shares if fifteen (15) cities are delivered within one hundred fifty (150) days;
and 10,000 restricted shares for each additional city thereafter before December
31, 1999 up to 30 cities. Further, NG will be granted warrants to purchase
warrants to purchase 30,000 shares of the Company's restricted Common Stock
exercisable for a period of two (2) years at an exercise price of $2.50 per
share for every block of 5,000 pre-registered customers up to 75,000
pre-registered customers in a twelve (12) month period. For such offering, the
Company relied upon Section 4(2) of the Act and Rule 506 and Section 14-4-126(F)
of the Arizona Code. See Part II, Item 4. "Recent Sales of Unregistered
Securities."
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<PAGE>
Item 8. Description of Securities
Description of Capital Stock
The Company's authorized capital stock consists of 50,000,000 shares of
Common Stock, $.001 par value per share and 10,000,000 shares of Preferred Stock
(including both Senior Convertible Preferred and Preferred shares), $.001 par
value per share. As of September 30, 1999, the Company had 16,618,998 shares of
its Common Stock outstanding, 1,150 shares of its Senior Convertible Preferred
and 250,000 of its Redeemable Convertible Preferred Stock outstanding. The
Company voted to unwind the INS transaction ab initio, to rescind the issuances
made under the acquisition and the employment agreements and to terminate Mr.
Stazzone's employment. Consequently, on the date hereof, of the 16,618,998
shares of Common Stock outstanding, 300,000 shares issued to Mr. Stazzone are to
be rescinded and all of the Redeemable Convertible Preferred Shares will be
canceled.
Description of Common Stock
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully-paid and non-assessable shares. Cumulative voting in the election of
directors is not permitted; which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any, to be distributed to holders of the Preferred shares. All shares of the
Company's Common Stock issued and outstanding are fully-paid and nonassessable.
Dividend Policy
Holders of shares of Common Stock are entitled to share pro rata in
dividends and distribution with respect to the Common Stock when, as and if
declared by the Board of Directors out of funds legally available therefore,
after requirements with respect to preferential dividends on, and other matters
relating to, the Preferred shares, if any, have been met. The Company has not
paid any dividends on its Common Stock and intends to retain earnings, if any,
to finance the development and expansion of its business. Future dividend policy
is subject to the discretion of the Board of Directors and will depend upon a
number of factors, including future earnings, capital requirements and the
financial condition of the Company.
Description of the Preferred Shares
Senior Convertible Preferred
The Senior Convertible Preferred shares are without dividends and contain a
conversion feature providing that, in the event of a default in payment on the
Notes issued pursuant to the February 1, 1999 offering which is not reasonably
cured, all outstanding Senior Convertible Preferred shares shall be converted
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<PAGE>
into Common Stock of the Company in an amount of shares which shall, immediately
after issuance, equal 51% of the issued and outstanding shares, warrants and
options of the Common Stock of the Company. Upon default, the Company also
agrees to promptly call a special stockholder meeting in order to provide the
stockholders with the opportunity to elect a majority of the Board from the
Noteholders' group. All Senior Convertible Preferred shares are redeemable at no
cost to the Company at the time that each Note is fully paid.
Redeemable Preferred Stock
Shares of Redeemable Preferred Stock were issued in connection with the INS
acquisition. Each share is convertible on or after April 7, 2000 (one (1) year
from the date of the INS acquisition) to one (1) share of the Company's common
stock or, at the option of the holder, redeemable at a redemption price of $2.00
per share. The Company voted to unwind the INS transaction ab initio, to rescind
the issuances made under the acquisition and the employment agreements and to
terminate Mr. Stazzone's employment. Consequently, on the date hereof, of the
16,618,998 shares of Common Stock outstanding, 300,000 shares issued to Mr.
Stazzone are to be rescinded and all of the Redeemable Convertible Preferred
Shares will be canceled.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Company's Common and Preferred
Stock is Interwest Transfer Co., Inc. which is located at 1981 E. Murray
Holladay Road, Suite 100, Salt Lake City, UT 84117, telephone (801) 272-9294,
facsimile (801) 277-3147.
PART II.
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
a) Market Information.
The Common Stock of the Company currently is quoted on the OTC Bulletin
Board under the symbol "IPVC" and has been since July 1998. The high, low and
average bid information for each quarter since July 1998 to the present are as
follows:
<TABLE>
<S> <C> <C> <C>
Quarter High Bid Low Bid Average Bid
Third Quarter 1998 1.17 .55 .86
Fourth Quarter 1998 .56 .10 .24
First Quarter 1999 1.38 .19 .95
Second Quarter 1999 7.50 .75 3.13
Third Quarter 1999 3.06 1.50 2.17
</TABLE>
68
<PAGE>
Please note that over-the-counter market quotations have been provided
herein. The quotations reflect inter-dealer prices, without retail markup,
mark-down or commission and may not represent actual transactions.
(b) Holders.
As of September 30, 1999 the Company had 78 shareholders of record of its
16,618,998 outstanding shares of Common Stock, 9,529,429 of which are restricted
Rule 144 shares and 7,089,569 of which are free-trading. As of the date hereof,
the Company has outstanding options to purchase 2,562,500 shares of Common
Stock. Of the Rule 144 shares, 5,856,523 shares have been held by affiliates of
the Company for more than one (1) year. The Company voted to unwind the INS
transaction ab initio, to rescind the issuances made under the acquisition and
the employment agreements and to terminate Mr. Stazzone's employment.
Consequently, on the date hereof, of the 16,618,998 shares of Common Stock
outstanding, 300,000 shares issued to Mr. Stazzone are to be rescinded and all
of the Redeemable Convertible Preferred Shares will be canceled.
(c) Dividends.
The Company has never paid or declared any dividends on its Common Stock
and does not anticipate paying cash dividends in the foreseeable future.
Item 2. Legal Proceedings
No legal proceedings have been initiated either by or against the Company
to date.
Item 3. Changes in and Disagreements with Accountants
The Company has used the firm of Durland & Company, CPA's since inception.
Their address is 340 Royal Palm Way, Suite 201, Palm Beach, Florida 33480. There
has been no change in the Company's independent accountant during the period
commencing with the Company's retention of Durland & Company, CPA's through the
date hereof.
Item 4. Recent Sales of Unregistered Securities
The Company relied upon Section 4(2) of the Act and Rule 506 for several
transactions regarding the issuance of its unregistered securities. In each
instance, such reliance was based upon the fact that (i) the issuance of the
shares did not involve a public offering, (ii) there were no more than
thirty-five (35) investors (excluding "accredited investors"), (iii) each
investor who was not an accredited investor either alone or with his purchaser
representative(s) has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of the prospective
investment, or the issuer reasonably believes immediately prior to making any
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sale that such purchaser comes within this description, (iv) the offers and
sales were made in compliance with Rules 501 and 502, (v) the securities were
subject to Rule 144 limitations on resale and (vi) each of the parties was a
sophisticated purchaser and had full access to the information on the Company
necessary to make an informed investment decision by virtue of the due diligence
conducted by the purchaser or available to the purchaser prior to the
transaction.
The Company relied upon Section 3(b) of the Act and Rule 504 for several
transactions regarding the issuance of its unregistered securities. In each
instance, such reliance was based on the following: (i) the aggregate offering
price of the offering of the shares of Common Stock and warrants did not exceed
$1,000,000, less the aggregate offering price for all securities sold with the
twelve months before the start of and during the offering of shares in reliance
on any exemption under Section 3(b) of, or in violation of Section 5(a) of the
Act; (ii) no general solicitation or advertising was conducted by the Company in
connection with the offering of any of the shares; (iii) the fact that the
Company had not been since its inception (a) subject to the reporting
requirements of Section 13 or 15(d) of the Securities Act of 1934, as amended,
(b) and an "investment company" within the meaning of the Investment Company Act
of 1940, as amended, or (c) a development stage company that either had no
specific business plan or purpose or had indicated that its business plan was to
engage in a merger or acquisition with an unidentified company or companies or
other entity or person.
The Company relied upon Florida Code Section 517.061(11) for several Rule
504 or Rule 506 transactions. In each instance, such reliance is based on the
following: (i) sales of the shares of Common Stock were not made to more than
thirty-five (35) persons; (ii) neither the offer nor the sale of any of the
shares was accomplished by the publication of any advertisement; (iii) all
purchasers either had a preexisting personal or business relationship with one
or more of the executive officers of the Company or, by reason of their business
or financial experience, could be reasonably assumed to have the capacity to
protect their own interests in connection with the transaction; (iv) each
purchaser represented that he was purchasing for his own account and not with a
view to or for sale in connection with any distribution of the shares; and (v)
prior to sale, each purchaser had reasonable access to or was furnished all
material books and records of the Company, all material contracts and documents
relating to the proposed transaction, and had an opportunity to question the
executive officers of the Company. Pursuant to Rule 3E-500.005, in offerings
made under Section 517.061(11) of the Florida Statutes, an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or given reasonable access to full and fair disclosure of material
information. An issuer is deemed to be satisfied if such purchaser or his
representative has been given access to all material books and records of the
issuer; all material contracts and documents relating to the proposed
transaction; and an opportunity to question the appropriate executive officer.
In the regard, the Company supplied such information and was available for such
questioning (the "Florida Exemption").
The Company relied upon Nevada Code Section 90.530(11) for several Rule 504
or Rule 506 transactions. In each instance, the following transactions are
exempt from NRS 90.460 and 90.560, except as otherwise provided in such
subsection. A transaction pursuant to an offer to sell securities of an issuer
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if: (a) the transaction is part of an issue in which there are no more than
twenty-five (25) purchasers in Nevada, other than those designated in subsection
10, during any twelve (12) consecutive months; (b) no general solicitation or
general advertising is used in connection with the offer to sell or sale of the
securities; (c) no commission or other similar compensation is paid or given,
directly or indirectly, to a person, other than a broker-dealer licensed or not
required to be licensed under such chapter, for soliciting a prospective
purchaser in Nevada; and (d) one of the following conditions is satisfied: (1)
the seller reasonably believes that all the purchasers in Nevada, other than
those designated in subsection 10, are purchasing for investment; or (2)
immediately before and immediately after the transaction, the issuer reasonably
believes that the securities of the issuer are held by 50 or fewer beneficial
owners, other than those designated in subsection 10, and the transaction is
part of an aggregate offering that does not exceed $500,000 during any twelve
(12) consecutive months. The administrator may by rule or order as to a security
or transaction or a type of security or transaction, withdraw or further
condition the exemption set forth in such subsection or waive one or more of the
conditions of the exemption. (the "Nevada Exemption").
The Company relied upon Geogia Code Section 10-5-9(13) for several
transactions. In each instance such reliance is based on the following: (i) the
number of Georgia purchasers did not exceed fifteen (15); (ii) the securities
were not offered for sale by means of any form of general or public
solicitations or advertisements; (iii) a legend was placed upon the
certificates; and (iv) each purchaser represented that he purchased for
investment. (the "Georgia Exemption").
In February 1997, prior to its acquisition of IPVCDE, the Company sold
1,400,000 shares of its unrestricted Common Stock to sixty-nine (69) individuals
for $14,000. For such offering, the Company relied upon Section 3(b) of the Act
and Rule 504 and the Florida Exemption, Section 4[5/4](G) of the Illinois Code,
the Nevada Exemption, Section 78 A-17(9) of the North Carolina Code, Section
48-2-103(b)(4) of the Tennessee Code and Section 5[581-5]I(c) of the Texas Code.
No state exemption was necessary for the sales made to Bahamian, Canadian or
French investors. A Form D was filed with the Securities and Exchange Commission
("SEC").
For purposes of Section 4[5/4] of the Illinois code, the facts upon which
the Company relied are: (i) sales had an aggregate sales price of not more than
$1,000,000; (ii) no general advertising was used; and (iii) no commission,
discount or other remuneration exceeded 20% of the sales price. Although a
report was required by the Rule, none was filed. The failure to file a report
does not affect the availability of the exemption.
For purposes of Section 78 A-17(9) of the North Carolina code, the facts
upon which the Company relied are: (i) the offer was directed to not more than
twenty-five (25) persons in North Carolina; (ii) the Company believed that all
buyers in North Carolina purchased for investment; (iii) no commission,
discount, finder's fee or other similar remuneration was paid for soliciting any
prospective purchaser in North Carolina; (iv) the disclosure document used in
this offering contained a North Carolina legend; and (v) no form of general
solicitation or general advertising was used. Although a filing with the State
was required by the Rule, no filing was made.
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For purposes of Section 48-2-103(b)(4) of the Tennessee code, the facts
upon which the Company relied are: (i) the number of purchasers in Tennessee did
not exceed fifteen (15); (ii) the securities were not offered by means of
publicly disseminated advertisements or sales literature; and (iii) all
purchasers represented that they purchased for investment.
For purposes of Section 5[581-5]I(c) of the Texas code, the facts upon
which the Company relied are: (i) sales were made to not more than fifteen (15)
persons in Texas; and (ii) purchasers represented that they purchased for
investment.
In March 1998, the Company's predecessor, Nova, entered into a share
exchange agreement with IPVCDE and its shareholders whereby Nova issued
9,000,000 shares of its restricted Common Stock valued at $9,000 to IPVCDE's
shareholders for all of the outstanding capital stock of IPVCDE, which then
became a wholly-owned subsidiary of Nova. In connection with the agreement, the
Company entered into employment agreements with Barbara Will, its current
Director, Chief Operating Officer and President and with Anthony Welch, designer
of the Company's proprietary software, who currently serves as the Senior
Vice-President of Research and Development. As part of the exchange, Ms. Will,
Mr. Welch and Condor each received 3,000,000 shares of the Company's restricted
common stock. Mr. Howson, the Company's Chairman and Chief Executive Officer, is
the beneficial owner of Condor. For such offering, the Company relied upon
Section 4(2) of the Act, Rule 506, Section 11-51-308(1)(j) of the Colorado Code,
Section 7309(b)(9) of the Delaware Code and Section 90.530(17) of the Nevada
code. The Company relied on no state exemption for the issuance to Condor, which
is a Bahamian corporation. A Form D was filed with the SEC.
For purposes of Section 11-51-308(1)(j) of the Colorado Code, the facts
upon which the Company relied are: (i) the offering was directed to not more
than twenty (20) persons in Colorado; (ii) the securities were sold to not more
than ten (10) buyers in Colorado; (iii) all purchasers represented that they
purchased for investment; (iv) no commission or other remuneration was paid or
given for soliciting any prospective buyer in Colorado.
For purposes of Section 7309(b)(9) of the Delaware code, the facts upon
which the Company relied are: (i) the securities were offered to not more than
twenty-five (25) persons in Delaware; and (ii) all purchasers represented that
they were purchasing for investment.
For purposes of Section 90.530(17) of the Nevada code, the facts upon which
the Company relied are: (i) the transaction was pursuant to a merger,
consolidation, exchange of securities, sale of assets or other reorganization;
and (ii) the securities which were distributed were not required to be
registered under the Act. Although a filing was required, none was made.
In April 1998, the Company sold 154,000 shares of its unrestricted Common
Stock to five (5) investors for $154,000. For such offering, the Company relied
upon Section 3(b) of the Act and Rule 504 and the Florida Exemption and Section
359(f)(2)(d) of the New York Code. No state exemption was necessary for the
shares sold to a United Kingdom corporation. A Form D was filed with the SEC.
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The facts upon which the Company relied upon for purposes of Section
359(f)(2)(d) of the New York Code are: (i) the securities were sold in a limited
offering to not more than forty (40) persons. Although a filing was required,
none was made.
In July 1998, the Company sold 53,333 shares of its unrestricted Common
Stock to one (1) investor for $40,000. For such offering, the Company relied
upon Section 3(b) of the Act and Rule 504 and the Florida Exemption. A Form D
was filed with the SEC.
In July 1998, the Company entered into a consulting agreement with Calpe,
to provide public relations consulting services valued at $85,000 to the Company
in exchange for 850,000 shares of the Company's unrestricted Common Stock, of
which 200,000 shares were given to ICG pursuant to its consulting contract (as
more fully described herein) and 23,000 shares were given to CI pursuant to its
consulting contract (as more fully described herein). In consideration of its
627,000 shares, Calpe agreed to forego commissions equal to $62,700 from IPVC
product sales. The term of the Agreement was for a period of three (3) years and
is still in effect. For such offering, the Company relied upon Section 3(b) of
the Act and Rule 504. No state exemption was necessary for the Calpe shares, as
Calpe is a Bahamian corporation. However, the Company relied upon the Georgia
Exemption for the ICG shares and Section 14-4-140 of the Arizona Code for the CI
shares. A Form D was filed with the SEC.
The facts upon which the Company relied upon for purposes of Section
14-4-140 of the Arizona Code are: (i) offers by the issuer were made only by the
Company's employees, officers and directors who were not retained for the
primary purpose of making offers; (ii) the sale of securities did not exceed
$1,000,000; (iii) the Company was not a development stage company with no
specific business plan or a development stage company that has indicated that
its business plan is to engage in a merger or acquisition with an unidentified
company or companies, or other entity or person; (iv) offers specified that they
would be made only to accredited investors and sales were made only to
accredited investors; (v) a legend was placed on all offering documents; and
(vi) the issuer, any of its predecessors, affiliates, directors, officers,
beneficial owners of ten (10) percent or more of any class of its equity
securities did not fall within the disqualification provisions. Although a
filing and the placement of a legend on the certificates was required by the
Rule, neither were done.
In July, 1998, the Company entered into a consulting agreement with ICG to
provide financial public relations and direct marketing advertising and
consulting services to the Company. For such services, the Company agreed to pay
ICG $75,000 over the term of the Agreement and to issue 200,000 shares of the
unrestricted Common Stock of the Company, and to grant warrants to purchase
100,000 shares of the restricted Common Stock of the Company exercisable for a
period of two (2) years at an exercise price of $2.00 per share. Such warrants
have piggy-back registration rights. Such issuance of shares were valued at
$20,000, while the warrants were valued at $0. IPVC has a right of first refusal
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to buy back any shares proposed to be sold by ICG to any third party. Of the
850,000 shares of its unrestricted Common Stock issued to Calpe, 200,000 shares
were given to ICG pursuant to its contract. The contract term was for a period
of six (6) months and has since terminated. For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504. The Company relied upon the
Georgia Exemption for the issuance of ICG shares. A Form D was filed with the
SEC.
In July 1998, the Company entered into a consulting agreement with CI to
provide public and investor relations consulting services to the Company in
exchange for 23,000 shares of the Company's unrestricted Common Stock. The
Agreement was for a term of three (3) months and terminated automatically in
November 1998. Of the 850,000 shares of its unrestricted Common Stock issued to
Calpe, 23,000 shares were given to CI pursuant to its contract. The Company
relied upon Section 3(b) of the Act and Rule 504. The Company relied upon
Section 14-4-140 of the Arizona Code for the issuance of CI shares. A Form D was
filed with the SEC.
The facts upon which the Company relied upon for the purposes of Section
14-4-140 of the Arizona Code are: (i) offers by the issuer were made only by the
Company's employees, officers and directors who were not retained for the
primary purpose of making offers; (ii) the sale of securities did not exceed
$1,000,000; (iii) the Company was not a development stage company with no
specific business plan or a development stage company that has indicated that
its business plan is to engage in a merger or acquisition with an unidentified
company or companies, or other entity or person; (iv) offers specified that they
would be made only to accredited investors and sales were made only to
accredited investors; (v) a legend was placed on all offering documents; and
(vi) the issuer, any of its predecessors, affiliates, directors, officers,
beneficial owners of ten (10) percent or more of any class of its equity
securities did not fall within the disqualification provisions. Although a
filing and the placement of a legend on the certificates was required by the
Rule, neither were done.
In July 1998, the Company entered into an agreement with Armstrong wherein
the Company granted Armstrong the non-exclusive right to market, advertise and
sell the Company's domestic and international calling services. As payment for
these services, IPVC issued Armstrong warrants to purchase 50,000 shares of the
Company's Common Stock exercisable at a price of $0.75 per share or, at the
option of IPVC, for a total sum of $37,500 as well as commissions on sales of
the Company's products and services. The term of the agreement is for a period
of three (3) years. For such offering, the Company relied upon Section 4(2) of
Act and Rule 506 and the Florida Exemption. A Form D was filed with the SEC.
In September 1998, the Company sold 20,000 shares of its unrestricted
Common Stock to one (1) investor for $10,000. For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504 and the Florida Exemption. A
Form D was filed with the SEC.
In September 1998, the Company sold 100,000 shares of its unrestricted
Common Stock to one (1) investor for $25,000. For such offering, he Company
relied upon Section 3(b) of the Act and Rule 504 and Section 49:3-50(b)(9) of
the New Jersey Code. A Form D was filed with the SEC.
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The facts upon which the Company relied upon for purposes of Section
49:3-50(b)(9) of the New Jersey Code are: (i) sales were made to not more than
ten (10) persons in New Jersey; (ii) all purchasers represented that they
purchased for investment; (iii) no commission or other remuneration was paid or
given for soliciting any prospective buyer in New Jersey; and (iv) the
securities were not offered or sold by general solicitation or any general
advertisement.
In September 1998, the Company sold 80,000 shares of its unrestricted
Common Stock to one (1) investor for $15,000. For such offering, the Company
relied upon Section 3(b) of the Act and Rule 504 and the Florida Exemption. A
Form D was filed with the SEC.
In September 1998, the Company issued 100,000 shares of its unrestricted
common stock in exchange for legal services valued at $10,000. For such
offering, the Company relied upon Section 3(b) of the Act, Rule 504 and the
Florida Exemption. A Form D was filed with the SEC.
In October 1998, the Company entered into a consulting agreement with IIP,
memorializing an oral agreement made in July 1998, to provide financial,
consulting and advisory services valued at $35,000 in exchange for the issuance
of 350,000 shares, of which 243,760 are unrestricted Common Stock of the Company
and 106,240 are restricted Common Stock of the Company, the grant of warrants to
purchase an additional 1,600,000 shares of the unrestricted Common Stock of the
Company exercisable without time limitation at an exercise price of $0.06 per
share, the grant of warrants to purchase an additional 350,000 shares of the
restricted Common Stock of the Company exercisable without time limitation at an
exercise price of $3.90 per share and in consideration of $100 the grant of
warrants to purchase an 5% of the restricted Common Stock of the Company on a
fully-diluted basis at a price of $1.00 per share. IIP exercised its warrant to
purchase 1,600,000 shares in April 1999 at an exercise price of $26,000. The
Agreement is for a period of three (3) years and is still in effect. The Company
must also pay a monthly fee of $4,000 the first year, $6,000 the second year and
$8,000 the third year. For the unrestricted shares and warrants to purchase
unrestricted shares, the Company relied upon Section 3(b) of the Act and Rule
504. For the restricted shares and warrants to purchase restricted shares, the
Company relied upon Section 4(2) of the Act and Rule 506. No state exemption was
necessary, as IIP is an Irish corporation. A Form D was filed with the SEC.
In October, 1998, the Company entered into a consulting agreement with
Inside.com to provide media relations services and consulting advice to the
Company valued at $41,250 in exchange for the issuance of 275,000 shares of the
unrestricted Common Stock of the Company and the grant of warrants to purchase
an additional 155,000 shares of the unrestricted Common Stock of the Company
exercisable for a period of one (1) year at a price of $0.645 per share.
Inside.com exercised its warrant to purchase 155,000 shares in April 1999 at an
exercise price of $100,000. The Agreement is for a term of one (1) year and is
still in effect. For such issuance, the Company relied upon Section 3(b) of the
Act and Rule 504 and the Florida Exemption. A Form D was filed with the SEC.
From December 1998 through January 1999, the Company sold 896,665 shares of
its unrestricted Common Stock to eight (8) investors for $134,500. For such
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offering, the Company relied upon Section 3(b) of the Act and Rule 504 and
Section 11-51-308(1)(j) of the Colorado Code, the Florida Exemption and Section
49:3-50(b)(9) of the New Jersey Code. No state exemption was required for two
(2) Bahamian investors. A Form D was filed with the SEC.
For purposes of Section 11-51-308(1)(j) of the Colorado Code, the facts
upon which the Company relied are: (i) the offering was directed to not more
than twenty (20) persons in Colorado; (ii) the securities were sold to not more
than ten (10) buyers in Colorado; (iii) all purchasers represented that they
purchased for investment; (iv) no commission or other remuneration was paid or
given for soliciting any prospective buyer in Colorado.
For purposes of Section 11-51-308(1)(j) of the New Jersey Code, the facts
upon which the Company relied are: (i) sales were made to not more than ten (10)
persons in New Jersey; (ii) all purchasers represented that they purchased for
investment; (iii) no commission or other remuneration was paid or given for
soliciting any prospective buyer in New Jersey; and (iv) the securities were not
offered or sold by general solicitation or any general advertisement.
From February 1999 through May 1999, the Company sold forty-six (46) units
to twenty-four (24) investors for $1,150,000. Each unit consisted of: (i) a note
payable in two (2) years with an option for the Company to extend it for an
additional two (2) years in the principal amount of $24,900 bearing interest at
9% per annum payable quarterly in cash or, at the option of the Company, in
unrestricted shares of the Company's Common Stock; (ii) a warrant to purchase
18,750 shares of the Company's restricted Common Stock exercisable during the
period in which the note is outstanding at an exercise price equal to 125% of
the average closing price of the stock for the thirty (30) trading days
immediately prior to February 1, 1999, which warrants contain piggy-back
registration rights; and (iii) twenty-five (25) of the Company's Senior
Convertible Preferred shares. In the event of a default in repayment of the
notes, all outstanding Senior Convertible Preferred shares shall be converted
into Common Stock of the Company in an amount which will equal 51% of the issued
and outstanding shares, warrants and options of the Company. For such offering,
the Company relied upon Section 4(2) of the Act and Rule 506 and Section
14-4-126(f) of the Arizona Code, Section 25102(f) of the California Code, the
Florida Exemption, Section 130.293 of the Illinois Code, Section 191-50.14(502)
of the Iowa Code, Section 451.803.7 of the Michigan Code, Section 359(f)(2)(d)
of the New York Code and Section 70P.S.1-211 of the Pennsylvania Code. A Form D
was filed with the SEC.
For purposes of Section 14-4-126(f) of the Arizona Code, the facts upon
which the Company relied are: (i) Units were sold to less than thirty-five (35)
persons; (ii) each purchaser who was not an accredited investor either alone or
with purchaser representative had such knowledge and experience in financial and
business matters sufficient to evaluate the merits and risks of the prospective
investment; (iii) the bad boy provisions of the rule apply to neither the
Company nor its predecessors or affiliates; and (iv) neither the issuer nor any
person acting on its behalf offered or sold the securities by any form of
general solicitation or general advertising. Although a filing was required by
the Rule, none was made.
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For purposes of Section 25102(f) of the California Code, the facts upon
which the Company relied are: (i) units were sold to not more than thirty-five
(35) persons, including persons not in California; (ii) all purchasers had a
preexisting relationship with the offeror or its officers, directors or by
reason of business or financial experience or by reason of their professional
advisors had the capacity to protect their own interests; (iii) each purchaser
represented that they were purchasing for their own account and with a view to
or for sale in connection with any distribution; and (iv) the offer and sale
were not accomplished by the publication of any advertisement. Although the Rule
required the filing of notice, none was filed. Failure to file notice did not
affect the applicability of the exemption.
In both Illinois and Iowa, the Company failed to file notice, as required
by the Rules of those states.
For purposes of Section 451.803.7 of the Michigan Code, the facts upon
which the Company relied are: (i) no commissions were paid or given to any
person for soliciting any prospective purchaser in Michigan unless such person
was appropriately registered in Michigan as a broker-dealer, agent, finder or
investment adviser; (ii) no bad boy provisions set forth in the Rule were
applicable; and (iii) in all sales to nonaccredited investors, the Company
believed either (a) the investment was suitable for the purchaser; (b) the
purchaser had sufficient knowledge and experience in financial and business
matters sufficient to evaluate the merits and risks of the prospective
investment. Although a filing was required by the Rule, no filing was made.
For purposes of Section 359(f)(2)(d) of the New York Code, the facts upon
which the Company relied are: (i) the securities were sold in a limited offering
to not more than forty (40) persons. Although a filing was required, none was
made.
In Pennsylvania, the Company relied upon the National Securities Markets
Improvement Act of 1996 ("NSMIA"), which pre-empted states' ability to regulate
the sale of federally covered securities. Although the NSMIA preserved the
rights of states to require a notice filing and although Pennsylvania requires
such filing, none was made.
In March and April 1999, the Company sold 875,000 shares of its
unrestricted Common Stock to one (1) investor for $350,000. For such offering,
the Company relied upon Section 3(b) of the Act and Rule 504. No state exemption
was required, as the investor was a Bahamian corporation. A Form D was filed was
filed with the SEC.
In March 1999, the Company entered into a consulting agreement with BPN to
provide financial public relations consulting services to the Company for which
the Company agreed to pay $40,000 for the first month, and $30,000 for the
second and third months, with subsequent months to be agreed upon, each of which
is payable in unrestricted shares of the Company's Common Stock the number of
which is determined by dividing the monthly payment by $1.00. The contract term
was through September 1999 and has expired without renewal. In exchange for
services rendered by BPN, the Company issued 100,000 shares of its unrestricted
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Common Stock valued at $106,200 to Joyce Research Group, of which BPN is a
division. For the fourth, fifth and sixth months of the contract, the Company
granted Joyce Research Group options to purchase 150,000 shares of the Company's
restricted Common Stock at an exercise price equal to 60%, 65% and 70% of the
market price respectively. For such offering, the Company relied upon Section
3(b) of the Act and Rule 504 and the Florida Exemption. A Form D was filed with
the SEC.
In April 1999, the Company entered into a share exchange agreement with INS
whereby the Company exchanged 250,000 shares of its Redeemable Convertible
Preferred stock valued at $500,000 for all of the outstanding capital stock of
INS. Such Redeemable Convertible Preferred stock contains 1 for 1 conversion
rights after one (1) year and is redeemable at $2.00 per share. The President of
INS, Peter M. Stazzone, remained with the Company as the President of the
subsidiary. At the time of the exchange Mr. Stazzone became Secretary, Treasurer
and Chief Financial Officer of the Company under an employment agreement. Also
at the time of the exchange, Mr. Stazzone received 50,000 shares of the
Redeemable Convertible Preferred Stock of the Company. Pursuant to the
Employment Agreement, Mr. Stazzone received 200,000 shares of the Company's
Restricted Common Stock, a stock bonus of 100,000 shares of the Restricted
Common Stock deemed earned on the date of the Share Exchange Agreement, but to
be delivered on the earlier of (i) the first anniversary date or (ii) Mr.
Stazzone's termination and options to purchase an additional 200,000 shares of
the restricted Common Stock of the Company exercisable for a period of three (3)
years at an exercise price of $1.00 per share. It was represented that INS had
acquired certain assets, including the rights to INS' name, from the Bankruptcy
Court in the Chapter 11 filing of Telsave. Mr. Stazzone was the Chief Financial
Officer of Telsave at the time the bankruptcy was filed and the Bankruptcy Court
was provided with disclosure of his involvement with INS prior to the Court's
approval of the sale of certain Telsave assets to INS. In June 1998, Mr.
Stazzone was loaned $50,000 by INS, which loan bears no interest and has no
stated repayment terms. At the time of the acquistion of INS, the Company
believed that it was acquiring the rights to the CIC Code. The purchase price
was based in part upon an appraisal of the value of the CIC Code which is loaded
in approximately 60% of the domestic market. However, during the course of the
audit, it was discovered that clear title may not have passed to INS and
subsequently the Company. Therefore, the Board resolved that, in the event clear
title had not passed to the Company, it would be in the best interest of the
shareholders to unwind the transaction. The Company sought a legal opinion on
the status of such title and just prior to filing this Form 10SB discovered that
there was no clear link between the ownership of the CIC Code and INS. Therefore
the Company voted to unwind the transaction ab initio, to rescind the issuances
made under the acquisition and the employment agreements and to terminate Mr.
Stazzone's employment. For such offering, the Company relied upon Section 4(2)
of the Act and Rule 506, Section 14-4-126(f) of the Arizona Code and Section
90.530(11) of the Nevada Code. A Form D was filed with the SEC.
For purposes of Section 14-4-126(f) of the Arizona Code, the facts upon
which the Company relied are: (i) units were sold to less than thirty-five (35)
persons; (ii) each purchaser who was not an accredited investor either alone or
with purchaser representative had such knowledge and experience in financial and
business matters sufficient to evaluate the merits and risks of the prospective
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investment; (iii) the bad boy provisions of the rule apply to neither the
Company nor its predecessors or affiliates; and (iv) neither the issuer nor any
person acting on its behalf offered or sold the securities by any form of
general solicitation or general advertising. Although a filing was required by
the Rule, none was made.
In April 1999, the Company entered into a marketing agreement with Benae to
market the Company's telephony services and to register a minimum of one hundred
(100) customers in the thirty (30) cities in which IPVC plans to offer telephony
services within twelve(12) months in exchange for 200,000 shares of the
unrestricted Common Stock of the Company valued at $206,200. The shares are to
be returned to the Company if the minimum is not met. For such offering, the
Company relied upon Section 3(b) of the Act and Rule 504 and the Nevada
Exemption. A Form D was filed with the SEC.
In April, 1999, the Company entered into a marketing and advertising
agreement with NG to provide marketing services to a minimum of 75,000 customers
in thirty (30) cities designated by IPVC within a twelve (12) month period in
exchange for 100,000 shares of the restricted Common Stock of the Company valued
at $103,100, which shares must be returned if NG fails to deliver a minimum of
eight (8) cities for a total of 75,000 customers before December 31, 1999. In
addition, NG may earn performance bonuses of: 50,000 restricted shares if eight
(8) cities are delivered within ninety (90) days of execution; 50,000 restricted
shares if fifteen (15) cities are delivered within one hundred fifty (150) days;
and 10,000 restricted shares for each additional city thereafter before December
31, 1999 up to 30 cities. Further, NG will be granted warrants to purchase
warrants to purchase 30,000 shares of the Company's restricted Common Stock
exercisable for a period of two (2) years at an exercise price of $2.50 per
share for every block of 5,000 pre-registered customers up to 75,000
pre-registered customers in a twelve (12) month period. For such offering, the
Company relied upon Section 4(2) of the Act and Rule 506 and Section 14-4-126(f)
of the Arizona Code. A Form D was filed with the SEC.
For purposes of Section 14-4-126(f) of the Arizona code, the facts upon
which the Company relied are: (i) Units were sold to less than thirty-five (35)
persons; (ii) each purchaser who was not an accredited investor either alone or
with purchaser representative had such knowledge and experience in financial and
business matters sufficient to evaluate the merits and risks of the prospective
investment; (iii) the bad boy provisions of the rule apply to neither the
Company nor its predecessors or affiliates; and (iv) neither the issuer nor any
person acting on its behalf offered or sold the securities by any form of
general solicitation or general advertising. Although a filing was required by
the Rule, none was made.
In September 1999, the Company issued 100,000 shares of its unrestricted
Common Stock in exchange for legal services valued at $10,000. The shares were
issued pursuant to an obligation incurred in 1998. The Company relied upon
Section 3(b) of the Act, Rule 504 and the Florida Exemption. A Form D was filed
with the SEC.
79
<PAGE>
Item 5. Indemnification of Directors and Officers
The Company's Articles of Incorporation provide that: no director of this
Corporation shall have personal liability to the Corporation or any of its
stockholders for monetary damages for breach of any duty as a director or
officers involving any act or omission of any such director or officer. The
foregoing provision shall not eliminate or limit the liability of a director (i)
for any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or, which involve
intentional misconduct or a knowing violation of the law, (iii) under applicable
Sections of the Nevada Revised Statutes, (iv) the payment of dividends in
violation of Section 78.300 of the Nevada Revised Statutes or, (v) for any
transactions from which the director derived an improper personal benefit. Any
repeal or modification of this Article by the stockholders of the Corporation
shall be prospective only and shall not adversely affect any limitation on the
personal liability of a director or officer of the Corporation for acts or
omissions prior to such repeal or modification.
The Company's Bylaws provide that no Officer or Director shall be
personally liable for any obligations for the Corporation or for any duties or
obligations arising out of any acts or conduct of said Officer or Director
performed for or on behalf of the Corporation. The Corporation shall and does
hereby indemnify and hold harmless each person and his heirs and administrators
who shall serve at any time hereafter as a Director or Officer of the
Corporation from and against any and all claims, judgments and liabilities to
which such persons shall become subject by reason of any action alleged to have
heretofore or hereafter taken or omitted to have been taken by him as such
Director or Officer, and shall reimburse each such person for all legal and
other expenses reasonably incurred by him in connection with any such claim or
liability, including power to defend such persons from all suits or claims as
provided for under the provisions of the Nevada Revised Statutes.. The rights
accruing to any person under the foregoing provisions of this section shall not
exclude any other right to which he may lawfully be entitled, nor shall anything
herein contained restrict the right of the Corporation to indemnify or reimburse
such person in any proper case, event though not specifically herein provided
for. The Corporation, it's Directors, Officers, employees and agents shall be
fully protected in taking any action or making any payment, or in refusing so to
do in reliance upon the advice of counsel.
The Nevada Revised Statutes ("NRS") provide that: (1) A corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, except an action by or in the
right of the corporation, by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with the
action, suit or proceeding if he acted in good faith and in a manner which he
reasonably believes to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order settlement, conviction or upon
plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believes to be in or not opposed to the best interests of the
80
<PAGE>
corporation, and that, with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful and (2) A corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses, including amounts paid in settlement and attorneys'
fees actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he acted in good faith and in a manner which
he reasonably believes to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue or matter as
to which such a person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the corporation or
for amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitles to
indemnify for such expenses as the court deems proper.
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections 1 and 2, or in defense of any claim, issue
or matter therein, the corporation shall indemnify him against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense.
The statutes also provide that any discretionary indemnification under NRS
78.7502 unless ordered by a court or advanced pursuant to subsection 2, may be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances. The determination must be made: (1) by the
stockholders; (2) by the board of directors by majority vote of a quorum
consisting of directors who were not parties to the action, suit or proceeding;
(3) if a majority vote of a quorum consisting of directors who were not parties
to the action, suit or proceeding so orders, by independent legal counsel in a
written opinion; or (4) if a quorum consisting of directors who were not parties
to the action, suit or proceeding cannot be obtained, by independent legal
counsel in a written opinion.
The articles of incorporation, the bylaws or an arrangement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsequent do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
81
<PAGE>
The indemnification and advancement of expenses authorized in or ordered by
a court pursuant to this section: (1) does not exclude any other rights to which
a person seeking indemnification or advancement of expenses may be entitled
under the articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either an action in
his official capacity or an action in another capacity while holding his office,
except that indemnification, unless ordered by a court pursuant to NRS 78.7502
or for the advancement of expenses made pursuant to subsection 2, may not be
made to or on behalf of any director if a final adjudication establishes that
his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action and (2) continues
for a person who has ceased to be a director, officer, employee or agent and
inures to the benefit of the heirs, executors and administrators of such a
person.
PART F/S
The Financial Statements of the Company required by Regulation S-X
commence on page F-1 hereof.
82
<PAGE>
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Audited Financial Statements
For the Year Ended December 31, 1998 and
from February 19, 1997 (Inception) through December 31, 1997
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report............................................F-2
Consolidated Balance Sheets.............................................F-3
Consolidated Statements of Operations...................................F-4
Consolidated Statements of Changes in Stockholders' Deficiency..........F-5
Consolidated Statements of Cash Flows...................................F-6
Notes to Consolidated Financial Statements..............................F-7
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO: The Board of Directors
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Denver, Colorado
We have audited the accompanying consolidated balance sheets of IPVoice
Communications, Inc., a development stage enterprise, (the "Company") as of
December 31, 1998 and 1997 and the related consolidated statements of
operations, changes in stockholders' deficiency and cash flows for the year
ended December 31, 1998 and from February 19, 1997(Inception) through December
31, 1997. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 1998 and 1997 and the results of their operations and their cash
flows for the year ended December 31, 1998 and from February 19, 1997
(Inception) through December 31, 1997, in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 4 to the
consolidated financial statements, the Company has experienced an operating loss
since inception. The Company's financial position and operating results raise
substantial doubt about its ability to continue as a going concern. Management's
plans with regard to these matters are also described in Note 4. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Durland & Company
- ---------------------------
Durland & Company, CPAs, P.A.
Palm Beach, Florida
August 20, 1999
except for Note 6
as to which the date is
October 28, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Consolidated Balance Sheet
December 31, December 31,
1998 1997
----------------- -------------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 908 $ 1,745.00
Inventory 152,980 0
----------------- -------------------
Total current assets 153,888 1,745
----------------- -------------------
PROPERTY AND EQUIPMENT
Computer equipment 30,953 0
Office machines and equipment 11,015 0
----------------- -------------------
41,968 0
Less accumulated depreciation (4,343) 0
----------------- -------------------
Total property and equipment 37,625 0
----------------- -------------------
Total Assets $ 191,513 $ 1,745
================= ===================
LIABILITIES AND SHAREHOLDER'S DEFICIENCY
CURRENT LIABILITIES
Accounts payable
Trade $ 191,817 $ 0
Officer 34,268 0
Related party 0 14,000
Shareholder 20,564 0
Accrued payroll taxes 35,730 0
Advances from shareholder 24,750 0
----------------- -------------------
Total current liabilities 307,129 14,000
----------------- -------------------
Total Liabilities 307,129 14,000
----------------- -------------------
STOCKHOLDERS' DEFICIENCY
Preferred stock, $0.001 par value, authorized 10,000,000
shares; 0 issued and outstanding at December 31, 1998 and
1997 0 0
Common stock, $0.001 par value, authorized
50,000,000 shares; 12,578,999 and 10,400,000
issued and outstanding at December 31, 1998
and 1997, respectively 12,579 10,400
Additional paid-in capital 465,171 12,600
Stock subscription receivable (62,700) (12,274)
Deficit accumulated during the development stage (530,666) (22,981)
----------------- -------------------
Total stockholders' deficiency (115,616) (12,255)
----------------- -------------------
Total Liabilities and Stockholders' Deficiency $ 191,513 $ 1,745
================= ===================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-3
<PAGE>
<TABLE>
<CAPTION>
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Operations
Period from
February 19,
1997
(Inception)
Year Ended through
December 31, December 31, Cumulative
1998 1997 from Inception
--------------------- ----------------- ------------------------
REVENUES $ 41,254 $ 0 $ 41,254
--------------------- ----------------- ------------------------
<S> <C> <C> <C>
OPERATING EXPENSES
Consulting fees - related party $ 45,000 $ 9,000 $ 54,000
Depreciation 4,343 0 4,343
General and administrative 275,709 0 275,709
Organization expense - related party 0 14,000 14,000
Professional fees - related party 46,096 0 46,096
Salaries
Officers 140,076 0 140,076
Other 37,715 0 37,715
--------------------- ----------------- ------------------------
Total operating expenses 548,939 23,000 571,939
--------------------- ----------------- ------------------------
INTEREST INCOME 0 19 19
--------------------- ----------------- ------------------------
Net loss $ (507,685)$ (22,981)$ (530,666)
===================== ================= ========================
Loss per weighted average common share $ (0.04)$ (0.001)
===================== ================= ========================
Number of weighted average common shares
outstanding 11,620,451 10,192,405
===================== ================= ========================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
<TABLE>
<CAPTION>
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Changes in Stockholders' Deficiency
Deficit
Accumulated
Additional Stock During the Total
Number of Common Paid-in Subscription Development Stockholders'
Shares Stock Capital Receivable Stage Deficiency
------------ ---------- -------------- ------------- ----------------- ----------------
BEGINNING BALANCE,
<S> <C> <C> <C> <C> <C> <C>
February 19, 1997 (Inception) 0 $ 0 $ 0 $ 0 $ 0 $ 0
2/97 - founder's services ($0.001/sh.) 9,000,000 9,000 0 0 0 9,000
3/97 - cash ($0.01/sh.) 1,400,000 1,400 12,600 (12,274) 0 1,726
Net loss 0 0 0 0 (22,981) (22,981)
------------ ---------- -------------- ------------- ----------------- ----------------
BALANCE, December 31, 1997 10,400,000 10,400 12,600 (12,274) (22,981) (12,255)
3/19 - donated - related party
($0.001/sh.) (9,000,000) (9,000) 9,000 0 0 0
3/19 - issued for acquisition
($0.001/sh.) 9,000,000 9,000 (9,000) 0 0 0
3/20 - cash paid for stock subscription 0 0 0 12,274 0 12,274
2nd quarter - cash ($1.00/sh.) 144,000 144 143,856 0 0 144,000
3rd quarter - cash ($1.00/sh.) 10,000 10 9,990 0 0 10,000
3rd quarter - cash ($0.75/sh.) 53,333 53 39,947 0 0 40,000
3rd quarter - cash ($0.50/sh.) 20,000 20 9,980 0 0 10,000
3rd quarter - cash ($0.25/sh.) 100,000 100 24,900 0 0 25,000
3rd quarter - cash ($0.10/sh.) 627,000 627 62,073 (62,700) 0 0
3rd quarter - services ($0.10/sh.) 473,000 473 46,827 0 0 47,300
4th quarter - cash ($0.15/sh.) 396,666 397 56,103 0 0 59,500
4th quarter - services ($0.15/sh.) 275,000 275 40,975 0 0 41,250
4th quarter - cash ($0.19/sh.) 80,000 80 14,920 0 0 15,000
Net loss 0 0 0 0 (507,685) (507,685)
------------ ---------- -------------- ------------- ----------------- ----------------
BALANCE, December 31, 1998 12,578,999 $ 12,579 $ 465,171 $ (62,700)$ (530,666)$ (115,616)
============ ========== ============== ============= ================= ================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE>
<TABLE>
<CAPTION>
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
Period from
February 19,
1997
(Inception)
Year Ended through
December 31, December 31, Cumulative from
1998 1997 Inception
-------------- -------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net Loss $ (507,685)$ (22,981)$ (530,666)
Adjustments to reconcile net loss to net cash used by
operating activities:
Stock issued in exchange for services - related party 88,550 9,000 97,550
Depreciation 4,343 0 4,343
Changes in operating assets and liabilities
Increase in inventory (152,980) 0 (152,980)
Increase in accounts payable - trade 191,817 0 191,817
Increase in accounts payable - officer 34,268 0 34,268
Increase (decrease) in accounts payable - related party (14,000) 14,000 0
Increase in accounts payable - shareholder 20,564 0 20,564
Increase in accrued payroll taxes 35,730 0 35,730
-------------- -------------- --------------------
Net cash (used) provided by operating activities (299,393) 19 (299,374)
-------------- -------------- --------------------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (41,968) 0 (41,968)
-------------- -------------- --------------------
Net cash used by investing activities (41,968) 0 (41,968)
-------------- -------------- --------------------
CASH FLOW FROM FINANCING ACTIVITIES :
Advance from shareholder 24,750 0 24,750
Common stock issued for cash 303,500 1,726 305,226
Proceeds from stock subscription receivable 12,274 0 12,274
-------------- -------------- --------------------
Net cash provided by financing activities 340,524 1,726 342,250
-------------- -------------- --------------------
Net increase (decrease) in cash and equivalents (837) 1,745 908
CASH and equivalents, beginning of period 1,745 0 0
-------------- -------------- --------------------
CASH and equivalents, end of period $ 908 $ 1,745 $ 908
============== ============== ====================
NON-CASH FINANCING ACTIVITIES:
Stock subscription receivable $ (62,700)$ (12,274)$ (74,974)
============== ============== ====================
Donated capital - related party $ 9,000 $ 0 $ 9,000
============== ============== ====================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-6
<PAGE>
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Principles
The Company IPVoice Communications, Inc., is a Nevada chartered
development stage corporation which conducts business from its
headquarters in Castle Rock, Colorado. The Company was incorporated on
February 19, 1997 as Nova Enterprises, Inc., and changed its name to
IPVoice Communications, Inc. in March 1998.
The Company is principally involved in the internet telephony industry.
Current activities include software and hardware development, raising
additional equity, and negotiating with potential key personnel and
facilities.
The Company is in the development stage and is acquiring the necessary
operating assets and is beginning its proposed business. While the
Company is developing tools necessary to enter the internet telephony
market, there is no assurance that any benefit will result from such
activities. The Company will receive limited operating revenues and
will continue to incur expenses during its development, possibly in
excess of revenue.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) Use of estimates The consolidated financial statements have been
prepared in conformity with generally accepted accounting principles.
In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of the date of the statements of
financial condition, and revenues and expenses for the year then ended.
Actual results may differ significantly from those estimates.
b) Significant acquisition In March 1998, IPVoice Communications, Inc.,
a Nevada corporation, acquired 100% of the issued and outstanding
shares of the common stock of IPVoice Communications, Inc., a Delaware
corporation, in a reverse merger, which was accounted for as a
reorganization of the Delaware company.
c) Principles of consolidation The consolidated financial statements
include the accounts of IPVoice Communications, Inc. and its wholly
owned subsidiary. All significant intercompany balances and
transactions have been eliminated.
d) Net loss per share Basic loss per weighted average common share is
computed by dividing the net loss by the weighted average number of
common shares outstanding during the period.
e) Stock compensation for services rendered The Company issues shares
of common stock in exchange for services rendered. The costs of the
services are valued according to generally accepted accounting
principles and have been charged to operations.
F-7
<PAGE>
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Principles (Continued)
f) Inventory Inventory consists mainly of computer parts to be used in
the assembly of units to be sold to customers, or utilized by the
Company in its operations. Once the assembly is complete, the
respective computer part costs are charged to operations or
reclassified to property and equipment based on the nature of the
transaction. Inventory is valued at the lower of cost or market. Cost
is determined using the first-in, first-out (FIFO) method.
g) Property and equipment All property and equipment are recorded at
cost and depreciated over their estimated useful lives, using the
straight-line method. Upon sale or retirement, the costs and related
accumulated depreciation are eliminated from their respective accounts,
and the resulting gain or loss is included in the results of
operations. Repairs and maintenance charges which do not increase the
useful lives of the assets are charged to operations as incurred.
(2) Stockholders' Equity The Company has authorized 50,000,000 shares of
$0.001 par value common stock and 10,000,000 shares of $0.001 par value
preferred stock. The Company had 12,578,999 and 10,400,000 shares of
common stock issued and outstanding at December 31, 1998 and 1997,
respectively. In February 1997, the Company issued 9,000,000 shares to
its founder for services rendered to the Company valued at $9,000 (See
Note 1e). In March 1997, the Company completed a Regulation D Rule 504
Placement for 1,400,000 shares in exchange for $14,000 cash.
In March 1998, a majority shareholder donated 9,000,000 shares of
common stock to the Company. 9,000,000 shares were simultaneously
issued for the acquisition of IPVoice Communications, Inc., a Delaware
corporation (Note (1)(b)). During the second quarter of 1998, the
Company issued 144,000 shares of common stock for $144,000 in cash. The
Company issued 473,000 shares of common stock for services rendered,
valued at the current market rate of $47,300, during the third quarter
of 1998. Also during the third quarter, the Company issued 183,333
shares of common stock for $85,000 in cash, and 627,000 shares of
common stock for a subscription receivable of $62,700. In the fourth
quarter of 1998, the Company issued 275,000 shares of common stock for
services rendered, valued at the current market rate of $41,250. In the
same quarter, 476,666 shares of common stock were issued for $121,800
in cash.
(3) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax
and financial reporting purposes. The Company had net operating loss
carry-forwards for income tax purposes of approximately $442,116, which
expire beginning December 31, 2117.
F-8
<PAGE>
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(3) Income Taxes (Continued)
The amount recorded as a deferred tax asset, cumulative as of December
31, 1998, is $66,317, which represents the amount of tax benefits of
the loss carry-forwards. The Company has established a valuation
allowance for this deferred tax asset of $66,317, as the Company has no
history of profitable operations.
(4) Going Concern As shown in the accompanying consolidated financial
statements, the Company has incurred, from February 19, 1997
(Inception) through December 31, 1998, a total net loss of $530,666.
The ability of the Company to continue as a going concern is dependent
upon increasing sales and obtaining additional capital and financing.
The financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern. The
Company is currently seeking financing to allow it to begin its planned
operations.
(5) Related Parties During 1997, the Company incurred certain organization
expenses totaling $14,000, which were paid for by a company under
common control. The balance owed to this related party at December 31,
1997, which was paid in full during 1998, is presented in Accounts
payable - related party.
At December 31, 1998, the Company owed one of its officers $34,268 for
reimbursement of expenses paid on behalf of the Company. This amount is
represented in Accounts payable - officer.
During the year ended December 31, 1998, the Company owed two of its
shareholders $20,564 for consulting services performed on behalf of the
Company. This amount is represented in Accounts payable - shareholder.
Total consulting fees incurred to these shareholders during the year
amounted to $31,096.
During 1998, additional consulting fees of $35,000 were paid to an
officer and $25,000 in professional fees were paid to a shareholder of
the Company. There were no outstanding amounts owed respective to these
fees as of December 31, 1998.
During the year ended December 31, 1998, one of the Company's
shareholders advanced funds totaling $24,750 for payment of general
operating expenses. This amount is presented in Advance from
shareholder.
(6) Subsequent Events - Significant Acquisition On April 7, 1999, the
Company acquired all of the issued and outstanding common stock of
SatLink 3000, Inc., d/b/a Independent Network Services, a Nevada
Corporation (INS). The Company issued 250,000 shares of redeemable
convertible preferred shares. Each share is convertible, on or after
one year after Closing, into one share of the Company's common stock
or, at the shareholder's option, redeemable by the Company at a price
of $2 per share, giving a total valuation of $500,000 to this
transaction.
F-9
<PAGE>
IPVoice Communications, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(6) Subsequent Events - Significant Acquisition (Continued)
The acquisition was accounted for as a purchase. Substantially all of
the purchase price was assigned to intangibles, including state
certifications, state and Federal tariffs and loaded carrier
identification codes, and cash.
The above agreement was subject to the Company entering into agreements
with the President and Chief Executive Officer of SatLink 3000, Inc.,
including, but not limited to, an employment agreement, consulting
agreement, compensation agreement, stock operation agreement, and stock
grant agreement. The Employment/Compensation Agreement provides
compensation to this individual as Director and Chief Financial Officer
of the Company. In addition, certain stock incentives are provided.
Certain of these are recognized in the amount of $318,600 as of April
7, 1999.
During the course of the audit of the SatLink 3000, Inc. December 31,
1998 financial statements, certain information was disclosed to the
Company. Based on this information, the Board of Directors elected, on
October 29, 1999, to rescind the acquisition transaction and nullify
the above-mentioned agreements with the President and Chief Executive
Officer of SatLink 3000, Inc. These transactions are being treated as
if they never occurred, except for the assumption of an office space
lease. The annually renewable lease obligation commences August 1999,
with monthly payments of $3,862.
Change of Corporate Name On May 24, 1999, the Company formally changed
its name to IPVoice.com, Inc.
Private Offering During the second quarter of 1999, the Company raised
$1,150,000 through the issuance of forty-six investment units in the
amount of $25,000. Each unit consisted of a two year note in the
principal amount of $24,900, with interest payable quarterly at 9% per
annum; a warrant for 18,750 shares of stock of the Company; and
twenty-five senior convertible preferred shares.
Management anticipates the net proceeds, less initial expenses payable,
will be applied to the business of the Company to provide working
capital.
F-10
<PAGE>
<TABLE>
<CAPTION>
INDEX TO THE FINANCIAL STATEMENTS
<S> <C>
Balance Sheets for the six months ended
June 30, 1999 and 1998 (unaudited) F-12
Statements of Operations for the six months ended
June 30, 1999 and 1998 (unaudited) F-13
Statement of Stockholder's Equity for the six
months ended June 30, 1999 (unaudited) F-14
Statements of Cash Flows for the six months
ended June 30, 1999 and 1998 (unaudited) F-15
Footnotes to the Financial Statements F-16
</TABLE>
F-11
<PAGE>
<TABLE>
<CAPTION>
IPVoice.com, Inc.
(A Development Stage Enterprise)
Balance Sheets
June 30, 1998 and June 30, 1999
June 30, June 30,
ASSETS 1999 1998
(Unaudited) (Unaudited)
------------- ------------
CURRENT ASSETS
<S> <C> <C>
Cash $ 1,069,856 $22,932
Accounts Receivable, 4,370 28,686
Inventory 168,771 36,030
------------- -----------
Total Current Assets 1,242,997 87,648
------------- -----------
FIXED ASSETS
Computer Equipment 37,677 17,132
Office machines and equipment 20,438 8,983
-------------- -----------
58,115 26,115
Less: accumulated depreciation (9,203) (990)
-------------- -----------
Total Property and Equipment 48,912 25,125
-------------- -----------
Total Assets $ 1,291,909 $ 112,773
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable
Trade $ 90,353 $ 34,307
Officer 6,338 1,335
Shareholder 14,912 7,344
Accrued interest-shareholders 11,547
-------------- -----------
Total Current Liabilities 123,150 42,986
-------------- -----------
Long-Term Liabilities
Notes payables-shareholders 1,145,400
-------------- -----------
Total Liabilities 1,268,550 42,986
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value,
authorized 10,000,000 shares; 1,150 and 0
shares issued and outstanding at
June 30, 1999 and 1998, respectively 1
Common stock, $0.001 par value, authorized 50,000,000
Shares, 16,202,758 and 10,544,000 issued and outstanding
At June 30, 1999 and 1998, respectively 16,203 10,544
Additionally paid in capital 1,516,710 156,456
Stock subscription receivable (177,700)
Deficit accumulated during the development stage (1,331,855) (97,213)
-------------- ------------
Total Stockholders' Equity 23,359 69,787
-------------- ------------
Total Liabilities and Stockholders' Equity $1 ,291,909 $ 112,773
=========== ============
</TABLE>
The accompanying notes are an integral part
of the condensed financial statements
F-12
<PAGE>
<TABLE>
<CAPTION>
IPVoice.com, Inc.
(A Development Stage Enterprise)
Statements of Operations (Unaudited)
June 30, June 30,
1999 1998
------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Sales $ $ 40,384
Cost of sales - -
Gross Profit - 40,384
Expenses
Consulting fees-related party 35,693 21,944
Depreciation and amortization 4,860 990
General and administrative 120,209 33,298
Professional fees-related party 457,324 17,032
Salaries
Officers 147,329 36,116
Other 30,613 5,236
----------
Total Operating Expenses 796,028 114,616
---------
Loss from Operations (796,028) (74,232)
Other Expense-Interest (11,547) -
Other Income-Interest 6,386 -
Net Loss $ (801,189) $ (74,232)
===========
Basic loss per weighted average common share $ (0.05) $ (0.01)
============
Basic number of weighted average common shares outstanding 14,762,758 10,436,000
</TABLE>
The accompanying notes are an integral part of
the condensed financial statements
F-13
<PAGE>
<TABLE>
<CAPTION>
IPVoice.com, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Changes in Stockholders' Equity
Deficit
Perferred Common Accumulated
Stock Stock Additional Stock During the Total
Number of Number of Perferred Common Paid-in Subscription Development Stockholders'
Shares Shares Stock Stock Capital Receivable Stage Equity
-------- ----------- -------- --------- ---------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1997 0 10,400,000 $ $ 10,400 $ 12,600 $ (12,274) $ (22,981) $ (12,255)
3/19 - donated - 0 (9,000,000) 0 (9,000) 9,000 0 0 0
related party ($0.001/sh.)
3/19 - issued for 0 9,000,000 0 9,000 (9,000) 0 0 0
acquisition ($0.001/sh.)
3/20 - cash 0 0 0 0 0 12,274 0 12,274
2nd quarter - cash ($1.00/sh.) 0 144,000 0 144 143,856 0 0 144,000
3rd quarter - cash ($1.00/sh.) 0 10,000 0 10 9,990 0 0 10,000
3rd quarter - cash ($0.75/sh.) 0 53,333 0 53 39,947 0 0 40,000
3rd quarter - cash ($0.50/sh.) 0 20,000 0 20 9,980 0 0 10,000
3rd quarter - cash ($0.25/sh.) 0 100,000 0 100 24,900 0 0 25,000
3rd quarter - cash ($0.10/sh.) 0 627,000 0 627 62,073 (62,700) 0 0
3rd quarter - services ($0.10/sh.) 0 473,000 0 473 46,827 0 0 47,300
4th quarter - cash ($0.15/sh.) 0 396,666 0 397 56,103 0 0 59,500
4th quarter - services ($0.15/sh.) 0 275,000 0 275 40,975 0 0 41,250
4th quarter - cash ($0.19/sh.) 0 80,000 0 80 14,920 0 0 15,000
Net loss 0 0 0 0 0 0 (507,685) (507,685)
------- ----------- ------- ---------- ----------- ------------ --------------- --------------
BALANCE, December 31, 1998 0 12,578,999 0 12,579 465,171 (62,700) (530,666) (115,616)
------- ----------- ------- ---------- ----------- ------------ --------------- --------------
1st quarter-cash ($.15-.40/sh) 0 687,499 0 687 149,313 0 0 150,000
1st quarter-stock issued for services 0 193,760 0 194 120,070 0 0 120,264
1st quarter-subscription receivable 0 437,500 0 438 174,562 (175,000) 0 0
2nd quarter-cash ($.06-.65/sh) 0 2,005,000 0 2,005 293,995 0 0 296,000
2nd quarter-received from subscription 0 0 0 0 0 60,000 0 60,000
2nd quarter-stock issued for services 0 300,000 0 300 309,000 0 0 309,300
Issuance of Preferred Stock 1,150 0 1 0 4,599 0 0 4,600
Net loss - - 0 0 0 0 (801,189) (801,189)
------- ----------- ------- ---------- ----------- ------------ --------------- --------------
BALANCE, June 30, 1999 1,150 16,202,758 $ 1 $ 16,203 $ 1,516,710 $ (177,700) $ (1,331,855)$ 23,359
(Unaudited)
======= =========== ======= ========== =========== ============ =============== ==============
</TABLE>
The accompanying notes are an integral part of
the condensed financial statements
F-14
<PAGE>
<TABLE>
<CAPTION>
IPVoice.com, Inc.
(A Development Stage Enterprise)
Statements of Cash Flows (Unaudited)
June 30, June 30,
1999 1998
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (801,189) $ (74,232)
Adjustments to reconcile net loss to net cash used by
operating activities:
Stock issued in exchange for services - related party 429,564
Depreciation 4,860 990
Changes in operating assets and liabilities
(Increase) in inventory (15,791) (36,030)
(Increase) in accounts receivable (4,370) (28,686)
(Decrease) Increase in accounts payable - trade (101,464) 34,307
(Decrease) Increase in accounts payable - officer (27,930) 1,335
(Decrease) Increase in accounts payable - related party (14,000)
(Decrease) Increase in accounts payable - shareholder (5,652) 7,334
Increase in accrued interest payables 11,547
(Decrease) in accrued payroll taxes (35,730)
-------------- --------------
Net cash (used) provided by operating activities (546,155) (108,972)
-------------- --------------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (16,147) (26,115)
-------------- --------------
Net cash used by investing activities (16,147) (26,115)
-------------- --------------
CASH FLOW FROM FINANCING ACTIVITIES :
Repayment of shareholder advances (24,750)
Proceeds from notes payable 1,145,400
Common stock issued for cash 446,000 144,000
Preferred stock issued cash 4,600
Stock subscription receivable 60,000 12,274
-------------- --------------
Net cash provided by financing activities 1,631,250 156,274
-------------- --------------
Net increase (decrease) in cash and equivalents 1,068,948 21,187
CASH and equivalents, beginning of period 908 1,745
-------------- --------------
CASH and equivalents, end of period $ 1,069,856 $ 22,932
============== ==============
NON-CASH FINANCING ACTIVITIES:
Stock subscription receivable $ (115,000)$ (12,274)
============== ==============
Donated capital - related party $ $ 9,000
============== ==============
</TABLE>
The accompanying notes are an integral part of
the condensed financial statements
F-15
<PAGE>
IPVoice.com, Inc.
(A Development Stage Enterprise)
Notes to Unaudited Consolidated Financial Statements
(1) Summary of Significant Accounting Principles
The Company IPVoice Communications, Inc., is a Nevada chartered
development stage corporation which conducts business from its
headquarters in Denver, Colorado. The Company was incorporated on
February 19, 1997, as Nova Enterprises, Inc. and changed its name to
IPVoice Communications, Inc. in March 1998. On May 24, 1999, the Company
formally changed its name to IPVoice.Com, Inc.
The Company is principally involved in the internet telephony industry.
Current activities include software and hardware development, raising
additional equity, and negotiating with potential key personnel and
facilities.
The Company is in the development stage and is acquiring the necessary
operating assets and is beginning its proposed business. While the
Company is developing tools necessary to enter the internet telephony
market, there is no assurance that any benefit will result from such
activities. The Company will receive limited operating revenues and will
continue to incur expenses during its development, possibly in excess of
revenue.
The financial statements for the six months ended June 30, 1999 and 1998
contain all adjustments, which in the opinion of management are
necessary for fair presentation.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) Use of estimates The consolidated financial statements have been
prepared in conformity with generally accepted accounting principles. In
preparing the consolidated financial statements, management is required
to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the statements of financial
condition, and revenues and expenses for the year then ended. Actual
results may differ significantly from those estimates.
b) Principles of consolidation The consolidated financial statements
include the accounts of IPVoice Communications, Inc. and its wholly
owned subsidiary. All significant intercompany balances and transactions
have been eliminated.
c) Start-up costs Costs of start-up activities, including organization
costs, are expensed as incurred, in accordance with Statement of
Position (SOP) 98-5. This SOP sets forth the generally accepted
accounting principles for costs of start-up activities as it applies to
development stage entities.
d) Net loss per share Basic loss per weighted average common share is
computed by dividing the net loss by the weighted average number of
common shares outstanding during the period.
e) Stock compensation for services rendered The Company issues shares of
common stock in exchange for services rendered. The costs of the
services are valued according to generally accepted accounting
principles and have been charged to operations.
f) Accounts receivable No allowance for uncollectible accounts has been
provided. Management has evaluated the accounts and believes they are
all collectible.
g) Inventory Inventory consists mainly of computer parts to be used in
the assembly of units to be sold to customers, or utilized by the
Company in its operations. Once the assembly is complete, the respective
computer part costs are charged to operations or reclassified to
property and equipment based on the nature
F-16
<PAGE>
IPVoice.com, Inc.
(A Development Stage Enterprise)
Notes to Unaudited Consolidated Financial Statements
(1) Summary of Significant Accounting Principles (Continued)
g) Inventory (Continued)
of the transaction. Inventory is valued at the lower of cost or market.
Cost is determined using the first-in, first-out (FIFO) method.
h) Property and equipment All property and equipment are recorded at
cost and depreciated over their estimated useful lives, using the
straight-line method. Upon sale or retirement, the costs and related
accumulated depreciation are eliminated from their respective accounts,
and the resulting gain or loss is included in the results of operations.
Repairs and maintenance charges which do not increase the useful lives
of the assets are charged to operations as incurred.
(2) Stockholders' Equity The Company has authorized 50,000,000 shares of $0.001
par value common stock. The Company had 16,202,758 and 10,544,000 shares of
common stock issued and outstanding at June 30, 1999 and 1998, respectively. In
February 1997, the Company issued 9,000,000 shares to its founder for services
rendered to the Company valued at par value, or $9,000. In March 1997, the
Company completed a Regulation D Rule 504 Placement for 1,400,000 shares in
exchange for $14,000 cash.
In March 1998, a majority shareholder donated 9,000,000 shares of common
stock to the Company. These shares were simultaneously issued for the
acquisition of IPVoice Communications, Inc., a Delaware corporation
(Note (1)(b)). During the second quarter of 1998, the Company issued
144,000 shares of common stock for $144,000 in cash. The Company issued
473,000 shares of common stock for services rendered, valued at the
current market rate of $47,300 during the third quarter of 1998. Also
during the third quarter, the Company issued 183,333 shares of common
stock for $85,000 in cash, and 627,000 shares of common stock for a
subscription receivable of $62,700. In the fourth quarter of 1998, the
Company issued 275,000 shares of common stock for services rendered,
valued at the current market rate of $41,250. In the same quarter,
476,666 shares of common stock were issued for $121,800 in cash.
In the first quarter of 1999, the Company issued 687,499 shares of
common stock for $150,000 in cash and 193,760 shares of common stock for
services rendered, valued at the current market rate of $120,264. Also
during the first quarter, the Company issued 437,500 shares of common
stock for a subscription receivable of $175,000. In the second quarter
of 1999, the Company issued 2,005,000 shares of common stock for
$296,000 in cash and 300,000 shares of common stock for service
rendered, valued at the current market rate of $309,300.
Additionally, the Company has authorized 1,000,000 shares of $0.001 par
value preferred stock. There were 1,160 and 0 shares of preferred stock
issued and outstanding at June 30, 1999 and 1998, respectively. As part
of the Private Offering completed in the second quarter of 1999, the
Company issued 1,150 twenty-five year senior convertible preferred
shares for $4,600 in cash.
(3) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax and
financial reporting purposes. The Company had net operating loss carry-forwards
for income tax purposes of approximately $1,332,000, which expire beginning
December 31, 2117.
The amount recorded as deferred tax assets, cumulative as of June 30,
1999, is $199,800 which represents the amount of tax benefits of loss
carry-forwards. The Company has established a valuation allowance for
this deferred tax asset of $199,800, as the Company has no history of
profitable operations.
F-17
<PAGE>
IPVoice.com, Inc.
(A Development Stage Enterprise)
Notes to Unaudited Consolidated Financial Statements
(4) Going Concern As shown in the accompanying consolidated financial
statements, the Company has incurred, from February 19, 1997 (Inception) through
June 30, 1999, a total net loss of $1,331,855. The ability of the Company to
continue as a going concern is dependent upon increasing sales and obtaining
additional capital and financing. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern. The Company is currently seeking financing to allow it to begin
its planned operations.
(5) Related Parties During the six months ended June 30, 1998, the Company
repaid funds totaling $14,000. This amount was paid a company under common
control for organization expenses incurred on behalf of the Company in 1997.
At June 30, 1998, the Company owed one of its shareholders $7,344 for
consulting and professional services provided to the Company. This
amount is presented in Accounts payable - shareholder. Total consulting
and professional fees incurred to this shareholder during the six months
ended June 30, 1998 amounted to $17,032. During 1998, the Company also
paid consulting and professional fees to three other shareholders
totaling $21,944. There were no outstanding amounts owed respective to
these fees as of June 30, 1998.
At June 30, 1999 and 1998, the Company owed one of its officers $6,338
and $1,335, respectively, for reimbursement of expenses paid on behalf
of the Company. These amounts are presented in Accounts payable -
officer.
At June 30, 1999, the Company owed two of its shareholders $14,912 for
consulting and professional services performed on behalf of the Company.
This amounts is presented in Accounts payable - shareholder. Total
consulting and professional fees incurred to these shareholders during
the six months ended June 30, 1999 and 1998 amounted to $35,693 and
$27,760, respectively.
At June 30, 1999, the Company owed $11,547 to shareholders who
participated in the Private Offering in the second quarter of 1999. This
amount is presented in Accrued interest - shareholders
During the six months ended June 30, 1999, the Company repaid $24,750
advanced from one of the Company's shareholders for payment of general
operating expenses.
(6) Significant Acquisition In March 1998, IPVoice Communications, Inc., a
Nevada corporation, acquired 100% of the issued and outstanding shares of common
stock of IPVoice Communications, Inc., a Delaware corporation, in a reverse
merger, which was accounted for as a reorganization of the Delaware company.
On April 7, 1999, the Company acquired all of the issued and outstanding
common stock of SatLink 3000, Inc., d/b/a Independent Network Services,
a Nevada Corporation (INS). The Company issued 250,000 shares of
redeemable convertible preferred shares. Each share is convertible, on
or after one year after Closing, into one share of the Company's common
stock or, at the shareholder's option, redeemable by the Company at a
price of $2.00 per share, giving a total valuation of $500,000 to this
transactions.
The above acquisition was subject to the Company entering into
agreements with the President and Chief Executive Officer of INS,
including, but not limited to, an employment agreement, consulting
agreement, compensation agreement, stock operation agreement, and stock
grant agreement. The Employment/Compensation Agreement provides
compensation to this individual as Director and Chief Financial Officer
of the Company. In addition, certain stock incentives are provided. (See
Note 9)
F-18
<PAGE>
IPVoice.com, Inc.
(A Development Stage Enterprise)
Notes to Unaudited Consolidated Financial Statements
(7) Private Offering During the second quarter of 1999, the Company raised
$1,150,000 through the issuance of forty-six investment units in the
amount of $25,000. Each unit consisted of a two-year note in the
principal amount of $24,900, with interest payable quarterly at 9% per
annum; a warrant for 18,750 shares of stock of the Company; and
twenty-five senior convertible preferred shares. The warrant exercise
price is 125% of the average closing price of the Company's shares of
common stock for the 30 trading days immediately prior to the offering
date. The senior convertible preferred shares are convertible into
shares of common stock representing 51% of the then issued and
outstanding common stock of the Company. This conversion can only occur
upon an event of default, which is not reasonably cured, of the two-year
notes.
Management anticipates the net proceeds, less initial expenses payable,
will be applied to the business of the Company to provide working
capital.
(8) Subsequent Events - Significant Acquisition During the course of the audit
of the SatLink 3000, Inc. December 31, 1998 financial statements, certain
information was disclosed to the Company. Based on this information, the Board
of Directors elected on October 29, 1999, to rescind the acquisition transaction
and nullify the above mentioned agreements with the President and Chief
Executive Officer of SatLink 3000, Inc. These transactions are being treated as
if they never occurred, except for the assumption of an office space lease. The
annually renewable lease obligation commences August 1999, with monthly payments
of $3,862.
F-19
<PAGE>
PART III
Item 1. Index to Exhibits
Item No. Description
3.(i).1 * Articles of Incorporation of Nova Enterprises, Inc.
filed February 19, 1997.
3.(i).2 * Certificate of Amendment of Articles of Incorporation
changing name to IPVoice Communications, Inc.
filed March 24, 1998.
3.(i).3 * Certificate of Amendment of Articles of Incorporation
changing name to IPVC.com, Inc.
3.(i).4 * Certificate of Amendment of Articles of Incorporation
changing name to IPVoice.com, Inc.
3.(ii).1 * Bylaws of Nova Enterprises, Inc.
4.1 * Form of Private Placement Offering
of 1,600,000 common shares at $0.01 per share.
4.2 * Form of Private Placement Offering
of 992,500 common shares at $1.00 per share.
4.3 * Form of Private Placement Offering
of 100,000 common shares at $0.50 per share.
4.4 * Form of Private Placement Offering
of 1,000,000 common shares at $0.15 per share.
4.5 * Form of Private Placement Offering
of 1,250,000 common shares at $0.40 per share.
4.6 * Form of Private Placement Offering
of 104 Units at $25,000.00 per unit.
4.7 * Form of Promissory Note for Private Placement Offering
of 104 Units at $25,000 per unit.
4.8 * Form of Warrant for Private Placement Offering
of 104 Units at $25,000 per unit.
10.1 * Agreement dated March 1998 with Nova Enterprises, Inc.
10.2 * Agreement dated April 1999 with Independent Network Services.
10.3 * Agreement dated February 1998 with Natural MicroSystems Corp.
85
<PAGE>
10.4 * Agreement dated June 1999 with ICG Telecom Group, Inc.
10.5 * Agreement dated August 1999 with RSL Com U.S.A., Inc.
10.6 * Agreement dated July 1999 with Star Telecommunications, Inc.
10.7 * Agreement dated August 1999 with ILD Communications, Inc.
10.8 * Agreement dated June 1999 with Level 3 Communications LLC.
10.9 * Agreement dated August, 1999 with Worldcom Technologies, Inc.
10.10 * Agreement dated March 1999 with Teleco Service International,Inc.
10.11 * Agreement dated March 1999 with Billion Telecommunication
Services, Ltd.
10.12 * Agreement dated May 1999 with Firstnet Telephany Ltd.
10.13 * Agreement dated July 1999 with MetroPlus Communication
Technology, Inc.
10.14 * Agreement dated February 1999 with BlueGrass Net.
10.15 * Agreement dated July 1998 with The Armstrong International
Group, Inc.
10.16 * Agreement dated February 1999 with International Investment
Partners, Ltd.
10.17 * Agreement dated March 1999 with Kenneth M. Brown
10.18 * Agreement dated April 1999 with Netgenie.com LLC
10.19 * Agreement dated April 1999 with Benae International Inc.
10.20 * Consulting Agreement dated November 1997 with Condor
Worldwide, Ltd.
10.21 * Consulting Agreement dated July 1998 with Calpe, Ltd.
10.22 * Consulting Agreement dated July 1998 with The Investor
Communications Group, Inc.
10.23 * Consulting Agreement dated July 1998 with Corporate Imaging.
10.24 * Consulting Agreement dated September 1998 with First Capital
Partners, Inc.
86
<PAGE>
10.25 * Consulting Agreement dated October 1998 with International
Investment Partners, Ltd.
10.26 * Consulting Agreement dated October 1998 with Insidestock.com, Inc
10.27 * Consulting Agreement dated March 1999 with Buying Power Network.
10.28 * Employment Agreement dated April 1998 with Barbara S. Will.
10.29 * Employment Agreement dated April 1998 with Anthony K. Welch.
10.30 * Employment Agreement dated April 1999 with Peter M. Stazzone.
10.31 * Lease effective August 1, 1999 for Phoenix offices
27.1 * Financial Data Sheet.
- ----------------
(* Filed herewith)
Item 2. Description of Exhibits
The documents required to be filed as Exhibits Number 2 and 6 and in
Part III of Form 1-A filed as part of this Registration Statement on Form 10-SB
are listed in Item 1 of this Part III above. No documents are required to be
filed as Exhibit Numbers 3 , 5 or 7 in Part III of Form 1-A and the reference to
such Exhibit Numbers is therefore omitted.
87
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
IPVoice.com, Inc.
(Registrant)
Date: October 29, 1999 By:/s/ Barbara S. Will
-------------------------------
Barbara S. Will, Director, President
and Chief Operating Officer
By:/s/ James Howson
-------------------------------
James Howson, Chairman, Chief
Executive Officer
By:/s/ James L. DeSalle
-------------------------------
James L. DeSalle, Acting Chief
Financial Officer
88
EXHIBIT 3.(i).1
FILED Articles of Incorporation Filing fee:
IN THE OFFICE OF THE (PURSUANT TO NRS 78) Receipt #:
SECRETARY OF STATE STATE OF NEVADA
OF THE
STATE OF NEVADA
FEB 19 1997 [State Seal]
No. C3312-97
/s/ Dean Heller
Secretary of State (For filing office use)
1. NAME OF CORPORATION: NOVA ENTERPRISES, INC.
2. RESIDENT AGENT: (designated resident agent and his STREET ADDRESS in Nevada
where process may be served)
Name of Resident Agent: Corporate Creations
Street Address: 1504 #8-RS265 Main Street (PHYSICAL LOCATION ONLY! NO
MAILED ALLOWED) Gardnerville
Mailing Address (if different):
Street No. Street Name City Zip
4521 PGA Boulevard Suite 211, Palm Beach Gardens, FL 33410
3. SHARES: (number of shares the corporation is authorized to issue)
Number of shares with par value: 20,000,000 Par value: $.001
Number of shares without par value:
4. GOVERNING BOARD: shall be styled as (check one): X Directors _ Trustees
The FIRST BOARD OF DIRECTORS shall consist of one members and the names
and addresses are as follows:
Dale B. Finfrock, Jr. P.O. Box 669, Palm Beach, FL 33480
-------------------------------------------------------------------------
Name Address City/State/Zip
5. PURPOSE (optional - see reverse side): The purpose of the corporation shall
be:
6. NRS 78.037: States that the articles of incorporation may also contain a
provision eliminating or limiting the personal liability of a director or
officer of the corporation or its stockholders for damages for breach of
fiduciary duty as a director or officer except acts or omissions which
include misconduct or fraud. Do you want this provision to be part of your
articles? Please check one of the following:
YES X NO __
7. OTHER MATTERS: This form includes the minimal statutory requirements to
incorporate under NRS 78. You may attach additional information noted on
separate pages. But, if any additional information is contradictory to this
<PAGE>
form it cannot be filed and will be returned to you for correction.. Number
of pages attached 1 .
8. SIGNATURES OF INCORPORATORS: The names and addresses of each of the
incorporators signing the articles: (signature must be authorized)
Brian R. Fons . Subscribed and sworn to before me this
Name (print) 19th day of February, 1997 .
401 Ocean Drive #312 (Door Code 125)
Miami Beach FL 33139-6629 /s/ (illegible)
Address City/State/Zip Notary Public
/s/ Brian R. Fons
Signature
[Notary Seal]
9. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
I Corporate Creations hereby accept appointment as Resident Agent for the above
named corporation.
/s/ (illegible), Asst. Secretary 2-19-97
Signature of Resident Agent Date
<PAGE>
Articles of Incorporation Filing fee:
(PURSUANT TO NRS 78) Receipt #
STATE OF NEVADA
[State Seal]
STATE OF NEVADA
(For filing office use) Secretary of State
Attachment #1
3. SHARES: Continued
The Corporation shall also have the authority to issue 1,000,000 shares of
preferred stock, par value $.001 per share, which may be divided into series and
with the preferences, limitations and relative rights determined by the Board of
Directors.
The Corporation elects not to be governed by the provisions of NRS 78.378 to
78.3793 governing the acquisition of a controlling interest in the Corporation.
The Corporation also adopts the following additional provisions:
Denial of Preemptive Rights
No Shareholder shall have any right to acquire shares or other securities of the
Corporation except to the extent such right may be granted by an amendment to
these Articles of Incorporation or by a resolution of the Board of Directors.
Liability and Indemnification of Directors and Officers
To the fullest extent permitted by law, no director or officer of the
Corporation shall be personally liable to the Corporation or its shareholders
for damages for breach of any duty owed to the Corporation or its shareholders.
In addition, the Corporation shall have the power, in its Bylaws or in any
resolution of its stockholders or directors, to undertake to indemnify the
officers and directors of this Corporation against any contingency or peril as
may be determined to be in the best interests of this Corporation, and to
procure policies of insurance at this Corporation's expense.
Amendment of Bylaws
Notwithstanding anything in these Articles of Incorporation, the Bylaws, or
applicable state corporation law, the shareholders shall not adopt, modify,
amend or repeal bylaws of the Corporation except upon the affirmative vote of a
simple majority vote of the holders of all the issued and outstanding shares of
the Corporation entitled to vote thereon.
Shareholders
Inspection of Books. The Board of Directors shall make reasonable rules to
determine at what times and places and under what conditions the books of the
Corporation shall be open to inspection by shareholders or a duly appointed
representative of a shareholder.
<PAGE>
Quorum. The holders of shares entitled to one-third of the votes at a meeting of
shareholders shall constitute a quorum.
Required Vote. Acts of shareholders shall require the approval of holders of
50.01% of the outstanding votes of shareholders.
Contracts
No contract or other transaction between this Corporation and any person, firm
or other company shall be affected by the fact that any other officer or
director of this Corporation is, or at some time in the future becomes, an
officer, director or partner of such other contracting party, or has now or in
the future obtains a direct or indirect interest in such contract.
EXHIBIT 3.(i).2
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE STATE
STATE OF NEVADA
[stamp]
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock) Filed By:
MAR 24 1998 NOVA ENTERPRISES, INC.
No. C 3312-97 Name of Corporation
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
[stamp]
We the undersigned Dale B. Finfrock, Jr., President and Assistant Secretary
of NOVA ENTERPRISES, INC.
do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened,
held on March 24, 1998, adopted a resolution to amend the original articles as
follows:
Article 1 is hereby amended to read as follows:
1. The name of this Corporation is : IPVoice Communications, Inc.
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 10,400,000: that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ Dale B. Finfrock
President or Vice President
/s/ Dale B. Finfrock
Secretary or Assistant Secretary
<PAGE>
State of FLORIDA )
) ss.
County of DADE )
On March , personally appeared before me, a Notary Public, Dale B. Finfrock ,
who acknowledged that they executed the above instrument.
LUIS A. URIARTE /s/ Luis Uriarte
COMMISSION # CC(illegible) --------------------------
EXPIRES SEP 02, 2000 Signature of Notary
BONDED THROUGH
ATLANTIC BONDING CO., INC.
[Notary Stamp or Seal]
EXHIBIT 3.(i).3
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE STATE
STATE OF NEVADA
[stamp]
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock) Filed By:
APR 19, 1999 IPVoice Communications, Inc.
No. C 3312-97 Name of Corporation
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
[stamp]
We, the undersigned Barbara S. Will, President, Chief Operating Officer and
Chairperson and Anthony K. Welch, Executive Vice-President of Research &
Development and Director of IPVoice Communications, Inc.
do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on April 15, 1998, adopted a resolution to amend the original
articles as follows:
Article 1 is hereby amended to read as follows:
1. The name of the corporation is: IPVC.com, Inc.
Article 3 is hereby reaffirmed and re-ratified except as follows:
3. Shares: (number of shares the corporation is authorized to issue)
The maximum number of shares of stock that this corporation is authorized
to have outstanding at any one time is 50,000,000 shares of common stock having
$.001 par value per share and 10,000,000 shares of preferred stock having $.001
par value per share. The preferred shares may be divided into series and will
have the preferences, limitations and relative rights determined by the Board of
Directors.
The corporation also adopts the following provision:
SPECIAL AUTHORITY OF BOARD OF DIRECTORS AND WAIVER OF DISSENTERS
RIGHTS
The Board of Directors by a majority vote thereof shall be and are hereby
authorized to enter into on behalf of the corporation and to bind the
corporation without shareholder approval, any and all acts approving (a) the
terms and conditions of a merger and/or a share exchange; and (b) divisions,
combinations and/or splits of shares of any class or series of stock of the
corporation, whether issued or unissued, with or without any change in the
number of authorized shares; and shareholders affected thereby, shall not be
<PAGE>
entitled to dissenters rights with respect thereto under any applicable
statutory dissenters rights provisions.
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 14,347,758, that the said changes
and amendment have been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
/s/ Barbara S. Will
- -----------------------------------
Barbara S. Will, President, COO and Chairperson
/s/ Anthony K. Welch
- ---------------------------------
Anthony K. Welch, V.P. of R&D and Director/Secretary
State of Colorodo }
} SS.
County of Jefferson }
On April 16, 1999, personally appeared before me, a Notary Public, Barbara S.
Will, who acknowledged that she executed the above instrument.
/s/ Lillian M. Vader
-----------------------------
Signature of Notary
(Notary Stamp or Seal)
EXHIBIT 3.(i).4
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE STATE
STATE OF NEVADA
[stamp]
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock) Filed By:
JUN 09 1999 IPVoice Communications, Inc.
No. C 3312-97 Name of Corporation
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
[stamp]
I the undersigned, BARBARA WILL, PRESIDENT and ASSISTANTSECRETARY of IPVC.com.
Inc.
do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened,
held on May 24, 1999, adopted a resolution to amend the original articles as
follows:
Article 1 is hereby amended to read as follows:
The name of the corporation is : IPVoice.com, Inc.
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 14,347,758; that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ Barbara S. Will /s/ Anthony K. Welch
- -------------------------------- --------------------------------
President or Vice President Secretary or Assistant Secretary
State of Colorado )
) ss.
County of Jefferson )
On May 24, 1999 personally appeared before me, a Notary Public, Barbara
S. Will, who acknowledged that they executed the above instrument.
/s/ Lillian M. Vader
Signature of Notary
(Notary Stamp or Seal)
My commission expires 8/12/99
EXHIBIT 3.(ii).1
Bylaws
of
NOVA ENTERPRISES, INC.
ARTICLE I. DIRECTORS
SECTION 1. FUNCTION. All corporate powers shall be exercised by or under the
authority of the Board of Directors. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors. Directors must
be natural persons who are at least 18 years of age but need not be shareholders
of the Corporation. Residents of any state may be directors.
SECTION 2. COMPENSATION. The shareholders shall have authority to fix the
compensation of directors. Unless specifically authorized by a resolution of the
shareholders, the directors shall serve in such capacity without compensation.
SECTION 3. PRESUMPTION OF ASSENT. A director who is present at a meeting of the
Board of Directors or a committee of the Board of Directors at which action on
any corporate matter is taken shall be presumed to have assented to the action
taken unless he objects at the beginning of the meeting (or promptly upon
arriving) to the holding of the meeting or transacting the specified business at
the meeting, or if the director votes against the action taken or abstains form
voting because of an asserted conflict of interest.
SECTION 4. NUMBER. The Corporation shall have at least he minimum number of
directors required by law. The number of directors may be increase or decreased
from time to time by the Board of Directors.
SECTION 5. ELECTION AND TERM. At each annual meeting of the shareholder, the
shareholders shall elect directors to hold office until the next annual meeting
or until their earlier resignation, removal from office or death. Directors
shall be elected by a plurality of the votes cast by the shares entitled to vote
in the election at a meeting at which a quorum is present.
SECTION 6. VACANCIES. Any vacancy occurring the Board of Directors, including a
vacancy created by an increase in the number of directors, may be filled by the
shareholders or by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors. A director elected to fill
a vacancy shall hold office only until the next election of directors by the
shareholders. If there are no remaining directors, the vacancy shall be filled
by the shareholders.
SECTION 7. REMOVAL OF DIRECTORS. At a meeting of shareholders, any director or
the entire Board of Directors may be removed, with or without cause, provided
the notice of the meeting states that one of the purposes of the meeting is the
removal of the director. A director may be removed only if the number of votes
cast to remove him exceeds the number of votes cast against removal.
<PAGE>
SECTION 8. QUORUM AND VOTING. A majority of the number of directors fixed by
these Bylaws shall constitute a quorum for the transaction of business. The act
of a majority of directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
SECTION 9. EXECUTIVE AND OTHER COMMITTEES. The Board of Directors, by resolution
adopted by a majority of the full Board of Directors, may designate from among
its members one or more committees each of which must have at least two members.
Each committee shall have the authority set forth in the resolution designating
the committee.
SECTION 10. PLACE OF MEETING. Regular and special meetings of the Board of
Directors shall be held at the principal place of business of the Corporation or
at another place designated by the person or persons giving notice or otherwise
calling the meeting.
SECTION 11. TIME, NOTICE AND CALL OF MEETINGS. Regular meetings of the Board of
Directors shall be held without notice at the time and one the date designated
by resolution of the Board of Directors. Written notice of the time, date and
place of special meetings of the Board of Directors shall be given to each
director by mail delivery at least two days before the meeting.
Notice of a meeting of the Board of Directors need not be given to a
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting constitutes a waiver of notice of that
meeting and waiver of all objections to the place of the meeting and waiver of
all objections to the place of the meeting, the time of the meeting, and the
manner in which it has been called or convened, unless a director objects to the
transaction of business (promptly upon arrival at the meeting) because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors must be specified in the notice or waiver of notice of the meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of an adjourned meeting shall be given to the directors who were not
present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors. Meetings of the Board of Directors may be called by the President or
the Chairman of the Board of Directors. Members of the Board of Directors and
any committee of the board may participate in the meeting by telephone
conference or similar communications equipment if all persons participating in
the meeting can hear each other at the same time. Participation by these means
constitutes presence in person at a meeting.
SECTION 12. ACTION BY WRITTEN CONSENT. Any action required or permitted to be
taken at a meeting of directors may be taken without a meeting if a consent in
writing setting forth the action to be taken and signed by all of the directors
is filed in the minutes of the proceedings of the Board. The action taken shall
be deemed effective when the last director signs the consent, unless the consent
specifies otherwise.
ARTICLE II. MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of the
corporation for the election of officers and for such other business as may
properly come before the meeting shall be held at such time and place as
designated by the Board of Directors.
<PAGE>
SECTION 2. SPECIAL MEETING. Special meetings of the shareholders shall be held
when directed by the President or when requested in writing by shareholders
holding at least 10% of the Corporation's stock having the right and entitled to
vote at such meeting. A meeting requested by shareholders shall be called by the
President for a date not less than 10 nor more than 60 days after the request is
made. Only business within the purposes described in the meeting notice may be
conducted at a special shareholders' meeting.
SECTION 3. PLACE. Meetings of the shareholders will be held at the principal
place of business of the Corporation or at such other place as is designated by
the Board of Directors.
SECTION 4. NOTICE. A written notice of each meeting of shareholders shall be
mailed to each shareholder having the right and entitled to vote at the meeting
at the address as it appears on the records of the Corporation. The meeting
notice shall be mailed not less than 10 nor more than 60 days before the date
set for the meeting. The record date for determining shareholders entitled to
vote at the meeting will be the close of business on the day before the notice
is sent. The notice shall state the time and place the meeting is to be held. A
notice of a special meeting shall also state the purposes of the meeting. A
notice of meeting shall be sufficient for that meeting and any adjournment of
it. If a shareholder transfers any shares after the notice is sent, it shall not
be necessary to notify the transferee. All shareholders may waive notice of a
meeting at any time.
SECTION 5. SHAREHOLDER QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Any number of shareholders, even if less than a quorum, may
adjourn the meeting without further notice until a quorum is obtained.
SECTION 6. SHAREHOLDER VOTING. If a quorum is present, the affirmative vote of a
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders. Each outstanding share
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. An alphabetical list of all shareholders who are entitled to
notice of a shareholders' meeting along with their addresses and the number of
shares held by each shall be produced at a shareholders' meeting upon the
request of any shareholder.
SECTION 7. PROXIES. A shareholder entitled to vote at any meeting of
shareholders or any adjournment thereof may vote in person or by proxy executed
in writing and signed by the shareholder or his attorney-in-fact. The
appointment of proxy will be effective when received by the Corporation's
officer or agent authorized to tabulate votes. No proxy shall be valid more than
11 months after the date of its execution unless a longer term is expressly
stated in the proxy.
SECTION 8. VALIDATION. If shareholders who hold a majority of the voting stock
entitled to vote at a meeting are present at the meeting, and sign a written
consent to the meeting on the record, the acts of the meeting shall be valid,
even if the meeting was not legally called and noticed.
SECTION 9. CONDUCT OF BUSINESS BY WRITTEN CONSENT. Any action of the
shareholders may be taken without a meeting if written consents, setting forth
the action taken, are signed by at least a majority of shares entitled to vote
and are delivered to the officer or agent of the Corporation having custody of
the Corporation's records within 60 days after the date that the earliest
written consent was delivered. Within 10 days after obtaining an authorization
<PAGE>
of an action by written consent, notice shall be given to those shareholders who
have not consented in writing or who are not entitled to vote on the action. The
notice shall fairly summarize the material features of the authorized action. If
the action creates dissenters' rights, the notice shall contain a clear
statement of the right of dissenting shareholders to be paid the fair value of
their shares upon compliance with and as provided for by the state law governing
corporations.
ARTICLE III. OFFICERS
SECTION 1. OFFICERS; ELECTION; RESIGNATION; VACANCIES. The Corporation shall
have the officers and assistant officers that the Board of Directors appoint
from time to time. Except as otherwise provided in an employment agreement which
the Corporation has with an officer, each officer shall serve until a successor
is chosen by the directors at a regular or special meeting of the directors or
until removed. Officers and agents shall be chosen, serve for the terms, and
have the duties determined by the directors. A person may hold two or more
offices.
Any officer may resign at any time upon written notice to the Corporation. The
resignation shall be effective upon receipt, unless the notice specifies a later
date. If the resignation is effective at a later date and the Corporation
accepts the future effective date, the Board of Directors may fill the pending
vacancy before the effective date provided the successor officer does not take
office until the future effective date. Any vacancy occurring in any office of
the Corporation by death, resignation, removal or otherwise may be filled for
the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
SECTION 2. POWERS AND DUTIES OF OFFICERS. The officers of the Corporation shall
have such powers and duties in the management of the Corporation as may be
prescribed by the Board of Directors and, to the extent not so provided, as
generally pertain to their respective offices, subject to the control of the
Board of Directors.
SECTION 3. REMOVAL OF OFFICERS. An officer or agent or member of a committee
elected or appointed by the Board of Directors may be removed by the Board with
or without cause whenever in its judgment the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of an
officer, agent or member of a committee shall not of itself create contract
rights. Any officer, if appointed by another officer, may be removed by that
officer.
SECTION 4. SALARIES. The Board of Directors may cause the Corporation to enter
into employment agreements with any officer of the Corporation. Unless provided
for in an employment agreement between the Corporation and an officer, all
officers of the Corporation serve in their capacities without compensation.
SECTION 5. BANK ACCOUNTS. The Corporation shall have accounts with financial
institutions as determined by the Board of Directors.
ARTICLE IV. DISTRIBUTIONS
The Board of Directors may, from time to time, declare distributions to its
shareholders in cash, property, or its own shares, unless the distribution would
cause (i) the Corporation to be unable to pay its debts as they become due in
<PAGE>
the usual course of business, or (ii) the Corporation's assets to be less than
its liabilities plus the amount necessary, if the Corporation were dissolved at
the time of the distribution, to satisfy the preferential rights of shareholders
whose rights are superior to those receiving the distribution. The shareholders
and the Corporation may enter into an agreement requiring the distribution of
corporate profits, subject to the provisions of law.
ARTICLE V. CORPORATE RECORDS
SECTION 1. CORPORATE RECORDS. The corporation shall maintain its records in
written form or in another form capable of conversion into written form within a
reasonable time. The Corporation shall keep as permanent records minutes of all
meetings of its shareholders and Board of Directors, a record of all actions
taken by the shareholders or Board of Directors without a meeting, and a record
of all actions taken by a committee of the Board of Directors on behalf of the
Corporation. The Corporation shall maintain accurate accounting records and a
record of its shareholders in a form that permits preparation of a list of the
names and addresses of all shareholders in alphabetical order by class of shares
showing the number and series of shares held by each.
The Corporation shall keep a copy of its articles or restated articles or
incorporation and all amendments to them currently in effect; these Bylaws or
restated Bylaws and all amendments currently in effect; resolutions adopted by
the Board of Directors creating one or more classes or series of shares and
fixing their relative rights, preferences, and limitations, if shares issued
pursuant to those resolutions are outstanding; the minutes of all shareholders'
meetings and records of all actions taken by shareholders without a meeting for
the past three years; written communications to all shareholders generally or
all shareholders of a class of series within the past three years, including the
financial statements furnished for the last three years; a list of names and
business street addresses of its current directors and officers; and its most
recent annual report delivered to the Department of State.
SECTION 2. SHAREHOLDERS' INSPECTION RIGHTS. A shareholder is entitled to inspect
and copy, during regular business hours at a reasonable location specified by
the Corporation, any books and records of the Corporation. The shareholder must
give the Corporation written notice of this demand at least five business days
before the date on which he wishes to inspect and copy the record(s). The demand
must be made in good faith and for a proper purpose. The shareholder must
describe with reasonable particularity the purpose and the records he desires to
inspect, and the records must be directly connected with this purpose. This
Section does not affect the right of a shareholder to inspect and copy the
shareholders' list described in this Article if the shareholder is in litigation
with the Corporation. In such a case, the shareholder shall have the same rights
as any other litigant to compel the production of corporate records for
examination.
The Corporation may deny and demand for inspection if the demand was made for an
improper purpose, or if the demanding shareholder was within the two year
preceding his demand, sold or offered for sale any list of shareholders of the
Corporation or of any other corporation, has aided or abetted any person in
procuring any list of shareholders for that purpose, or has improperly used any
information secured through any prior examination of the records of this
Corporation or any other corporation.
<PAGE>
SECTION 3. FINANCIAL STATEMENTS FOR SHAREHOLDERS. Unless modified by resolution
of the shareholders within 120 days after the close of each fiscal year, the
Corporation shall furnish its shareholders with annual financial statement which
may be consolidated or combined statements of the Corporation and one or more of
its subsidiaries, as appropriate, that include a balance sheet as of the end of
the fiscal year, an income statement for that year, and a statement of cash
flows for that year. If financial statements are prepared for the Corporation on
the basis of generally accepted accounting principles, the annual financial
statements must also be prepared on that basis.
If the annual financial statements are reported upon by a public accountant, his
report must accompany them. If not, the statements must be accompanied by a
statement of the President or the person responsible for the Corporation's
accounting records stating his reasonable belief whether the statements were
prepared on the basis of generally accepted accounting principles and, if not,
describing the basis of preparation and describing any respects in which the
statements were not prepared on a basis of accounting consistent with the
statements prepared for the preceding year. The Corporation shall mail the
annual financial statements to each shareholder within 120 days after the close
of each fiscal year or within such additional time thereafter as is reasonably
necessary to enable the Corporation to prepare its financial statements.
Thereafter, on written request from a shareholder who was not mailed the
statements, the Corporation shall mail him the latest annual financial
statements.
SECTION 4. OTHER REPORTS TO SHAREHOLDERS. If the Corporation indemnifies or
advances expenses to any director, officer, employee or agent otherwise than by
court order or action by the shareholders or by an insurance carrier pursuant to
insurance maintained by the Corporation, the Corporation shall report the
indemnification or advance in writing to the shareholders with or before the
notice of the next annual shareholders' meeting, or prior to the meeting if the
indemnification or advance occurs after the giving of the notice but prior to
the time the annual meeting is held. This report shall include a statement
specifying the persons paid, the amounts paid, and the nature and status at the
time of such payment of the litigation or threatened litigation.
If the Corporation issues or authorizes the issuance of shares for promises to
render services in the future, the Corporation shall report in writing to the
shareholders the number of shares authorized or issued, and the consideration
received by the corporation, with or before the notice of the next shareholders'
meeting.
ARTICLE VI. STOCK CERTIFICATES
SECTION 1. ISSUANCE. The Board of Directors may autho4rize the issuance of some
or all of the shares of any or all of its classes or series without
certificates. Each certificate issued shall be signed by the President and the
Secretary (or the Treasurer). The rights and obligations of shareholders are
identical wither or not their shares are represented by certificates.
SECTION 2. REGISTERED SHAREHOLDERS. No certificate shall be issued for any share
until the share is fully paid. The Corporation shall be entitled to treat the
holder of record of shares as the holder in fact and, except as otherwise
provided by law, shall not be bound to recognize any equitable or other claim to
or interest in the shares.
<PAGE>
SECTION 3. TRANSFER OF SHARES. Shares of the Corporation shall be transferred on
its books only after the surrender to the Corporation of the share certificates
duly endorsed by the holder of record or attorney-in-fact. If the surrendered
certificates are canceled, new certificates shall be issued to the person
entitled to them, and the transaction recorded on the books of the Corporation.
SECTION 4. LOST, STOLEN OR DESTROYED CERTIFICATES. If a shareholder claims to
have lost or destroyed a certificate of shares issued by the Corporation, a new
certificate shall be issued upon the delivery to the Corporation of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen
or destroyed, and, at the discretion of the Board of Directors, upon the deposit
of a bond or other indemnity as the Board reasonably requires.
ARTICLE VII. INDEMNIFICATION
SECTION 1. RIGHT TO INDEMNIFICATION. The Corporation hereby indemnifies each
person (including the heirs, executors, administrators, or estate of such
person) who is or was a director or officer of the Corporation to the fullest
extent permitted or authorized by current or future legislation or judicial or
administrative decision against all fines, liabilities, costs and expenses,
including attorneys' fees, arising out of his or her status as a director,
officer, agent, employee or representative. The foregoing right of
indemnification shall not be exclusive of other rights to which those seeking an
indemnification may be entitled. The Corporation may maintain insurance, at its
expense, to protect itself and all officers and directors against fines,
liabilities, costs and expenses, wither or not the Corporation would have the
legal power to indemnify them directly against such liability.
SECTION 2. ADVANCES. Costs, charges and expenses (including attorneys' fees)
incurred by person referred to in Section 1 of this Article in defending a civil
or criminal proceeding shall be paid by the Corporation in advance of the final
disposition thereof upon receipt of an undertaking to repay all amounts advanced
if it is ultimately determined that the person is not entitled to be indemnified
by the Corporation as authorized by this Article, and upon satisfaction of other
conditions required by current or future legislation.
SECTION 3. SAVINGS CLAUSE. If this Article or any portion of it is invalidated
on any ground by a court of competent jurisdiction, the Corporation nevertheless
indemnifies each person described in Section 1 of this Article to the fullest
extent permitted by all portions of this Article that have not been invalidated
and to the fullest extent permitted by law.
ARTICLE VIII. AMENDMENT
These Bylaws may be altered, amended or repealed, and new Bylaws adopted, by a
majority vote of the directors or by a vote of the shareholder holding a
majority of the shares.
I certify that these are the Bylaws adopted by the Board of Directors of the
Corporation.
/s/ Dale B. Finfrock
------------------------------
Secretary
Date signed: 2-21-97
EXHIBIT 4.1
Offering Memorandum Confidential
Dated February 27, 1997
Nova Enterprises, Inc.
(A Nevada Corporation)
1,600, 000 Shares
At a Price of $.01 Per Share
Nova Enterprises, Inc., a Nevada corporation (the "Company"), is a
company which is in the medical supply business.
The Company's principal office is located at 222 Lakeview Avenue, Suite
160-124, West Palm Beach, FL 33401.
AN INVESTMENT IN THE COMPANY IS SPECULATIVE AND INVOLVES A HIGH DEGREE
OF RISK. INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SUITABLE ONLY FOR
PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD A TOTAL LOSS OF THEIR
INVESTMENT AND WILL BE SOLD ONLY TO ACCREDITED OR OTHERWISE QUALIFIED INVESTORS.
FOR A DISCUSSION OF THE MATERIAL RISKS IN CONNECTION WITH THE PURCHASE OF THE
SHARES, SEE "INVESTMENT RISK CONSIDERATIONS".
The SECURITIES ARE BEING OFFERED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (The "ACT"), IN RELIANCE UPON The EXEMPTION
FROM REGISTRATION AFFORDED BY SECTIONS 4(2) AND 3(b) OF The SECURITIES ACT AND
REGULATION D PROMULGATED THEREUNDER.
THIS MEMORANDUM HAS NOT BEEN REVIEWED OR APPROVED OR DISAPPROVED, NOR
HAS The ACCURACY OR ADEQUACY OF THE INFORMATION SET FORTH HEREIN BEEN PASSED
UPON BY The SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
ADMINISTRATOR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS
OFFERING IS BEING MADE PURSUANT TO THE EXEMPTIONS AFFORDED BY SECTIONS 4(2) OR
3(b) OF THE SECURITIES ACT OF 1933 AND RULE 504 OF REGULATION D PROMULGATED
THEREUNDER AND STATE SMALL CORPORATE OFFERING REGISTRATION PROVISIONS. PURSUANT
TO RULE 504, THE SHARES SOLD HEREBY WILL NOT BE SUBJECT TO ANY LIMITATIONS ON
RESALE THEREOF UNDER FEDERAL LAW. THE SHARES MAY, HOWEVER, BE SUBJECT TO
LIMITATIONS ON THE OFFER AND SALE AND THE RESALE OF THE SHARES IMPOSED BY The
BLUE SKY LAWS OF INDIVIDUAL STATES. IN ADDITION, The COMPANY INTENDS TO FILE THE
REQUIRED DOCUMENTS IN CERTAIN OTHER STATES IDENTIFIED BY MANAGEMENT AS HAVING
POSSIBLE INVESTOR INTEREST AND USE ITS BEST EFFORTS TO QUALIFY The SHARES FOR
SECONDARY TRADING IN SUCH STATES, THOUGH NO ASSURANCE CAN BE GIVEN THAT IT WILL
BE ABLE TO QUALIFY The SHARES FOR SECONDARY TRADING IN ANY SUCH STATES IN WHICH
IT SUBMITS SUCH APPLICATIONS AND DOCUMENTS. AN INABILITY TO QUALIFY The SHARES
FOR SECONDARY TRADING WILL CREATE SUBSTANTIAL RESTRICTION ON The TRANSFERABILITY
OF SUCH SHARES WHICH MAY NEGATE The BENEFIT OF The EXEMPTION PROVIDED BY RULE
1
<PAGE>
504 OF REGULATION D. SEE "RISK FACTORS." THE COMPANY WILL USE ITS BEST EFFORTS
TO CAUSE The SHARES TO BE LISTED ON THE ELECTRONIC BULLETIN BOARD OPERATED BY
The NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AS A MARKET IN WHICH THEY
MAY BE TRADED. THERE IS NO ASSURANCE THAT SUCH LISTING WILL BE OBTAINED OR THAT
IF A LISTING IS OBTAINED THAT ANY MARKET FOR THE SHARES WILL DEVELOP, OR IF
DEVELOPED, THAT IT WILL BE SUSTAINED.
- ----------------------------------------------------------------
Subscription Proceeds to the
Price Commissions(1) Company
Per Share $0.01 $ -0- $ 16,000
(1) The Shares are being sold by the Company's sole Officer and no commissions
will be paid in connection with the Offering.
Nova Enterprises, Inc.
222 Lakeview Avenue
Suite 160-124
West Palm Beach, FL 33401
(561) 833-5092
2
<PAGE>
CONFIDENTIAL INFORMATION
THE INFORMATION CONTAINED IN THIS OFFERING MEMORANDUM IS CONFIDENTIAL
AND PROPRIETARY TO THE COMPANY AND IS BEING SUBMITTED TO PROSPECTIVE INVESTORS
IN THE COMPANY SOLELY FOR SUCH INVESTORS' CONFIDENTIAL USE WITH THE EXPRESS
UNDERSTANDING THAT, WITHOUT THE PRIOR WRITTEN PERMISSION OF THE COMPANY, SUCH
PERSONS WILL NOT RELEASE THIS DOCUMENT OR DISCUSS THE INFORMATION CONTAINED
HEREIN OR MAKE REPRODUCTIONS OF OR USE THIS OFFERING MEMORANDUM FOR ANY PURPOSE
OTHER THAN EVALUATING A POTENTIAL INVESTMENT IN THE SHARES.
A PROSPECTIVE INVESTOR, BY ACCEPTING DELIVERY OF THIS OFFERING
MEMORANDUM, AGREES PROMPTLY TO RETURN TO THE COMPANY THIS OFFERING MEMORANDUM
AND ANY OTHER DOCUMENTS OR INFORMATION FURNISHED IF THE PROSPECTIVE INVESTOR
ELECTS NOT TO PURCHASE ANY OF THE SHARES OFFERED HEREBY.
THE INFORMATION PRESENTED HEREIN WAS PREPARED BY THE COMPANY IS BEING
FURNISHED BY THE COMPANY SOLELY FOR USE BY PROSPECTIVE INVESTORS IN CONNECTION
WITH THE OFFERING NOTHING CONTAINED HEREIN IS, OR SHOULD BE RELIED ON AS A
PROMISE OR REPRESENTATION AS TO THE FUTURE PERFORMANCE OF THE COMPANY.
THIS OFFERING MEMORANDUM DOES NOT PURPORT TO BE ALL-INCLUSIVE OR TO
CONTAIN ALL THE INFORMATION THAT A PROSPECTIVE INVESTOR MAY DESIRE IN
INVESTIGATING THE COMPANY. EACH INVESTOR MUST CONDUCT AND RELY ON ITS OWN
EVALUATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SHARES
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED
IN CONNECTION WITH THE PURCHASE OF SHARES.
THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SHARES IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. EXCEPT AS OTHERWISE INDICATED, THIS OFFERING MEMORANDUM SPEAKS AS
OF THE DATE HEREOF. NEITHER THE DELIVERY OF THIS OFFERING MEMORANDUM NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE HEREOF.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OTHER THAN THAT
CONTAINED IN THIS OFFERING MEMORANDUM, OR TO MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THE OFFERING MADE HEREBY, AND, FI GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THE COMPANY DISCLAIMS IN, OR OMISSION FROM, THIS OFFERING
MEMORANDUM OR ANY OTHER WRITTEN OR ORAL COMMUNICATION TRANSMITTED OR MADE
AVAILABLE TO THE RECIPIENT.
3
<PAGE>
FOR RESIDENT OF ALL STATES:
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND SUCH LAWS. THE SHARES ARE SUBJECT TO RESTRICTIONS ON THE TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION. ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS OFFERING MEMORANDUM.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICES TO PROSPECTIVE INVESTORS
THIS OFFERING MEMORANDUM IS SUBMITTED IN CONNECTION WITH THE OFFERING
OF THE SHARES AND MAY NOT BE REPRODUCED OR USED FOR ANY OTHER PURPOSE. BY
ACCEPTING DELIVERY OF THIS OFFERING MEMORANDUM, EACH RECIPIENT AGREES TO RETURN
THIS OFFERING MEMORANDUM AND ALL OTHER DOCUMENTS IF THE RECIPIENT DOES NOT AGREE
TO PURCHASE ANY OF THE SHARES TO THE COMPANY AT ITS ADDRESS LISTED ON THE COVER
OF THE OFFERING MEMORANDUM.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON THE TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED BY THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS.
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM, INVESTORS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO PURCHASE SHARES TO ANY PERSON IN ANY STATE OR IN ANY
4
<PAGE>
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS UNLAWFUL, SUBJECT TO THE
PRECEDING SENTENCE. THIS OFFERING MEMORANDUM IS INTENDED FOR THE EXCLUSIVE USE
OF THE PERSON TO WHOM IT IS DELIVERED BY AN AUTHORIZED AGENT OF THE COMPANY ON
BEHALF OF THE COMPANY.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS
CONFIDENTIAL OFFERING MEMORANDUM OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS AS
LEGAL, TAX OR INVESTMENT ADVICE. EACH INVESTOR SHOULD CONSULT HIS OWN COUNSEL,
ACCOUNTANT OR BUSINESS ADVISOR AS TO LEGAL, TAX AND RELATED MATTERS COVERING HIS
INVESTMENT.
THE SHARES ARE OFFERED SUBJECT TO THE ACCEPTANCE BY THE COMPANY OF
OFFERS BY PROSPECTIVE INVESTORS, ALLOCATION OF SHARES BY THE COMPANY AND OTHER
CONDITIONS SET FORTH HEREIN. THE COMPANY MAY REJECT ANY OFFER IN WHOLE OR IN
PART AND NEED NOT ACCEPT OFFERS IN THE ORDER RECEIVED.
THIS CONFIDENTIAL OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE
STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE
THE STATEMENTS MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE,
NOT MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENT
PURPORTED TO BE SUMMARIZED HEREIN.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
SAID ACT AND SUCH LAWS. THE SHARES UNDERLYING THE SHARES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY
OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING
OR THE ACCURACY OR ADEQUACY OF THE OFFERING MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
THE SUBSCRIPTION PRICE FOR THE SHARES IS PAYABLE IN FULL UPON
SUBSCRIPTION. THE OFFERING PRICE WAS DETERMINED ARBITRARILY BY THE COMPANY AND
BEARS NO RELATIONSHIP TO ASSETS, EARNINGS, BOOK VALUE OR ANY OTHER CRITERIA OF
VALUE. NO REPRESENTATION IS MADE THAT THE SHARES HAVE MARKET VALUE OF, OR COULD
BE RESOLD AT, THAT PRICE (SEE "RISK FACTORS," "DILUTION," AND "USE OF PROCEEDS).
THE SHARES WILL BE OFFERED BY THE COMPANY ON A BEST EFFORTS BASIS TO A
SELECT GROUP OF INVESTORS WHO MEET CERTAIN SUITABILITY STANDARDS. NO COMMISSIONS
AND NO NON-ACCOUNTABLE OR ACCOUNTABLE EXPENSE ALLOWANCE OF ANY KIND WILL BE PAID
5
<PAGE>
FROM OR DEDUCTED FROM THE PROCEEDS RAISED HEREBY. THE COMPANY WILL ABSORB ALL
MARKETING EXPENSES ASSOCIATED WITH THIS OFFERING 9SEE "USE OF PROCEEDS").
THE COMPANY HAS AGREED TO PROVIDE, PRIOR TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREIN, TO EACH POTENTIAL PURCHASER OF SECURITIES (OR
HIS REPRESENTATIVES) OR BOTH) THE OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE
ANSWERS FROM, THE COMPANY OR ANY PERSON ACTING ON ITS BEHALF CONCERNING THE
TERMS AND CONDITIONS OF THIS OFFERING AND TO OBTAIN ANY ADDITIONAL INFORMATION,
TO THE EXTENT THEY POSSESS SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT
UNREASONABLE EFFORT OR EXPENSE NECESSARY TO VERIFY THE ACCURACY OF THE
INFORMATION SET FORTH HEREIN.
THIS OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO ANY PERSON WHO
DOES NOT MEET THE SUITABILITY STANDARDS DESCRIBED HEREIN. REPRODUCTION OF THIS
OFFERING MEMORANDUM IS STRICTLY PROHIBITED.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS OFFERING MEMORANDUM EXCEPT AS NOTED ABOVE
WITH REGARD TO QUESTIONS ASKED OF THE COMPANY AND OF THOSE AUTHORIZED TO ACT ON
ITS BEHALF. NO OFFERING LITERATURE OR ADVERTISING HAS BEEN AUTHORIZED BY THE
COMPANY EXCEPT THE INFORMATION CONTAINED HEREIN. ANY INFORMATION OR
REPRESENTATION NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ITS OFFICERS AND DIRECTORS. EXCEPT AS OTHERWISE
INDICATED, THIS OFFERING MEMORANDUM SPEAKS AS OF THE DATE ON THE COVER PAGE
NEITHER THE DELIVERY OF THIS OFFERING MEMORANDUM NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE RESPECTIVE DATES AT WHICH THE
INFORMATION IS GIVEN HEREIN OR THE DATE HEREOF.
ANY UNSOLD SHARES MAY BE PURCHASED BY THE COMPANY OR ITS AFFILIATES ON
THE SAME TERMS AS SHARES PURCHASED BY OTHER INVESTORS.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES
NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES IT PASS UPON
THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
6
<PAGE>
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT OF AN
ALABAMA PURCHASER WHO IS NOT AN ACCREDIT INVESTOR MAY NOT EXCEED TWENTY (20%)
PER CENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE,
FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA SECURITIES
ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO ARIZONA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ARIZONA SECURITIES
ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION
44-184(1) OF SUCH ACT. THESE SECURITIES MAY NOT BE SOLD WITHOUT REGISTRATION
UNDER SUCH ACT OR EXEMPTION THEREFROM.
ARIZONA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM ANNUAL GROSS INCOME OF SEVENTY FIVE THOUSAND
(475,000) DOLLARS; OR (iii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE
THOUSAND ($225,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
SECTION 14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE
SECURITIES ACT OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION
HAS PASSED UPON THE VALUE OF THESE SECURITIES, MADE ANY RECOMMENDATIONS AS TO
THEIR PURCHASE, APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT IS
UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR WITHOUT THE PRIOR WRITTEN
7
<PAGE>
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT
AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER
IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. THE
SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN
ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE
WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER, WHICHEVER OCCURS LATER.
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA SECURITIES ACT
OF 1973, AS AMENDED. IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION SET FORTH
IN SECTION 9(M) OF SUCH ACT AND THE SECURITIES CANNOT BE SOLD OR TRANSFERRED
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR IN A TRANSACTION WHICH IS
OTHERWISE IN COMPLIANCE WITH SAID ACT.
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
ANYTHING TOT HE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET
WORTH.
8
<PAGE>
NOTICE TO INDIANA RESIDENTS
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A
NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) EQUAL TO AT LEAST
THREE (3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN N O EVENT LESS THAN SEVENTY
FIVE THOUSAND (475,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF HOME, HOME
FURNISHING AND AUTOMOBILES OF TOW (2) TIMES HIS INVESTMENT BUT IN NOT EVENT LESS
THAN THIRTY THOUSAND ($30,000) DOLLARS AND A GROSS INCOME OF THIRTY THOUSAND
($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTH
THOUSAND ($40,000) DOLLARS (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES)
AND A MINIMUM ANNUAL GROSS INCOME OF FORTH THOUSAND ($40,000) DOLLARS, OR (ii) A
NET WORTH OF AT LEAST ONE HUNDRED TWENTY FIVE THOUSAND ($125,000) DOLLARS AS
COMPUTED ABOVE.
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE,
FURNISHINGS THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT)
HAVE BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREIN.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING,THE INVESTMENT BY A NON-
ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) OF THE INVESTOR'S NET WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION
1052(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUES. THESE SECURITIES MAY BE
DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL
THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
9
<PAGE>
NOTICE TO MARYLAND RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND SECURITIES
ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION
11-602(9) OF SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY NOT BE
REOFFERED FOR SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A SECURITY, OR
IN A TRANSACTION EXEMPT UNDER SUCH ACT.
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH OF
AT LEAST FIFTY THOUSAND ($50,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAKE YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THAT ACT OR
EXEMPTION THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED
WRITTEN STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX
(6) MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER
OCCURS FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENT
THEREAFTER.
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE
MINNESOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION. NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NO HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
10
<PAGE>
THERE IS NOT ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT
BE ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF
THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN
INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY
STANDARDS AND MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT.
ADDITIONALLY, ALL PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET
WORTH OF AT LEAST THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000)
DOLLARS. THESE SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR
IN A TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN
A TRANSACTION EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(b), MISSOURI
UNIFORM SECURITIES ACT (RMSO 1969).
THE SHARES HAVE TO BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
MISSOURI, UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD
IN THE STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER
SAID ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A
MINIMUM ANNUAL INCOME OF THIRTY THOUSAND ($330,000) DOLLARS AND A NET WORTH OF
AT LEAST THIRTY THOUSAND ($30,000)(DOLLARS, EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING OFFERED
HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS
AFTER DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH.
11
<PAGE>
NOTICE TO NEBRASKA RESIDENTS
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA
SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THE ACT
OR EXEMPTION THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS
EITHER (i) A NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) OF
TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS OR (iii) A NET WORTH (EXCLUSIVE OF
HOME, HOME FURNISHINGS AND AUTOMOBILES OF ONE HUNDRED TWENTY FIVE THOUSAND
($125,000) DOLLARS AND FIFTY THOUSAND ($50,000 DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES TO CONSTITUTE
APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE
DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES COMMISSION OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS CRIMINAL OFFENCE.
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL
PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS
NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
NORTH CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATOR
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NEITHER RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE
ADMINISTRATOR PASSED ON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED
HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THESE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES ACT. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF
1933 AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF COUNSEL TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-ACCREDITS
INVESTOR SHALL NOT EXCEED THEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE BEEN REGISTERED WITH THE DIRECTOR OF THE
STATE OF OREGON UNDER THE PROVISIONS OF OAR 441-65-240. THE INVESTOR IS ADVISED
THAT THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION STATEMENT
AND HAS NOT REVIEWED THIS DOCUMENTS SINCE THIS DOCUMENT IS NOT REQUIRED TO BE
FILED WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE COMPANY
CREATING THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND
RISKS INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN THE
COMMONWEALTH OF PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE
PENNSYLVANIA SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE,
AND RECEIVE A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY
LIABILITY, WITHIN TWO (20) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE
OF THIS WITHDRAWAL RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY
PERSON WHO WISHES TO EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVEN
NOTICE BY LETTER OR TELEGRAM SENT TO POSTMARKED BEFORE THE END OF THE SECOND
BUSINESS DAY AFTER EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED
ORALLY, WRITTEN CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS
WHO IS A PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF
TWELVE (12) MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST
HAVE EITHER (i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS
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(EXCLUDING HOME, HOME FURNISHING AND AUTOMOBILES) AND A MINIMUM ANNUAL GROSS
INCOME OF THIRTY THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (AS COMPUTED ABOVE0, AND MAY NOT INVEST
MORE THAN TEN (10%) PER CENT OF THEIR NET WORTH (EXCLUSIVE OF THE SUBSCRIBER'S
HOME, HOME FURNISHINGS AND AUTOMOBILES).
NOTICE TO SOUTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
SOUTH CAROLINA UNIFORM SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO
THESE SECURITIES HAS NOT BEEN FILED WITH THE SOUTH CAROLINA SECURITIES
COMMISSIONER. THE COMMISSIONER DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY
SECURITIES, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47.31 OF THE SOUTH
DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF
LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT
LEAST SIXTY THOUSAND ($60,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE THOUSAND ($225,000) DOLLARS
(AS COMPUTED ABOVE).
NOTICE OF TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE OF TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE AND MAY NOT
BE REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS MAY PLACE SUCH INVESTOR
AND THE ISSUER IN VIOLATION OF THE TEXAS SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
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NOTICE TO UTAH RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UTAH SECURITIES ACT AND
MAY NOT NE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON SECURITIES
ACT AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON HAS NOT
REVIEWED THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT BE SOLD
WITHOUT REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY
ITSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE
UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS.
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OFFERING MEMORANDUM
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Nova Enterprises, Inc.
(A Florida Corporation)
Offering Memorandum Dated February 27, 1997
1,600,000 Shares
Nova Enterprises, Inc., (the "Company"), a Nevada corporation, is
offering on a "best efforts, no minimum basis" up to a maximum of 1,600,000
shares of common stock ("Common Stock"), $.001 par value, at $0.01 per Share.
Since there is no minimum, no proceeds will be held in escrow account and all
funds will be immediately available to the Company.
The Company intends to apply for inclusion of the Common Stock on the
Over the Counter Electronic Bulletin Board. There can be no assurances that an
active trading market will develop, even if the securities are accepted for
quotation. Additionally, even if the Company's securities are accepted for
quotation and active trading develops, the Company is still required to maintain
certain minimum criteria established by NASDAQ, of which there can be no
assurance that the Company will be able to continue to fulfill such criteria.
Prior to this offering, there has been no public market for the common
stock of the Company. The price of the Shares offered hereby was arbitrarily
determined by the Company and does not bear any relationship to the Company's
assets, book value, net worth, results of operations or any other recognized
criteria of value. For additional information regarding the factors considered
in determining the offering price of the Shares, see "Risk Factors - Arbitrary
Offering Price," "Description of Securities".
The Company does not presently file reports or other information with
the Securities and Exchange Commission ("Commission"). However, following
completion of this offering, the Company intends to furnish its security holders
with annual reports containing audited financial statements and such interim
reports, in each case as it may determine to furnish or as may be required by
law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
This offering involves special risks concerning the Company (see "Risk
Factors"). Investors should carefully review the entire Memorandum and should
not invest any funds in this Offering unless they can afford to lose their
entire investment. In making an investment decision, investors must rely on
their own examination of the issuer and the terms of the Offering, including the
merit and risks involved.
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OFFERING SUMMARY
The following summary information is qualified in its entirety by the
detailed information and financial statements and notes thereto appearing
elsewhere in this Memorandum.
The Company is in the business of providing services to the video,
voice and data communications industry. The Company was incorporated in the
State of Nevada and its principal executive office is located at 222 Lakeview
Avenue, Suite 160--124, West Palm Beach, FL 33401 and its telephone number is
(561) 833-5092
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK. ONLY THOSE PERSONS ABLE TO LOSE THEIR ENTIRE INVESTMENT SHOULD PURCHASE
THESE SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION,
SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER MATTERS
REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS:
Risk Factors Relating to the Business of the Company
Start-up or Development Stage Company. The Company has had no
operations since its organization and is a "start-up" or "development stage"
company. No assurances can be given that the Company will be able to compete
with other companies in its industry. The purchase of the securities offered
hereby must be regarded as the placing of funds at a high risk in a new or
"start-up" venture with all the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject. See "Use of Proceeds to Issuer"
and "Description of Business."
No Assurance of Profitability. To date, the Company has not generated
any revenues from operations. The Company does not anticipate any significant
revenues in the near future. The Company's ability to successfully implement its
business plan is dependent on the completion of this Offering. There can be no
assurance that the Company will be able to develop into a successful or
profitable business.
No Assurance of Payment of Dividends. No assurances can be made that the
future operations of the Company will result in additional revenues or will be
profitable. Should the operations of the Company become profitable, it is likely
that the Company would retain much or all of its earnings in order to finance
future growth and expansion. Therefore, the Company does not presently intend to
pay dividends, and it is not likely that any dividends will be paid in the
foreseeable future. See "Dividend Policy."
Possible Need for Additional Financing . The Company intends to fund
its operations and other capital needs for the next 12 months substantially from
the proceeds of this Offering, but there can be no assurance that such funds
will be sufficient for these purposes. The Company may require additional
amounts of capital for its future expansion, operating costs and working
capital. The Company has made no arrangements to obtain future additional
financing, and if required, there can be no assurance that such financing will
be available, or that such financing will be available on acceptable terms. See
"Use of Proceeds."
Dependence on Management. The Company's success is principally dependent on
its current management personnel for the operation of its business.
Broad Discretion in Application of Proceeds . The management of the
Company has broad discretion to adjust the application and allocation of the net
proceeds of this offering, in order to address changed circumstances and
opportunities. As a result of the foregoing, the success of the Company will be
substantially dependent upon the discretion and judgment of the management of
the Company with respect to the application and allocation of the net proceeds
hereof. Pending use of such proceeds, the net proceeds of this offering will be
invested by the Company in temporary, short-term interest-bearing obligations.
See "Use of Proceeds."
Arbitrary Offering Price. There has been no prior public market for the
Company's securities. The price to the public of the Shares offered hereby has
been arbitrarily determined by the Company and bears no relationship to the
Company's earnings, book value or any other recognized criteria of value.
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Immediate and Substantial Dilution. An investor in this offering will
experience immediate and substantial dilution.
Lack of Prior Market for Securities of the Company. No prior market has
existed for the securities being offered hereby and no assurance can be given
that a market will develop subsequent to this offering.
No Escrow of Investors' Funds. This offering is being made on a "best
efforts, no minimum basis" As such, all the funds from this Offering will be
immediately available to the Company.
USE OF PROCEEDS
The Company will receive the proceeds from the Offering for working
capital.
DIVIDEND POLICY
Holders of the Company's Common Stock are entitled to dividends when, as
and if declared by the Board of Directors out of funds legally available
therefor. The Company does not anticipate the declaration or payment of any
dividends in the foreseeable future. The Company intends to retain earnings, if
any, to finance the development and expansion of its business. Future dividend
policy will be subject to the discretion of the Board of Directors and will be
contingent upon future earnings, if any, the Company's financial condition,
capital requirements, general business conditions and other factors. Therefore,
there can be no assurance that any dividends of any kind will ever be paid.
THE COMPANY
The Company is in the business of providing supplies and other products to
the medical industry. In addition, the company is negotiating with other
companies in the medical field with the intent of acquiring all of the shares or
assets of one or more of these companies. However, if the company is unable to
complete the acquisition/acquisitions it will continue to operate its existing
business and expand its activities through internal growth.
Management
Dale B. Finfrock, Jr. , is the Company's sole Director, and its President
and Secretary.
EXECUTIVE COMPENSATION
Since the Company was recently incorporated, it has no historical
information with respect to executive compensation. At the conclusion of the
Offering, the Company does not intend to compensate its officers for services to
the Company from the proceeds of this Offering and will only do so when and if
the Company generates profits.
Compensation of Directors
Directors are not paid fees for their services nor reimbursed for expenses
of attending board meetings.
DESCRIPTION OF SECURITIES
Shares
The Company is offering hereby a "best efforts, no minimum basis" up to
1,600,000 shares of Common Stock at $.01 per Share.
Common Stock
The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
18
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subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefor when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid and nonassessable, and all shares to be sold and issued as
contemplated hereby, will be validly authorized and issued, fully paid and
nonassessable. The Board of Directors is authorized to issue additional shares
of Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and Bylaws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the State of
Florida for a more complete description concerning the rights and liabilities of
stockholders.
Prior to this offering, there has been no market for the Common Stock of
the Company, and no predictions can be made of the effect, if any, that market
sales of shares or the availability of shares for sale will have on the market
price prevailing from time to time. Nevertheless, sales of significant amounts
of the Common Stock of the Company in the public market may adversely affect
prevailing market prices, and may impair the Company's ability to raise capital
at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of directors can elect all the
directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.
PLAN OF DISTRIBUTION
The Company has no underwriter for this Offering. The Offering is therefore
a self-underwriting. The Shares will be offered by the Company at the offering
price of $.01 per Share.
Price of the Offering.
There is no, and never has been, a market for the Shares, and there is no
guaranty that a market will ever develop for the Company's shares. Consequently,
the offering price has been determined by the Company. Among other factors
considered in such determination were estimates of business potential for the
Company, the Company's financial condition, an assessment of the Company's
management and the general condition of the securities market at the time of
this Offering. However, such price does not necessarily bear any relationship to
the assets, income or net worth of the Company.
The offering price should not be considered an indication of the actual
value of the Shares. Such price is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Shares can
be resold at the Offering Price.
There can be no assurance that an active trading market will develop upon
completion of this Offering, or if such market develops, that it will continue.
Consequently, purchasers of the Shares offered hereby may not find a ready
market for Shares.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to making
an investment in the Company, that he has had the opportunity to inspect the
books and records of the Company and that he has had the opportunity to make
inquiries to the officers and directors of the Company and further that he has
been provided full access to such information.
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INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
Suitability
Shares will be offered and sold pursuant an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Shares to
that Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) private business development company as defined in Section 202(a)
(22) of the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,100,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
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(8) An entity in which all of the equity owners are accredited
investors (as defined above).
As used in this Memorandum, the term "net worth" means the excess of total
assets over total liabilities. In computing net worth for the purpose of (5)
above, the principal residence of the investor must be valued at cost, including
cost of improvements, or at recently appraised value by an institutional lender
making a secured loan, net of encumbrances. In determining income an investor
should add to the investor's adjusted gross income any amounts attributable to
tax exempt income received, losses claimed as a limited partner in any limited
partnership, deductions claimed for depletion, contributions to an IRA or KEOGH
retirement plan, alimony payments, and any amount by which income form long-term
capital gains has been reduced in arriving at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
nonaccredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to
investments in limited partnerships either alone or with its Purchaser
Representative, if any; and
(2) The Investor has been provided access to all relevant documents it
desires or needs; and
(3)The Investor is aware of its limited ability to sell and/or transfer
its Shares in the Company; and
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE
IF A POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Shares, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Shares will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Shares. In addition, the fiduciary must consider
whether the investment in Shares will satisfy the diversification requirement of
Section 404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of
the offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Shares by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Shares for its own account and for the purpose of
investment only, not with a view to, or in accordance with, the distribution of
sale of the Shares and that it will not sell, pledge, assign or transfer or
offer to sell, pledge, assign or transfer any of its Shares without an effective
registration statement under the Securities Act, or an exemption there from and
an opinion of counsel acceptable to the Company that registration under the
Securities Act is not required and that the transaction complies with all other
applicable Federal and state securities or Blue Sky laws.
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Nova Enterprises, Inc.
(A Nevada Corporation)
Subscription Documents
February 27, 1997
INSTRUCTION FOR COMPLETION:
In connection with your subscription for Nova Enterprises, Inc.. (the
"Company"), enclosed herewith are the following documents which must be properly
and fully completed and signed:
1. INVESTMENT AGREEMENT. Fully completed and signed. Please make your
check payable to the Company. (Note to partnerships who wish to subscribe: each
general partner of the partnership must fully complete and sign the Investment
Agreement).
- ----------------------------------------------------------------
NOTES TO SUBSCRIBERS:
(a) Please indicate on the Subscription Agreement and the Confidential
Purchaser Questionnaire how the Units are to be held (e.g. joint tenants with
rights of survivorship, tenants by the entireties, etc.)
(b) Please return Subscription Documents and checks to the Company at
P.O. Box 669, Palm Beach, FL 33480. Checks should be made payable to the Nova
Enterprises, Inc.
(c) Additional copies of the required forms are available from the
Company at P.O. Box 669, Palm Beach, FL 33480, or by calling the Company at
(407) 833-5092.
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INVESTMENT SUBSCRIPTION AGREEMENT
To: Nova Enterprises, Inc.
P.O. Box 669
Palm Beach, FL 33480
Gentlemen:
You have informed me that the Company is offering shares of the
Company's common stock at a price of $0.01 per share.
1. Subscription. Subject to the terms and conditions of this
Subscription Agreement (the "Agreement"), the undersigned hereby tenders this
subscription, together with the payment (in cash or by bank check in lawful
funds of the United States) of an amount equal to $0.01 per Share, and the other
subscription documents, all in the forms submitted to the undersigned.
2. Acceptance of Subscription: Adoption and Appointment. It is
understood and agreed that this Agreement is made subject to the following terms
and conditions:
(a) The Company shall have the right to accept or reject
subscriptions in any order it shall determine, in whole or in part, for any
reason (or for no reason).
(b) Investments are not binding on the Company until accepted
by the Company. The Company will refuse any subscription by giving written
notice to the purchaser by personal delivery or first-class mail. In its sole
discretion, the Company may establish a limit on the purchase of Units by a
particular purchaser.
(c) The undersigned hereby intends that his signature hereon
shall constitute an irrevocable subscription to the Company of this Agreement,
subject to a three day right of rescission for Florida residents pursuant to
Section 517.061 of the Florida Securities and Investor Protection Act. Each
Florida resident has a right to withdraw his or her subscription for Units,
without any liability whatsoever, and receive a full refund of all monies paid,
within three days after the execution of this Agreement or payment for the Units
has been made, whichever is later. To accomplish this withdrawal, a subscriber
need only send a letter or telegram to the Company at the address set forth in
this Agreement, indicating his or her intention to withdraw. Such letter or
telegram should be sent and postmarked prior to the end of the aforementioned
third day. It is prudent to send such letter by certified mail, return receipt
requested, to ensure that is received and also to evidence the time when it was
mailed. If the request is made orally (in person or by telephone) to the Company
a written confirmation that the request has been received should be requested.
Upon satisfaction of the all the conditions referred to herein, copies
of this Agreement, duly executed by the Company, will be delivered to the
undersigned.
23
<PAGE>
3. Representations and Warranties of the Undersigned. The undersigned
hereby represents and warrants to the Company as follows:
(a) The undersigned (I) has adequate means of providing for
his current needs and possible personal contingencies, and he has no need for
liquidity of his investment in the Company; (ii) is an Accredited Investor, as
defined below, or has the net worth sufficient to bear the risk of losing his
entire investment; and (iii) has, alone or together with his Purchaser
Representative (as hereinafter defined), such knowledge and experience in
financial matters that the undersigned is capable of evaluating the relative
risks and merits of this investment.
"Accredited Investors" include: (I) accredited investors as defined in
Regulation D under the Securities Act of 1933, as amended ("Reg. D") i.e., (a)
$1,000,000 in net worth (including spouse) or (b) $200,000 in annual income for
the last two years and projected for the current year; and (ii) the Company or
affiliates of the Company.
"Non-Accredited Investors" are all subscribers who are not "Accredited
Investors."
All investors must have either a preexisting personal or business
relationship with the Company or any of its affiliates, or by reason of their
business or financial experience (or the business or financial experience of
their unaffiliated professional advisors) would reasonably be assumed to have
the capacity to protect their own interests in connection with this investment.
Each subscriber must represent that he is purchasing for his own account not
with a view to or for resale in connection with any distribution of the Units.
(b) The address set forth in his Purchaser Questionnaire is
his true and correct residence, and he has no present intention of becoming a
resident of any other state or jurisdiction.
(c) The undersigned acknowledges that if a "Purchaser
Representative", as defined in Regulation D, has been utilized by the
undersigned, (I) the undersigned has completed and executed the Acknowledgment
of Use of Purchaser Representative; (ii) in evaluating his investment as
contemplated hereby, the undersigned has been advised by his Purchaser
Representative as to the merits and risks of the investment in general and the
suitability of the investment for the undersigned in particular; and (ii) the
undersigned's Purchaser Representative has completed and executed the Purchaser
Representative Questionnaire.
(d) The undersigned has received and read or reviewed with his
Purchaser Representative, if any, and represents he is familiar with this
Agreement, the other Subscription Documents and the Memorandum accompanying
these documents. The undersigned confirms that all documents, records and books
pertaining to the investment in the Company and requested by the undersigned or
his Purchaser Representative have been made available or have been delivered to
the undersigned and/or the undersigned's Purchaser Representative.
(e) The undersigned and/or his Purchaser Representative have
had an opportunity to ask questions of and receive answers from the Company or a
person or persons acting on its behalf, concerning the terms and conditions of
this investment and the financial condition, operations and prospects of the
Company.
24
<PAGE>
(f) The undersigned understands that the Units have not been
registered under the Securities Act of 1933, as amended (the "Securities Act")
or any state securities laws and are instead being offered and sold in reliance
on exemptions from registration; and the undersigned further understands that he
is purchasing an interest in a Company without being furnished any offering
literature or prospectus other than the material furnished hereby.
(g) The Units for which the undersigned hereby subscribed are
being acquired solely for his own account, and are not being purchased with a
view to or for the resale, distribution, subdivision, or fractionalization
hereof. He has no present plans to enter into any such contract, undertaking,
agreement or arrangement. In order to induce the Company to sell and issue the
Units subscribed for hereby to the undersigned, it is agreed that the Company
will have no obligation to recognize the ownership, beneficial or otherwise, of
such Units by anyone but the undersigned.
(h) The undersigned has received, completed and returned to
the Company the Purchaser Questionnaire relating to his general ability to bear
the risks of an investment in the Company and his suitability as an investor in
a private offering; and the undersigned hereby affirms the correctness of his
answers to such Confidential Purchaser Questionnaire and all other written or
oral information concerning the undersigned's suitability provided to the
Company by, or on behalf of, the undersigned.
(i) The person, if any, executing the Purchaser Representative
Questionnaire, a copy of which has been received by the undersigned, is acting
and is hereby designated to act as the undersigned's Purchaser Representative in
connection with the offer and sale of the Units to the undersigned. This
designation of a Purchaser Representative was made with the knowledge of the
representations and disclosures made in such Purchaser Representative
Questionnaire and other Subscription Documents.
(j) The undersigned acknowledges and is aware of the
following:
(1) That there are substantial restrictions on the
transferability of the Units and the Units will not be, and investors in the
Company have no rights to require that, the Units be registered under the
Securities act; the undersigned may not be able to avail himself of certain of
the provisions of Rule 144 adopted by the Securities and Exchange Commission
under the Securities Act with respect to the resale of the Units and,
accordingly, the undersigned may be required to hold the Units for a substantial
period of time and it may not be possible for the undersigned to liquidate his
investment in the Company.
(k) That no federal or state agency has made any finding or
determination as to the fairness of the offering of Units for investment or any
recommendation or endorsement of the Units.
(1) The approximate or exact length of time that he
will be required to remain as owner of the Units.
(2) The prior performance on the part of the Company
or any Affiliate (as defined in Rule 405 under the Securities Act), or its
associates, agents, or employees or of any other person, will in any way
indicate the predictable results of the ownership of the Units or of the overall
Company.
25
<PAGE>
(3) Subscriptions will be accepted in the order in
which they are received.
(l) That the Company shall incur certain costs and expenses
and undertake other actions in reliance upon the irrevocability of the
subscription (following the three day rescission period described in Paragraph
2(C) of this Agreement) for the Units made hereunder.
The foregoing representations and warranties are true and
accurate as of the date of delivery of the Funds to the Company and shall
survive such delivery. If, in any respect, such representations and warranties
shall not be true and accurate prior to the delivery of the Funds pursuant to
Paragraph 1 hereof, the undersigned shall give written notice of such fact to
his Purchaser Representative, if any, specifying which representations and
warranties are not true and accurate and the reasons therefor, with a copy to
the Company and otherwise to give the same information to the Company directly.
4. Indemnification. The undersigned acknowledges that he understands
the meaning and legal consequences of the representations and warranties
contained in Paragraph 3 hereof, and he hereby indemnifies and holds harmless
the Company, agents, employees and affiliates, from and against any and all
losses, claims, damages or liabilities due to or arising out of a breach of any
representations(s) or warranty(s) of the undersigned contained in this
Agreement.
5. No Waiver. Notwithstanding any of the representations, warranties,
acknowledgment or agreements made herein by the undersigned, the undersigned
does not thereby or in any other manner waive any rights granted to him under
federal or sate securities laws.
6. Transferability. The undersigned agrees not to transfer or assign
this Agreement, or any of his interest herein. Further, an investor in the Units
pursuant to this Agreement and applicable law, will not be permitted to transfer
or dispose of the Units unless they are registered or unless such transaction is
exempt from registration under the Securities Act or other securities laws and
in the case of the purportedly exempt sale, such investor provided (at his own
expense) an opinion of counsel reasonably satisfactory to the Company that such
exemption is, in fact available.
7. Revocation. The undersigned acknowledges and agrees that his
subscription for the Units made by the execution and delivery of this Agreement
by the undersigned is irrevocable and subject to the three day right of
rescission in Florida described in Section 2(C) herein, and that such
subscription shall survive the death or disability of the undersigned, except as
provided pursuant to the blue sky laws of the states in which the Units may be
offered, or any other applicable state statutes or regulations.
8. Miscellaneous.
(a) All notices or other communications given or made
hereunder shall be in writing and shall be delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the undersigned at
his address set forth below and to
(b) Notwithstanding the place where this Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and shall be
govern by the laws of the State of Florida.
26
<PAGE>
(c) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof any may be amended only
by writing executed by all parties.
(d) This Agreement shall be binding upon the heirs, estates,
legal representatives, successors and assigns of all parties hereto.
(e) All terms used herein shall be deemed to include the
masculine and the feminine and the singular and the plural as the context
requires.
27
<PAGE>
NOVA ENTERPRISES, INC.
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
Accredited __
Non Accredited ___
Number of Shares Subscribed for:
Amount tendered at $0.01 per Share:
Date: __________________________
---------------------------- -----------------------------
(Signature of Subscriber) (Signature of Spouse, or joint
tenant, if any)
- ----------------------------- -----------------------------
(Printed Name of Subscriber) (Printed Name of Spouse, or
other joint tenant, if any)
- ----------------------------- -----------------------------
(Address) (Address)
- ----------------------------- ----------------------------
- ----------------------------- ----------------------------
(Social Security Number) (Social Security Number)
28
EXHIBIT 4.2
------------------------------------------------------------------------
OFFERING MEMORANDUM
------------------------------------------------------------------------
IPVoice Communications, Inc.
(A Nevada Corporation)
Offering Memorandum Dated April 20, 1998
992,500 Shares
IPVoice Communications, Inc., a Nevada corporation, f/k/a Nova
Enterprises, Inc., (the "Company"), is offering on a "best efforts, no minimum
basis" up to a maximum of 992,500 shares of common stock ("Shares"), $.001 par
value, at $1.00 per share. Since there is no minimum, no proceeds will be held
in an escrow account and all funds will be immediately available to the Company.
The Shares are being sold by the Company's Officers and Directors and
no commissions will be paid to them in connection with the Offering. However,
participating NASD registered broker/dealers, if any, shall receive a maximum of
10% sales commissions on all shares sold through their efforts.
The Company intends to apply for inclusion of the Common Stock on the
Over the Counter Electronic Bulletin Board. There can be no assurances that an
active trading market will develop, even if the securities are accepted for
quotation.
Prior to this offering, there has been no public market for the common
stock of the Company. The price of the Shares offered hereby was arbitrarily
determined by the Company and does not bear any relationship to the Company's
assets, book value, net worth, results of operations or any other recognized
criteria of value. For additional information regarding the factors considered
in determining the offering price of the Shares, see "Risk Factors - Arbitrary
Offering Price", "Description of Securities".
The Company does not presently file reports or other information with
the Securities and Exchange Commission ("Commission"). However, following
completion of this Offering, the Company intends to furnish its security holders
with annual reports containing audited financial statements and such interim
reports in each case as it may determine to furnish or as may be required by
law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
This offering involves special risks concerning the Company (see "Risk
Factors"). Investors should carefully review the entire Memorandum and should
not invest any funds in this Offering unless they can afford to lose their
entire investment. In making an investment decision, investors must rely on
their own examination of the issuer and the terms of the Offering, including the
merit and risks involved.
<PAGE>
REGULATION D OFFERING
THIS OFFERING IS BEING MADE PURSUANT TO THE EXEMPTIONS AFFORDED BY
SECTIONS 4(2) OR 3(b) OF SECURITIES ACT OF 1933 AND RULE 504 OF REGULATION D
PROMULGATED THEREUNDER AND THE STATE SMALL CORPORATE OFFERING REGISTRATION
PROVISION. PURSUANT TO RULE 504, THE SHARES SOLD HEREBY WILL NOT BE SUBJECT TO
ANY LIMITATIONS ON RESALE THEREOF UNDER FEDERAL LAW. THE SHARES MAY, HOWEVER, BE
SUBJECT TO LIMITATIONS ON THE OFFER AND SALE AND THE RESALE OF THE SHARES
IMPOSED BY THE BLUE SKY LAWS OF INDIVIDUAL STATES. IN ADDITION, THE COMPANY
INTENDS TO FILE THE REQUIRED DOCUMENTS IN CERTAIN OTHER STATES IDENTIFIED BY
MANAGEMENT AS HAVING POSSIBLE INVESTOR INTEREST AND USE ITS BEST EFFORTS TO
QUALIFY THE SHARES FOR SECONDARY TRADING IN SUCH STATES, THOUGH NO ASSURANCE CAN
BE GIVEN THAT IT WILL BE ABLE TO QUALIFY THE SHARES FOR SECONDARY TRADING IN ANY
SUCH STATES IN WHICH IT SUBMITS SUCH APPLICATIONS AND DOCUMENTS. AN INABILITY TO
QUALIFY THE SHARES FOR SECONDARY TRADING WILL CREATE SUBSTANTIAL RESTRICTIONS ON
THE TRANSFERABILITY OF SUCH SHARES WHICH MAY NEGATE THE BENEFIT OF THE EXEMPTION
PROVIDED BY RULE 504 OF REGULATION D. THE COMPANY WILL USE ITS BEST EFFORTS TO
CAUSE THE SHARES TO BE LISTED ON THE ELECTRONIC BULLETIN BOARD OPERATED BY THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AS A MARKET IN WHICH THEY MAY
BE TRADED. THERE IS NO ASSURANCE THAT SUCH LISTING WILL BE OBTAINED OR THAT IF A
LISTING IS OBTAINED THAT ANY MARKET FOR THE SHARES WILL DEVELOP, OR IF
DEVELOPED, THAT IT WILL BE SUSTAINED.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES
NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES IT PASS UPON
THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT OF AN
ALABAMA PURCHASER WHO IS NOT AN ACCREDIT INVESTOR MAY NOT EXCEED TWENTY (20%)
PER CENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE,
FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA SECURITIES
ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO ARIZONA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ARIZONA SECURITIES
ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION
44-184(1) OF SUCH ACT. THESE SECURITIES MAY NOT BE SOLD WITHOUT REGISTRATION
UNDER SUCH ACT OR EXEMPTION THEREFROM.
ARIZONA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM ANNUAL GROSS INCOME OF SEVENTY FIVE THOUSAND
(475,000) DOLLARS; OR (iii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE
THOUSAND ($225,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
SECTION 14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE
SECURITIES ACT OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION
HAS PASSED UPON THE VALUE OF THESE SECURITIES, MADE ANY RECOMMENDATIONS AS TO
THEIR PURCHASE, APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT IS
UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR WITHOUT THE PRIOR WRITTEN
<PAGE>
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT
AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER
IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. THE
SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN
ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE
WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER, WHICHEVER OCCURS LATER.
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA SECURITIES ACT
OF 1973, AS AMENDED. IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION SET FORTH
IN SECTION 9(M) OF SUCH ACT AND THE SECURITIES CANNOT BE SOLD OR TRANSFERRED
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR IN A TRANSACTION WHICH IS
OTHERWISE IN COMPLIANCE WITH SAID ACT.
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
ANYTHING TOT HE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET
WORTH.
<PAGE>
NOTICE TO INDIANA RESIDENTS
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A
NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) EQUAL TO AT LEAST
THREE (3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN N O EVENT LESS THAN SEVENTY
FIVE THOUSAND (475,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF HOME, HOME
FURNISHING AND AUTOMOBILES OF TOW (2) TIMES HIS INVESTMENT BUT IN NOT EVENT LESS
THAN THIRTY THOUSAND ($30,000) DOLLARS AND A GROSS INCOME OF THIRTY THOUSAND
($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTH
THOUSAND ($40,000) DOLLARS (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES)
AND A MINIMUM ANNUAL GROSS INCOME OF FORTH THOUSAND ($40,000) DOLLARS, OR (ii) A
NET WORTH OF AT LEAST ONE HUNDRED TWENTY FIVE THOUSAND ($125,000) DOLLARS AS
COMPUTED ABOVE.
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE,
FURNISHINGS THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT)
HAVE BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREIN.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING,THE INVESTMENT BY A NON-
ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) OF THE INVESTOR'S NET WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION
1052(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUES. THESE SECURITIES MAY BE
DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL
THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
<PAGE>
NOTICE TO MARYLAND RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND SECURITIES
ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION
11-602(9) OF SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY NOT BE
REOFFERED FOR SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A SECURITY, OR
IN A TRANSACTION EXEMPT UNDER SUCH ACT.
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH OF
AT LEAST FIFTY THOUSAND ($50,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAKE YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THAT ACT OR
EXEMPTION THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED
WRITTEN STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX
(6) MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER
OCCURS FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENT
THEREAFTER.
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE
MINNESOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION. NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NO HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
<PAGE>
THERE IS NOT ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT
BE ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF
THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN
INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY
STANDARDS AND MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT.
ADDITIONALLY, ALL PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET
WORTH OF AT LEAST THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000)
DOLLARS. THESE SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR
IN A TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN
A TRANSACTION EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(b), MISSOURI
UNIFORM SECURITIES ACT (RMSO 1969).
THE SHARES HAVE TO BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
MISSOURI, UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD
IN THE STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER
SAID ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A
MINIMUM ANNUAL INCOME OF THIRTY THOUSAND ($330,000) DOLLARS AND A NET WORTH OF
AT LEAST THIRTY THOUSAND ($30,000)(DOLLARS, EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING OFFERED
HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS
AFTER DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH.
<PAGE>
NOTICE TO NEBRASKA RESIDENTS
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA
SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THE ACT
OR EXEMPTION THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS
EITHER (i) A NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) OF
TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS OR (iii) A NET WORTH (EXCLUSIVE OF
HOME, HOME FURNISHINGS AND AUTOMOBILES OF ONE HUNDRED TWENTY FIVE THOUSAND
($125,000) DOLLARS AND FIFTY THOUSAND ($50,000 DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES TO CONSTITUTE
APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE
DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES COMMISSION OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS CRIMINAL OFFENCE.
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL
PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS
NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
NORTH CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATOR
<PAGE>
NEITHER RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE
ADMINISTRATOR PASSED ON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED
HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THESE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES ACT. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF
1933 AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF COUNSEL TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-ACCREDITS
INVESTOR SHALL NOT EXCEED THEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE BEEN REGISTERED WITH THE DIRECTOR OF THE
STATE OF OREGON UNDER THE PROVISIONS OF OAR 441-65-240. THE INVESTOR IS ADVISED
THAT THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION STATEMENT
AND HAS NOT REVIEWED THIS DOCUMENTS SINCE THIS DOCUMENT IS NOT REQUIRED TO BE
FILED WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE COMPANY
CREATING THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND
RISKS INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN THE
COMMONWEALTH OF PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE
PENNSYLVANIA SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE,
AND RECEIVE A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY
LIABILITY, WITHIN TWO (20) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE
OF THIS WITHDRAWAL RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY
PERSON WHO WISHES TO EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVEN
NOTICE BY LETTER OR TELEGRAM SENT TO POSTMARKED BEFORE THE END OF THE SECOND
BUSINESS DAY AFTER EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED
ORALLY, WRITTEN CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS
WHO IS A PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF
TWELVE (12) MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST
HAVE EITHER (i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS
<PAGE>
(EXCLUDING HOME, HOME FURNISHING AND AUTOMOBILES) AND A MINIMUM ANNUAL GROSS
INCOME OF THIRTY THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (AS COMPUTED ABOVE0, AND MAY NOT INVEST
MORE THAN TEN (10%) PER CENT OF THEIR NET WORTH (EXCLUSIVE OF THE SUBSCRIBER'S
HOME, HOME FURNISHINGS AND AUTOMOBILES).
NOTICE TO SOUTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
SOUTH CAROLINA UNIFORM SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO
THESE SECURITIES HAS NOT BEEN FILED WITH THE SOUTH CAROLINA SECURITIES
COMMISSIONER. THE COMMISSIONER DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY
SECURITIES, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47.31 OF THE SOUTH
DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF
LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT
LEAST SIXTY THOUSAND ($60,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE THOUSAND ($225,000) DOLLARS
(AS COMPUTED ABOVE).
NOTICE OF TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE OF TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE AND MAY NOT
BE REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS MAY PLACE SUCH INVESTOR
AND THE ISSUER IN VIOLATION OF THE TEXAS SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
<PAGE>
NOTICE TO UTAH RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UTAH SECURITIES ACT AND
MAY NOT NE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON SECURITIES
ACT AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON HAS NOT
REVIEWED THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT BE SOLD
WITHOUT REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY
ITSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE
UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE, ACCEPTANCE
OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFER,
WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR
IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
<PAGE>
OFFERING SUMMARY
The following summary information is qualified in its entirety by the
detailed information appearing elsewhere in this Memorandum.
IPVoice Communications, Inc. was founded in September 1997 to provide a
vehicle for key software technologies and a Research and Development laboratory
for the emerging Voice over the Internet market. IPVoice core software
technologies require little additional development to produce market viability.
New technologies presently under development such as TrueConnect may require
additional financial support to bring them to the marketplace.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK. ONLY THOSE PERSONS ABLE TO LOSE THEIR ENTIRE INVESTMENT SHOULD PURCHASE
THESE SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION,
SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER MATTERS
REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS.
Risk Factors Relating to the Business of the Company
Start-Up Development Stage Company The Company has had no revenues from
operations since its organization and is a "start-up" or "development stage"
company. No assurances can be given that the Company will be able to compete
with other companies in its industry. The purchases of the securities offered
hereby must be regarded as the placing of funds at a high risk in a new or
"start-up" venture with all the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject. See "Use of Proceeds" and "The
Company."
No Assurance of Profitability To date, the Company has not generated
any revenues from operations. The Company can not ensure any significant
revenues in the near future. The Company's ability to successfully implement its
business plan is dependent on the completion of this Offering. There can be no
assurance that the Company will be able to develop into a successful or
profitable business.
No Assurance of Payment of Dividends. No assurances can be made that
the future operations of the Company will result in additional revenues or will
be profitable. Should the operations of the Company become profitable, it is
likely that the Company would retain much or all of its earnings in order to
finance future growth and expansion. Therefore, the Company does not presently
intend to pay dividends, and it is not likely that any dividends will be paid ln
the foreseeable future.
Possible Need for Additional Financing. The Company intends to fund its
operations and other capital needs for the next 12 months substantially from the
proceeds of this Offering and another contemplated offering, but there can be no
assurance that such funds will be sufficient for these purposes. The Company may
require additional amounts of capital for its future expansion, operating costs
and working capital. The Company has made no formal arrangements to obtain
future additional financing, and if required, there can be no assurance that
such financing will be available, or that such financing will be available on
acceptable terms. See "Use of Proceeds."
Dependence on Management The Company's success is principally dependent
on its current management personnel for the operation of its business.
Broad Discretion in Application of Proceeds. The management of the
Company has broad discretion to adjust the application and allocation of the net
proceeds of this offering, in order to address changed circumstances and
opportunities. As a result of the foregoing, the success of the Company will be
substantially dependent upon the discretion and judgment of the management of
the Company with respect
<PAGE>
to the application and allocation of the net proceeds hereof. Pending use of
such proceeds, the net proceeds of this offering will be invested by the Company
in temporary, short-term interest-bearing obligations. See "Use of Proceeds."
Arbitrary Offering Price. There has been no prior public market for the
Company's securities. The price to the public of the Shares offered hereby has
been arbitrarily determined by the Company and bears no relationship to the
Company's earnings, book value or any other recognized criteria of value.
Immediate and Substantial Dilution. An investor in this offering will
experience immediate and substantial dilution.
Lack of Prior Market for Securities of the Company. No prior market has
existed for the securities being offered hereby and no assurance can be given
that a market will develop subsequent to this Offering.
No Escrow of Investors' Funds. This offering is being made on a "best
efforts, no minimum basis" As such, all the funds from this Offering will be
immediately available to the Company.
No Assurance of Acquisition While it is the Company's intent to acquire
either all of the shares or assets of other industry related companies in
addition to expanding its own operations, there is no assurance that the Company
will be able to achieve this goal. That event could cause a materially adverse
affect on the future of the Company.
Forward-Looking Statements This Memorandum includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, included or incorporated
by reference in this Memorandum which address activities, events or developments
which the Company expects or anticipates will or may occur in the future,
including such things as capital expenditures (including the amount and nature
thereof), expected sales revenues, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate under the circumstances. However, whether actual
results and developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, including the
risk factors discussed in this Memorandum, general economic, market or business
conditions, the business opportunities (or lack thereof) that may be presented
to and pursued by the Company, changes in laws or regulations, and other
factors, some of which are beyond the control of the Company. Consequently, all
of the forward-looking statements made in this Memorandum are qualified by these
cautionary statements and there can be no assurance that the actual results or
developments anticipated by the Company will be realized or, even if
substantially realized, that they will have the expected consequences to or
effects on the Company or its business or operations. The Company assumes no
obligation to update any such forwardlooking statements.
THE COMPANY
IPVoice Communications, Inc., a Nevada corporation, and its subsidiary
IPVoice Communications, Inc., a Delaware corporation owned 100% by IPVoice
Communications, Inc., a Nevada corporation are both hereinafter referred to as
the "Company."
"The Telecommunications "Long Distance" Market is now over twenty years
old and has produced many successful and profitable companies such as MCI,
Sprint, AT&T, World Com and others. They got there by building, installing,
leasing and sharing satellite, fiber-optic and cable systems to bring your calls
from one location to another. These carriers have invested billions of dollars
in equipment such as large and complex switching centers and other systems to
run these networks.
During the past decade, the growth of the Internet has been truly
explosive. In 1986, approximately five thousand computers were connected via the
Internet. By 1991, the number of computers on the Internet had climbed to a
staggering 500,000. Today, a phenomenal ten million computers are connected to
<PAGE>
the Internet with industry analysts predicting no signs of a slow-down. In fact,
these analysts have predicted that more than one hundred million computers will
be connected to the Internet by the end of 1999, producing revenues of about
$560m through activities entirely to the Internet.
The Internet is fundamentally changing telecommunications just as it is
changing virtually every other aspect of business and industry. In the past,
telephone networks and the Internet networks that primarily handled data existed
side by side. Now they have reached critical mass-coming together to deliver a
whole new range of powerful and economical new communication options. The
personal computer is designed to become the communication device of the future
handling everything from answering and making calls to transmitting and
receiving data, fax, video and other media. Products and services that address
these existing changes and needs are referred to as "Internet Telephony"
products or "IP" products.
IPVoice ("IPV" or "the Company"), is nearing completion of it's unique,
state-of-the-art software and hardware solutions to bridge the gap between the
telephone and the Internet. Deregulation has opened the door for many
development-stage companies to provide new and exciting products to take
advantage of this exciting technological era. IPVoice intends to fully exploit
this opportunity with its innovative and highly advanced Internet telephony
products and associated software programs.
IPVoice plans to deliver communications products to allow companies and
individuals to route their phone calls, fax, other data, video signals and voice
mail across the Internet at substantial cost savings without sacrificing
quality. IP telephony has been heralded as the new foundation for a new class of
telecommunication applications. These solutions will be as common as your
desktop phone. Right now, there is tremendous opportunity for young,
technologically competent companies to take full advantage of this new
communications era by providing IP Telephony products.
IPVoice offers several unique and proprietary products for use in
IPVoice Telephony. The Company's premier product is an Internet Gateway named
TrueConnect. TrueConnect is nearing completion following three years of
extensive development. TrueConnect provides a gateway for bridging the public
telephone system with the Internet. With TrueConnect, users will be able to
conduct real-time, full duplex, high quality two-way voice communications over
the Internet for dramatic savings as compared to standard long distance
telecommunications services. Both voice and data can be utilized with
TrueConnect, thus allowing businesses to create "virtual offices" anywhere in
the world by enabling off-site or traveling employees to connect to the main
office using a lap-top computer and an Internet connection. To support the
TrueConnect product, the Company has completed several proprietary products that
will allow the Company and it's distributors to offer a total solution in
Internet Telephony. These products include MultiCom, a complete order entry,
billing, customer service, agent management and switching network management
system for telecommunications businesses worldwide. Key features of this
technology are stability, industry proven usability, platform independence, the
compatibility for remote access worldwide and the ability to be used by
personnel with a wide variety of skill levels. MultiCom offers additional
distinct components to allow efficient tracking in real-time of
telecommunication functions such as billing and agent activity, providing
unprecedented management control. MultiCom BillMaker is a complete invoicing
system that supports multiple billing cycles, multiple customer types and up to
ten thousand rate tables across each product type, time-of-day billing, and
weekend and holiday sensitive rates. This invoicing system is capable of
creating customer, agent or carrier billing. Each invoice may be custom-labeled
and is automatically transmitted directly to the user's printer. No outside
printing service or software is required to produce telecom-grade professional
invoices. MultiCom's order entry module is a complete order-entry system in
real-time. When a new order is added or an existing order is modified in some
way, MultiCom performs the change in real-time. The customer's services are
immediately updated and activated. It is MultiCom's real-time design paradigm
that has made this immediate response feature possible. With MultiCom, all
changes are reflected instantly across the network -something competitors have
not thus far been able to provide. Another key feature of MultiCom is it's open
architecture data bridge, an open architecture based software system that allows
MultiCom to communicate with a wide variety of switching platforms and
telecommunications systems. Key features of this technology are:
*Creates a seamless integration of heterogeneous switching networks,
*Compatible with both Progress and Microsoft-based databases,
12
<PAGE>
*Provides real-time connections to Harris-based ICB networks and Summa Four
digital switches,
*Runs independently of critical switch-control software components and has
"zero-impact" footprint of existing network installations, and;
*Allows existing installations on open systems approach to information
management via MultiCom.
IPVoice has also developed AuditRite, a software module add-on for the
MultiCom system that allows MultiCom to read and interpret carrier-supplied
data-tapes. The AuditRite system is a powerful tool for analyzing call patterns
and finding threats to profits or errors in a vendor's billing.
The Company has also developed 4Com for Summa Four switches and
ICBConnect for Harris switches. 4Com is a complete Summa Four switch control
software environment supporting debit, routing, 1800, real-time least cost
routing and call rating. It is fully integrated and compatible with the MultiCom
system providing real-time switch network response to new orders or changes to
existing configurations.
The ICBConnect platform provides a complete International callback
solution for Harris-based switching networks. When combined with the MultiCom
data bridge and the MultiCom data management system, a complete full-featured
ICB platform emerges for the Harris digital switch.
All of the Company's products are available for minimal capital
investment of between $5,000- $50,000. IPVoice products utilize specially
developed and proprietary software that will provide ongoing revenues from the
calls made, whether voice or data. This situation is potentially very lucrative.
The significant benefit of these products is that they provide the effective
means to combine IP Telephony solutions and products with a mature, real-time
billing system for ease of use, affordability and quality. Most IP Telephony
systems available in the market place today have underdeveloped and ineffective
billing systems. IPVoice can provide the answer to these outdated systems by
providing solutions offering real- time remote access and manageability of
information. The Company knows of no other system currently available which
offers the advanced features and benefits of IPVoice products.
The Company is in a position to rapidly deploy its products into the
marketplace by an established independent representative and distributor base,
under the direction of the Company's President, Ms. Barbara Will. The Company's
marketing efforts will be supported by its close association with key
organizations and individuals, a result of Ms. Will's prior experience in a
senior capacity with MCI. These contacts will prove invaluable during marketing
and sales activities. With Ms. Will's contacts, and the sales team already in
place, the Company believes it can quickly sell its products to businesses and
other telecommunication companies in both the US and abroad. The Company's sales
efforts will be supported by trade shows targeting the telecommunication
industry and large businesses, professional articles, peerreviewed studies,
direct calls and a comprehensive marketing campaign. After purchasing the
products from the Company, IPVoice customers will have the option of using the
network services offered by IPVoice at extremely competitive rates. The Company
believes it is well placed to capitalize on this very large and profitable
opportunity.
IPVoice products were designed and produced by the Company at its
research and development office suite in Denver, Colorado. IPVoice products are
made from company-designed software and hardware products purchased from major
suppliers, many of whom are interested in future joint ventures with the
Company, such as Natural Microsystems, Inc. The Company's goal is to stay ahead
of the competition, and plans to aggressively continue its program of product
enhancement and development.
The Company has begun to take steps to protect its position and
technology by trademark and copyright protection, software security systems and
nondisclosure/non-compete agreements with key executives, management and
engineers.
MANAGEMENT
The following sets forth the names of the Company's officers and
directors:
<PAGE>
BARBARA WILL PRESIDENT, CHIEF OPERATING OFFICER AND CHAIRPERSON
Barbara Will has over 20 years of experience in all areas of
telecommunications, domestic and international. She spent the last 11 years with
MCI. Her broad spectrum of involvement included Major Accounts, National
Accounts, Hospitality, and Carriers/Resellers who provided MCI with revenues of
between $35 to $130 million. Ms. Will was responsible for signing some of the
largest contracts with a carrier/reseller in MCI's history. Her vast industry
experience encompasses, but is not limited to, international and international
private line; International 800; data; DSO, DSI, DSC, OC3; dedicated in and
outbound; One-Plus; calling and debit cards; Operator Assistance; Internet;
Enhanced Services; and Enhanced Network.
During her time at MCI she received numerous awards for outstanding
performance and was recognized as having successfully obtained one of the
largest private-line contracts in the history of MCI. Ms. Will attended Colorado
State University, and graduated with a Communications and Business
Administration degree.
ANTHONY K. WELCH VICE PRESIDENT OF R&D AND DIRECTOR
Mr. Welch is the original designer of the MultiCom, AuditRite, and True
Connect platforms and has served as Special Consultant to various
telecommunications organizations. Mr. Welch is the driving force behind the
IPVoice technologies and has been instrumental in providing critical technology
solutions. He has been a key player in creating viable proposals and business
strategies for technology solutions and joint ventures. He has provided key
technology and management solutions to many telecommunications companies. Mr.
Welch is responsible for maintaining the Company's superior position in the
industry by producing continuous innovations in IPVoice's technology.
Mr. Welch has served as Special Consultant and Project Design Leader
for such organizations as Wal-Mart International (US HQ and Mexico City Branch),
Nation's Bank CS Headquarters, Frito-Lay Worldwide Headquarters, NEC America
Mobile Radio/Cellular/Pager Division Headquarters, and Southwestern Bell Mobile
(Cellular/Pager) Systems Headquarters.
Mr. Welch has received numerous awards and recognition for his work in
Artificial Intelligence-both in military and academic circles-and has applied
this experience to creating technology solutions that are both intelligent and
flexible in nature. The technology behind the MultiCom system has received
recognition from several telecom trade magazines ("Computer Telephony" and
"Telephony" magazines). Mr. Welch won first place in the International Science
competition for Artificial Intelligence at just 17 years of age. He attended the
University of Mississippi and was the first freshman in the history of the
college to be admitted into the artificial intelligence Ph. D. Program.
RAY ZIMPHER MANAGER, SOFTWARE DEVELOPMENT
Mr. Zimpher is responsible for maintaining and creating enhancements to
the MultiCom system and is the Project Manager for all MultiCom systems. He is a
widely experienced data processing engineer with a solid background in analysis,
design and problem solving on mainframe, mini and PC based systems. Prior to
joining IPVoice, Mr. Zimpher had worked on software solutions for
Deloitte-Touche, Trinary Systems, IGT, Inc., and others.
Mr. Zimpher has worked with the MultiCom technology for over two years
and thus is highly qualified to maintain and enhance the MultiCom system.
Mr. Zimpher brings over 27 years of system development experience in the
Information Technology industry and has been witness to and participated in many
technological advances with computers and design methodologies. Mr. Zimpher is a
graduate of the US Army College.
<PAGE>
PRINCIPAL SHAREHOLDERS
Prior to this offering, the Company had 10,400,000 shares of its Common
Stock issued and outstanding. The following table sets forth, as of October 29,
1999, the beneficial ownership of the Company's Common Stock (i) by the only
persons who are known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each director of the Company; and (iii) by all
directors and officers as a group.
<TABLE>
Name Number of Shares Percentage Owned Percentage Owned
Owned Prior to Offering Before Offering After Offering
<S> <C> <C> <C>
Barbara S. Will 3,000,000 29% 26%
Condor Worldwide Ltd. 3,000,000 29% 26%
Anthony K. Welch 3,000,000 29% 26%
- --------------------------------------------------------------------------------------------
Officers and Directors 6,000,000 58% 53%
as a group
</TABLE>
USE OF PROCEEDS
The Company plans to utilize the proceeds of this Offering for working
capital and for further research and development necessary to complete its
TrueConnect product.
DESCRIPTION OF SECURITIES
Shares The Company is hereby offering a "best efforts, no minimum basis" up to
992,500 shares of Common Stock at $1.00 per Share.
Common Stock
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefor when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid and nonassessable, and all shares to be sold and issued as
contemplated hereby, will be validly authorized and issued, fully paid and
nonassessable. The Board of Directors is authorized to issue additional shares
of Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and Bylaws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the State of
Nevada for a more complete description concerning the rights and liabilities of
stockholders.
Prior to this offering, there has been no market for the Common Stock
of the Company, and no predictions can be made of the effect, if any, that
market sales of shares or the availability of shares for sale will have on the
market price prevailing from time to time. Nevertheless, sales of significant
amounts of the Common Stock of the Company in the public market may adversely
affect prevailing market prices, and may impair the Company's ability to raise
capital at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
<PAGE>
percent of the shares voting for the election of directors can elect all the
directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.
Preferred Stock
The authorized capital stock of the Company also consists of 1,000,000
shares of Preferred Stock, $.001 par value, none of which are issued.
PLAN OF DISTRIBUTION
The Company has no underwriter for this Offering. The Offering is
therefore a self-underwriting. The Shares will be offered by the Company at the
offering price of $1.00 per share.
Price of the Offering.
There is no, and never has been, a market for the Shares, and there is
no guaranty that a market will ever develop for the Company's shares.
Consequently, the offering price has been determined by the Company. Among other
factors considered in such determination were estimates of business potential
for the Company, the Company's financial condition, an assessment of the
Company's management and the general condition of the securities market at the
time of this Offering. However, such price does not necessarily bear any
relationship to the assets, income or net worth of the Company.
The offering price should not be considered an indication of the actual
value of the Shares. Such price is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Shares can
be resold at the Offering Price.
There can be no assurance that an active trading market will develop
upon completion of this Offering, or if such market develops, that it will
continue. Consequently, purchasers of the Shares offered hereby may not find a
ready market for Shares.
CAUTIONARY WARNING
THE COMPANY'S BUSINESS PLAN AND THE COMPANY'S FINANCIAL STATEMENTS AND
PROJECTIONS ARE FORWARD LOOKING. STATEMENT AND ACTUAL RESULTS COULD
MATERIALLY DIFFER FROM THE PROJECTIONS. AS SUCH, NO INVESTOR SHOULD RELY ON SUCH
INFORMATION IN MAKING HIS INVESTMENT.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to making an
investment in the Company, that he has had the opportunity to inspect the books
and records of the Company and that he has had the opportunity to make inquiries
to the officers and directors of the Company and further that he has been
provided full access to such information.
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
------------------------------------
Suitability
Shares will be offered and sold pursuant an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Shares to
that Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,000,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
<PAGE>
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8) An entity in which all of the equity owners are accredited
investors (as defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income form long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
non-accredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to
investments in limited partnerships either alone or with its Purchaser
Representative, if any; and
(2) The Investor has been provided access to all relevant documents it
desires or needs; and
(3)The Investor is aware of its limited ability to sell and/or transfer
its Shares in the Company; and
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE IF A
POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Shares, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Shares will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Shares. In addition, the fiduciary must consider
whether the investment in Shares will satisfy the diversification requirement of
Section 404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of
the offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Shares by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Shares for its own account and for the purpose of
investment only, not with a view to, or in accordance with, the distribution of
<PAGE>
sale of the Shares and that it will not sell, pledge, assign or transfer or
offer to sell, pledge, assign or transfer any of its Shares without an effective
registration statement under the Securities Act, or an exemption therefrom
(including an exemption under Regulation D, Section 504) and an opinion of
counsel acceptable to the Company that registration under the Securities Act is
not required and that the transaction complies with all other applicable Federal
and state securities or Blue Sky laws.
<PAGE>
IPVoice Communications, Inc.
(A Nevada corporation)
==================
SUBSCRIPTION DATA SHEET
==================
Name of Subscriber
(Offeree):_______________________________________________________
Address of Residence
(if natural person):_____________________________________________
- -----------------------------------------------------------------
Address of
Business:________________________________________________________
- -----------------------------------------------------------------
Subscriber's
Telephone No.:___________________________________________________
Subscriber's Social
Security No. or
Tax I.D. No.:____________________________________________________
Preferred Address for
receiving mail:
( ) Residence
( ) Business
( ) Other, if any: _____________________________________________
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Date of Subscription:____________________________________________
Amount of
Subscription: $_________________________________________________
<PAGE>
SUBSCRIPTION AGREEMENT AND INVESTMENT
REPRESENTATION OF INVESTORS
IPVoice Communications, Inc.
10724 W. Ontario Place
Littleton, CO 80274
Gentlemen:
1. Subject to the terms and conditions hereof, the undersigned,
intending to be legally bound, hereby irrevocably subscribes for and agrees to
accept and subscribe to _________ shares of Regulation D, Section 504 common
stock of IPVoice Communications, Inc., a Nevada corporation (the Company), for a
total consideration of $_________, the receipt and sufficiency of which is
hereby acknowledged.
2. In order to induce the Company to accept the subscription made
hereby, the undersigned hereby represents and warrants to the Company, and each
other person who acquires or has acquired the Shares, as follows :
(a) The undersigned, if an individual (i) has reached the age
of majority in the state in which he resides and (ii) is a bona fide resident
and domiciliary (not a temporary or transient resident) of the state set forth
beneath his signature below.
(b) The undersigned has the financial ability to bear the
economic risk of an investment in the Shares has adequate means of providing for
his current needs and personal contingencies, has no need for liquidity in such
investment, and could afford a complete loss of such investment. The
undersigned's overall commitment to investments that are not readily marketable
is not disproportionate to his net worth, and his investment in the Company will
not cause such overall commitment to become excessive.
(c) The undersigned meets at least one of the following
criteria:
(i) the undersigned is a natural person whose individual net
worth or joint net worth with his spouse, at the time of his
purchase, exceeds $1,000,000 (ONE MILLION DOLLARS); or
(ii) the undersigned is a natural person and had an
individual income in excess of $200,000 (TWO-HUNDRED THOUSAND
DOLLARS) in each of the two most recent years, or jointly with
his spouse in excess of $300,000 (THREE-HUNDRED THOUSAND DOLLARS)
in each of those years, and who reasonably expects to achieve at
least the same income level in the current year; or
(iii) qualifies as an accredited investor under Regulation D
of the Securities Act of 1933 (the "Act").
(d) The investment is one in which I am purchasing for myself
and not for others, the investment amount does not exceed 10% of my net worth
and I have the capability to understand the investment and the risk.
(e) The undersigned has been given a full opportunity to ask
questions of and to receive answers from the Company concerning the terms and
conditions of the offering and the business of the Company, and to obtain
additional information necessary to verify the accuracy of the information given
him or to obtain such other information as is desired in order to evaluate an
investment in the Shares. All such questions have been answered to the full
satisfaction of the undersigned.
(f) In making his decision to purchase the Shares herein
subscribed for, the undersigned has relied solely upon independent
investigations made by him. He has received no representation or warranty from
the Company or from a broker-dealer, if any, or any of the affiliates, employees
or agents of either. In addition, he is not subscribing pursuant hereto for any
<PAGE>
Shares as a result of or subsequent to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees, including the undersigned, had been invited as a result of,
subsequent to, or pursuant to any of the foregoing.
(g) The undersigned understands that the Shares have not been
registered under the Act in reliance upon specific exemptions from registration
thereunder, and he agrees that his Shares may not be sold, offered for sale,
transferred, pledged, hypothecated, or otherwise disposed of except in
compliance with the Act and applicable state securities laws, which restrictions
require the approval of the Company for the transfer of any Shares (which
approval, except under limited circumstances, may be withheld by the Company in
its sole discretion). The undersigned has been advised that the Company has no
obligations to cause the Shares to be registered under the Act or to comply with
any exemption under the Act, including but not limited to that set forth in Rule
144 promulgated under the Act, which would permit the Shares to be sold by the
undersigned. The undersigned understands that it is not anticipated that there
will be any market for resale of the Shares, and that it may not be possible for
the undersigned to liquidate an investment in the Shares. The undersigned
understands the legal consequences of the foregoing to mean that he must bear
the economic risk of his investment in the Shares. He understands that any
instruments representing the Shares may bear legends restricting the transfer
thereof.
3. To the extent I have the right to rescind my purchase of the Shares,
which right of recision is hereby offered, I waive and relinquish such rights
and agree to accept certificate(s) evidencing such Shares.
4. This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Nevada.
5. All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties hereto may require.
6. The shares referred to herein will be sold to the subscriber in a
transaction exempt under Section 517.061 of the Florida Securities Act. The
shares have not been registered under said act in the State of Florida. In
addition, if sales are made to five or more persons in the State of Florida, any
sale in the State of Florida is voidable by the purchaser within three (3) days
after the first tender of consideration is made by such purchaser to the issuer,
an agent of the issuer, or an escrow agent or within three (3) days after the
availability of that privilege is communicated to such purchaser, whichever
occurs later.
IN WITNESS WHEREOF, the undersigned has executed and agrees to be bound
by this Subscription Agreement and Investment Representation on the date written
below as the Date of Subscription:
(TO BE USED FOR INDIVIDUAL(S))
- ---------------------------- -------------------------------
Print Name of Individual Signature of Individual
- ----------------------------- -------------------------------
State of Residence Date of Subscription
<PAGE>
(TO BE USED FOR PARTNERSHIPS, CORPORATIONS,
TRUSTS OR OTHER ENTITIES)
_______________________________ By:______________________________
Print Name of Partnership Signature of Authorized
Corporation - Trust - Entity Representative
- ------------------------------- ---------------------------------
Capacity of Authorized Print Name of Authorized
Representative Representative
- ------------------------------- --------------------------------
Print Jurisdiction of Date of Subscription
Incorporation or Organization
EXHIBIT 4.3
-------------------------------------------------------------------------
OFFERING MEMORANDUM
-------------------------------------------------------------------------
IPVoice Communications, Inc.
(A Nevada Corporation)
Offering Memorandum Dated September 15, 1998
1,000,000 Shares
IPVoice Communications, Inc., a Nevada corporation, f/k/a Nova
Enterprises, Inc., (the "Company"), is offering on a "best efforts, no minimum
basis" up to a maximum of 1,000,000 shares of common stock ("Shares"), $.001 par
value, at $.50 per share. Since there is no minimum, no proceeds will be held in
an escrow account and all funds will be immediately available to the Company.
The Shares are being sold by the Company's Officers and Directors and
no commissions will be paid to them in connection with the Offering. However,
participating NASD registered broker/dealers, if any, shall receive a maximum of
10% sales commissions on all shares sold through their efforts.
The Company's Common Stock is currently listed on the Over the Counter
Electronic Bulletin Board. There can be no assurances that an active trading
market for the Company's stock exists, or will continue if it currently exists.
The price of the Shares offered hereby was arbitrarily determined by
the Company and does not bear any relationship to the Company's assets, book
value, net worth, results of operations or any other recognized criteria of
value. For additional information regarding the factors considered in
determining the offering price of the Shares, see "Risk Factors - Arbitrary
Offering Price", "Description of Securities".
The Company does not presently file reports or other information with
the Securities and Exchange Commission ("Commission"). However, following
completion of this Offering, the Company intends to furnish its security holders
with annual reports containing audited financial statements and such interim
reports in each case as it may determine to furnish or as may be required by
law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
This offering involves special risks concerning the Company (see "Risk
Factors"). Investors should carefully review the entire Memorandum and should
not invest any funds in this Offering unless they can afford to lose their
entire investment. In making an investment decision, investors must rely on
their own examination of the issuer and the terms of the Offering, including the
merit and risks involved.
<PAGE>
REGULATION D OFFERING
THIS OFFERING IS BEING MADE PURSUANT TO THE EXEMPTIONS AFFORDED BY
SECTIONS 4(2) OR 3(b) OF SECURITIES ACT OF 1933 AND RULE 504 OF REGULATION D
PROMULGATED THEREUNDER AND THE STATE SMALL CORPORATE OFFERING REGISTRATION
PROVISION. PURSUANT TO RULE 504, THE SHARES SOLD HEREBY WILL NOT BE SUBJECT TO
ANY LIMITATIONS ON RESALE THEREOF UNDER FEDERAL LAW. THE SHARES MAY, HOWEVER, BE
SUBJECT TO LIMITATIONS ON THE OFFER AND SALE AND THE RESALE OF THE SHARES
IMPOSED BY THE BLUE SKY LAWS OF INDIVIDUAL STATES. IN ADDITION, THE COMPANY
INTENDS TO FILE THE REQUIRED DOCUMENTS IN CERTAIN OTHER STATES IDENTIFIED BY
MANAGEMENT AS HAVING POSSIBLE INVESTOR INTEREST AND USE ITS BEST EFFORTS TO
QUALIFY THE SHARES FOR SECONDARY TRADING IN SUCH STATES, THOUGH NO ASSURANCE CAN
BE GIVEN THAT IT WILL BE ABLE TO QUALIFY THE SHARES FOR SECONDARY TRADING IN ANY
SUCH STATES IN WHICH IT SUBMITS SUCH APPLICATIONS AND DOCUMENTS. AN INABILITY TO
QUALIFY THE SHARES FOR SECONDARY TRADING WILL CREATE SUBSTANTIAL RESTRICTIONS ON
THE TRANSFERABILITY OF SUCH SHARES WHICH MAY NEGATE THE BENEFIT OF THE EXEMPTION
PROVIDED BY RULE 504 OF REGULATION D. THE COMPANY WILL USE ITS BEST EFFORTS TO
CAUSE THE SHARES TO BE LISTED ON THE ELECTRONIC BULLETIN BOARD OPERATED BY THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AS A MARKET IN WHICH THEY MAY
BE TRADED. THERE IS NO ASSURANCE THAT SUCH LISTING WILL BE OBTAINED OR THAT IF A
LISTING IS OBTAINED THAT ANY MARKET FOR THE SHARES WILL DEVELOP, OR IF
DEVELOPED, THAT IT WILL BE SUSTAINED.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES
NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES IT PASS UPON
THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT OF AN
ALABAMA PURCHASER WHO IS NOT AN ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%)
PERCENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE,
FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA SECURITIES
ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES
NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES IT PASS UPON
THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT OF AN
ALABAMA PURCHASER WHO IS NOT AN ACCREDIT INVESTOR MAY NOT EXCEED TWENTY (20%)
PER CENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE,
FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA SECURITIES
ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO ARIZONA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ARIZONA SECURITIES
ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION
44-184(1) OF SUCH ACT. THESE SECURITIES MAY NOT BE SOLD WITHOUT REGISTRATION
UNDER SUCH ACT OR EXEMPTION THEREFROM.
ARIZONA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM ANNUAL GROSS INCOME OF SEVENTY FIVE THOUSAND
(475,000) DOLLARS; OR (iii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE
THOUSAND ($225,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
SECTION 14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE
SECURITIES ACT OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION
HAS PASSED UPON THE VALUE OF THESE SECURITIES, MADE ANY RECOMMENDATIONS AS TO
THEIR PURCHASE, APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT IS
UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR WITHOUT THE PRIOR WRITTEN
<PAGE>
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT
AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER
IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. THE
SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN
ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE
WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER, WHICHEVER OCCURS LATER.
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA SECURITIES ACT
OF 1973, AS AMENDED. IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION SET FORTH
IN SECTION 9(M) OF SUCH ACT AND THE SECURITIES CANNOT BE SOLD OR TRANSFERRED
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR IN A TRANSACTION WHICH IS
OTHERWISE IN COMPLIANCE WITH SAID ACT.
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
ANYTHING TOT HE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET
WORTH.
<PAGE>
NOTICE TO INDIANA RESIDENTS
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A
NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) EQUAL TO AT LEAST
THREE (3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN N O EVENT LESS THAN SEVENTY
FIVE THOUSAND (475,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF HOME, HOME
FURNISHING AND AUTOMOBILES OF TOW (2) TIMES HIS INVESTMENT BUT IN NOT EVENT LESS
THAN THIRTY THOUSAND ($30,000) DOLLARS AND A GROSS INCOME OF THIRTY THOUSAND
($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTH
THOUSAND ($40,000) DOLLARS (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES)
AND A MINIMUM ANNUAL GROSS INCOME OF FORTH THOUSAND ($40,000) DOLLARS, OR (ii) A
NET WORTH OF AT LEAST ONE HUNDRED TWENTY FIVE THOUSAND ($125,000) DOLLARS AS
COMPUTED ABOVE.
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE,
FURNISHINGS THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT)
HAVE BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREIN.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING,THE INVESTMENT BY A NON-
ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) OF THE INVESTOR'S NET WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION
1052(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUES. THESE SECURITIES MAY BE
DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL
THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
<PAGE>
NOTICE TO MARYLAND RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND SECURITIES
ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION
11-602(9) OF SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY NOT BE
REOFFERED FOR SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A SECURITY, OR
IN A TRANSACTION EXEMPT UNDER SUCH ACT.
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH OF
AT LEAST FIFTY THOUSAND ($50,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAKE YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THAT ACT OR
EXEMPTION THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED
WRITTEN STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX
(6) MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER
OCCURS FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENT
THEREAFTER.
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE
MINNESOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION. NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NO HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
<PAGE>
THERE IS NOT ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT
BE ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF
THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN
INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY
STANDARDS AND MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT.
ADDITIONALLY, ALL PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET
WORTH OF AT LEAST THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000)
DOLLARS. THESE SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR
IN A TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN
A TRANSACTION EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(b), MISSOURI
UNIFORM SECURITIES ACT (RMSO 1969).
THE SHARES HAVE TO BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
MISSOURI, UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD
IN THE STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER
SAID ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A
MINIMUM ANNUAL INCOME OF THIRTY THOUSAND ($330,000) DOLLARS AND A NET WORTH OF
AT LEAST THIRTY THOUSAND ($30,000)(DOLLARS, EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING OFFERED
HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS
AFTER DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH.
<PAGE>
NOTICE TO NEBRASKA RESIDENTS
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA
SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THE ACT
OR EXEMPTION THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS
EITHER (i) A NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) OF
TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS OR (iii) A NET WORTH (EXCLUSIVE OF
HOME, HOME FURNISHINGS AND AUTOMOBILES OF ONE HUNDRED TWENTY FIVE THOUSAND
($125,000) DOLLARS AND FIFTY THOUSAND ($50,000 DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES TO CONSTITUTE
APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE
DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES COMMISSION OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS CRIMINAL OFFENCE.
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL
PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS
NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
NORTH CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATOR
<PAGE>
NEITHER RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE
ADMINISTRATOR PASSED ON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED
HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THESE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES ACT. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF
1933 AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF COUNSEL TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-ACCREDITS
INVESTOR SHALL NOT EXCEED THEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE BEEN REGISTERED WITH THE DIRECTOR OF THE
STATE OF OREGON UNDER THE PROVISIONS OF OAR 441-65-240. THE INVESTOR IS ADVISED
THAT THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION STATEMENT
AND HAS NOT REVIEWED THIS DOCUMENTS SINCE THIS DOCUMENT IS NOT REQUIRED TO BE
FILED WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE COMPANY
CREATING THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND
RISKS INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN THE
COMMONWEALTH OF PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE
PENNSYLVANIA SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE,
AND RECEIVE A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY
LIABILITY, WITHIN TWO (20) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE
OF THIS WITHDRAWAL RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY
PERSON WHO WISHES TO EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVEN
NOTICE BY LETTER OR TELEGRAM SENT TO POSTMARKED BEFORE THE END OF THE SECOND
BUSINESS DAY AFTER EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED
ORALLY, WRITTEN CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS
WHO IS A PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF
TWELVE (12) MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST
HAVE EITHER (i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS
<PAGE>
(EXCLUDING HOME, HOME FURNISHING AND AUTOMOBILES) AND A MINIMUM ANNUAL GROSS
INCOME OF THIRTY THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (AS COMPUTED ABOVE0, AND MAY NOT INVEST
MORE THAN TEN (10%) PER CENT OF THEIR NET WORTH (EXCLUSIVE OF THE SUBSCRIBER'S
HOME, HOME FURNISHINGS AND AUTOMOBILES).
NOTICE TO SOUTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
SOUTH CAROLINA UNIFORM SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO
THESE SECURITIES HAS NOT BEEN FILED WITH THE SOUTH CAROLINA SECURITIES
COMMISSIONER. THE COMMISSIONER DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY
SECURITIES, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47.31 OF THE SOUTH
DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF
LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT
LEAST SIXTY THOUSAND ($60,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE THOUSAND ($225,000) DOLLARS
(AS COMPUTED ABOVE).
NOTICE OF TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE OF TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE AND MAY NOT
BE REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS MAY PLACE SUCH INVESTOR
AND THE ISSUER IN VIOLATION OF THE TEXAS SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
<PAGE>
NOTICE TO UTAH RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UTAH SECURITIES ACT AND
MAY NOT NE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON SECURITIES
ACT AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON HAS NOT
REVIEWED THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT BE SOLD
WITHOUT REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY
ITSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE
UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS.
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
OFFERING SUMMARY
The following summary information is qualified in its entirety by the
detailed information appearing elsewhere in this Memorandum.
IPVoice Communications, Inc. was founded in September 1997 to provide a
vehicle for key software technologies and a Research and Development laboratory
for the emerging Voice over the Internet market. IPVoice core software
technologies require little additional development to produce market viability.
New technologies presently under development such as TrueConnect may require
additional financial support to bring them to the marketplace.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK. ONLY THOSE PERSONS ABLE TO LOSE THEIR ENTIRE INVESTMENT SHOULD PURCHASE
THESE SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION,
SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER MATTERS
REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS.
Risk Factors Relating to the Business of the Company
Start-Up Development Stage Company The Company has had limited revenues
from operations since its organization and is a "start-up" or "development
stage" company. No assurances can be given that the Company will be able to
compete with other companies in its industry. The purchases of the securities
offered hereby must be regarded as the placing of funds at a high risk in a new
or "start-up" venture with all the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject. See "Use of Proceeds" and "The
Company."
No Assurance of Profitability To date, the Company has not generated
significant revenues from operations. The Company can not ensure any significant
revenues in the near future. The Company's ability to successfully implement its
business plan is dependent on the completion of this Offering. There can be no
assurance that the Company will be able to develop into a successful or
profitable business.
No Assurance of Payment of Dividends. No assurances can be made that
the future operations of the Company will result in additional revenues or will
be profitable. Should the operations of the Company become profitable, it is
likely that the Company would retain much or all of its earnings in order to
finance future growth and expansion. Therefore, the Company does not presently
intend to pay dividends, and it is not likely that any dividends will be paid ln
the foreseeable future.
Possible Need for Additional Financing. The Company intends to fund its
operations and other capital needs for the next 12 months substantially from the
proceeds of this Offering, but there can be no assurance that such funds will be
sufficient for these purposes. The Company may require additional amounts of
capital for its future expansion, operating costs and working capital. The
<PAGE>
Company has made no formal arrangements to obtain future additional financing,
and if required, there can be no assurance that such financing will be
available, or that such financing will be available on acceptable terms. See
"Use of Proceeds."
Dependence on Management The Company's success is principally dependent
on its current management personnel for the operation of its business.
Broad Discretion in Application of Proceeds. The management of the
Company has broad discretion to adjust the application and allocation of the net
proceeds of this offering, in order to address changed circumstances and
opportunities. As a result of the foregoing, the success of the Company will be
substantially dependent upon the discretion and judgment of the management of
the Company with respect to the application and allocation of the net proceeds
hereof. Pending use of such proceeds, the net proceeds of this offering will be
invested by the Company in temporary, short-term interest-bearing obligations.
See "Use of Proceeds."
Arbitrary Offering Price. The price to the public of the Shares offered
hereby has been arbitrarily determined by the Company and bears no relationship
to the Company's earnings, book value or any other recognized criteria of value.
Immediate and Substantial Dilution. An investor in this offering will
experience immediate and substantial dilution.
Limited Market for Securities of the Company. A limited market has
existed for the securities being offered hereby and no assurance can be given
that a market will develop subsequent to this Offering.
No Escrow of Investors' Funds. This offering is being made on a "best
efforts, no minimum basis" As such, all the funds from this Offering will be
immediately available to the Company.
No Assurance of Acquisition While it is the Company's intent to acquire
either all of the shares or assets of other industry related companies in
addition to expanding its own operations, there is no assurance that the Company
will be able to achieve this goal. That event could cause a materially adverse
affect on the future of the Company.
Forward-Looking Statements This Memorandum includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, included or incorporated
by reference in this Memorandum which address activities, events or developments
which the Company expects or anticipates will or may occur in the future,
including such things as capital expenditures (including the amount and nature
thereof), expected sales revenues, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate under the circumstances. However, whether actual
results and developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, including the
risk factors discussed in this Memorandum, general economic, market or business
conditions, the business opportunities (or lack thereof) that may be presented
to and pursued by the Company, changes in laws or regulations, and other
factors, some of which are beyond the control of the Company. Consequently, all
of the forward-looking statements made in this Memorandum are qualified by these
cautionary statements and there can be no assurance that the actual results or
developments anticipated by the Company will be realized or, even if
substantially realized, that they will have the expected consequences to or
effects on the Company or its business or operations. The Company assumes no
obligation to update any such forward-looking statements.
THE COMPANY
IPVoice Communications, Inc., a Nevada corporation, and its subsidiary
IPVoice Communications, Inc., a Delaware corporation owned 100% by IPVoice
Communications, Inc., a Nevada corporation are both hereinafter referred to as
the "Company."
The Telecommunications "Long Distance" Market is now over twenty years
old and has produced many successful and profitable companies such as MCI,
Sprint, AT&T, World Com and others. They got
<PAGE>
there by building, installing, leasing and sharing satellite, fiber-optic and
cable systems to bring your calls from one location to another. These carriers
have invested billions of dollars in equipment such as large and complex
switching centers and other systems to run these networks.
During the past decade, the growth of the Internet has been truly
explosive. In 1986, approximately five thousand computers were connected via the
Internet. By 1991, the number of computers on the Internet had climbed to a
staggering 500,000. Today, a phenomenal ten million computers are connected to
the Internet with industry analysts predicting no signs of a slow-down. In fact,
these analysts have predicted that more than one hundred million computers will
be connected to the Internet by the end of 1999, producing revenues of about
$560m through activities entirely to the Internet.
The Internet is fundamentally changing telecommunications just as it is
changing virtually every other aspect of business and industry. In the past,
telephone networks and the Internet networks that primarily handled data existed
side by side. Now they have reached critical mass coming together to deliver a
whole new range of powerful and economical new communication options. The
personal computer is designed to become the communication device of the future
handling everything from answering and making calls to transmitting and
receiving data, fax, video and other media. Products and services that address
these existing changes and needs are referred to as "Internet Telephony"
products or "IP" products.
IPVoice ("IPV" or "the Company"), is nearing completion of its unique,
state-of-the-art software and hardware solutions to bridge the gap between the
telephone and the Internet. Deregulation has opened the door for many
development-stage companies to provide new and exciting products to take
advantage of this exciting technological era. IPVoice intends to fully exploit
this opportunity with its innovative and highly advanced Internet telephony
products and associated software programs.
IPVoice plans to deliver communications products to allow companies and
individuals to route their phone calls, fax, other data, video signals and voice
mail across the Internet at substantial cost savings without sacrificing
quality. IP telephony has been heralded as the new foundation for a new class of
telecommunication applications. These solutions will be as common as your
desktop phone. Right now, there is tremendous opportunity for young,
technologically competent companies to take full advantage of this new
communications era by providing IP Telephony products.
IPVoice offers several unique and proprietary products for use in
IPVoice Telephony. The Company's premier product is an Internet Gateway named
TrueConnect. TrueConnect is nearing completion following three years of
extensive development on MultiCom. TrueConnect provides a gateway for bridging
the public telephone system with the Internet. With TrueConnect, users will be
able to conduct real-time, full duplex, high quality two-way voice
communications over the Internet for dramatic savings as compared to standard
long distance telecommunications services. Both voice and data can be utilized
with TrueConnect, thus allowing businesses to create "virtual offices" anywhere
in the world by enabling off-site or traveling employees to connect to the main
office using a lap-top computer and an Internet connection. To support the
TrueConnect product, the Company has completed several proprietary products that
will allow the Company and its distributors to offer a total solution in
Internet Telephony. These products include MultiCom, a complete order entry,
billing, customer service, agent management and switching network management
system for telecommunications businesses worldwide. Key features of this
technology are stability, industry proven usability, platform independence, the
compatibility for remote access worldwide and the ability to be used by
personnel with a wide variety of skill levels. MultiCom offers additional
distinct components to allow efficient tracking in real-time of
telecommunication functions such as billing and agent activity, providing
unprecedented management control. MultiCom BillMaker is a complete invoicing
system that supports multiple billing cycles, multiple customer types and up to
ten thousand rate tables across each product type, time-of-day billing, and
weekend and holiday sensitive rates. This invoicing system is capable of
creating customer, agent or carrier billing. Each invoice may be custom-labeled
and is automatically transmitted directly to the user's printer. No outside
printing service or software is required to produce telecom-grade professional
invoices. MultiCom's order entry module is a complete order-entry system in
real-time. When a new order is added or an existing order is modified in some
way, MultiCom performs the change in real-time. The customer's services are
immediately updated and activated. It is MultiCom's real-time design paradigm
that has made this immediate response feature possible. With MultiCom, all
changes are reflected instantly across the network -something competitors have
not thus far been able to provide.
<PAGE>
Another key feature of MultiCom is its open architecture data bridge, an open
architecture based software system that allows MultiCom to communicate with a
wide variety of switching platforms and telecommunications systems. Key features
of this technology are:
*Creates a seamless integration of heterogeneous switching networks,
*Compatible with both Progress and Microsoft-based databases,
*Provides real-time connections to Harris-based ICB networks and Summa Four
digital switches,
*Runs independently of critical switch-control software components and has
"zero-impact" footprint of existing network installations, and;
*Allows existing installations on open systems approach to information
management via MultiCom.
IPVoice has also developed AuditRite, a software module add-on for the
MultiCom system that allows MultiCom to read and interpret carrier-supplied
data-tapes. The AuditRite system is a powerful tool for analyzing call patterns
and finding threats to profits or errors in a vendor's billing.
The Company has also developed 4Com for Summa Four switches and
ICBConnect for Harris switches. 4Com is a complete Summa Four switch control
software environment supporting debit, routing, Toll-Free, real-time least cost
routing and call rating. It is fully integrated and compatible with the MultiCom
system providing real-time switch network response to new orders or changes to
existing configurations.
The ICBConnect platform provides a complete International callback
solution for Harris-based switching networks. When combined with the MultiCom
data bridge and the MultiCom data management system, a complete full-featured
ICB platform emerges for the Harris digital switch.
All of the Company's products are available for minimal capital
investment of between $5,000- $100,000. IPVoice products utilize specially
developed and proprietary software that will provide ongoing revenues from the
calls made, whether voice or data. This situation is potentially very lucrative.
The significant benefit of these products is that they provide the effective
means to combine IP Telephony solutions and products with a mature, real-time
billing system for ease of use, affordability and quality. Most IP Telephony
systems available in the market place today have underdeveloped and ineffective
billing systems. IPVoice can provide the answer to these outdated systems by
providing solutions offering real- time remote access and manageability of
information. The Company knows of no other system currently available which
offers the advanced features and benefits of IPVoice products.
The Company is in a position to rapidly deploy its products into the
marketplace by an established independent representative and distributor base,
under the direction of the Company's President, Ms. Barbara Will. The Company's
marketing efforts will be supported by its close association with key
organizations and individuals, a result of Ms. Will's prior experience in a
senior capacity with MCI. These contacts will prove invaluable during marketing
and sales activities. With Ms. Will's contacts, and the sales team already in
place, the Company believes it can quickly sell its products to businesses and
other telecommunication companies in both the US and abroad. The Company's sales
efforts will be supported by trade shows targeting the telecommunication
industry and large businesses, professional articles, peerreviewed studies,
direct calls and a comprehensive marketing campaign. After purchasing the
products from the Company, IPVoice customers will have the option of using the
network services offered by IPVoice at extremely competitive rates. The Company
believes it is well placed to capitalize on this very large and profitable
opportunity.
IPVoice products were designed and produced by the Company at its
research and development office suite in Castle Rock, Colorado. IPVoice products
are made from company-designed software and hardware products purchased from
major suppliers, many of whom are interested in future joint ventures with the
Company, such as Natural Microsystems, Inc. The Company's goal is to stay ahead
of the competition, and plans to aggressively continue its program of product
enhancement and development.
<PAGE>
The Company has begun to take steps to protect its position and
technology by trademark and copyright protection, software security systems and
nondisclosure/non-compete agreements with key executives, management and
engineers.
MANAGEMENT
The following sets forth the names of the Company's officers and
directors:
BARBARA WILL PRESIDENT, CHIEF OPERATING OFFICER AND CHAIRPERSON
Barbara Will has over 20 years of experience in all areas of
telecommunications, domestic and international. She spent the last 11 years with
MCI. Her broad spectrum of involvement included Major Accounts, National
Accounts, Hospitality, and Carriers/Resellers who provided MCI with revenues of
between $35 to $130 million. Ms. Will was responsible for signing some of the
largest contracts with a carrier/reseller in MCI's history. Her vast industry
experience encompasses, but is not limited to, international and international
private line; International Toll-Free; data; DSO, DSI, DSC, OC3; dedicated in
and outbound; One-Plus; calling and debit cards; Operator Assistance; Internet;
Enhanced Services; and Enhanced Network.
During her time at MCI she received numerous awards for outstanding
performance and was recognized as having successfully obtained one of the
largest private-line contracts in the history of MCI. Ms. Will attended Colorado
State University, and graduated with a Communications and Business
Administration degree.
ANTHONY K. WELCH EXECUTIVE VICE PRESIDENT OF R&D AND DIRECTOR
Mr. Welch is the original designer of the MultiCom, AuditRite, and True
Connect platforms and has served as Special Consultant to various
telecommunications organizations. Mr. Welch is the driving force behind the
IPVoice technologies and has been instrumental in providing critical technology
solutions. He has been a key player in creating viable proposals and business
strategies for technology solutions and joint ventures. He has provided key
technology and management solutions to many telecommunications companies. Mr.
Welch is responsible for maintaining the Company's superior position in the
industry by producing continuous innovations in IPVoice's technology.
Mr. Welch has served as Special Consultant and Project Design Leader
for such organizations as Wal-Mart International (US HQ and Mexico City Branch),
Nation's Bank CS Headquarters, Frito-Lay Worldwide Headquarters, NEC America
Mobile Radio/Cellular/Pager Division Headquarters, and Southwestern Bell Mobile
(Cellular/Pager) Systems Headquarters.
Mr. Welch has received numerous awards and recognition for his work in
Artificial Intelligence-both in military and academic circles-and has applied
this experience to creating technology solutions that are both intelligent and
flexible in nature. The technology behind the MultiCom system has received
recognition from several telecom trade magazines ("Computer Telephony" and
"Telephony" magazines). Mr. Welch won first place in the International Science
competition for Artificial Intelligence at just 17 years of age. He attended the
University of Mississippi and was the first freshman in the history of the
college to be admitted into the artificial intelligence Ph. D. Program.
RAY ZIMPHER MANAGER, SOFTWARE DEVELOPMENT
Mr. Zimpher is responsible for maintaining and creating enhancements to
the MultiCom system and is the Project Manager for all MultiCom systems. He is a
widely experienced data processing engineer with a solid background in analysis,
design and problem solving on mainframe, mini and PC based systems. Prior to
joining IPVoice, Mr. Zimpher had worked on software solutions for
Deloitte-Touche, Trinary Systems, IGT, Inc., and others.
Mr. Zimpher has worked with the MultiCom technology for over two years
and thus is highly qualified to maintain and enhance the MultiCom system.
<PAGE>
Mr. Zimpher brings over 27 years of system development experience in the
Information Technology industry and has been witness to and participated in many
technological advances with computers and design methodologies. Mr. Zimpher is a
graduate of the US Army College.
PRINCIPAL SHAREHOLDERS
Prior to this offering, the Company had 10,400,000 shares of its Common
Stock issued and outstanding. The following table sets forth, as of September
15, 1998, the beneficial ownership of the Company's Common Stock (i) by the only
persons who are known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each director of the Company; and (iii) by all
directors and officers as a group.
<TABLE>
Name Number of Shares Percentage Owned Percentage Owned
Owned Prior to Offering Before Offering After Offering
<S> <C> <C> <C>
Barbara S. Will 3,000,000 29% 26%
Condor Worldwide Ltd. 3,000,000 29% 26%
Anthony K. Welch 3,000,000 29% 26%
- --------------------------------------------------------------------------------------------
Officers and Directors 6,000,000 58% 53%
as a group
</TABLE>
USE OF PROCEEDS
The Company plans to utilize the proceeds of this Offering for working
capital and for further research and development necessary to complete its
TrueConnect product and to start deployment.
DESCRIPTION OF SECURITIES
Shares The Company is hereby offering a "best efforts, no minimum basis" up to
1,000,000 shares of Common Stock at $.50 per Share.
Common Stock
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefor when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid and nonassessable, and all shares to be sold and issued as
contemplated hereby, will be validly authorized and issued, fully paid and
nonassessable. The Board of Directors is authorized to issue additional shares
of Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and Bylaws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the State of
Nevada for a more complete description concerning the rights and liabilities of
stockholders.
Prior to this offering, there has been a limited market for the Common
Stock of the Company, and no predictions can be made of the effect, if any, that
market sales of shares or the availability of shares for sale will have on the
market price prevailing from time to time. Nevertheless, sales of significant
amounts
<PAGE>
of the Common Stock of the Company in the public market may adversely affect
prevailing market prices, and may impair the Company's ability to raise capital
at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of directors can elect all the
directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.
Preferred Stock
The authorized capital stock of the Company also consists of 1,000,000
shares of Preferred Stock, $.001 par value, none of which are issued.
PLAN OF DISTRIBUTION
The Company has no underwriter for this Offering. The Offering is
therefore a self-underwriting. The Shares will be offered by the Company at the
offering price of $.50 per share.
Price of the Offering.
There is no, and never has been, a market for the Shares, and there is
no guaranty that a market will ever develop for the Company's shares.
Consequently, the offering price has been determined by the Company. Among other
factors considered in such determination were estimates of business potential
for the Company, the Company's financial condition, an assessment of the
Company's management and the general condition of the securities market at the
time of this Offering. However, such price does not necessarily bear any
relationship to the assets, income or net worth of the Company.
The offering price should not be considered an indication of the actual
value of the Shares. Such price is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Shares can
be resold at the Offering Price.
There can be no assurance that an active trading market will develop
upon completion of this Offering, or if such market develops, that it will
continue. Consequently, purchasers of the Shares offered hereby may not find a
ready market for Shares.
CAUTIONARY WARNING
THE COMPANY'S BUSINESS PLAN AND THE COMPANY'S FINANCIAL STATEMENTS AND
PROJECTIONS ARE FORWARD LOOKING. STATEMENT AND ACTUAL RESULTS COULD MATERIALLY
DIFFER FROM THE PROJECTIONS. AS SUCH, NO INVESTOR SHOULD RELY ON SUCH
INFORMATION IN MAKING HIS INVESTMENT.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to making an
investment in the Company, that he has had the opportunity to inspect the books
and records of the Company and that he has had the opportunity to make inquiries
to the officers and directors of the Company and further that he has been
provided full access to such information.
(The Remainder of this page intentionally left blank)
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
------------------------------------
Suitability
Shares will be offered and sold pursuant an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Shares to
that Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,000,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
<PAGE>
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8) An entity in which all of the equity owners are accredited
investors (as defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income form long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
non-accredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to
investments in limited partnerships either alone or with its Purchaser
Representative, if any; and
(2) The Investor has been provided access to all relevant documents it
desires or needs; and
(3)The Investor is aware of its limited ability to sell and/or transfer
its Shares in the Company; and
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE IF A
POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Shares, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Shares will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Shares. In addition, the fiduciary must consider
whether the investment in Shares will satisfy the diversification requirement of
Section 404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of
the offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Shares by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
<PAGE>
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Shares for its own account and for the purpose of
investment only, not with a view to, or in accordance with, the distribution of
sale of the Shares and that it will not sell, pledge, assign or transfer or
offer to sell, pledge, assign or transfer any of its Shares without an effective
registration statement under the Securities Act, or an exemption therefrom
(including an exemption under Regulation D, Section 504) and an opinion of
counsel acceptable to the Company that registration under the Securities Act is
not required and that the transaction complies with all other applicable Federal
and state securities or Blue Sky laws.
<PAGE>
IPVoice Communications, Inc.
(A Nevada corporation)
==================
SUBSCRIPTION DATA SHEET
==================
Name of Subscriber
(Offeree):_______________________________________________________
Address of Residence
(if natural person):_____________________________________________
- -----------------------------------------------------------------
Address of
Business:________________________________________________________
- -----------------------------------------------------------------
Subscriber's
Telephone No.:___________________________________________________
Subscriber's Social
Security No. or
Tax I.D. No.:____________________________________________________
Preferred Address for
receiving mail:
( ) Residence
( ) Business
( ) Other, if any: _____________________________________________
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Date of Subscription:____________________________________________
Amount of
Subscription: $_________________________________________________
<PAGE>
SUBSCRIPTION AGREEMENT AND INVESTMENT
REPRESENTATION OF INVESTORS
IPVoice Communications, Inc.
7804 Yorkshire Drive
Castle Rock, CO 80104
Gentlemen:
1. Subject to the terms and conditions hereof, the undersigned,
intending to be legally bound, hereby irrevocably subscribes for and agrees to
accept and subscribe to _________ shares of Regulation D, Section 504 common
stock of IPVoice Communications, Inc., a Nevada corporation (the Company), for a
total consideration of $_________, the receipt and sufficiency of which is
hereby acknowledged.
2. In order to induce the Company to accept the subscription made
hereby, the undersigned hereby represents and warrants to the Company, and each
other person who acquires or has acquired the Shares, as follows :
(a) The undersigned, if an individual (i) has reached the age
of majority in the state in which he resides and (ii) is a bona fide resident
and domiciliary (not a temporary or transient resident) of the state set forth
beneath his signature below.
(b) The undersigned has the financial ability to bear the
economic risk of an investment in the Shares has adequate means of providing for
his current needs and personal contingencies, has no need for liquidity in such
investment, and could afford a complete loss of such investment. The
undersigned's overall commitment to investments that are not readily marketable
is not disproportionate to his net worth, and his investment in the Company will
not cause such overall commitment to become excessive.
(c) The undersigned meets at least one of the following
criteria:
(i) the undersigned is a natural person whose individual
net worth or joint net worth with his spouse, at the
time of his purchase, exceeds $1,000,000 (ONE MILLION
DOLLARS); or
(ii) the undersigned is a natural person and had an
individual income in excess of $200,000 (TWO-HUNDRED
THOUSAND DOLLARS) in each of the two most recent years,
or jointly with his spouse in excess of $300,000
(THREE-HUNDRED THOUSAND DOLLARS) in each of those
years, and who reasonably expects to achieve at least
the same income level in the current year; or
(iii)qualifies as an accredited investor under Regulation D
of the Securities Act of 1933 (the "Act").
(d) The investment is one in which I am purchasing for myself
and not for others, the investment amount does not exceed 10% of my net worth
and I have the capability to understand the investment and the risk.
(e) The undersigned has been given a full opportunity to ask
questions of and to receive answers from the Company concerning the terms and
conditions of the offering and the business of the Company, and to obtain
additional information necessary to verify the accuracy of the information given
him or to obtain such other information as is desired in order to evaluate an
investment in the Shares. All such questions have been answered to the full
satisfaction of the undersigned.
(f) In making his decision to purchase the Shares herein
subscribed for, the undersigned has relied solely upon independent
investigations made by him. He has received no representation or warranty from
the Company or from a broker-dealer, if any, or any of the affiliates, employees
or agents of either. In addition, he is not subscribing pursuant hereto for any
Shares as a result of or subsequent to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
<PAGE>
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees, including the undersigned, had been invited as a result of,
subsequent to, or pursuant to any of the foregoing.
(g) The undersigned understands that the Shares have not been
registered under the Act in reliance upon specific exemptions from registration
thereunder, and he agrees that his Shares may not be sold, offered for sale,
transferred, pledged, hypothecated, or otherwise disposed of except in
compliance with the Act and applicable state securities laws, which restrictions
require the approval of the Company for the transfer of any Shares (which
approval, except under limited circumstances, may be withheld by the Company in
its sole discretion). The undersigned has been advised that the Company has no
obligations to cause the Shares to be registered under the Act or to comply with
any exemption under the Act, including but not limited to that set forth in Rule
144 promulgated under the Act, which would permit the Shares to be sold by the
undersigned. The undersigned understands that it is not anticipated that there
will be any market for resale of the Shares, and that it may not be possible for
the undersigned to liquidate an investment in the Shares. The undersigned
understands the legal consequences of the foregoing to mean that he must bear
the economic risk of his investment in the Shares. He understands that any
instruments representing the Shares may bear legends restricting the transfer
thereof.
3. To the extent I have the right to rescind my purchase of the Shares,
which right of recission is hereby offered, I waive and relinquish such rights
and agree to accept certificate(s) evidencing such Shares.
4. This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Nevada.
5. All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties hereto may require.
6. The shares referred to herein may be sold to the subscriber in a
transaction exempt under Section 517.061 of the Florida Securities Act. The
shares have not been registered under said act in the State of Florida. In
addition, if sales are made to five or more persons in the State of Florida, any
sale in the State of Florida is voidable by the purchaser within three (3) days
after the first tender of consideration is made by such purchaser to the issuer,
an agent of the issuer, or an escrow agent or within three (3) days after the
availability of that privilege is communicated to such purchaser, whichever
occurs later.
IN WITNESS WHEREOF, the undersigned has executed and agrees to be bound
by this Subscription Agreement and Investment Representation on the date written
below as the Date of Subscription:
(TO BE USED FOR INDIVIDUAL(S))
- ---------------------------- -------------------------------
Print Name of Individual Signature of Individual
- ----------------------------- -------------------------------
State of Residence Date of Subscription
<PAGE>
(TO BE USED FOR PARTNERSHIPS, CORPORATIONS,
TRUSTS OR OTHER ENTITIES)
_______________________________ By:______________________________
Print Name of Partnership Signature of Authorized
Corporation - Trust - Entity Representative
- ------------------------------- ---------------------------------
Capacity of Authorized Print Name of Authorized
Representative Representative
- ------------------------------- --------------------------------
Print Jurisdiction of Date of Subscription
Incorporation or Organization
EXHIBIT 4.4
-------------------------------------------------------------------------
OFFERING MEMORANDUM
-------------------------------------------------------------------------
IPVoice Communications, Inc.
(A Nevada Corporation)
Offering Memorandum Dated December 1, 1998
1,000,000 Shares
IPVoice Communications, Inc., a Nevada corporation, f/k/a Nova
Enterprises, Inc., (the "Company"), is offering on a "best efforts, no minimum
basis" up to a maximum of 1,000,000 shares of common stock ("Shares"), $.001 par
value, at $.15 per share. Since there is no minimum, no proceeds will be held in
an escrow account and all funds will be immediately available to the Company.
The Shares are being sold by the Company's Officers and Directors and
no commissions will be paid to them in connection with the Offering. However,
participating NASD registered broker/dealers, if any, shall receive a maximum of
10% sales commissions on all shares sold through their efforts.
The Company's Common Stock is currently listed on the Over the Counter
Electronic Bulletin Board. There can be no assurances that an active trading
market for the Company's stock exists, or will continue if it currently exists.
The price of the Shares offered hereby was arbitrarily determined by
the Company and does not bear any relationship to the Company's assets, book
value, net worth, results of operations or any other recognized criteria of
value. For additional information regarding the factors considered in
determining the offering price of the Shares, see "Risk Factors - Arbitrary
Offering Price", "Description of Securities".
The Company does not presently file reports or other information with
the Securities and Exchange Commission ("Commission"). However, following
completion of this Offering, the Company intends to furnish its security holders
with annual reports containing audited financial statements and such interim
reports in each case as it may determine to furnish or as may be required by
law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
This offering involves special risks concerning the Company (see "Risk
Factors"). Investors should carefully review the entire Memorandum and should
not invest any funds in this Offering unless they can afford to lose their
entire investment. In making an investment decision, investors must rely on
their own examination of the issuer and the terms of the Offering, including the
merit and risks involved.
REGULATION D OFFERING
THIS OFFERING IS BEING MADE PURSUANT TO THE EXEMPTIONS AFFORDED BY SECTIONS
4(2) OR 3(b) OF SECURITIES ACT OF 1933 AND RULE 504 OF REGULATION D PROMULGATED
<PAGE>
THEREUNDER AND THE STATE SMALL CORPORATE OFFERING REGISTRATION PROVISION.
PURSUANT TO RULE 504, THE SHARES SOLD HEREBY WILL NOT BE SUBJECT TO ANY
LIMITATIONS ON RESALE THEREOF UNDER FEDERAL LAW. THE SHARES MAY, HOWEVER, BE
SUBJECT TO LIMITATIONS ON THE OFFER AND SALE AND THE RESALE OF THE SHARES
IMPOSED BY THE BLUE SKY LAWS OF INDIVIDUAL STATES. IN ADDITION, THE COMPANY
INTENDS TO FILE THE REQUIRED DOCUMENTS IN CERTAIN OTHER STATES IDENTIFIED BY
MANAGEMENT AS HAVING POSSIBLE INVESTOR INTEREST AND USE ITS BEST EFFORTS TO
QUALIFY THE SHARES FOR SECONDARY TRADING IN SUCH STATES, THOUGH NO ASSURANCE CAN
BE GIVEN THAT IT WILL BE ABLE TO QUALIFY THE SHARES FOR SECONDARY TRADING IN ANY
SUCH STATES IN WHICH IT SUBMITS SUCH APPLICATIONS AND DOCUMENTS. AN INABILITY TO
QUALIFY THE SHARES FOR SECONDARY TRADING WILL CREATE SUBSTANTIAL RESTRICTIONS ON
THE TRANSFERABILITY OF SUCH SHARES WHICH MAY NEGATE THE BENEFIT OF THE EXEMPTION
PROVIDED BY RULE 504 OF REGULATION D. THE COMPANY WILL USE ITS BEST EFFORTS TO
CAUSE THE SHARES TO BE LISTED ON THE ELECTRONIC BULLETIN BOARD OPERATED BY THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AS A MARKET IN WHICH THEY MAY
BE TRADED. THERE IS NO ASSURANCE THAT SUCH LISTING WILL BE OBTAINED OR THAT IF A
LISTING IS OBTAINED THAT ANY MARKET FOR THE SHARES WILL DEVELOP, OR IF
DEVELOPED, THAT IT WILL BE SUSTAINED.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES
NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES IT PASS UPON
THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT OF AN
ALABAMA PURCHASER WHO IS NOT AN ACCREDIT INVESTOR MAY NOT EXCEED TWENTY (20%)
PER CENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE,
FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA SECURITIES
ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO ARIZONA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ARIZONA SECURITIES
ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION
44-184(1) OF SUCH ACT. THESE SECURITIES MAY NOT BE SOLD WITHOUT REGISTRATION
UNDER SUCH ACT OR EXEMPTION THEREFROM.
ARIZONA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM ANNUAL GROSS INCOME OF SEVENTY FIVE THOUSAND
(475,000) DOLLARS; OR (iii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE
THOUSAND ($225,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
SECTION 14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE
SECURITIES ACT OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION
HAS PASSED UPON THE VALUE OF THESE SECURITIES, MADE ANY RECOMMENDATIONS AS TO
THEIR PURCHASE, APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT IS
UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR WITHOUT THE PRIOR WRITTEN
<PAGE>
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT
AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER
IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. THE
SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN
ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE
WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER, WHICHEVER OCCURS LATER.
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA SECURITIES ACT
OF 1973, AS AMENDED. IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION SET FORTH
IN SECTION 9(M) OF SUCH ACT AND THE SECURITIES CANNOT BE SOLD OR TRANSFERRED
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR IN A TRANSACTION WHICH IS
OTHERWISE IN COMPLIANCE WITH SAID ACT.
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
ANYTHING TOT HE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET
WORTH.
<PAGE>
NOTICE TO INDIANA RESIDENTS
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A
NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) EQUAL TO AT LEAST
THREE (3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN N O EVENT LESS THAN SEVENTY
FIVE THOUSAND (475,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF HOME, HOME
FURNISHING AND AUTOMOBILES OF TOW (2) TIMES HIS INVESTMENT BUT IN NOT EVENT LESS
THAN THIRTY THOUSAND ($30,000) DOLLARS AND A GROSS INCOME OF THIRTY THOUSAND
($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTH
THOUSAND ($40,000) DOLLARS (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES)
AND A MINIMUM ANNUAL GROSS INCOME OF FORTH THOUSAND ($40,000) DOLLARS, OR (ii) A
NET WORTH OF AT LEAST ONE HUNDRED TWENTY FIVE THOUSAND ($125,000) DOLLARS AS
COMPUTED ABOVE.
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE,
FURNISHINGS THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT)
HAVE BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREIN.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING,THE INVESTMENT BY A NON-
ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) OF THE INVESTOR'S NET WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION
1052(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUES. THESE SECURITIES MAY BE
DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL
THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
<PAGE>
NOTICE TO MARYLAND RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND SECURITIES
ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION
11-602(9) OF SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY NOT BE
REOFFERED FOR SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A SECURITY, OR
IN A TRANSACTION EXEMPT UNDER SUCH ACT.
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH OF
AT LEAST FIFTY THOUSAND ($50,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAKE YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THAT ACT OR
EXEMPTION THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED
WRITTEN STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX
(6) MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER
OCCURS FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENT
THEREAFTER.
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE
MINNESOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION. NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NO HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
<PAGE>
THERE IS NOT ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT
BE ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF
THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN
INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY
STANDARDS AND MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT.
ADDITIONALLY, ALL PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET
WORTH OF AT LEAST THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000)
DOLLARS. THESE SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR
IN A TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN
A TRANSACTION EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(b), MISSOURI
UNIFORM SECURITIES ACT (RMSO 1969).
THE SHARES HAVE TO BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
MISSOURI, UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD
IN THE STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER
SAID ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A
MINIMUM ANNUAL INCOME OF THIRTY THOUSAND ($330,000) DOLLARS AND A NET WORTH OF
AT LEAST THIRTY THOUSAND ($30,000)(DOLLARS, EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING OFFERED
HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS
AFTER DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH.
<PAGE>
NOTICE TO NEBRASKA RESIDENTS
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA
SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THE ACT
OR EXEMPTION THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS
EITHER (i) A NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) OF
TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS OR (iii) A NET WORTH (EXCLUSIVE OF
HOME, HOME FURNISHINGS AND AUTOMOBILES OF ONE HUNDRED TWENTY FIVE THOUSAND
($125,000) DOLLARS AND FIFTY THOUSAND ($50,000 DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES TO CONSTITUTE
APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE
DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES COMMISSION OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS CRIMINAL OFFENCE.
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL
PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS
NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
NORTH CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATOR
<PAGE>
NEITHER RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE
ADMINISTRATOR PASSED ON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED
HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THESE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES ACT. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF
1933 AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF COUNSEL TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-ACCREDITS
INVESTOR SHALL NOT EXCEED THEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE BEEN REGISTERED WITH THE DIRECTOR OF THE
STATE OF OREGON UNDER THE PROVISIONS OF OAR 441-65-240. THE INVESTOR IS ADVISED
THAT THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION STATEMENT
AND HAS NOT REVIEWED THIS DOCUMENTS SINCE THIS DOCUMENT IS NOT REQUIRED TO BE
FILED WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE COMPANY
CREATING THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND
RISKS INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN THE
COMMONWEALTH OF PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE
PENNSYLVANIA SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE,
AND RECEIVE A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY
LIABILITY, WITHIN TWO (20) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE
OF THIS WITHDRAWAL RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY
PERSON WHO WISHES TO EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVEN
NOTICE BY LETTER OR TELEGRAM SENT TO POSTMARKED BEFORE THE END OF THE SECOND
BUSINESS DAY AFTER EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED
ORALLY, WRITTEN CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS
WHO IS A PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF
TWELVE (12) MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST
HAVE EITHER (i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS
<PAGE>
(EXCLUDING HOME, HOME FURNISHING AND AUTOMOBILES) AND A MINIMUM ANNUAL GROSS
INCOME OF THIRTY THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (AS COMPUTED ABOVE0, AND MAY NOT INVEST
MORE THAN TEN (10%) PER CENT OF THEIR NET WORTH (EXCLUSIVE OF THE SUBSCRIBER'S
HOME, HOME FURNISHINGS AND AUTOMOBILES).
NOTICE TO SOUTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
SOUTH CAROLINA UNIFORM SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO
THESE SECURITIES HAS NOT BEEN FILED WITH THE SOUTH CAROLINA SECURITIES
COMMISSIONER. THE COMMISSIONER DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY
SECURITIES, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47.31 OF THE SOUTH
DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF
LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT
LEAST SIXTY THOUSAND ($60,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE THOUSAND ($225,000) DOLLARS
(AS COMPUTED ABOVE).
NOTICE OF TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE OF TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE AND MAY NOT
BE REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS MAY PLACE SUCH INVESTOR
AND THE ISSUER IN VIOLATION OF THE TEXAS SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
<PAGE>
NOTICE TO UTAH RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UTAH SECURITIES ACT AND
MAY NOT NE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON SECURITIES
ACT AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON HAS NOT
REVIEWED THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT BE SOLD
WITHOUT REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY
ITSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE
UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
OFFERING SUMMARY
The following summary information is qualified in its entirety by the
detailed information appearing elsewhere in this Memorandum.
IPVoice Communications, Inc. was founded in September 1997 to provide a
vehicle for key software technologies and a Research and Development laboratory
for the emerging Voice over the Internet market. IPVoice core software
technologies require little additional development to produce market viability.
New technologies presently under development such as TrueConnect may require
additional financial support to bring them to the marketplace.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK. ONLY THOSE PERSONS ABLE TO LOSE THEIR ENTIRE INVESTMENT SHOULD PURCHASE
THESE SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION,
SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER MATTERS
REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS.
Risk Factors Relating to the Business of the Company
Start-Up Development Stage Company The Company has had limited revenues
from operations since its organization and is a "start-up" or "development
stage" company. No assurances can be given that the Company will be able to
compete with other companies in its industry. The purchases of the securities
offered hereby must be regarded as the placing of funds at a high risk in a new
or "start-up" venture with all the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject. See "Use of Proceeds" and "The
Company."
No Assurance of Profitability To date, the Company has not generated
significant revenues from operations. The Company can not ensure any significant
revenues in the near future. The Company's ability to successfully implement its
business plan is dependent on the completion of this Offering. There can be no
assurance that the Company will be able to develop into a successful or
profitable business.
No Assurance of Payment of Dividends. No assurances can be made that
the future operations of the Company will result in additional revenues or will
be profitable. Should the operations of the Company become profitable, it is
likely that the Company would retain much or all of its earnings in order to
finance future growth and expansion. Therefore, the Company does not presently
intend to pay dividends, and it is not likely that any dividends will be paid ln
the foreseeable future.
Possible Need for Additional Financing. The Company intends to fund its
operations and other capital needs for the next 12 months substantially from the
proceeds of this Offering, but there can be no assurance that such funds will be
sufficient for these purposes. The Company may require additional amounts of
capital for its future expansion, operating costs and working capital. The
Company has made no formal arrangements to obtain future additional
9
<PAGE>
financing, and if required, there can be no assurance that such financing will
be available, or that such financing will be available on acceptable terms. See
"Use of Proceeds."
Dependence on Management The Company's success is principally dependent
on its current management personnel for the operation of its business.
Broad Discretion in Application of Proceeds. The management of the
Company has broad discretion to adjust the application and allocation of the net
proceeds of this offering, in order to address changed circumstances and
opportunities. As a result of the foregoing, the success of the Company will be
substantially dependent upon the discretion and judgment of the management of
the Company with respect to the application and allocation of the net proceeds
hereof. Pending use of such proceeds, the net proceeds of this offering will be
invested by the Company in temporary, short-term interest-bearing obligations.
See "Use of Proceeds."
Arbitrary Offering Price. The price to the public of the Shares offered
hereby has been arbitrarily determined by the Company and bears no relationship
to the Company's earnings, book value or any other recognized criteria of value.
Immediate and Substantial Dilution. An investor in this offering will
experience immediate and substantial dilution.
Limited Market for Securities of the Company. A limited market has
existed for the securities being offered hereby and no assurance can be given
that a market will develop subsequent to this Offering.
No Escrow of Investors' Funds. This offering is being made on a "best
efforts, no minimum basis" As such, all the funds from this Offering will be
immediately available to the Company.
No Assurance of Acquisition While it is the Company's intent to acquire
either all of the shares or assets of other industry related companies in
addition to expanding its own operations, there is no assurance that the Company
will be able to achieve this goal. That event could cause a materially adverse
affect on the future of the Company.
Forward-Looking Statements This Memorandum includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, included or incorporated
by reference in this Memorandum which address activities, events or developments
which the Company expects or anticipates will or may occur in the future,
including such things as capital expenditures (including the amount and nature
thereof), expected sales revenues, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate under the circumstances. However, whether actual
results and developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, including the
risk factors discussed in this Memorandum, general economic, market or business
conditions, the business opportunities (or lack thereof) that may be presented
to and pursued by the Company, changes in laws or regulations, and other
factors, some of which are beyond the control of the Company. Consequently, all
of the forward-looking statements made in this Memorandum are qualified by these
cautionary statements and there can be no assurance that the actual results or
developments anticipated by the Company will be realized or, even if
substantially realized, that they will have the expected consequences to or
effects on the Company or its business or operations. The Company assumes no
obligation to update any such forward-looking statements.
THE COMPANY
IPVoice Communications, Inc., a Nevada corporation, and its subsidiary
IPVoice Communications, Inc., a Delaware corporation owned 100% by IPVoice
Communications, Inc., a Nevada corporation are both hereinafter referred to as
the "Company."
The Telecommunications "Long Distance" Market is now over twenty years
old and has produced many successful and profitable companies such as MCI,
Sprint, AT&T, World Com and others. They got there by building, installing,
leasing and sharing satellite, fiber-optic and cable systems to bring your calls
<PAGE>
from one location to another. These carriers have invested billions of dollars
in equipment such as large and complex switching centers and other systems to
run these networks.
During the past decade, the growth of the Internet has been truly
explosive. In 1986, approximately five thousand computers were connected via the
Internet. By 1991, the number of computers on the Internet had climbed to a
staggering 500,000. Today, a phenomenal ten million computers are connected to
the Internet with industry analysts predicting no signs of a slow-down. In fact,
these analysts have predicted that more than one hundred million computers will
be connected to the Internet by the end of 1999, producing revenues of about
$560m through activities entirely to the Internet.
The Internet is fundamentally changing telecommunications just as it is
changing virtually every other aspect of business and industry. In the past,
telephone networks and the Internet networks that primarily handled data existed
side by side. Now they have reached critical mass coming together to deliver a
whole new range of powerful and economical new communication options. The
personal computer is designed to become the communication device of the future
handling everything from answering and making calls to transmitting and
receiving data, fax, video and other media. Products and services that address
these existing changes and needs are referred to as "Internet Telephony"
products or "IP" products.
IPVoice ("IPV" or "the Company"), is nearing completion of its unique,
state-of-the-art software and hardware solutions to bridge the gap between the
telephone and the Internet. Deregulation has opened the door for many
development-stage companies to provide new and exciting products to take
advantage of this exciting technological era. IPVoice intends to fully exploit
this opportunity with its innovative and highly advanced Internet telephony
products and associated software programs.
IPVoice plans to deliver communications products to allow companies and
individuals to route their phone calls, fax, other data, video signals and voice
mail across the Internet at substantial cost savings without sacrificing
quality. IP telephony has been heralded as the new foundation for a new class of
telecommunication applications. These solutions will be as common as your
desktop phone. Right now, there is tremendous opportunity for young,
technologically competent companies to take full advantage of this new
communications era by providing IP Telephony products.
IPVoice offers several unique and proprietary products for use in
IPVoice Telephony. The Company's premier product is an Internet Gateway named
TrueConnect. TrueConnect is nearing completion following three years of
extensive development on MultiCom. TrueConnect provides a gateway for bridging
the public telephone system with the Internet. With TrueConnect, users will be
able to conduct real-time, full duplex, high quality two-way voice
communications over the Internet for dramatic savings as compared to standard
long distance telecommunications services. Both voice and data can be utilized
with TrueConnect, thus allowing businesses to create "virtual offices" anywhere
in the world by enabling off-site or traveling employees to connect to the main
office using a lap-top computer and an Internet connection. To support the
TrueConnect product, the Company has completed several proprietary products that
will allow the Company and its distributors to offer a total solution in
Internet Telephony. These products include MultiCom, a complete order entry,
billing, customer service, agent management and switching network management
system for telecommunications businesses worldwide. Key features of this
technology are stability, industry proven usability, platform independence, the
compatibility for remote access worldwide and the ability to be used by
personnel with a wide variety of skill levels. MultiCom offers additional
distinct components to allow efficient tracking in real-time of
telecommunication functions such as billing and agent activity, providing
unprecedented management control. MultiCom BillMaker is a complete invoicing
system that supports multiple billing cycles, multiple customer types and up to
ten thousand rate tables across each product type, time-of-day billing, and
weekend and holiday sensitive rates. This invoicing system is capable of
creating customer, agent or carrier billing. Each invoice may be custom-labeled
and is automatically transmitted directly to the user's printer. No outside
printing service or software is required to produce telecom-grade professional
invoices. MultiCom's order entry module is a complete order-entry system in
real-time. When a new order is added or an existing order is modified in some
way, MultiCom performs the change in real-time. The customer's services are
immediately updated and activated. It is MultiCom's real-time design paradigm
that has made this immediate response feature possible. With MultiCom, all
changes are reflected instantly across the network -something competitors have
not thus far been able to provide. Another key feature of MultiCom is its open
architecture data bridge, an open architecture based software
<PAGE>
system that allows MultiCom to communicate with a wide variety of switching
platforms and telecommunications systems. Key features of this technology are:
*Creates a seamless integration of heterogeneous switching networks,
*Compatible with both Progress and Microsoft-based databases,
*Provides real-time connections to Harris-based ICB networks and Summa Four
digital switches,
*Runs independently of critical switch-control software components and has
"zero-impact" footprint of existing network installations, and;
*Allows existing installations on open systems approach to information
management via MultiCom.
IPVoice has also developed AuditRite, a software module add-on for the
MultiCom system that allows MultiCom to read and interpret carrier-supplied
data-tapes. The AuditRite system is a powerful tool for analyzing call patterns
and finding threats to profits or errors in a vendor's billing.
The Company has also developed 4Com for Summa Four switches and
ICBConnect for Harris switches. 4Com is a complete Summa Four switch control
software environment supporting debit, routing, Toll-Free, real-time least cost
routing and call rating. It is fully integrated and compatible with the MultiCom
system providing real-time switch network response to new orders or changes to
existing configurations.
The ICBConnect platform provides a complete International callback
solution for Harris-based switching networks. When combined with the MultiCom
data bridge and the MultiCom data management system, a complete full-featured
ICB platform emerges for the Harris digital switch.
All of the Company's products are available for minimal capital
investment of between $5,000- $100,000. IPVoice products utilize specially
developed and proprietary software that will provide ongoing revenues from the
calls made, whether voice or data. This situation is potentially very lucrative.
The significant benefit of these products is that they provide the effective
means to combine IP Telephony solutions and products with a mature, real-time
billing system for ease of use, affordability and quality. Most IP Telephony
systems available in the market place today have underdeveloped and ineffective
billing systems. IPVoice can provide the answer to these outdated systems by
providing solutions offering real- time remote access and manageability of
information. The Company knows of no other system currently available which
offers the advanced features and benefits of IPVoice products.
The Company is in a position to rapidly deploy its products into the
marketplace by an established independent representative and distributor base,
under the direction of the Company's President, Ms. Barbara Will. The Company's
marketing efforts will be supported by its close association with key
organizations and individuals, a result of Ms. Will's prior experience in a
senior capacity with MCI. These contacts will prove invaluable during marketing
and sales activities. With Ms. Will's contacts, and the sales team already in
place, the Company believes it can quickly sell its products to businesses and
other telecommunication companies in both the US and abroad. The Company's sales
efforts will be supported by trade shows targeting the telecommunication
industry and large businesses, professional articles, peerreviewed studies,
direct calls and a comprehensive marketing campaign. After purchasing the
products from the Company, IPVoice customers will have the option of using the
network services offered by IPVoice at extremely competitive rates. The Company
believes it is well placed to capitalize on this very large and profitable
opportunity.
IPVoice products were designed and produced by the Company at its
research and development office suite in Castle Rock, Colorado. IPVoice products
are made from company-designed software and hardware products purchased from
major suppliers, many of whom are interested in future joint ventures with the
Company, such as Natural Microsystems, Inc. The Company's goal is to stay ahead
of the competition, and plans to aggressively continue its program of product
enhancement and development.
<PAGE>
The Company has begun to take steps to protect its position and
technology by trademark and copyright protection, software security systems and
nondisclosure/non-compete agreements with key executives, management and
engineers.
MANAGEMENT
The following sets forth the names of the Company's officers and
directors:
BARBARA WILL PRESIDENT, CHIEF OPERATING OFFICER AND CHAIRPERSON
Barbara Will has over 20 years of experience in all areas of
telecommunications, domestic and international. She spent the last 11 years with
MCI. Her broad spectrum of involvement included Major Accounts, National
Accounts, Hospitality, and Carriers/Resellers who provided MCI with revenues of
between $35 to $130 million. Ms. Will was responsible for signing some of the
largest contracts with a carrier/reseller in MCI's history. Her vast industry
experience encompasses, but is not limited to, international and international
private line; International Toll-Free; data; DSO, DSI, DSC, OC3; dedicated in
and outbound; One-Plus; calling and debit cards; Operator Assistance; Internet;
Enhanced Services; and Enhanced Network.
During her time at MCI she received numerous awards for outstanding
performance and was recognized as having successfully obtained one of the
largest private-line contracts in the history of MCI. Ms. Will attended Colorado
State University, and graduated with a Communications and Business
Administration degree.
ANTHONY K. WELCH EXECUTIVE VICE PRESIDENT OF R&D AND DIRECTOR
Mr. Welch is the original designer of the MultiCom, AuditRite, and True
Connect platforms and has served as Special Consultant to various
telecommunications organizations. Mr. Welch is the driving force behind the
IPVoice technologies and has been instrumental in providing critical technology
solutions. He has been a key player in creating viable proposals and business
strategies for technology solutions and joint ventures. He has provided key
technology and management solutions to many telecommunications companies. Mr.
Welch is responsible for maintaining the Company's superior position in the
industry by producing continuous innovations in IPVoice's technology.
Mr. Welch has served as Special Consultant and Project Design Leader
for such organizations as Wal-Mart International (US HQ and Mexico City Branch),
Nation's Bank CS Headquarters, Frito-Lay Worldwide Headquarters, NEC America
Mobile Radio/Cellular/Pager Division Headquarters, and Southwestern Bell Mobile
(Cellular/Pager) Systems Headquarters.
Mr. Welch has received numerous awards and recognition for his work in
Artificial Intelligence-both in military and academic circles-and has applied
this experience to creating technology solutions that are both intelligent and
flexible in nature. The technology behind the MultiCom system has received
recognition from several telecom trade magazines ("Computer Telephony" and
"Telephony" magazines). Mr. Welch won first place in the International Science
competition for Artificial Intelligence at just 17 years of age. He attended the
University of Mississippi and was the first freshman in the history of the
college to be admitted into the artificial intelligence Ph. D. Program.
MICHAEL MCKIM VICE PRESIDENT OF RESEARCH & DEVELOPMENT
Michael McKim is responsible for designing and developing the interface
between the telephony hardware and the TrueConnect gateway software. Mr. McKim
will also be responsible for the technical pre- sales support and post-sale
installation support. Mr. McKim has a master degree in electrical engineering
and has been involved with automation for over 12 years with extensive
experience in developing business applications.
<PAGE>
CONSULTANTS
RAY ZIMPHER SOFTWARE DEVELOPMENT
Mr. Zimpher is responsible for maintaining and creating enhancements to
the MultiCom system and is the Project Manager for all MultiCom systems. He is a
widely experienced data processing engineer with a solid background in analysis,
design and problem solving on mainframe, mini and PC based systems. Prior to
joining IPVoice, Mr. Zimpher had worked on software solutions for
Deloitte-Touche, Trinary Systems, IGT, Inc., and others.
Mr. Zimpher has worked with the MultiCom technology for over two years
and thus is highly qualified to maintain and enhance the MultiCom system.
Mr. Zimpher brings over 27 years of system development experience in the
Information Technology industry and has been witness to and participated in many
technological advances with computers and design methodologies. Mr. Zimpher is a
graduate of the US Army College.
PRINCIPAL SHAREHOLDERS
Prior to this offering, the Company had 11,897,333 shares of its Common
Stock issued and outstanding. The following table sets forth, as of December 1,
1998, the beneficial ownership of the Company's Common Stock (i) by the only
persons who are known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each director of the Company; and (iii) by all
directors and officers as a group.
<TABLE>
Name Number of Shares Percentage Owned Percentage Owned
Owned Prior to Offering Before Offering After Offering
<S> <C> <C> <C>
Barbara S. Will 3,000,000 29% 26%
Condor Worldwide Ltd. 3,000,000 29% 26%
Anthony K. Welch 3,000,000 29% 26%
- --------------------------------------------------------------------------------------------
Officers and Directors 6,000,000 58% 53%
as a group
</TABLE>
USE OF PROCEEDS
The Company plans to utilize the proceeds of this Offering for working
capital and for further research and development necessary to complete its
TrueConnect product and to start deployment.
DESCRIPTION OF SECURITIES
Shares The Company is hereby offering a "best efforts, no minimum basis" up to
1,000,000 shares of Common Stock at $.15 per Share.
Common Stock
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefor when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
<PAGE>
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid and nonassessable, and all shares to be sold and issued as
contemplated hereby, will be validly authorized and issued, fully paid and
nonassessable. The Board of Directors is authorized to issue additional shares
of Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and Bylaws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the State of
Nevada for a more complete description concerning the rights and liabilities of
stockholders.
Prior to this offering, there has been a limited market for the Common
Stock of the Company, and no predictions can be made of the effect, if any, that
market sales of shares or the availability of shares for sale will have on the
market price prevailing from time to time. Nevertheless, sales of significant
amounts of the Common Stock of the Company in the public market may adversely
affect prevailing market prices, and may impair the Company's ability to raise
capital at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of directors can elect all the
directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.
Preferred Stock
The authorized capital stock of the Company also consists of 1,000,000
shares of Preferred Stock, $.001 par value, none of which are issued.
PLAN OF DISTRIBUTION
The Company has no underwriter for this Offering. The Offering is
therefore a self-underwriting. The Shares will be offered by the Company at the
offering price of $.15 per share.
Price of the Offering.
There is no, and never has been, a market for the Shares, and there is
no guaranty that a market will ever develop for the Company's shares.
Consequently, the offering price has been determined by the Company. Among other
factors considered in such determination were estimates of business potential
for the Company, the Company's financial condition, an assessment of the
Company's management and the general condition of the securities market at the
time of this Offering. However, such price does not necessarily bear any
relationship to the assets, income or net worth of the Company.
The offering price should not be considered an indication of the actual
value of the Shares. Such price is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Shares can
be resold at the Offering Price.
There can be no assurance that an active trading market will develop
upon completion of this Offering, or if such market develops, that it will
continue. Consequently, purchasers of the Shares offered hereby may not find a
ready market for Shares.
CAUTIONARY WARNING
THE COMPANY'S BUSINESS PLAN AND THE COMPANY'S FINANCIAL STATEMENTS AND
PROJECTIONS ARE FORWARD LOOKING. STATEMENT AND ACTUAL RESULTS COULD
MATERIALLY DIFFER FROM THE PROJECTIONS. AS SUCH, NO INVESTOR SHOULD RELY ON SUCH
INFORMATION IN MAKING HIS INVESTMENT.
<PAGE>
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to making an
investment in the Company, that he has had the opportunity to inspect the books
and records of the Company and that he has had the opportunity to make inquiries
to the officers and directors of the Company and further that he has been
provided full access to such information.
(The Remainder of this page intentionally left blank)
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
------------------------------------
Suitability
Shares will be offered and sold pursuant an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Shares to
that Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,000,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
<PAGE>
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8) An entity in which all of the equity owners are accredited
investors (as defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income form long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
non-accredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to
investments in limited partnerships either alone or with its Purchaser
Representative, if any; and
(2) The Investor has been provided access to all relevant documents it
desires or needs; and
(3)The Investor is aware of its limited ability to sell and/or transfer
its Shares in the Company; and
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE IF A
POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Shares, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Shares will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Shares. In addition, the fiduciary must consider
whether the investment in Shares will satisfy the diversification requirement of
Section 404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of
the offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Shares by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Shares for its own account and for the purpose of
investment only, not with a view to, or in accordance with, the
<PAGE>
distribution of sale of the Shares and that it will not sell, pledge, assign or
transfer or offer to sell, pledge, assign or transfer any of its Shares without
an effective registration statement under the Securities Act, or an exemption
therefrom (including an exemption under Regulation D, Section 504) and an
opinion of counsel acceptable to the Company that registration under the
Securities Act is not required and that the transaction complies with all other
applicable Federal and state securities or Blue Sky laws.
<PAGE>
IPVoice Communications, Inc.
(A Nevada corporation)
==================
SUBSCRIPTION DATA SHEET
==================
Name of Subscriber
(Offeree):_______________________________________________________
Address of Residence
(if natural person):_____________________________________________
- -----------------------------------------------------------------
Address of
Business:________________________________________________________
- -----------------------------------------------------------------
Subscriber's
Telephone No.:___________________________________________________
Subscriber's Social
Security No. or
Tax I.D. No.:____________________________________________________
Preferred Address for
receiving mail:
( ) Residence
( ) Business
( ) Other, if any: _____________________________________________
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Date of Subscription:____________________________________________
Amount of
Subscription: $_________________________________________________
<PAGE>
SUBSCRIPTION AGREEMENT AND INVESTMENT
REPRESENTATION OF INVESTORS
IPVoice Communications, Inc.
7804 Yorkshire Drive
Castle Rock, CO 80104
Gentlemen:
1. Subject to the terms and conditions hereof, the undersigned,
intending to be legally bound, hereby irrevocably subscribes for and agrees to
accept and subscribe to _________ shares of Regulation D, Section 504 common
stock of IPVoice Communications, Inc., a Nevada corporation (the Company), for a
total consideration of $_________, the receipt and sufficiency of which is
hereby acknowledged.
2. In order to induce the Company to accept the subscription made
hereby, the undersigned hereby represents and warrants to the Company, and each
other person who acquires or has acquired the Shares, as follows :
(a) The undersigned, if an individual (i) has reached the age
of majority in the state in which he resides and (ii) is a bona fide resident
and domiciliary (not a temporary or transient resident) of the state set forth
beneath his signature below.
(b) The undersigned has the financial ability to bear the
economic risk of an investment in the Shares has adequate means of providing for
his current needs and personal contingencies, has no need for liquidity in such
investment, and could afford a complete loss of such investment. The
undersigned's overall commitment to investments that are not readily marketable
is not disproportionate to his net worth, and his investment in the Company will
not cause such overall commitment to become excessive.
(c) The undersigned meets at least one of the following
criteria:
(i) the undersigned is a natural person whose individual
net worth or joint net worth with his spouse, at the
time of his purchase, exceeds $1,000,000 (ONE MILLION
DOLLARS); or
(ii) the undersigned is a natural person and had an
individual income in excess of $200,000 (TWO-HUNDRED
THOUSAND DOLLARS) in each of the two most recent years,
or jointly with his spouse in excess of $300,000
(THREE-HUNDRED THOUSAND DOLLARS) in each of those
years, and who reasonably expects to achieve at least
the same income level in the current year; or
(iii)qualifies as an accredited investor under Regulation D
of the Securities Act of 1933 (the "Act").
(d) The investment is one in which I am purchasing for myself
and not for others, the investment amount does not exceed 10% of my net worth
and I have the capability to understand the investment and the risk.
(e) The undersigned has been given a full opportunity to ask
questions of and to receive answers from the Company concerning the terms and
conditions of the offering and the business of the Company, and to obtain
additional information necessary to verify the accuracy of the information given
him or to obtain such other information as is desired in order to evaluate an
investment in the Shares. All such questions have been answered to the full
satisfaction of the undersigned.
(f) In making his decision to purchase the Shares herein
subscribed for, the undersigned has relied solely upon independent
investigations made by him. He has received no representation or warranty from
the Company or from a broker-dealer, if any, or any of the affiliates, employees
or agents of either. In addition, he is not subscribing pursuant hereto for any
Shares as a result of or subsequent to (i) any advertisement, article, notice or
other communication published in any
<PAGE>
newspaper, magazine or similar media or broadcast over television or radio, or
(ii) any seminar or meeting whose attendees, including the undersigned, had been
invited as a result of, subsequent to, or pursuant to any of the foregoing.
(g) The undersigned understands that the Shares have not been
registered under the Act in reliance upon specific exemptions from registration
thereunder, and he agrees that his Shares may not be sold, offered for sale,
transferred, pledged, hypothecated, or otherwise disposed of except in
compliance with the Act and applicable state securities laws, which restrictions
require the approval of the Company for the transfer of any Shares (which
approval, except under limited circumstances, may be withheld by the Company in
its sole discretion). The undersigned has been advised that the Company has no
obligations to cause the Shares to be registered under the Act or to comply with
any exemption under the Act, including but not limited to that set forth in Rule
144 promulgated under the Act, which would permit the Shares to be sold by the
undersigned. The undersigned understands that it is not anticipated that there
will be any market for resale of the Shares, and that it may not be possible for
the undersigned to liquidate an investment in the Shares. The undersigned
understands the legal consequences of the foregoing to mean that he must bear
the economic risk of his investment in the Shares. He understands that any
instruments representing the Shares may bear legends restricting the transfer
thereof.
3. To the extent I have the right to rescind my purchase of the Shares,
which right of recission is hereby offered, I waive and relinquish such rights
and agree to accept certificate(s) evidencing such Shares.
4. This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Nevada.
5. All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties hereto may require.
6. The shares referred to herein may be sold to the subscriber in a
transaction exempt under Section 517.061 of the Florida Securities Act. The
shares have not been registered under said act in the State of Florida. In
addition, if sales are made to five or more persons in the State of Florida, any
sale in the State of Florida is voidable by the purchaser within three (3) days
after the first tender of consideration is made by such purchaser to the issuer,
an agent of the issuer, or an escrow agent or within three (3) days after the
availability of that privilege is communicated to such purchaser, whichever
occurs later.
IN WITNESS WHEREOF, the undersigned has executed and agrees to be bound
by this Subscription Agreement and Investment Representation on the date written
below as the Date of Subscription:
(TO BE USED FOR INDIVIDUAL(S))
- ---------------------------- -------------------------------
Print Name of Individual Signature of Individual
- ----------------------------- -------------------------------
State of Residence Date of Subscription
<PAGE>
(TO BE USED FOR PARTNERSHIPS, CORPORATIONS,
TRUSTS OR OTHER ENTITIES)
_______________________________ By:______________________________
Print Name of Partnership Signature of Authorized
Corporation - Trust - Entity Representative
- ------------------------------- ---------------------------------
Capacity of Authorized Print Name of Authorized
Representative Representative
- ------------------------------- --------------------------------
Print Jurisdiction of Date of Subscription
Incorporation or Organization
EXHIBIT 4.5
-------------------------------------------------------------------
OFFERING MEMORANDUM
-------------------------------------------------------------------
IPVoice Communications, Inc.
(A Nevada Corporation)
Offering Memorandum Dated February 1, 1999
1,250,000 shares
IPVoice Communications, Inc., a Nevada corporation, f/k/a Nova
Enterprises, Inc., (the "Company"), is offering on a "best efforts, no minimum
basis" 1,250,000 shares of its common stock ("Shares"), $.001 par value, at a
price of $0.40 per share (the "Subscription Price"). Since there is no minimum,
no proceeds will be held in an escrow account and all funds will be immediately
available to the Company.
The Shares are being sold by the Company's Officers and Directors and
no commissions will be paid to them in connection with the Offering. However,
participating NASD registered broker/dealers, if any, shall receive a maximum of
10% sales commissions on all shares sold through their efforts.
The Company's Common Stock is currently listed on the Over the Counter
Electronic Bulletin Board. There can be no assurances that an active trading
market for the Company's stock exists, or will continue if it currently exists.
The price of the Shares offered hereby was arbitrarily determined by
the Company and does not bear any relationship to the Company's assets, book
value, net worth, results of operations or any other recognized criteria of
value. For additional information regarding the factors considered in
determining the offering price of the Shares, see "Risk Factors - Arbitrary
Offering Price", "Description of Securities".
The Company does not presently file reports or other information with
the Securities and Exchange Commission ("Commission"). However, following
completion of this Offering, the Company intends to furnish its security holders
with annual reports containing audited financial statements and such interim
reports in each case as it may determine to furnish or as may be required by
law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
This offering involves special risks concerning the Company (see "Risk
Factors"). Investors should carefully review the entire Memorandum and should
not invest any funds in this Offering unless they can afford to lose their
entire investment. In making an investment decision, investors must rely on
their own examination of the issuer and the terms of the Offering, including the
merit and risks involved.
<PAGE>
REGULATION D OFFERING
THIS OFFERING IS BEING MADE PURSUANT TO THE EXEMPTIONS AFFORDED BY
SECTIONS 4(2) OR 3(b) OF SECURITIES ACT OF 1933 AND RULE 504 OF REGULATION D
PROMULGATED THEREUNDER AND THE STATE SMALL CORPORATE OFFERING REGISTRATION
PROVISION. PURSUANT TO RULE 504, THE SHARES SOLD HEREBY WILL NOT BE SUBJECT TO
ANY LIMITATIONS ON RESALE THEREOF UNDER FEDERAL LAW. THE SHARES MAY, HOWEVER, BE
SUBJECT TO LIMITATIONS ON THE OFFER AND SALE AND THE RESALE OF THE SHARES
IMPOSED BY THE BLUE SKY LAWS OF INDIVIDUAL STATES. IN ADDITION, THE COMPANY
INTENDS TO FILE THE REQUIRED DOCUMENTS IN CERTAIN OTHER STATES IDENTIFIED BY
MANAGEMENT AS HAVING POSSIBLE INVESTOR INTEREST AND USE ITS BEST EFFORTS TO
QUALIFY THE SHARES FOR SECONDARY TRADING IN SUCH STATES, THOUGH NO ASSURANCE CAN
BE GIVEN THAT IT WILL BE ABLE TO QUALIFY THE SHARES FOR SECONDARY TRADING IN ANY
SUCH STATES IN WHICH IT SUBMITS SUCH APPLICATIONS AND DOCUMENTS. AN INABILITY TO
QUALIFY THE SHARES FOR SECONDARY TRADING WILL CREATE SUBSTANTIAL RESTRICTIONS ON
THE TRANSFERABILITY OF SUCH SHARES WHICH MAY NEGATE THE BENEFIT OF THE EXEMPTION
PROVIDED BY RULE 504 OF REGULATION D. THE COMPANY WILL USE ITS BEST EFFORTS TO
CAUSE THE SHARES TO BE LISTED ON THE ELECTRONIC BULLETIN BOARD OPERATED BY THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AS A MARKET IN WHICH THEY MAY
BE TRADED. THERE IS NO ASSURANCE THAT SUCH LISTING WILL BE OBTAINED OR THAT IF A
LISTING IS OBTAINED THAT ANY MARKET FOR THE SHARES WILL DEVELOP, OR IF
DEVELOPED, THAT IT WILL BE SUSTAINED.
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES
NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES IT PASS UPON
THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT OF AN
ALABAMA PURCHASER WHO IS NOT AN ACCREDIT INVESTOR MAY NOT EXCEED TWENTY (20%)
PER CENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE,
FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA SECURITIES
ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO ARIZONA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ARIZONA SECURITIES
ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION
44-184(1) OF SUCH ACT. THESE SECURITIES MAY NOT BE SOLD WITHOUT REGISTRATION
UNDER SUCH ACT OR EXEMPTION THEREFROM.
ARIZONA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM ANNUAL GROSS INCOME OF SEVENTY FIVE THOUSAND
(475,000) DOLLARS; OR (iii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE
THOUSAND ($225,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
SECTION 14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE
SECURITIES ACT OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION
HAS PASSED UPON THE VALUE OF THESE SECURITIES, MADE ANY RECOMMENDATIONS AS TO
THEIR PURCHASE, APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT IS
UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR WITHOUT THE PRIOR WRITTEN
<PAGE>
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT
AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER
IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. THE
SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN
ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE
WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER, WHICHEVER OCCURS LATER.
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA SECURITIES ACT
OF 1973, AS AMENDED. IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION SET FORTH
IN SECTION 9(M) OF SUCH ACT AND THE SECURITIES CANNOT BE SOLD OR TRANSFERRED
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR IN A TRANSACTION WHICH IS
OTHERWISE IN COMPLIANCE WITH SAID ACT.
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE CONNECTICUT SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION
THEREFROM.
ANYTHING TOT HE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET
WORTH.
<PAGE>
NOTICE TO INDIANA RESIDENTS
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A
NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) EQUAL TO AT LEAST
THREE (3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN N O EVENT LESS THAN SEVENTY
FIVE THOUSAND (475,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF HOME, HOME
FURNISHING AND AUTOMOBILES OF TOW (2) TIMES HIS INVESTMENT BUT IN NOT EVENT LESS
THAN THIRTY THOUSAND ($30,000) DOLLARS AND A GROSS INCOME OF THIRTY THOUSAND
($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTH
THOUSAND ($40,000) DOLLARS (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES)
AND A MINIMUM ANNUAL GROSS INCOME OF FORTH THOUSAND ($40,000) DOLLARS, OR (ii) A
NET WORTH OF AT LEAST ONE HUNDRED TWENTY FIVE THOUSAND ($125,000) DOLLARS AS
COMPUTED ABOVE.
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE,
FURNISHINGS THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT)
HAVE BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREIN.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING,THE INVESTMENT BY A NON-
ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) OF THE INVESTOR'S NET WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION
1052(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUES. THESE SECURITIES MAY BE
DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL
THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
<PAGE>
NOTICE TO MARYLAND RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND SECURITIES
ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION
11-602(9) OF SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY NOT BE
REOFFERED FOR SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A SECURITY, OR
IN A TRANSACTION EXEMPT UNDER SUCH ACT.
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH OF
AT LEAST FIFTY THOUSAND ($50,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAKE YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS (AS COMPUTED ABOVE).
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THAT ACT OR
EXEMPTION THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED
WRITTEN STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX
(6) MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER
OCCURS FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENT
THEREAFTER.
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE
MINNESOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION. NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NO HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
<PAGE>
THERE IS NOT ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT
BE ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF
THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN
INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY
STANDARDS AND MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT.
ADDITIONALLY, ALL PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET
WORTH OF AT LEAST THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000)
DOLLARS. THESE SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR
IN A TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN
A TRANSACTION EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(b), MISSOURI
UNIFORM SECURITIES ACT (RMSO 1969).
THE SHARES HAVE TO BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
MISSOURI, UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD
IN THE STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER
SAID ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A
MINIMUM ANNUAL INCOME OF THIRTY THOUSAND ($330,000) DOLLARS AND A NET WORTH OF
AT LEAST THIRTY THOUSAND ($30,000)(DOLLARS, EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY
(20%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING OFFERED
HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS
AFTER DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PER CENT OF THE INVESTOR'S
NET WORTH.
<PAGE>
NOTICE TO NEBRASKA RESIDENTS
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA
SECURITIES ACT AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THE ACT
OR EXEMPTION THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS
EITHER (i) A NET WORTH (EXCLUSIVE OF HOME, HOME FURNISHING AND AUTOMOBILES) OF
TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS OR (iii) A NET WORTH (EXCLUSIVE OF
HOME, HOME FURNISHINGS AND AUTOMOBILES OF ONE HUNDRED TWENTY FIVE THOUSAND
($125,000) DOLLARS AND FIFTY THOUSAND ($50,000 DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES TO CONSTITUTE
APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE
DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES COMMISSION OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS CRIMINAL OFFENCE.
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL
PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS
NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
NORTH CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATOR
<PAGE>
NEITHER RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE
ADMINISTRATOR PASSED ON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED
HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THESE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES ACT. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF
1933 AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF COUNSEL TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-ACCREDITS
INVESTOR SHALL NOT EXCEED THEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE BEEN REGISTERED WITH THE DIRECTOR OF THE
STATE OF OREGON UNDER THE PROVISIONS OF OAR 441-65-240. THE INVESTOR IS ADVISED
THAT THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION STATEMENT
AND HAS NOT REVIEWED THIS DOCUMENTS SINCE THIS DOCUMENT IS NOT REQUIRED TO BE
FILED WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE COMPANY
CREATING THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND
RISKS INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN THE
COMMONWEALTH OF PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE
PENNSYLVANIA SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE,
AND RECEIVE A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY
LIABILITY, WITHIN TWO (20) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE
OF THIS WITHDRAWAL RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY
PERSON WHO WISHES TO EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVEN
NOTICE BY LETTER OR TELEGRAM SENT TO POSTMARKED BEFORE THE END OF THE SECOND
BUSINESS DAY AFTER EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED
ORALLY, WRITTEN CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS
WHO IS A PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF
TWELVE (12) MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST
HAVE EITHER (i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS
<PAGE>
(EXCLUDING HOME, HOME FURNISHING AND AUTOMOBILES) AND A MINIMUM ANNUAL GROSS
INCOME OF THIRTY THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST
SEVENTY FIVE THOUSAND ($75,000) DOLLARS (AS COMPUTED ABOVE0, AND MAY NOT INVEST
MORE THAN TEN (10%) PER CENT OF THEIR NET WORTH (EXCLUSIVE OF THE SUBSCRIBER'S
HOME, HOME FURNISHINGS AND AUTOMOBILES).
NOTICE TO SOUTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
SOUTH CAROLINA UNIFORM SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO
THESE SECURITIES HAS NOT BEEN FILED WITH THE SOUTH CAROLINA SECURITIES
COMMISSIONER. THE COMMISSIONER DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY
SECURITIES, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS OFFERING
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47.31 OF THE SOUTH
DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF
LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT
LEAST SIXTY THOUSAND ($60,000) DOLLARS (EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES) AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY FIVE THOUSAND ($225,000) DOLLARS
(AS COMPUTED ABOVE).
NOTICE OF TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
NOTICE OF TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE AND MAY NOT
BE REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS MAY PLACE SUCH INVESTOR
AND THE ISSUER IN VIOLATION OF THE TEXAS SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PER CENT OF THE INVESTOR'S NET WORTH.
<PAGE>
NOTICE TO UTAH RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UTAH SECURITIES ACT AND
MAY NOT NE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON SECURITIES
ACT AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON HAS NOT
REVIEWED THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT BE SOLD
WITHOUT REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY
ITSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE
UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF
THE OFFER, WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER,
IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
OFFERING SUMMARY
The following summary information is qualified in its entirety by the
detailed information appearing elsewhere in this Memorandum.
IPVoice Communications, Inc. was founded in September 1997 to provide a
vehicle for key software technologies and a Research and Development laboratory
for the emerging Voice over the Internet market. IPVoice core software
technologies require little additional development to produce market viability.
New technologies presently under development such as TrueConnect may require
additional financial support to bring them to the marketplace.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK. ONLY THOSE PERSONS ABLE TO LOSE THEIR ENTIRE INVESTMENT SHOULD PURCHASE
THESE SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION,
SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER MATTERS
REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS.
Risk Factors Relating to the Business of the Company
Development Stage Company The Company has had limited revenues from
operations since its organization and is a "start-up" or "development stage"
company. No assurances can be given that the Company will be able to compete
with other companies in its industry. The purchases of the securities offered
hereby must be regarded as the placing of funds at a high risk in a new or
"start-up" venture with all the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject. See "Use of Proceeds" and "The
Company."
No Assurance of Profitability To date, the Company has not generated
significant revenues from operations. The Company can not ensure significant
revenues in the near future. The Company's ability to successfully implement its
business plan is dependent on the completion of this Offering. There can be no
assurance that the Company will be able to develop into a successful or
profitable business.
No Assurance of Payment of Dividends. No assurances can be made that
the future operations of the Company will result in additional revenues or will
be profitable. Should the operations of the Company become profitable, it is
likely that the Company would retain much or all of its earnings in order to
finance future growth and expansion. Therefore, the Company does not presently
intend to pay dividends, and it is not likely that any dividends will be paid ln
the foreseeable future.
Possible Need for Additional Financing. The Company intends to fund its
operations and other capital needs for the next 24 months substantially from the
proceeds of this Offering and another (506) offering, but there can be no
assurance that such funds will be sufficient for these purposes. The Company may
require additional amounts of capital for its future expansion, operating costs
<PAGE>
and working capital. The Company has made no formal arrangements to obtain
future additional financing, and if required, there can be no assurance that
such financing will be available, or that such financing will be available on
acceptable terms. See "Use of Proceeds."
Dependence on Management The Company's success is principally dependent
on its current management personnel for the operation of its business.
Broad Discretion in Application of Proceeds. The management of the
Company has broad discretion to adjust the application and allocation of the net
proceeds of this offering, in order to address changed circumstances and
opportunities. As a result of the foregoing, the success of the Company will be
substantially dependent upon the discretion and judgment of the management of
the Company with respect to the application and allocation of the net proceeds
hereof. Pending use of such proceeds, the net proceeds of this offering will be
invested by the Company in temporary, short-term interest-bearing obligations.
See "Use of Proceeds."
Arbitrary Offering Price. The price to the public of the Shares offered
hereby has been arbitrarily determined by the Company and bears no relationship
to the Company's earnings, book value or any other recognized criteria of value.
Immediate and Substantial Dilution. An investor in this offering may
experience immediate and substantial dilution.
Limited Market for Securities of the Company. A limited market has
existed for the securities being offered hereby and no assurance can be given
that a market will develop subsequent to this Offering.
No Escrow of Investors' Funds. This offering is being made on a "best
efforts, no minimum basis" As such, all the funds from this Offering will be
immediately available to the Company.
No Assurance of Acquisition While it is the Company's intent to acquire
either all of the shares or assets of other industry related companies in
addition to expanding its own operations, there is no assurance that the Company
will be able to achieve this goal. That event could cause a materially adverse
affect on the future of the Company.
Forward-Looking Statements This Memorandum includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, included or incorporated
by reference in this Memorandum which address activities, events or developments
which the Company expects or anticipates will or may occur in the future,
including such things as capital expenditures (including the amount and nature
thereof), expected sales revenues, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate under the circumstances. However, whether actual
results and developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, including the
risk factors discussed in this Memorandum, general economic, market or business
conditions, the business opportunities (or lack thereof) that may be presented
to and pursued by the Company, changes in laws or regulations, and other
factors, some of which are beyond the control of the Company. Consequently, all
of the forward-looking statements made in this Memorandum are qualified by these
cautionary statements and there can be no assurance that the actual results or
developments anticipated by the Company will be realized or, even if
substantially realized, that they will have the expected consequences to or
effects on the Company or its business or operations. The Company assumes no
obligation to update any such forward-looking statements.
<PAGE>
THE COMPANY
Introduction
In the fast moving world of communications, especially Internet
telephony, the companies with systems in the market are just now battling
between open and closed systems. IPVoice has developed open systems and will
have an edge on the competition in more ways than one.
With the meteoric rise of the Internet (which is predicted to continue
at a staggering rate), and the obvious savings that Internet telephony can
provide, the future looks bright. In the multi-billion dollar telephone
industry, IPVoice does not have to compete with AT&T and MCI. A small Internet
telephone company can create significant revenues without ever disturbing the
major players and thus having to compete with them in advertising or
price-warring for market share. As the Internet telephony segment continues to
grow and break out, which many industry analysts predict it surely will, it is
an area that the large companies will certainly look to enter, probably through
acquisitions. In that scenario, with their installed client base and established
network customers well entrenched, their international presence developed, and
their forward-thinking software developed, tested and already implemented,
IPVoice could be perfectly positioned to become a prime buyout candidate.
The Company
IPVoice Communications, Inc., a Nevada corporation of which IPVoice
Communications, Inc., a Delaware corporation, is a wholly owned subsidiary
(hereafter collectively referred to as "IPVoice" or the "Company") was
originally formed in September 1997. The company was established with the
intention of developing its MultiCom Business Management Software (developed by
Anthony Welch, installed and ran in a Carrier grade switching environment for
over three years) to interact with voice over the internet application under the
product name of TrueConnect. By introducing Carrier grade Business Management
into the marketplace, IPVoice is poised to take advantage of the explosive
potential in Internet telephony. IPVoice is preparing to deliver products that
allow companies and individuals to route their phone calls, faxes, and other
data across the Internet at substantial cost savings with limited sacrifice of
quality compared to traditional telephone networks.
IPVoice's unique; state-of-the-art software and hardware solutions will
bridge the gap between the telephone and the Internet. IP Telephony has been
heralded as the foundation for a new class of telecommunication applications
which promise to be as common as your desktop phone. This new technology, when
exposed to the deregulated communications marketplace, will offer tremendous
opportunity for young, Internet technology companies. Smaller companies which
can easily assimilate new technology and which can quickly adapt to inevitable
changes in the Internet, are expected to take fuller advantage of the market
created for such products. IPVoice intends to make an impact on the Internet
Telephony market by setting the standard for billing, management network and
marketing programs.
The Exploding Internet Market
The potential market for Internet telephony is awesome. Industry analysts
speculate that revenues could grow sixteen-fold between 1995 and the turn of the
century.
<PAGE>
[GRAPHIC OMITTED]
International Data Corporation (IDC) has predicted that the IP Telephony
market will be worth $560 million in 1999 with annual growth of over 382%
(CAGR).
Internet Telephony
Traditional telephone networks give every call a nailed-down circuit. This
means that a dedicated circuit must be utilized for the full time that the call
is connected. This wastes precious expensive resources because only one person
can talk at a time and also because there are breaks in the conversation. In a
normal conversation, one person speaks while the other listens. This wastes half
of the capacity of the dedicated circuit. At best, a traditional telephone
network uses 25% of the capacity of each call. This significantly inflates the
costs of making calls.
IP stands for Internet Protocol. IP is the most significant of the
protocols on which the Internet (and thus the World Wide Web) is based. It
allows a packet of information (voice, video, e-mail, data, images, etc.) to
cross multiple networks on its way to its final destination. Thus, instead of
having one dedicated circuit for a call, the entire network is shared. The
"conversation" (voice, data, images, video, etc.) is split into many small
packets and each packet is sent down whichever path is open at that time.
Packets are reassembled at the destination. Until recently, packet switching was
very slow. New technology can zip packets around networks at lightning speed.
Fast packet networks will make voice sound as good (and possibly better) than
the circuit-switched voice networks used currently.
Companies using IPVoice's technology can achieve savings of 30% to 70% over
circuit-switched voice. The estimated saving on expensive international calls is
remarkable.
The following graph shows the market predictions of the emerging IP
Telephony industry (Source: Frost & Sullivan):
[GRAPHIC OMITTED]
<PAGE>
$1.81 Billion, Compound Annual Growth Rate: 149% for the period
Leading Edge Products
IPVoice products have been designed and produced by the Company at its
research and development site located in Denver, Colorado. IPVoice products are
made from company-designed software and hardware as well as materials purchased
from a few major suppliers. The Company has two sites operational and is
preparing to deploy TrueConnect Gateways in the Domestic and International arena
in the first quarter 1999.
The launch of TrueConnect follows three years of extensive research and
development, field-testing and trials on MultiCom, which is the business
management system behind TrueConnect. TrueConnect provides a gateway for
bridging the public telephone system with the Internet. With TrueConnect, users
will be able to conduct real-time, full duplex, high quality two-way voice
communications over the Internet. This method promises substantial savings
compared to standard long distance telecommunications services.
To support the True Connect product, the Company has completed several
proprietary products that will allow the Company and its distributors to offer a
total solution in Internet Telephony. These products including MultiCom, offer a
complete order entry, billing, customer service, agent management and switching
network management system for telecommunications businesses worldwide.
AuditRite, is a software module add-in for the MultiCom system that allows
MultiCom to read and interpret carrier-supplied data-tapes. The AuditRite system
provides a powerful tool for analyzing call patterns and finding possible errors
in a vendor's billing. The Company has also developed 4Com for Summa Four
switches, ICBConnect for Harris switches and TrueWeb1, which when introduced to
the world of IP Telephony, will change the way businesses function.
The hardware technology to route calls over the Internet (Internet
Telephony) has existed for about three years. Put simply, because it avoids
traditional telephone networks, Internet Telephony is faster, more direct and
efficient, and therefore ultimately cheaper than traditional telephone networks.
As such, Internet Telephony possesses an immediate and incredible opportunity
for those companies developing the software to harness and direct the
technology. The competition in the industry is presently focused on the software
applications necessary to operate an Internet Telephony network.
In simplest terms, the business of telephone companies is to sell minutes.
Blocks of minutes represent the commodity of the industry. The more minutes you
can switch through your network switches, the more money you make. The way
established phone networks are set up, a call from your home to New York City
will pass through switches belonging to your local provider, a regional
provider, a national provider, a second regional provider and the local provider
on the other end. Everyone gets a bite of the "per minute charge". Internet
Telephony provides the ability to leapfrog the middle men, thereby creating a
huge dollar savings to the customer, as well as allow immediate monitoring of
your telephone services that have never been available until now.
Where the rubber meets the road in the industry is in the software
applications that control everything from routing to billing. It is in this new
and wide open market that IP Voice stakes its claim to being the Best in the
Industry. The companies that have gotten into the industry have concentrated on
software that simply switches the minutes across the network, without concerning
themselves about how they would manage the network, conduct billing, and
implement feature functionality. Telecommunications technology expert Anthony
Welch, who is Executive Vice President of IP Voice, developed the MultiCom,
AuditRite and TrueConnect platforms (all of which have received wide recognition
in this fledgling industry) that are totally unique to IP Voice, and were
designed to handle all the manageability and billing and design upgrades and
service options that this exploding technology will soon need.
1 The IPVoice TrueWeb product is a complete business management system available
over the Web and is scheduled for release soon.
<PAGE>
The company believes that its closest competition is at least 12 months
behind IPVoice in terms of its software capability, and it may take even longer
for the competition to provide the same services IPVoice has had in operation
for several years. Lucent is only now buying up companies that it will use to
develop this technology. In the time it takes the rest of the industry to catch
up, IPVoice, with former MCI top marketing executive Barbara S. Will at the
helm, will have established its network and be on its way to providing newer and
better services. (The company randomly changes its source code on its software,
up to four times daily, to prevent any pirating of its technology.)
The unique aspects of IP Voice's software include:
Real Time Billing - Currently offered by no one in the telephone industry, real
time billing provides a customer with the ability to secure reports on their
volume of calls, locations called and exact amount owed, among a host of other
features.
Full Feature Functionality - IPVoice can add services to its software at will,
as they come on line or when requested by a customer. Moreover, traditional
phone companies are saddled with huge costs and implementation times, as they
update each switch individually across their network. IPVoice can update its
entire International Network from its home base.
Unrivaled Agent Control - A single agent can sit in front of a Gateway terminal
and control the entire operation. Moreover, IPVoice can directly control the
entire network from its main office in the U.S. This has huge implications on
the commercial side, adding and servicing customers.
IPVoice's architecture can switch through multiple networks, both Internet
and traditional, giving it a unique universal application. No other stand-alone
switch can do this. The IPVC Gateways also boast a unique open architecture,
which means that the gateways can both send and receive calls from any other
telephone carrier in the market. Everyone else is limited to receiving calls
only.
IPVoice's Gateway switches cost a partner $65,000 installed (and cost the
company even less if it installs them itself), while a similar traditional
switch, with all the attendant hardware and support for services and billing
functions, would cost anywhere from $500,000 to $5 million.
Debit Card and Calling Card functions are built into the Gateway, also a
unique function. The software modules have been designed to work seamlessly and
efficiently with each other, to provide the most extensive and well thought out
approach to the business end of the technology.
Given its technology, IPVoice's business plan is simple and flexible. They
can set up their own switches, or partner with a local switching business and
take a percentage of the minutes. The gateways can route calls over the Internet
where their network is established, or use traditional phone lines when desired
or necessary (special features allow a savings even when traditional phone lines
are used, and IPVoice can also procure bulk minutes at a lower rate). The
Company has several Letters of Intent with partners around the world, and is set
to ship the first units in the first part of 1999. Therefore, IPVoice is a
company ready to capitalize on its technologically superior position in a
rapidly rising industry.
Focused Business Strategy
IPVoice intends to corner the market with these products, not only because
they will be the first its kind, but because competitors will spend years of
time and countless research dollars only to develop similar products.
Within the IP telephony world, few companies stand apart from the rest as
"market leaders" and are invariably the companies relied upon when seeking new
technology. Although these companies may have been reliable in the past, their
future performances can be no better than their underlying hardware. (One such
<PAGE>
company uses Natural MicroSystems, Inc.) IPVoice's systems are scalable along
with centralized accounting which also has redundancy built into the
environment. IPVoice's technology could transform competitors into customers, as
IPVoice's billing and management software can communicate with other platforms
due to its own open platform design. The industry leaders lack a critical
component to their solutions: effective data-management and billing.
With the recent acquisition of key technologies and the emergence of the IP
telephony market, IPVoice stands in a unique position:
I. No competitor equals the IPVoice combined IP telephony solution and
mature, real-time billing system for ease of use, affordability and
quality. All competing IP telephony solutions in the marketplace today
have immature billing systems.
II. No other telecommunications group can provide the same level of
real-time remote access and manageability of information.
III. No other group can offer the same level of customer and agent access.
The resulting sales momentum from empowering the remote agents will
create a self-driving sales force unparalleled in the industry.
IV. With IPVoice's industry-unique combination of IP telephony technology,
Internet remote-access technology, and a comprehensive order-entry and
invoicing system, IPVoice can instantly address and secure new
marketplaces and opportunities.
IPVoice products, utilizing specially developed proprietary software, will
provide ongoing revenues from calls made whether voice or data. All of the
Company's products are available for a minimal capital investment of $65,000.
The Company is exploring possible relationships with venture capital groups and
private investment concerns. TruePartners who have already signed Letters of
Intent are being sent their contracts so that the Company can start deployment
of its TrueConnect Gateways. The Company has secured seven LOI's and is anxious
to move forward with product into the marketplace via new, as well as
established, independent representatives and distributors, under the direction
of the Company's President, Barbara Will.
Ms. Will's close association with key organizations and individuals will
support the Company's marketing efforts, as a result of her prior experience in
a senior capacity with MCI. These contacts should prove invaluable during these
marketing and sales activities.
The Company has targeted International markets and will support its sales
efforts by participating in trade shows targeting the telecommunication industry
and large businesses, as well as through professional articles, peer- reviewed
studies, direct calls and a comprehensive marketing campaign. After purchasing
the products from the Company, IPVoice customers will use network services to be
developed by the Company and offered at extremely competitive rates. The Company
believes it is well placed to capitalize on this very large and potentially
profitable opportunity.
Locations assigned IPVoice TruePartners and awaiting deployment:
Hong Kong Madrid Paris
Taiwan London Caribbean
China New York Panama
Greece Costa Rica Mexico
Revenue from Distribution Channels
Management of the Company is anticipating gross margins to be
approximately 42% on sales of IPVoice products.
<PAGE>
MANAGEMENT
The following sets forth the names of the Company's officers and
directors:
BARBARA WILL PRESIDENT, CHIEF OPERATING OFFICER AND CHAIRPERSON
Barbara Will has over 20 years of experience in all areas of
telecommunications, domestic and international. She spent the last 11 years with
MCI. Her broad spectrum of involvement included Major Accounts, National
Accounts, Hospitality, and Carriers/Resellers who provided MCI with revenues of
between $35 to $130 million. Ms. Will was responsible for signing some of the
largest contracts with a carrier/reseller in MCI's history. Her vast industry
experience encompasses, but is not limited to, international and international
private line; International Toll-Free; data; DSO, DSI, DSC, OC3; dedicated in
and outbound; One-Plus; calling and debit cards; Operator Assistance; Internet;
Enhanced Services; and Enhanced Network.
During her time at MCI she received numerous awards for outstanding
performance and was recognized as having successfully obtained one of the
largest private-line contracts in the history of MCI. Ms. Will attended Colorado
State University, and graduated with a Communications and Business
Administration degree.
ANTHONY K. WELCH EXECUTIVE VICE PRESIDENT OF R&D AND DIRECTOR
Mr. Welch is the original designer of the MultiCom, AuditRite, and True
Connect platforms and has served as Special Consultant to various
telecommunications organizations. Mr. Welch is the driving force behind the
IPVoice technologies and has been instrumental in providing critical technology
solutions. He has been a key player in creating viable proposals and business
strategies for technology solutions and joint ventures. He has provided key
technology and management solutions to many telecommunications companies. Mr.
Welch is responsible for maintaining the Company's superior position in the
industry by producing continuous innovations in IPVoice's technology.
Mr. Welch has served as Special Consultant and Project Design Leader
for such organizations as Wal-Mart International (US HQ and Mexico City Branch),
Nation's Bank CS Headquarters, Frito-Lay Worldwide Headquarters, NEC America
Mobile Radio/Cellular/Pager Division Headquarters, and Southwestern Bell Mobile
(Cellular/Pager) Systems Headquarters.
Mr. Welch has received numerous awards and recognition for his work in
Artificial Intelligence-both in military and academic circles-and has applied
this experience to creating technology solutions that are both intelligent and
flexible in nature. The technology behind the MultiCom system has received
recognition from several telecom trade magazines ("Computer Telephony" and
"Telephony" magazines). Mr. Welch won first place in the International Science
competition for Artificial Intelligence at just 17 years of age. He attended the
University of Mississippi and was the first freshman in the history of the
college to be admitted into the artificial intelligence Ph. D. Program.
MICHAEL MCKIM VICE PRESIDENT OF RESEARCH & DEVELOPMENT
Michael McKim is responsible for designing and developing the interface
between the telephony hardware and the TrueConnect gateway software. Mr. McKim
will also be responsible for the technical pre-sales support and post-sale
installation support. Mr. McKim has a master degree in electrical engineering
and has been involved with automation for over 12 years with extensive
experience in developing business applications.
CONSULTANTS
RAY ZIMPHER SOFTWARE DEVELOPMENT
Mr. Zimpher is responsible for maintaining and creating enhancements to
the MultiCom system and is the Project Manager for all MultiCom systems. He is a
widely experienced data processing engineer with a solid background in analysis,
design and problem solving on mainframe, mini and PC based systems. Prior to
joining IPVoice, Mr. Zimpher had worked on software solutions for
Deloitte-Touche, Trinary Systems, IGT, Inc., and others.
<PAGE>
Mr. Zimpher has worked with the MultiCom technology for over two years
and thus is highly qualified to maintain and enhance the MultiCom system.
Mr. Zimpher brings over 27 years of system development experience in
the Information Technology industry and has been witness to and participated in
many technological advances with computers and design methodologies.
Mr. Zimpher is a graduate of the US Army College.
PRINCIPAL SHAREHOLDERS
Prior to this offering, the Company had 13,006,091 shares of its Common
Stock issued and outstanding. The following table sets forth, as of February 1,
1999, the beneficial ownership of the Company's Common Stock (i) by the only
persons who are known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each officer and director of the Company; and
(iii) by all directors and officers as a group.
<TABLE>
Name Number of Shares Percentage Owned Percentage Owned
Owned Prior to Offering Before Offering After Offering
<S> <C> <C> <C>
Barbara S. Will 3,000,000 29% 26%
Condor Worldwide Ltd. 3,000,000 29% 26%
Anthony K. Welch 3,000,000 29% 26%
- --------------------------------------------------------------------------------------------
Officers and Directors 6,000,000 58% 53%
as a group
</TABLE>
USE OF PROCEEDS
The Company plans to utilize the proceeds of this Offering for working
capital and for further research and development necessary to complete its
TrueConnect product and to start deployment.
DESCRIPTION OF SECURITIES
Shares The Company is hereby offering a "best efforts, no minimum basis"
1,250,000 shares of its Common Stock at a price of $0.40 per share.
Common Stock
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefor when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid and nonassessable, and all shares to be sold and issued as
contemplated hereby, will be validly authorized and issued, fully paid and
nonassessable. The Board of Directors is authorized to issue additional shares
of Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and Bylaws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the State
<PAGE>
of Nevada for a more complete description concerning the rights and liabilities
of stockholders.
Prior to this offering, there has been a limited market for the Common
Stock of the Company, and no predictions can be made of the effect, if any, that
market sales of shares or the availability of shares for sale will have on the
market price prevailing from time to time. Nevertheless, sales of significant
amounts of the Common Stock of the Company in the public market may adversely
affect prevailing market prices, and may impair the Company's ability to raise
capital at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of directors can elect all the
directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.
Preferred Stock
The authorized capital stock of the Company also consists of 1,000,000
shares of Preferred Stock, $.001 par value, none of which are issued.
PLAN OF DISTRIBUTION
The Company has no underwriter for this Offering. The Offering is
therefore self-underwriting. The Shares offered hereby will be offered by the
Company at a price of $0.40 per share.
Price of the Offering.
There is a limited market for the Shares, and there is no guaranty that
a market will continue or further develop for the Company's shares.
Consequently, the offering price has been determined by the Company. Among other
factors considered in such determination were estimates of business potential
for the Company, the Company's financial condition, an assessment of the
Company's management and the general condition of the securities market at the
time of this Offering. However, such price does not necessarily bear any
relationship to the assets, income or net worth of the Company.
The offering price should not be considered an indication of the actual
value of the Shares. Such price is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Shares can
be resold at the Offering Price.
There can be no assurance that an active trading market will develop
upon completion of this Offering, or if such market develops, that it will
continue. Consequently, purchasers of the Shares offered hereby may not find a
ready market for Shares.
CAUTIONARY WARNING
THE COMPANY'S BUSINESS PLAN AND THE COMPANY'S FINANCIAL STATEMENTS AND
PROJECTIONS ARE FORWARD LOOKING. STATEMENT AND ACTUAL RESULTS COULD
MATERIALLY DIFFER FROM THE PROJECTIONS. AS SUCH, NO INVESTOR SHOULD RELY ON
SUCH INFORMATION IN MAKING HIS INVESTMENT.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to making an
investment in the Company, that he has had the opportunity to inspect the books
and records of the Company and that he has had the opportunity to make inquiries
to the officers and directors of the Company and further that he has been
provided full access to such information.
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
------------------------------------
Suitability
Shares will be offered and sold pursuant an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Shares to
that Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section 202(a)
(22) of the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,000,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
<PAGE>
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8) An entity in which all of the equity owners are accredited
investors (as defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income form long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
non-accredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to
investments in limited partnerships either alone or with its Purchaser
Representative, if any; and
(2) The Investor has been provided access to all relevant documents it
desires or needs; and
(3)The Investor is aware of its limited ability to sell and/or transfer
its Shares in the Company; and
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE IF A
POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Shares, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Shares will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Shares. In addition, the fiduciary must consider
whether the investment in Shares will satisfy the diversification requirement of
Section 404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of
the offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Shares by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Shares for its own account and for the purpose of
<PAGE>
investment only, not with a view to, or in accordance with, the distribution of
sale of the Shares and that it will not sell, pledge, assign or transfer or
offer to sell, pledge, assign or transfer any of its Shares without an effective
registration statement under the Securities Act, or an exemption therefrom
(including an exemption under Regulation D, Section 504) and an opinion of
counsel acceptable to the Company that registration under the Securities Act is
not required and that the transaction complies with all other applicable Federal
and state securities or Blue Sky laws.
(The remainder of this page intentionally left blank)
<PAGE>
CONFIDENTIAL
IP Voice Communications, Inc., a Nevada corporation
INVESTOR SUITABILITY EVALUATION QUESTIONNAIRE
1. NAME ________________________________________________
2. ADDRESS ________________________________________________
------------------------------------------------
3. PHONE Residence ( )_________________________________
Business ( )_________________________________
4. SOCIAL SECURITY NUMBER _______________________________
TAX IDENTIFICATION NUMBER _______________________________
5. DATE OF BIRTH _________________________________________________
6. REPRESENTATIONS (Investor should initial the appropriate blanks to
which an affirmative representation can be made)
_______________The total purchase price does not exceed twenty percent
(20%) of my net worth at the time of the sale and my
subscription is at least One Hundred Fifty Thousand
Dollars ($150,000.00).
_______________I have a net worth of One Million Dollars($1,000,000.00)
or more.
_______________I have an income of Two Hundred Thousand Dollars
($200,000.00) or more in each of the past two (2) years
and during the current year.
_______________The total purchase price does not exceed twenty percent
(20%) of my net worth.
I further represent that I can bear the economic risk of this
investment and that I have substantial experience in making investment decisions
of this type.
------------------------------
Signature of Investor
Date:___________________________ ______________________________
Name of Investor
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
------------------------------------
Suitability
Shares will be offered and sold pursuant to an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Shares to
that Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
<PAGE>
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,000,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8)An entity in which all of the equity owners are accredited investors
(as defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income form long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
non-accredited Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to
investments in limited partnerships either alone or with its Purchaser
Representative, if any; and
(2) The Investor has been provided access to all relevant documents it
desires or needs; and
(3) The Investor is aware of its limited ability to sell and/or
transfer its Shares in the Company; and
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
<PAGE>
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE IF A
POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET
FORTH IN THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Shares, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Shares will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Shares. In addition, the fiduciary must consider
whether the investment in Shares will satisfy the diversification requirement of
Section 404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of
the offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Shares by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Shares for its own account and for the purpose of
investment only, not with a view to, or in accordance with, the distribution of
sale of the Shares and that it will not sell, pledge, assign or transfer or
offer to sell, pledge, assign or transfer any of its Shares without an effective
registration statement under the Securities Act, or an exemption therefrom
(including an exemption under Regulation D, Section 504) and an opinion of
counsel acceptable to the Company that registration under the Securities Act is
not required and that the transaction complies with all other applicable Federal
and state securities or Blue Sky laws.
<PAGE>
IPVoice Communications, Inc.
(A Nevada corporation)
==================
SUBSCRIPTION DATA SHEET
==================
Name of Subscriber
(Offeree):_______________________________________________________
Address of Residence
(if natural person):_____________________________________________
- -----------------------------------------------------------------
Address of
Business:________________________________________________________
- -----------------------------------------------------------------
Subscriber's
Telephone No.:___________________________________________________
Subscriber's Social
Security No. or
Tax I.D. No.:____________________________________________________
Preferred Address for
receiving mail:
( ) Residence
( ) Business
( ) Other, if any: _____________________________________________
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Date of Subscription:____________________________________________
Amount of
Subscription: $_________________________________________________
<PAGE>
SUBSCRIPTION AGREEMENT AND INVESTMENT
REPRESENTATION OF INVESTORS
IPVoice Communications, Inc.
5901 South Middlefield Road, Suite 100
Littleton, CO 80123
Gentlemen:
1. Subject to the terms and conditions hereof, the undersigned,
intending to be legally bound, hereby irrevocably subscribes for and agrees to
accept and subscribe to _________ shares of Rule 504 common stock of IPVoice
Communications, Inc., a Nevada corporation (the Company), for a total
consideration of $_________, the receipt and sufficiency of which is hereby
acknowledged.
2. In order to induce the Company to accept the subscription made
hereby, the undersigned hereby represents and warrants to the Company, and each
other person who acquires or has acquired the Shares, as follows :
(a) The undersigned, if an individual (i) has reached the age
of majority in the state in which he resides and (ii) is a bona fide resident
and domiciliary (not a temporary or transient resident) of the state set forth
beneath his signature below.
(b) The undersigned has the financial ability to bear the
economic risk of an investment in the Shares has adequate means of providing for
his current needs and personal contingencies, has no need for liquidity in such
investment, and could afford a complete loss of such investment. The
undersigned's overall commitment to investments that are not readily marketable
is not disproportionate to his net worth, and his investment in the Company will
not cause such overall commitment to become excessive.
(c) The undersigned meets at least one of the following
criteria:
(i) the undersigned is a natural person whose individual
net worth or joint net worth with his spouse, at the
time of his purchase, exceeds $1,000,000 (ONE MILLION
DOLLARS); or
(ii) the undersigned is a natural person and had an
individual income in excess of $200,000 (TWO-HUNDRED
THOUSAND DOLLARS) in each of the two most recent years,
or jointly with his spouse in excess of $300,000
(THREE-HUNDRED THOUSAND DOLLARS) in each of those
years, and who reasonably expects to achieve at least
the same income level in the current year; or
(iii)qualifies as an accredited investor under Regulation D
of the Securities Act of 1933 (the "Act").
<PAGE>
(d) The investment is one in which I am purchasing for myself
and not for others, the investment amount does not exceed 10% of my net worth
and I have the capability to understand the investment and the risk.
(e) The undersigned has been given a full opportunity to ask
questions of and to receive answers from the Company concerning the terms and
conditions of the offering and the business of the Company, and to obtain
additional information necessary to verify the accuracy of the information given
him or to obtain such other information as is desired in order to evaluate an
investment in the Shares. All such questions have been answered to the full
satisfaction of the undersigned.
(f) In making his decision to purchase the Shares herein
subscribed for, the undersigned has relied solely upon independent
investigations made by him. He has received no representation or warranty from
the Company or from a broker-dealer, if any, or any of the affiliates, employees
or agents of either. In addition, he is not subscribing pursuant hereto for any
Shares as a result of or subsequent to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees, including the undersigned, had been invited as a result of,
subsequent to, or pursuant to any of the foregoing.
(g) The undersigned understands that the Shares have not been
registered under the Act in reliance upon specific exemptions from registration
thereunder, and he agrees that his Shares may not be sold, offered for sale,
transferred, pledged, hypothecated, or otherwise disposed of except in
compliance with the Act and applicable state securities laws, which restrictions
require the approval of the Company for the transfer of any Shares (which
approval, except under limited circumstances, may be withheld by the Company in
its sole discretion). The undersigned has been advised that the Company has no
obligations to cause the Shares to be registered under the Act or to comply with
any exemption under the Act, including but not limited to that set forth in Rule
144 promulgated under the Act, which would permit the Shares to be sold by the
undersigned. The undersigned understands that it is anticipated that there may
not be any market for resale of the Shares, and that it may not be possible for
the undersigned to liquidate an investment in the Shares. The undersigned
understands the legal consequences of the foregoing to mean that he must bear
the economic risk of his investment in the Shares. He understands that any
instruments representing the Shares will bear legends restricting the transfer
thereof.
3. To the extent I have the right to rescind my purchase of the Shares,
which right of recission is hereby offered, I waive and relinquish such rights
and agree to accept certificate(s) evidencing such Shares.
4. This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Nevada.
5. All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties hereto may require.
6. The shares referred to herein may be sold to the subscriber in a
transaction exempt under Section 517.061 of the Florida Securities Act. The
shares have not been registered under said act in the State of Florida. In
addition, if sales are made to five or more persons in the State of
<PAGE>
Florida, any sale in the State of Florida is voidable by the purchaser within
three (3) days after the first tender of consideration is made by such purchaser
to the issuer, an agent of the issuer, or an escrow agent or within three (3)
days after the availability of that privilege is communicated to such purchaser,
whichever occurs later.
IN WITNESS WHEREOF, the undersigned has executed and agrees to be bound
by this Subscription Agreement and Investment Representation on the date written
below as the Date of Subscription:
(TO BE USED FOR INDIVIDUAL(S))
- ---------------------------- -------------------------------
Print Name of Individual Signature of Individual
- ----------------------------- -------------------------------
State of Residence Date of Subscription
(TO BE USED FOR PARTNERSHIPS, CORPORATIONS,
TRUSTS OR OTHER ENTITIES)
_______________________________ By:______________________________
Print Name of Partnership Signature of Authorized
Corporation - Trust - Entity Representative
- ------------------------------- ---------------------------------
Capacity of Authorized Print Name of Authorized
Representative Representative
- ------------------------------- --------------------------------
Print Jurisdiction of Date of Subscription
Incorporation or Organization
EXHIBIT 4.6
IPVOICE COMMUNICATIONS, INC.
OFFERING OF NO MORE THAN 104 UNITS OF IPVOICE COMMUNICATIONS, INC., AT AN
OFFERING PRICE OF TWENTY FIVE THOUSAND DOLLARS ($25,000) PER UNIT
IPVOICE COMMUNICATIONS, INC. ("Company", "IPVC" or "IPVoice"), is a
Nevada corporation offering a minimum of 20 Units and a maximum of 104 Units for
sale at a price of $25,000 per Unit. There is no limitation on the number of
Units a subscriber may purchase. Units are being sold in minimum amounts of two
Units per subscriber ($50,000) although the Company may under certain
circumstances accept subscriptions for one Unit or for partial Units. An escrow
account has been established to hold the proceeds from Unit sales until such
time that the minimum offering has been reached ($500,000) or the Company has
written contracts with customers to deploy 9 gateways (3 of which must be sent
to third parties). Any further proceeds from the sale of Units will be held in
escrow until such time that the Company has written contracts to deploy 2
gateways and then $100,000 will be released from escrow to fulfill the
commitment.
Prior to this Offering there has been a limited public market for the
securities of the Company and there can be no assurance that any such public
market for the securities of the Company will develop subsequent to this
Offering. The Offering price has been determined arbitrarily by the Company and
does not necessarily bear any relationship to the Company's assets, book value,
net worth or any other recognized criteria of value.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SUBSTANTIAL
DILUTION TO PUBLIC INVESTORS. THEY SHOULD BE PURCHASED ONLY BY
PERSONS WHO CAN AFFORD THE RISK OF LOSS OF THEIR INVESTMENT. SEE "RISK
FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Discounts and Proceeds to
Price to Public (1) Commissions (2) the Issuer (3)
<S> <C> <C> <C>
Per Unit $ 25,000 $ -0- $ 25,000
Total Minimum
Offering $ 500,000 $ -0- $ 500,000
Total Maximum
Offering $2,600,000 $ -0- $2,600,000
</TABLE>
(1) This offering is made by the Company on a "best efforts" basis, for
a period of 365 days from the date of this Memorandum and may be extended, at
the option of the Company for an additional period or periods not exceeding an
additional 365 days in the aggregate.
(2) No commissions will be paid in connection with sales which are made
directly by the Company. All sales will be made directly by the Company's
principals (officers, directors or employees).
(3) Before deducting certain other cost(s) related to this Offering
payable by the Company including legal, accounting and printing expenses.
<PAGE>
The date of this Private Offering Memorandum is February 1, 1999.
EXPLANATION OF UNIT INTEREST
A Unit shall consist of the following:
(A.) A two (2) year Note in the principal amount of $24,900 including
interest payable quarterly in cash at 9% per annum, or at the option of the
Company in freely-trading stock (if available) calculated at 18% per annum based
on the average closing price of the stock for 7 days prior to the payment date.
The Notes may, at the option of the Company, be extended for an additional one
year term with equal monthly amortization at the rate of 110% of principal plus
accrued interest at the Note rate; or, the Company may at its option extend the
term of the Note for a total of two (2) additional years with equally monthly
amortization at the rate of 120% of principal plus accrued interest at the Note
rate, such option to extend the Note to be exercised by the Company in writing
to the Noteholder at least 60 days prior to its original maturity date.
(B.) Warrant for 18,750 shares of Common Stock of the Company
exercisable at any time during the term of the Note, including any extensions
thereof, the exercise price to be 125% of the average closing price of the stock
for the 30 trading days immediately prior to the Offering date. The Company
agrees to provide piggy-back registration rights to holders of such warrants in
the event a registration statement is filed by the Company before the Notes are
repaid.
(C.) Twenty Five (25) Senior Convertible Preferred shares, without
dividends, with a conversion feature providing that in the event of a default in
payment which is not reasonably cured, all outstanding Senior Convertible
Preferred shares shall be converted into common stock of the Company in an
amount of shares which shall, immediately after issuance, equal 51% of the
issued and outstanding shares, warrants and options of the common stock of the
Company. Upon default, the Company also agrees to promptly call a special
stockholder meeting in order to provide the stockholders with the opportunity to
elect a majority of the Board from the Noteholder group. All Preferred shares
are redeemable at no cost to the Company at the time that each Note is fully
paid.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
TABLE OF CONTENTS
Page No.
Summary of Offering...................................................
Risk Factors..........................................................
Capitalization........................................................
Use of Proceeds.......................................................
Business..............................................................
Management............................................................
Principal Shareholders................................................
Conflicts of Interest.................................................
Description of the Securities.........................................
Redemptions...........................................................
Plan of Distribution..................................................
Taxation..............................................................
EXHIBITS
Financial Data.........................................................A
Subscription Agreement and Investment Representation of Investors......B
<PAGE>
THE UNITS ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND WILL NOT BE
REGISTERED UNDER THE 1933 ACT, OR QUALIFIED UNDER THE SECURITIES LAW OF ANY
STATE AND THEREFORE CANNOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION AND QUALIFICATION, OR THE AVAILABILITY OF AN EXEMPTION
THEREFROM. THERE IS NO PUBLIC OR OTHER MARKET FOR SUCH INTERESTS.
THE UNITS OFFERED HEREBY INVOLVE RISK AND SHOULD NOT BE PURCHASED BY ANYONE
WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. (SEE "RISK FACTORS.")
EACH RECIPIENT MUST RELY UPON HIS OR HER OWN REPRESENTATIVE AS TO LEGAL,
TAX AND RELATED MATTERS. THE COMPANY HAS NOT APPLIED AND WILL NOT APPLY FOR A
RULING AS TO ITS TAX STATUS AS A PARTNERSHIP FROM THE INTERNAL REVENUE SERVICE.
(SEE "TAX CONSIDERATIONS.")
THE COMPANY INTENDS TO CONDUCT THE OFFERING THROUGH THE COMPANY IN SUCH A
MANNER THAT A SIGNIFICANT NUMBER OF THE SHARES WILL BE SOLD TO "ACCREDITED
INVESTORS" AS THAT TERM IS DEFINED IN REGULATION D UNDER THE SECURITIES ACT OF
1933. THE REPRESENTATIONS OF EACH INVESTOR WILL BE REVIEWED TO DETERMINE THE
SUITABILITY OF PROSPECTIVE INVESTORS (PARTICULARLY NONACCREDITED INVESTORS), AND
THE COMPANY WILL HAVE THE RIGHT TO REFUSE A SUBSCRIPTION FOR SHARES IF IN ITS
SOLE DISCRETION THE COMPANY BELIEVES THAT THE PROSPECTIVE INVESTOR DOES NOT MEET
THE APPLICABLE SUITABILITY REQUIREMENT OR THAT THE SHARES ARE OTHERWISE AN
UNSUITABLE INVESTMENT FOR THE PROSPECTIVE INVESTOR.
THE COMPANY SHALL PRIOR TO THE SALE OF ANY SECURITIES ALLOW EACH INVESTOR
OR HIS AGENT THE OPPORTUNITY TO ASK QUESTIONS OF AND RECEIVE ANSWERS FROM ANY
PERSON AUTHORIZED TO ACT ON BEHALF OF THE COMPANY CONCERNING ANY ASPECT OF THE
INVESTMENT AND TO OBTAIN ANY ADDITIONAL INFORMATION (TO THE EXTENT THE COMPANY
POSSESSES SUCH INFORMATION) NECESSARY TO VERIFY THE ACCURACY OF THE INFORMATION
CONTAINED IN THIS OFFERING MEMORANDUM. INVESTORS OR THEIR REPRESENTATIVES HAVING
QUESTIONS OR DESIRING ADDITIONAL INFORMATION SHOULD CONTACT BARBARA WILL AT
(303) 738-1266.
4
<PAGE>
NOTICES TO RESIDENTS OF CERTAIN STATES
NOTICE TO ALABAMA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES
NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES IT PASS UPON
THE ACCURACY OR COMPLETENESS OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT OF AN
ALABAMA PURCHASER WHO IS NOT AN ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%)
PERCENT OF SUCH PURCHASER'S NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE,
FURNISHINGS AND AUTOMOBILES.
NOTICE TO ALASKA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ALASKA SECURITIES ACT
AND MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO ARIZONA RESIDENTS
SUBJECT TO THE PROVISIONS OF ARIZONA ADMINISTRATIVE CODE R14-4-140, THESE
SECURITIES MAY BE OFFERED AND SOLD BY THE ISSUER ONLY TO ACCREDITED INVESTORS AS
DEFINED IN ARIZONA ADMINISTRATIVE CODE R14-4-126 AND MAY BE RE-OFFERED AND SOLD
WITHIN ARIZONA FOR A THREE YEAR PERIOD ONLY TO ACCREDITED INVESTORS. THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR THE ARIZONA CORPORATION COMMISSION, NOR HAVE THEY PASSED UPON THE
MERITS OF OR OTHERWISE APPROVED THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO ARKANSAS RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER SECTION
14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE SECURITIES ACT
OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS NOT BEEN
FILED WITH THE ARKANSAS SECURITIES DEPARTMENT OR WITH THE SECURITIES AND
EXCHANGE COMMISSION. NEITHER THE DEPARTMENT NOR THE COMMISSION HAS PASSED UPON
THE VALUE OF THESE
5
<PAGE>
SECURITIES, MADE ANY RECOMMENDATIONS AS TO THEIR PURCHASE, APPROVED OR
DISAPPROVED THE OFFERING, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AN INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PERCENT OF THE INVESTOR'S
NET WORTH AT THE TIME OF PURCHASE, ALONE OR JOINTLY WITH SPOUSE.
NOTICE TO CALIFORNIA RESIDENTS
IF THE COMPANY ELECTS TO SELL SHARES IN THE STATE OF CALIFORNIA, IT IS
UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SHARES, OR OTHER INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFORE WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BANKING
COMMISSIONER OF THE STATE OF CONNECTICUT NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
NOTICE TO DELAWARE RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT
AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
NOTICE TO FLORIDA RESIDENTS
THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER
IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. THE
SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN
ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE
WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER, WHICHEVER OCCURS LATER.
6
<PAGE>
NOTICE TO GEORGIA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE GEORGIA SECURITIES ACT
OF 1973, AS AMENDED, IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION SET FORTH
IN SECTION 9(m) OF SUCH ACT AND THE SECURITIES CANNOT BE SOLD OR TRANSFERRED
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR IN A TRANSACTION WHICH IS
OTHERWISE IN COMPLIANCE WITH SAID ACT.
NOTICE TO IDAHO RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE IDAHO SECURITIES ACT
AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY AN
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET
WORTH.
NOTICE TO INDIANA RESIDENTS
EACH INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS EITHER (i) A NET
WORTH (EXCLUSIVE OF HOME, HOME FURNISHINGS AND AUTOMOBILES) EQUAL TO AT LEAST
THREE (3) TIMES THE AMOUNT OF HIS INVESTMENT BUT IN NO EVENT LESS THAN
SEVENTY-FIVE THOUSAND ($75,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF HOME,
HOME FURNISHINGS AND AUTOMOBILES OF TWO (2) TIMES HIS INVESTMENT BUT IN NO EVENT
LESS THAN THIRTY THOUSAND ($30,000) DOLLARS AND A GROSS INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS.
NOTICE TO IOWA RESIDENTS
IOWA RESIDENTS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST FORTY THOUSAND
($40,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND AUTOMOBILES] AND A
MINIMUM ANNUAL GROSS INCOME OF FORTY THOUSAND ($40,000) DOLLARS, OR (ii) A NET
WORTH OF AT LEAST ONE HUNDRED TWENTY-FIVE THOUSAND ($125,000) DOLLARS AS
COMPUTED ABOVE.
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<PAGE>
NOTICE TO KANSAS RESIDENTS
AN INVESTMENT BY AN NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY (20%)
PERCENT OF THE INVESTOR'S NET WORTH; EXCLUDING PRINCIPAL RESIDENCE, FURNISHINGS
THEREIN AND PERSONAL AUTOMOBILES.
NOTICE TO KENTUCKY RESIDENTS
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR OTHER DOCUMENT), HAVE
BEEN ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION OR
QUALIFICATION PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREIN.
ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET
WORTH.
NOTICE TO MAINE RESIDENTS
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION
WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION 10520(2)(R) OF
TITLE 32 OF THE MAINE REVISED STATUTES. THESE SECURITIES MAY BE DEEMED
RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL THE
SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
NOTICE TO MARYLAND RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND SECURITIES ACT
IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION 11-602(9)
OF SUCH ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY NOT BE REOFFERED
FOR SALE OR RESOLD IN THE STATE OF MARYLAND, EXCEPT AS A SECURITY, OR IN A
TRANSACTION EXEMPT UNDER SUCH ACT.
8
<PAGE>
NOTICE TO MASSACHUSETTS RESIDENTS
MASSACHUSETTS RESIDENTS MUST HAVE HAD EITHER (i) A MINIMUM NET WORTH OF AT
LEAST FIFTY THOUSAND ($50,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES] AND HAD DURING THE LAST YEAR, OR IT IS ESTIMATED THAT THE
SUBSCRIBER WILL HAVE DURING THE CURRENT TAX YEAR, TAXABLE INCOME OF FIFTY
THOUSAND ($50,000) DOLLARS OR (ii) A NET WORTH OF AT LEAST ONE HUNDRED FIFTY
THOUSAND ($150,000) DOLLARS [AS COMPUTED ABOVE].
NOTICE TO MICHIGAN RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MICHIGAN SECURITIES ACT
AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THAT ACT OR
EXEMPTION THEREFROM.
THE COMPANY SHALL PROVIDE ALL MICHIGAN INVESTORS WITH A DETAILED WRITTEN
STATEMENT OF THE APPLICATION OF THE PROCEEDS OF THE OFFERING WITHIN SIX (6)
MONTHS AFTER COMMENCEMENT OF THE OFFERING OR UPON COMPLETION, WHICHEVER OCCURS
FIRST, AND WITH ANNUAL CURRENT BALANCE SHEETS AND INCOME STATEMENTS THEREAFTER.
NOTICE TO MINNESOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER 80 OF THE MINNESOTA
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED FOR VALUE
EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW.
NOTICE TO MISSISSIPPI RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH
THE SECURITIES AND EXCHANGE COMMISSION, NEITHER THE SECRETARY OF STATE NOR THE
COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NOR HAS APPROVED OR
DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE
OF THESE OR ANY OTHER SECURITIES.
THERE IS NO ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT BE
ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION
9
<PAGE>
PRICE OF THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS
NOT AN INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.
THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY STANDARDS
AND MUST BE ABLE TO BEAR THE ENTIRE LOSS OF HIS INVESTMENT. ADDITIONALLY, ALL
PURCHASERS WHO ARE NOT ACCREDITED INVESTORS MUST HAVE A NET WORTH OF AT LEAST
THIRTY THOUSAND ($30,000) DOLLARS AND INCOME OF THIRTY THOUSAND ($30,000)
DOLLARS OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS. THESE
SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR EXCEPT IN A
TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR IN A
TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.
NOTICE TO MISSOURI RESIDENTS
THESE SECURITIES ARE SOLD TO, AND BEING ACQUIRED BY, THE HOLDER IN A
TRANSACTION EXEMPTED UNDER SECTION 10, SUBSECTION 409.402(B), MISSOURI UNIFORM
SECURITIES ACT (RMSO 1969).
THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
MISSOURI. UNLESS THE SHARES ARE REGISTERED, THEY MAY NOT BE REOFFERED OR RESOLD
IN THE STATE OF MISSOURI, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPT UNDER
SAID ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTOR MUST HAVE A MINIMUM
ANNUAL INCOME OF THIRTY THOUSAND ($30,000) DOLLARS AND A NET WORTH OF AT LEAST
THIRTY THOUSAND ($30,000) DOLLARS (EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES) OR A NET WORTH OF SEVENTY FIVE THOUSAND ($75,000) DOLLARS EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES.
AN INVESTMENT BY A NON-ACCREDITED INVESTOR SHALL NOT EXCEED TWENTY (20%)
PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO MONTANA RESIDENTS
EACH MONTANA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES BEING OFFERED
HEREBY AGREES NOT TO SELL THESE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS
AFTER DATE OF PURCHASE.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE INVESTMENT BY A
NON-ACCREDITED INVESTOR MAY NOT EXCEED TWENTY (20%) PERCENT OF THE INVESTORS NET
WORTH.
10
<PAGE>
NOTICE TO NEBRASKA RESIDENTS
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE NEBRASKA SECURITIES ACT AND
MAY NOT BE SOLD WITHOUT REGISTRATION UNDER THAT ACT OR EXEMPTION THEREFROM.
NOTICE TO NEW HAMPSHIRE RESIDENTS
EACH NEW HAMPSHIRE INVESTOR PURCHASING SHARES MUST WARRANT THAT HE HAS
EITHER (i) A NET WORTH (EXCLUSIVE OF HOME, FURNISHINGS AND AUTOMOBILES) OF TWO
HUNDRED FIFTY THOUSAND ($250,000) DOLLARS OR (ii) A NET WORTH (EXCLUSIVE OF
HOME, FURNISHING AND AUTOMOBILES) OF ONE HUNDRED TWENTY FIVE THOUSAND ($125,000)
DOLLARS AND FIFTY THOUSAND ($50,000) DOLLARS ANNUAL INCOME.
NOTICE TO NEW JERSEY RESIDENTS
THE ATTORNEY GENERAL OF THE STATE HAS NOT PASSED OR ENDORSED THE MERITS OF
THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES NOT CONSTITUTE APPROVAL OF
THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE DEPARTMENT OF
LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
NOTICE TO NEW YORK RESIDENTS
THIS OFFERING MEMORANDUM HAS NOT YET BEEN REVIEWED BY THE ATTORNEY GENERAL
PRIOR TO ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT
PASSED OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
THIS OFFERING MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL
FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE IN
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THAT WERE MADE, NOT MISLEADING. IT
CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
11
<PAGE>
NOTICE TO NORTH DAKOTA RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
COMMISSIONER OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
NOTICE TO NORTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE
NORTH CAROLINA SECURITIES ACT. THE NORTH CAROLINA SECURITIES ADMINISTRATION
NEITHER RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE
ADMINISTRATOR PASSED ON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED
HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTICE TO OKLAHOMA RESIDENTS
THE SECURITIES RENDERED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES ACT. THE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF 1933
AND/OR THE OKLAHOMA SECURITIES ACT OF AN OPINION OF COUNSEL TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY A NON-ACCREDITED
INVESTOR SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTORS NET WORTH.
NOTICE TO OREGON RESIDENTS
THE SECURITIES OFFERED HAVE NOT BEEN REGISTERED WITH THE DIRECTOR OF THE
STATE OF OREGON UNDER THE PROVISIONS OF OAR 441-65-240. THE INVESTOR IS ADVISED
THAT THE DIRECTOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION STATEMENT
AND HAS NOT REVIEWED THIS DOCUMENT SINCE THIS DOCUMENT IS NOT REQUIRED TO BE
FILED WITH THE DIRECTOR.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE COMPANY
CREATING THE SECURITIES, AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND
RISKS INVOLVED IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
12
<PAGE>
NOTICE TO PENNSYLVANIA RESIDENTS
ANY PERSON WHO ACCEPTS AN OFFER TO PURCHASE THE SECURITIES IN COMMONWEALTH
OF PENNSYLVANIA IS ADVISED, THAT PURSUANT TO SECTION 207(m) OF THE PENNSYLVANIA
SECURITIES ACT, HE SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE, AND RECEIVE
A FULL REFUND OF ANY CONSIDERATION PAID, WITHOUT INCURRING ANY LIABILITY, WITHIN
TWO (2) BUSINESS DAYS FROM THE TIME THAT HE RECEIVES NOTICE OF THIS WITHDRAWAL
RIGHT AND RECEIVES THE PLACEMENT OFFERING MEMORANDUM. ANY PERSON WHO WISHES TO
EXERCISE SUCH RIGHT OF WITHDRAWAL IS ADVISED TO GIVE NOTICE BY LETTER OR
TELEGRAM SENT AND POSTMARKED BEFORE THE END OF THE SECOND BUSINESS DAY AFTER
EXECUTION. IF THE REQUEST FOR WITHDRAWAL IS TRANSMITTED ORALLY, WRITTEN
CONFIRMATION MUST BE GIVEN. ANY PERSON WHO PURCHASES INTERESTS WHO IS A
PENNSYLVANIA RESIDENT WILL NOT SELL SUCH INTERESTS FOR A PERIOD OF TWELVE (12)
MONTHS BEGINNING WITH THE CLOSING DATE. PENNSYLVANIA RESIDENTS MUST HAVE EITHER
(i) A MINIMUM NET WORTH OF THIRTY THOUSAND ($30,000) DOLLARS [EXCLUDING HOME,
HOME FURNISHINGS AND AUTOMOBILES] AND A MINIMUM ANNUAL GROSS INCOME OF THIRTY
THOUSAND ($30,000) DOLLARS, OR (ii) A NET WORTH OF AT LEAST SEVENTY-FIVE
THOUSAND ($75,000) DOLLARS [AS COMPUTED ABOVE], AND MAY NOT INVEST MORE THAN TEN
(10%) PERCENT OF THEIR NET WORTH [EXCLUSIVE OF THE SUBSCRIBER'S HOME, HOME
FURNISHINGS AND AUTOMOBILES].
NOTICE TO SOUTH CAROLINA RESIDENTS
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER ONE OR
MORE SECURITIES ACTS.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSIONER OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
13
<PAGE>
NOTICE TO SOUTH DAKOTA RESIDENTS
THE SHARES HAVE NOT BEEN REGISTERED UNDER CHAPTER 47-31 OF THE SOUTH DAKOTA
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DEPOSED OF FOR
VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM OR OPERATION OF LAW.
SOUTH DAKOTA RESIDENTS MUST HAVE EITHER (i) A MINIMUM NET WORTH OF AT LEAST
SIXTY THOUSAND ($60,000) DOLLARS [EXCLUDING HOME, HOME FURNISHINGS AND
AUTOMOBILES] AND A MINIMUM GROSS INCOME OF SIXTY THOUSAND ($60,000) DOLLARS, OR
(ii) A NET WORTH OF AT LEAST TWO HUNDRED TWENTY-FIVE THOUSAND ($225,000) DOLLARS
[AS COMPUTED ABOVE].
NOTICE TO TENNESSEE RESIDENTS
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO TEXAS RESIDENTS
THIS OFFERING MEMORANDUM IS FOR THE INVESTOR'S CONFIDENTIAL USE AND MAY NOT
BE REPRODUCED. ANY ACTION CONTRARY TO THESE RESTRICTIONS MAY PLACE SUCH INVESTOR
AND THE ISSUER IN VIOLATION OF THE TEXAS SECURITIES ACT.
ANYTHING TO THE CONTRARY NOTWITHSTANDING, AN INVESTMENT BY ANY INVESTOR
SHALL NOT EXCEED TEN (10%) PERCENT OF THE INVESTOR'S NET WORTH.
NOTICE TO UTAH RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THAT ACT OR EXEMPTION
THEREFROM.
NOTICE TO WASHINGTON RESIDENTS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE WASHINGTON SECURITIES
ACT AND THE ADMINISTRATOR OF SECURITIES OF THE STATE OFWASHINGTON HAS NOT
REVIEWED THE OFFERING OR OFFERING MEMORANDUM. THESE SECURITIES MAY NOT BE SOLD
WITHOUT REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
14
<PAGE>
IT IS THE RESPONSIBILITY OF ANY INVESTOR PURCHASING SHARES TO SATISFY
ITSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE
UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OF ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE, ACCEPTANCE
OR AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFER,
WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR
IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
SUMMARY OF OFFERING
The Company
IPVoice Communications, Inc. was founded in September 1997 to provide a
vehicle for key software technologies and a Research and Development laboratory
for the emerging Voice Over The Internet market. IPVoice core software
technologies require little additional development to produce market viability.
New technologies presently under development such as TrueConnect may require
additional financial support to bring them to the marketplace.
The executive offices of IPVoice are as follows:
5901 South Middlefield Road, Suite 100
Littleton, CO 80123
Telephone: (303) 738-1266
Facsimile: (303) 738-1294
(Original subscription documents must be received by Company before stock can be
ordered)
The Offering
Type of security offered.... Notes, Warrants,
Senior Convertible Preferred Shares
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<PAGE>
Offering price per Units.......................................... $ 25,000
Maximum Number of Units Offered............................................ 104
Minimum Number of Units Offered . . . . . . . . .. . . . . . . . . . . . . . 20
Shares Outstanding
Prior to the Offering ........................................ 13,006,091
After the Minimum Offering . . . . . . . . . . .. . . . . . . . . . . .
After the Maximum Offering . . . . . . . .. . .. . . . . . . . . . . .
(Assumes that all Warrants included in the Units distributed herein are executed
and that no senior convertible stock distributed herein has been converted into
common shares of the Company) Selected Financial Information
The financial data included in this Memorandum as Exhibit A sets forth
information regarding the Company as of its stated date. A summary of pertinent
financial data relating to the Company is set forth therein.
RISK FACTORS
The purchase of Units offered hereby involves a high degree of risk. These
securities should only be purchased by persons who can afford the risk of loss
of their entire investment. Prior to the purchasing of shares, prospective
investors should carefully consider the following risk factors:
1. IPVoice is a development stage company with a limited
operating history. To date the Company has minimal revenues from operations and
only nominal assets. See "Financial Statements." The Company faces all the risks
inherent in a new business and there can be no assurance that any of the
Company's planned future activities will be successful. Since the Company was
recently organized, it cannot provide historical information and financial data
upon which a prospective investor can make an informed judgment as to the future
prospects of the Company. The purchase of the securities offered hereby must
therefore be regarded as the placing of funds at a high risk in a new or
"start-up" venture with all the unforeseen costs, expenses, problems and
difficulties to which such ventures are subject. See "Use of Proceeds" and
"Business."
2. Without the proceeds of this Offering the Company will have
only minimal capital and will be limited in its operations. If the Offering does
not raise a substantial amount of funds, the Company's capital may prove to be
insufficient to permit substantial operations to commence, other than to a very
limited extent. The Company may receive from this offering maximum net proceeds
of $2,600,000, which management believes will be sufficient to implement the
Company's initial plan of operation for the next 24 months. Less than the
maximum amount may be obtained. If substantially less than the maximum financing
offering is available to the Company, its planned activities may be materially
and adversely affected.
16
<PAGE>
3. None of the outstanding stock of the Company currently
outstanding has been registered under the Securities Act of 1933, as amended
(the "Act"). Common stock underlying the Units offered herein will be issued
pursuant to Regulation D, and may be "restricted" under the Securities Act of
1933. State securities laws may also require the placement of transfer
restrictions on the securities purchased herein.
4. The Company is not registered as, and is not required to
register as, an investment company or "mutual fund" and thus is not subject to
the extensive regulation imposed by the Securities and Exchange Commission under
the Investment Company Act of 1940 (the "40 Act"). Accordingly, stockholders
will not be accorded the protections provided by the 40 Act or by the SEC which
enforces those acts and may not be accorded the protection provided by the
Advisers Act.
5. The Articles of Incorporation and/or the Bylaws provide
that the Management may be indemnified against costs and expenses incurred in
connection with, and will not be liable to the stockholders for, any action
taken, or failure to act, on behalf of the Company in connection with the
business of the Company as determined by the Management if not engaged in
willful misconduct. Therefore, a stockholder may have a more limited right of
action against the Management than would be available absent these provisions in
the Articles of Incorporation and/or Bylaws.
6. Management will have broad discretion to utilize the funds
of the company.
<TABLE>
<CAPTION>
CAPITALIZATION
Outstanding To be Outstanding
Title of Class as of February 1, 1999 After Maximum Offering
- -------------- ---------------------- ----------------------
<S> <C> <C>
Common Stock $619,064 $ 619,064
Preferred Stock $ 0 $ 10,400
Notes $ 0 $2,589,600
</TABLE>
USE OF PROCEEDS
The net proceeds to be realized from this Offering will approximate
$2,600,000 if the Maximum Offering is sold; however, it is likely that less than
the full amount of this offering will be obtained. Management anticipates the
net proceeds less initial expenses payable will be applied to the business of
the Company, providing working capital. An escrow account has been established
17
<PAGE>
to hold the proceeds from Unit sales until such time that the minimum offering
has been reached ($500,000) and the Company has written contracts with customers
to deploy 9 gateways (3 of which must be to third parties). Any further proceeds
from the sale of Units will be held in escrow until such time that the Company
has written contracts to deploy 2 gateways and then $100,000 will be released
from escrow to fulfill this commitment.
Initial expenses payable consist of: (a) legal, accounting, Blue Sky
compliance, printing costs and transfer agent fees. No other charges or expenses
are expected or anticipated. The balance of the funds will be utilized by the
Management for working capital.
BUSINESS
Introduction
In the fast moving world of communications, especially Internet telephony,
the companies with systems in the market are just now battling between open and
closed systems. IPVoice has developed open systems and will have an edge on the
competition in more ways than one.
With the meteoric rise of the Internet (which is predicted to continue at a
staggering rate), and the obvious savings that Internet telephony can provide,
the future looks bright. In the multi-billion dollar telephone industry, IPVoice
does not have to compete with AT&T and MCI. A small Internet telephone company
can create significant revenues without ever disturbing the major players and
thus having to compete with them in advertising or price-warring for market
share. As the Internet telephony segment continues to grow and break out, which
many industry analysts predict it surely will, it is an area that the large
companies will certainly look to enter, probably through acquisitions. In that
scenario, with their installed client base and established network customers
well entrenched, their international presence developed, and their
forward-thinking software developed, tested and already implemented, IPVoice
could be perfectly positioned to become a prime buyout candidate.
The Company
IPVoice Communications, Inc., a Nevada corporation of which IPVoice
Communications, Inc., a Delaware corporation, is a wholly owned subsidiary
(hereafter collectively referred to as "IPVoice" or the "Company") was
originally formed in September 1997. The company was established with the
intention of developing its MultiCom Business Management Software (developed by
Anthony Welch, installed and ran in a Carrier grade switching environment for
over three years) to interact with voice over the internet application under the
product name of TrueConnect. By introducing Carrier grade Business Management
into the marketplace, IPVoice is poised to take advantage of the explosive
potential in Internet telephony. IPVoice is preparing to deliver products that
allow companies and individuals to route their phone calls, faxes, and other
data across the Internet at substantial cost savings with limited sacrifice of
quality compared to traditional telephone networks.
18
<PAGE>
IPVoice's unique; state-of-the-art software and hardware solutions will
bridge the gap between the telephone and the Internet. IP Telephony has been
heralded as the foundation for a new class of telecommunication applications
which promise to be as common as your desktop phone. This new technology, when
exposed to the deregulated communications marketplace, will offer tremendous
opportunity for young, Internet technology companies. Smaller companies which
can easily assimilate new technology and which can quickly adapt to inevitable
changes in the Internet, are expected to take fuller advantage of the market
created for such products. IPVoice intends to make an impact on the Internet
Telephony market by setting the standard for billing, management network and
marketing programs.
The Exploding Internet Market
The potential market for Internet telephony is awesome. Industry analysts
speculate that revenues could grow sixteen-fold between 1995 and the turn of the
century.
[GRAPHIC OMITTED]
International Data Corporation (IDC) has predicted that the IP Telephony
market will be worth $560 million in 1999 with annual growth of over 382%
(CAGR).
Internet Telephony
Traditional telephone networks give every call a nailed-down circuit. This
means that a dedicated circuit must be utilized for the full time that the call
is connected. This wastes precious expensive resources because only one person
can talk at a time and also because there are breaks in the conversation. In a
normal conversation, one person speaks while the other listens. This wastes half
of the capacity of the dedicated circuit. At best, a traditional telephone
network uses 25% of the capacity of each call. This significantly inflates the
costs of making calls.
19
<PAGE>
IP stands for Internet Protocol. IP is the most significant of the
protocols on which the Internet (and thus the World Wide Web) is based. It
allows a packet of information (voice, video, e-mail, data, images, etc.) to
cross multiple networks on its way to its final destination. Thus, instead of
having one dedicated circuit for a call, the entire network is shared. The
"conversation" (voice, data, images, video, etc.) is split into many small
packets and each packet is sent down whichever path is open at that time.
Packets are reassembled at the destination. Until recently, packet switching was
very slow. New technology can zip packets around networks at lightning speed.
Fast packet networks will make voice sound as good (and possibly better) than
the circuit-switched voice networks used currently.
Companies using IPVoice's technology can achieve savings of 30% to 70% over
circuit-switched voice. The estimated saving on expensive international calls is
remarkable.
The following graph shows the market predictions of the emerging IP
Telephony industry (Source: Frost & Sullivan):
[GRAPHIC OMITTED]
$1.81 Billion, Compound Annual Growth Rate: 149% for the period
Leading Edge Products
IPVoice products have been designed and produced by the Company at its
research and development site located in Denver, Colorado. IPVoice products are
made from company-designed software and hardware as well as materials purchased
from a few major suppliers. The Company has two sites operational and is
preparing to deploy TrueConnect Gateways in the Domestic and International arena
in the first quarter 1999.
20
<PAGE>
The launch of TrueConnect follows three years of extensive research and
development, fieldtesting and trials on MultiCom, which is the business
management system behind TrueConnect. TrueConnect provides a gateway for
bridging the public telephone system with the Internet. With TrueConnect, users
will be able to conduct real-time, full duplex, high quality two-way voice
communications over the Internet. This method promises substantial savings
compared to standard long distance telecommunications services.
To support the True Connect product, the Company has completed several
proprietary products that will allow the Company and its distributors to offer a
total solution in Internet Telephony. These products including MultiCom, offer a
complete order entry, billing, customer service, agent management and switching
network management system for telecommunications businesses worldwide.
AuditRite, is a software module add-in for the MultiCom system that allows
MultiCom to read and interpret carrier-supplied data-tapes. The AuditRite system
provides a powerful tool for analyzing call patterns and finding possible errors
in a vendor's billing. The Company has also developed 4Com for Summa Four
switches, ICBConnect for Harris switches and TrueWeb2, which when introduced to
the world of IP Telephony, will change the way businesses function.
The hardware technology to route calls over the Internet (Internet
Telephony) has existed for about three years. Put simply, because it avoids
traditional telephone networks, Internet Telephony is faster, more direct and
efficient, and therefore ultimately cheaper than traditional telephone networks.
As such, Internet Telephony possesses an immediate and incredible opportunity
for those companies developing the software to harness and direct the
technology. The competition in the industry is presently focused on the software
applications necessary to operate an Internet Telephony network.
In simplest terms, the business of telephone companies is to sell minutes.
Blocks of minutes represent the commodity of the industry. The more minutes you
can switch through your network switches, the more money you make. The way
established phone networks are set up, a call from your home to New York City
will pass through switches belonging to your local provider, a regional
provider, a national provider, a second regional provider and the local provider
on the other end. Everyone gets a bite of the "per minute charge". Internet
Telephony provides the ability to leapfrog the middle men, thereby creating a
huge dollar savings to the customer, as well as allow immediate monitoring of
your telephone services that have never been available until now.
Where the rubber meets the road in the industry is in the software
applications that control everything from routing to billing. It is in this new
and wide open market that IP Voice stakes its claim to being the Best in the
Industry. The companies that have gotten into the industry have concentrated on
software that simply switches the minutes across the network, without concerning
- --------
2 The IPVoice TrueWeb product is a complete business management system available
over the Web and is scheduled for release soon.
21
<PAGE>
themselves about how they would manage the network, conduct billing, and
implement feature functionality. Telecommunications technology expert Anthony
Welch, who is Executive Vice President of IP Voice, developed the MultiCom,
AuditRite and TrueConnect platforms (all of which have received wide recognition
in this fledgling industry) that are totally unique to IP Voice, and were
designed to handle all the manageability and billing and design upgrades and
service options that this exploding technology will soon need.
The company believes that its closest competition is at least 12 months
behind IPVoice in terms of its software capability, and it may take even longer
for the competition to provide the same services IPVoice has had in operation
for several years. Lucent is only now buying up companies that it will use to
develop this technology. In the time it takes the rest of the industry to catch
up, IPVoice, with former MCI top marketing executive Barbara S. Will at the
helm, will have established its network and be on its way to providing newer and
better services. (The company randomly changes its source code on its software,
up to four times daily, to prevent any pirating of its technology.)
The unique aspects of IP Voice's software include:
REAL TIME BILLING - Currently offered by no one in the telephone industry, real
time billing provides a customer with the ability to secure reports on their
volume of calls, locations called and exact amount owed, among a host of other
features.
FULL FEATURE FUNCTIONALITY - IPVoice can add services to its software at will,
as they come on line or when requested by a customer. Moreover, traditional
phone companies are saddled with huge costs and implementation times, as they
update each switch individually across their network. IPVoice can update its
entire International Network from its home base.
UNRIVALED AGENT CONTROL - A single agent can sit in front of a Gateway terminal
and control the entire operation. Moreover, IPVoice can directly control the
entire network from its main office in the U.S. This has huge implications on
the commercial side, adding and servicing customers.
IPVoice's architecture can switch through multiple networks, both Internet
and traditional, giving it a unique universal application. No other stand-alone
switch can do this. The IPVC Gateways also boast a unique open architecture,
which means that the gateways can both send and receive calls from any other
telephone carrier in the market. Everyone else is limited to receiving calls
only.
IPVoice's Gateway switches cost a partner $65,000 installed (and cost the
company even less if it installs them itself), while a similar traditional
switch, with all the attendant hardware and support for services and billing
functions, would cost anywhere from $500,000 to $5 million.
Debit Card and Calling Card functions are built into the Gateway, also a
unique function. The software modules have been designed to work seamlessly and
efficiently with each other, to provide the most extensive and well thought out
approach to the business end of the technology.
22
<PAGE>
Given its technology, IPVoice's business plan is simple and flexible. They
can set up their own switches, or partner with a local switching business and
take a percentage of the minutes. The gateways can route calls over the Internet
where their network is established, or use traditional phone lines when desired
or necessary (special features allow a savings even when traditional phone lines
are used, and IPVoice can also procure bulk minutes at a lower rate). The
Company has several Letters of Intent with partners around the world, and is set
to ship the first units in the first part of 1999. Therefore, IPVoice is a
company ready to capitalize on its technologically superior position in a
rapidly rising industry. Focused Business Strategy
IPVoice intends to corner the market with these products, not only because
they will be the first its kind, but because competitors will spend years of
time and countless research dollars only to develop similar products.
Within the IP telephony world, few companies stand apart from the rest as
"market leaders" and are invariably the companies relied upon when seeking new
technology. Although these companies may have been reliable in the past, their
future performances can be no better than their underlying hardware. (One such
company uses Natural MicroSystems, Inc.) IPVoice's systems are scalable along
with centralized accounting which also has redundancy built into the
environment. IPVoice's technology could transform competitors into customers, as
IPVoice's billing and management software can communicate with other platforms
due to its own open platform design. The industry leaders lack a critical
component to their solutions: effective data-management and billing.
With the recent acquisition of key technologies and the emergence of the IP
telephony market, IPVoice stands in a unique position:
I. No competitor equals the IPVoice combined IP telephony solution and mature,
real-time billing system for ease of use, affordability and quality. All
competing IP telephony solutions in the marketplace today have immature
billing systems.
II. No other telecommunications group can provide the same level of real-time
remote access and manageability of information.
III. No other group can offer the same level of customer and agent access. The
resulting sales momentum from empowering the remote agents will create a
self-driving sales force unparalleled in the industry.
IV. With IPVoice's industry-unique combination of IP telephony technology,
Internet remote-access technology, and a comprehensive order-entry and
invoicing system, IPVoice can instantly address and secure new marketplaces
and opportunities.
IPVoice products, utilizing specially developed proprietary software, will
provide ongoing revenues from calls made whether voice or data. All of the
Company's products are available for a minimal capital investment of $65,000.
23
<PAGE>
The Company is exploring possible relationships with venture capital groups and
private investment concerns. TruePartners who have already signed Letters of
Intent are being sent their contracts so that the Company can start deployment
of its TrueConnect Gateways. The Company has secured seven LOI's and is anxious
to move forward with product into the marketplace via new, as well as
established, independent representatives and distributors, under the direction
of the Company's President, Barbara Will.
Ms. Will's close association with key organizations and individuals will
support the Company's marketing efforts, as a result of her prior experience in
a senior capacity with MCI. These contacts should prove invaluable during these
marketing and sales activities.
The Company has targeted International markets and will support its sales
efforts by participating in trade shows targeting the telecommunication industry
and large businesses, as well as through professional articles, peer-reviewed
studies, direct calls and a comprehensive marketing campaign. After purchasing
the products from the Company, IPVoice customers will use network services to be
developed by the Company and offered at extremely competitive rates. The Company
believes it is well placed to capitalize on this very large and potentially
profitable opportunity.
Locations assigned IPVoice TruePartners and awaiting deployment:
Hong Kong Madrid Paris
Taiwan London Caribbean
China New York Panama
Greece Costa Rica Mexico
Revenue from Distribution Channels
Management of the Company is anticipating gross margins to be approximately
42% on sales of IPVoice products.
MANAGEMENT
The primary strength of the leadership team stems from their combined
expertise in both business management and technical fields.
BARBARA WILL, PRESIDENT, COO AND CHAIRPERSON
BARBARA WILL, PRESIDENT, COO AND CHAIRPERSON
Barbara Will has over 20 years of experience in all areas of
telecommunications, domestic and international. Prior to joining IPVoice, Ms.
Will spent 11 years in a senior capacity with MCI and was responsible for
signing some of the largest contracts with a carrier/reseller in MCI's history.
Her vast industry experience includes international and international private
line; International 800; data; DSO, DSI, DSC, OC3; dedicated in and outbound;
One-Plus; calling and debit cards; Operator Assistance; Internet; Enhanced
Services; and Enhanced Network.
24
<PAGE>
During her time at MCI, she received numerous awards for her outstanding
performance. Ms. Will attended Colorado State University and graduated in
Communications and Business Administration.
ANTHONY K. WELCH, EXEC. VICE PRESIDENT AND DIRECTOR
Anthony Welch is the original designer of the MultiCom, AuditRite, and
TrueConnect platforms and has served as Special Consultant to various
telecommunications organizations. Mr. Welch has served as Special Consultant and
Project Design Leader for such organizations as Wal- Mart International (US HQ
and Mexico City Branch), Nation's Bank CS Headquarters, Frito-Lay Worldwide
Headquarters, NEC America Mobile Radio/Cellular/Pager Division Headquarters, and
Southwestern Bell Mobile (Cellular/Pager) Systems Headquarters.
Mr. Welch has received numerous awards and recognition for his work in
Artificial Intelligence - both in Military and Academic circles - and has
applied this experience to creating technology solutions that are both
intelligent and flexible. The technology behind the MultiCom system has received
recognition from several telecom trade magazines ("Computer Telephony" and
"Telephony" magazines). Mr. Welch obtained first place in the International
Science competition for Artificial Intelligence at just 17 years of age. Mr.
Welch attended the University of Mississippi and was the first freshman in the
history of the college to be admitted into the artificial intelligence Ph.D.
Program.
MICHAEL MCKIM, VICE PRESIDENT OF RESEARCH & DEVELOPMENT
Michael McKim is responsible for designing and developing the interface
between the telephony hardware and the TrueConnect gateway software. Mr. McKim
will also be responsible for the technical pre-sales support and post-sale
installation support. Mr. McKim has a master's degree in electrical engineering
and has been involved with automation for over 12 years with extensive
experience in developing business applications.
CONSULTANTS
RAY ZIMPHER, CONSULTANT
Ray Zimpher has worked with the MultiCom technology for over two years and
is highly qualified to maintain and enhance the MultiCom system. Mr. Zimpher
brings over 27 years of system development experience in the Information
Technology industry and has been witness to and participated in many
technological advances with computers and design methodologies. Mr. Zimpher is a
graduate of the US Army College.
25
<PAGE>
FACILITIES
IPVoice products were designed and produced by the Company at its
research and development office suite in Littleton, Colorado.
REMUNERATION
The Company has an agreement with respect to compensation for its key
personnel and management as well as with the legal and accounting firms it has
retained.
PRINCIPAL SHAREHOLDERS
Prior to this offering, the Company had 13,006,091 shares of its Common
Stock issued and outstanding. The following table sets forth, as of February 1,
1999, the beneficial ownership of the Company's Common Stock (i) by the only
persons who are known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each officer and/or director of the Company; and
(iii) by all directors and officers as a group.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES PERCENTAGE OWNED PERCENTAGE OWNED
OWNED PRIOR TO OFFERING BEFORE OFFERING AFTER MAXIMUM OFFERING
- --------------------------------------------------------------------------
<S> <C> <C> <C>
BARBARA S. WILL 3,000,000 23.1% %
ANTHONY K. WELCH 3,000,000 23.1% %
MICHAEL MCKIM 0 0% 0%
CONDOR WORLDWIDE 3,000,000 23.1% %
LTD.
- --------------------------------------------------------------------------------
OFFICERS AND DIRECTORS 46.1% %
AS A GROUP
</TABLE>
(assumes that all warrants included in the units distributed herein are executed
and that no senior convertible stock distributed herein has been converted into
common shares of the company) description of the securities units the company is
hereby offering a "best efforts basis" up to 104 units at $25,000 per unit.
A UNIT SHALL CONSIST OF THE FOLLOWING:
26
<PAGE>
(A.) A two (2) year Note in the principal amount of $24,900 including
interest payable quarterly in cash at 9% per annum, or at the option of the
Company in freely-trading stock (if available) calculated at 18% per annum based
on the average closing price of the stock for 7 days prior to the payment date.
The Notes may, at the option of the Company, be extended for an additional one
year term with equal monthly amortization at the rate of 110% of principal plus
accrued interest at the Note rate; or, the Company may at its option extend the
term of the Note for a total of two (2) additional years with equally monthly
amortization at the rate of 120% of principal plus accrued interest at the Note
rate, such option to extend the Note to be exercised by the Company in writing
to the Noteholder at least 60 days prior to its original maturity date.
(B.) Warrant for 18,750 shares of Common Stock of the Company
exercisable at any time during the term of the Note, including any extensions
thereof, the exercise price to be 125% of the average closing price of the stock
for the 30 trading days immediately prior to the Offering date. The Company
agrees to provide piggy-back registration rights to holders of such warrants in
the event a registration statement is filed by the Company before the Notes are
repaid.
(C.) Twenty Five (25) Senior Convertible Preferred shares, without
dividends, with a conversion feature providing that in the event of a default in
payment which is not reasonably cured, all outstanding Senior Convertible
Preferred shares shall be converted into common stock of the Company in an
amount of shares which shall, immediately after issuance, equal 51% of the
issued and outstanding shares, warrants and options of the common stock of the
Company. Upon default, the Company also agrees to promptly call a special
stockholder meeting in order to provide the stockholders with the opportunity to
elect a majority of the Board from the Noteholder group. All Preferred shares
are redeemable at no cost to the Company at the time that each Note is fully
paid.
Prior to this Offering there has been a limited public market for the
securities of the Company and it is unlikely that any such public market for the
securities of the Company will develop subsequent to this offering. The Offering
price has been determined arbitrarily by the Company and does not necessarily
bear any relationship to the Company's assets, book value, net worth or any
other recognized criteria of value.
Common Stock
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
27
<PAGE>
subscription rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefore when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid and nonassessable, and all shares to be sold and issued as
contemplated hereby, will be validly authorized and issued, fully paid and
nonassessable. The Board of Directors is authorized to issue additional shares
of Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and Bylaws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the State of
Nevada for a more complete description concerning the rights and liabilities of
stockholders.
Prior to this Offering, there has been a limited market for the Common
Stock of the Company, and no predictions can be made of the effect, if any, that
market sales of shares or the availability of shares for sale will have on the
market price prevailing from time to time. Nevertheless, sales of significant
amounts of the Common Stock of the Company in the public market may adversely
affect prevailing market prices, and may impair the Company's ability to raise
capital at that time through the sale of its equity securities.
Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of directors can elect all the
directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.
Preferred Stock
The authorized capital stock of the Company also consists of 1,000,000
shares of Preferred Stock, $.001 par value, none of which are issued.
PLAN OF DISTRIBUTION
The Company will offer up to 104 Units and a minimum of 20 Units. The Units
will be offered directly by the Principals of the Company at the offering price
of $25,000 per Unit. There is no limitation on the number of Units a subscriber
may purchase.
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<PAGE>
Price of the Offering
There is a limited market for shares of the Company's common stock, no
market for shares of the Company's preferred stock or warrants, and there is no
guaranty that a market will ever develop for these securities. Accordingly, the
offering price has been determined by the Company. Among other factors
considered in such determination were estimates of business potential for the
Company, the Company's financial condition, an assessment of the Company's
management and the general condition of the securities market at the time of
this Offering. Such price does not necessarily bear any relationship to the
assets, income or net worth of the Company.
The Offering price should not be considered an indication of the actual
value of the Shares. Such price is subject to change as a result of market
conditions and other factors, and no assurance can be given that the Shares can
be resold at the Offering Price.
There can be no assurance that an active trading market will develop
upon completion of this Offering, or if such market develops, that it will be
sustained. Consequently, purchasers of the Shares offered hereby may not find a
ready market for Shares.
CAUTIONARY WARNING
THE COMPANY'S BUSINESS PLAN AND THE COMPANY'S FINANCIAL STATEMENTS AND
PROJECTIONS ARE FORWARD LOOKING. STATEMENTS AND ACTUAL RESULTS COULD
MATERIALLY DIFFER FROM THE PROJECTIONS. AS SUCH, NO INVESTOR SHOULD RELY ON
SUCH INFORMATION IN MAKING HIS INVESTMENT.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to
making an investment in the Company, that he has had the opportunity to inspect
the books and records of the Company and that he has had the opportunity to make
inquiries to the officers and directors of the Company and further that he has
been provided full access to such information.
29
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
-----------------------------------
SUITABILITY
Units will be offered and sold pursuant to an exemption under the
Securities Act, and exemptions under applicable state securities and Blue Sky
laws. There are different standards under these federal and state exemptions
which must be met by prospective investors in the Company.
The Company will sell Units only to those Investors it reasonably
believes meet certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser
questionnaire and each Purchaser Representative, if any, must complete a
Purchaser Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED
TO INVEST IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN
INVESTMENT HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE
DIVERSIFIED OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within
any one of the following categories at the time of the sale of the Units to that
Investor:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan with the investment decisions made
solely by persons that are accredited investors;
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) An organization described in Section 501(c)(3) of the Internal
Revenue Code with total assets in excess of $5,000,000;
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase of the Units
exceeds $1,000,000;
(6) A natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
(7) A trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as describe in Rule 506(b)(2)(ii) of
Regulation D; and
(8) An entity in which all of the equity owners are accredited investors
(as defined above).
As used in this Memorandum, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
(5) above, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income an investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income form long-term capital gains has been reduced in arriving
at adjusted gross income.
In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdiction may be required to meet additional
suitability requirements.
An Investor that does not qualify as an accredited Investor is a
non-accredited Investor and may acquire Shares only if:
30
<PAGE>
(1) The Investor is knowledgeable and experienced with respect to
investments in limited partnerships either alone or with its Purchaser
Representative, if any; and
(2) The Investor has been provided access to all relevant documents it
desires or needs; and
(3) The Investor is aware of its limited ability to sell and/or
transfer its Units in the Company; and
(4) The Investor can bear the economic risk (including loss of the
entire investment) without impairing its ability to provide for its financial
needs and contingencies in the same manner as it was prior to making such
investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE IF A
POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET FORTH IN
THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investors
In addition to the foregoing suitability standards generally applicable
to all Investors, the Employee Retirement Income Security Act of 1934, as
amended ("ERISA"), and the regulations promulgated thereunder by the Department
of Labor impose certain additional suitability standards for Investors that are
qualified pension, profit-sharing or stock bonus plans ("Benefit Plan
Investor"). In considering the purchase of Units, a fiduciary with respect to a
prospective Benefit Plan Investor must consider whether an investment in the
Units will satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA,
since there is not expected to be any market created in which to sell or
otherwise dispose of the Units. In addition, the fiduciary must consider whether
the investment in Units will satisfy the diversification requirement of Section
404(a)(1)(C) of ERISA.
Restrictions on Transfer or Resale of Shares
The Availability of Federal and state exemptions and the legality of
the offers and sales of the Shares are conditioned upon, among other things, the
fact that the purchase of Units by all Investors are for investment purposes
only and not with a view to resale or distribution. Accordingly, each
prospective Investor will be required to represent in the Subscription Agreement
that it is purchasing the Units for its own account and for the purpose of
investment only, not with a view to, or in accordance with, the distribution of
sale of the Units and that it will not sell, pledge, assign or transfer or offer
to sell, pledge, assign or transfer any of its Units without an effective
registration statement under the Securities Act, or an exemption therefrom
(including an exemption under Regulation D, Rule 505 or Regulation D, Rule 506)
and an opinion of counsel acceptable to the Company that registration under the
Securities Act is not required and that the transaction complies with all other
applicable Federal and state securities or Blue Sky laws.
31
<PAGE>
IP Voice Communications, Inc., a Nevada corporation
INVESTOR SUITABILITY EVALUATION QUESTIONNAIRE
1. NAME ________________________________________________
2. ADDRESS ________________________________________________
------------------------------------------------
3. PHONE Residence ( )_________________________________
Business ( )_________________________________
4. SOCIAL SECURITY NUMBER _______________________________
TAX IDENTIFICATION NUMBER _______________________________
5. DATE OF BIRTH _________________________________________________
6. REPRESENTATIONS (Investor should initial the appropriate blanks to
which an affirmative representation can be made)
_______________The total purchase price does not exceed twenty percent
(20%) of my net worth at the time of the sale and my
subscription is at least One Hundred Fifty Thousand
Dollars ($150,000.00).
_______________I have a net worth of One Million Dollars($1,000,000.00)
or more.
_______________I have an income of Two Hundred Thousand Dollars
($200,000.00) or more in each of the past two (2) years
and during the current year.
_______________The total purchase price does not exceed twenty percent
(20%) of my net worth.
I further represent that I can bear the economic risk of this
investment and that I have substantial experience in making investment decisions
of this type.
------------------------------
Signature of Investor
Date:___________________________ ______________________________
Name of Investor
DATE:___________________________ ______________________________
NAME OF INVESTOR
<PAGE>
IPVoice Communications, Inc.
(A Nevada corporation)
==================
SUBSCRIPTION DATA SHEET
==================
Name of Subscriber
(Offeree):_______________________________________________________
Address of Residence
(if natural person):_____________________________________________
- -----------------------------------------------------------------
Address of
Business:________________________________________________________
- -----------------------------------------------------------------
Subscriber's
Telephone No.:___________________________________________________
Subscriber's Social
Security No. or
Tax I.D. No.:____________________________________________________
Preferred Address for
receiving mail:
( ) Residence
( ) Business
( ) Other, if any: _____________________________________________
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Date of Subscription:____________________________________________
Amount of
Subscription: $_________________________________________________
<PAGE>
SUBSCRIPTION AGREEMENT AND INVESTMENT
REPRESENTATION OF INVESTORS
IPVOICE COMMUNICATIONS, INC.
5901 SOUTH MIDDLEFIELD ROAD, SUITE 100
LITTLETON, CO 80123
GENTLEMEN:
1. SUBJECT TO THE TERMS AND CONDITIONS HEREOF, THE UNDERSIGNED, INTENDING
TO BE LEGALLY BOUND, HEREBY IRREVOCABLY SUBSCRIBES FOR AND AGREES TO ACCEPT AND
SUBSCRIBE TO _________ UNITS OF IPVOICE COMMUNICATIONS, INC., A NEVADA
CORPORATION (THE COMPANY), FOR A TOTAL CONSIDERATION OF $_________, THE RECEIPT
AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED.
2. IN ORDER TO INDUCE THE COMPANY TO ACCEPT THE SUBSCRIPTION MADE HEREBY,
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS TO THE COMPANY, AND EACH OTHER
PERSON WHO ACQUIRES OR HAS ACQUIRED THE UNITS, AS FOLLOWS :
(A) THE UNDERSIGNED, IF AN INDIVIDUAL (I) HAS REACHED THE AGE OF
MAJORITY IN THE STATE IN WHICH HE RESIDES AND (II) IS A BONA FIDE RESIDENT
AND DOMICILIARY (NOT A TEMPORARY OR TRANSIENT RESIDENT) OF THE STATE SET
FORTH BENEATH HIS SIGNATURE BELOW.
(B) THE UNDERSIGNED HAS THE FINANCIAL ABILITY TO BEAR THE ECONOMIC
RISK OF AN INVESTMENT IN THE UNITS HAS ADEQUATE MEANS OF PROVIDING FOR HIS
CURRENT NEEDS AND PERSONAL CONTINGENCIES, HAS NO NEED FOR LIQUIDITY IN SUCH
INVESTMENT, AND COULD AFFORD A COMPLETE LOSS OF SUCH INVESTMENT. THE
UNDERSIGNED'S OVERALL COMMITMENT TO INVESTMENTS THAT ARE NOT READILY
MARKETABLE IS NOT DISPROPORTIONATE TO HIS NET WORTH, AND HIS INVESTMENT IN
THE COMPANY WILL NOT CAUSE SUCH OVERALL COMMITMENT TO BECOME EXCESSIVE.
(C) THE UNDERSIGNED MEETS AT LEAST ONE OF THE FOLLOWING CRITERIA:
(I) THE UNDERSIGNED IS A NATURAL PERSON WHOSE INDIVIDUAL NET
WORTH OR JOINT NET WORTH WITH HIS SPOUSE, AT THE TIME OF HIS PURCHASE,
EXCEEDS $1,000,000 (ONE MILLION DOLLARS); OR
(II) THE UNDERSIGNED IS A NATURAL PERSON AND HAD AN INDIVIDUAL
INCOME IN EXCESS OF $200,000 (TWO-HUNDRED THOUSAND DOLLARS) IN EACH OF
THE TWO MOST RECENT YEARS, OR JOINTLY WITH HIS SPOUSE IN EXCESS OF
$300,000 (THREE-HUNDRED THOUSAND DOLLARS) IN EACH OF THOSE YEARS, AND
<PAGE>
WHO REASONABLY EXPECTS TO ACHIEVE AT LEAST THE SAME INCOME LEVEL IN
THE CURRENT YEAR; OR
(III) QUALIFIES AS AN ACCREDITED INVESTOR UNDER REGULATION D OF
THE SECURITIES ACT OF 1933 (THE "ACT").
(D) THE INVESTMENT IS ONE IN WHICH I AM PURCHASING FOR MYSELF AND NOT
FOR OTHERS, THE INVESTMENT AMOUNT DOES NOT EXCEED 10% OF MY NET WORTH AND I
HAVE THE CAPABILITY TO UNDERSTAND THE INVESTMENT AND THE RISK.
(E) THE UNDERSIGNED HAS BEEN GIVEN A FULL OPPORTUNITY TO ASK QUESTIONS
OF AND TO RECEIVE ANSWERS FROM THE COMPANY CONCERNING THE TERMS AND
CONDITIONS OF THE OFFERING AND THE BUSINESS OF THE COMPANY, AND TO OBTAIN
ADDITIONAL INFORMATION NECESSARY TO VERIFY THE ACCURACY OF THE INFORMATION
GIVEN HIM OR TO OBTAIN SUCH OTHER INFORMATION AS IS DESIRED IN ORDER TO
EVALUATE AN INVESTMENT IN THE UNITS. ALL SUCH QUESTIONS HAVE BEEN ANSWERED
TO THE FULL SATISFACTION OF THE UNDERSIGNED.
(F) IN MAKING HIS DECISION TO PURCHASE THE UNITS HEREIN SUBSCRIBED
FOR, THE UNDERSIGNED HAS RELIED SOLELY UPON INDEPENDENT INVESTIGATIONS MADE
BY HIM. HE HAS RECEIVED NO REPRESENTATION OR WARRANTY FROM THE COMPANY OR
FROM A BROKER-DEALER, IF ANY, OR ANY OF THE AFFILIATES, EMPLOYEES OR AGENTS
OF EITHER. IN ADDITION, HE IS NOT SUBSCRIBING PURSUANT HERETO FOR ANY UNITS
AS A RESULT OF OR SUBSEQUENT TO (I) ANY ADVERTISEMENT, ARTICLE, NOTICE OR
OTHER COMMUNICATION PUBLISHED IN ANY NEWSPAPER, MAGAZINE OR SIMILAR MEDIA
OR BROADCAST OVER TELEVISION OR RADIO, OR (II) ANY SEMINAR OR MEETING WHOSE
ATTENDEES, INCLUDING THE UNDERSIGNED, HAD BEEN INVITED AS A RESULT OF,
SUBSEQUENT TO, OR PURSUANT TO ANY OF THE FOREGOING.
(G) THE UNDERSIGNED UNDERSTANDS THAT THE UNITS HAVE NOT BEEN
REGISTERED UNDER THE ACT IN RELIANCE UPON SPECIFIC EXEMPTIONS FROM
REGISTRATION THEREUNDER, AND HE AGREES THAT HIS UNITS MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED
OF EXCEPT IN COMPLIANCE WITH THE ACT AND APPLICABLE STATE SECURITIES LAWS,
WHICH RESTRICTIONS REQUIRE THE APPROVAL OF THE COMPANY FOR THE TRANSFER OF
ANY UNITS (WHICH APPROVAL, EXCEPT UNDER LIMITED CIRCUMSTANCES, MAY BE
WITHHELD BY THE COMPANY IN ITS SOLE DISCRETION). THE UNDERSIGNED HAS BEEN
ADVISED THAT THE COMPANY HAS NO OBLIGATIONS TO CAUSE THE UNITS TO BE
REGISTERED UNDER THE ACT OR TO COMPLY WITH ANY EXEMPTION UNDER THE ACT,
INCLUDING BUT NOT LIMITED TO THAT SET FORTH IN RULE 144 PROMULGATED UNDER
THE ACT, WHICH WOULD PERMIT THE UNITS TO BE SOLD BY THE UNDERSIGNED. THE
UNDERSIGNED UNDERSTANDS THAT IT IS ANTICIPATED THAT THERE MAY NOT BE ANY
MARKET FOR RESALE OF THE UNITS, AND THAT IT MAY NOT BE POSSIBLE FOR THE
UNDERSIGNED TO LIQUIDATE AN INVESTMENT IN THE UNITS. THE UNDERSIGNED
36
<PAGE>
UNDERSTANDS THE LEGAL CONSEQUENCES OF THE FOREGOING TO MEAN THAT HE MUST
BEAR THE ECONOMIC RISK OF HIS INVESTMENT IN THE UNITS. HE UNDERSTANDS THAT
ANY INSTRUMENTS REPRESENTING THE UNITS WILL BEAR LEGENDS RESTRICTING THE
TRANSFER THEREOF.
3. TO THE EXTENT I HAVE THE RIGHT TO RESCIND MY PURCHASE OF THE UNITS,
WHICH RIGHT OF RECISSION IS HEREBY OFFERED, I WAIVE AND RELINQUISH SUCH RIGHTS
AND AGREE TO ACCEPT CERTIFICATE(S) EVIDENCING SUCH UNITS.
4. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEVADA.
5. ALL PRONOUNS CONTAINED HEREIN AND ANY VARIATIONS THEREOF SHALL BE DEEMED
TO REFER TO THE MASCULINE, FEMININE OR NEUTER, SINGULAR OR PLURAL, AS THE
IDENTITY OF THE PARTIES HERETO MAY REQUIRE.
6. THE UNITS REFERRED TO HEREIN MAY BE SOLD TO THE SUBSCRIBER IN A
TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. THE
UNITS HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN
ADDITION, IF SALES ARE MADE TO FIVE OR MORE PERSONS IN THE STATE OF FLORIDA, ANY
SALE IN THE STATE OF FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN THREE (3) DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER,
AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN THREE (3) DAYS AFTER THE
AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER
OCCURS LATER.
IN WITNESS WHEREOF, THE UNDERSIGNED HAS EXECUTED AND AGREES TO BE BOUND BY
THIS SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION ON THE DATE WRITTEN
BELOW AS THE DATE OF SUBSCRIPTION:
(TO BE USED FOR INDIVIDUAL(S))
- ---------------------------- -------------------------------
PRINT NAME OF INDIVIDUAL SIGNATURE OF INDIVIDUAL
- ----------------------------- -------------------------------
STATE OF RESIDENCE DATE OF SUBSCRIPTION
<PAGE>
(TO BE USED FOR PARTNERSHIPS, CORPORATIONS,
TRUSTS OR OTHER ENTITIES)
_______________________________ BY:______________________________
PRINT NAME OF PARTNERSHIP SIGNATURE OF AUTHORIZED
CORPORATION - TRUST - ENTITY REPRESENTATIVE
- ------------------------------- ---------------------------------
CAPACITY OF AUTHORIZED PRINT NAME OF AUTHORIZED
REPRESENTATIVE REPRESENTATIVE
- ------------------------------- --------------------------------
PRINT JURISDICTION OF DATE OF SUBSCRIPTION
INCORPORATION OR ORGANIZATION
EXHIBIT 4.7
THIS NOTE, AND THE SECURITIES ISSUABLE UPON THE CONVERSION OF THIS NOTE, HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
APPLICABLE STATE LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE ACT OR UNLESS THE
COMPANY RECEIVES AN OPINION FROM COUNSEL FOR THE HOLDER AND IS SATISFIED THAT
THIS NOTE AND THE UNDERLYING SECURITIES MAY BE TRANSFERRED WITHOUT REGISTRATION
UNDER THE ACT.
PROMISSORY NOTE
As of ____________
$___________ Littleton, Colorado
For Value Received, Ipvoice.com, Inc., a Nevada Corporation (The "Company"),
Hereby Promises to Pay to the Order of __________, or Any Subsequent Holder of
this Note (The "Payee"), at _________________________, Two (2) Years from the
Date Hereof or at Such Other Place as May Be Designated by the Payee from Time
to Time by Notice to the Company, the Principal Sum of
__________________________________ Dollars ($_________), Together with Simple
Interest from the Date Hereof (The "Issuance Date"), Payable Quarterly, on the
Unpaid Principal Amount at an Annual Rate Equal to Nine Percent (9.0%) per
Annum, or at the Option of the Company in its Free-trading Common Stock (If
Available) Calculated at the Rate of 18% per Annum and Based on the Average
Closing Price of the Stock for Seven (7) Days Prior to the Payment Date;
Provided However, the Note May at the Option of the Company, Be Extended for an
Additional One Year Term with Equal Monthly Amortization at the Rate of 110% of
Principal plus Accrued Interest at the Note Rate; Or, the Company May at its
Option Extend the Term of the Note for a Total of Two (2) Additional Years with
Equal Monthly Amortization at the Rate of 120% of Principal plus Accrued
Interest at the Note Rate, Such Option to Extend the Note to Be Exercised by the
Company in Writing to the Holder at Least 60 Days Prior to its Original Maturity
Date.
2. Notices.
All Notices, Requests, Demands or Other Communications Hereunder Shall Be in
Writing and Personally Addressed or Sent by Telecopier or by Registered or
Certified Mail, Return Receipt Requested, Postage Prepaid, Addressed or
Telecopied as Follows or to Such Other Address or Telecopier Number of Which
Notice Has Been Given Pursuant Hereto:
If to the Company: Ipvoice.com, Inc.
5050 West 19th Avenue
Suite 417
Phoenix, Az 85015
Phone: (602) 335-1231
Fax: (602) 335-1577
With Copy To: Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, Fl 33480
Attn: Donald F. Mintmire, Esq.
Telephone (561) 832-5696
Fax (561) 659-5371
<PAGE>
If to the Holder: to Such Holder at the Address Set Forth on the Records of
the Company. In Addition, Copies of All Such Notices or
Other Communications Shall Be Concurrently Delivered by the
Person Giving the Same to Each Person Who Has Been
Identified to the Company by Such Holder as a Person Who Is
to Receive Copies of Such Notices.
3. Governing Law.
This Note Shall Be Governed By, and Construed and Interpreted in Accordance
With, the Laws of the State of Nevada, Without Giving Effect to Conflict of Law
Principles.
4. Successors and Assigns.
This Note Shall Be Binding upon and Inure to the Benefit of the Company and the
Holder Hereof and Their Respective Successors and Permitted Assigns; Provided,
However, That the Company May Not Transfer or Assign Any of its Rights or
Obligations Hereunder Without the Prior Written Consent of the Holder Hereof.
In Witness Whereof, the Company Has Caused this Note to Be Executed by its Duly
Authorized Officers as of the Date First Set Forth Above.
Ipvoice.com, Inc.
By: ___________________________________
Barbara S. Will
EXHIBIT 4.8
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT,
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") OR APPLICABLE STATE LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE ACT OR
UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER AND IS
SATISFIED THAT THIS WARRANT AND THE UNDERLYING SECURITIES MAY BE TRANSFERRED
WITHOUT REGISTRATION UNDER THE ACT.
-------------
IPVOICE.COM, INC.
REDEEMABLE COMMON STOCK PURCHASE WARRANT
VOID AFTER 5:00 P.M., EASTERN TIME
_________________ UNLESS EXTENDED
FOR VALUE RECEIVED, IPVoice.com, Inc., a Nevada corporation (the
"Company"), promises to issue in the name of, and sell and deliver to,
________________, (the "Holder"), or the Holder's registered transferee or
assignee (also the "Holder"), a certificate or certificates for an aggregate of
_____________ shares (the "Shares") of Common Stock, $0.001 par value per share
(the "Common Stock"), of the Company, at any time on or before the later of 5:00
p.m., Eastern Time, on __________________ unless extended, and in no event
beyond ______________ (the "Exercise Period"), upon payment therefore of $0.9875
per Share in lawful funds of the United States of America. The exercise period
of this Warrant shall be extended in the event the Company extends the final
maturity date of a certain Note issued by the Company to the Holder in the
amount of $________________ of even date herewith, said Note issued as a part of
this financing transaction. The Note expressly provides for an initial two (2)
year term and principal amount of $_________________- plus interest thereon
payable quarterly in cash from and after date at the rate of 9% per annum, or at
the option of the Company in free-trading stock (if available) calculated at the
rate of 18% per annum and based on the average closing price of the stock for
seven (7) days prior to the payment date; provided however, the Note may at the
option of the Company, be extended for an additional one year term with equal
monthly amortization at the rate of 110% of principal plus accrued interest at
the Note rate; or, the Company may at its option extend the term of the Note for
a total of two (2) additional years with equal monthly amortization at the rate
of 120% of principal plus accrued interest at the Note rate, such option to
extend the Note to be exercised by the Company in writing to the Holder at least
60 days prior to its original maturity date.
1. Exercise of the Warrant. In case the Holder of this Warrant shall
desire to exercise this Warrant in whole or in part, the Holder shall surrender
this Warrant, with the form of exercise notice on the last page hereof duly
executed by the Holder, to the Company, accompanied by payment of the Exercise
Price of $0.9875 per Warrant. This Warrant may be exercised in whole or in part
but not for fractional Shares. In case of the
<PAGE>
exercise in part only, the Company will deliver to the Holder a new Warrant of
like tenor in the name of the Holder evidencing the right to purchase the number
of Shares as to which this Warrant has not been exercised.
2. Covenants of the Company. The Company hereby covenants and agrees
that prior to the expiration of this Warrant by exercise or by its terms:
(a) The Company shall at all times reserve and keep available,
out of its authorized and unissued share capital, solely for the purpose of
providing for the exercise, forthwith upon the request of the Holder of the
Warrants then outstanding and in effect, such number of shares of Common Stock,
as shall, from time to time, be sufficient for the exercise of the Warrants. The
Company shall, from time to time, in accordance with the laws of the State of
Nevada, increase the authorized amount of its share capital if at any time the
number of shares of Common Stock remaining unissued and unreserved for other
purposes shall not be sufficient to permit the exercise of the Warrants then
outstanding and in effect.
(b) The Company covenants and agrees that all shares that may
be issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued, fully paid and non-assessable, and free from all
taxes, liens and charges with respect to the issue thereof.
3. Loss, Theft, Destruction or Mutilation. In case this Warrant shall
become mutilated or defaced or be destroyed, lost or stolen, the Company shall
execute and deliver a new Warrant in exchange for and upon surrender and
cancellation of such mutilated or defaced Warrant or in lieu of and in
substitution for such warrant so destroyed, lost, or stolen, upon the Holder of
such Warrant filing with the Company such evidence satisfactory to it that such
Warrant has been so mutilated, defaced, destroyed, lost or stolen and of the
ownership thereof by the Holder; provided, however, that the Company shall be
entitled, as a condition to the execution and delivery of such new Warrant, to
demand indemnity satisfactory to it and payment of expenses and charges incurred
in connection with the delivery of such new Warrant, and may demand a bond from
the Holder. Any Warrant so surrendered to the Company shall be canceled.
4. Record Owner. At the time of the surrender of this Warrant, together
with the form of subscription properly executed and payment of the Exercise
Price, the person exercising this Warrant shall be deemed to be the Holder of
record of the Common Stock deliverable upon such exercise, in whole or in part,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such securities shall not then be
actually delivered to such person.
5. Mailing of Notices, etc. All notices and other communications from
the Company to the Holder of this Warrant shall be mailed by first-class
registered or certified mail, return receipt requested, potage prepaid, to the
Holder at the address set forth in the
<PAGE>
records of the Company, or to such other address furnished to the Company in
writing from time to time by the Holder of this Warrant.
6. Registration Under the Securities Act of 1933, as amended. Neither
this Warrant nor the Shares underlying it have been registered under the
Securities Act of 1933, as amended (the "Act"). Unless and until registered
under the Act, this Warrant and all replacement Warrants shall bear the
following legend:
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR APPLICABLE STATE LAW AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE ACT
AND ANY APPLICABLE STATE ACT OR UNLESS THE COMPANY RECEIVES AN OPINION
FROM COUNSEL FOR THE HOLDER AND IS SATISFIED THAT THIS WARRANT AND THE
UNDERLING SECURITIES MAY BE TRANSFERRED WITHOUT REGISTRATION UNDER THE
ACT.
The Shares issuable upon exercise of this Warrant shall be Rule 144
restricted shares (the "Restricted Securities"). After issuance of the Shares,
Company agrees to use its best efforts to assist Holder in registering the
Shares or to register the Shares under the Act subject to the rules,
regulations, and other provisions of said Act.
7. Piggyback Registration.
(a) At any time that the Company proposes to file a Company
registration statement on Form S-1 or other appropriate registration form
(excluding Form 10-SB) under the Act (the "Registrations Statement"), for its
own account, the Company shall give the Holder written notice of its intention
to do so and of the intended method of sale (the "Registration Notice") within a
reasonable time prior to the anticipated filing date of the Company's
Registration Statement effecting such Company registration. Holder may request
inclusion of any Restricted Securities in such Registration Statement by
delivering to the Company, within ten (10) Business Days after receipt of the
Registration Notice, a written notice (the "Piggyback Notice") stating the
number of Restricted Securities proposed to be included and that such shares are
to be included in any underwriting only on the same terms and conditions as the
shares of Common Stock otherwise being sold through underwriters under such
Company Registration Statement. The Company shall use its best efforts to cause
all Restricted Securities specified in the Piggyback Notice to be included in
the Company Registration Statement and any related offering, all to the extent
requisite to permit the sale by the Holder of its Restricted Securities in
accordance with the method of sale applicable to the other shares of Common
Stock included in such Company Registration Statement; provided, however, that
if, at any time after giving written notice of its intention to register any
securities and prior to the effective date of the Company Registration Statement
filed in connection with such registration, the Company shall determine for any
reason not to register or to delay registration of Holder's Restricted
Securities, the Company may, at its election, give written notice of such
determination to Holder and, thereupon:
<PAGE>
(i) in the case of a determination not to register, shall be relieved
of its obligation to register Holder's Restricted Securities in
connection with such registration, and
(ii) in the case of a delay in registering, shall be permitted to
delay registering Holder's Restricted Securities for the same
period as the delay in registering such other securities.
(b) The Company's obligation to include Restricted Securities
in a Company's Registration Statement pursuant to Section 7(a) shall be subject
to the following limitations:
(i) The Company may elect, at its sole option and for any reason, not
to register Holder's Restricted Shares, provided however, that
this right is limited to one (1) time and relative to one (1)
particular Company Registration Statement.
(ii) The Company shall not be obligated to include any Restricted
Securities in a registration statement filed on Form S-4, Form
S-8 or such other similar successor forms then in effect under
the Securities Act.
(iii)If a Company Registration Statement involves an underwritten
offering and the managing underwriter advises the Company in
writing that in its opinion, the number of securities requested
to be included in such Company Registration Statement exceeds the
number which can be sold in such offering without adversely
affecting the offering, the Company shall include in such Company
Registration Statement the number of such securities which the
Company is so advised can be sold in such offering without
adversely affecting the offering, determined as follows:
(A) first, the securities proposed by the Company to be sold for
it own account, and
(B) second, any Restricted Securities requested to be included
in such registration and any other securities of the Company
in accordance with the priorities, if and then existing
among the holders of such securities pro rata among the
holders thereof requesting such registration on the basis of
the number of shares of such securities requested to be
included by such holders.
(iv) The Company shall not be obligated to include Restricted
Securities in more than one (1) Company Registration Statement.
(c) To the extent Holder's Restricted Securities are intended
to be included in a Company Registration Statement, Holder may include any of
its Restricted Securities in such Company Registration Statement pursuant to
this Agreement only if Holder furnishes to the Company in writing, within ten
(10) business days after receipt of a written request therefor, such information
specified in Item 507 of Regulation S-K under the Act or such other information
as the Company may reasonably request for use in connection
<PAGE>
with the Company Registration Statement or Prospectus or preliminary Prospectus
included therein and in any application to the NASD. Holder as to which the
Company Registration Statement is being effected agrees to furnish promptly to
the Company all information required to be disclosed in order to make all
information previously furnished to the Company by Holder not materially
misleading.
8. Antidilution Provision. The Exercise Price in effect from time to
time shall be, subject to adjustment in accordance with the provisions of this
Section 8.
(a) Adjustments for Stock Splits and Combinations. If the
Company shall at any time or from time to time after the date hereof, effect a
stock split of the outstanding Common Stock, the applicable Exercise Price in
effect immediately prior to the stock split shall be proportionately decreased.
If the Company shall at any time or from time to time after the date hereof,
combine the outstanding shares of Common Stock, the applicable Exercise Price in
effect immediately prior to the combination shall be proportionately increased.
Any adjustments under this Section 8(a) shall be effective at the close of
business on the date the stock split or combination occurs.
(b) Adjustments for Certain Dividends and Distributions. If
the Company shall at any time or from time to time after the date hereof, make
or issue or set a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in shares of Common
Stock, then, and in each event, the applicable Exercise Price in effect
immediately prior to such event shall be decreased as of the time of such
issuance or, in the event such a record date shall have been fixed, as of the
close of business on such record date, by multiplying, as applicable, the
applicable Exercise Price then in effect by a fraction;
(i) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date;
and
(ii) the denominator of which shall be the total number of shares of
Common Stock issued and outstanding 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.
(c) Adjustment for Other Dividends and Distributions. If the
Company shall at any time or from time to time after the date hereof, make or
issue or set a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in other than
shares of Common Stock, then, and in each event, an appropriate revision to the
Exercise Price shall be made and provision shall be made (by adjustments of the
Exercise Price or otherwise) so that the holder of this Note shall receive upon
conversions thereof, in addition to the number of shares of Common Stock
receivable thereon, the number of securities of the Company which they would
have received had this Note been converted into Common Stock on the date of such
event and had thereafter, during the period from the date of such event to and
<PAGE>
including the date hereof, retained such securities (together with any
distributions payable thereon during such period), giving application to all
adjustments called for during such period under this Section 8(c) with respect
to the rights of the holders of the Warrant.
(d) Adjustments for Reclassification, Exchange or
Substitution. If the Common Stock issuable upon conversion of this Warrant at
any time or from time to time after the date hereof shall be changed into the
same or different number of shares of any class or classes of stock, whether by
reclassification, exchange, substitution or otherwise (other than by way of a
stock split or combination of shares or stock dividends provided for in Sections
8(a), (b) and (c), or a reorganization, merger, consolidation, or sale of assets
provided for in Section 8(e), then, and in each event, an appropriate revision
to the Exercise Price shall by made and provisions shall be made (by adjustments
of the Exercise Price of otherwise) so that the holder of this Warrant shall
have the right thereafter to convert such Warrant into the kind and amount of
shares of stock and other securities receivable upon reclassification, exchange,
substitution or other change, by holders of the number of shares of Common Stock
into which such Warrant might have been converted immediately prior to such
reclassification, exchange, substitution or other change, all subject to further
adjustment as provided herein.
(e) Adjustments for Reorganization, Merger, Consolidation or
Sales of Assets. If at any time or from time to time after the date hereof there
shall be a capital reorganization of the Company (other than by way of a stock
split or combination of shares or stock dividends or distributions provided for
in Section 8(a), (b), and (c), or a reclassification, exchange or substitution
of shares provided for in Section 8(d), or a merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially
all of the Company's properties or assets to any other person, then as a part of
such reorganization, merger, consolidation, or sale, an appropriate revision to
the Exercise Price shall be made and provision shall be made (by adjustments of
the Exercise Price or otherwise) so that the holder of this Warrant shall have
the right thereafter to convert this Warrant into the kind and amount of shares
of stock and other securities or property of the Company or any successor
corporation resulting from such reorganization, merger, consolidation, or sale,
to which a holder of Common Stock deliverable upon conversion of such shares
would have been entitled upon such reorganization, merger, consolidation, or
sale, to which a holder of Common Stock deliverable upon conversion of such
shares would have been entitled upon such reorganization, merger, consolidation,
or sale. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 8(e) with respect to the rights of
the holders of this Warrant after the reorganization, merger, consolidation, or
sale to the end that the provisions of this Section 8(e) (including any
adjustment in the applicable conversion ratio then in effect and the number of
shares of stock or other securities deliverable upon conversion of this Warrant)
shall be applied after that event in as nearly an equivalent manner as may be
practicable.
<PAGE>
9. Laws of the State of Nevada. This Warrant shall be governed by,
interpreted under and construed in all respects in accordance with, the laws of
the State of Nevada, irrespective of the place of domicile or residence of any
party.
10. Entire Agreement and Modification. The Company and the Holder of
this Warrant hereby represent and warrant that this Warrant is intended to and
does contain and embody all of the understandings and agreements, both written
and oral, of the parties hereto with respect to the subject matter of this
Warrant, and that there exists no oral agreement or understanding, express or
implied, whereby the absolute, final and unconditional character and nature of
this Warrant shall be in any way invalidated, empowered or affected. A
modification or waiver of any of the terms, conditions or provisions of this
Warrant shall be effective only if made in writing and executed with the same
formality as this Warrant.
This Warrant will become wholly void and of no effect and the rights
evidenced hereby will terminate unless exercised in accordance with the terms
and provisions hereof at or before 5:00 p.m., Eastern Time, on the Expiration
Date.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
executed this Warrant this ________ day of ________, 1999.
IPVoice.com, Inc.
By: ______________________________
Barbara S. Will, President
<PAGE>
[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE.)
FOR VALUE RECEIVED ______________________________________ HEREBY
SELLS, ASSIGNS AND TRANSFERS UNTO _______________________________________
(PLEASE PRINT NAME AND ADDRESS OF TRANSFEREE)
THIS WARRANT CERTIFICATE, TOGETHER WITH ALL RIGHT, TITLE AND INTEREST THEREIN,
AND DOES HEREBY IRREVOCABLY CONSTITUTE AND APPOINT
___________________________________, ATTORNEY, TO TRANSFER THE WITHIN WARRANT
CERTIFICATE ON THE BOOKS OF THE WITHIN-NAMED COMPANY, WITH FULL POWER OF
SUBSTITUTION.
DATED:
SIGNATURE:_________________________________
(SIGNATURE MUST CONFORM IN ALL RESPECTS TO NAME OF HOLDER AS SPECIFIED ON THE
FACE OF THE WARRANT CERTIFICATE)
- -------------------------------------
- -------------------------------------
(INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
<PAGE>
FORM OF EXERCISE
THE UNDERSIGNED HEREBY IRREVOCABLY ELECTS TO EXERCISE THE PURCHASE
RIGHTS REPRESENTED BY THIS WARRANT FOR, AND TO PURCHASE THEREUNDER,
_________________ SHARES OF COMMON STOCK, $0.001 PAR VALUE PER SHARE, OF
IPVOICE.COM, INC., AND HEREWITH MAKES PAYMENT OF $0.9875 PER SHARE, OR A TOTAL
OF $____________________ THEREFORE, AND REQUEST THAT SUCH SHARES BE ISSUED TO:
(PRINT NAME)
- ---------------------------------
(ADDRESS)
- ---------------------------------
(SOCIAL SECURITY NUMBER)
DATED:
(SIGNATURE MUST CONFORM IN ALL RESPECTS TO NAME
OF HOLDER AS SPECIFIED ON THE FACE OF THIS WARRANT)
EXHIBIT 10.1
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER TH SECURITIES ACT OF 1933 9THE "1933 ACT"), NOR REGISTERED UNDER ANY STATE
SECURITIES LAW, AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE
144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT FOR THE EXCHANGE OF STOCK
AGREEMENT made this 19th day of March, 1998, by and between Nova
Enterprises, Inc., a Nevada corporation, (the "ISSUER") and the individuals
listed in Exhibit A attached hereto, (the "SHAREHOLDERS"), which SHAREHOLDERS
own all of the issued and outstanding shares of IPVoice Communications, Inc., a
Delaware corporation ("IPC").
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES. Subject to the terms and conditions of this
Agreement, the ISSUER agrees to issue to SHAREHOLDERS, 9,000,000 shares of
common stock of ISSUER, $.001 par value, (the "Shares") in exchange for 100% of
the issued and outstanding shares of FAD, such that FAD shall become a wholly
owned subsidiary of the ISSUER.
2. REPRESENTATIONS AND WARRANTIES. ISSUER represents and warrants to
SHAREHOLDERS and FAD the following:
i. Organization. ISSUER is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada, and has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in Nevada. All actions
taken by the ISSUER have been valid and in accordance with the laws of the State
of Nevada.
ii. Capital The authorized capital stock of ISSUER consists of
20,000,000 shares of common stock, $.001 part value, of which 10,400,000 are
issued and outstanding, and 1,000,000 shares of preferred stock, par value
1
<PAGE>
$.001, none of which are issued. All outstanding shares are fully paid and non
assessable, free of liens, encumbrance, options, restrictions and legal or
equitable rights of others not a part to this Agreement. At closing, there will
be no outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitments obligating ISSUER to issue or to
transfer from treasury any additional shares of its capital stock. None of the
outstanding shares of ISSUER are subject to any stock restriction agreements.
All of the shareholders of ISSUER have valid title to such shares and acquired
their shares in a lawful transaction and in accordance with the laws of Nevada.
iii. Financial Statements. Exhibit B to this Agreement
includes the balance sheet of ISSUER as of March 31, 1998, and the related
statements of income and retained earnings for the period then ended. The
financial statements have been prepared in accordance with generally accepted
accounting principles consistently followed by ISSUER throughout the periods
indicated, and fairly present the financial position of ISSUER as of the date of
the balance sheet in the financial statements, and the results of its operations
for the periods indicated.
iv. Absence of Changes. Since the date of the financial
statements, there has not been any change in the financial condition or
operations of ISSUER, except changes in the ordinary course of business, which
changes have not in the aggregate been materially adverse.
v. Liabilities. ISSUER does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected on the ISSUERS'
financial statement. ISSUER is not aware of any pending, threatened or asserted
claims, lawsuits or contingencies involving ISSUER or its common stock. There is
no dispute of any kind between ISSUER and any third party, and no such dispute
will exist at the closing of this Agreement. At closing, ISSUER will be free
from any and all liabilities, liens, claims and/or commitments.
vi. Ability to Carry Out Obligations. ISSUER has the right,
power, and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by ISSUER and the
performance by ISSUER of its obligations hereunder will not cause, constitute,
or conflict with or result in (a) any breach or violation or any of the
provisions of or constitute a default under any license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaw, or other agreement or
instrument to which ISSUER or its shareholders are a party, or by which they may
be bound, nor will any consents or authorizations of any party other than those
hereto be required, (b) an event that would cause ISSUER to be liable to any
party, or (c) an event that would result in the creation or imposition or any
lien, charge or encumbrance on any asset of ISSUER or upon the securities of
ISSUER to be acquired by SHAREHOLDERS.
2
<PAGE>
vii. Full Disclosure. None of the representations and
warranties made by the ISSUER, or in any certificate or memorandum furnished or
to be furnished by the ISSUER, contains or will contain any untrue statement of
a material fact, or omit any material fact the omission of which would be
misleading.
viii. Contract and Leases. ISSUER is not currently carrying on
any business and is not a party to any contract, agreement or lease. No person
holds a power of attorney from ISSUER.
ix. Compliance with Laws. ISSUER has complied with, and is not
in violation of any federal, state, or local statute, law, and/or regulation
pertaining to ISSUER. ISSUER has complied with all federal and state securities
laws in connection with the issuance, sale and distribution of its securities.
x. Litigation. ISSUER is not (and has not been) a part to any
suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against ISSUER and ISSUER is not subject to or in default with
respect to any order, writ, injunction or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
xi. Conduct of Business. Prior to the closing, ISSUER shall
conduct its business in the normal course, shall not (1) sell, pledge, or assign
any assets (2) amend its Articles of incorporation or By-Laws, (3) declare
dividends, redeem or sell stock or other securities, (4) incur any liabilities,
(5) acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third party, or (6) enter into any other transaction.
xii. Corporate Documents. Copies of each of the following
documents, which are true, complete and correct in all material respects, will
be attached to and made a part of this Agreement:
1. Articles of Incorporation;
2. Bylaws;
3. Minutes of Shareholders Meetings;
4. Minutes of Directors Meetings;
5. List of Officers and Directors;
6. Balance Sheet as of July 31, 1997 together with other financial
statements described in Section 2(iii);
7. Stock register and stock records of ISSUER
and a current, accurate list of ISSUER's
shareholders.
xiii. Documents. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be valid and in accordance
with both the laws of Nevada.
3
<PAGE>
xiv. Title. The Shares to be issued to SHAREHOLDERS will be,
at closing, free and clear of all liens, security interests, pledges, charges,
claims and encumbrances and restrictions of any kind. None of such shares are or
will be subject to any voting trust or agreement. No person holds or has the
right to receive any proxy or similar instrument with respect to such shares,
except as provided in this Agreement, the ISSUER is not a party to any agreement
which offers or grants to any person the right to purchase or acquire any of the
securities to be issued to SHAREHOLDERS. There is no applicable local, state or
federal law, rule, regulation, or decree which would, as a result of the
issuance of the Shares to SHAREHOLDERS, impair, restrict or delay SHAREHOLDERS'
voting rights with respect to the Shares.
3.SHAREHOLDERS and IPC represent and warrant to ISSUER the following:
i. Organization. IPC is a corporation duly organized, validly
existing, and in good standing under the laws of Delaware, and has all necessary
corporate powers to own properties and carry on a business, and is duly
qualified to do business and is in good standing in Delaware. All actions taken
by the incorporators, directors and shareholders of IPC have been valid and in
accordance with the laws of the State of Delaware.
ii. Shareholders and Issued Stock.. Exhibit A annexed hereto
sets forth the names and share holdings of 100% of IPC's shareholders.
iii. Listing Stock for Trading. Upon closing, SHAREHOLDERS and
IPC shall take all steps reasonably necessary to get the ISSUER's common stock
listed for trading in NASD Automated Bulletin Board and to, as soon as
practicably possible, have the company listed with Standard & Poors or Moodys in
their Accelerated Corporate Report.
iv. Counsel. SHAREHOLDERS and IPC represent and warrant that
prior to Closing, that they are represented by independent counsel or have had
the opportunity to retain independent counsel to represent them in this
transaction and that prior to Closing, the law offices of Donald F. Mintmire &
Associates has acted as exclusive counsel tot he ISSUER and has not represented
either the SHAREHOLDERS or IPC in any manner whatsoever.
4. INVESTMENT INTENT. SHAREHOLDERS agrees that the Shares being issued
pursuant to this Agreement may be sold, pledged, assigned hypothecate or
otherwise transferred, with or without consideration (a "Transfer"), only
pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act, the availability of which is to be
established to the satisfaction of ISSUER. SHAREHOLDERS agrees, prior to any
Transfer, to give written notice to ISSUER expressing his desire to effect the
transfer and describing the proposed transfer.
4
<PAGE>
5. CLOSING. The closing of this transaction shall take place at the law
offices of Donald F. Mintmire, 265 Sunrise Avenue, Suite 204, Palm Beach,
Florida. Unless the closing of this transaction takes place on or before March
31, 1998, then either party may terminate this Agreement.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
IX By the ISSUER
(1) Board of Directors Minutes authorizing the
issuance of a certificate or certificates for 9,000,000 Shares, registered in
the names of the SHAREHOLDERS equal to their pro-rata holdings in IPC.
(2) The resignation of all officers of ISSUER.
(3) A Board of Directors resolution appointing such
person as SHAREHOLDERS designate as a director(s) of ISSUER.
(4) The resignation of all the directors of ISSUER,
except that of SHAREHOLDERS designee, dated subsequent to he resolution
described in 3, above.
(5) Unaudited financial statements of ISSUER, which
shall include a balance sheet dated as of March 31, 1998 and statements of
operations, stockholders equity and cash flows for the twelve month period then
ended.
(6) All of the business and corporate records of
ISSUER, including but not limited to correspondence files, bank statements,
checkbooks, savings account books, minutes of shareholder and directors meeting,
financial statements, checkbooks, savings account books, minutes of shareholder
and directors meetings, financial statements, shareholder listings, stock
transfer records, agreements and contracts.
(7) Such other minutes of ISSUER's shareholders or
directors as may reasonably be required by SHAREHOLDERS.
(8) Within 30 days of closing, a private placement
memorandum pursuant to Rule 504 of Regulation D as promulgated under the
Securities Act of 1933.
(9) An Opinion Letter from ISSUER's Attorney
attesting to the validity and condition of the ISSUER.
ii. By SHAREHOLDERS AND IPC:
5
<PAGE>
(1) Delivery to the ISSUER, or to its Transfer Agent,
the certificates representing 100% of the issued and outstanding stock of IPC.
(2) Consents signed by all the shareholders of IPC
consenting to the terms of this Agreement.
7. REMEDIES.
i. Arbitration. Any controversy or claim arising out of, or
relating to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Palm Beach County, Florida in
accordance with the Commercial Rules of the American Arbitration Association
then existing and judgment on the arbitration award may be entered in any court
having jurisdiction over the subject matter of the controversy.
8.MISCELLANEOUS.
i. Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
now way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
ii. No Oral change. This Agreement and any provision herein,
may not be waived, changed, modified, or discharged orally, but only by a
written agreement signed by party against whom enforcement of any waiver, change
modification or discharge is sought.
iii. No Waiver. Except as otherwise provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be deemed to
have been made unless expressly in writing and signed by the party against whom
such waiver is charged; and (I) the failure of any party to insist in any one or
more cases upon the performance of any of the provisions, covenants, or
conditions of this Agreement or to exercise any option herein contained shall
not be construed as a waiver or relinquishment for the future of any such
provisions, covenants, or conditions, (ii) the acceptance of performance of
anything required by this Agreement to be performed with knowledge of the breach
or failure of a covenant, condition, or provision hereof shall not be deemed a
waiver of such breach or failure, and (iii) no waiver by any party of one breach
by another party shall be construed as a waiver with respect to any other or
subsequent breach.
iv. Time of Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
v. Entire Agreement. This Agreement contains the entire
Agreement and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
6
<PAGE>
vi.Counterparts. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
vii. Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, and by fax, as follows:
ISSUER: Dale B. Finfrock
P.O. Box 669
Palm Beach, FL 33480
With a copy to: Donald F. Mintmire, Esquire
265 Sunrise Avenue, Suite 204
Palm Beach, Florida 33480
IPC: Barbara S. Will
10724 W. Ontario Place
Littleton, CO 80274
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
19th day of March, 1998.
NOVA ENTERPRISES, INC. IP VOICE COMMUNICATIONS, INC.
By:/s/ Dale B. Frinfrock By: /s/ Barbara S. Will
- --------------------------- ------------------------------
Dale B. Finfrock, President Barbara S. Will, President
7
<PAGE>
EXHIBIT A
SHAREHOLDERS OF IPVOICE COMMUNICATIOS, INC.
NAME SHARES
Barbara S. Will 3,000,000
Condor Worldwide Ltd 3,000,000
Anthony K. Welch 3,000,000
8
EXHIBIT 10.2
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"), NOR REGISTERED UNDER ANY
STATE SECURITIES LAW, AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN
RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
AGREEMENT made this 7th day of April, 1999, by and between IP Voice
Communications, Inc., a Nevada corporation, (the "ISSUER"), and SATLINK 3000,
Inc. d/b/a Independent Network Services, a Nevada Corporation ("INS") and the
individuals listed in Exhibit A attached hereto, (the "SHAREHOLDERS"), which
SHAREHOLDERS own of all the issued and outstanding shares of INS.
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES. Subject to the terms and conditions of this
Agreement, the ISSUER agrees to issue to SHAREHOLDERS, 250,000 redeemable
convertible preferred shares convertible one (1) year after issuance for one
share of common (or at the option of ISSUER redeemable at $2.00 per share), (the
"Shares"), in exchange for 100% of the issued and outstanding shares of INS,
such that INS shall become a wholly owned subsidiary of the ISSUER.
2. REPRESENTATIONS AND WARRANTIES. ISSUER represents and warrants to
SHAREHOLDERS and INS the following:
i. Organization. ISSUER is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada, and has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in Nevada. All actions
taken by the Incorporators, directors and shareholders of ISSUER have been valid
and in accordance with the laws of the State of Nevada.
1
<PAGE>
ii. Capital. The authorized capital stock ISSUER consists of
20,000,000 shares of common stock, $ 0.001 par value, of which 13,006,091 are
issued and outstanding, and 1,000,000 shares of preferred stock, none of which
are issued. All outstanding shares are fully paid and non assessable, free of
liens, encumbrances, options, restrictions and legal or equitable rights of
others not a party to this Agreement as set forth herein. In addition, ISSUER
has outstanding in excess of 3,000,000 warrants exercisable at prices ranging
from $0.75 to $2.000 per share. At closing, there will be no outstanding
subscriptions, options, rights, warrants, convertible securities, or other
agreements or commitments obligating ISSUER to issue or to transfer from
treasury any additional shares of its capital stock except as set forth herein.
None of the outstanding shares of ISSUER are subject to any stock restriction
agreements. All of the shareholders of ISSUER have valid title to such shares
and acquired their shares in a lawful transaction and in accordance with the
laws of Nevada.
iii. Financial Statements. The current balance sheet of
ISSUER, and the related statements of income and retained earnings for the
periods have been disclosed to INS and its shareholders. The financial
statements have been prepared in accordance with generally accepted accounting
principles consistently followed by ISSUER throughout the periods indicated, and
fairly present the financial position of ISSUER as of the date of the balance
sheet and the financial statements, and the results of its operations for the
periods indicated.
iv. Absence of Changes. Since the date of the financial
statements, there has not been any change in the financial condition or
operations of ISSUER, except changes in the ordinary course of business, which
changes have not in the aggregate been materially adverse.
v. Liabilities. ISSUER does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected in the ISSUERS'
financial statement. ISSUER is not aware of any pending, threatened or asserted
claims, lawsuits or contingencies involving ISSUER or its common stock. There is
no dispute of any kind between the ISSUER and any third party, and no such
dispute will exist at the closing of this Agreement.
vi. Ability to Carry Out Obligations. ISSUER has the right,
power, and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by Issuer and the
performance by ISSUER of its obligations hereunder will not cause, constitute,
INIT /s/ PS Confidential
INIT /s/ BW 04/7/99
2
<PAGE>
or conflict with or result in (a) any breach or violation or any of the
provisions of or constitute a default under any license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaw, or other agreement or
instrument to which ISSUER or its shareholders are a party, or by which they may
be bound, nor will any consents or authorizations of any party other than those
hereto be required, (b) an event that would cause ISSUER to be liable to any
party, or (c) an event that would result in the creation or imposition or any
lien, charge or encumbrance on any asset of ISSUER or upon the securities of
ISSUER to be acquired by SHAREHOLDERS.
vii. Full Disclosure. None of the representations and
warranties made by the ISSUER, or in any certificate or memorandum furnished or
to be furnished by the ISSUER, contains or will contain any untrue statement of
a material fact, or omit any material fact the omission of which would be
misleading.
viii. Compliance with Laws. ISSUER has complied with, and is
not in violation of any federal, state, or local statute, law, and/or regulation
pertaining to ISSUER. ISSUER has complied with all federal and state securities
laws in connection with the issuance, sale and distribution of its securities.
ix. Litigation. ISSUER is not (and has not been) a party to
any suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against ISSUER and ISSUER is not subject to or in default with
respect to any order, writ, injunction, or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
x. Conduct of Business. Prior to the closing, ISSUER shall
conduct its business in the normal course, and shall not (1) sell, pledge, or
assign any assets (2) amend its Articles of Incorporation or Bylaws, (3) declare
dividends, redeem or sell stock or other securities, (4) incur any liabilities,
(5) acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third party, or (6) enter into any other transaction.
xi. Documents. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be valid and in accordance
with the laws of Nevada.
INIT /s/ PS Confidential
INIT /s/ BW 04/7/99
3
<PAGE>
xii. Title. The Shares to be issued to SHAREHOLDERS will be,
at closing, free and clear of all liens, security interests, pledges, charges,
claims, encumbrances and restrictions of any kind. None of such Shares are or
will be subject to any voting trust or agreement. No person holds or has the
right to receive any proxy or similar instrument with respect to such shares,
except as provided in this Agreement, the ISSUER is not a party to any agreement
which offers or grants to any person the right to purchase or acquire any of the
securities to be issued to SHAREHOLDERS. There is no applicable local, state or
federal law, rule, regulation, or decree which would, as a result of the
issuance of the Shares to SHAREHOLDERS, impair, restrict or delay SHAREHOLDERS'
voting rights with respect to the Shares.
3. SHAREHOLDERS and INS represent and warrant to ISSUER the following:
i. Organization. INS is a corporation duly organized, validly
existing, and in good standing under the laws of Nevada, has all necessary
corporate powers to own properties and carry on a business, and is duly
qualified to do business and is in good standing in Nevada. All actions taken by
the Incorporators, directors and shareholders of INS have been valid and in
accordance with the laws of Nevada.
ii. Shareholders and Issued Stock. Exhibit A annexed hereto
sets forth the names and share holdings of 100% of INS's shareholders.
INIT /s/ PS Confidential
INIT /s/ BW 04/7/99
4
<PAGE>
iii. Listing Stock for Trading.At closing, ISSUER's common
stock shall be listed for quotation on NASD Automated Bulletin Board and listed
with Standard and Poors or Moodys in their Accelerated Corporate Report.
iv. Counsel. INS represents and warrants that they are
represented by independent counsel or have had the opportunity to retain
independent counsel to represent them in this transaction and that prior to
Closing, the law offices of Mintmire & Associates has acted as exclusive counsel
to the ISSUER and has not represented either the SHAREHOLDERS or INS in this
transaction in any manner whatsoever.
4. INVESTMENT INTENT. SHAREHOLDERS agree that the shares being issued
pursuant to this Agreement may be sold, pledged, assigned, hypothecate or
otherwise transferred, with or without consideration (a "Transfer"), only
pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act, the availability of which is to be
established to the satisfaction of ISSUER. SHAREHOLDERS agree, prior to any
Transfer, to give written notice to ISSUER expressing his desire to effect the
transfer and describing the proposed transfer.
5. CLOSING. The closing of this transaction shall take place at the law
office of Donald F. Mintmire, 265 Sunrise Avenue, Suite 204, Palm Beach, FL.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
i. By the ISSUER
(1) Board of Directors Minutes authorizing the issuance of a
certificate or certificates for 500,000 shares of redeemable convertible
preferred stock, registered in the names of the SHAREHOLDERS equal to their
pro-rata holdings in INS.
(2) A Board of Directors resolution appointing Peter M.
Stazzone as Director and Executive Officer of ISSUER.
(3) Such other minutes of ISSUER's shareholders or directors
as may reasonably be required by SHAREHOLDERS.
ii. By SHAREHOLDERS AND INS:
INIT /s/ PS Confidential
INIT /s/ BW 04/7/99
5
<PAGE>
(1) Delivery to the ISSUER, or to its Transfer Agent, the
certificates representing 100% of the issued and outstanding stock of INS.
(2) Consents signed by all the shareholders of INS consenting
to the terms of this Agreement.
(3) Any and all documents required by ISSUER regarding the
current or past conditions or status of INS.
7. REMEDIES.
i. Arbitration. Any controversy or claim arising out of, or
relating to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Denver, Colorado in accordance with
the Rules of the American Arbitration Association then existing, and judgment on
the arbitration award may be entered in any court having jurisdiction over the
subject matter of the controversy.
8. MISCELLANEOUS.
i. Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
ii. No oral change. This Agreement and any provision hereof,
may not be waived, changed, modified, or discharged orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
iii. Non Waiver. Except as otherwise provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (I) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver by
any party of one breach by another party shall be construed as a waiver with
respect to any other or subsequent breach.
6
<PAGE>
iv. Time of Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
v. Entire Agreement. This Agreement contains the entire
Agreement and understanding between the parties hereto, and supersedes all
prior agreements and understandings.
vi. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
vii. Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed, and by fax, as follows:
ISSUER: IPVoice Communications, Inc.
5901 South Middlefield Road, Suite 100
Littleton, CO 80123
INS: Mr. Peter M. Stazzone
5050 North 19th Avenue, Suite 417
Phoenix, AZ 85015
viii and ix. See attached Addendum.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this 7th day of
April 1999.
IP Voice Communications, Inc. Independent Network Services
By: /s/ Barbara S. Will By: /s/ Peter M. Stazzone
- ------------------------ ----------------------------
Barbara S. Will Peter M. Stazzone,
By: /s/ Peter M. Stazzone
- --------------------------------
Peter M. Stazzone, Individually
7
<PAGE>
ADDENDUM
viii. All definitive documents and/or agreements relating to this
transaction, including this AGREEMENT FOR THE EXCHANGE OF COMMON STOCK, are
subject to the approval of the Board of Directors of the ISSUERS and
SHAREHOLDERS and Board of Directors of INS.
IX. All definitive documents and/or agreements relating to this
transaction, including this AGREEMENT FOR THE EXCHANGE OF COMMON STOCK, are
subject to the ISSUER entering into agreements with Peter M. Stazzone, including
but not limited to employment agreement, consulting agreement, compensation
agreement, stock option agreement, and stock grant agreement, acceptable to
Stazzone and IPVoice.
8
<PAGE>
EXHIBIT A
SHAREHOLDERS OF SATLINK 3000, INC.
D/B/A Independent Network Services, A Nevada Corporation
<TABLE>
<S> <C>
NAME SHARES
Oakmont Industries, Inc. 250,000
Franklin R. Foster 10,000
Daniel V. Dowd 10,000
Christine Minter-Dowd, Custodian FBO
Damon V. Dowd 10,000
Christine Minter-Dowd, Custodian FBO
Colin D. Dowd 10,000
Maryland Capital Management, Inc. 10,000
Peter M. Stazzone 75,000
</TABLE>
EXHIBIT 10.3
EVALUATION AGREEMENT
Upon acceptance of this Agreement by the parties signing below, Natural
MicroSystems Corporation ("NMS") and the undersigned individual or corporation
("Evaluation Customer") agree as follows:
1. Use of Hardware. NMS will ship to Evaluation Customer the hardware
and related documentation described in Attachment A (collectively "Hardware") at
no charge, whereupon Evaluation Customer shall be entitled to use the Hardware
solely for internal evaluation purposes for 60 days (the "Evaluation Period").
Upon completion of the Evaluation Period, Evaluation Customer will either
purchase the Hardware at the then current list price, or at such price mutually
agreed upon by NMS and Evaluation Customer, or will return the Hardware to NMS
in the same condition as received, reasonable wear and tear excepted.
2. Use of Software. NMS grants to Evaluation Customer a non-exclusive
license to use the software and related documentation described in Attachment A
(collectively, "Software") during the Evaluation Period solely for internal
evaluation purposes. Upon completion of the Evaluation Period, Evaluation
customer will either enter into a license agreement with NMS for future use of
the Software, or this license will immediately terminate and Evaluation Customer
will return the Software to NMS in the same condition as received, reasonable
wear and tear excepted.
3. Ownership and Confidentiality.
3.1 Evaluation Customer acknowledges that this Agreement grants
Evaluation Customer solely a limited right to use the Hardware and Software, and
agrees that title to and all applicable rights in patents, copyrights and trade
secrets with respect to such Hardware and Software, updates and enhancements
thereto, and any copies thereof are and shall remain the property of NMS.
3.2 Evaluation Customer shall not use, copy, reverse engineer or
transfer the Software, in whole or in part, except as expressly provided for in
this Agreement. If you transfer possession of any copy or merged portion of the
program to another party, your license and your right to use the program is
automatically terminated.
1
<PAGE>
4. Special Notice. Certain of the Software and related materials
licensed hereby are classified as "restricted computer software" as defined in
clause 52.227-19 of the Federal Acquisition Regulation ("FAR") and were
developed entirely at private expense for nongovernmental purposes, are
commercial in nature and have been regularly used for nongovernmental purposes,
and, to the extent not published and copyrighted, are trade secrets and
confidential and are provided with all rights reserved under the copyright laws
of the United States. The Government's rights to the software and related
materials are limited and restricted as provided in clause 52.227-19 of the FAR.
5. No Warranty. NMS FURNISHES THE HARDWARE AND SOFTWARE TO EVALUATION
CUSTOMER "AS IS" AND DISCLAIMS ALL WARRANTIES OF ANY KIND, INCLUDING WITHOUT
LIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
NMS SHALL HAVE NO LIABILITY FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR TORT DAMAGES ARISING OUT OF THE USE OR PERFORMANCE OF THE
SOFTWARE OR HARDWARE, EVEN IF NMS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
6. Proprietary Notices. Evaluation Customer acknowledges that the
Hardware and Software, and all copies thereof, are owned by NMS and shall
display NMS copyright and other proprietary notices.
7. Term. This Agreement shall terminate at the end of the Evaluation
Period. NMS may terminate this agreement at any time with or without cause.
Evaluation Customer's obligations under Section 1,2 and 3 shall survive any
termination.
8. No Obligation. Evaluation Customer's participation in this Agreement
shall be at no charge to Evaluation Customer, and Evaluation Customer shall have
no obligation to purchase the Hardware or license the Software from NMS except
as described in Section 1 and 2. However, in partial consideration for
participation in this Agreement the Evaluation Customer will freely provide its
evaluation of the Hardware and Software to NMS, and will promptly disclose to
NMS any material errors, problems or malfunctions it discovers, if any, during
the Evaluation Period. NMS will not disclose Evaluation Customer's evaluations
to any person (other than NMS' employees and agents), provided that such
evaluations are labeled or otherwise identified in writing as confidential. NMS
shall, however, have an unrestricted royalty-free right to use information
contained in Evaluation Customer's evaluations for purposes of correcting and/or
enhancing the Hardware or Software.
9. Governing Law: Forum. The provisions of this Agreement shall be
governed by the laws of the Commonwealth of Massachusetts, and shall be binding
2
<PAGE>
upon the parties in the United States and worldwide. The federal and state
courts within the Commonwealth of Massachusetts shall have exclusive
jurisdiction to adjudicate any dispute arising out of this Agreement.
10. Remedies. Evaluation Customer acknowledges that a violation of this
Agreement may cause irreparable harm to NMS, and agrees that, in addition to any
other remedies provided by law, NMS will be entitled to obtain injunctive relief
against any such violation without having to post a bond.
11. Authority.Each party hereby represents that it has the unrestricted
right and authority to enter into and perform its obligations under this
Agreement.
NATURAL MICROSYSTEMS IP Voice Communications
CORPORATION Evaluation Customer
By: /s/ William Cole By: /s/ Anthony Welch
- ---------------------------------- ---------------------------
Name: William Cole Name: Anthony Welch
Title: Corporate Sales Rep Title: Director R & D
Date: February 10, 1998 Date: 2/18/98
3
<PAGE>
Attachment A
Description of the Software
<TABLE>
<CAPTION>
Software:
Name Version Quantity
- ------- ---------- --------
<S> <C> <C> <C>
8850 Fusion ADK 2.0 1 $1,080
7404 Fusion Runtings 2.0 1 $ 0
8746 CT Access 1.1 1 $1,995
8859 H323 Call Control Software 1.0 1 $ 0
8852-02 H323 Licenses 1.0 16 $ 540
8856 Fusion ADK G723.1 1.0 2 $ 0
8852-03 G723.I Licenses 1.0 16 $ 240
</TABLE>
<TABLE>
<CAPTION>
Description of the Hardware
Hardware:
Name Quantity
- -------- --------
<S> <C> <C> <C>
8643 AG8/80 + RT1 2 $4,124 ea $8,248
8686 AG8/80 LS 2 $1,684 ea $9,368
8865 TX2000 2 $2,396 ea $4,792
- ---------------------------------------------------------------------------
Total $20,263
Shipping (UPS RED) $ 67
Net $20,330
</TABLE>
4
<PAGE>
Natural
MicroSystems
May 4, 1998
Barbara Will
IP Voice Communications
7904 Yorkshire Drive
Castle Rock, CO 80104
Dear Barbara:
here is the "Invoices only" document that I mentioned in our last communication,
5/1/98. If you would check it over and sign as indicated, page 4 of the Order
Verification and fax it back to me at 508-271-1350, I will use this as your
purchase order.
I also included a copy of the Evaluation Agreement for your records.
Thank you Barbara. If you have any questions regarding this activity, please
give me a call at 800-533-6120 extension 1389.
Sincerely,
/s/ Bill
------------------
William Cole
<PAGE>
Order Verification
NATURAL MICROSYSTEMS CORP. Page: 1
100 CROSSING BLVD. Salesperson:
FRAMINGHAM MA 01702
508/620-9300
FED ID: Tax ID 2:
Route To: ipvoice Ship To:
IP Voice Communications IP Voice Communications
ATTN: Ms Barbara Will ATTN: Ms. Barbara Will
7804 Yorkshire Drive 7804 Yorkshire Drive
Castle Rock CO 80104 Castle Rock CO 80104
United States United States
Cust Curr: USD US DOLLARS
FED ID: Tax ID 2:
Order # Cust PO No. Ship Via Pk PP Date Ord Terms Ver Date
- --------------------------------------------------------------------------------
US04537 INVOICE ONLY Not Applicable 4/30/98 1% 10, NET 45 05/4/98
Line/Rel Due Date Qty Item Unit Price/Net Amount
- --------------------------------------------------------------------------------
1 1.000 888 1,080.00
05/05/98 EA 1,080,00
8850 Fusion ADX
2 1.000 888 0.00
05/05/98 EA 0.00
Fusion Runtime
3 1.000 888 1,995.00
05/05/98 EA 1,995.00
CT Access NT Developers kit
4 1.000 888 0.00
05/05/08 EA 0.00
<PAGE>
Order Verification
NATURAL MICROSYSTEMS CORP. Page: 2
100 CROSSING BLVD. Salesperson:
FRAMINGHAM MA 01702
508/620-9300
FED ID: Tax ID 2:
Route To: ipvoice Ship To: 0
IP Voice Communications IP Voice Communications
ATTN: Ms Barbara Will ATTN: Ms. Barbara Will
7804 Yorkshire Drive 7804 Yorkshire Drive
Castle Rock CO 80104 Castle Rock CO 80104
United States United States
Cust Curr: USD US DOLLARS
FED ID: Tax ID 2:
Order # Cust PO No. Ship Via Pk PP Date Ord Terms Ver Date
- --------------------------------------------------------------------------------
US04537 INVOICE ONLY Not Applicable 4/30/98 1% 10, NET 45 05/4/98
Line/Rel Due Date Qty Item Unit Price/Net Amount
- --------------------------------------------------------------------------------
8859 H.323 Call Control Software
5 1.000 888 540.00
05/05/98 EA 540.00
8852-16 H.323 Licenses
6 1.000 888 0.00
05/05/98 EA 0.00
8856 Fusion ADX G 723.1
7 1.000 888 240.00
05/05/98 EA 240.00
8853-16 G 723.1 Licenses
8 2.000 888 4,124.00
<PAGE>
Order Verification
NATURAL MICROSYSTEMS CORP. Page: 3
100 CROSSING BLVD. Salesperson:
FRAMINGHAM MA 01702
508/620-9300
FED ID: Tax ID 2:
Route To: ipvoice Ship To: 0
IP Voice Communications IP Voice Communications
ATTN: Ms Barbara Will ATTN: Ms. Barbara Will
7804 Yorkshire Drive 7804 Yorkshire Drive
Castle Rock CO 80104 Castle Rock CO 80104
United States United States
Cust Curr: USD US DOLLARS
FED ID: Tax ID 2:
Order # Cust PO No. Ship Via Pk PP Date Ord Terms Ver Date
- --------------------------------------------------------------------------------
US04537 INVOICE ONLY Not Applicable 4/30/98 1% 10, NET 45 05/4/98
Line/Rel Due Date Qty Item Unit Price/Net Amount
- --------------------------------------------------------------------------------
05/05/98 EA 8,248.00
8643 AG8/80 RT1
9 2.000 888 1,684.00
05/05/98 EA 3,368.00
8686 AG8/80 voice boards
10 2.000 888 2,396.00
05/05/98 EA 4,792.00
8865 TX2000 data communications boards
EVALUATION CONVERTING TO NEW ACCOUNT
INVOICE ONLY ----- INVOICE ONLY-----
DO NOT SHIP PRODUCT AGAINST THIS SALES
ORDER
<PAGE>
Order Verification
NATURAL MICROSYSTEMS CORP. Page: 4
100 CROSSING BLVD. Salesperson:
FRAMINGHAM MA 01702
508/620-9300
FED ID: Tax ID 2:
Route To: ipvoice Ship To: 0
IP Voice Communications IP Voice Communications
ATTN: Ms Barbara Will ATTN: Ms. Barbara Will
7804 Yorkshire Drive 7804 Yorkshire Drive
Castle Rock CO 80104 Castle Rock CO 80104
United States United States
Cust Curr: USD US DOLLARS
FED ID: Tax ID 2:
Order # Cust PO No. Ship Via Pk PP Date Ord Terms Ver Date
- --------------------------------------------------------------------------------
US04537 INVOICE ONLY Not Applicable 4/30/98 1% 10, NET 45 05/4/98
Line/Rel Due Date Qty Item Unit Price/Net Amount
- --------------------------------------------------------------------------------
INVOICE ONLY---------INVOICE ONLY-----------
X______________________________
<TABLE>
<S> <C> <C> <C>
Sale Amount: 20,263.00
Order Disc (0.0000%): 00.00
Sales Tax: 00.00
Sales Tax: 00.00
Remit To: Natural Microsystems Corp. Fr: 67.00
Dept. CH10926 MC: 00.00
Palatine, IL 60055-0926
Total: 20,330.00
</TABLE>
EXHIBIT 10.4
Contract # 301394
ICG Master Telecommunications
Telecom Group, Inc. Services Agreement
161 Inverness Drive West, Englewood, Colorado 80112
This Master Telecommunications Services Agreement (the "Master Agreement") is
effective this 25th day of June, 1999 (the "Effective Date"), by and between ICG
Telecom Group, Inc. ("ICG"), a Colorado corporation with offices at 161
Inverness Drive West, Englewood, Colorado 80112 and the undersigned Customer.
WHEREAS, ICG is a provider of a full range of telecommunications services to the
public and Customer desires to purchase certain of these services ("Services")
from ICG, and ICG is willing to provide the Services to Customer pursuant to the
rates, terms and conditions set forth in this Master Agreement, any Attachments
or exhibits hereto, or in the applicable ICG Tariffs on file with regulatory
authorities.
NOW THEREFORE, the parties agree as follows :
Company Name (Exact legal name) Type of Entity (Individual,
corporation, partnership,
limited liability co. etc.)
IPVOICE COMMUNICATIONS, INC. CORP
Street Address City State Zip Code
5901 MIDDLEFIELD ROAD #100 LITTLETON CO 8
Company's Main Tel. No. Fax No.
303 738-1266
Customer Contact Name (Technical) Tel. No.
Jim Giannoit 714 681-5405
CPE Vendor Name Tel. No.
SELF
Additional Info. Attached CPE Brand Model
Federal ID No. State ID No.
(If yes, please attach a copy of exemption certificate.)
Tax-Exempt? Yes No Current Customer Yes No
--- ---
<PAGE>
ADDENDUM TO SERVICE AGREEMENT
This Addendum to Service Agreement ("Addendum) is entered into this 25th
day of June 1999 by and between ICG Telecom Group, Inc., a Colorado corporation
("ICG") and IPVOICE Communications, Inc. ("Customer").
WHEREAS, ICG and Customer desire to amend the Master Telecommunications
Services Agreement for telecommunications services to be provided by ICG to
Customer (the "Agreement") contemporaneously with or prior to execution,
NOW THEREFORE, the following additional terms and conditions shall apply to
the Agreement:
2. Notwithstanding anything in the Agreement to the contrary, in the event
ICG increases its prices for Services provided under this Agreement, through one
or more price increases, to a price which is more than twenty percent (20%)
above the initial prices for the Services, then Customer shall be allowed to
terminate the effected Services without liability for termination fees or
similar charges. Any such price increase shall not be effective until six (6)
months after Customer's receipt of notice thereof from ICG.
3. Notwithstanding anything int eh Agreement to the contrary, in the event
ICG discontinues any Services provided to Customer under the Agreement, ICG will
grandfather such Services by continuing to provide the Services to Customer for
the remaining contracted term for such Services.
4. During and throughout the Term of this Agreement, in the event Customer
receives a bona fide offer to purchase telecommunications services from a third
party, which offer Customer wishes to accept, the Customer shall first offer in
writing (the "Offer") to purchase such telecommunications services from ICG upon
the same, prices, terms, and conditions as those offered by the third party.
Upon receipt of the Offer, ICG shall have ten (10) business days (hereinafte4r
"Offer Period") to accept such Offer. If said Offer is not accepted by ICG in
writing by the expiration of the Offer Period, the Customer shall have the right
to purchase such telecommunications services from the third party at the rates
and under the same terms and conditions contained in the Offer. Upon ICG's
election to accept the Offer, Customer shall promptly submit a service order to
ICG for the telecommunications services to be provided.
5. Effect of Amendment. Except to the extent set forth herein, all of the
other terms and conditions of the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed by
their duly authorized representatives on the day and year first above written.
ICG TELECOM GROUP, INC. IPVOICE Communications, Inc.
By______________________________ By /s/ Barbara S. Will
----------------------
Title____________________________ Title President & COO
<PAGE>
E911 WAIVER AND INDEMNIFICATION
This Waiver and Indemnification is given by IPVoice Communications,
Inc. ("Customer") this 25 day of June, 1999 in favor of ICG Telecom Group, Inc.
("ICG")in connection with the agreement for telecommunications services to be
entered between the parties.
RECITALS
Whereas, Customer has requested telecommunications services (the
"Telecommunication Services") from ICG and as part of the request, Customer, who
is located in a location served by normally different local telephone numbers.
Whereas, use of foreign telephone numbers at __________________________
(address) would cause emergency 911 calls to be delayed and could create an
opportunity for error. It is likely that the calls would first be routed to the
public safety answering point ("PSAP") "home" to the foreign telephone number,
here the above address would be displayed; the home PSAP would then transfer the
call tot he correct PSAP for handling. In any event, use of the foreign numbers
could cause problems involving emergency 911 service.
Whereas, ICG is willing to provide the service and the foreign telephone numbers
to Customer only upon customer entering into this Waiver and Indemnification.
Now, therefore, Customer agrees as follows:
1. In consideration for ICG's entering into the agreement to provide the
Telecommunications Services, including the foreign telephone numbers, to
Customer, in no event shall ICG, its employees, agents, representatives or
affiliates be liable to Customer or any third party for any direct, indirect,
consequential, special, incidental, actual, punitive or any other damages,
whether such damages be to person (including, but not limited to, damage claims
for wrongful death) or property, arising from or in any way connected with any
delay, miscommunications, misconnection or other failure involving emergency 911
telephone calls or services; and
2. Customer agrees to defend, indemnify, and hold harmless ICG from and against
any loss, cost, claim, liability, damage, or expense, including reasonably
attorneys' fees, to third parties, relating to or arising out of any emergency
911 telephone call. In addition, Customer shall, to the extent of its
obligations to indemnify hereunder, defend any action or suit brought by a third
party against ICG.
3. Customer agrees to maintain at lease one line from the rate center designated
to serve the customer's address for the purpose of properly providing 911
capability. This line's telephone number is: ________________________________.
THIS WAIVER AND INDEMNIFICATION shall be binding upon IPVoice Communications and
its successors and assigns and shall continue for as long as ICG continues to
provide the Telecommunications Services to IPVoice Communications obligation to
defend, indemnify and hold harmless ICG as set forth herein shall survive
termination of the Telecommunications Services.
Customer: IPVoice Communications, Inc. (Print Company Name)
By: /s/ Barbara S. Will
--------------------------------------------
Title: President & COO
<PAGE>
Contract# 301394
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc. L.A. CA
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
L.A, CA - LA#'s
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A __X__ PLAN B ___
24 B ______ 23 B Primary D _5__ 23 B Primary D ____
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 120
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-1
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc. L.A. CA
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
L.A, CA - LA, Imine#'s
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A __X__ PLAN B ___
24 B ______ 23 B Primary D _5__ 23 B Primary D ____
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 120
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-2
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications,Inc SanDiego
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A __X__ PLAN B ___
24 B ______ 23 B Primary D _3__ 23 B Primary D ____
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 72
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-3
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications Inc
SanFrancisco
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B ___
24 B ______ 23 B Primary D _5__ 23 B Primary D ____
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 120
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-4
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
SanFrancisco
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
SanFran, Oakland #'s
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A __X__ PLAN B ___
24 B ______ 23 B Primary D _4__ 23 B Primary D ____
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 96
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-5
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc. SanFran
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
SanFran, SanJose#'s
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A __X__ PLAN B ___
24 B ______ 23 B Primary D _4__ 23 B Primary D ____
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 96
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-6
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
Sacramento
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Sacramento
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A __X__ PLAN B ___
24 B ______ 23 B Primary D _3__ 23 B Primary D ____
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 72
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-7
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
Denver, CO
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Denver
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__ 2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __3__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 72
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-8
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc. Denver
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Colo Spgs # to Denver
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__
24 B ______ 23 B Primary D ___ 23 B Primary D __1__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 24
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-9
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc. Atlanta
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Atlanta
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B ___2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __4__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 96
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-10
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc. Dallas
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Dallas
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B ___2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __5__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 120
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-11
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc. Houston
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Houston
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __5__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 120
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-12
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc. Austin
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Austin
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __2__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 48
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-13
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
San Antonio
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
San Antonio
<TABLE>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __3__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 72
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-14
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
Cinncinati
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Cinncinnati
<TABLE>
<CAPTION>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __3__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 72
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-15
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
Cleveland
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Cleveland
<TABLE>
<CAPTION>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A _X___ PLAN B _X__2-way
24 B ______ 23 B Primary D _2__ 23 B Primary D __1__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 72
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-16
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
Nashville
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Nashville
<TABLE>
<CAPTION>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __3__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 72
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-17
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
Charlotte
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Charlotte
<TABLE>
<CAPTION>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __2__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 48
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-18
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
Birmingham
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Birmingham
<TABLE>
<CAPTION>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __1__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 24
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
<PAGE>
Contract# 301394-19
ICG
Telecom Group, Inc.
161 Inverness Drive West, Englewood, Colorado 80112 ATTACHMENT A
LOCAL EXCHANGE SERVICE
AGREEMENT
(use a separate attachment for each city)
LOCAL EXCHANGE SERVICE (subject to Additional Terms and Conditions on the
reverse side the Master Agreement):
TERM OR SERVICE (check one)
The Term selected will commence on installation of the Local Exchange Service.
Customer selects the following Service Term (pleas check appropriate box):
__ Month to Month __12 months __24 months _X_ 36 months __48 months __60 months
Following the expiration of the Term selected above, the Term shall
automatically renew for successive one-month periods unless either party shall
notify the other of its intent not to renew by giving the either party at least
thirty (30) days prior written notice.
INSTALLATION INFORMATION Requested Service Date
Date:
Customer Contact Name: Mr. Jim Giannoit
Company Name and Physical Location (City): IPVoice Communications, Inc.
Louisville
LOCAL EXCHANGE SERVICE OPTIONS
SERVICE DESCRIPTION
_X__ON-SWITCH ___ RESALE Customer acknowledges
that ICG may elect to move Resale
Service Customers onto its network
when such network becomes available,
thereby converting such customers to
an On-Switch status.
Louisville
<TABLE>
<CAPTION>
ISND PRI SERVICE DIGITAL ACCESS SERVICE (DAS): Where Available
<S> <C> <C>
23 B & Primary D ______ PLAN A ____ PLAN B _X__2-way
24 B ______ 23 B Primary D ___ 23 B Primary D __2__
23 B & D Backup ______ 24 B ____ 24 B _________
DID Service ______ 24 B & D Backup ____ 24 B & D Backup ____
</TABLE>
<PAGE>
Other: ______ Expanded Originating Service ___ Other _____
Other: ______ DSO Total 48
DIGITAL SERVICE ANALOG SERVICE
PBX Trunks ______ Standard Lines _______
PBX Trunks with DID ______ SBL + _______
Fully configured T1 ______ TBX Trunks _______
DID Service ______ PBX Trunks with DID _______
Other: ______ DSO Total___ Other:________ DSO Total ____
LETTER OF AGENCY AUTHORIZATION
Effective this 25th day of June 1999 the undersigned Customer hereby appoints
ICG Telecom Group Inc. ("ICG") as Customer's agent for the purpose of changing
Customer's local exchange service provide with respect to the Billing Telephone
Numbers listed on the attached page(s) (the "BTNs" from New Service ("Prior
Carrier") to ICG, and ICG hereby accepts such appointment. Customer intends to
change the provider of local service for the BTNs and associated working
telephone numbers from Prior Carrier to ICG. This Letter of Agency ("LOA") is
exclusive with respect to the BTNs and revokes any previous Letters Of Agency
regarding local service to be provided to the BTNs. ICG warrants the validity of
this LOA to any third person, including Prior Carrier, to whom ICG shows the
original or copy of this LOA and who relies on this LOA with respect to the
scope of ICG's authority to act on behalf of Customer. This LOA shall remain in
effect until revoked by Customer in writing.
TARIFF APPLICABILITY
Customer understands and acknowledges that the Local Exchange Service will be
provided by ICG pursuant to the terms and conditions in the Master Agreement and
the rates, terms and conditions of the following ICG Tariffs, depending upon
where the Customer is located: Alabama P.S.C. Tariff No. 3, on file with the
Alabama Public Service Commission; Schedule Cal. P.U.C. No. A1, on file at the
California Public Utilities Commission; Colorado P.U.C. Tariff No. 3 and
Colorado P.U.C. Tariff No. 4, on file at the Colorado Public Utilities
Commission; Georgia Tariff No. 1 on file with the Georgia Public Service
Commission; Kentucky P.S.C. Tariff No. 2, on file with the Kentucky Public
Utilities Commission; N.C.U.C. price List No. 1, on file at the North Carolina
Utilities Commission; P.U.C.O. Tariff No.2, on file at the Public Utility
Commission of Ohio; Tennessee Tariff No.1 on file at the Tennessee Regulatory
Authority; Texas Tariff No. 1, on file at the Public Utility Commission of
Texas. In the event of a conflict between the applicable ICG Tariff(s) and this
Agreement, the Tariff will always take precedence.
ICG Initials/Date /s/ J.C. Customer Initials/Date /s/ BW
EXHIBIT 10.5
[logo] RSL COM
RSL COM U.S.A. INC.
CARRIER SERVICES AGREEMENT
This Agreement is made this 12th day of August, 1999, by and between
RSL COM U.S.A., Inc. a Delaware corporation, with its principal office at 5550
Topanga Canyon Boulevard, Suite 250, Woodland Hills, California 91367, ("RSL
COM") and IPVoice.com, Inc. with its principal office at 5901 South Middlefield
Road, #100, Littleton, Colorado, 80123 ("Customer").
WITNESSETH:
Whereas, RSL COM is in the business of providing long distance
telecommunications service: and
Whereas, customer is in the business of purchasing long distance
telecommunications services,
Whereas, RSL COM agrees to provide and Customer agrees to accept the
telecommunications services described in the Service Schedule attached hereto
and in RSL COM's filed tariffs (collectively "Services") subject to the terms
and conditions contained in this Agreement and in conformity with each Service
Request which is accepted hereunder,
1. EFFECTIVE DATE - SERVICE TERM.
A. EFFECTIVE DATE This Agreement shall be effective between the parties
as of the date first written above.
B. START OF SERVICE RSL COM's obligation to provide and Customer's
obligation to accept and pay for Service shall be binding to the
extent provided for in this Agreement upon the execution of a Service
Schedule by both parties. RSL COM will use reasonable efforts to
provide Service within thirty days, following execution of the
applicable Service Schedule, or the requested delivery date, whichever
is later.
C. TERM Except as otherwise provided herein, the parties' obligations
hereunder with respect to Service shall continue from Start of Service
Customer /s/BW RSL /s/FS
1
<PAGE>
over the period of time specified in the Service Schedule. Any minimum
commitment term shall be specified in the Service Schedule. Either
party may terminate this Agreement upon thirty (30) day written notice
to the other party.
D. CHARGES RSL COM reserves the right tot modify rates and/or charges for
and/or delete RSL COM Service offerings to specific locations and
modify Service Interconnection charges, if any, upon five (5) days
notice to Customer.
E. MINIMUM COMMITMENT Customers Minimum Usage Commitment ("MUC") shall be
100,000 minutes per month per DS1 or as set forth in the Service
Schedule. In the event Customer fails to maintain its MUC, RSL COM
shall have the right to suspend Service(s) to Customer upon seven (7)
days written notice. Suspension of Service does not relieve Customer
of its obligations to pay the actual usage for such billing cycle up
to and including the date of suspension. (F9 /s/BW 8-17-99)
2. SERVICE SCHEDULES. Service requested by Customer hereunder shall be
requested on RSL COM Service Schedule forms and subscribed to by authorized
representatives of Customer and RSL COM. Each Service Schedule shall reference
this Agreement and shall become a part of this Agreement to the extent that it
describes the Service, Requested Service Date, Service Interconnection, if any,
relevant to the Service in question, charges, specific Service terms and other
information necessary for RSL COM to provide Service to Customer as set forth in
Exhibit A attached.
3. CUSTOMER RESPONSIBILITIES.
A. CUSTOMER FACILITIES Customer has sole responsibility for the
installation, testing, operation of and costs associated with
facilities, services and equipment other than the specifically to be
provided by RSL COM as described in a Service Schedule ("Customer
Facilities"). In no event will the untimely installation or
non-operation of Customer Facilities relieve Customer of its
obligation to pay charges for Service provided by RSL COM. If Customer
is responsible for establishing a Service Interconnection over
facilities other than those controlled by RSL COM, RSL COM shall not
be obligated to provide Service relevant thereto if the Service
Interconnection in question is not activated within sixty (60) days
following the Requested Service Date.
2
/s/ FS /s/ BW 8-17-99
<PAGE>
B. EXPEDITE CHARGES Should Customer request expeditious Service and/or
changes to orders and RSL agrees to such request, RSL will pass
through the charges assessed by any supplying parties involved at the
same rate to Customer. RSL may further condition its agreement with
such request upon Customer's payment of additional charges to RSL.
C. FRAUDULENT CALLS Customer shall indemnify and hold RSL COM harmless
from all costs, expenses, claims or actions arising from fraudulent
calls of any nature carried by means of the Services. Customer shall
not be excused from paying RSL CM for Services provided to Customer or
any portion thereof on the basis that fraudulent calls comprised a
corresponding portion of the Service. In the event RSL COM discovers
fraudulent calls being made or reasonably believes fraudulent calls
are being made, nothing contained herein shall prohibit RSL COM from
taking immediate action, without notice to Customer, that is
reasonably necessary to prevent such calls from taking place.
D. LICENSES Customer is solely responsible for obtaining all licenses,
approvals, or regulatory authorities for its operation as a reseller
of services to its customers. If Customer is prohibited, on a
temporary or long term basis, from conducting its telecommunications
operations, Customer shall immediately notify RSL COM. In such event,
RSL COM reserves the right to terminate this Agreement.
E. TAX EXEMPTION Customer will provide RSL COM with a valid tax exemption
form to exempt Customer, under applicable law, from taxes that would
otherwise be paid by Customer. RSL COM will invoice Customer for taxes
that are not covered by tax exemption certificate properly filed with
RSL COM.
4. Charges and Payment Terms.
A. TAXES CUSTOMER acknowledges and understands that all charges stated in
Service Schedules are computed by RSL COM exclusive of any applicable
use, excise, gross receipts, sales and privilege taxes, duties fees or
other taxes or similar liabilities (other than general income or
property taxes), whether charged to or against RSL COM or Customer
because of the Service furnished to Customer ("Additional Charges").
Such Additional Charges shall be paid by Customer in addition to all
other charges provided for herein.
B. BILLING DISPUTES Any billing discrepancies shall be presented to RSL
COM in reasonable detail, in writing, within thirty (30) days of the
date of the invoice in question. RSL COM shall not be obligated to
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consider any Customer notice of billing discrepancies which are
received by RSL COM more than thirty (30) days following the date of
the invoice in question. Customer shall be obligated to pay all
disputed amounts, which amounts shall thereafter be credited to
Customer's next invoice in the event the parties conclude that the
disputed amount or part thereof is owing Customer. The parties shall
use their best efforts to resolve the disputed bill within thirty days
of notice given by Customer. If such resolution is not attained, the
parties' dispute shall be settled by arbitration as set forth in
paragraph 12 herein.
C. CHARGES AND PAYMENT Terms RSL COM billings for Service are made on a
weekly basis following Start of Service. RSL COM reserves the right to
change its billing cycle from time to time, as its sole discretion,
upon reasonable written notice given to Customer. Service shall be
billed at the rates set forth on the Service Requests. Customer will
pay each RSL COM invoice for Service in full, without deduction or
offset of any kind, within seven (7) days of the invoice date set
forth on each RSL COM invoice to Customer ("Due Date"). All payments
due hereunder shall be made in U.S. dollars. If payment is not
received by RSL COM on or before the Due Date, Customer shall also pay
a late fee in the amount of the lesser of one and on-half percent (1
1/2%) of the unpaid balance of the Service Charges per month or the
maximum lawful rate under applicable law.
D. SUSPENSION OF SERVICES With the exception of terms set forth in
paragraph 4(c) above, in the event payment in full is not received
from Customer by Due Date, RSL COM shall also have the right, after
giving Customer three (3) days written prior notice, to suspend all or
any portion of the Service to Customer until such time as Customer has
paid in full all charges then due, including any late fees. Following
such payment, RSL COM shall b required to reinstitute Service to
Customer only upon the provision by Customer to RSL COM, Customer of
satisfactory assurance (such as a deposit) of Customer's ability to
pay for Service and Customer's advance payment of the cost of
reinstituting Service. If Customer fails to make such payment by a
date determined by and acceptable to RSL COM, Customer will be deemed
to have canceled the Service effective as of such date. Such
cancellation shall not relieve Customer of payment liability for the
unexpired portion of the Minimum Service Term relevant to the canceled
Service.
E. CREDIT Customer's execution of this Agreement signifies Customer's
acceptance of RSL COM's initial and continuing credit approval
procedures and policies. RSL COM reserves the right to withhold
initiation or full implementation of Service under this Agreement
pending initial satisfactory credit review and approval thereof which
may be conditioned upon terms specified by RSL COM, including, but not
limited to, security for payments due hereunder in the form of cash
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deposit, guarantee, irrevocable letter of credit or other means, which
may be increased upon RSL COM's request at its discretion. As may be
determined by RSL COM in its sole discretion at any time, if the
financial circumstances or payment history is or becomes unacceptable,
or in the event Customer exceeds its credit limit as determined by RSL
COM or indicates difficulties in meeting its payments, RSL COM may
require a new or increased deposit, partial payment, guarantee or
irrevocable letter of credit, at RSL COM's option, to secure
Customer's payments for the term of the Agreement. Failure of Customer
to provide the requested security shall constitute a material breach
of Agreement.
5. WARRANTY. RSL COM will use reasonable efforts under the circumstances to
maintain its overall network quality. The quality of Service provided hereunder
shall be consistent with other common carrier industry standards, government
regulations and sound business practices. RSL COM MAKES NO OTHER WARRANTIES
ABOUT THE SERVICE PROVIDED HEREUNDER, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE.
6. CONTINUING RELATIONSHIP AND TERMINATION. This Agreement and the relationship
of the Parties may be terminated by the non-defaulting Party in accordance with
applicable provisions hereof and/or the occurrence of any of the following
events which shall constitute a default:
A. RSL COM may terminate this Agreement in the event Customer fails to
make any payments when due or fails to furnish security as may be
required pursuant to Paragraph 4(E) hereof, and fails to cure such
default within five (5) days after the receipt of notice of such
default.
B. The non-defaulting party mat terminate this Agreement in the event of:
1. Material Breach of this Agreement (other than as
specified in Paragraph 6(A) above) after the notice thereof and
failure of the breaching Party to cure such breach within twenty
(20) days of receipt of notice of such default.
2. The filing by either party of a voluntary petition in
bankruptcy or insolvency, the ajudication of either party as
bankrupt or insolvent, or the appointment of a receiver or any
act or action constituting a general assignment by either Party
of its proprieties and interest for the benefit of its creditors.
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3. The determination by any governmental entity having
jurisdiction over the Service provided under this Agreement that
the relationship of the Parties and/or Services provided
hereunder are contrary to then existing laws.
7. LIABILITY; GENERAL INDEMNITY.
A. Limited Liability IN NO EVENT WILL EITHER PARTY HERETO BE LIABLE TO
THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
LOSSES OR DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF REVENUE, LOSS
OF CUSTOMERS OR CLIENTS, LOSS OF GOODWILL OR LOSS OF PROFITS ARISING
IN ANY MANNER FROM THIS AGREEMENT AND THE PERFORMANCE OR
NONPERFORMANCE OF OBLIGATIONS HEREUNDER.
THE LIABILITY OF RSL COM WITH RESPECT TO THE INSTALLATION (INCLUDING
DELAYS THEREOF), PROVISION, TERMINATION, MAINTENANCE, REPAIR,
INTERRUPTION, OR RESTORATION OF ANY SERVICE OR FACILITIES OFFERED
UNDER THIS AGREEMENT SHALL NOT EXCEED AN AMOUNT EQUAL TO THE CHARGE
APPLICABLE UNDER THIS AGREEMENT TO THE PERIOD DURING WHICH SERVICES
WERE AFFECTED. FOR THOSE SERVICES WITH MONTHLY RECURRING CHARGES, THE
LIABILITY OF RSL COM IS LIMITED TO AN AMOUNT EQUAL TO THE
PROPORTIONATE MONTHLY RECURRING CHARGES FOR THE PERIOD DURING WHICH
SERVICE WAS AFFECTED.
B. GENERAL INDEMNITY In the event parties other than Customer (e.g.
Customer's switched service customers) shall have use of the Service
through Customer, then Customer agrees to forever indemnify and hold
RSL COM, its affiliated companies and any third-party provider or
operator of facilities employed in provision of the Service harmless
from and against any and all claims, suits, actions, losses, damages,
assessments or payments which may be asserted by said parties arising
out of relating to any defect in the Service.
8. FORCE MAJEURE. The provisions of Force Majeure apply to this Agreement.
9. NOTICES. Any notice or other communication required or permitted to be
given hereunder shall be in writing addressed to the persons listed below, at
the last known address of the company, and shall be given by prepaid first class
mail, by facsimile or other means of electronic communication or by hand
delivery, and shall be deemed received one day after being sent.
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a) For RSL COM:
Company: RSL COM U.S.A., Inc.
Contact Person: Manager, Contract Administration
Address: 5550 Topanga Cannyon Boulevard, Suite 250
Woodland Hills, CA 91367
Phone Number: 818 888-7600
Fax Number: 818 704-6290
b) For Customer:
Company: IPVoice.com, Inc.
Contact Person: Pete Stazzone
Address: 5901 South Middlefield Road, Suite #100
Littleton, CO 80123
Phone Number: 303 738-1266
Fax Number: 303 738-1295
10. NO WAIVER. No term or provision of this Agreement shall be deemed waived
and no breach or default shall be deemed excused unless such waiver or consent
shall be in writing and signed by the party claimed to have waived or consented.
No consent by any party to, or waiver of, a breach or default by the other,
whether expressed or implied, shall constitute a consent to, waiver of, or
excuse for any different or subsequent breach or default.
11. PARTIAL INVALIDITY; GOVERNMENTAL ACTION.
(A) Partial Invalidity If any term or provision of this Agreement shall be
found to be illegal or unenforceable, then, notwithstanding such
illegality or unenforceability, this Agreement shall remain in full
force and effect and such term or provision shall be deemed to be
deleted.
(B) Governmental Action Upon thirty (30) days prior notice, either party
shall have the right, without liability to the other, to cancel an
affected portion of the Service if any material rate or term contained
herein and relevant to the affected Service is substantially changed
Customer /s/BW RSL /s/FS
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or found to be unlawful or the relationship between the parties
hereunder is found to be unlawful by order of the highest court of
competent jurisdiction to which the matter is appealed, the Federal
Communications Commission, or other local, state or federal government
authority of competent jurisdiction.
12. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by Arbitration in New York,
administered by the American Arbitration Association under its Commercial
Arbitration Rules, and judgment on the award rendered by the Arbitrators may be
entered in any Court having jurisdiction thereof.
13. USE OF SERVICE. Upon RSL COM"s acceptance of a Service Schedule hereunder,
RSL COM will provide the Service specified therein to Customer upon condition
that the Service shall not be used for any unlawful purpose. The provision of
Service will not create a partnership or joint venture between the parties or
result in a joint communications service offering to the third parties, and RSL
COM and Customer agree that this Agreement, to the extent it is subject to
regulation by the Federal Communications Commission, is an intercarrier
agreement which is not subject to the filing requirements of the FCC.
14. CHOICE OF LAW: FORUM.
The construction, interpretation, and performance of this Agreement shall be
governed by the local laws of the State of New York, and exclusive jurisdiction
shall be with the courts of that State.
15. PROPRIETY INFORMATION.
(A) Confidential Information The parties understand and agree that the
terms and conditions of this Agreement, all documents and invoices and
all communications between the parties regarding this Agreement or the
Service to be provided as well as such information relevant to any
other agreement between the parties (collectively "Confidential
Information"), are strictly confidential as between Customer and RSL
COM.
(B) Limited Disclosure A party shall not disclose Confidential Information
unless subject to discovery or disclosure pursuant to legal process,
or to any other party other than the directors, officers, and
employees of a party or agent's of a party including their respective
brokers, lenders, insurance carries or prospective purchasers who have
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specifically agreed in writing to nondisclosure of the terms and
conditions hereof. Any disclosure hereof required by legal process
shall only be made after providing the non-disclosing party to seek an
appropriate protective order or exemption. Violation by a party, as
its option, to obtain injunctive relief without a showing of
irreparable harm or injury and without bond.
(C) PRESS RELEASES The parties further agree that any press release,
advertisement or publication generated by a party regarding this
Agreement, the Service provided hereunder or in which a party desire
to mention the name of the other party or the other party's parent or
affiliated company(ies), will be submitted to the non- publishing
party for its written approval prior to publication.
(D) SURVIVAL AND CONFIDENTIALITY The provisions of this Section 15 will be
effective as of the date of this Agreement and remain in full force
and effect for a period equal to the longer of: one year following the
effective date of this Agreement; or one year following the
termination of all Service hereunder.
16. SUCCESSORS AND ASSIGNMENT. This Agreement shall be binding upon and inure
tio the benefit of the parties hereto and their respective successors or
assigns, provided, however, that Customer shall not assign or transfer its
rights or obligations under this Agreement without the prior written consent of
RSL COM, and further provided that any assignment or transfer without such
consent shall be void.
17. GENERAL.
(A) Survival of Terms The terms and provisions contained in this Agreement
that by their sense and context are intended to survive the
performance thereof by the parties hereto shall so survive the
completion of performance and termination of this Agreement,
including, without limitation, provisions for indemnification and the
making of any and all payments due hereunder.
(B) Heading Descriptive headings in this Agreement are for convenience
only and shall not affect the construction of this Agreement
(C) Industry Terms Words having well-known technical or trade meanings
shall be so construed, and all listings of items shall not be taken to
be exclusive, but shall include other items, whether similar or
dissimilar to those listed, as the context reasonably requires.
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18. ENTIRE AGREEMENT. This Agreement, together with any and all executed
Service Schedules, constitutes the complete and exclusive statement of the
understandings between the parties and supersedes all proposals and prior
agreements, oral or written, between the parties.
IN WITNESS WHEREOF, the parties have executed this agreement on the date
first written above.
RSL COM U.S.A., Inc. IPVoice.com, Inc.
By: /s/ Frank Sarotte By: /s/ Barbara S. Will
----------------------- -----------------------
(signature) (signature)
Frank Sarotte Barbara S. Will
--------------- ----------------
(print name) (print name)
President, Wholesale Carrier Services CEO & President
------------------------------------ ----------------
(title) (title)
Customer /s/BW RSL /s/FS
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EXHIBIT 10.6
CARRIER SERVICE AGREEMENT
THIS CARRIER SERVICE AGREEMENT ("AGREEMENT") IS ENTERED INTO ON July 2, 1999,
between STAR TELECOMMUNICATIONS, INC., a Delaware corporation ("Provider"), with
offices at 223 East De La Guerra Street, Santa Barbara, California, 93101, and
IPVOICE.COMMUNICATIONS, INC. dba IPVOICE.COM, a Nevada
corporation ("Purchaser"), with its principal office located at 5901 Middlefield
Road, Suite 100, Littleton, Colorado 80123.
Background:
A. Provider provides telephone communications services between its location
and the outbound termination points identified on Exhibit A attached hereto and
incorporated herein by this reference; and
B. Purchaser desires to purchase and Provider desires to provide, upon the
terms and conditions set forth in this Agreement, telephone communication
services to Purchaser.
Agreement:
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
Business Provisions:
1. Service Commencement Date. Beginning on or about July 15, 1999, Provider
shall provide telephone communication services to Purchaser at the rates, terms
and conditions described in Exhibits A and B and to the termination points set
forth in Exhibit A. Purchaser acknowledges that the per-minute rate set forth on
Exhibit A (the "Discount Rate") is a preferential rate based on prompt payment
on or before the Due Date. Such rate is subject to adjustment as provided in
Section 4. The services to be provided are limited to those set forth in Exhibit
A and require from Purchaser a monthly minimum usage per T-1 and/or E-1 as set
forth in said Exhibit. Rates listed in Exhibit A are subject to change by
Provider with five (5) days written notice to Purchaser, either by facsimile
and/or overnight courier.
IPVoice Communications, Inc, dba IPVoice.Com BW Initials
June 21, 1999
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2. Period of Service. This Agreement shall be effective and the parties'
obligations shall commence upon the above date of execution by the parties and
this Agreement shall continue (subject to Provider's right to terminate this
Agreement sooner as provided in Section 6) for a period of SIX ( 6 ) MONTHS from
such date. This Agreement will be automatically renewed on a month-to-month
basis after the expiration of the initial term or any subsequent term. If either
party desires to cancel this Agreement upon the expiration of the initial term
or any subsequent term, it shall give the other party written notice of its
intent to cancel at least thirty (30) days prior to the expiration of the
current term. This Agreement shall continue and remain in full force and effect
until canceled by either party upon notice as provided herein.
3. Security. As a condition of the Provider's obligations hereunder, to ensure
the prompt payment of sums due hereunder, Purchaser shall furnish to Provider
upon the execution of this Agreement $DEPOSIT WAIVED in the form of cash,
irrevocable and unconditional letter of credit, or such other security as may be
acceptable to Provider. If Purchaser's account balance, plus Purchaser's
unbilled usage exceeds a credit limit of $50,000.00 per month, Provider reserves
the right to request a deposit. In the event that payment is received late one
(1) time, Provider reserves the right to request Purchaser provide an additional
deposit equal to one (1) month's usage. Purchaser shall provide deposit for
additional security and/or late payment(s) within five (5) days of request for
such deposit by Provider.
Purchaser shall at all times comply with Provider's initial and continuing
credit approval procedures and policies. Provider reserves the right to withhold
initiation and full implementation of services under this Agreement pending
initial, satisfactory credit review and approval thereof, which may be
conditioned upon terms specified, including but not limited to, security for
payments due hereunder as stated in the previous paragraph. Upon request by
Provider, at any time, Purchaser agrees to provide financial statements or other
indications of financial circumstances. As may be determined by Provider, in its
sole discretion at any time, if the financial circumstances or
payment history of Purchaser is or becomes unacceptable, Provider may require a
new or increased deposit, guarantee or irrevocable letter of credit, at
Purchaser's option, to secure Purchaser's payments for the term of the
Agreement. Failure of Purchaser to provide requested security
IPVoice Communications, Inc, dba IPVoice.Com BW Initials
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shall permit the other party to immediately suspend services, without further
notice or demand, until such time as requested security is provided.
General Provisions:
4. Invoice.
(a) Provider shall submit an invoice to Purchaser each month, covering
charges for the previous month. Purchaser shall make payment to Provider within
twenty (20) days after the invoice date (the "Due Date"), which shall be the
last date of the previous month's billing cycle.
(b) If payment is not received by Provider by the Due Date, then the
Discount rate will be increased by one cent ($.01) per minute for each minute
billed during the month preceding the invoice date (the "Adjusted Rate"). In
addition, a late fee of one and one-half percent (1 1/2%) per month shall be
assessed on Purchaser's delinquent balance of undisputed usage not paid by the
Due Date.
PLEASE INITIAL HERE: ____ INITIALS
Nothing herein shall be construed to constitute a waiver of Provider's right to
declare a default by Purchaser under this Agreement on account of such
delinquency, to terminate this Agreement and to exercise any other rights under
this Agreement or at law or in equity.
5. Taxes. Upon the execution of this Agreement, Purchaser shall furnish Provider
with a properly executed Certificate of Exemption for all foreign, federal,
state, county and local taxes and fees (if any) and shall be responsible for the
collection of all applicable end-user taxes and fees and the remittance of such
taxes and fees to the relevant governmental authority.
6. Termination. If payment has not been received by the Due Date described
above, or any extension thereof permitted in writing at Provider's option, for
all charges (including transmission charges, service charges and monthly fixed
charges, if any) billed to Purchaser, then Provider may at its sole discretion,
and with five (5) days prior written notice to Purchaser, terminate transmission
services in part or in whole. Provider reserves the right to collect attorneys'
fees and any and all costs incurred by Provider in the collection of any unpaid
amounts whether or not suit is instituted.
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7. Adjustments. Requests for billing adjustments must be made within sixty (60)
days of the invoice date. Any amounts which are determined to be in error will
be credited against the next month's invoice. Such request for adjustment shall
not be cause for delay in payment of the balance due.
8. No Warranties. PROVIDER MAKES NO WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT
TO THE TRANSMISSION SERVICES PROVIDED HEREUNDER AND EXPRESSLY DISCLAIMS ANY
WARRANTY OF MERCHANTABILITY, DESCRIPTION OR FITNESS FOR ANY PARTICULAR PURPOSE
OR FUNCTION.
9. Waiver of Liability. As a material inducement for Provider to provide the
services hereunder at the prices stated, Purchaser agrees that Provider shall in
no event be liable for any loss, expense or damage for (i) loss of revenue,
profits savings, business or goodwill, and (ii) exemplary, proximate,
consequential, or incidental damages and expenses of any type or nature on
account of any breach or default hereunder by Provider or on account of the use
or nonuse or the services.
10. Indemnity. Purchaser shall indemnify and hold harmless Provider, its
stockholders, officers, directors, employees and agents from any and all loss,
cost, damage, expense or liability, including, without limitation, court costs
and reasonable attorneys' fees, arising out of, in whole or in part, directly or
indirectly, the installation, hook-up, maintenance, service or trouble-shooting
of the transmission services described in this Agreement including any
interruption of transmission service to Purchaser, its employees, agents and
customers, except when caused by the gross negligence by the Provider or the
intentional violations of any applicable law or governmental regulation by
Provider.
11. Regulations. This Agreement is made expressly subject to all present and
future valid orders and regulations of any regulatory body having jurisdiction
over the subject matter hereof and to the laws of the United States of America,
any of its states, or any foreign governmental agency having jurisdiction. In
the event this Agreement, or any of its provisions, shall be found contrary to
or in conflict with any such order, rule , regulation or law, this Agreement
shall be deemed modified to the extent necessary to comply with any such order,
rule, regulation or law and shall be modified in such a way as is consistent
with the form, intent and purpose of this Agreement.
12. No Agency. Neither party is authorized to act as an agent for, or legal
representativeof, the other party and neither party shall have the authority
IPVoice Communications, Inc, dba IPVoice.Com BW Initials
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to assume or create any obligation on behalf of, in the name of, or binding upon
the other party.
13. Force Majeure. The parties' obligations under this Agreement are subject to,
and neither party shall be liable for, delays, failures to perform (except the
payment of money by Purchaser), damages, losses or destruction, or malfunction
of any equipment or any consequence thereof caused or occasioned by, or due to
fire, flood, water, the elements, labor disputes or shortages, utility
curtailments, power failures, explosions, civil disturbances, governmental
actions, shortages of equipment for supplies, unavailability of transportation,
acts or omissions of third parties, or any other cause beyond the party's
reasonable control. Purchaser shall not represent that Provider is responsible
for the type or quality of Purchaser's services to its customers.
14. No Waiver. The failure of either party to enforce or insist upon compliance
with any of the provisions of this Agreement or the waiver thereof, in any
instance, shall not be construed as a general waiver or relinquishment of any
other provision of this Agreement.
15. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
assigns. Neither party shall voluntarily or by operation of law assign,
transfer, license, or otherwise transfer all or any part of its right, duties or
other interests in this Agreement or the proceeds thereof (collectively,
"Assignment"), without the other party's prior written consent, which consent
shall not be unreasonably withheld or delayed. Any attempt to make an Assignment
in violation of this provision shall be null and void. Purchaser shall provide
written notice to Provider of any material change in ownership of Purchaser.
Purchaser's failure to comply with the assignment provisions, as contained in
this paragraph, shall give Provider, at its sole discretion, the option to
either accept Purchaser's assignee or terminate this Agreement. No assignment
shall release Purchaser of its obligations hereunder.
16. Amendment. This Agreement may not be amended except by an instrument in
writing, executed by the parties. No modification or amendment hereto shall be
effected by the acknowledgment or acceptance by either party of any purchaser
order, sales acknowledgment or other similar form from the other party.
17. Merger. This Agreement (including its exhibits) supersedes and merges all
prior agreements, promises, understandings, statements, representations,
warranties, indemnities and covenants and all inducements to the making of this
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Agreement relied upon by either party herein, whether written or oral, and
embodies the parties' complete and entire agreement with respect to the subject
matter hereof. No statement or agreement, oral or written, made before the
execution of this Agreement shall vary or modify the written terms hereof in any
way whatsoever.
18. Interpretation. The words and phrases used herein shall have the meaning
generally understood in the telecommunications industry. This Agreement shall be
construed in accordance with its fair meaning and not for or against either
party on account of which party drafted this Agreement.
19 Third Party Beneficiaries/Parties in Interest. This Agreement has been made
and is made solely for the benefit of the Provider and Purchaser, and their
respective successors and permitted assigns. Nothing in this Agreement is
intended to confer any rights/remedies under or by reason of this Agreement on
any third party.
20. Severability. If any term or provision of this Agreement is determined to be
illegal, unenforceable, or invalid in whole or in part for any reason, such
illegal, unenforceable, or invalid provisions or part(s) thereof shall be
stricken from this Agreement and such provision shall not affect the legality,
enforceability, or validity of the remainder of this Agreement. If any provision
or part thereof of this Agreement is stricken in accordance with the provisions
of this section, then the stricken provision shall be replaced, to the extent
possible, with a legal, enforceable, and valid provision that is as similar in
tenor to the stricken provision as is legally possible.
21. Representation of Authority. Each party represents and warrants to the other
that the execution and delivery of this Agreement and the performance of such
party's obligations hereunder have been duly authorized and that the Agreement
is a valid and legal agreement binding on such parties and enforceable in
accordance with its terms.
22. Further Assurances. The parties shall at their own cost and expense execute
and deliver such further documents and instruments and shall take such other
actions as may be reasonably required or appropriate to carry out the intent and
purposes of this Agreement.
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23. Governing Law. This Agreement shall be in all respects, governed by and
construed and enforced in accordance with the laws of the State of California,
including all matters of construction, validity and performance. Any action to
enforce or interpret the terms of this Agreement shall be instituted and
maintained in the Superior Court of the County of Santa Barbara, State of
California. Purchaser hereby consents to the jurisdiction of such court and
waives any objections to such jurisdiction. In any action or proceeding arising
out of this Agreement, the party prevailing in such action shall be entitled to
recover its reasonable attorneys' fees and costs.
24. Counterparts. This Agreement may be executed in several counterparts, each
of which shall constitute an original, but all of which shall constitute one and
the same instrument.
25. Notices. All notices, demands, requests and other communications required or
permitted hereunder shall be in writing and shall be deemed to be delivered when
actually received, or, if earlier and regardless of whether actually received on
the day following the date of mailing, first class mail, duly addressed and with
proper postage to the last known place of business of either party. Notices will
be delivered as follows:
To Provider: To Purchaser:
Attn: Contract Manager Attn: Barbara Will
STAR Telecommunications, Inc. IPVoice.com
223 East De La Guerra Street 5901 So. Middlefield Road
Santa Barbara, CA 93101 Littleton, CO 80123
Phone: (805) 899-1962 Phone: (303) 738-1266
Fax: (805) 884-0342 Fax: (303) 738-1295
Billing Contact: Billing Contact:
Leticia Anguiano, Name: Lillian Vader
Billing Director
Phone: (805) 899-1962 Phone/Fax: Same as above
Fax: (805) 966-5482
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
PROVIDER: STAR TELECOMMUNICATIONS, INC.
By:/s/ David Vaun Crumly
- ------------------------------
Printed Name: David Vaun Crumly
Title: Executive Vice President
PURCHASER: IPVOICE COMMUNICATIONS, INC dba IPVOICE.COM
By: Barbara S. Will
- ---------------------------
Printed Name: Barbara S. Will
Title: President
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EXHIBIT B
ANCILLARY PRICING SCHEDULE FOR TERMINATION SERVICES
(Charges Applicable When Utilizing the Services Listed Below)
<TABLE>
<CAPTION>
NON-RECURRING CHARGES DS-1 DS-3 E-1
<S> <C> <C> <C>
Circuit Order: Supplements, Changes $250.00 $250.00 $300.00
Disconnects
Order Expedite $250.00 $250.00 $300.00
Cross Connects: $250.00 $250.00 $300.00
MONTHLY RECURRING CHARGES
Circuit Cross Connect $ 50.00 $400.00 $150.00
Call Detail Records $ 35.00
(provided on CD-ROM)
IMPORTANT! If you want to receive
Call Detail Records, please contact your
Account Manager.
ADPCM Equipment Rental (2:1 compression) $250.00
SS7 Translations:
SNET $200.00
PACE $350.00
</TABLE>
<TABLE>
<S> <C> <C>
MISCELLANEOUS Monthly Recurring Non-recurring
M1/3 Multiplexer: 1 Yr. Term $350.00 $250.00
2 Yr. Term $300.00 $250.00
T-1 Echo Canceller (per circuit end)
6 Mo. Term $200.00 $250.00
1 Yr. Term $150.00 $250.00
(Required for all customer circuits
over 600 miles from STAR switch or POP)
E-1 Echo Canceller (per circuit end)
6 Mo. Term $350.00 $350.00
1 Yr. Term $250.00 $250.00
AC Power (20 amp minimum) $140.00
Over 20 amps: $7.00 per amp
DC Power (10 amp minimum)** $130.00
Over 10 amps: $13.00 per amp
</TABLE>
All of the above-listed charges are monthly fees per T-1 or E-1. All Ancillary
charges are subject to change with 30-day notices. Services not described above
will be considered special handling and charges will be assessed on an
individual basis.
IPVoice Communications, Inc, dba IPVoice.Com BW Initials
June 21, 1999
DC / BW Initials
10
EXHIBIT 10.7
SERVICES AGREEMENT
THIS AGREEMENT is entered into this 25th day of August, 1999 by and between
ILD Communications, Inc., a Delaware corporation, hereinafter referred to as
"ILD", having its principal place of business at 16200 Addison Road, Suite 100,
Addison , Texas 75001 and Independent Network Services, a subsidiary of IP
Voice.com, Inc., hereinafter referred to as "Distributor", having its principal
place of business at 5050 North 19th Avenue, Suite #417, Phoenix, AZ 85015.
WHEREAS, Distributor is a carrier and reseller of prepaid long distance
debit cards (Debit Cards); and
WHEREAS, ILD is a provider of telecommunications services to the Telephone
and Debit Card Industries; and
WHEREAS, Distributor desires to purchase telecommunications services from
ILD as described in this Agreement.
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. TERM
a. The term of this Agreement shall be one (1) year (Initial Term).
Thereafter, this Agreement shall automatically renew for successive terms of one
(1) year each (Renewal Term(s)).
b. Either party may terminate this Agreement during the initial term or any
renewal term by providing the other party with thirty (30) days written notice
of such termination. Notwithstanding the above, either party may terminate this
Agreement, effective immediately, upon notice to the other party of any of the
following events: (A) the other party commences a voluntary case or other
proceeding seeking liquidation, rehabilitation, conservatorship, reorganization
or other similar relief under any bankruptcy, insolvency or similar law, seeks
the appointment of a trustee, receiver, liquidator, rehabilitation, conservator,
custodian or similar official of it or any substantial part of its property,
makes a general assignment for the benefit of creditors or (B) an involuntary
case or other proceeding is commenced against such other party
IPVoice Communications, Inc, dba IPVoice.Com
BW Initials DC Initials
June 21, 1999
<PAGE>
seeking liquidation, rehabilitation, conservatorship, reorganization or other
relief under any bankruptcy, insolvency or similar law or seeking the
appointment of a trustee, receiver, liquidator, rehabilitator, conservator,
custodian or other similar Official of it or any substantial part of its
property related Contractual obligations.
2. OBLIGATIONS OF ILD AND Distributor. ILD and Distributor will have the
following obligations under this Agreement:
a. ILD will provide the following (Services) to Distributor:
(i) ILD shall provide, switching services and long distance rates
(Rate Decks) per EXHIBIT "A".
(ii) ILD shall provide a toll free "800" number(s) for the card. The
"800" number shall provide Distributor to ILD's debit card platform
with English and Spanish voice prompts. ILD shall provide a personal
identification number (PIN) for each debit card. The PIN will be
printed on the back of the debit card and will be used by the debit
card holder (End Users) to validate the dollar amount and number of
minutes available after dialing ILD 800 Distributor number. ILD will
provide voice prompts so the end user will be able to validate the
dollar amount and number of minutes available each time they use the
debit card. Said 800 number shall be available for Distributor
throughout the United States. ILD shall additionally provide
multilingual customer service for distributors prepaid calling cards
24 hours per day, 7 days a week.
(iii) Upon receipt of a request, from Distributor to activate certain
debit cards, ILD shall activate said debit cards by 12:00 noon Pacific
Standard Time of the following business day provided ILD receives such
request on or before 10:00 AM on the previous business day Pacific
Standard Time and Distributor is current with all obligations as set
forth in this agreement.
(iv) ILD agrees to use its best efforts to fully investigate any
discrepancy between the face value of cards and its program value. The
results of discrepant cards will be reported to Distributor within (3)
business days of receipt of written request.
IPVoice Communications, Inc, dba IPVoice.Com
BW Initials DC Initials
June 21, 1999
<PAGE>
(v) Should service be interrupted and the platform experience busy
signals, dropped calls or other switching or network failure
distributor will be credited for cards that are returned to store and
card printing costs. Credits will apply as follows; Cards are to be
returned to ILD with a manifest showing the PIN number and value left
on card. Distributor will be credited for balance of card and card
cost. ILD will then issue credit memo within 7 working days from
receipt of returned cards.
(vi) ILD will provide distributor with a contact person to be used to
de-activate prepaid calling cards that are returned from the field.
This will insure returned cards cannot be re-used. (vii) Distributor
shall use its best efforts to market, solicit, and distribute ILD's
products and services to prospective customers.
(vii) Distributor shall present itself and professionally and
honestly to end users, potential customers and to the industry in
general.
(viii) Distributor shall be considered independent contractor, and at
no time should be considered an employee, representative or joint
venture partner of ILD.
(ix) Distributor shall cooperate, at its cost, with any investigation
or proceeding of any governmental authority related to its
distribution or sale of ILD products and services.
a. Distributor shall pay ILD for the services based on the following
rate schedule below. The commission will be on a sliding scale based on the
following cumulative volume;
Per rate deck listed in Exhibit A
Face Value of Card Cost to Distributor
-----------------------------------------------
$ 5.00 $ 3.15
$10.00 $ 6.30
$20.00 $12.60
Face Value of Card Cost with additional 3% discount
$ 5.00 $ 3.00
$10.00 $ 6.00
$20.00 $ 12.00
IPVoice Communications, Inc, dba IPVoice.Com
BW Initials DC Initials
June 21, 1999
<PAGE>
Discount rate for this card will be an additional 3% once distributor
sells (3) Three Million in face value of card. Printing costs are the
responsibility of distributor.
3. TERMS OF PAYMENT. After the debit cards are delivered to Distributor, they
shall notify ILD of the date to activate the debit cards. On the date ILD
activates cards an invoice shall be issued to distributor for services. For all
invoices, payment is to be received by ILD within 14 days of the activation of
cards. Payments from Distributor to ILD will be wire transferred to:
Nations Bank ABA# 111000012
600 Peachtree street N.E. Account # 3750855476
20th Floor GA1-006-20-12
Atlanta, Georgia 30308-2214 Attn: Sheryl Jordan
Phone - 404-607-5938
Net Terms are defined as Payments due on the 14th day following activation. A
stand by letter of credit will be in place in the event of default of payment
terms. The terms of the letter of credit will be Stand By in favor of ILD
Telecommunications, Inc. upon presentation of invoice and activation report in
duplicate. The amount of the letter of credit may require adjustments from time
to time to secure ILD. Written request will be sent to:
Pete Stazzone
5050 North 19th Ave.
Suite 417
Phoenix, AZ 85015
Phone - 602-335-1231 ext. 306
Request amendments will be made within 7 days to avoid interruption of
activation request.
Failure to pay invoices on the terms established in this paragraph is considered
an automatic breach of this agreement.
IPVoice Communications, Inc, dba IPVoice.Com
BW Initials DC Initials
June 21, 1999
<PAGE>
4. TAXES. It is understood that ILD is responsible for all telecommunications
and Federal Excise tax applicable to sale of debit cards.
5. RESPONSIBILITY FOR SALES. Distributor will be solely responsible for and
indemnify ILD against claims including all attorneys' fees and costs regarding
the content and nature of all promotions, advertising and artwork associated
with the debit cards, including, but not limited to the solicitation of retail
distributors or vendors of the debit cards.
6. RESPONSIBILITY FOR SERVICES. ILD will be solely responsible for
telecommunications services. ILD agrees to use its best efforts to provide and
maintain the system operating the services in a reasonable working order. ILD
acknowledges it has granted distributor the opportunity to resell ILD prepaid
calling cards under applicable ILD tariffs and FCC 214 registrations in the 50
United States. The rates listed in Exhibit A have been filed with the public
utilities commission.
7. CONFIDENTIALITY. During the term of this Agreement and for a Period of one
(1) year thereafter, ILD and Distributor agree to protect and keep confidential
the trade secrets and proprietary information of the other (Proprietary
information). The terms and conditions of this Agreement, including the
wholesale buy rates set forth herein, shall be deemed proprietary information.
Neither party shall disclose, publish or otherwise make available such
proprietary information to any person or entity without the prior written
consent of the other party. The parties agree that the other will suffer
immediate and irreparable injury in the event of a breach of this paragraph for
which there is no adequate remedy at law. Accordingly, the parties specifically
agree that the restrictions of this paragraph may be enforced by injunction and
that irreparable injury shall be presumed. The parties specifically waive the
right to bond in any such injunction action. The remedies provided in this
paragraph are not exclusive and are in addition to any other remedies available
at law or in equity. The provisions of this paragraph shall survive termination
of this Agreement.
8. Rates. Distributor agrees to immediately renegotiate rates and/or discount
with ILD in the event that the average international call duration exceeds 18
minutes. If for any reason should ILD need to renegotiate rates supplier will be
notified at least 30 days in advance. ILD agrees to maintain all activated PINS
provided at the current rate structure associated with such Pin's.
IPVoice Communications, Inc, dba IPVoice.Com
BW Initials DC Initials
June 21, 1999
<PAGE>
9. ASSIGNMENT OF TELECOMMUNICATIONS SERVICES. The parties may not assign their
rights and obligations under this Agreement unless said assignment is approved
in writing by the other party which approval will not be unreasonably withheld.
11. NOTICE. All notices and other communications pursuant to this Agreement
shall be in writing and shall be deemed proper if given by personal delivery,
overnight delivery service, facsimile or mailed by registered or certified mail,
return receipt requested, to the applicable party at its address indicated below
or such other address as may be hereafter designated by such party in writing in
accordance herewith:
If to ILD: ILD Telecommunications, Inc.
16200 Addison Road, Suite 100
Addison, TX 75001
Fax No. (503) 916 - 4279
Fax No. (503) 916 - 4279
If to Distributor: Independent Network Services
5050 N 19th Street, Suite 417
Phoenix, AZ 85015
Fax No. (602) 335 - 1577
Fax No. (602) 335 - 1577
12. GENERAL PROVISIONS.
a. Applicable Law: This Agreement will be governed by and construed in
accordance with the Laws of the State of Georgia.
b. Invalidity. If any term or provision of this Agreement is determined to
be illegal, unenforceable or invalid, in whole or in part for any reason,
such term or provision shall be deemed limited in scope and effect to the
minimum extent necessary to make such term or provision legal, enforceable
and valid, and in the event no such limiting construction may be made, the
term or provision shall be stricken from this Agreement and such term or
provision shall not effect the legality, enforceability or validity of the
remainder of this Agreement.
IPVoice Communications, Inc, dba IPVoice.Com
BW Initials DC Initials
June 21, 1999
<PAGE>
c. Waiver. Any waiver by either party of a breach of any Provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasion shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. All waivers
must be in writing.
d. Headings. The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the meaning or interpretation of
this Agreement.
e. Force Majeure. Neither party shall be liable for delays, failures to
perform, damages, losses or destruction, or malfunction of any equipment or
any consequence thereof caused or occasioned by, or due to fire, flood,
earthquake, water, the elements, labor disputes or governmental actions.
f. Entire Agreement. This Agreement and the exhibits hereto constitute the
entire Agreement between the parties for the subject matter hereof and
supersedes and replaces any and all prior agreements or arrangements
between the parties. The Agreement may be amended only as provided herein
or in writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and
year first written above.
ACCEPTED AND AGREED TO:
ILD Communications, Inc. Independent Network Services
SUPPLIER DISTRIBUTOR
BY:/s/ Randy Wright BY: /s/ Peter Stazzone
--------------------------- ----------------------------
ITS: V.P. Retail ITS: President
DATE: 8/24/99 DATE: 8/26/99
IPVoice Communications, Inc, dba IPVoice.Com
June 21, 1999
EXHIBIT 10.8
Level (3) Communications
TERMS AND CONDITIONS
FOR DELIVERY OF SERVICE
These Terms and Conditions for Delivery of Service (the "Terms and Conditions")
shall be applicable to Customer Orders executed by Customer for Services
delivered by Level 3 Communications, LLC ("Level 3"), and shall be incorporated
into each Customer Order. These Terms and Conditions are applicable to sales of
Services originating or terminating in the United States.
DEFINITIONS
Confidential Information: Licensed Software, and all source code, source
documentation, inventions, know-how, and ideas, updated and any documentation
and information related to the Licensed Software, and any non-public information
regarding the business of a party provided to either party by either party where
such information is marked or otherwise communicated as being "proprietary" or
"confidential" or the like, or where such information is, by its nature,
confidential.
Customer: The person, firm or corporation so named on the Customer Order.
Customer Order: A request for Level 3 Service submitted by the Customer in the
format devised by Level 3 and accepted by Level 3.
Firm Order Commitment: A written communication from Level 3 to Customer within
which Level3 commits to deliver some or all of the Services requested in a
Customer Order.
Licensed Software: Computer software, in object code format only, the use of
which is required for use of Service ordered by Customer hereunder.
Premises: The location(s) occupied by Customer or its end users specified in the
Customer Order to (or from) which Service will be delivered.
Revenue Commitment: A commitment which, if made by Customer in a Customer Order
or in any other form specified and accepted by Level 3 obligated Customer to
order and pay for a minimum volume of Services during an agreed term.
Service: Any communications (or related) service offered by Level 3 pursuant to
a Customer Order.
1
<PAGE>
SECTION 1. CUSTOMER ORDERS
1.1 Submission of Customer Orders. Customer may submit to Level 3 Customer
Order forms requesting the provision of Service. Each Customer Order shall be
submitted on a form designated by Level 3. Level 3 shall confirm the accuracy of
information on the Customer Order form and the availability of the Services
requested. Level 3's delivery of a Firm Order Commitment respecting such
Services shall constitute Level 3's acceptance of the Customer Order for such
Services. The Customer Order form and attachments shall set forth the Service,
the locations for delivery of same, the prices to be charged for same and any
applicable terms and/or Revenue Commitment.
1.2 Undertaking of Level 3. If Level 3 issues a Firm Order Commitment
respecting Services, Level 3 will furnish such Services in accordance with these
Terms and Conditions and any Customer Orders executed by Customer. All title to
equipment or materials used to deliver the Services (except as otherwise
expressly agreed) shall be and remain with Level 3.
SECTION 2. BILLING AND PAYMENT
2.1 Payment and Rendering of Bills. Level 3 shall bill all charges incurred
by and credits due to Customer on a monthly basis (unless otherwise agreed in
writing by Level 3 and Customer). Level 3 shall bill in advance charges for all
Services to be provided during the ensuring month except for charges which are
dependent upon usage of Service (which charges shall be billed in arrears).
Adjustments for the quantities of Service established or discontinued in any
billing period will be prorated to the number of days based on a 30-day month.
Level 3 will, upon request and if available, furnish such detailed information
as may reasonable be required for verification of the bill.
2.2 Payment of Bills. All bills are due upon receipt thereof by Customer,
and become past due thirty (30) days thereafter. The unpaid balance of any past
due bills shall bear interest at a rate of 1.5% per month (prorated on a daily
basis), or the highest rate allowed by law, whichever is less. Interest will be
applied for the number of days from the date the bill became past due and
including the date that payment is received by Level 3.
2.3 Taxes and fees. Except for taxes based on Level 3's net income and
except with respect to ad valorem personal and real property taxes imposed on
Level 3's property, Customer shall be responsible for payment of all sales, use,
gross receipts, excise, access, bypass, franchise or other local, state and
federal taxes, fees, charges, or surcharges, however designated, imposed on or
based upon the provision, sale or use of the Services delivered by Level 3
(including, but not limited to, taxes and fees lawfully assessed by nations
outside of the United States). Any taxes shall be separately stated on
Customer's bill. Any state or local tax, fee, charge, or surcharge shall be
payable only for Services that are subject to such imposition.
2.4 Regulatory and Legal Changes. In the event of any change in applicable
law or regulation that materially increases the cost of delivery of Service,
2
<PAGE>
Level 3 and Customer shall negotiate regarding the rates charged to Customer to
reflect such increase in the cost and, in the event that the parties are unable
to reach agreement respecting new rates within thirty (30) days after Level 3's
delivery of written notice requesting costs through Customer, and (b) Customer
may terminate the affected Customer Order upon no less than sixty (60) days'
prior written notice without payment of any applicable termination charge.
2.5 Disputed Bills. In the event that Customer disputes any portion of the
charges contained in a bill, Customer must pay the undisputed portion of the
invoice in full and submit a documented claim for the disputed amount. All
claims must be submitted to Level 3 within sixty (60) days of receipt of billing
for those Services. If Customer does not submit a claim within such period and
in the manner stated above, Customer waives al rights to dispute such charges.
2.6 Credit Approval and Deposits. Customer shall provide Level 3 with
credit informati0on as requested in advance of the commencement of delivery of
Service under any Customer Order. Delivery of Service is subject to credit
approval. Level 3 may require any Customer to make a deposit as a condition to
Level 3's acceptance of any Customer Order submitted by Customer, or as a
condition to Level 3's continuation of Service under any Customer Order (but
only when Customer's consumption of Service materially exceeds Customer's
anticipated use or when, in Level 3's reasonable discretion, such deposit is
required in order to secure Customer's continued payment obligation), which
deposit shall be held by Level 3 as security for payment of charges. A deposit
may not exceed the actual or estimated rates and charges for the Service for a
two (2) month period. At such time as the provision of Service to Customer is
terminated, the amount of the deposit will be credited to Customer's account and
any credit balance which may remain will be refunded.
2.7 Fraudulent Use of Services. Customer shall be solely responsible for
all charges incurred respecting the Services, even if such charges were incurred
through or as a result of fraudulent or unauthorized use of the Services, unless
Level 3 has actual knowledge of such fraudulent or unauthorized use and fails to
inform Customer thereof or otherwise limit or preclude such use. Nothing in this
Section 2.7, however, shall be construed to obligate Level 3 to detect or report
unauthorized or fraudulent use of Services.
SECTION 3. CANCELLATION OF CUSTOMER ORDERS
3.1 Cancellation of Customer Order by Level 3.
A. For nonpayment: Level 3 may, upon fourteen (14)days' written notice,
discontinue Service without incurring any liability when there is an unpaid
balance for Service that is past due.
B. For any violation of law or of any of the provisions governing the
furnishing of Service: Any Customer Order shall be subject to cancellation,
without notice, for any government authority having jurisdiction over
Service or by reason of any order or decision of a court
3
<PAGE>
or other government authority having jurisdiction which prohibits Level 3
from furnishing such Service.
C. For other causes: Any Customer Order shall be subject to cancellation,
upon fourteen (14) days' prior written notice, in the event of a breach of
a Customer Order, fraudulent use of the Service, or fraud or
misrepresentation in any submission of information required in a Customer
Order or any other information required in a Customer Order or any other
information submission to Level 3.
D. For any Customer filing bankruptcy or reorganization or failing to
discharge an involuntary petition therefor within sixty (60) days after
filing: Level 3 may immediately discontinue or suspend delivery of Service
without incurring any liability.
E. For consumption of Services that materially exceeds Customer's credit
limit: Level 3 may, upon fourteen (14) days prior written notice and
provided Customer has not provided additional security for payment which is
sufficient in Level 3's reasonable discretion, discontinue or suspend
delivery of Service without incurring any liability.
3.2 Effect of Cancellation. Upon Level 3's discontinuance of Service to
Customer under any of the foregoing subparagraphs, level 3 may, in addition to
all other remedies that may be available to Level 3 at law or in equity or under
any other provision of a Customer Order, assess and collect from Customer any
termination charge set forth herein (to the extent applicable).
3.3 Resumption of Service. If Service has been discontinued by Level 3, and
Customer requests that service be restored, Level 3 shall have the sole and
absolute discretion to restore such Service only after satisfaction of such
conditions as Level 3 determines to be required for its protection. Nonrecurring
charges apply to restoration of Service.
SECTION 4. DELIVERY OF SERVICES
4.1 Level 3 Access to Premises. Customer shall allow Level 3 continuous and
reasonable access to the Premises to the extent reasonably determined by Level 3
to be appropriate to the installation, inspection and maintenance of equipment,
facilities and systems relating to the Service. Level 3 shall notify Customer
two (2) business days in advance of any regularly scheduled maintenance that
will require access to the Premises.
4.2 Level 3 Facilities. Level 3 will use reasonable efforts to maintain the
facilities and equipment required to deliver Service. Customers shall not and
shall not permit others to rearrange, disconnect, remove, attempt to repair, or
otherwise tamper with any of the facilities or equipment installed by Level 3,
except upon written consent of level 3. Equipment provided or installed at the
Premises by Level 3 for use in connection with the Service shall not be used for
any purpose other than that for which Level 3 provided it. In
4
<PAGE>
the event that Customer or a third party attempts to operate or maintain any
Level 3-owned equipment without first obtaining Level 3's written approval, in
addition to any other remedies of level 3 for a breach by Customer of Customer's
obligations hereunder, Customer shall pay level 3 for any damage to level
3-owned equipment caused thereby. Customer shall be responsible for the payment
of service charges in the event that maintenance or inspection of the equipment
is required as a result of Customer's breach of this Section. Level 3 shall, in
the event that such expenses are incurred, deliver to Customer a written invoice
therefor. In no event shall Level 3 be liable to Customer or any other person
for interruption of Service or for any other loss, cost or damage caused or
related to improper use or maintenance of Level 3-owned equipment.
4.3 Title and Power. Title to all facilities (except as otherwise agreed),
including terminal equipment, shall remain with Level 3. The electric power
consumed by such equipment on the Premises shall be provided by and maintained
at the expense of Customer.
4.4 Customer-Provided Equipment. Level 3 shall not be responsible for the
operation or maintenance of any Customer-provided communications equipment.
Level 3 may install certain Customer provided communications equipment upon
installation of Service; unless otherwise agreed by Level 3 in writing, Level 3
shall not thereafter be responsible for the operation or maintenance of such
equipment. Level 3 shall not be responsible for the transmission or reception of
signals by Customer-provided equipment or for the quality of, or defects in,
such transmission.
4.5 Removal of Equipment. Customer agrees to allow Level 3 to remove all
Level 3-owned equipment from the Premises:
A. after termination, interruption or suspension of the Service in
connection with which the equipment was used; and
B. for the repair, replacement or otherwise as Level 3 may determine is
necessary or desirable. At the time of such removal, such equipment shall
be in the same condition as when delivered to Customer or installed in the
Premises, normal wear and tear only excepted. Customer shall reimburse
Level 3 for the depreciated cost of any equipment which is not in such
condition.
4.6 Service Subject to Availability. The furnishing of Service under these
terms and Conditions is subject to the availability on a continuing basis of all
the necessary facilities and is limited to the capacity of Level 3's facilities
and is limited to the capacity of Level 3's facilities, as well as facilities
Level 3 may obtain from other carriers to furnish Service from time to time as
required at the sole discretion of Level 3. Nothing in these Terms and
Conditions shall be construed to obligate Customer to submit, or Level 3 to
accept, Customer Orders.
4.7 No Liability for Failure to Transmit Messages. Level 3 does not
undertake to transmit messages, but offers the use of its Service when available
5
<PAGE>
and, as more fully set forth elsewhere in these Terms and Conditions and any
applicable Customer Orders, shall not be liable for errors in transmission or
for failure to establish connections.
4.8 Service Level Agreements. All warrants respecting the Service, and the
remedies applicable to a failure of Level 3 to meet such warranties, shall be
set forth in Service Level Agreements applicable to the particular Service,
which Service Level Agreements (when and if issued by Level 3) shall be deemed
attached hereto and by this reference incorporated herein.
4.7 No Liability for Failure to Transmit Messages. Level 3 does not
undertake to transmit messages, but offers the use of its Service when
available, and, as more fully set forth elsewhere in these Terms and Conditions
and any applicable Customer Orders, shall not be liable for errors in
transmission or for failure to establish connections.
4.8 Service Level Agreements. All warranties respecting the Service, and
the remedies applicable to a failure of Level 3 to meet such warranties, shall
be set forth in Service Level Agreements applicable to the particular Service,
which Service Level Agreements (when and if issued by Level 3) shall be deemed
attached hereto and by this reference incorporated herein.
SECTION 5. OBLIGATIONS AND LIABILITY LIMITATION
5.1 Obligations of the Customer. Customer shall be responsible for:
A. The payment of all charges applicable to the Service (including charges
incurred as a result of fraud or unauthorized use of the Service).
B. Damage or loss of Level 3's facilities or equipment installed on the
Premises (unless caused by the negligence or willful misconduct of the
employees or agents of level 3);
C. Providing the level of power, heating and air conditioning necessary to
maintain the proper environment on the Premises for the provision of
Service;
D. Providing a safe place to work and complying with all laws and
regulation regarding the working conditions on the Premises;
E. Granting Level 3 or its employees access to the Premise for the purpose
of maintaining Level 3's facilities in accordance herewith.;
F. Keeping Level 3's equipment and facilities located on Premises free and
clear of any liens or encumbrances.
5.2 Liability. The liability of Level 3 for damages arising out of the
furnishing of Service, including but not limited to mistakes, omissions,
6
<PAGE>
interruptions, delays, tortuous conduct or errors, or other defects,
representations, use of Service or arising out of the failure to furnish
Service, whether caused by acts of commission or omission, shall be limited to
the extension of credit allowances due under any Service Level Agreement. The
extension of such credit allowances or refunds shall be the sole remedy of
Customer and the sole liability of Level 3. Neither party shall be liable for
any indirect, incidental, special, consequential, exemplary or punitive damages
(including but not limited to damages for lost profits or lost revenues),
whether or not caused by the acts or omissions or negligence of its employees or
agents, and regardless of whether such party has been informed of the
possibility or likelihood of such damages.
5.3 Disclaimer of Warranties. LEVEL 3 MAKES NO WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED EITHER IN FACT OR BY OPERATION OF LAW
STATUTORY OR OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR USE, EXCEPT THOSE EXPRESSLY SET FORTH HEREIN OR IN ANY APPLICABLE
SERVICE LEVEL AGREEMENT.
SECTION 6. SOFTWARE TERMS
6.1 License: If and to the extent that Customer requires the use of
Licensed Software in order to use the Service supplied under any Customer Order,
then Customer shall have a nonexclusive, nontransferable license to use such
Licensed Software only and solely to the extent required to permit delivery of
the Service. Customer shall in no event be entitled to claim title to or any
ownership interest in any Licensed Software (or any derivations or improvements
thereto), and Customer shall execute any documentation reasonably required by
Level 3 to memorialize Level 3'w existing and continued ownership of Licensed
Software.
6.2 Restrictions. Customer agreed that it shall not:
A. copy the Licensed Software except as allowed and permitted by the
express written consent of Level 3;
B. reverse engineer, decompile or disassemble the Licensed Software;
C. sell, lease, license or sublicense the Licensed Software; or
D. create, write or develop any derivative software or any other software
program based on the Licensed Software or any Confidential Information of
Level 3.
SECTION 7. CONFIDENTIAL INFORMATION
7.1 Disclosure and Use. The Confidential Information disclosed by either
party constitutes the confidential and proprietary information of the disclosing
7
<PAGE>
party and the receiving party shall retain same in strict confidence and not to
disclose to any third party (except as authorized by these Terms and Conditions)
without the disclosing party's express written consent. Each party agrees to
treat all Confidential Information of the other in the same manner as it treats
its own proprietary information, but i no case will the degree of care be less
than reasonable care.
7.2 Restricted Use: Each party agrees:
A. to use Confidential Information only for the purposes of performance of
any Customer Order or as otherwise expressly permitted by these Terms and
Conditions;
B. not to make copies of Confidential Information or any part thereof
except for purposes consistent with these Terms and Conditions; and
C. to reproduce and maintain on any copies of any Confidential Information
such proprietary legends or notices (whether of disclosing party or a third
party) as are contained in or on the original or as the disclosing party
may otherwise reasonably request.
7.3 Exceptions. Notwithstanding the foregoing, each party's confidentiality
obligations hereunder shall not apply to information which:
A. is already known to the receiving party;
B. becomes publicly available without fault of the receiving party;
C. is rightfully obtained by the receiving party from a third party without
restriction as to disclosure, or is approved for release by written
authorization of the disclosing party;
D. is developed independently by the receiving party without use of the
disclosing party's Confidential Information;
E. is required to be disclosed by law.
7.4 Publicity. This agreement shall not be construed as granting to either
party any right to use any of the other party's or its affiliates' trademarks,
service marks or trade names or otherwise refer to the other party in any
marketing, promotional or advertising materials or activities. Without limiting
the generality of the forgoing, neither party shall issue any publication or
press release relating to, or otherwise disclose the existence of, any
contractual relationship between Level 3 and Customer, except as may be required
by law.
7.5 Remedies. Notwithstanding any other section of these Terms and
Conditions, the non- breaching party shall be entitled to seek equitable relied
to protect its interests, including but not limited to preliminary and permanent
injunctive relief. Nothing stated herein shall be construed to limit any other
remedies available to the parties.
8
<PAGE>
7.6 Survival. The obligations of confidentiality and limitation of use
shall survive the termination of any applicable Customer Order.
SECTION 8. GENERAL TERMS
8.1 Force Majeure. Except with respect to payment obligations, neither
party shall be liable, nor shall any credit allowance or other remedy be
extended, for any failure of performance or equipment due to causes beyond such
party's reasonable control, including but not limited to: acts of God, fire,
flood or other catastrophes; any law, order, regulation, direction, action, or
request of any governmental entity or agency, or any civil or military
authority; national emergencies, insurrections, riots, wars; unavailability of
rights-of-way or materials; or strikes, lock-outs, work stoppages, or other
labor difficulties. In the event Level 3, for reasons set forth in paragraph
8.1, is unable to deliver Service pursuant to any Customer Prder for 90
consecutive days then Customer may terminate the affected Customer Order without
termination liability.
8.2 Assignment of Transfer. Customer may not transfer or assign the use of
Service without the express prior written consent of Level 3, and them only when
such transfer or assignment can be accomplished without interruption of the user
or location of Service. These Terms and Conditions shall apply ro all such
permitted transferees or assignees. Customer shall, unless otherwise expressly
agreed by Level 3 in writing, remain liable for the payment of all charges due
under each Customer Order.
8.3 Notices. Any notice Level 3 may give to Customer or Customer shall give
to Level 3 shall be deemed properly given when delivered, if delivered in
person, or when sent via facsimile, overnight courier, electronic mail or when
deposited in the U.S. Postal Service, (a) with respect to Customer, the address
listed on each Customer Order, or (b) with respect to Level 3, to: Contract
Administration, Level 3 Communications, LLC, 1450 Infinite Drive, Louisville, CO
80027. Customer shall notify Level 3 of any changes to its addresses listed on
any Customer Order.
8.4 Identification by Customer. Customer shall indemnify, defend and hold
Level 3 harmless from claims, loss, damage, expense (including attorney's fees
and court costs), or liability (including liability for patent infringement)
arising from (1) any claims made against Level 3 by any end user in connection
with the delivery or consumption of Service, (2) use of facilities furnished by
Level 3 in a manner inconsistent with the terms hereof or in a manner that Level
3 did not contemplate and over which Level 3 exercises no control and (3) all
other claims, loss, damage, expense (including attorneys fees and court costs),
or liability arising out of any commission or omission by Customer in connection
with the Service.
8.5 Indemnification by Level3. Level 3 shall indemnify, defend and hold
Customer harmless from claims, loss, damage, expense (including attorneys fees
and court costs), or liability for property damage or personal injury to the
9
<PAGE>
extent that such claims arise out of or are caused by Level 3's negligence or
willful misconduct.
8.6 Application of Tariffs. Level 3 may elect or be required by law to file
with the appropriate regulatory agency tariffs respecting the delivery of
certain Service. In the event and to the extent that such tariffs have been or
are filed respecting Service ordered by Customer, then (to the extent such
Order) the terms set forth in the applicable tariff shall govern Level 3's
delivery of, and Customer's consumption or use of such Service.
8.7 Contents of Communications. Level 3 shall have no liability or
responsibility for the content of any communications transmitted via the Service
by Customer or any other party, and Customer shall hold Level 3 harmless from
any and all claims (including claims by governmental entities seeking to impose
penal sanctions) related to such content.
8.8 Entire Understanding. These Terms and Conditions, including any
Customer Orders executed hereunder (and any tariff applicable to the delivery of
Service), constitutes the entire understanding of the parties related to the
subject matter hereof. In the event of a conflict between these Terms and
Conditions and any Customer Order executed hereunder, the Customer Order shall
control. These Terms and Conditions shall be governed and construed in
accordance with the laws of the state of Colorado.
8.9 No Waiver. No failure by either party to enforce any rights hereunder
shall constitute a waiver of such right.
10
<PAGE>
TERMS AND CONDITIONS
PRIVATE LINE SERVICE
The following Terms and Conditions shall be applicable to metropolitan (local),
city to city (within the United States) and international (from the United
States to another country) private line, non-switchable circuits (the "Private
Line Services") ordered by Customer under any Customer Order.
1. Any state or federal tariffs applicable to the Private Line Services to be
delivered under any Customer Order are incorporated into the terms thereof.
2. The nonrecurring charges and monthly recurring rates for the Private Line
Services provided by Level 3 to Customer shall be set forth in each Customer
Order.
3. Customer hereby agrees to pay for the Private Line Services for the period of
time specified in each Customer Order, which period shall commence with the
initiation of delivery of such Services. The rates and other charges set forth
in each Customer Order are established in reliance in the terms commitment made
therein. In the event that Customer terminates Services ordered in any Customer
Oder or in the event that the delivery of Services terminated sue to a failure
of Customer to satisfy the requirements set forth herein or in the Terms and
Conditions prior to the end of the agreed term, Customer shall (unless Customer
has made a Revenue Commitment) pay a termination charge equal to the termination
or other charges paid or to be paid by Level 3 for services purchased from other
sources used to deliver the Private Line Services to Customer, plus the
percentage of the monthly recurring charges for the terminated Private Line
Services calculated as follows:
A. 100% of the monthly recurring charge that would have been incurred for
the Private Line Service for months 1-12 of the agreed term; plus
B. 75% of the monthly recurring charge that would have been incurred for
the Private Line Service for months 13-24 of the agreed term; plus
C. 50% of the monthly recurring charge that would have been incurred for
the Private Line Service for months 25 through the end of the agreed term.
Customer may, in the event that a Revenue Commitment is made and is then being
satisfied by Customer, terminate, rearrange or reconfigure the Private Line
Services ordered under a Customer Order without payment of the termination
charge specified above; PROVIDED, HOWEVER, that Customer shall be responsible
for payment of Level 3's then-current standard nonrecurring charges for such
termination, rearrangement or reconfiguration.
11
<PAGE>
Standard Service Level Agreement (SLA)
International/US National Private Line
International/National Private Line service will be backed by a Standard Service
Level Agreement that has two components: a Service Delivery SLA and a Network
Performance SLA.
NOTE: The total number of credits per month for both Service Delivery is limited
to four days.
Service Delivery SLA
<TABLE>
<CAPTION>
US On-net City Standard Service Delivery Intervals
(US NPLS and IPL)
Nx64K, DS1, E1* DS3 OC3/OC12
US NPLS IPL US NPLS IPL US NPLS IPL
<S> <C> <C> <C> <C> <C> <C>
On-Net 20 working 20 working 30 working 30 working 40 working 30
days days days days days
Off-Net building within 30 working 60 working 45 working 60 working 60 working ICB
SSA (either end) days days days days days
Off-net building outside 30 working 60 working 45 working 60 working 70 working ICB
SSA (within 50 miles) days days days days days
(either end)
</TABLE>
<TABLE>
<CAPTION>
US Domestic Served Standard Service Delivery Intervals
Off-net City
DS1 DS3 OC3
<S> <C> <C> <C>
One side of the circuit is 30 working days 45 working days 60 working days (70 days would
served by an off-net apply if the customer location
city POP served by the customer location
served by the gateway city is
outside of the SSA)
</TABLE>
Off-net building must have DS3 local service availability in order to support
E1 delivery is available in NYC only and is dependant upon local availability of
E1 delivery
1. Single toll-free number to reach Level 3 Customer Service for all customer
issues, including technical, billing, and product inquiries.
2. Mean Time to Response-Within 30 minutes
3. 2 hour calendar month Average Time To Repair (MTTR)
12
<PAGE>
If Level 3 fails to meet any of the guarantees above, Level 3 will review all
reported failures at the end of the month, and calculate the applicable credits:
1. Anycustomer inquiry to the Level 3 Customer Service Center that results in
a Time to response of .30 minutes will result in a one day service credit
when the customer notifies Level 3 of the failure.
2. MTTR is calculated as a monthly average. All reported customer trouble
tickets will totaled over the month, then the average time to close each
ticket will be calculated. If the MTTR is greater than 2 hours, the
customer will receive a one day service credit.
3. Credits will only be applied to events where the Customer reports a failure
to the Level 3 Customer Care organization. Customers must report any
service Delivery failures within five business days of the event.
13
<PAGE>
Network Performance SLA
99.99 % Service Availability
Target Bit Error Rate 3
End-to-end link (Level 3 on-net) 1 x 10 at T1 Rate (equivalent rate for
DS0 1 x 10)
End-to-end link (Non-Level 3 access) 1 x 10 (Dependent on local supplier)
Target Severely Errored Seconds 4
End-to-end link (Level 3 fiber access) 0.008%
End-to-end link (Non-Level 3 access) 0.013% (Dependent on local supplier)
Availability refers to customer's access point to the Level 3 Backbone Network,
including their Level 3 provided local access circuit.
Availability does not include regularly scheduled or emergency maintenance
events, or customer caused outages or disruptions.
Customers may report service unavailability events of longer than 15 consecutive
minutes to Level 3 customer service within 48 hours of the event. If the
event is confirmed by Level 3 customer service, the customer will receive a
pro-rated service credit that equals the time of the unavailability.
NOTES:
All measurements are based on monthly averages.
These guarantees only apply to the Level 3 Network (including the Local Access
to the customer). They do not apply to off-net city circuits which do not
transmit the Level 3 Backbone Network (or the portion the circuit which
does not transmit the Level 3 Backbone)
This SLA does not apply to periods of regularly scheduled or emergency
maintenance that Level 3 performs on its network or associated hardware and
software.
Credits will only be applied to events where the Customer reports a network
performance failure to the Level 3 Customer Care organization.
Customers must report any Network Performance failures (unavailability or delay)
within 48 hours (two business days) of the service affecting event in order
to receive a credit. Customers must report any Service Delivery failures
within five business days of the event.
1 Bit Error Rate Figure excludes periods of more than 10 seconds having error
rates equal to, or worse than 1x10
2 Severely Errored Seconds have bit error rates, to, or worse than 1 x 10.
14
<PAGE>
TERMS AND CONDITIONS
TELEPHONY COLOCATION
The Following Terms and Conditions shall be applicable to Customer's use of
space within Level 3 facilities used for the purpose of colocating
telecommunications equipment (the "Space") ordered by Customer under any
Customer Order.
1. Upon execution and performance of Customer's obligations under a Customer
Order for use of Space, Customer shall be granted the right to occupy the space
identified therein. Customer may submit multiple Customer Orders requesting use
of different Space, each of which shall be governed by the terms hereof.
2. Customer shall be permitted to use the Space only for placement and
maintenance of communications equipment which shall be interconnected to the
network service offered by Level 3. Customer may use the Space to cross connect
to the facilities of other communications carriers if and only if Level 3 cannot
or will not provide such services to Customer on commercially reasonable terms.
The nonrecurring and monthly charges for the Space and any Services ordered by
Customer shall be set forth in each Customer Order.
3. During the term for use of the Space set forth in each Customer Order,
Customer shall commit to use, order and pay for Level 3 network communications
services (not including monthly recurring fees charged for the use of the Space)
with monthly recurring charges of at least $2,000.00 for each cabinet of Space
ordered by Customer. Customer shall achieve the minimum service level no later
than six (6) months after submission and acceptance of each Customer Order.
Level 3 may terminate use of the Space in the event that Customer does not
satisfy this minimum service commitment.
4. Level 3 shall perform such janitorial services, environmental systems
maintenance, power plant maintenance and other actions as are reasonably
required to maintain the facility in which the Space is located in good
condition which is suitable for the placement of communications equipment.
Customer shall maintain the Space in orderly and safe condition, and shall
return the Space to Level 3 at the conclusion of the term set forth in the
Customer Order in the same condition (reasonable wear and tear excepted) as when
such Space was delivered to Customer. EXCEPT AS EXPRESSLY STATED HEREIN OR IN
ANY CUSTOMER ORDER, THE SPACE SHALL BE DELIVERED AND ACCEPTED "AS IS" BY
CUSTOMER, AND NO REPRESENTATION HAS BEEN MADE BY LEVEL 3 AS TO THE FITNESS OF
THE SPACE FOR CUSTOMER'S INTENDED PURPOSE.
5. The term of use of the space shall begin on the later to occur of the date
requested by Customer or the date that Level 3 completes the build-out of the
space. Customer's use of the Space beyond the initial term shall be on a
month-to-month basis, unless Customer and Level 3 have agreed in writing to a
renewal of the right to use such Space.
6. Level 3 shall sue reasonable efforts to complete the build-out and make the
Space available to Customer on or before the date requested by Customer. In the
event that Level 3 fails to complete the build-out within sixty (60) days of the
date requested by Customer, ten Customer may terminate its rights to use such
Space and receive a refund of any fees paid for the use or build-out of such
Space.
<PAGE>
7. Customer shall abide by any posted or otherwise communicated rules relating
to use of, access to, or security measures respecting the Space. In the event
that unauthorized parties gain access to the Space through access cards, keys or
other access devices provided to Customer, Customer shall be responsible for any
damages incurred as a result thereof. Customer shall be responsible for the cost
of replacing any security devices lost or stolen after delivery thereof to
Customer. In addition, Level 3 shall have the right to terminate Customer's use
of the Space in the event that: (a) Level 3's rights to use the facility within
which the Space is located terminates or expires for any reason; (b) Customer
has violated the terms hereof or any Customer Order submitted hereunder; (c)
Customer makes any material alterations to the Space without firs obtaining the
written consent of level 3; (d) Customer allows personnel or contractors to
enter the Space who have not been approved by Level 3 in advance; or (e)
Customer violates any posted or otherwise communicate rules relating to use of
or access to the Space. Level 3 shall use reasonable efforts to notify Customer
of any events that may result in termination of the use of the Space.
8. Customer shall all pay monthly recurring fees, cross-connect fees, power
charges and nonrecurring fees specified in each Customer Order for the agreed
term thereof. In the event that Customer terminates a Customer Order for Space
or in the event that the Customer Order is terminated due to a failure of
Customer to satisfy the requirements set forth herein or in the Customer Order
prior to the end of the agreed term, Customer shall pay a termination charge
equal to the costs incurred by Level 3 in returning the Space to a condition
suitable for use by other parties, plus the percentage of the monthly recurring
fees for the terminated Space calculated as follows:
A. 100% of the monthly recurring fees that would have been charged for the
Space for months 1-12 of the agreed term; plus
B. 75% of the monthly recurring fees that would have been charged for the
Space for months 13-24 of the agreed term; plus
C. 50% of the monthly recurring fees that would have been charged for the
Space for months 25 through the end of the agreed term.
9. Level reserves the right to change the location or configuration of the
Space, provided, however, that Level 3 shall not arbitrarily or discriminatorily
require such changes. Level 3 and Customer shall work in good faith to minimize
any disruption in Customer's services that may be caused by such changes in
location or configuration of the Space.
10. Prior to occupancy and during the term of use of any Space, Customer shall
procure and maintain the following minimum insurance coverage: (a) Workers'
Compensation in compliance with all applicable statutes of appropriate
jurisdiction. Employer's Liability with limits of $500,000 each accident; (b)
Commercial General Liability with combined single limits of $1,000,000 each
occurrence; and (c) "All Risk" Property insurance covering all of Customers
personal property located in the Space. Customer's Commercial General Liability
policy shall be endorsed to show Level 3 (and any underlying property
<PAGE>
owner, as requested by Level 3) as an additional insured. All policies shall
provide that Customer's insurers waive all rights of subrogation against Level
3. Customer shall furnish Level 3 with certificates of insurance demonstrating
that Customer has obtained the required insurance coverages prior to occupancy
of the Space. Such certificates shall contain a statement that the insurance
coverage shall not be materially changed or cancelled without at least thirty
(30) days' prior written notice to Level 3. Customer shall require any
contractor entering the Space on its behalf to procure and maintain the same
types, amounts and coverage extensions as required of Customer above.
11. The liability of Level 3 for damages arising out of the furnishing of Space,
including but not limited to mistakes, omissions, interruptions, delays,
tortious conduct or errors, or other defects arising out of the failure to
furnish Space, whether caused by acts of commission or omission, shall be
limited to a prorated refund of the charges paid by Customer for the use of the
Space hereunder. The extension of such refunds shall be the sole remedy of
Customer and the sole liability of Level 3.
<PAGE>
TERMS AND CONDITIONS
IP COLOCATION
The following Terms and Conditions shall be applicable to Customer's use of
space within Level 3 facilities used for the purpose of colocating equipment
used for connection to the internet (the "Space") ordered by Customer under any
Customer Order.
1. Upon execution and performance of Customer's obligations under a Customer
Order for use of Space, Customer shall be granted the right to occupy the Space
identified therein. Customer further agrees to purchase certain communications
services ("Services") identified in Customer Orders for such Services submitted
by Customer hereunder. Customer may submit multiple Customer Orders requesting
use of different Space, each of which shall be governed by the terms hereof.
Services ordered by Customer shall at all times be used by Customer in
compliance with Level 3's then-current Acceptable Use Policy and Privacy Policy,
as amended by Level 3 from time to time and which are available through Level
3's web site.
2. Customer shall be permitted to use the Space only for placement and
maintenance of computer and/or communications equipment which shall be
interconnected to the Services provided by Level 3. Customer may use the Space
to cross connect to the facilities of other communications carriers if and only
if Level 3 cannot or will not provide such services to Customer on commercially
reasonable terms. The nonnonrecurring and monthly recurring charges for the
Space and the Services shall be set forth in each Customer Order.
3. During the term for use of the Space set forth in each Customer Order,
Customer shall commit to use, order and pay for the following amounts of
bandwidth provided by Level 3: (a) for Customers using cabinets, at least 1 Mbps
of bandwidth for each partial cabinet anc at least 2 Mbps of bandwidth for each
full cabinet of Space ordered by Customer; and (b) for Customers using private
rooms, at least 1 Mbps of bandwidth for each 10 square feet of Space ordered by
Customer. Customer shall achieve the minimum service level immediately after
submission and acceptance of each Customer Order. Level 3
<PAGE>
may terminate use of the Space in the event that Customer does not satisfy this
minimum service service commitment.
4. Level 3 shall perform such janitorial services, environmental systems
maintenance, power plant maintenance and other actions as are reasonably
required to maintain the facility in which the Space is located in good
condition which is suitable for the placement of communications equipment. In
addition, Customer may order and pay for Level 3 to perform certain limited
("remote hands") maintenance services on Customer's equipment within the space,
which shall be performed in accordance with Customer's directions. "Remote
hands" maintenance services includes power cycling equipment. Level 3 shall in
no event be responsible for the repair, configuration or tuning of equipment
(although Level 3 will provide reasonable assistance to Customer in such
installation). Customer shall maintain the Space in orderly and safe condition,
and shall return the Space to Level 3 at the conclusion of the term set forth in
the Customer Order in the same condition (reasonable wear and tear excepted) as
when such Space was delivered to Customer. EXCEPT AS EXPRESSLY STATED HEREIN OR
IN ANY CUSTOMER ORDER, THE SPACE SHALL BE DELIVERED AND ACCEPTED "AS IS" BY
CUSTOMER, AND NO REPRESENTATION HAS BEEN MADE BY LEVEL 3 AS TO THE FITNESS OF
THE SPACE FOR CUSTOMER'S INTENDED PURPOSE.
5. The term of use of the Space shall begin on the later to occur of the date
requested by Customer or the date that Level 3 completes the build-out of the
Space. Customer's use of the Space beyond the initial term shall be on a
month-to-month basis, unless Customer and Level 3 have agreed in writing to a
renewal of the right to use such Space. Customer hereby agrees to pay for the
Space and Services for the period of time specified in each Customer Order,
which period shall commence when both completion of the build-out of the Space
and initiation of delivery of such Services has occurred. The rates and other
charges set forth in each Customer Order are established in reliance on the term
commitment made therein. In the event that Customer terminates a Customer Order
for Space or in the event that the Customer Order is terminated due to a failure
of Customer to satisfy the requirements set forth herein or in the Customer
Order prior to the end of the agreed term, Customer shall pay a termination
charge equal to the costs incurred by Level 3 in returning the Space to a
condition suitable for use by other parties, plus the percentage of the monthly
recurring fees for the terminated Space calculated as follows:
a. 100% of the monthly recurring fees that would have been charged for the
space for months 1-12 of the agreed term; plus
b. 75% of the monthly recurring fees that would have been charged for the
Space for months 13-24 of the agreed term; plus
c. 50% of the monthly recurring fees that would have been charged for the
Space for months 25 through the end of the agreed term.
6. Level 3 shall use reasonable efforts to complete the build-out and make the
Space available to Customer on or before the date requested by Customer. In the
event that Level 3 fails to complete the build-out within sixty (60) days of the
date requested by Customer, then Customer may terminate its rights to use such
Space and receive a refund of any fees paid for the use or build-out of such
pace.
<PAGE>
7. Customer shall abide by any posted or otherwise communicated rules relating
to use of, access to, or security measures respecting the Space. In the event
that unauthorized parties gain access to the Space through access cards, keys or
other access devices provided to Customer, Customer shall be responsible for any
damages incurred as a result thereof. Customer shall be responsible for the cost
of replacing any security devices lost or stolen after delivery thereof to
Customer. In addition, Level 3 shall have the right to terminate Customer's use
of the Space in the event that: (a) Level 3's rights to use the facility within
which the Space is located terminates or expires for any reason; (b) Customer
has violated the terms hereof or any Customer Order submitted hereunder; (c)
Customer makes any material alterations to the Space without firs obtaining the
written consent of level 3; (d) Customer allows personnel or contractors to
enter the Space who have not been approved by Level 3 in advance; or (e)
Customer violates any posted or otherwise communicate rules relating to use of
or access to the Space. Level 3 shall use reasonable efforts to notify Customer
of any events that may result in termination of the use of the Space or delivery
of Services.
8. Level 3 reserves the right to change the location or configuration of the
Space, provided, however, that Level 3 shall not arbitrarily or discriminatorily
require such changes. Level 3 and Customer shall work in good faith to minimize
any disruption in Customer's services that may be caused by such changes in
location or configuration of the Space.
9. Level 3 provides only access to the Internet; Level 3 does not operate or
control the information, services, opinions or other content of the Internet.
Customer agrees that it shall make no claim whatsoever against Level 3 relating
to the content of the Internet or respecting any information, product, service
or software ordered through or provided by virtue of the Internet.
10. Prior to occupancy and during the term of use of any Space, Customer shall
procure and maintain the following minimum insurance coverage: (a) Workers'
Compensation in compliance with all applicable statutes of appropriate
jurisdiction. Employer's Liability with limits of $500,000 each accident; (b)
Commercial General Liability with combined single limits of $1,000,000 each
occurrence; and (c) "All Risk" Property insurance covering all of Customers
personal property located in the Space. Customer's Commercial General Liability
policy shall be endorsed to show Level 3 (and any underlying property owner, as
requested by Level 3) as an additional insured. All policies shall provide that
Customer's insurers waive all rights of subrogation against Level 3. Customer
shall furnish Level 3 with certificates of insurance demonstrating that Customer
has obtained the required insurance coverages prior to occupancy of the Space.
Such certificates shall contain a statement that the insurance coverage shall
not be materially changed or cancelled without at least thirty (30) days' prior
written notice to Level 3. Customer shall require any contractor entering the
Space on its behalf to procure and maintain the same types, amounts and coverage
extensions as required of Customer above.
11. The liability of Level 3 for damages arising out of the furnishing of Space,
including but not limited to mistakes, omissions, interruptions, delays,
tortious conduct or errors, or other defects arising out of the failure to
furnish Space, whether caused by acts of commission or omission, shall be
limited to a prorated refund of the charges paid by Customer for the use of the
Space hereunder. The extension of such refunds shall be the sole remedy of
Customer and the sole liability of Level 3.
<PAGE>
TERMS AND CONDITIONS
INTERNET ACCESS - DEDICATED AND DIAL UP
The following Terms and Conditions shall be applicable to dedicated and dial-up
Internet Access service (the "Internet Access Services") ordered by Customer
under any Customer Order.
1.Any state or federal tariffs applicable to the Internet Access Service s to be
delivered under any Customer Order are incorporated into the terms thereof. The
Internet Access Services shall at all times be used in compliance with Level 3's
then0current Acceptable Use Policy and Privacy Policy, as amended by Level 3
from time to time and which are available through Level 3's web site.
2.The nonrecurring charges and monthly recurring rates for the Internet Access
Services provided by Level 3 to Customer shall be set forth in each Customer
Order.
3.Customer hereby agrees to pay for the Internet Access Services for the period
of time specified in each Customer Order are established in reliance on the term
and/or volume commitment made therein. In the event that Customer terminates
Internet Access Services ordered in any Customer Order or in the event that the
delivery of Internet Access Services is terminated due to a failure of Customer
to satisfy the requirements set forth herein or in the Customer Order prior to
the end of the agreed term, Customer shall (unless Customer has made a revenue
Commitment) pay a termination charge equal to the termination or other charges
paid or to be paid by Level 3 for services purchased from other sources used to
deliver the Internet Access Services to Customer, plus the percentage of the
monthly recurring charges for the terminated Internet Access Services calculated
as follows :
A. 100% of the monthly recurring charge that would have been incurred for the
Internet Access Service for months 1-12 of the agreed term; plus
B. 75% of the monthly recurring charge that would have been incurred for the
Internet Access Service for months 13-24 of the agreed term; plus
C. 50% of the monthly recurring charge that would have been incurred for the
Internet Access Service for months 25 through the end of the agreed term.
Customer may, in the event that a Revenue Commitment is made and is then being
satisfied by Customer, terminate, rearrange or reconfigure the Internet Access
Services ordered under a Customer Order without payment of the termination
charge specified above; PROVIDED, HOWEVER, that Customer shall be responsible
for payment of Level 3's then-current standard nonrecurring charges for such
termination, rearrangement or reconfiguration.
4.Level 3 provides only access to the Internet; Level 3 does not operate or
control the information, services, opinions or other content on the Internet.
Customer agrees that it shall make no claim whatsoever against Level 3 relating
<PAGE>
to the content of the Internet or respecting any information, product, service
or software ordered through or provided by virtue of the Internet.
5.This Section 5 shall apply only to Customers who order Dial-Up Internet Access
Services. The Dial-Up Internet Access Services shall be used only by an officer,
director, employee or agent ("Employee") of Customer. Customer shall assure that
each Employee accessing the Dial- UP Internet Access Service abides by these
Terms and Conditions. Prior to any Employee accessing Dial-Up Internet Access
Services, such Employee will be required to accurately complete an on-line
registration process.
During this registration process, each Employee will be required to identify
himself/herself through some means satisfactory to Level 3. Pursuant to the
registration process, by clicking an"ACCEPT" icon, each Employee will (i) agree
to accurately complete the registration; (ii) agree to abide by all of the
provisions, terms, limitations, conditions and restrictions of Theses Terms and
Conditions; and (iii) agree to use the Dial-UP Internet Access Services in
accordance with any requirements set forth in the online registration process
and for the legitimate business purposes of Customer only. Each Employee will
also receive a password which such Employee will agree to keep ij strict
confidence and which will be required whenever accessing the Dial-Up Internet
Services.
<PAGE>
Standard Service Level Agreement (SLA)
Release 1
Internet Dedicated Access
Dedicated Internet Access service will be backed by a Standard Service Level
Agreement that has two components: a Service Delivery SLA and a Network
Performance SLA.
NOTE: The total number of credits per month for both Service Delivery and
Network Performance is limited to four days.
Service Delivery SLA
30 Calendar Day Installation Guarantee for Customers buying Dedicated
Internet Access in speeds from 64 Kbps - 1.544 Kbps within the Standard
Service Area.
45 Calendar Day Installation Guarantee for customers buying Dedicated
Internet Access in speeds from 3 Mbps - 45 Mbps within the Standard Service
Area.
Single toll-free number to reach Level 3 Customer Service for all customer
issues, including technical, billing, and product inquiries.
Time to Respond - Within 30 minutes
2 hour calendar month Average Time to Repair (ATTR)
If Level 3 fails to meet any of the guarantees above, Level 3 will review all
reported failures at the end of the month, and calculate the applicable credits:
Any customer inquiry to the Level 3 Customer Service Center that results in
a Time to Respond of > 30 minutes will result in a one day service credit
when the customer notifies Level 3 of the failure.
ATTR is calculated as a monthly average. All reported customer trouble
tickets will be totaled over the month, then the average time to close each
ticket will be calculated. If the ATTR is greater than 2 hours, the
customer will receive a one day service credit.
Credit will only be applied f to events where the Customer reports a
failure to the Level 3 Customer Care organization. Customers must report
ant Service Delivery failures within five business days of the event.
Network Performace SLA
Service Availability
<PAGE>
Availability refers to customer's access point to Level 3 Internet network,
including their Level3 provided local access circuit, and the customer's
port.
Unavailability Events are defined as any outage of the Level 3 provided
local access circuit and the customer's port of longer than 15 consecutive
minutes.
The Availability Guarantee does not extend to the performance of Internet
networks controlled by other companies, or traffic exchange points
(including NAPs and MARs) which are controlled by other companies.
Availability does not include regularly scheduled or emergency maintenance
events, or customer caused outages or disruptions.
Customers may report service unavailability events of longer than 15
consecutive minutes to Level 3 customer service within 48 hours of the
event. I the event is confirmed by Level 3 customer service, the customer
will receive a pro-rated service credit that equals the time of the
unavailability.
40 ms One-Way Delay Guarantee
The Delay Guarantee refers to the average delay parameters among the Level
3 Gateway sites in the United States. It does not extend to the customer's
local access circuit, transit pr peering connections, or to circuits to the
traffic exchange points, including NAPs and MAEs.
Delay is measured as the average delay, over a calendar month, of traffic
between all major Gateways on the level 3 U.S. Internet network.
Level 3 will publicly report the Average Monthly Delay measurement for the
Level 3 U.S. Internet Network at the end of every month
If the customer reports that Level 3 has failed to meet the Delay
Guarantee, and this is confirmed by Level 3 customer service, the customer
will be issued one day service credit.
Notes:
All measurements are based on monthly averages.
These guarantees only apply to the Level 3 Internet Network. They do not
apply to NAP or transit connections, or to any traffic once it leaves the
Level 3 network.
This SLA does not apply to periods of regularly scheduled or emergency
maintenance that Level 3 performs on its network or associated hardware and
software.
Credits will only be applied to events where the Customer reports a network
performance failure to the level 3 Customer Care organization.
Customer must report any Network Performance failures (unavailability or
delay) within 48 hours (two business days) of the service affecting event
in order to receive credit. Customers must report any Service Delivery
within five business of the event.
<PAGE>
Terms and Conditions
MANAGED MODEM - DEDICATED, QUICKSTART AND TRANSIT SERVICES
The following Terms and Conditions shall be applicable to services required to
allow access to "Dedicated Services," "Dedicated Service with Quickstart" and
"Transit Services" as offered by Level 3 (the "Managed Modem Services") ordered
by Customer under any Customer Order.
1. Any state or federal tariffs applicable to the Managed Modern Services to be
delivered under any Customer Order are incorporated into the terms thereof. The
Managed Modem Services shall at all times be used in compliance with Level 3's
then-current Acceptable Use Policy and Privacy Policy, as amended by Level 3
from time to time and which are available through Level 3's web site.
2. In the event Customer orders "Dedicated Service," end user traffic will be
routed through and aggregated in Level 3's facility, sent to the Customer's
Premises via a dedicated circuit, and then routed to its final destination by
Customer. In the event that Customer orders "Transit Services." End User traffic
will be routed to Level 3's facility and then routed to its final destination by
Level 3 via the Internet. Dedicated Service with "QuickStart" will initially be
provisioned to the Customer in the same fashion as Transit Services, until such
time as Level 3 has provisioned the dedicated circuit to send user traffic from
Level 3's facility to the Customer's Premises. QuickStart will then be migrated
to standard Dedicated Service. Customers ordering Dedicated Services will be
required to make a portion of the Premises available to Level 3 for the
placement of equipment necessary to provide such Dedicated Services. For
Dedicated Service, all Customer CPE as well as the private line necessary to
support this service will be ordered, installed and managed by Level 3. Any
telephone numbers assigned to Customer for the purpose of providing Managed
Modem Services hereunder shall be property of Customer; PROVIDED, however, that
Level 3 shall be obligated to release such numbers to Customer upon expiration
or termination hereof if and only if Customer is then in compliance with all of
the terms contained herein or in the Standard Terms and Conditions.
3. The nonrecurring charges and monthly recurring rates for the Managed Modem
Services provided by Level 3 to Customer shall be set forth in each Customer
Order. Level 3 will dedicate the specified number of ports to Customer in the
Level 3 facilities as identified in each Customer Order. Customer may be
responsible for additional monthly charges if Customer's use of the Managed
Modem Services requires and utilizes more ports than the number committed to and
ordered by Customer.
4. Customer hereby agrees to pay for the Services for the period of time
specifies in each Customer Order, which period shall commence with the
initiation of delivery of such Managed Modem Services. The rates and other
charges set forth in each Customer Order are established in reliance on the term
commitment made therein. In the event that Customer terminates Managed Modem
Services ordered in any Customer Order or in the event that the delivery of
Managed Modem Services is terminated due to a failure of Customer to satisfy the
requirements set forth herein or
<PAGE>
in the Customer Order prior to the end of the agreed term, Customer shall
(unless Customer has made a Revenue Commitment) pay a termination charge equal
to the termination or other charges paid or to be paid by Level 3 for services
purchased from other sources used to deliver the managed Modem Service to
Customer, plus the percentage of the monthly recurring charges for the
terminated Managed Modem Services calculated as follows:
a. 100% of the monthly recurring charge that would have been incurred for
the Managed Modem Service for months 1-12 of the agreed term; plus
b. 75% of the monthly recurring charge that would have been incurred for
the Managed Modem Service for months 13-14 of the agreed term; plus
c. 50% of the monthly recurring charge that would have been incurred for
the Managed Modem Service for months 25- through the end of the agreed term.
Customer may, in the event that a Revenue Commitment is made and is then being
satisfied by Customer, terminate, rearrange or reconfigure the Managed Modem
Services ordered under a Customer Order without payment of the termination
charge specified above; PROVIDED, HOWEVER, that Customer shall be responsible
for payment of Level 3's then-current standard nonrecurring charges for such
termination, rearrangement or reconfiguration.
5. Level 3 provides only access to the Internet; Level 3 does not operate or
control the information, services, opinions or other content of the Internet.
Customer agrees that it shall make no claim whatsoever against Level 3 relating
to the content of the Internet or respecting any information, product, service
or software ordered through or provided by virtue of the Internet.
<PAGE>
Standard Service Level 1 Agreement (SLA)
Release 1
Managed Modem
Managed Modem service will be backed by a Service Delivery SLA
NOTE: The total number of credits per month is limited to four days.
Service Delivery SLA
30 Calendar Day Installation Guarantee for Customers buying Managed Modem
service in speeds from 64 Kbps - 1.544 Kbps within the Standard Service
Area.
45 Calendar Day Installation Guarantee for Customers buying Managed Modem
service in speeds from 3Mbps - 45 Mbps within the Standard Service Area .
Single toll-free number to reach Level 3 Customer Service for all customer
issues, including technical, billing, and product inquiries.
Time to Respond - Within 30 minutes
2 hour calendar month Average Time to Repair (ATTR)
If Level 3 fails to meet any of the guarantees above, Level 3 will review all
reported failures at the end of the month, and calculate the applicable credits:
Any customer inquiry to the Level 3 Customer Service Center that results in
a Time to Respond of > 30 minutes will result in a one day service credit
when the customer notifies Level 3 of the failure.
ATTR is calculated as a monthly average. All reported customer trouble
tickets will be totaled over the month, then the average time to close each
ticket will be calculated. If the ATTR is greater than 2 hours, the
customer will receive a one day service credit.
Credits will only be applied to events where the Customer reports to the
Level 3 Customer Care organization. Customer must report any Service
Delivery failures within five business days of the event.
<PAGE>
ADDENDUM
This addendum (the "Addendum") modifies the Level 3 Terms and Conditions
for Delivery of Service, version 2 ("Terms & Conditions") between Level 3
Communications, LLC and IPVoice Communications, Inc. ("Customer").
Capitalized terms used but not defined herein shall have the meanings set
forth in the Terms & Conditions, and the terms and conditions contained in
this Addendum modify the Terms and Conditions in the following limited
respects:
MODIFICATIONS TO TERMS AND CONDITIONS FOR DELIVERY OF SERVICE
1. A new Section 3.4 is added to the Terms and Conditions reading as follows:
3.4 Discontinuance of Customer Order by Customer. Customer shall have the
right to terminate any Customer Order and discontinue Service prior to the
end of the agreed term with respect to which a Customer Order has been
executed without payment of any applicable termination charge if: (i) such
Service is Unavailable (as defined below) on two or more separate occasions
of more than eight (8) hours each in any 30 day period, and (ii) following
written notice thereof from Customer to Level 3, Level 3 has an
Unavailability event of more than 12 hours at any time within the 12 month
period immediately following said notice. For purposes of the foregoing,
Unavailability shall mean the period of time beginning when Customer
reports an outage in its Service to the Level 3 Customer Service and
Support Organization (1-877-4LEVEL3) and shall end when the Service is
operative. Unavailability shall not apply to any outage which is caused by
Customer, Customer's end users or any third party, which results from
failure of power or equipment provided by Customer or others, which occurs
or continues during any period in which Level 3 is not given access to the
Premises or the Space, or which results from maintenance events. Customer
must exercise its right to terminate under this Section, in writing, no
later than thirty (30) days after the Unavailability event giving rise to a
right of termination hereunder. In the event that any Services are
terminated pursuant to this paragraph, the monthly recurring charges
attributable to those Services immediately prior to said termination shall
continue to be credited to the Customer for the purposes of Customer
meeting its Revenue Commitment.
CHANGES TO TERMS AND CONDITIONS, IP CO-LOCATION
1. Sections 2 and 3 of the Terms and Conditions, IP Co-location are deleted
and replaced with the following provision:
2. Customer shall be permitted to use the Space only for placement and
maintenance of communications equipment. The nonrecurring and monthly
recurring charges for the Space and any Services ordered by Customer shall
be set forth in each Customer Order.
<PAGE>
Customer hereby agrees, within six (6) months of ordering such Space, to
use the Space for placement and maintenance of telecommunications or
internet access equipment. In the event Customer fails to fill said Space
as set forth herein, Level 3 has the right to reclaim the proportion of
Space not being used exclusively as indicated above, if the same is not
cured within forty-five (45) days' prior notice thereof to Customer.
Customer agrees to immediately vacate such recaptured Space and Level 3
shall reduce the Colocation fees allocated to such recaptured Space.
Customer further agrees that no refunds shall be made to Customer regarding
such recaptured Space.
CUSTOMER ACCEPTANCE LEVEL 3 ACCEPTANCE
/s/ Barbara S. Will /s/ Kathy Perone
------------------------ -----------------------
Authorized Customer Signature Authorized Level 3 Signature
6-8-99 6/23/99
--------- ----------
Date Date
Barbara S. Will Kathy Perone
------------------------- ----------------------
Typed or Printed Name Typed or Printed Name
President Sr. Vice President
----------------------- ------------------------
Title Title
EXHIBIT 10.9
MCI WORLDCOM
T1 INTERNET ACCESS SERVICE
Customer Information
Company Name: IPVoice.com, Inc.
Billing Address-Line1: 5901 South Middlefield Road Suite 100
City: LittletonState: CO Zip+4: 80123
Phone: (303) 738-1266 Fax: (303) 738-1295
Billing Address-Line 2:
T1 Services
<TABLE>
<CAPTION>
Flexible T1 Service 1 Double/Diverse T1 Service2 Shadow T1 Service5 Discounted Equipment6 and
CPE Maintenance (Available
only w/ service. Complete, sign
and return CPR Maintenance
Program Agreeme
Sustained Monthly Start-Up4 Item Monthly Start-Up Start-Up Monthly Item Price
Use (Klops)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0-128 $796.00 Waive Double T $4,200 $7,000 $350 $3,600 Cisco 2524 Router $1,950
128-256 $1,895 $5,000 Diverse T $4,200 $7,000 Cisco Internal T1 $995
CSU/DSU
256-3 CPE Maintenance Program0(See
Attachment)
384-512 $2,750 $5,000 Open ROUTE GTX 1000 $1,450
router with internal
T1 CSU/DSU
Over 512 $3,000 $5,000 Open ROUTE $470
internal T1
CSU/DSU
Price $2,495 $5,000
Protected
</TABLE>
Term and Payment
Term: _1 yr _2 yr _3 yr _4 yr _5 yr
Term Discount: 1 yr 5% 2 yr 10% 3,4 or 5 yr 15%
P.O. Number-If P.O. required, return it with Agreement
Notes: The service prices above do not include telco installation fees, domain-
registration fees, monthly line charges, or equipment costs.
1. Connectivity is provided to Customer's organization only. Resale to or use
by another organization is prohibited
2. Networks assigned from a MCI WorldCom net block are non-portable. Network
space allocated by MCI WorldCom must be returned to MCI WorldCom if
Customer discontinues service. MCI WorldCom may suspend service or
terminate this Agreement, effective upon notice, for a violation of these
requirements.
<PAGE>
3. Monthly Fee includes MCI WorldCom domain-name service for one domain per
Customer and any sub-domains; additional domains for internal Customer use
are $50 each. Domain-name registration requires a separate fee that will be
billed directly to Customer by Network Solutions. MCI WorldCom will not,
under any circumstances, send payment to Network Solutions on behalf of
Customer. All domain name applications that use MCI WorldCom name servers
must be authorized by MCI WorldCom, or the application may be denied or
delayed. Customer may not use in applications for its customers' domains
MCI WorldCom name servers.
4. Monthly billing is based on the level of sustained use during the month. To
determine this level, traffic samples are taken every five minutes; the
level under which 95% of these samples fall is the level of sustained use.
5. To ensure proper installation, MCI WorldCom will order all telco lines; a
$500 surcharge applies for Customer-ordered lines. Installation may be
scheduled Monday through Friday, excluding holidays, between the hours of
8am and 7pm ET; Customers requiring installation outside of these hours
must pay a surcharge of $500. Customer's installation period extends for 30
days after MCI WorldCom has passed packets with Customer's router. MCI
WorldCom's installation engineers are not responsible for providing
consulting on or configuring security equipment (MCI WorldCom offers
security products and consulting services. Asl a Sales Representative for
details).
6. Term Discount applicable only to Monthly Fee. At the conclusion of the Term
Commitment, this Agreement shall continue in effect on a month-to-month
basis at MCI WorldCom's then current list price for the service.
Flex T1 customers always have available to them the full T1 bandwidth over an
unshared, non-fractional 1.5 Mbps digital leased line.
Minimum 1-Year Term Commitment required; Term Commitment discounts do not apply.
Available only to customers getting new Internet connection and only during the
first six months of T1 service.
Applies to the first year of service. After the first year, MCI WorldCom will
sample Customer's use statistics, using the same traffic-sample method described
above. If Customer's sustained use qualifies for a tiered Monthly Fee that is:
(a) lower than the Price-Protected Monthly Fee, Customer may elect to
continue service at the lower tiered Monthly Fee or sign up for another year at
the Price-Protected Monthly Fee, or
(b) higher than the Price-Protected Monthly Fee, MCI WorldCom will begin
charging the appropriate tiered Monthly Fee.
Shadow T1 Service requires that Customer does not exceed a 16 Kbps sustained-use
level. To determine this level, traffic samples are taken every five minutes;
the level under which 95% of these samples from the previous month falls is the
level of sustained use. Should the 16 kbps limit be exceeded, MCI WorldCom will
bill Customer automatically at the standard MCI WorldCom rate for the
corresponding sustained-use level. Customer will be billed at this rate until:
(1) The sustained-use level decreases below 16 kbps and (2) Customer provides a
written request to MCI WorldCom to return to Shadow T1 Service.
Available only with service. MCI WorldCom is acting only as a reseller with
respect to the hardware and software offered under this Agreement ("Equipment"),
which Equipment was manufactured by a third party ("Manufacture"). MCI WorldCom
will provide first-level support for Equipment, but will not repair or replace
Equipment unless Customer has purchased CPE Maintenance from MCI WorldCom.
Customer's use of Equipment is subject to the terms and conditions of the
Manufacturer's end-user agreement. Should Customer purchase Equipment from MCI
WorldCom, MCI WorldCom will ship to Customer the current WorldCom-tested
version.
<PAGE>
Terms and Conditions
This Service Agreement ("Agreement") for the services provided hereunder is made
by and between Customer ("Customer") and MCI Telecommunications Corporation and
WorldCom Technologies, Inc., together with their respective affiliates,
including UUNET Technologies, Inc. (collectively "MCI WorldCom").
1. MCI WorldCom exercises no control over, and accepts no responsibility for,
the content of the information passing through MCI WorldCom's host computers,
network hubs, and points of presence (the "MCI WorldCom Network"). EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 7 BELOW, MCI WorldCom (a) MAKES NO WARRANTIES OF
ANY KIND, WHETHER EXPRESS OR IMPLIED, FOR TH SERVICES AND EQUIPMENT IT IS
PROVIDING and (b) DISCLAIMS ANY WARRANTY OF TITLE, MERCHANTABILITY, NON-
INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE. Use of any information
obtained via MCI WorldCom Network is at Customer's own risk. MCI WorldCom
specifically denies any responsibility for the accuracy or quality of
information obtained through its services. MCI WorldCom shall not be liable for
any delay or failure in performance due to Force Majeure, which shall include
acts of God; earthquake; labor disputes; changes in law, regulation, or
government policy; riots; war; fire; epidemics; acts or omission s of vendors or
suppliers; equipment failures; transportation difficulties; or other occurrences
that are beyond MCI WorldCom's reasonable control.
2. All use of the MCI WorldCom Network and the service must comply with the
then-current version of the MCI WorldCom Acceptable Use Policy ("Policy"), which
is part of this Agreement and is available at the following URL:
www.uu.net/usepolicy.html. MCI WorldCom reserves the right to amend the Policy
from time to time, effective upon either posting of the revised Policy at the
URL or providing other notice to Customer. MCI WorldCom reserves the right to
suspend the service or terminate this Agreement, effective upon notice, for a
violation of the Policy. Customer agrees to indemnify MCI WorldCom and hold it
harmless from any losses, damages, costs, or expenses resulting from any
third-party claim or allegation ("Claim") arising out of or relating to use of
the service, including any Claim that, if true, would constitute a violation of
the Policy.
3. NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL,
PUNITIVE, OR CONSEQUENTIAL DAMAGES THAT RESULT FROM CUSTOMER'S OR CUSTOMER'S
USERS' USE OF THE MCI WorldCom NETWORK AND THE SERVICE, INCLUDING, WITHOUT
LIMITATION, ANY SUCH DAMAGES FOR LOSS OF DATA RESULTING FROM DELAYS, NON-
DELIVERIES, MISDELIVERIES, OR SERVICE INTERRUPTIONS. Notwithstanding anything to
the contrary stated in this Agreement, Customer's sole remedies for any claims
relating to this service or the MCI WorldCom Network are set forth in Section 7
below.
4. Connectivity is provided to Customer's organization only. Resale to or use by
another organization is prohibited. Networks assigned from a MCI WorldCom
net-block are non-portable. Network space allocated by MCI WorldCom must be
returned to MCI WorldCom in the event Customer discontinues service. MCI
WorldCom may suspend the service or terminate this Agreement effective upon
notice for a violation of the terms of this Section.
5. Payment is due 30 days after the date of invoice. Accounts are in default if
payment is not received within 30 days after the date of invoice. Payment made
by a check that is later returned to MCI WorldCom for insufficient funds shall
place Customer immediately in default and subject Customer to a MCI WorldCom
returned-check charge of $25. Accounts unpaid 60 days after date of invoice may
have service interrupted or terminated. Such interruption or termination does
not relieve Customer of the obligation to pay the Monthly Fee. Only a written
request to terminate Customer's service relieves Customer of the obligation to
pay the monthly fee. Accounts in default are subject to an interest charge on
the outstanding balance of the lesser of 1.5% pr month or the maximum rate
permitted by law. Customer agrees to pay MCI WorldCom its reasonable expenses.
Including attorney and collection-agency fees, incurred in enforcing its rights
under these Terms and Conditions. Prices are exclusive of any taxes that may be
levied or assesses upon the equipment or services provided hereunder. Any such
taxes shall be paid by Customer. If Customer is exempt from otherwise applicable
taxes, Customer must submit its tax identification number and exemption
certificate at the same time it submits this Agreement.
<PAGE>
6. Billing for MCI Worldcom service will commence when a MCI WolrdCom hub and a
functioning telephone circuit are prepared to route IP packets to Customer's
site. The Startup Charge is invoiced upon acceptance of this Agreement by MCI
WorldCom. Charges for Equipment shall be invoiced upon shipment. Service is
invoiced monthly in advance, and may ne canceled only by 60 days' advance, and
may be canceled only by 60 days' advance written notice. In the event of early
cancellation of a Term of Commitment, Customer will be required to pay 75% of
MCI WorldCom's standard Monthly Fee for each month remaining in the Term
Committment. MCI WorldCom reserves the right to change the rates by notifying
Customer 60 days in advance of the effective date.
7. The Service Level Agreement ("SLA") for this service is set forth at
www.wcom.com/sla and applied only to customers agreeing to a Term Commitment of
at least one year. The SLA is also only applicable to Shadow T1 service of the
service becomes Standard T1 service. MCI WorldCom reserves the right to amend
the SLA from time to time, effective upon either posting of the revised SLA to
this URL or providing other notice to Customer. In the event of any amendment
resulting in a material reduction of the SLA's service levels or credits,
Customer may terminate this Agreement without penalty by providing MCI WorldCom
written notice of termination during the 30 days following notice of such
amendment. The SLA sets forth Customer's sole remedies for any claim relating to
this service or the MCI WorldCom Network, including any failure to meet any
guarantee set forth in the SLA. MCI WorldCom's records and data shall be the
basis for all SLA calculations and determinations. Notwithstanding anything to
the contrary, the maximum amount of credit in any calendar month under the SLA
shall not exceed the Monthly Fee and/or Startup Charge that, absent the credit,
would have been charged for MCI WorldCom service that month (collectively the
"MCI WorldCom Fees"), provided that the maximum amount of credit for failure to
meet the Availability Guarantee shall not exceed the sum of (a) the MCI WorldCom
Fees plus (b) the telephone-company line charge that, absent the credit, would
have been charged for said month.
8. Neither party may use the other party's name, trademark, trade names, or
other proprietary identifying symbols without the prior written approval of the
other party. Neither party may assign or transfer any of its rights or
obligations under this Agreement without the priot express, written consent of
the other party, provided that either party may assign or transfer this
Agreement to any affiliate of such party upon advance written notice to the
other party. No failure or delay on the part of either party to exercise any
right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy hereunder preclude any other
or further exercise thereof or the exercise of any right or remedy granted
hereby or by law.
9. These Terms and Conditions supersede all previous representations,
understandings, or agreements and shall prevail notwithstanding any variance
with terms and conditions of any order submitted. Acceptance of this Agreement
by MCI WorldCom may be subject, in MCI WorldCom's absolute discretion, to
satisfactory completion of a credit check. Activiation of service shall indicate
MCI WorldCom's acceptance of this Agreement. Use of the MCI WorldCom Network
constitutes acceptance of these Terms and Conditions.
In the event that the Federal Communications commission or other lawful
authority determines that the Company must contribute to support government
"Universal Service" programs based upon revenues obtained from the provision of
service hereunder, the Company, without any further agreement of Customer, may
impose a fee or charge designed to recover its required contribution, based upon
revenues earned under this Agreement.
Customer questions should be directed to Customer's MCI WorldCom sales
representative
Customer Authorized Agent: Title: President
Signature: /s/ Barbara S. Will
Date: 8/20/99
MCI WorldCom, MCI Telecommunications Corporation
Three Ravinia Drive
Atlanta, GA 30346
Exhibit 10.10
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
This Marketing Agreement (Agreement) is made and entered into on this 1st day of
March, 1999, between IPVoice Communications, Inc., a Nevada Corporation, known
as ("IPVC") and Teleco Service International, Inc., 2391 Old Spring Road,
Smyrma, GA 30080, the TruePartner Joint Venture, known as (TPJV).
1. Exclusive Territory
IPVC grants to TPJV the exclusive right to jointly market, advertise and
sell IPVC network and equipment (TrueConnect Gateways) or TrueWeb access
(Services) as defined in Appendix A.-1 Wholesale Network Pricing and
Appendix A-2 Wholesale TrueConnect Gateway Pricing. The TPJV shall also
have the right to market, advertise and sell the Services to be offered
through IPVC in the future, the compensation for such activities to be set
by agreement of the parties when such services are made available. It is
acknowledged that although TPJV is granted a right to market the Services
within the Territory as a Master Distributor of IPVC, TPJV shall also have
authority to market the Service with the Territory using other agents. The
identical terms and conditions of this agreement will apply to agents or
partners of TPJV.
2. Equipment Testing Period (Beta) Terms and Conditions
Gateways
A period of thirty (30) days from time of install shall be set aside for
the customer to test TrueConnect Gateway features and functions. During
this period of time Customer and TPJV agree to work and consult with IPVC
staff on any questions, concerns or issues that might arise to ensure that
the TrueConnect Gateways meet or exceed Customer's desired performance
requirements. Should the TrueConnect Gateways not meet TPJV's reasonable
requirements and should IPVC be unable to correct the problem, the Customer
shall be allowed to return the Gateway (at the cost of TPJV) to IPVC and
IPVC will refund Customer's posted Letter of Credit less a 10% restocking
fee. Furthermore, should the TrueConnect Gateway fail to be acceptable
under the Beta test requirements (setforth in that document) the Customer
shall have no contractual obligations to IPVC. Should TrueConnect Gateways
perform and pass Beta Test requirements, IPVC shall have the right to pull
the entire Letter of Credit and apply it as payment in full for the tested
Gateway(s) on the Customers site. Customer further agrees that all
TrueConnect Gateways must be paid in full prior to shipping and
installation.
Confidential /s/JAL
03/01/99
2
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Voice Quality
IPVC cannot guarantee voice quality to the Customer because it is not a
function of the Gateway itself, but the capabilities of the chosen Internet
Provider in that area. Should Customer not have access to IPVC recommended
Site and Internet Requirements, IPVC agrees to work with Customer on
alternative routes, providers and carriers.
A. TPJV's Obligations
TPJV shall work diligently with IPVC staff during the installation and
testing period to ensure that the Services are sold as described within the
Territory. TPJV has the authority to hire technicians or employees to
comply with the obligation. TPJV shall have approved Technical,
Installation and User Manuals and Beta Testing reports and is responsible
for having materials translated into the major languages spoken within the
Territory. TPJV's agents or partners will comply with the terms and
limitations of this Agreement. IPVC shall have the right to require TPJV's
agents and partners to sign an Addendum to this Agreement to that effect.
B. IPVC's Obligations
An IPVC technical representative will travel to Customer's location to
install a Gateway and to train Customer's staff on the use of TrueConnect.
IPVC will supply TPJV and Customer with details of reporting that will be
required during the testing period. IPVC will pay the cost of travel and
lodging for the IPVC technical personnel for a maximum of two- (2)
travel-days and a five- (5) business-day stay. Should the Customer desire
that the IPVC technical person stay longer, the additional expenses will be
billed to the Customer unless otherwise approved by IPVC in advance.
3. Compensation
In consideration for marketing, advertising and selling by both companies,
and the Services as set forth above, TPJV and IPVC will share revenue
afterrecovery of IPVC's cost of network.
In consideration for TPJV purchase of equipment, IPVC revenue sharing will
be 50/50 for the term of this agreement.
4. Billing and Collecting
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IPVoice Communications, Inc.
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A. Collecting will be pre-payment based on estimated usage and Licensing
fees, with terms of Net 30 days. IPVC will give TPJV prior credit
approval before extending these terms to the Customer. TPJV shall be
required to post a Letter of Credit with IPVC on behalf of the
Customer, or the Customer shall post a Letter of Credit directly with
IPVC for the full purchase price including shipping and handling of
the TrueConnect Gateway prior to shipping and installation.
B. IPVC will, at the end of a thirty-day period, provide TPJV with a
detailed invoice. IPVC will also forward to TPJV a complete listing of
all revenues credited to the TPJV with the associated calculation of
TPJV's shared revenue. In no event will the shared revenue received be
held by IPVC for longer than thirty (30) days after either the
two-week or month-ending account receivable cycle.
5. Letter of Credit
TPJV agrees to provide an Irrevocable Letter of Credit (LOC) from a
mutually agreed upon financial institution for one and one-half times the
estimated monthly billing for those customers that IPVC will not extend
credit to. The LOC shall be adjusted periodically using IPVC procedures to
account for variations in the value of billings. In no case shall the LOC
be less than one and one-half times the estimated monthly billing. The LOC
shall state that if payment is not received by IPVC within 30 calendar
days, IPVC shall have the ability to draw on the LOC for the outstanding
amount due IPVC (usage charge less TPJV's shared revenue).
6. Third Party Infringements
TPJV shall initially have the sole right, in its discretion, to initiate,
prosecute or settle legal actions against any person infringing on any
intellectual property rights to the Services within the Territory (except
any settlement, which would have the effect of denying to IPVC the benefits
of this Agreement). Each party shall promptly notify the other of any
actual or potential infringement, which becomes known to it. Should TPJV
fail to take appropriate and diligent action with respect to any such
infringement by a third person, in the sole and absolute discretion of
IPVC, then IPVC shall have the right to take such action, at its own
expense and in its own name and the right to enforce and collect any
judgment thereon. Each party shall cooperate (including appearance for
testimony at trials and depositions) with the other party as such party may
reasonably request in regard to any legal action brought by a party
pursuant to this Section. The party requesting such cooperation shall pay
all out-of-pocket costs of the party providing such cooperation.
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
7. Confidentiality
Neither party shall disclose any trade secrets (if it has been designated
as such in writing at the time of its original disclosure by one party to
the other) to persons other than those bound by the terms of this Agreement
or persons who have executed Confidentiality Agreements which require such
persons to maintain the confidentiality of such trade secrets to
substantially the same extent as required by this Section. Nothing in the
foregoing sentence shall prohibit disclosure of any information which is
publicly known at or after the time of disclosure, which is already known
to the recipient, or which is required to be disclosed by law.
8. Agreement Not to Compete
A. TPJV agrees that during the period commencing on the date of this
Agreement and continuing until the date two (2) years after this
Agreement is terminated, it will not directly or indirectly, either as
an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, investor, or financier or in
any other individual or representative capacity, or otherwise, engage
or participate in any business which directly or indirectly competes
with the business of IPVC or any TPJV supplying services to IPVC
within any country being serviced by IPVC or any TPMD supplying the
service to IPVC at the time this Agreement is terminated. TPJV
covenants that during the term referenced above, it will not, either
for itself or for any other person or entity, except as may be
required by the terms of this Agreement either directly or indirectly:
(1) call on, solicit, take away or hire any customers, employees,
principals, lessors, distributors or suppliers or other personnel or
independent contractors, of IPVC or any TPJV or TPMD supplying the
Services to IPVC, (2) acquire or attempt to acquire rights for
providing any product or services in competition with IPVC or any TPJV
or TPMD supplying the Services to IPVC, or (3) engage in any act which
would interfere with or harm any business relationship with any
customer, lessor, employee, principal or supplier of IPVC or any TPJV
or TPMD supplying the Services to IPVC.
B. The parties agree that a breach of the covenants described in this
Section will result in substantial damages to IPVC, which would be
difficult, if not impossible to ascertain. The TPJV agrees that in the
event of such a breach or threatened breach, IPVC shall have the right
to a Restraining Order and an Injunction, without bond or other
security (all of which is waived) both temporary and permanent,
enjoining and restraining any such breach or threatened breach. Such
injunctive relief shall be in addition to any other remedy available
to IPVC at law or in equity. Nothing in this Agreement shall be
construed to prohibit or prevent IPVC from initiating an action or
otherwise recovering any damages that may be sustained as a result of
the breach or threatened breach by TPJV. TPJV also agrees that IPVC
may pursue any remedy available to it, and the pursuit of any one such
remedy at any time will
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
not be deemed an election of remedies or waiver of right to pursue any
other remedy.
C. Should TPJV breach or violate any term of this Agreement at any time
when monies are due and owing to it from IPVC, then all unpaid monies
due TPJV shall be subject to offset by the amount of any damages
incurred by IPVC, the amount of any attorney fees and other related
expenses incurred by IPVC in enforcing this Agreement, and by the
amount of any other claims IPVC may have against TPJV.
9. No Relationship
The parties to this Agreement are independent contractors only and nothing
in this Agreement shall be construed as establishing any agency, joint
venture, partnership, fiduciary or other relationship between the parties.
10. Warranty
Each party represents and warrants to the other that it has the power and
authority to execute and deliver, and to perform its obligations under this
Agreement, and that neither the execution or delivery of this Agreement nor
the performance of its obligations hereunder will constitute a breach of
the terms or provisions of any contract or violate any law or the rights of
any third party.
11. Term and Termination
The term of this Agreement will commence as of the date first above written
and shall continue until the second anniversary of the date of its
execution. If either TPJV or IPVC commits a material breach of any material
provision of this Agreement, and such breach is not cured within ninety
(90) days after the date of which notice of breach is provided to the
breaching party in writing, the non-breaching party shall have the right to
terminate this Agreement upon further thirty (30) day written notice.
12. Governing Law
This Agreement shall be governed and construed in accordance with the laws
of Florida, USA (excluding any conflicts with laws or rules) and each party
submits to the jurisdiction of any state, county or federal court in the
State of Florida, USA.
13. Entire Agreement
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
This Agreement sets forth the entire Agreement or any understanding between
the parties as to its subject matter and supersedes all other documents,
verbal commitments or understandings made before conclusion of this
Agreement, and none of the terms of this Agreement may be amended or
modified except in writing signed by both parties.
14. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party except that any party may assign this
Agreement to any successor corporation (including the surviving corporation
in any consolidation or merger) or assignee of all or substantially all of
its business. In the event of such an assignment, the assigning party shall
remain jointly and severally liable with the assignee for the full and
timely performance by such assignee of the assigning party's obligations
hereunder.
15. Notices
Any notice, consent or approval required or permitted under this Agreement
shall be in writing and shall be delivered to the following addresses (i)
personally by hand (ii) by certified mail, postage prepaid with return
receipt requested, or (iii) by fax confirmed by such certified mail:
If to TPJV:
Teleco Service International, Inc.
2391 Old Spring Road
Smyrma, GA 30080
E-mail address:
Phone number: 770 805 4074
Fax number:
If to: IPVoice Communications, Inc.
5901 South Middlefield Road, Suite 100
Littleton, Colorado 80123
E-mail Address: [email protected]
Phone Number: 303.738.1266
Fax Number: 303.738.1295
All notices shall be deemed effective upon the date delivered by hand or
sent by fax, or if mailed, as of the date which is five (5) days after the
date of mailing. Either party may change its address for notice purposes by
notifying the other party of such changes of address in accordance with the
foregoing.
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
16. Waivers
No waiver of any term or condition of this Agreement shall be valid except
when made by an instrument in writing expressly waiving such term or
condition signed by the waiving party. A waiver by any party of any term or
condition of this Agreement in one instance shall not be deemed a waiver of
such term or condition for any similar instance in the future or of any
subsequent breach. All rights, remedies obligations and agreements
contained in this Agreement shall be cumulative and not in limitation of
any other remedy, right, obligation or agreement of any other party.
17. Severability
If any part of this Agreement is contrary to, prohibited by or deemed
invalid under the laws of any jurisdiction, such provision shall, as to
such jurisdiction be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, without invalidation or affecting the
validity or enforceability of such provision in any other jurisdiction.
18. Specific Performance
The parties acknowledge that there may be no adequate remedy at law for any
violation of sections of this Agreement, and that in addition to any other
remedies which might be available, such Sections shall be specifically
enforceable in accordance with their terms.
19. Headings
Headings contained in this Agreement are for convenience of reference only
and shall not affect the meaning or construction under the provision of
this Agreement.
20. Voluntary Agreement
Each party warrants that before signing this Agreement such party has been
fully advised of its contents and meaning, has had legal counsel explain
the meaning and legal significance of each and every provision therein, and
executes this Agreement freely and voluntarily with full knowledge and
understanding of its contents.
21. Cumulative Remedies
No remedies or election hereunder shall be deemed exclusive, but shall,
whenever possible, be cumulative with all other remedies at law or in
equity.
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
22. Attorney Fees
In the event any action, proceeding or litigation, judicial or
non-judicial, arises out of the subject matter of this Agreement the
prevailing party shall be entitled to payment of all costs, expenses and
attorney fees incurred.
23. Successor/Assigns
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, successors, personal
representative and assigns. The parties each agree to take such further
action and deliver such ancillary document as may be reasonable or
necessary in order to carry out the terms and provision of this Agreement.
24. Authority
Each individual executing this Agreement in a representative capacity
warrants to the other party that such person has sufficient authority to
bind the party on behalf of whom they are executing this document.
25. Duplicate Originals
Any fully executed copy of this Agreement shall be deemed for all purposes
as a duplicate original. All originals and duplicate must be signed before
a notary or will be considered invalid.
EXECUTED by the parties effective as of the date first written above.
IPVoice Communications, Inc.
By: /s/ Barbara S. Will
--------------------------
Barbara S. Will, President and COO
State of Colorado )
County of Jefferson ) ss
Country of USA )
Subscribed and sworn to under oath before me on this 25th day of March, 1999.
/s/ Lillian M. Vader
----------------------------
Notary Public
8601 Zuni #153, Denver, CO 80221
My Commission Expires 8-12-99
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Teleco Service International, Inc.
By: /s/ Joseph Long
Joseph Long
President
State of Georgia )
County of Cobb ) ss
Country of USA )
Subscribed and sworn to under oath before me on this 22nd day of March, 1999.
/s/ Julia A. Moulton
--------------------------
Notary Public
2391 Old Spring, Smyrna GA 30080
My Commission Expires 12/01/02
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix A
Non-Exclusivity of Territory
Or
Exclusivity of Territory
_ IPVoice Communications Inc. and TPJV have agreed that IPVC gives
non-exclusivity of territory to TPJV.
INIT _______INIT _______
|X| IPVoice Communications Inc. and TPJV have agreed that IPVC gives
exclusivity to TPJV in the following Territory. TPJV will purchase the
exclusive to market IPVC services in the chosen country. TPJV is entitled
to:
o Exclusivity.
o A Dedicated Sales and Service Contact.
o On-site training for sales and service.
o Training Manuals, changes and updates as they become available.
o Updates on IPVC competitive advantage.
o Market Overview and updates.
o Detailed information on IPVC products and services.
o Wholesale Pricing.
o Billing and Collection guidelines.
o Newsletter and future product development charts.
o Technical Assistance.
o Future product development changes.
o Regular Agent and TruePartners meetings.
The purchase of the exclusive territory will vary by country and market and has
been determined as follows:
1.) Exclusive Territory is granted to TPJV and is as follows:
Territory Signing Fee
a) USA termination for China 0
b) USA termination for Nicaragua 0
c) USA termination for El Salvador 0
d) USA termination for Guatemala 0
e) USA termination for Honduras 0
f) USA termination for Panama 0
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix A (Continued)
Non-Exclusivity of Territory
Or
Exclusivity of Territory
This is for the right to market and advertise the services and to establish an
office. As used in this Agreement, "Service" shall mean domestic, intra-country
and international calling services offered through the date of this Agreement,
specifically origination and termination in designated calling patterns,
international and calling card. TPJV shall also have the exclusive right to
market, advertise, and sell the services to be offered through IPVC in the
future, the compensation for such activities to be set by agreement of the
parties as set forth in Appendix B.
It is acknowledged that although TPJV is given (a) the right to market a
geographic territory, and (b) Product and Services; as a TPJV on behalf of IPVC,
IPVC also grants authority to TPJV to market said Territory by using TPJV's own
agents or direct sales staff.
TPJV Obligations under Exclusive Territory
TPJV shall diligently promote the Service within the Territory. TPJV has the
authority to hire agents or employees to comply with the obligations of this
Agreement at the sole expense of TPJV. TPJV shall have IPVC pre-approved
promotional materials which must be translated into the major languages spoken
within the Territory at the sole cost of the TPJV. TPJV's agents or partners
will comply with the terms and limitations of this agreement and will sign
documentation to that effect. TPJV is responsible for setting up an office,
where customer calls can be answered, "IPVoice Communications (country name),"
and that sales and service can be handled in a professional manner.
TPJV understands and agrees that IPVC has the right, in its sole and absolute
discretion, should the following quota not be met to terminate and/or change
TPJV's Country Exclusivity.
QUOTA: 1,000,000 minutes per month per Exclusive Territory after a twelve (12)
month ramp.
TPJV understands and agrees that all Gateways are owned by IPVC at conclusion of
the Beta Test period.
INIT _______INIT _______
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix B
TPJV Wholesale Pricing
This Appendix B, dated March 1, 1999 by and between IPVoice Communications, Inc.
(IPVC), a Nevada Corporation, and Teleco Service International, Inc.,
TruePartner Joint Venture (TPJV), is attached to and made a part of the
Agreement between IPVC and TPJV dated March 1, 1999 (the Agreement).
As set forth in this Appendix hereto, payment for Servics shall be determined by
the destination and duration of the calls, and at the per minute rates listed in
the folowing Schedules. IPVC at it's sole discretion and upon five (5) days
advance written notice, may change such rates as it deems necessary unless such
changes is required by law, order, rule or regulation, whereupon IPVC will
6promptly notify TPJV of such changes but such notice shall not act as a
condition precedent thereto. TPJV agrees to pre- pay for all services and
understands that no equipment will be shipped prior to payment. An estimated
monthly amount will be posted each month for usage with a true-up at the end of
each billing cycle.
Equipment Descriptions listed in Appendices D and E
A. TrueConnect Gateway Wholesale Pricing for Domestic and International
Product Sold Wholesale Pricing Retail Pricing
TrueConnect Gateway
Domestic (T/1) $49,894.82 $59,894.82
International (E/1) $53,718.22 $63,718.22
Added Gateways (Pricing does not
include install or travel)
Domestic $39,894.82 $44,894.82
International $43,718.22 $48,718.22
T-1 Cards $ 6,300.00 $ 6,500.00
E-1 Cards $ 6,500.00 $ 6,700.00
B. TrueConnect Gateway's using MultiCom software but no network applications
or resell of of minutes:
Per Customer Location:
Pricing not available at this time.
Should market conditions change, IPVC reserves the right to modify the pricing
structure.
"Net Revenues" shall mean gross revenues actually received by IPVC or TPJV
for sales of the services defined in this Agreement, less IPVC's cost of,
but not limited to, taxes, duties, discounts, license fees, equipment,
network, labor, refunds and administrative costs. Both IPVC and TPJV shall
determine rates and commissions for any IPVC network used by TPJV customer
switching in TPJV's Territory.
In order to stay competitive and in order to maximize return, IPVC shall require
in the event an 800-toll free access number is being used, that the number be
changed periodically.
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix B (Continued)
TPJV specifically agrees to contact customers to make the required number
changes within two (2) weeks of receipt of notice from IPVC. IPVC will give a
minimum of two weeks notice after which toll free number change is required.
IPVC may invalidate this Agreement if TPJV fails to make the required changes
without agreed written notice from IPVC for delays.
IPVoice Communications, Inc.
By: __________________________
Barbara S. Will, President and COO
Teleco Service International, Inc.
By: __________________
Joseph Long, President
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix C
Contact Form
This contact form must be filled out, dated and submitted to IPVoice by mail,
fax or e-mail for every potential customer, distributor, sub-agent or client
that the TPJV proposes to list in its base of working accounts. TPJV understands
and agrees that should submitted contact not sign an agreement after one-year
from the time it was submitted to IPVoice, IPVoice shall have the right to
contact and sell directly. (Unless otherwise agreed to in writing)
DATE SUBMITTED_______________________________________
SUBMITTED BY: ______________________ RECEIVED BY: _______________________
CUSTOMER'S NAME: ________________________________________________________
CONTACTS NAME: __________________________________________________________
DAYTIME OR OFFICE PHONE NUMBER: _____________________________________
AFTER HOURS NUMBER: ____________________________________________________
FAX NUMBER: _________________________E-MAIL ADDRESS: ___________________
ADDRESS: ______________________________________________________________
CITY/STATE/COUNTRY: _________________________________________________
ZIP___________________
COMMENTS: ____________________________________________________________________
PROGRAMS/SERVICES OR PRODCTS ARE UNDER NEGOTIATIONS:
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix D
TrueConnect Gateway
T-1 Applications Sale and Price Sheet
Description
USA Domestic and some International Locations. Each TrueConnect Gateway is
set up with (2) T-1 Cards and has the capacity to hold (4) T-1 Cards. Each
card should be able to handle 250,000 minutes per month. To insure optimum
performance, IPVoice recommends that you DO NOT operate your Gateways with
(4) Cards. As minutes grow, Gateway can be added to support growth.
Sales Price:
First TrueConnect Gateway _________
TrueConnect Gateway Adds _________
T-1 Cards _________
Licensing Fees for MultiCom
Set up Fee of $5000.00
Monthly Fee of $5000.00 or $0.0025 per call record (which is ever greater)
Equipment
(1) One each of the following:
Computer with Keyboard, Sound Card, Monitor, Network Card, Windows,
NT Server, Network Hub, Surge Protection, Cable, Modem, Manual
Hardware
One each of the following:
AGRT2S, TX3000, Fusion 2.0 for NT, G.723.1, H.323 Stack
Other Hardware and Qty
2 AG-T1+RT2 Cards
48 G.723.1 runtime
48 H.323 runtime
Software
MultiCom Software
TrueConnect Switch Software
PCAnywhere Software
Shipping and handling
Cost will vary.
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix E
TrueConnect Gateway
E-1 Applications Sale and Price Sheet
Description
For use in most International Locations.
Each TrueConnect Gateway is set up with (2) E-1 Cards and has capacity to
hold (4) E-1 Cards. Each card should be able to handle 250,000 minutes per
month. To insure optimum performance, IPVoice recommends that you DO NOT
operate your Gateways with (4) Cards. As minutes grow Gateway, can be added
to support growth.
Sales Price:
First TrueConnect Gateway
TrueConnect Gateway Adds
E-1 Cards
Licensing Fees for MultiCom
Set up Fee of $5000.00
Monthly Fee of $5000.00 or $0.0025 per call record (which is ever greater)
Equipment
One each of the following:
Computer with Keyboard, Sound Card, Monitor, Network Card, Windows, NT
Server, Network Hub, Surge Protection, Cable, Modem, Manual
Hardware
One each of the following:
AGRT2S, TX3000, Fusion 2.0 for NT, G.723.1, H.323 Stack
Other Hardware and Qty
2 AG-E1+RT2 Cards
60 G.723.1 runtime
60 H.323 runtime
Software
MultiCom Software
Shipping and handling
Cost will vary.
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix F
TrueConnect System/Site Requirements
Last Revised: 10/23/98
This document outlines the system and site requirements needed to install and
operate a TrueConnect Internet Telephony Gateway.
Primary Gateway Hardware (Provided by IPVoice):
Chassis: 19" Rack Mountable
CPU: Intel 266Mhz CPU with 64 MB Ram
Disks: 3-5GB Hard Disk with CD-ROM
PSTN: IPVoice T1/E1/ Analog Interface Card
VoIP: IPVoice PSTN/VoIP Translator Card
Software Configuration (Provided by IPVoice):
Windows NT 4.0 Server
TrueConnect Call Control v1.0
MultiCom Billing v3.3 Access Included
Optional Components:
Additional IPVoice T1/E1/PSTN Interface cards
Site Requirements (Provided by TruePartner):
T1/E1 to the local PSTN for local termination/origination (bi-directional)
Dedicated connection to the Internet Backbone (High Bandwidth)
10/100Base-T Ethernet connection Cable
Dedicated IP Address for the TrueConnect Gateway
Dedicated Phone Line at Install Site (for emergency access to gateway)
8-Port 10-Base-T Hub (If required by ISP)
Uninterruptable Power Supply (UPS)
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix G
Pre Installation Testing Procedures
o1. Customer must aquire a facility providing both Internet connectivity and
PSTN connectivity
o2. Customer must obtain a unique IP Address for the TrueConnect Gateway
o3. Customer must provide the IP Address of the Gateway to IPVoice
o4. Customer must provide the IP Address of the router that will be used for
the gateway
o5. Customer must conduct latency testing and transmit this data to IPVoice
o6. Customer must obtain Internet access from their office. (Dial-Up or LAN)
Latency Testing
o1. Customer must set up a computer at the facility using the
IP address for the Gateway
o2. Run the "ping" utility continuously for a period no less than 72 hours.
(Target IP Address for the ping is: 204.181.36.24)
o3. Send the output to IPVoice
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IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix H
Beta Testing Fuctionality Checklist
MULTICOM
1. Remote Access via Procomm 3.+
(Requires Internet Connection from Office Site)
2.Customer Management
3.Customer Invoicing
4.Agent Management
5.Account Management
6.System Reports (printing requires HP III compatible Laser Printer)
7.Real-Time Traffic Information
8.Debit Card Creation and Management
9.Rate Table Management
TRUECONNECT GATEWAY
1.Receive and Authorize Inbound Customer Calls
2.Terminate Customer Calls
3.Rate Calls and Debit Customer Accounts
4.Basic Voice Prompts (English)
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EXHIBIT 10.11
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
This Marketing Agreement (Agreement) is entered into this 10th day of March,
1999, between IPVoice Communications, Inc., a Nevada Corporation, known as
(IPVC) and Billion Telecommunication Services, Ltd., Ming Tak Commercial
Building, 8th Floor,101 103A Wanchai Road, Wanchai, Hong Kong, the TruePartner
Equipment Distributor (TPED).
1. Exclusive Territory
IPVC Grants TPED the exclusive right to market, advertise and sell IPVC
equipment (TrueConnect Gateways) or TrueWeb access (Services) as defined in
Appendix A. TPED shall also have the exclusive right to market, advertise and
sell the Services to be offered through IPVC in the future, the compensation for
such activities to be set by agreement of the parties when such services are
made available. It is acknowledged that although TPED is granted a right to
market the Services within the Territory as an Equipment Distributor of IPVC,
TPED may also have authority to market the Service with the Territory using
other agents. The identical terms and conditions of this agreement will apply to
agents or partners of TPED.
2. Equipment Testing Period (Beta) Terms and Conditions
Gateways A period of thirty (30) days from time of install is set aside for the
customer to test TrueConnect Gateway features and functionality that were sold
at the time of Beta install. During this period of time Customer and TPED agree
to work and consult with IPVC staff on any questions, concerns or issues that
might arise to insure that the TrueConnect Gateways meet or exceed customer's
reasonable performance requirements. Should the TrueConnect Gateways not meet
TPED=s requirements and should IPVC be unable to correct the problem, the
customer shall be allowed to return the Gateway (at the cost of TPED) to IPVC
and IPVC will refund customer=s posted Letter of Credit less a 10% restocking
fee. Furthermore should the TrueConnect Gateway fail to be acceptable under the
Beta test requirements (setforth in that document) the customer shall have no
contractual obligations to IPVC.
Should TrueConnect Gateways perform and pass Beta Test requirements, IPVC shall
have the right todraw against the entire Letter of Credit and apply it as
payment in full for the tested Gateway(s) on the Customer's site. Customer
March 10, 1999
<PAGE>
for the tested Gateway(s) on the Customer's site. Customer further agrees that
all TrueConnect Gateways must be paid for in full prior to shipping and install.
Voice Quality
IPVC cannot guarantee voice quality to the customer because it is not a function
of the Gateway itself but the capabilities of the chosen Internet Provider in
that area. Should customer not have access to IPVC recommended Site and Internet
requirements, IPVC agrees to work with customer on alternative routes, providers
and carriers.
A. TPED's Obligations
TPED shall work diligently with IPVC staff during the installation and
testing period to ensure that the Services are sold as described within the
Territory. TPED has the authority to hire Technicians or employees to
comply with the obligation. TPED shall have approved Technical,
installation and user manuals and Beta Testing reports and is responsible
for having materials translated into the major languages spoken within the
Territory. TPED's agents or partners will comply with the terms and
limitations of this Agreement. IPVC shall have the right to require TPED=s
agents and partners to sign an Addendum to this Agreement to that effect.
TPED shall diligently promote the Services as described above within the
Territory. TPED has the authority to hire agents or employees on its own
behalf and not on behalf of IPVC to comply with TPED=s obligations under
this Agreement. TPED shall have approved promotional materials translated
into the major languages spoken within the Territory. TPED's agents or
partners will comply with the terms and limitations of this Agreement.
B. IPVC=s Obligations
An IPVC technical representative will travel to customer=s location to
install a Gateway and to train customer=s staff on the use of TrueConnect.
IPVC will supply TPED and customer with what reporting will be required
during the testing period. IPVC will pay the cost of travel and lodging for
the IPVC technical personnel for a maximum of a 2-Travel day and a
5-business day stay. Should the customer desire that the IPVC technical
person stay longer, the additional expenses will be billed to the customer
unless otherwise approved by IPVC in advance.
3. Compensation
In consideration for marketing, advertising and selling the Services as set
forth above, TPED shall be paid a commission as set forth in Appendix B.
4. Billing and Collecting
March 10, 1999
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
A. Collecting will be by Invoice on the monthly Licensing fees, with terms
of Net 30 days. IPVC will give TPED prior credit approval before extending
these terms to the customer. TPED shall be required to post a Letter of
Credit with IPVC on behalf of the customer, or the customer should post a
Letter of Credit directly with IPVC for the full purchase price including
shipping and handling of the TrueConnect Gateway prior to shipping and
installation.
B. IPVC will, at the end of a thirty-day period, provide TPED with a
detailed invoice. IPVC will also forward to TPED a complete listing of all
revenues credited to TPED with the associated calculation of TPED's
commission. In no event will the commission be held by IPVC for longer than
thirty (30) days after either the two-week or month-ending account
receivable cycle.
5. Letter of Credit
TPED agrees to provide an Irrevocable Letter of Credit (LOC.) from a mutually
agreed upon financial institution for one and one-half times the estimated
monthly billing for those customers that IPVC will not extend credit to. The LOC
shall be adjusted periodically using IPVC procedures to account for variations
in the value of billings. In no case may the LOC be less than one and one-half
times the estimated monthly billing. The LOC shall state that if payment is not
received by IPVC within 30 calendar days, IPVC shall have the ability to draw
against the LOC for the outstanding amount due IPVC (usage charge less TPED's
commission).
6. Third Party Infringements
TPED shall initially have the sole right, in its discretion, to initiate,
prosecute or settle legal actions against any person infringing on any
intellectual property rights to the Services within the Territory (except any
settlement, which would have the effect of denying to IPVC the benefits of this
Agreement). Each party shall promptly notify the other of any actual or
potential infringement, which becomes known to it. Should TPED fail to take
appropriate and diligent action with respect to any such infringement by a third
person, in the sole and absolute discretion of IPVC, then IPVC shall have the
right to take such action, at its own expense and in its own name and the right
to enforce and collect any judgment thereon. Each party shall cooperate
(including appearance for testimony at trials and depositions) with the other
party as such party may reasonably request in regard to
March 10, 1999
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
any legal action brought by a party pursuant to this Section. The party
requesting such cooperation shall pay all out-of-pocket costs of the party
providing such cooperation.
7. Confidentiality
Neither party shall disclose any trade secrets (if it has been designated as
such in writing at the time of its original disclosure by one party to the
other) to persons other than those bound by the terms of this Agreement or
persons who have executed Confidentiality Agreements which require such persons
to maintain the confidentiality of such trade secrets to substantially the same
extent as required by this Section. Nothing in the foregoing sentence shall
prohibit disclosure of any information which is publicly known at or after the
time of disclosure, which is already known to the recipient, or which is
required to be disclosed by law.
8. Agreement Not to Compete
March 10, 1999
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
A. TPED agrees that during the period commencing on the date of this
Agreement and continuing until the date two (2) years after this Agreement
is terminated, it will not directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder, corporate
officer, director, investor, or financier or in any other individual or
representative capacity, or otherwise, engage or participate in any
business which competes with the business of IPVC or any TPED supplying
services to IPVC within any country being serviced by IPVC or any TPED
supplying the service to IPVC at the time this Agreement is terminated.
TPED covenants that during the term referenced above, it will not, either
for itself or for any other person or entity, except as may be required by
the terms of this Agreement either directly or indirectly: (1) call on,
solicit, take away or hire any customers, employees, principals, lessors,
distributors or suppliers or other personnel or independent contractors, of
IPVC or any TPED supplying the Services to IPVC, (2) acquire or attempt to
acquire rights for providing any product or services in competition with
IPVC or any TPED supplying the Services to IPVC, or (3) engage in any act
which would interfere with or harm any business relationship with any
customer, lessor, employee, principal or supplier of IPVC or any TPED
supplying the Services to IPVC.
B. The parties agree that a breach of the covenants described in this
Section will result in substantial damages to IPVC, which would be
difficult, if not impossible to ascertain. TPED agrees that in the event of
such a breach or threatened breach, IPVC shall have the right to a
Restraining Order and an Injunction, without bond or other security (all of
which is waived) both temporary and permanent, enjoining and restraining
any such breach or threatened breach. Such injunctive relief shall be in
addition to any other remedy available to IPVC at law or in equity. Nothing
in this Agreement shall be construed to prohibit or prevent IPVC from
initiating an action or otherwise recovering any damages that may be
sustained as a result of the breach or threatened breach by TPED. TPED also
agrees that IPVC may pursue any remedy available to it, and the pursuit of
any one such remedy at any time will not be deemed an election of remedies
or waiver of right to pursue any other remedy.
C. Should TPED breach or violate any term of this Agreement at any time
when monies are due and owing to it from IPVC, then all unpaid monies due
TPED shall be subject to offset by the amount of any damages incurred by
IPVC, the amount of any attorney fees
March 10, 1999
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
and other related expenses incurred by IPVC in enforcing this Agreement,
and by the amount of any other claims IPVC may have against TPED.
9. No Relationship
The parties to this Agreement are independent contractors only and nothing in
this Agreement shall be construed as establishing any agency, joint venture,
partnership, fiduciary or other relationship between the parties.
10. Warranty
Each party represents and warrants to the other that it has the power and
authority to execute and deliver, and to perform its obligations under this
Agreement, and that neither the execution or delivery of this Agreement nor the
performance of its obligations hereunder will constitute a breach of the terms
or provisions of any contract or violate any law or the rights of any third
party.
11. Term and Termination
The term of this Agreement will commence as of the date first above written and
shall continue until the third anniversary of the date of its execution. If
either TPED or IPVC commits a material breach of any material provision of this
Agreement, and such breach is not cured within ninety (90) days after the date
of which notice of breach is provided to the breaching party in writing, the
non-breaching party shall have the right to terminate this Agreement upon
further thirty (30) day written notice.
12. Governing Law
This Agreement shall be governed and construed in accordance with the laws of
Florida, USA (excluding any conflicts with laws or rules) and each party submits
to the jurisdiction of any state, county or federal court in the state of
Florida, USA.
13. Entire Agreement
This Agreement sets forth the entire Agreement or any understanding between the
parties as to its subject matter and supersedes all other documents, verbal
commitments or understandings made before conclusion of this Agreement, and none
of the terms of this
March 10, 1999
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
Agreement may be amended or modified except in writing signed by both parties.
14. Assignment
This Agreement may not be assigned by either party without the prior written
consent of the other party except that any party may assign this Agreement to
any successor corporation (including the surviving corporation in any
consolidation or merger) or assignee of all or substantially all of its
business. In the event of such an assignment, the assigning party shall remain
jointly and severally liable with the assignee for the full and timely
performance by such assignee of the assigning party=s obligations hereunder.
15. Notices
Any notice, consent or approval required or permitted under this Agreement shall
be in writing and shall be delivered to the following addresses (i) personally
by hand (ii) by certified mail, postage prepaid with return receipt requested,
or (iii) by fax confirmed by such certified mail:
If to TPED:
Billion Telecommunication Services, Ltd.
Ming Tak commercial Building, 8th Floor
101-103A Wanchai Road
Wanchai, Hong Kong
E-mail address: [email protected]
Phone number: 2511 0838
Fax number: 2511 2698
If to: IPVoice Communications, Inc.
5901 South Middlefield Road, Suite 100
Littleton, Colorado 80123
E-mail Address: [email protected]
Phone Number: 303.738.1266
Fax Number: 303.738.1295
All notices shall be deemed effective upon the date delivered by hand or sent by
fax, or if mailed, as of the date which is five (5) days after the date of
mailing. Either party may change its address for notice purposes by notifying
the other party of such changes of address in accordance with the foregoing.
March 10, 1999
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
16. Waivers
No waiver of any term or condition of this Agreement shall be valid except when
made by an instrument in writing expressly waiving such term or condition signed
by the waiving party. A waiver by any party of any term or condition of this
Agreement in one instance shall not be deemed a waiver of such term or condition
for any similar instance in the future or of any subsequent breach. All rights,
remedies obligations and agreements contained in this Agreement shall be
cumulative and not in limitation of any other remedy, right, obligation or
agreement of any other party.
17. Severability
If any part of this Agreement is contrary to, prohibited by or deemed invalid
under the laws of any jurisdiction, such provision shall, as to such
jurisdiction be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, without invalidation or affecting the validity or
enforceability of such provision in any other jurisdiction.
18. Specific Performance
The parties acknowledge that there may be no adequate remedy at law for any
violation of sections of this Agreement, and that in addition to any other
remedies which might be available, such Sections shall be specifically
enforceable in accordance with their terms.
19. Headings
Headings contained in this Agreement are for convenience of reference only and
shall not affect the meaning or construction under the provision of this
Agreement.
20. Voluntary Agreement
Each party warrants that before signing this Agreement such party has been fully
advised of its contents and meaning, has had legal counsel explain the meaning
and legal significance of each and every provision therein, and executes this
Agreement freely and voluntarily with full knowledge and understanding of its
contents.
March 10, 1999
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
21. Cumulative Remedies
No remedies or election hereunder shall be deemed exclusive, but shall, whenever
possible, be cumulative with all other remedies at law or in equity.
22. Attorney Fees
In the event any action, proceeding or litigation, judicial or non-judicial,
arises out of the subject matter of this Agreement the prevailing party shall be
entitled to payment of all costs, expenses and attorney fees incurred.
23. Successor/Assigns
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, successors, personal representative and
assigns. The parties each agree to take such further action and deliver such
ancillary document as may be reasonable or necessary in order to carry out the
terms and provision of this Agreement.
24. Authority
Each individual executing this Agreement in a representative capacity warrants
to the other party that such person has sufficient authority to bind the party
on behalf of whom they are executing this document.
25. Duplicate Originals
Any fully executed copy of this Agreement shall be deemed for all purposes as a
duplicate original. All originals and duplicate must be signed before a notary
or will be considered invalid.
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
EXECUTED by the parties effective as of the date first written above.
IPVoice Communications, Inc.
By: /s/ Barbara S. Will
- --------------------------
Barbara S. Will
President and COO
State of Colorado )
County of Jefferson ) ss.
Country of USA )
Subscribed and sworn to under oath before me on this 10th day of March, 1999.
/s/ Lillian M. Vader
---------------------------
Notary Public
8601 Zuni # 153, Denver CO 80221
My Commission Expires August 12, 1999
Billion Telecommunication Services, Ltd.
By: /s/ Steve S. F. Wong
- ---------------------------
Steve S.F. Wong
Director
State of )
County of ) ss.
Country of )
Subscribed and sworn to under oath before me on this 24th day of March, 1999.
/s/ S.F. Shaw
- ----------------
Notary Public
My Commission Expires does not expire
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
Appendix A
Non-Exclusive of Territory
Or
Exclusive of Territory
_ IPVoice Communications Inc. and TPED have agreed that IPVC gives
non-exclusivity of territory to TPED.
INIT /s/ BW INIT /s/SW
_ IPVoice Communications Inc. and TPED have agreed that IPVC gives
exclusivity to TPED in the Following Territory. TPED will purchase the
exclusive to market IPVC services in their chosen country. All originating
traffic, regardless of who is responsible for the sale, will roll to TPED
revenue stream. With exclusivity for this/these country, state or city. The
fee set forth will entitle TPED to:
_ Exclusivivity.
_ A Dedicated Sales and Service Contact.
_ On-site training for sales and service.
_ Training Manuals, changes and updates as they become available.
_ Updates on IPVC competitive advantage.
_ Market Overview and updates.
_ Detailed information on IPVC products and services.
_ Wholesale Pricing or Commission payments
_ Monthly Fees for use of IPVoice Software.
_ Billing and Collection guidelines.
_ Newsletter and future product development charts.
_ Technical Assistance.
_ Future product development changes.
_ Regular Agent and TruePartners meetings.
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
Appendix A, (Continued)
The purchase of the exclusive territory will vary by country and market and has
been determined as follows:
1.) Exclusive Territory is granted to TPED and is as follows:
Territory Signing Fee
a) Hong Kong $ 1,000.00
b) Taiwan $ 500.00
c) CHINA
This is for the right to market and advertise the services and to establish an
office. As used in this Agreement, AService@ shall mean domestic, intra-country
and international calling services offered through the date of this Agreement,
specifically origination and termination in designated calling patterns,
international and calling card. The Agent shall also have the exclusive right to
market, advertise, and sell the services to be offered through IPVC in the
future, the compensation for such activities to be set by agreement of the
parties as set forth in Appendix B.
It is acknowledged that although TPED is given (a) the right to market a
geographic territory, and (b) Product and Services; as an Agent on behalf of
IPVC, IPVC also grants authority to TPED to market said Territory by using
TPED's own agents or direct sales staff.
TPED Obligations under Exclusive Territory
TPED shall diligently promote the Service within the Territory. The TPED has the
authority to hire agents or employees to comply with the obligations of this
Agreement at the sole expense of TPED. TPED shall have IPVC pre-approved
promotional materials which must be translated into the major languages spoken
within the Territory at the sole cost of the TPED. TPED's agents or partners
will comply with the terms and limitations of this agreement and will sign
documentation to that effect. TPED is responsible for setting up an office,
where customer calls can be answered, AIPVoice Communications (country name),@
and that sales and service can be handled in a professional manner.
TPED understands and agrees that IPVC has the right, in its sole and absolute
discretion, should the following quota be met to terminate and/or change TPED
Country Exclusivity.
QUOTA: 15 (fifteen) TRUECONNECT GATEWAYS PER YEAR, PER EXCLUSIVE
TERRITORY
TPED understands and agrees that Purchase price is due and payable at conclusion
of the Beta Test period.
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
Appendix B
TPED Compensation
This Appendix B, dated March 10, 1999, by and between IPVoice Communications,
Inc. (IPVC), a Nevada Corporation, and Billion Telecommunication Services, Ltd.,
TruePartner Equipment Distributor (TPED), is attached to and made a part of the
Agreement between IPVC and TPED dated March 10, 1999 (the AAgreement:).
IPVC agrees to pay the following commissions for the country(s) listed in
Appendix A only to TPED, at the times as set forth in the Agreement.
Equipment Sales and Fee=s listed in Appendices D and E
A. TrueConnect Gateway Sales for Domestic and International.
Product Sold Commission
TrueConnect Gateway 5%
Added Gateways 4%
T-1 and/or E-1 Cards 8%
B. TrueConnect Gateway=s using MultiCom software but no network applications
or resell of of minutes:
Per Customer Location:
25% of IPVC=s charges on a per call record or monthly minimum, per month
Commission percentages paid for services or equipment sold in countries other
than those in Paragraph A,and B above are country specific and will be added on
a country by country basis to this Agreement as deemed appropriate by TPED and
IPVC.
The above Commissions are paid to TPED 30 days after payment is received by
IPVC. Commissions paid in A. is paid one time and the percentage is determined
on the total sales price of the Product sold less ( more fully described below
as ANet Revenues@).
Should market conditions change, IPVC reserves the right to modify the
commission structure.
<PAGE>
IPVoice Communications, Inc.
TruePartner Equipment Distributor Agreement
ANet Revenues@ shall mean gross revenues actually received by IPVC or TPED for
of sales of the services defined in this Agreement, less IPVC=s cost of, but not
limited to, taxes, duties, discounts, license fees, equipment, network, labor,
refunds and administrative costs. Both IPVC and TPED shall determine rates and
commissions for any IPVC network used by TPED customer switching in TPED=s
Territory.
In order to stay competitive and in order to maximize return, IPVC shall require
that in the event that a 800-toll free access number is being used, that the
number be changed periodically. TPED specifically agrees to contact customers to
make the required number changes within receipt of two weeks notice by IPVC.
IPVC will give a minimum of two weeks notice after which toll free number change
is required. IPVC may invalidate this Agreement if TPED fails to make the
required changes without agreed written notice from IPVC for delays.
IPVoice Communications, Inc.
By: /s/ Barbara S. Will
--------------------------
Barbara S. Will, President and C.O.O.
Billion Telecommunication Services, Ltd.
By: /s/ Steven S. F. Wong
---------------------------
Steve S.F. Wong, Director
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix C
Contact Form
This contact form must be filled out, dated and submitted to IPVoice by mail,
fax or e-mail for every potential customer, distributor, sub-agent or client
that the TPJV proposes to list in its base of working accounts. TPJV understands
and agrees that should submitted contact not sign an agreement after one-year
from the time it was submitted to IPVoice, IPVoice shall have the right to
contact and sell directly. (Unless otherwise agreed to in writing)
DATE SUBMITTED_______________________________________
SUBMITTED BY: ______________________ RECEIVED BY: _______________________
CUSTOMER'S NAME: ________________________________________________________
CONTACTS NAME: __________________________________________________________
DAYTIME OR OFFICE PHONE NUMBER: _____________________________________
AFTER HOURS NUMBER: ____________________________________________________
FAX NUMBER: _________________________E-MAIL ADDRESS: ___________________
ADDRESS: ______________________________________________________________
CITY/STATE/COUNTRY: _________________________________________________
ZIP___________________
COMMENTS: ____________________________________________________________________
PROGRAMS/SERVICES OR PRODCTS ARE UNDER NEGOTIATIONS:
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix D
TrueConnect Gateway
T-1 Applications Sale and Price Sheet
Description
USA Domestic and some International Locations. Each TrueConnect Gateway is
set up with (2) T-1 Cards and has the capacity to hold (4) T-1 Cards. Each
card should be able to handle 250,000 minutes per month. To insure optimum
performance, IPVoice recommends that you DO NOT operate your Gateways with
(4) Cards. As minutes grow, Gateway can be added to support growth.
Sales Price:
First TrueConnect Gateway $59,894.00 USA dollars
TrueConnect Gateway Adds $44,895.00 USA dollars
T-1 Cards $ 6,200.00 USA dollars
Licensing Fees for MultiCom
Set up Fee of $5000.00
Monthly Fee of $5000.00 or $0.0025 per call record (which is ever greater)
Equipment
(1) One each of the following:
Computer with Keyboard, Sound Card, Monitor, Network Card, Windows,
NT Server, Network Hub, Surge Protection, Cable, Modem, Manual
Hardware
One each of the following:
AGRT2S, TX3000, Fusion 2.0 for NT, G.723.1, H.323 Stack
Other Hardware and Qty
2 AG-T1+RT2 Cards
48 G.723.1 runtime
48 H.323 runtime
Software
MultiCom Software
TrueConnect Switch Software
PCAnywhere Software
Shipping and handling
Cost will vary.
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix E
TrueConnect Gateway
E-1 Applications Sale and Price Sheet
Description
For use in most International Locations.
Each TrueConnect Gateway is set up with (2) E-1 Cards and has capacity to
hold (4) E-1 Cards. Each card should be able to handle 250,000 minutes per
month. To insure optimum performance, IPVoice recommends that you DO NOT
operate your Gateways with (4) Cards. As minutes grow Gateway, can be added
to support growth.
Sales Price:
First TrueConnect Gateway $63,720.00 USA dollars
TrueConnect Gateway Adds $48,720.00 USA dollars
E-1 Cards $ 6,400.00 USA dollars
Licensing Fees for MultiCom
Set up Fee of $5000.00
Monthly Fee of $5000.00 or $0.0025 per call record (which is ever greater)
Equipment
One each of the following:
Computer with Keyboard, Sound Card, Monitor, Network Card, Windows, NT
Server, Network Hub, Surge Protection, Cable, Modem, Manual
Hardware
One each of the following:
AGRT2S, TX3000, Fusion 2.0 for NT, G.723.1, H.323 Stack
Other Hardware and Qty
2 AG-E1+RT2 Cards
60 G.723.1 runtime
60 H.323 runtime
Software
MultiCom Software
Shipping and handling
Cost will vary.
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix F
TrueConnect System/Site Requirements
Last Revised: 10/23/98
This document outlines the system and site requirements needed to install and
operate a TrueConnect Internet Telephony Gateway.
Primary Gateway Hardware (Provided by IPVoice):
Chassis: 19" Rack Mountable
CPU: Intel 266Mhz CPU with 64 MB Ram
Disks: 3-5GB Hard Disk with CD-ROM
PSTN: IPVoice T1/E1/ Analog Interface Card
VoIP: IPVoice PSTN/VoIP Translator Card
Software Configuration (Provided by IPVoice):
Windows NT 4.0 Server
TrueConnect Call Control v1.0
MultiCom Billing v3.3 Access Included
Optional Components:
Additional IPVoice T1/E1/PSTN Interface cards
Site Requirements (Provided by TruePartner):
T1/E1 to the local PSTN for local termination/origination (bi-directional)
Dedicated connection to the Internet Backbone (High Bandwidth)
10/100Base-T Ethernet connection Cable
Dedicated IP Address for the TrueConnect Gateway
Dedicated Phone Line at Install Site (for emergency access to gateway)
8-Port 10-Base-T Hub (If required by ISP)
Uninterruptable Power Supply (UPS)
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix G
Pre Installation Testing Procedures
o1. Customer must aquire a facility providing both Internet connectivity and
PSTN connectivity
o2. Customer must obtain a unique IP Address for the TrueConnect Gateway
o3. Customer must provide the IP Address of the Gateway to IPVoice
o4. Customer must provide the IP Address of the router that will be used for
the gateway
o5. Customer must conduct latency testing and transmit this data to IPVoice
o6. Customer must obtain Internet access from their office. (Dial-Up or LAN)
Latency Testing
o1. Customer must set up a computer at the facility using the
IP address for the Gateway
o2. Run the "ping" utility continuously for a period no less than 72 hours.
(Target IP Address for the ping is: 204.181.36.24)
o3. Send the output to IPVoice
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix H
Beta Testing Fuctionality Checklist
MULTICOM
1. Remote Access via Procomm 3.+
(Requires Internet Connection from Office Site)
2.Customer Management
3.Customer Invoicing
4.Agent Management
5.Account Management
6.System Reports (printing requires HP III compatible Laser Printer)
7.Real-Time Traffic Information
8.Debit Card Creation and Management
9.Rate Table Management
TRUECONNECT GATEWAY
1.Receive and Authorize Inbound Customer Calls
2.Terminate Customer Calls
3.Rate Calls and Debit Customer Accounts
4.Basic Voice Prompts (English)
EXHIBIT 10.12
IPVoice Communications, Inc.
TruePartner Master Distributor Agreement
This Marketing Agreement (Agreement) is entered into this 21st day of May, 1999,
between IPVoice Communications, Inc., a Nevada Corporation, known as ("IPVC")
and Firstnet Telephony Ltd., of 40-44 Church Street, Reigate, Surrey, RH2 0AJ,
United Kingdom, the
TruePartner Master Distributor, known as (TPMD).
1. Exclusive Territory
IPVC grants to TPMD the exclusive right to market, advertise and sell IPVC
network and equipment (TrueConnect Gateways) or TrueWeb access (Services) as
defined in Appendix A and A-2 for wholesale TrueConnect Gateway pricing. TPMD
shall also have first right of refusal for all (/s/ RO, /s/ BW) other area in
the UK over and above London ^ (Greater London & and Manchester /s/ RO, /s/ BW)
with the exclusive right to market, advertise and sell Services to be offered
through IPVC in the future, the compensation for such activities to be set by
agreement of the parties when such services are made available. It is
acknowledged that although TPMD is granted a right to market Services within the
Territory as Master Distributor of IPVC, TPMD may also market the Service in the
Territory using other agents. The identical terms and conditions of this
agreement will apply to agents or partners of TPMD.
2. Equipment Testing Period (Beta) Terms and Conditions
Gateways
A period of thirty (30) days from time of installation is set aside for the
customer to test TrueConnect Gateway features and functions that were sold at
the time of Beta installation. During this period of time customer and TPMD
agree to work and consult with IPVC staff on any questions, concerns or issues
that might arise to ensure that the TrueConnect Gateways meet or exceed
Customer's reasonable performance requirements. Should the TrueConnect Gateways
not meet TPMD's requirements and should IPVC be unable to correct the problem,
the customer shall be allowed to return the Gateway (at the expense of TPMD) to
IPVC and IPVC will refund customer's Posted Letter of Credit less a 10%
restocking fee. Furthermore should the TrueConnect Gateway fail to be reasonably
acceptable under the Beta test requirements (setforth in that document) the
customer agreement shall be null and void.
INIT_RO______
INIT_BW_ ____ Page 1 Confidential
May 21, 1999
<PAGE>
IPVoice Communications, Inc.
TruePartner Master Distributor Agreement
Should TrueConnect Gateways perform and pass Beta Test requirements, IPVC shall
have the right to draw against the entire Letter of Credit and apply it as
payment in full for the tested Gateway(s) on the Customer's site. Customer
further agrees that all TrueConnect Gateways must be paid for in full prior to
shipping and installation.
Voice Quality
IPVC does not guarantee voice quality to the customer because it is not a
function of the Gateway itself but the capabilities of the chosen Internet
Provider in that area. Should customer not have access to IPVC recommended Site
and Internet requirements, IPVC agrees to work with customer on alternative
routes, providers and carriers.
A. TPMD's Obligations
TPMD shall work diligently with IPVC staff during the installation and
testing period to ensure that the Services are sold within the Territory as
described. TPMD has the authority to hire Technicians or employees to
comply with its obligations. TPMD shall have approved technical,
installation and user manuals and Beta Testing reports and is responsible
for having materials translated into the major languages spoken within the
Territory. TPMD's agents or partners will comply with the terms and
limitations of this Agreement. IPVC shall have the right to require TPMD's
agents and partners to sign an Addendum to this Agreement to that effect.
TPMD shall diligently promote the Services within the Territory. TPMD has
the authority to hire agents or employees on its own behalf and not on
behalf of IPVC to comply with TPMD's obligations under this Agreement. TPMD
shall have approved promotional materials translated into the major
languages spoken within the Territory. TPMD's agents or partners will
comply with the terms and limitations of this Agreement.
INIT RO INIT BW Page 2 Confidential May 21, 1999
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IPVoice Communications, Inc.
TruePartner Master Distributor Agreement
B. IPVC's Obligations
An IPVC technical representative will travel to TPMD's location to install
a Gateway and to train TPMD's staff on the use of TrueConnect. IPVC will
supply TPMD and customer with what reporting will be required during the
testing period. IPVC will pay the cost of travel and lodging for the IPVC
technical personnel for a maximum of two- (2) travel days and a five- (5)
business day stay. Should the customer desire that the IPVC technical
person stay longer, the additional expenses will be billed to the customer
unless otherwise approved by IPVC in advance.
IPVC will make best effort to provide continuous and uninterrupted access
to MultiCom so that TPMD can fulfill its obligations to its customers. TPMD
understands and agrees that continuous an uninterrupted access is not
always controlled by IPVC and because of this IPVC can not guarantee that
the TPMD service (s) will be continuous and uninterrupted.
3. Compensation
In consideration for marketing, advertising and selling the Services as set
forth above, TPMD shall be entitled to purchase Services at a wholesale rate as
set forth in Appendix B.
4. Billing and Collecting
A. Collecting will be prepaid based on estimated usage. Licensing fees will be
with terms of Net 30 days. IPVC must accept TPMD's prior credit approval before
credit approval is extended to the customer. TPMD shall be required to post a
Letter of Credit with IPVC on behalf of the customer, or the customer shall post
a Letter of Credit directly with IPVC for the full purchase price including
shipping and handling of the TrueConnect Gateway prior to shipping and
installation.
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A. IPVC will, at the end of a thirty-day period, provide TPMD with a detailed
invoice. IPVC will also forward to TPMD a complete listing of all revenues
credited to TPMD with the associated calculation of TPMD's commission. In no
event will the commission be held by IPVC for longer than thirty (30) days after
either the twoweek or month-ending account receivable cycle.
A. Lock Box may be used in place of LOC or pre-paid.
5. Letter of Credit
TPMD agrees to provide an Irrevocable Letter of Credit (LOC) from a mutually
acceptable financial institution for one and one-half times the estimated
monthly billing for those customers that IPVC will not extend credit to. The LOC
shall be adjusted periodically using IPVC procedures to account for variations
in the value of billings. In no case shall the LOC be less than one and one-half
times the estimated monthly billing. The LOC shall state that if payment is not
received by IPVC within 30 calendar days after billing. IPVC shall have the
ability to draw against the LOC for the outstanding amount due IPVC.
6. Third Party Infringements
TPMD shall have the sole right, in its discretion, to initiate, prosecute or
settle legal actions against any person infringing on any intellectual property
rights to the Services within the Territory (except any settlement that would
have the effect of denying to IPVC the benefits of this Agreement). Each party
shall promptly notify the other of any actual or potential infringement, which
becomes known to it. Should TPMD fail to take appropriate and diligent action
with respect to any such infringement by a third person, in the sole and
absolute discretion of IPVC, IPVC shall have the right to take such action, at
its own expense and in its own name, and including the right to enforce and
collect any judgment thereon. Each party shall cooperate (including appearance
for testimony at trials and depositions) with the other party as such party may
reasonably request with regard to any legal action brought by a party pursuant
to this Section. The party requesting such
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cooperation shall pay all out-of-pocket costs of the party providing such
cooperation.
7. Confidentiality
Neither party shall disclose any trade secrets (if it has been designated as
such in writing at the time of its original disclosure by one party to the
other) to persons other than those bound by the terms of this Agreement or
persons who have executed Confidentiality Agreements which require such persons
to maintain the confidentiality of such trade secrets to substantially the same
extent as required by this Section. Nothing in the foregoing sentence shall
prohibit disclosure of any information which is publicly known at or after the
time of disclosure, which is already known to the recipient, or which is
required to be disclosed by law.
8. Agreement Not to Compete
A. TPMD agrees that during the period commencing on the date of this Agreement
and continuing until the date two (2) years after this Agreement is terminated,
it will not directly or indirectly, either as an employee, employer, consultant,
agent, principal, partner, stockholder, corporate officer, director, investor,
or financier or in any other individual or representative capacity, or
otherwise, engage or participate in any business which directly or indirectly
competes with the business of IPVC or any TPMD supplying services to IPVC within
any country being serviced by IPVC or any TPMD supplying the service to IPVC at
the time this Agreement is terminated. TPMD covenants that during the term
referenced above, it will not, either for itself or for any other person or
entity, except as may be required by the terms of this Agreement either directly
or indirectly: (1) call on, solicit, take away or hire any customers, employees,
principals, lessors, distributors or suppliers or other personnel or independent
contractors, of IPVC or any TPMD supplying the Services to IPVC, (2) acquire or
attempt to acquire rights for providing any product or services in competition
with IPVC or any TPMD supplying the Services to IPVC, or (3) engage in any act
which would interfere with or harm any business relationship with any customer,
lessor, employee, principal or supplier of IPVC or any TPMD supplying the
Services to IPVC.
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B. IPVC and TPMD agree that a breach of the covenants described in this
Section will result in substantial damages to IPVC, which would be
difficult, if not impossible to ascertain. TPMD agrees that in the event of
such a breach or threatened breach, IPVC shall have the right to a
Restraining Order and an Injunction, without bond or other security (all of
which is waived) both temporary and permanent, enjoining and restraining
any such breach or threatened breach. Such injunctive relief shall be in
addition to any other remedy available to IPVC at law or in equity. Nothing
in this Agreement shall be construed to prohibit or prevent IPVC from
initiating an action or otherwise recovering any damages that may be
sustained as a result of the breach or threatened breach by TPMD. TPMD also
agrees that IPVC may pursue any remedy available to it, and the pursuit of
any one such remedy at any time will not be deemed an election of remedies
or waiver of right to pursue any other remedy.
C. Should TPMD breach or violate any term of this Agreement at any time
when monies are due and owing to it from IPVC, then all unpaid monies due
TPMD shall be subject to offset by the amount of any damages incurred by
IPVC, the amount of any attorney fees and other related expenses incurred
by IPVC in enforcing this Agreement, and by the amount of any other claims
IPVC may have against TPMD.
9. No Relationship
The parties to this Agreement are independent contractors only and nothing in
this Agreement shall be construed as establishing any agency, joint venture,
partnership, fiduciary or other relationship between the parties. ()
10. Warranty
Each party represents and warrants to the other that it has the power and
authority to execute and deliver, and to perform its obligations under this
Agreement, and that neither the execution or delivery of this Agreement nor the
performance of its obligations hereunder will constitute a breach of the terms
or provisions of any contract or violate any law or the rights of any third
party.
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11. Term and Termination
The term of this Agreement will commence as of the date first above written and
shall continue until the second anniversary of the date of its execution. This
agreement will automatically renew for a period of one year after the
anniversary date unless terminated by either party in writing 30 day prior to
the anniversary date. If either TPMD or IPVC commits a material breach of any
material provision of this Agreement, and such breach is not cured within ninety
(90) days after the date which notice of breach is provided to the breaching
party in writing, the non-breaching party shall have the right to terminate this
Agreement upon further thirty (30) day written notice.
12. Governing Law
This Agreement shall be governed and construed in accordance with the laws of
Florida, USA (excluding any conflicts with laws or rules) and each party submits
to the jurisdiction of any state, county or federal court in the state of
Florida, USA.
13. Entire Agreement
This Agreement sets forth the entire Agreement and supercedes any other
understanding between the parties as to its subject matter and supersedes all
other documents, verbal commitments or understandings made before conclusion of
this Agreement, and none of the terms of this Agreement may be amended or
modified except in writing signed by both parties.
14. Assignment
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This Agreement may not be assigned by either party without the prior written
consent of the other party except that any party may assign this Agreement to
any successor corporation (including the surviving corporation in any
consolidation or merger) or assignee of all or substantially all of its
business. In the event of such an assignment, the assigning party shall remain
jointly and severally liable with the assignee for the full and timely
performance by such assignee of the assigning party's obligations hereunder.
15. Notices
Any notice, consent or approval required or permitted under this Agreement shall
be in writing and shall be delivered to the following addresses (i) personally
by hand (ii) by certified mail, postage prepaid with return receipt requested,
or (iii) by fax confirmed by such certified mail:
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If to TPMD:
Firstnet Telephony Ltd.
40-44 Church Street
Reigate, Surrey RH2 0AJ
E-mail address [email protected]
Phone number: 011-44-1737-222271
Fax number: 011-44-1737-223838
If to: IPVoice Communications, Inc.
5901 South Middlefield Road, Suite 100
Littleton, Colorado 80123
E-mail Address: [email protected]
Phone Number: 303.738 1266
Fax Number: 303.738 1295
All notices shall be deemed effective upon the date delivered by hand or sent by
fax, or if mailed, as of the date which is five (5) days after the date of
mailing. Either party may change its address for notice purposes by notifying
the other party of such changes of address in accordance with the foregoing.
16. Waivers
No waiver of any term or condition of this Agreement shall be valid except when
made by an instrument in writing expressly waiving such term or condition signed
by the waiving party. A waiver by any party of any term or condition of this
Agreement in one instance shall not be deemed a waiver of such term or condition
for any similar instance in the future or of any subsequent breach. All rights,
remedies obligations and agreements contained in this Agreement shall be
cumulative and not in limitation of any other remedy, right, obligation or
agreement of any other party.
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17. Severability
If any part of this Agreement is contrary to, prohibited by or deemed invalid
under the laws of any jurisdiction, such provision shall, as to such
jurisdiction be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, without invalidation or affecting the validity or
enforceability of such provision in any other jurisdiction.
18. Specific Performance
The parties acknowledge that there may be no adequate remedy at law for any
violation of sections of this Agreement, and that in addition to any other
remedies which might be available, such Sections shall be specifically
enforceable in accordance with their terms.
19. Headings
Headings contained in this Agreement are for convenience of reference only and
shall not affect the meaning or construction under the provision of this
Agreement.
20. Voluntary Agreement
Each party warrants that before signing this Agreement such party has been fully
advised of its contents and meaning, has had legal counsel explain the meaning
and legal significance of each and every provision therein, and executes this
Agreement freely and voluntarily with full knowledge and understanding of its
contents.
21. Cumulative Remedies
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No remedies or election hereunder shall be deemed exclusive, but shall, whenever
possible, be cumulative with all other remedies at law or in equity.
22. Attorney Fees
In the event any action, proceeding or litigation, judicial or non-judicial,
arises out of the subject matter of this Agreement the prevailing party shall be
entitled to payment of all costs, expenses and attorney fees incurred.
23. Successor/Assigns
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, successors, personal representative and
assigns. The parties each agree to take such further action and deliver such
ancillary document as may be reasonable or necessary in order to carry out the
terms and provision of this Agreement.
24. Authority
Each individual executing this Agreement in a representative capacity warrants
to the other party that such person has sufficient authority to bind the party
on behalf of whom they are executing this document.
25. Duplicate Originals
Any fully executed copy of this Agreement shall be deemed for all purposes as a
duplicate original. All originals and duplicate must be signed before a notary
or will be considered invalid.
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26. Intellectual Property and or Proprietary Rights
The Software. TPMD acknowledges that the Software is protected by trade mark and
trade secret interests of IPVC and that TPMD has no rights to transfer or
reproduce the TrueConnect Software, MultiCom Software or TrueConnect Gateway or
prepare any derivative works with respect to or disclose confidential
information pertaining to, the software or any part thereof. Under no
circumstances shall TPMD be deemed to receive title to any portion of the
Software, title to which at all times shall vest exclusively to IPVC. IPVC
represents to TPMD that it owns and has the right and authority to grant TPMD
the license granted herein to the Software without infringing the propriety
rights of other. IPVC hereby agrees to indemnify TPMD against any claim of
infringement relating to TrueConnect and MultiCom, provided that TPMD gives IPVC
prompt notice of any such claim and agrees to immediately terminate any use
alleged to be the basis of infringement.
EXECUTED by the parties effective as of the date first written above.
IPVoice Communications, Inc.
By: /s/ Barbara S. Will
- ---------------------------------
Name: Barbara S. Will
Title: President and COO
State of Coloado )
County of Jefferson ) Ss.
Country of USA )
Subscribed and sworn to under oath before me on this 21st day of May, 1999.
Lillian M. Vader
Notary Public
8601 Zuni #153, Denver CO 80221
My Commission Expires August 12, 1999
Firstnet Telephony Ltd.
By: /s/ Robert Osborn
- -------------------------
Name:
Title: Managing Director
of England )
County of Curry ) ss.
Country of United Kingdom )
Subscribed and sworn to under oath before me on this 24th day of May, 1999.
/s/ (illegible)
Notary Public
113-115 London Road Mitcham Surrey CR4 2TA_
My Commission is for life
[Notary Seal]
<PAGE>
IPVoice Communications, Inc.
TruePartner Master Distributor Agreement
Appendix A
Exclusive of Territory
____ IPVoice Communications Inc. and TPMD have agreed that IPVC grants
exclusivity to TPMD in the following Territory. TPMD shall purchase the
exclusive to market IPVC services in the chosen country. All originating
traffic, regardless of who is responsible for the sale, will roll to TPMD
revenue stream with exclusivity for the territory. The fee set forth will
entitle TPMD to:
-Exclusivity.
-A Dedicated Sales and Service Contact.
-On-site training for sales and service.
-Training Manuals changes and updates, as they become available.
-Updates on IPVC competitive advantage.
-Market Overview and updates.
-Detailed information on IPVC products and services.
-Wholesale Pricing or Commission payments
-Monthly Fees for use of IPVoice Software.
-Billing and Collection guidelines.
-Newsletter and future product development charts.
-Technical Assistance.
-Future product development changes.
-Regular Agent and TruePartners meetings.
-First right of refusal in other areas of the UK
<PAGE>
IPVoice Communications, Inc.
TruePartner Master Distributor Agreement
Appendix A, (Continued)
The purchase of the exclusive territory will vary by country and market and has
been determined as follows:
1.) Exclusive Territory is granted to TPMD and is as follows:
Territory Signing Fee
a) London $10,000.00
b) Manchester $ 5,000.00
---------- -----------
This is for the right to market and advertise the services and to establish an
office. As used in this Agreement, "Service" shall mean domestic, intra-country
and international calling services offered through the date of this Agreement,
specifically origination and termination in designated calling patterns,
international and calling card. Agent shall also have the exclusive right to
market, advertise, and sell the services to be offered through IPVC in the
future, the compensation for such activities to be set by agreement of the
parties as set forth in
IPVC will wave Signing Fee for TPMD if Contract is signed by both parties period
to the May 31, 1999.
Appendix B.
It is acknowledged that although TPMD is given (a) the right to market a
geographic territory, and (b) Product and Services; as an Agent on behalf
of IPVC, IPVC also grants authority to TPMD to market said Territory by
using TPMD's own agents or direct sales staff.
TPMD Obligations under Exclusive Territory
TPMD shall diligently promote the Service within the Territory. TPMD has
the authority to hire agents or employees to comply with the obligations of
this Agreement at the sole expense of TPMD. TPMD shall have IPVC
pre-approved promotional materials that must be translated into the major
languages spoken within the Territory at the sole cost of TPMD. TPMD's
agents or partners will comply with the terms and limitations of this
agreement and will sign documentation to that effect. TPMD is responsible
for setting up an office, where customer calls can be answered, "IPVoice
Communications (country name)," and that sales and service can be handled
in a professional manner.
TPMD understands and agrees that IPVC has the right, in its sole and
absolute discretion, should the following quota not be met to terminate
and/or change TPMD Country Exclusivity.
Quota: A minimum of 1,000,000 ^ US dollars /s/ BW)per month as well as the
purchase of no less the 10 TrueConnect Gateways per the above Exclusive
Territories after a Twelve month ramp.
TPMD understands and agrees that Purchase price is due and payable at conclusion
of the Beta Test period.
<PAGE>
IPVoice Communications, Inc.
TruePartner Master Distributor Agreement
Appendix B
TPMD Wholesale Pricing
This Appendix B, dated May 21, 1999, by and between IPVoice Communications, Inc.
("IPVC"), a Nevada Corporation, and Firstnet Telephony Ltd., TruePartner Master
Distributor (TPMD), is attached to and made a part of the Agreement between IPVC
and TPMD dated May 21, 1999 (the "Agreement").
As set forth in this Schedule hereto, payment for Services shall be determined
by the destination and duration of the calls, and at the per minute rates listed
in the following Schedules. IPVC in its sole discretion and upon five (5) days
advance written notice, may change such rates as it deems necessary; unless such
changes are required by law, order, rule or regulation, whereupon IPVC will
promptly notify TPMD of such changes and notice shall not act as a condition
precedent thereto. TPMD agrees to prepay for all services and understands that
no equipment will be shipped prior to payment. An estimated monthly amount will
be posted each month for usage and finally determined at the end of each billing
cycle.
Equipment Descriptions listed in Appendices D and E
A. TrueConnect Gateway Wholesale Pricing for Domestic and International
Product Sold Two or More One Gateway
TrueConnect Gateway
Domestic (T/1) $59,894.82
International (E/1) $55, 000.00 $60,000.00
Added Gateways (Pricing does not include install or travel)
Domestic $44,894.82
International $48,000.00
T-1 Cards $ 6,500.00
E-1 Cards $ 6,700.00
B. TrueConnect Gateway's using MultiCom software but no network applications
or resale of minutes:
Per Customer Location:
(Pricing not available at this time.)
Should market conditions change IPVC reserves the right to modify the pricing
structure.
"Net Revenues" shall mean gross revenues actually received by IPVC or TPMD for
sales of the services defined in this Agreement, less IPVC's cost of, including
but not limited to, taxes, duties, discounts, license fees, equipment, network,
labor, refunds and administrative costs. Both IPVC and TPMD shall determine
rates and commissions for any IPVC network used by TPMD customer switching in
TPMD's Territory.
In order to stay competitive and in order to maximize return, IPVC shall require
that in the event of an 800-toll free access number being used, that the number
and pricing may change. When possible IPVC will give the TPMD the option to keep
the number at a higher or lower rate. If fraud exists but the TPMD chooses to
keep the number the TPMD understands that it is
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IPVoice Communications, Inc.
TruePartner Master Distributor Agreement
repressible for all usage. TPMD specifically agrees to contact customers to make
the required number changes within receipt of two weeks notice by IPVC.
Appendix B (Continued)
IPVC will give a minimum of two weeks notice after which toll free number change
might be required or recommended. IPVC may invalidate this Agreement if TPMD
fails to make the required changes without agreed written notice from IPVC for
delays.
IPVoice Communications, Inc.
By: /s/ Barbara S. Will
-------------------------
Barbara S. Will, President and C.O.O.
Firstnet Telephony Ltd.
By: /s/Robert Osborn
---------------------------
Name: Robert Osborn
Title: Managing Director
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix C
Contact Form
This contact form must be filled out, dated and submitted to IPVoice by mail,
fax or e-mail for every potential customer, distributor, sub-agent or client
that the TPJV proposes to list in its base of working accounts. TPJV understands
and agrees that should submitted contact not sign an agreement after one-year
from the time it was submitted to IPVoice, IPVoice shall have the right to
contact and sell directly. (Unless otherwise agreed to in writing)
DATE SUBMITTED_______________________________________
SUBMITTED BY: ______________________ RECEIVED BY: _______________________
CUSTOMER'S NAME: ________________________________________________________
CONTACTS NAME: __________________________________________________________
DAYTIME OR OFFICE PHONE NUMBER: _____________________________________
AFTER HOURS NUMBER: ____________________________________________________
FAX NUMBER: _________________________E-MAIL ADDRESS: ___________________
ADDRESS: ______________________________________________________________
CITY/STATE/COUNTRY: _________________________________________________
ZIP___________________
COMMENTS: ____________________________________________________________________
PROGRAMS/SERVICES OR PRODCTS ARE UNDER NEGOTIATIONS:
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix D
TrueConnect Gateway
T-1 Applications Sale and Price Sheet
Description
USA Domestic and some International Locations. Each TrueConnect Gateway is
set up with (2) T-1 Cards and has the capacity to hold (4) T-1 Cards. Each
card should be able to handle 250,000 minutes per month. To insure optimum
performance, IPVoice recommends that you DO NOT operate your Gateways with
(4) Cards. As minutes grow, Gateway can be added to support growth.
Sales Price:
First TrueConnect Gateway $59,894.00 USA dollars
TrueConnect Gateway Adds $44,895.00 USA dollars
T-1 Cards $ 6,200.00 USA dollars
Licensing Fees for MultiCom
Set up Fee of $5000.00
Monthly Fee of $5000.00 or $0.0025 per call record (which is ever greater)
Equipment
(1) One each of the following:
Computer with Keyboard, Sound Card, Monitor, Network Card, Windows,
NT Server, Network Hub, Surge Protection, Cable, Modem, Manual
Hardware
One each of the following:
AGRT2S, TX3000, Fusion 2.0 for NT, G.723.1, H.323 Stack
Other Hardware and Qty
2 AG-T1+RT2 Cards
48 G.723.1 runtime
48 H.323 runtime
Software
MultiCom Software
TrueConnect Switch Software
PCAnywhere Software
Shipping and handling
Cost will vary.
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix E
TrueConnect Gateway
E-1 Applications Sale and Price Sheet
Description
For use in most International Locations.
Each TrueConnect Gateway is set up with (2) E-1 Cards and has capacity to
hold (4) E-1 Cards. Each card should be able to handle 250,000 minutes per
month. To insure optimum performance, IPVoice recommends that you DO NOT
operate your Gateways with (4) Cards. As minutes grow Gateway, can be added
to support growth.
Sales Price:
First TrueConnect Gateway $63,720.00 USA dollars
TrueConnect Gateway Adds $48,720.00 USA dollars
E-1 Cards $ 6,400.00 USA dollars
Licensing Fees for MultiCom
Set up Fee of $5000.00
Monthly Fee of $5000.00 or $0.0025 per call record (which is ever greater)
Equipment
One each of the following:
Computer with Keyboard, Sound Card, Monitor, Network Card, Windows, NT
Server, Network Hub, Surge Protection, Cable, Modem, Manual
Hardware
One each of the following:
AGRT2S, TX3000, Fusion 2.0 for NT, G.723.1, H.323 Stack
Other Hardware and Qty
2 AG-E1+RT2 Cards
60 G.723.1 runtime
60 H.323 runtime
Software
MultiCom Software
Shipping and handling
Cost will vary.
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix F
TrueConnect System/Site Requirements
Last Revised: 10/23/98
This document outlines the system and site requirements needed to install and
operate a TrueConnect Internet Telephony Gateway.
Primary Gateway Hardware (Provided by IPVoice):
Chassis: 19" Rack Mountable
CPU: Intel 266Mhz CPU with 64 MB Ram
Disks: 3-5GB Hard Disk with CD-ROM
PSTN: IPVoice T1/E1/ Analog Interface Card
VoIP: IPVoice PSTN/VoIP Translator Card
Software Configuration (Provided by IPVoice):
Windows NT 4.0 Server
TrueConnect Call Control v1.0
MultiCom Billing v3.3 Access Included
Optional Components:
Additional IPVoice T1/E1/PSTN Interface cards
Site Requirements (Provided by TruePartner):
T1/E1 to the local PSTN for local termination/origination (bi-directional)
Dedicated connection to the Internet Backbone (High Bandwidth)
10/100Base-T Ethernet connection Cable
Dedicated IP Address for the TrueConnect Gateway
Dedicated Phone Line at Install Site (for emergency access to gateway)
8-Port 10-Base-T Hub (If required by ISP)
Uninterruptable Power Supply (UPS)
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix G
Pre Installation Testing Procedures
o1. Customer must aquire a facility providing both Internet connectivity and
PSTN connectivity
o2. Customer must obtain a unique IP Address for the TrueConnect Gateway
o3. Customer must provide the IP Address of the Gateway to IPVoice
o4. Customer must provide the IP Address of the router that will be used for
the gateway
o5. Customer must conduct latency testing and transmit this data to IPVoice
o6. Customer must obtain Internet access from their office. (Dial-Up or LAN)
Latency Testing
o1. Customer must set up a computer at the facility using the
IP address for the Gateway
o2. Run the "ping" utility continuously for a period no less than 72 hours.
(Target IP Address for the ping is: 204.181.36.24)
o3. Send the output to IPVoice
<PAGE>
IPVoice Communications, Inc.
TruePartner Joint Venture Agreement
Appendix H
Beta Testing Fuctionality Checklist
MULTICOM
1. Remote Access via Procomm 3.+
(Requires Internet Connection from Office Site)
2.Customer Management
3.Customer Invoicing
4.Agent Management
5.Account Management
6.System Reports (printing requires HP III compatible Laser Printer)
7.Real-Time Traffic Information
8.Debit Card Creation and Management
9.Rate Table Management
TRUECONNECT GATEWAY
1.Receive and Authorize Inbound Customer Calls
2.Terminate Customer Calls
3.Rate Calls and Debit Customer Accounts
4.Basic Voice Prompts (English)
<PAGE>
IPVoice Communications, Inc.
TruePartner Master Distributor Agreement
Appendix I
Prepaid Calling Cards
EXHIBIT 10.13
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
This Marketing Agreement (Agreement) is entered into this 19th day of July,
1999, between IPVoice.com, Inc., a Nevada Corporation, known as (AIPVC@) and
MetroPlus Communication Technology, Inc., of 1250 West Hastings Street,
Vancouver, BC V6E 2M4, the TruePartner Master Distributor, known as (TPMD).
1. Exclusive Territory
IPVC grants to TPMD the exclusive right to market, advertise and sell IPVC
network and equipment (TrueConnect Gateways) or TrueWeb access (Services)
as defined in Appendix A and A-2 for wholesale TrueConnect Gateway pricing.
TPMD shall also have the exclusive right to market, advertise and sell
Services to be offered through IPVC in the future, the compensation for
such activities to be set by agreement of the parties when such services
are made available. It is acknowledged that although TPMD is granted a
right to market Services within the Territory as Master Distributor of
IPVC, TPMD may also market the Service in the Territory using other agents.
The identical terms and conditions of this agreement will apply to agents
or partners of TPMD.
2. Equipment Testing Period (Beta) Terms and Conditions
Gateways
GatewaysGatewaysA period of thirty (30) days from time of installation is
set aside for the customer to test TrueConnect Gateway features and
functions that were sold at the time of Beta installation. During this
period of time customer and TPMD agree to work and consult with IPVC staff
on any questions, concerns or issues that might arise to ensure that the
TrueConnect Gateways meet or exceed Customer's reasonable performance
requirements. Should the TrueConnect Gateways not meet TPMD=s requirements
and should IPVC be unable to correct the problem, the customer shall be
allowed to return the Gateway (at the expense of TPMD) to IPVC and IPVC
will refund customer=s Posted Letter of Credit less a 10% restocking fee.
Furthermore should the TrueConnect Gateway fail to be reasonably acceptable
under the Beta test requirements (setforth in that document) the customer
agreement shall be null and void.
Should TrueConnect Gateways perform and pass Beta Test requirements, IPVC
shall have the right to draw against the entire Letter of Credit and apply
it as payment in full for the tested Gateway(s) on the Customer's site.
Customer further agrees that all TrueConnect Gateways must be paid for in
full prior to shipping and installation.
Voice Quality
IPVC does not guarantee voice quality to the customer because it is not a
function of the Gateway itself but the capabilities of the chosen Internet
Provider in that area. Should customer not have access to IPVC recommended
Site and Internet requirements, IPVC agrees to work with customer on
alternative routes, providers and carriers.
Page 1
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IPVoice.com, Inc.
TruePartner Master Distributor Agreement
A. TPMD's Obligations
TPMD shall work diligently with IPVC staff during the installation and
testing period to ensure that the Services are sold within the Territory as
described. TPMD has the authority to hire Technicians or employees to
comply with its obligations. TPMD shall have approved technical,
installation and user manuals and Beta Testing reports and is responsible
for having materials translated into the major languages spoken within the
Territory. TPMD's agents or partners will comply with the terms and
limitations of this Agreement. IPVC shall have the right to require TPMD=s
agents and partners to sign an Addendum to this Agreement to that effect.
TPMD shall diligently promote the Services within the Territory. TPMD has
the authority to hire agents or employees on its own behalf and not on
behalf of IPVC to comply with TPMD=s obligations under this Agreement. TPMD
shall have approved promotional materials translated into the major
languages spoken within the Territory. TPMD's agents or partners will
comply with the terms and limitations of this Agreement.
B. IPVC's Obligations
An IPVC technical representative will travel to customer's location to
install a Gateway and to train customer's staff on the use of TrueConnect.
IPVC will supply TPMD and customer with what reporting will be required
during the testing period. IPVC will pay the cost of travel and lodging for
the IPVC technical personnel for a maximum of two (2) travel days and a
five- (5) business day stay. Should the customer desire that the IPVC
technical person stay longer, the additional expenses will be billed to the
customer unless otherwise approved by IPVC in advance.
3. Compensation
In consideration for marketing, advertising and selling the Services as set
forth above, TPMD shall be entitled to purchase Services at a wholesale
rate as set forth in Appendix B.
4. Billing and Collecting
A. Collecting will be prepaid based on estimated usage. Licensing fees will
be with terms of Net 30 days. IPVC must accept TPMD's prior credit approval
before credit approval is extended to the customer. TPMD agrees that all
items will be made payable to a Lock box, (Appendix C) or shall be required
to post a Letter or of Credit with IPVC on behalf of the customer, or the
customer shall post a Letter of Credit directly with IPVC for the full
purchase price including shipping and handling of the TrueConnect Gateway
prior to shipping and installation.
B. IPVC will, at the end of a thirty-day period, provide TPMD with a
detailed invoice. IPVC will also forward to TPMD a complete listing of all
revenues credited to TPMD with the associated calculation of TPMD's
commission and/or revenues owed TPMD. Every effort will be made as it
pertains to processing daily ban lock box activity for the purpose of
crediting the TPMD. Funds held by IPVC at the end of the month, the Bank=s
regular statement covering the deposits to and withdrawals from the TPMD=s
accounts is to be mailed to the TPMD.
5. Letter of Credit
TPMD agrees to provide an Irrevocable Letter of Credit (LOC) from a
mutually acceptable financial institution for the full amount of each
TrueConnect Gateway order prior to shipment of any TrueConnect Gateway.
Page 2 Confidential
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Lock Box described in (Appendix C) will be used on TPMD=s customer usage in
all products. Should TPMD or the TPMD=s customer default in any way the
IPVC would still have the options to require the TPMD to post a Letter of
Credit in that amount of one and one-half times the estimated monthly
billing for those customers that IPVC will not extend credit to. The LOC
shall be adjusted periodically using IPVC procedures to account for
variations in the value of billings. In no case shall the LOC be less than
one and one-half times the estimated monthly billing. The LOC shall state
that if payment is not received by IPVC within 30 calendar days after
billing. IPVC shall have the ability to draw against the LOC for the
outstanding amount due IPVC.
6. Third Party Infringements
TPMD shall have the sole right, in its discretion, to initiate, prosecute
or settle legal actions against any person infringing on any intellectual
property rights to the Services within the Territory (except any settlement
which would have the effect of denying to IPVC the benefits of this
Agreement). Each party shall promptly notify the other of any actual or
potential infringement, which becomes known to it. Should TPMD fail to take
appropriate and diligent action with respect to any such infringement by a
third person, in the sole and absolute discretion of IPVC, IPVC shall have
the right to take such action, at its own expense and in its own name, and
including the right to enforce and collect any judgment thereon. Each party
shall cooperate (including appearance for testimony at trials and
depositions) with the other party as such party may reasonably request with
regard to any legal action brought by a party pursuant to this Section. The
party requesting such cooperation shall pay all out-of-pocket costs of the
party providing such cooperation.
7. Confidentiality
Neither party shall disclose any trade secrets (if it has been designated
as such in writing at the time of its original disclosure by one party to
the other) to persons other than those bound by the terms of this Agreement
or persons who have executed Confidentiality Agreements which require such
persons to maintain the confidentiality of such trade secrets to
substantially the same extent as required by this Section. Nothing in the
foregoing sentence shall prohibit disclosure of any information, which is
publicly known at or after the time of disclosure, which is already known
to the recipient, or which is required to be disclosed by law.
8. Agreement Not to Compete
A. TPMD agrees that during the period commencing on the date of this
Agreement and continuing until the date two (2) years after this Agreement
is terminated, it will not directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder, corporate
officer, director, investor, or financier or in any other individual or
representative capacity, or otherwise, engage or participate in any
business which directly or indirectly competes with the business of IPVC or
any TPMD supplying services to IPVC within any country being serviced by
IPVC or any TPMD supplying the service to IPVC at the time this Agreement
is terminated. TPMD covenants that during the term referenced above, it
will not, either for itself or for any other person or entity, except as
may be required by the terms of this Agreement either directly or
indirectly: (1) call on, solicit, take away or hire any customers,
employees, principals, lessors, distributors or suppliers or other
personnel or independent contractors, of IPVC or any TPMD supplying the
Services to IPVC, (2) acquire or attempt to acquire rights for providing
any product or services in competition with IPVC or any TPMD supplying the
Services to IPVC, or (3) engage in any act which would interfere with or
harm any business relationship with any customer, lessor, employee,
principal or supplier of IPVC or any TPMD supplying the Services to IPVC.
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IPVoice.com, Inc.
TruePartner Master Distributor Agreement
B. IPVC and TPMD agree that a breach of the covenants described in this
Section will result in substantial damages to IPVC, which would be
difficult, if not impossible to ascertain. TPMD agrees that in the event of
such a breach or threatened breach, IPVC shall have the right to a
Restraining Order and an Injunction, without bond or other security (all of
which is waived) both temporary and permanent, enjoining and restraining
any such breach or threatened breach. Such injunctive relief shall be in
addition to any other remedy available to IPVC at law or in equity. Nothing
in this Agreement shall be construed to prohibit or prevent IPVC from
initiating an action or otherwise recovering any damages that may be
sustained as a result of the breach or threatened breach by TPMD. TPMD also
agrees that IPVC may pursue any remedy available to it, and the pursuit of
any one such remedy at any time will not be deemed an election of remedies
or waiver of right to pursue any other remedy.
C. Should TPMD breach or violate any term of this Agreement at any time
when monies are due and owing to it from IPVC, then all unpaid monies due
TPMD shall be subject to offset by the amount of any damages incurred by
IPVC, the amount of any attorney fees and other related expenses incurred
by IPVC in enforcing this Agreement, and by the amount of any other claims
IPVC may have against TPMD.
9. No Relationship
The parties to this Agreement are independent contractors only and nothing
in this Agreement shall be construed as establishing any agency, joint
venture, partnership, fiduciary or other relationship between the parties.
10. Warranty
Each party represents and warrants to the other that it has the power and
authority to execute and deliver, and to perform its obligations under this
Agreement, and that neither the execution or delivery of this Agreement nor
the performance of its obligations hereunder will constitute a breach of
the terms or provisions of any contract or violate any law or the rights of
any third party.
11. Term and Termination
The term of this Agreement will commence as of the date first above written
and shall continue until the third anniversary of the date of its
execution. If either TPMD or IPVC commits a material breach of any material
provision of this Agreement, and such breach is not cured within ninety
(90) days after the date which notice of breach is provided to the
breaching party in writing, the non-breaching party shall have the right to
terminate this Agreement upon further thirty (30) day written notice.
12. Governing Law
This Agreement shall be governed and construed in accordance with the laws
of Florida, USA (excluding any conflicts with laws or rules) and each party
submits to the jurisdiction of any state, county or federal court in the
state of Florida, USA.
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IPVoice.com, Inc.
TruePartner Master Distributor Agreement
13. Entire Agreement
This Agreement sets forth the entire Agreement or any understanding between
the parties as to its subject matter and supersedes all other documents,
verbal commitments or understandings made before conclusion of this
Agreement, and none of the terms of this Agreement may be amended or
modified except in writing signed by both parties.
14. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party except that any party may assign this
Agreement to any successor corporation (including the surviving corporation
in any consolidation or merger) or assignee of all or substantially all of
its business. In the event of such an assignment, the assigning party shall
remain jointly and severally liable with the assignee for the full and
timely performance by such assignee of the assigning party's obligations
hereunder.
15. Notices
Any notice, consent or approval required or permitted under this Agreement
shall be in writing and shall be delivered to the following addresses (i)
personally by hand (ii) by certified mail, postage prepaid with return
receipt requested, or (iii) by fax confirmed by such certified mail:
If to TPMD:
MetroPlus CommunicationTechnology, Inc.
1250 West Hastings Street
Vancouver, BC V6E 2M4
E-mail address [email protected]
Phone number: 604 687 0300
Fax number: 604.687 0151
If to: IPVoice Communications, Inc.
5901 South Middlefield Road, Suite 100
Littleton, Colorado 80123
E-mail Address: [email protected]
Phone Number: 303.738 1266
Fax Number: 303.738 1295
All notices shall be deemed effective upon the date delivered by hand or
sent by fax, or if mailed, as of the date which is five (5) days after the
date of mailing. Either party may change its address for notice purposes by
notifying the other party of such changes of address in accordance with the
foregoing.
16. Waivers
No waiver of any term or condition of this Agreement shall be valid except
when made by an instrument in writing expressly waiving such term or
condition signed by the waiving party. A waiver by any party of any term or
condition of this Agreement in one instance shall not be deemed a waiver of
such term or condition for any similar instance in the future or of any
subsequent breach. All rights, remedies obligations and agreements
contained in this Agreement shall be cumulative and not in limitation of
any other remedy, right, obligation or agreement of any other party.
Page 5 Confidential
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17. Severability
If any part of this Agreement is contrary to, prohibited by or deemed
invalid under the laws of any jurisdiction, such provision shall, as to
such jurisdiction be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, without invalidation or affecting the
validity or enforceability of such provision in any other jurisdiction.
18. Specific Performance
The parties acknowledge that there may be no adequate remedy at law for any
violation of sections of this Agreement, and that in addition to any other
remedies which might be available, such Sections shall be specifically
enforceable in accordance with their terms.
19. Headings
Headings contained in this Agreement are for convenience of reference only
and shall not affect the meaning or construction under the provision of
this Agreement.
20. Voluntary Agreement
Each party warrants that before signing this Agreement such party has been
fully advised of its contents and meaning, has had legal counsel explain
the meaning and legal significance of each and every provision therein, and
executes this Agreement freely and voluntarily with full knowledge and
understanding of its contents.
21. Cumulative Remedies
No remedies or election hereunder shall be deemed exclusive, but shall,
whenever possible, be cumulative with all other remedies at law or in
equity.
22. Attorney Fees
In the event any action, proceeding or litigation, judicial or
non-judicial, arises out of the subject matter of this Agreement the
prevailing party shall be entitled to payment of all costs, expenses and
attorney fees incurred.
23. Successor/Assigns
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, successors, personal
representative and assigns. The parties each agree to take such further
action and deliver such ancillary document as may be reasonable or
necessary in order to carry out the terms and provision of this Agreement.
24. Authority
Each individual executing this Agreement in a representative capacity
warrants to the other party that such person has sufficient authority to
bind the party on behalf of whom they are executing this document.
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TruePartner Master Distributor Agreement
25. Duplicate Originals
Any fully executed copy of this Agreement shall be deemed for all purposes
as a duplicate original. All originals and duplicate must be signed before
a notary or will be considered invalid.
26. Intellectual Property and or Proprietary Rights
The Software. TPMD acknowledges that the Software is protected by trade
mark and trade secret interests of IPVC and that TPMD has no rights to
transfer or reproduce the TrueConnect Software, MultiCom Software or
TrueConnect Gateway or prepare any derivative works with respect to or
disclose confidential information pertaining to, the software or any part
thereof. Under no circumstances shall TPMD be deemed to receive title to
any portion of the Software, title to which at all times shall vest
exclusively to IPVC. IPVC represents to TPMD that it owns and has the right
and authority to grant TPMD the license granted herein to the Software
without infringing the propriety rights of other. IPVC hereby agrees to
indemnify TPMD against any claim of infringement relating to TrueConnect
and MultiCom, provided that TPMD gives IPVC prompt notice of any such claim
and agrees to immediately terminate any use alleged to be the basis of
infringement.
EXECUTED by the parties effective as of the date first written above.
IPVoice.com, Inc.
By: /s/ Barbara S. Will
Name: Barbara S. Will
Title: President and COO
State of )
County of ) ss.
Country of )
Subscribed and sworn to under oath before me on this _____day of
_____________, _______.
--------------------------
Notary Public
My Commission Expires:
Metroplus Communication Technology, Inc.
By: /s/ Mark Jensen
- ---------------------------
Name: Mark Jensen
Title: Marketing Director
Page 7 Confidential
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IPVoice.com, Inc.
TruePartner Master Distributor Agreement
State of )
County of British Columbia ) ss.
Country of Canada )
Subscribed and sworn to under oath before me on this _____day of
_____________, _______.
----------------------------
Notary Public
My Commission Expires:
Page 8 Confidential
February 9, 1999
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IPVoice.com, Inc.
TruePartner Master Distributor Agreement
Appendix A
Non-Exclusivity of Territory
Or
Exclusivity of Territory
IPVoice .com, Inc. and TPMD have agreed that IPVC gives non-exclusivity of
territory to TPMD.
INIT _______INIT _______
XX IPVoice .com, Inc. and TPMD have agreed that IPVC grants exclusivity to TPMD
in the following Territory. TPMD shall purchase the exclusive to market IPVC
services in the chosen country. All originating traffic, regardless of who is
responsible for the sale, will roll to TPMD revenue stream with exclusivity for
the territory. The fee set forth will entitle TPMD to:
_ Exclusivity.
_ A Dedicated Sales and Service Contact.
_ On-site training for sales and service.
_ Training Manuals changes and updates, as they become available.
_ Updates on IPVC competitive advantage.
_ Market Overview and updates.
_ Detailed information on IPVC products and services.
_ Wholesale Pricing or Commission payments
_ Monthly Fees for use of IPVoice Software.
_ Billing and Collection guidelines.
_ Newsletter and future product development charts.
_ Technical Assistance.
_ Future product development changes.
_ Regular Agent and TruePartners meetings.
The purchase of the exclusive territory will vary by country and market and has
been determined as follows:
1.) Exclusive Territory is granted to TPMD and is as follows:
Territory Signing Fee
----------- --------------
a) Canada $ 100,000.00
- Vancouver, Calgary, Edmonton, Winnipeg, Toronto,
Montreal, Halifax
b) Washington State $ 50,000
- Seattle, Tacoma, Spokane, Tri Cities, Vancouver
a) Oregon $ 50,000
- Albany, Beaverton, Eugene, Portland
Page 9 Confidential
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IPVoice.com, Inc.
TruePartner Master Distributor Agreement
This is for the right to market and advertise the services and to establish
an office. As used in this Agreement, AService@ shall mean domestic,
intra-country and international calling services offered through the date
of this Agreement, specifically origination and termination in designated
calling patterns, international and calling card. Agent shall also have the
exclusive right to market, advertise, and sell the services to be offered
through IPVC in the future, the compensation for such activities to be set
by agreement of the parties as set forth in Appendix B.
It is acknowledged that although TPMD is given (a) the right to market a
geographic territory, and (b) Product and Services; as an Agent on behalf
of IPVC, IPVC also grants authority to TPMD to market said Territory by
using TPMD's own agents or direct sales staff.
TPMD agrees and understands that the IPVC product offering "Flat25" must be
sold and supported in its exclusive cites and that our Target cites must be
installed first to support that product offering. "Flat25" will be an IPVC
offering and IPVC will split signing fees as well as revenues with the TPMD
in consideration for its contribution on all Flat25 customers sold by TPMD.
For customers sold by IPVC marketing partners IPVC will pay TPMD a
percentage per month to be agreed to.
Signing fees will be waved if signed before July 31, 1999.
TPMD Obligations under Exclusive Territory
TPMD shall diligently promote the Service within the Territory. TPMD has
the authority to hire agents or employees to comply with the obligations of
this Agreement at the sole expense of TPMD. TPMD shall have IPVC
pre-approved promotional materials, which must be translated into the major
languages spoken within the Territory at the sole cost of TPMD. TPMD's
agents or partners will comply with the terms and limitations of this
agreement and will sign documentation to that effect. TPMD is responsible
for setting up an office, where customer calls can be answered, AIPVoice
Communications (country name), and that sales and service can be handled
in a professional manner.
TPMD understands and agrees that IPVC has the right, in its sole and
absolute discretion, should the following quota not be met to terminate
and/or change TPMD Country Exclusivity.
Quota: A minimum of $250,000.00 per month, per City must meet or exceeds in
Exclusive Territory after a Six month ramp from installation. Should
revenues not be met then signing fees that were original waved will be due
and payable to IPVC. Total fees do $200,000.00
Quota: A minimum of 20 Gateway must be deployed and installed to support
customer's Exclusive Territory. This installation need to be done within
One year
TPMD understands and agrees that Purchase price is due and payable at conclusion
of the Beta Test period.
INIT _______INIT _______
Page 10 Confidential
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IPVoice.com, Inc.
TruePartner Master Distributor Agreement
Appendix B
TPMD Wholesale Pricing
This Appendix B, dated July 19, 1999 by and between IPVoice.com, Inc. ("IPVC"),
a Nevada Corporation, and Metroplus Communication Technology, Inc., TruePartner
Master Distributor (TPMD), is attached to and made a part of the Agreement
between IPVC and TPMD dated July 19, 1999 (the Agreement").
As set forth in this Schedule hereto, payment for Services shall be determined
by the destination and duration of the calls, and at the per minute rates listed
in the following Schedules. IPVC in its sole discretion and upon five (5) days
advance written notice, may change such rates as it deems necessary; unless such
changes are required by law, order, rule or regulation, whereupon IPVC will
promptly notify TPMD of such changes and notice shall not act as a condition
precedent thereto. TPMD agrees to prepay for all services and understands that
no equipment will be shipped prior to payment. An estimated monthly amount will
be posted each month for usage and finally determined at the end of each billing
cycle.
Equipment Descriptions listed in Appendices D and E
A. TrueConnect Gateway Wholesale Pricing for Domestic and International
Product Sold Pricing under this Agreement Price for One (1)
------------- --------------------------------------------------
TrueConnect Gateway
Domestic (T/1) $49,894.82 $59,894.82
International (E/1) $53,718.22 $63,718.22
Added Gateways (Pricing does not include install or travel)
Domestic $39,894.82 $44,894.82
International $43,718.22 $48,718.22
T-1 Cards $ 6,300.00 $ 6,500.00
E-1 Cards $ 6,500.00 $ 6,700.00
B. TrueConnect Gateway=s using MultiCom software but no network applications
or resale of minutes:
Per Customer Location: (Pricing not available under this agreement.)
Should market conditions change IPVC reserves the right to modify the pricing
structure.
"Net Revenues" shall mean gross revenues actually received by IPVC or TPMD for
sales of the services defined in this Agreement, less IPVC's cost of, including
but not limited to, taxes, duties, discounts, license fees, equipment, network,
labor, refunds and administrative costs. Both IPVC and TPMD shall determine
rates and commissions for any IPVC network used by TPMD customer switching in
TPMD's Territory.
In order to stay competitive and in order to maximize return, IPVC shall require
that in the event of an 800-toll free access number being used, that the number
be changed periodically. TPMD specifically agrees to contact customers to make
the required number changes within receipt of two weeks notice by IPVC.
Page 11 Confidential
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TruePartner Master Distributor Agreement
Appendix B (Continued)
IPVC will give a minimum of two weeks notice after which toll free number change
is required. IPVC may invalidate this Agreement if TPMD fails to make the
required changes without agreed written notice from IPVC for delays.
IPVoice.com, Inc.
By: /s/ Barbara S. Will
-------------------------
Barbara S. Will, President and C.O.O.
Metroplus Communication Technology, Inc.
By: /s/ Mark Jensen
-------------------------
Name: Mark Jensen, Marketing Director
Page 12 Confidential
February 9, 1999
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TruePartner Master Distributor Agreement
Contact Form
This contact form must be filled out, dated and submitted to IPVoice by mail,
fax or e-mail for every potential customer, distributor, sub-agent or client
that the TPMD proposes to list in its base of working accounts. TPMD understands
and agrees that should submitted contact not sign an agreement after one-year
from the time it was submitted to IPVoice, IPVoice shall have the right to
contact and sell directly. (Unless otherwise agreed to in writing)
DATE SUBMITTED_______________________________________
SUBMITTED BY: ______________________ RECEIVED BY: ______________________
CUSTOMER'S NAME: _______________________________________________________
CONTACTS NAME: _________________________________________________________
DAYTIME OR OFFICE PHONE NUMBER: ________________________________________
AFTER HOURS NUMBER: ____________________________________________________
FAX NUMBER: _________________________E-MAIL ADDRESS: ___________________
ADDRESS:________________________________________________________________
________________________________________________________________________
CITY: _______________STATE/COUNTRY: ____________________ZIP_____________
COMMENTS: ______________________________________________________________
________________________________________________________________________
PROGRAMS/SERVICES OR PRODCTS ARE UNDER NEGOTIATIONS:
<PAGE>
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
APPENDIX C
Lock Box Agreement
This Agreement dated July 19, 1999 is Between IPVoice.com, Inc/Independent
network Srvices and its affiliated entities ("IPVC/INS") with business offices
at 5901 South Middlefield Road, Suite 100, Littleton, CO 80123, and MetroPlus
Communication Technology, Inc. ("Customer") with offices at 1250 West Hastings
Street, Vancouver, BC V6E-2M4, and sets out the processing requirements to be
performed by the Bank for IPVC/INS and the Customer. The parties hereto agree
as follows:
1. Customer and IPVC/INS entered into a Business Service Agreement dated July
19, 1999 ("IPVC/INS Agreement") under which IPVC/INS provides Customer with
certain telecommunications services.
2. The Bank maintains a lock box into which checks for the customer are to be
processed. The Customer shall advise all its customers to send checks,
drafts, or other orders for the payment of money (Aitems@) to the lock box
addressed by the Bank.
3. The Bank shall endorse all items contained in such mail in the following
manner:
"Credit to the Account of the Within Named Payee Telecommunications
Corporation"
Should any items be returned to Purchaser by the drawee bank with a request
for a personal endorsement, Purchaser authorizes Bank to endorse the item:
"Pay to the Order of (Customer Name as indicated above)"
The Bank shall exercise due care and caution in handling these items, but
shall not be liable due to the special endorsement and handling.
4. It is understood by Customer that all items will be made payable to it;
however, all items shall be sole and exclusive property of Customer and
will immediately processed, endorsed and the funds credited to Customer's
account at the Bank (the "Account") pursuant to the instructions which
shall be in accordance with the applicable provisions of this Agreement.
Items which are made payable other than as stated, with the exception that
some items may be payable to an abbreviation of the foregoing name, will be
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IPVoice.com, Inc.
TruePartner Master Distributor Agreement
returned to Customer, unprocessed. The credit and collection of items shall
be further subject to the same terms and conditions as would apply to
deposits received by the Bank directly from the Customer.
5. The Bank shall maintain a microfilm record of all items deposited in
processing sequence in order to reconstruct any specific deposit by means
of duplicate photstats should the need arise and request be made by any
party. Customer or IPVC/INS may receive photocopies of the microfilmed
items at the Bank's customary rates by providing the deposit date and the
deposit total.
6. Due care shall be taken by the Bank to guard processing of items where
there exists an obvious dispute between Customer and end user. Such
situations are anticipated to be rare and would be directed generally by
notations on an item indicating "Payment in Full" or other such qualifying
statements. Should such statements be typed or handwritten, the bank will
exercise reasonable care to ensure the item will not be processed and will
be returned to Customer.
7. IPVC/INS or its affiliated entities shall act on behalf of Customer as its
pertains to processing daily bank lock box activity for the purpose of
crediting its end user accounts.
8. The Bank will exercise reasonable care to ensure items which are postdated
in excess of two (2) days shall be returned to Customer, unprocessed. All
other postdated items shall be handled in the regular manner by the Bank.
9. The Bank will exercise reasonable care to ensure items which do not bear
the drawer=s signature will not be deposited and shall be returned to
Customer, unprocessed.
10. Items with discrepancies between written and numerical amounts will be
guaranteed for the written amount whenever possible. Items which appear to
the Bank to have been materially altered will not be deposited.
11. Items denominated in foreign currencies and drawn on foreign banks may be
immediately credited at face value with foreign exchange settlement on the
next business day.
12. At the end of each month, the Bank's regular statement covering the
deposits to and withdrawals from the Customer's account is to be mailed to
the Customer at the address provided herein.
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IPVoice.com, Inc.
TruePartner Master Distributor Agreement
13. The Bank shall mail IPVC/INS or an affiliated entity on behalf of Customer
a copy o the deposit slip for deposits that were made into the account each
business day. The Bank shall mail IPVC/INS for an affiliated entity any
envelopes, remittance papers and other detail which might be included in
the remittance envelope.
14. All returned items shall be handled in the following manner:
a) Any dishonored items for an amount less than $1,000.00 which is returned
because of insufficient funds will be automatically redeposited a second
time.
b) Any dishonored item which has been returned for the second time or any
item which has been returned for reasons other than insufficent funds, such
as but not limited to, account closed or payment stopped, shall be charged
back to the Account
c) Any dishonored items for an amount equal to or greater than $1,000.00
shall be charged back to the Account.
d) The Bank shall give Customer reasonable notice of any returned items to
be charged back to the Account.
e) Customer shall at all times maintain a minimum balance in the Account of
$1,000.00 to cover any chargebacks. Although Customer is ultimately
responsible for the paymant of any chargebacks, the Bank reserves the right
to charge the Account if there is insufficient funds in the Account to
cover the chargebscks.
15. IPVC/INS's interest in the items arises out of its performance of services
for the Customer's end users and IPVC/INS's security interest in account
receivable from such customers. The Bank recognizes IPVC/INS's continuing
security interest in all items deposited in the Account, and the proceeds
thereof, Customer agrees to indemnify and hold the Bank harmless against
loss to the Bank as the result of the dishonor of any item and chargeback
of items to the Account in accordance with Section 14. Further, Customer
agrees to pay within thirty (30) days of receipt thereof, any documented
invoice from the Bank under this indemnity.
16. Any contact with Purchaser and.or IPVC/INS or its affiliated entities
regarding operational matters should be directed to Peter M. Stazzone at
602-335-1231, ext. 306; oor 1-800-388- 4542, ext. 306.
<PAGE>
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
17. All Bank maintenance charges and fees relating to the arrangements under
this Agreement shall be charged directly to Customer on a monthly basis.
Bank maintenance charges and fees will be charged directly to Customer=s
operating account managed by the Bank.
18. The Bank shall have the right to credit or debit the Account to correct
processing mistakes which are capable of correction. Copies of credit cards
or debit items shall be sent to IPVC/INS or its affiliated entities on
behalf of Customer. Any discrepancies in the Account statement or involving
items identified on said statement must be reported to the Bank within
sixty (60) days from the date of mailing, delivery or availability of the
first item and statement.
19. Deposits/Withdrawals
All funds collected on behalf of the Customer shall be automatically
deposited to the Customer's account as follows:
Bank
Account No.
ABA Routing
20. Notices. Any Notice, instrument or other communication required or
permitted to be given by one of the parties hereto to any other party under
this Agreement is considered as properly given if (I) delivered in person,
(ii) sent by facsimile transmission with the original then mailed by
first-class mail, or (iii) mailed by first class, registered or certified,
with return receipt requested and postage prepaid, to the following
addresses, which may be changed by giving the other parties thirty (30)
days advance written notice:
If to IPVC/INS: IPVoice.com, Inc.
5901 South Middlefield Road, #100
Littleton, CO 80123
If to Customer: MetroPlus Communication Technology, Inc.
1250 West Hastings Street
Vancouver, BC V6E-2M4 Canada
<PAGE>
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
21. This Agreement cannot be modified, altered or amended except by written
agreement specifically referring to this Agreement and signed by all
parties hereto:
22. Either party may terminate this Agreement by written notice delivered by
Customer and IPVC/INS thirty (30) days prior to the effective date of such
termination. Notices shall be personally delivered or sent by overnight
courier to the persons specified in Section 24. No such termination shall
impair the rights or obligations of any party with respect to items
received or processed prior to the effective date of the termination.
23. Relationship of parties. This Agreement does not constitute any of the
parties as agent or principal of any other party.
24. Entire Agreement. This Agreement (and any documents referenced specifically
herein) evidence the entire agreement between the parties in connection
with the operation of the lock box and the Collected Funds, and no other
agreements may be considered or adopted or binding, in whole or in part, by
or upon any of the parties and no additional obligations of the Escrow
Agent may be inferred from the terms of This Agreement or any other
Agreement. This Agreement may only be amended in writing signed by all of
the parties.
25. Captions. Paragraph headings and captions have been inserted for
convenience only and do not in any way limit the provisions set out in
these various paragraphs hereof.
26. Choice of Law. This Agreement shall be construed under the laws of the
state of Arizona without regard to choice of law principles.
27. Assignment. This Agreement may not be assigned or transferred without the
prior written consent of the other parties. This Agreement inures to the
benefit of each of the parties, their successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives to be effective as of the date and year
first written above.
CUSTOMER: IPVOICE.COM, INC.
By: /s/ Mark Jensen By: /s/Barbara S. Will
- ---------------------- ------------------------------
Printed Name: Mark Jensen Printed Name: Barbara S. Will
Title: Marketing Director Title: President & CEO
<PAGE>
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
Appendix D
TrueConnect Gateway
T-1 Applications Sale and Price Sheet
T-1 Applications Sale and Price Sheet
Description
USA Domestic and some International Locations
USA Domestic and some International LocationsEach TrueConnect Gateway
is set up with (2) T-1 Cards and has the capacity to hold (4) T-1
Cards. Each card should be able to handle 250,000 minutes per month.
Each TrueConnect Gateway is set up with (2) T-1 Cards and has the
capacity to hold (4) T-1 Cards. Each card should be able to handle
250,000 minutes per month.IPVoice does not recommend that you operate
your Gateways with (4) Cards to insure optimum performance. IPVoice
does not recommend that you operate your Gateways with (4) Cards to
insure optimum performance.As minutes grow, Gateway can be added to
support growth.
Sales Price:
First TrueConnect Gateway
TrueConnect Gateway Adds
TrueConnect Gateway Adds
T-1 Cards
Licensing Fees for MultiCom
Set up Fee of $50,000.00
Monthly Fee of $5000.00 or $0.0025 per call record
(which is ever greater
Equipment
One each of the following:
Computer with Keyboard, Sound Card, Monitor, Network Card, Windows,
NT Server, Network Hub, Surge Protection, Cable, Modem, Manual
Hardware
One each of the following:
AGRT2S, TX3000, Fusion 2.0 for NT, G.723.1, H.323 Stack
Other Hardware and Qty
2 AG-T1+RT2 Cards
48 G.723.1 runtime
48 H.323 runtime
Software
MultiCom Software
TrueConnect Switch Software
PCAnywhere Software
Shipping and handling
Cost will vary.
Page 13 Confidential
February 9, 1999
<PAGE>
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
Appendix E
TrueConnect Gateway
E-1 Applications Sale and Price Sheet
Description
For use in most International Locations
Each TrueConnect Gateway is set up with (2) E-1 Cards and has
capacity to hold (4) E-1 Cards.Each card should be able to handle
250,000 minutes per month.
IPVoice does not recommend that you operate your Gateways with (4)
Cards to insure optimum performance.
As minutes grow Gateway, can be added to support growth.
Sales Price:
First TrueConnect Gateway
TrueConnect Gateway Adds
E-1 Cards
Licensing Fees for MultiCom
Set up Fee of $50,000
Monthly Fee of $5000.00 or $0.0025 per call record
(which is ever greater
Equipment
One each of the following:
Computer with Keyboard, Sound Card, Monitor, Network Card, Windows, NT
Server, Network Hub, Surge Protection, Cable, Modem, Manual
Hardware One each of the following:
AGRT2S, TX3000, Fusion 2.0 for NT, G.723.1, H.323 Stack
Other Hardware and Qty
2 AG-E1+RT2 Cards
60 G.723.1 runtime
60 H.323 runtime
Software
MultiCom Software
TrueConnect Switch Software
PCAnywhere Software
Shipping and handling
Cost will vary.
Page 14 Confidential
February 9, 1999
<PAGE>
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
Appendix F
TrueConnect System/Site Requirements
Last Revised: 10/23/98
This document outlines the system and site requirements needed to install
and operate a TrueConnect Internet Telephony Gateway.
Primary Gateway Hardware (Provided by IPVoice):
Chassis: 19" Rack Mountable
CPU: Intel 266Mhz CPU with 64 MB Ram
Disks: 3-5GB Hard Disk with CD-ROM
PSTN: IPVoice T1/E1/ Analog Interface Card
VoIP: IPVoice PSTN/VoIP Translator Card
Software Configuration (Provided by IPVoice):
Windows NT 4.0 Server
TrueConnect Call Control v1.0
MultiCom Billing v3.3 Access Included
Optional Components:
Additional IPVoice T1/E1/PSTN Interface cards
Site Requirements (Provided by TruePartner):
T1/E1 to the local PSTN for local termination/origination (bi-directional)
Dedicated connection to the Internet Backbone (High Bandwidth)
10/100Base-T Ethernet connection Cable
Dedicated IP Address for the TrueConnect Gateway
Dedicated Phone Line at Install Site (for emergency access to gateway)
8-Port 10-Base-T Hub (If required by ISP)
Uninterruptable Power Supply (UPS)
Page 15 Confidential
February 9, 1999
<PAGE>
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
Appendix G
Pre Installation Testing Procedures
_1. Customer must acquire a facility providing both Internet connectivity and
PSTN connectivity
_2. Customer must obtain a unique IP Address for the TrueConnect Gateway
_3. Customer must provide the IP Address of the Gateway to IPVoice
_4. Customer must provide the IP Address of the router that will be used for
the gateway
_5. Customer must conduct latency testing and transmit this data to IPVoice
_6. Customer must obtain Internet access from their office. (Dial-Up or LAN)
Latency Testing
_1. Customer must set up a computer at the facility using the IP address for
the Gateway
_2. Run the "ping" utility continuously for a period no less than 72 hours.
(Target IP Address for the ping is: 204.181.36.24)
_3. Send the output to IPVoice
Page 16 Confidential
February 9, 1999
<PAGE>
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
Appendix H
Beta Testing Functionality Checklist
MultiCom
1. Remote Access via ProComm 3.+ (Requires Internet Connection from Office
Site)
2. Customer Management
3. Customer Invoicing
4. Agent Management
5. Account Management
6. System Reports (printing requires HP III compatible Laser Printer)
7. Real-Time Traffic Information
8. Debit Card Creation and Management
9. Rate Table Management
TrueConnect Gateway
1. Receive and Authorize Inbound Customer Calls
2. Terminate Customer Calls
3. Rate Calls and Debit Customer Accounts
4. Basic Voice Prompts (English)
Page 17 Confidential
February 9, 1999
<PAGE>
IPVoice.com, Inc.
TruePartner Master Distributor Agreement
Appendix I
Prepaid Calling Cards
Page 18 Confidential
February 9, 1999
EXHIBIT 10.14
BlueGrassNet [BluegrassNet Logo] Voice: 502.589.4638
520 South Fourth Avenue Fax: 502.515.1760
Suite 200 Email: [email protected]
Louisville KY 40202 Web: www.bluegrass.net
------------------------------------------------------
Internet Server Co-location Quote
Date: February 1, 1999
To: Mike McKim, IP Voice Communications
From: Norman Schippert, BluegrassNet
Re: Server Co-location
Monthly Rate: $250/month per server
Installation Costs: $250 per server
Contract Terms: one year
Notes: Please keep the attached sheet for your information. It contains a
thorough breakdown of the costs involved.
This quote for the co-location of the server is based on the bandwidth/pricing
matrix located on the BluegrassNet webpage. We've attached a copy of this for
your edification. The price of $250 per month is based on a maximum throughout
of 30 megabytes per day.
This quote is valid for 15 days from the above date only. Please contact our
offices to make arrangements for the procurement of this circuit.
BluegrassNet Infrastructure & Support
- - Multiple redundancy / BGP4 Routing / Load Balancing to the Internet
- - UUNet/Worldcom
- - Cable & Wireless (formerly IntenetMCI)
- - AGIS
- - Redundant Routing Topology
- - OC-48 Fiber Availability to NOC
- - Kentucky-wide WAN to Lexington and Elizabethtown
- - 24 hour network monitoring and emergency notification
- - Primary and Secondary DNS services if requested
- - Registration of Internet Domain (client responsible for Internic changes)
- - High-end NT and Unix Systems Emergency Network Consulting available upon
request
<PAGE>
Description of services provided
o 1 Co-located server account - $250.00 per month o 1 Block of 6 static IP
addresses provided (no-charge) per server.
o 1 Complimentary dial-up (ppp) account provided (no-charge) o 3 Additional
dial-up (ppp) accounts @ 15.00 per month (each)
Terms and conditions: BluegrassNet bills in advance for monthly services.
Payment can be made via direct billing, credit card, or EFT (electronic funds
transfer) withdrawals. Sales tax, if applicable, shall be paid in accord with
the quotation herein. A finance charge of one and one-half (1.5) percent per
month will be assessed on all amounts that are past due. Authorization: Your
signature below indicates your agreement with this description of services. Upon
receipt of this signed document, BluegrassNet will schedule personnel to begin
work on the services you have ordered.
Number of Servers: 1
/s/ Barbara S. Will President 3/22/99
- ------------------- ----------- ----------
Signature of individual Title Date
authorized to bind customer
EXHIBIT 10.15
IPVoice Communications, Inc.
TruePartner Master Agent Marketing Agreement
This Marketing Agreement (Agreement) dated this 23rd day of July, 1998, is
entered into between IPVoice Communications, Inc., a Nevada Corporation, known
as ("IPVC") and The Armstrong International Group, Inc. residing at 9403 North
West 42nd Street, Sun Rise, FL.
33351, known as TruePartner Master Agent (TPMA).
1. Non-Exclusive Territory grants to TPMA the non-exclusive right to market,
advertise and sell the Service as defined in Appendix A (if applicable). As
used in this Agreement, Service means domestic and international calling
services, programs such as TruePartners Master Distributors and Master
Agents offered through IPVC on the date of this Agreement, specifically,
TrueConnect Products, and Services and recruiting Distributors and Agents
to sell or use international and domestic origination and termination, 800
international service and International outbound service. TPMA shall also
have the non-exclusive right to market, advertise and sell the services to
be offered through IPVC in the future, the compensation for such activities
to be set by agreement of the parties when such services are made
available. It is acknowledged that although the TPMA is given a right to
market the Services within the Territory as an Agent of IPVC, TPMA also is
hereby granted the authority to market the Service with the Territory using
other Agents. The identical terms and conditions of this agreement will
apply to agents or partners of the TPMA.
2. TPMA's Obligations
TPMA shall diligently promote the Programs or Service within the Territory.
TPMA also is granted the authority to hire agents or employees to comply
with the obligation. TPMA shall supply documentation to Agents and
Distributors on approved promotional materials to be translated into the
major languages spoken within the Territory. TPMA agents or partners will
comply with the terms and limitations of this Agreement. TPMA's agents,
distributors or partners will comply with the terms and limitations of this
Agreement.
3. Compensation
In consideration for marketing, advertising, recruiting and selling the
Services and Programs as set above, the TPMA shall be paid a royalty as set
forth in Appendix B.
4. Billing and Collecting
A. Collecting will be by Pre-Payment or pre-approved Invoicing with terms
to be set forth at the time of contract. IPVC will grant the Agent prior
credit approval before extending terms to the customer. If it is determined
by IPVC that the customer is a credit risk, TPMA has the option of posting
<PAGE>
a Letter of Credit with IPVC on behalf of the customer, or requiring the
customer to post a Letter of Credit directly with IPVC.
B. IPVC shall, at the end of a thirty-day period, provide TPMA with a
compilation of accrued charges. Depending on the cycle of payment, IPVC
will forward to TPMA a complete listing of all revenues credited to the
Agent with the associated calculation of TPMA's royalty. In no case shall
the royalty be held by IPVC for longer than thirty (30) days after either
the two weeks or month-ending account receivable cycle.
5. Letter of Credit
TPMA agrees to provide an Irrevocable Letter of Credit (LOC.) from a
mutually agreed upon financial institution for one and one-half times the
estimated monthly billing for those customers that IPVC will not extend
credit to. The LOC shall be adjusted periodically using IPVC procedures to
account for variations in the value of billings. In no case shall the LOC
be less than one and one-half times the estimated monthly billing. The LOC
shall state that if payment is not received by IPVC within 30 calendar
days, IPVC shall have the ability to draw against the LOC for the
outstanding amount due IPVC (usage charge less TPMA's royalty).
6. Third Party Infringements
TPMA shall have the sole right, in its discretion, to initiate, prosecute
or settle legal actions against any person infringing any intellectual
property rights to the Services within the Territory (except any
settlement, which would have the effect of denying to IPVC the benefits of
this Agreement). Each party shall promptly notify the other of any actual
or potential infringement, which becomes known to it. Should TPMA fail to
take appropriate and diligent action with respect to any such infringement
by a third person, then IPVC shall have the right to take such action, at
its own expense and in its own name or in the name of TPMA and the right to
enforce and collect any judgment thereon. Each party shall cooperate
(including appearance for testimony at trials and depositions) with the
other party as such party may reasonably request in regard to any legal
action brought by a party pursuant to this Section. The party requesting
such cooperation shall pay all out-of-pocket costs of the party providing
such cooperation.
7. Confidentiality
Neither party shall disclose any trade secrets (if it has been designated
as such in writing at the time of its original disclosure by one party to
the other) to persons other than those bound by the terms of this Agreement
or persons who have executed Confidentiality Agreements which require such
persons to maintain the confidentiality of such trade secrets to
substantially the same extent as required by this Section. Nothing in the
foregoing sentence shall prohibit disclosure of any information, which is
publicly known at or after the time of disclosure, which is already known
<PAGE>
to the recipient, or which is required to be disclosed by law.
8. Agreement Not to Compete
A. TPMA agrees that during the period commencing on the date of this
Agreement and continuing until the date three (3) years after this
Agreement is terminated, it will not directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director, investor, or financier or in any other
individual or representative capacity, engage or participate in any
business which competes with the business of IPVC or any TPMA supplying the
Services to IPVC within any country being serviced by IPVC or any TPMA
supplying the Service to IPVC at the time this Agreement is terminated.
TPMA covenants that during the term referenced above, it will not, either
for itself or for any other person or entity, except as may be required by
the terms of this Agreement either directly or indirectly: (1) call on,
solicit, take away or hire any of customers, employees principals, lessors,
distributor or suppliers of IPVC or any TPMA supplying the Services to
IPVC, (2) acquire or attempt to acquire rights for providing any product or
services in competition with IPVC or any TPMA supplying the Services to
IPVC, or (3) engage in any act which would interfere with or harm any
business relationship with any customer, lessor, employee, principal or
supplier of IPVC or any TPMA supplying the Services to IPVC.
B. TPMA and IPVC agree that a breach of the covenants described in this
Section will result in substantial damages to IPVC, which would be
difficult, if not impossible to ascertain. TPMA agrees that in the event of
such a breach or threatened breach, IPVC shall have the right to a
Restraining Order and Injunction, both temporary and permanent, enjoining
and restraining any such breach or threatened breach. Such injunctive
relief shall be in addition to any other remedies available to IPVC at law
or in equity. Nothing in this Agreement shall be construed to prohibit or
prevent IPVC from initiating an action or otherwise recovering any damages
as may be sustained as a result of the breach or threatened breach by the
Company. TPMA also agrees that IPVC may pursue any remedy available to it,
and the pursuit of any one such remedy at any time will not be deemed an
election of remedies or waiver of right to pursue any other remedy.
C. Should TPMA breach or violate any term of this Agreement at any time
when monies are due and owing to it from IPVC, then all unpaid Monies due
TPMA shall be subject to offset by the amount of any damages incurred by
IPVC, the amount of any attorney fees and other related expenses incurred
by IPVC in enforcing this Agreement, and by the amount of any other claims
IPVC may have against TPMA.
<PAGE>
9. Independent Contractor
The parties to this Agreement are independent contractors only and nothing
in this Agreement shall be construed as establishing any other relationship
between the parties.
10. Warranty
Each party represents and warrants that it has the power and authority to
execute and deliver, and to perform its obligations under this Agreement,
and that neither the execution or delivery of this Agreement nor the
performance of its obligations hereunder will constitute a breach of the
terms or provisions of any contract or violate any law or the rights of any
third party.
11. Term and Termination
The term of this Agreement will commence as of the date first above written
and shall continue until the third anniversary of the date of its
execution. If either TPMA or IPVC commits a material breach of any material
provision of this Agreement, and such breach is not cured within ninety
(90) days after the date of which notice of breach is provided to the
breaching party, the non-breaching party shall have the right to terminate
this Agreement upon further thirty (30) day written notice.
12. Governing Law
This Agreement shall be governed and construed in accordance with the laws
of Florida, USA (excluding any conflicts with laws or rules) and each party
submits to the jurisdiction of any state, country or federal court in the
state of Florida, USA.
13. Entire Agreement
This Agreement sets forth the entire Agreement or any understanding between
the parties as to its subject matter and supersedes all other documents,
verbal commitments or understandings made before the conclusion of this
Agreement, and none of the terms of this Agreement may be amended or
modified except in writing signed by all the parties.
14. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party except that any party may assign this
Agreement to any successor corporation (including the surviving corporation
in any consolidation or merger) or assignee of all or substantially all of
its business. In the event of such an assignment, the assigning party shall
remain jointly and severally liable with the assignee for the full and
timely performance by such assignee of the assigning party's obligations
hereunder.
<PAGE>
15. Notices
Any notice, consent or approval required or permitted under this Agreement
shall be in writing and shall be delivered to the following addresses (i)
personally by hand (ii) by certified mail, postage prepaid with return
receipt requested, or (iii) by fax confirmed by such certified mail:
If to the TPMA: Armstrong International Group
9403 North West 42nd Street
Sun Rise, FL. 33351
E-mail address
Phone number 954 741 9693
Fax number 954 741 5125
If to; IPVoice Communications, Inc.
5901 South Middlefield Road, Suite 100
Littleton, Colorado 80123
E-mail Address: [email protected]
Phone Number: 303.738.1266
Fax Number: 303.738.1295
All notices shall be deemed effective upon the date delivered by hand or
sent by fax, or if mailed, as of the date which is five (5) days after the
date of mailing. Either party may change its address for notice purposes by
notifying the other party of such changes of address in accordance with the
foregoing.
16. Waivers
No waiver of any term or condition of this Agreement shall be valid except
when made by an instrument in writing expressly waiving such term or
condition signed by the waiving party. A waiver by any party of any term or
condition of this Agreement in one instance shall not be deemed a waiver of
such term or condition for any similar instance in the future or of any
subsequent breach. All rights, remedies obligations and agreements
contained in this Agreement shall be cumulative and not in limitation of
any other remedy, right, obligation or agreement of any other party.
17. Severability
If any part of this Agreement is contrary to, prohibited by or deemed
invalid under the laws of any jurisdiction, such provision shall, as to
such jurisdiction be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, without invalidation or otherwise
affecting the validity or enforceability of such provision in any other
jurisdiction.
<PAGE>
18. Specific Performance
The parties acknowledge that there may be no adequate remedy at law for any
violation of Sections 1, 7 and 8 of this Agreement, and that in addition to
any other remedies which might be available, such Sections shall be
specifically enforceable in accordance with their terms.
19. Headings
Headings contained in this Agreement are for convenience of reference only
and shall not affect the meaning or construction under the provision of
this Agreement.
20. Voluntary Agreement
Each party warrants that before signing this Agreement such party has been
fully advised of its contents and meaning, has had legal counsel explain
the meaning and legal significance of each and every provision therein, and
executes this Agreement freely and voluntarily with full knowledge and
understanding of its contents.
21. Cumulative Remedies
No remedies or election hereunder shall be deemed exclusive, but shall,
whenever possible, be cumulative with all other remedies at law or in
equity.
22. Attorney Fees
In the event any action, proceeding or litigation, judicial or
non-judicial, arises out of the subject matter of this Agreement the
prevailing party shall be entitled to payment of all costs, expenses and
attorney fees incurred.
23. Successor/Assigns
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, successors, personal
representative and assigns. The parties each agree to take such further
action and deliver such ancillary document as may be reasonable or
necessary in order to carry out the terms and provision of this Agreement.
24. Authority
Each individual executing this Agreement in a representative capacity
warrants to the other party that such person has sufficient authority to
bind the party on behalf of whom they are executing this document.
<PAGE>
25. Duplicate Originals
Any fully executed copy of this Agreement shall be deemed for all purposes
as a duplicate original. All originals and duplicate must be signed before
a notary or will be considered invalid.
EXECUTED by the parties effective as of the date first written above.
IPVoice Communications, Inc.
By: /s/ Barbara S. Will
- ---------------------------
Name: Barbara S. Will
Title: President and COO
State of )
County of ) ss.
Country of )
Subscribed and sworn to under oath before me on this _____day of ______________,
------------------------
Notary Public
My Commission Expires:
THE ARMSTRONG INTERNATIONAL GROUP
By: /s/ Robert L. Armstrong
- --------------------------------
Name: Robert Armstrong
Title: President
State of )
County of ) ss.
Country of )
Subscribed and sworn to under oath before me on this _____day of ______________,
------------------------
Notary Public
My Commission Expires:
<PAGE>
Appendix A
Non-Exclusive of Territory
Or
Exclusive of Territory
IPVoice Communications Inc. and TPMA have agreed that IPVC grants
non-exclusivity of territory to TPMA.
INIT RLA INIT BW
--- --
IPVoice Communications Inc. and TPMA have agreed that IPVC grants exclusivity to
TPMA in the Following Territory. TPMA does hereby purchase the exclusive right
to market IPVC services in the chosen country. All originating traffic,
regardless of who is responsible for the sale, will roll to the TPMA revenue
stream with exclusivity for its country, state or city. The fee set forth will
entitle TPMA to:
-Exclusivity.
-A Dedicated Sales and Service Contact
-On-site training for sales and service.
-Training Manuals, changes and updates as they become available.
-Updates on IPVC competitive advantage.
-Market Overview and updates.
-Detailed information on IPVC products and services.
-Wholesale Pricing.
-Billing and Collection guidelines.
-Newsletter and future product development charts.
-Technical Assistance.
-Future product development changes.
-Commission on terminating traffic from other Agents.
-Yearly Agent meetings.
The purchase of the exclusive territory will vary by country and market and has
been determined as follows:
1.) Exclusive Territory is granted to TPMA and is as follows:
Territory Signing Fee
a) ________ $________
b) ________ $________
<PAGE>
For the right to market and advertise the Services and set up an office. As used
in this Agreement, "Service" shall mean domestic, intra-country and
international calling services offered through the date of this Agreement,
specifically origination and termination in designated calling patterns,
international and calling card. TPMA shall also have the exclusive right to
market, advertise, and sell the services to be offered through IPVC in the
future, the compensation for such activities to be set by agreement of the
parties as set forth in Appendix B.
It is acknowledged that although TPMA is granted (a) the right to market a
geographic territory (b) Product and Services, as an Agent on behalf of IPVC,
IPVC also grants authority to TPMA to market said Territory by using TPMA's own
agents or direct sales staff.
TPMA Obligations
TPMA shall diligently promote the Service within the Territory. TPMA
has the authority to hire agents or employees to comply with the
obligations at the sole expense of TPMA. TPMA shall have pre-approved
promotional materials which must be translated into the major languages
spoken within the Territory at the cost of TPMA. TPMA's agents or
partners will comply with the terms and limitations of this agreement.
TPMA is responsible for setting up an office conclusive to where
customer calls can be answered, "IPVoice Communications (country
name)," and that sales and service can be handled in a professional
manner.
TPMA understands and agrees that Purchase price is due and payable at the
signing of this contract.
INIT RLA INIT BW
--- --
<PAGE>
Appendix B
Agent Compensation
This Appendix B, dated July 23, 1998, by and between IPVoice Communications,
Inc. ("IPVC"), a Nevada Corporation, and AIG, Ltd (Agent), is made part of the
Agreement between IPVC and TPMA dated July 23, 1998 (the "Agreement:).
IPVC agrees to pay the following royalties, fees, and stocks for the country(s)
listed in Appendix A and only to the TPMA, at the times set forth in the
Agreement.
A. Pre-Sale and Recruiting TruePartners Master Distributors and Agents.
Monthly Draw:
None
Warrants
50,000 warrants of IPVoice Common Stock at an exercise price of $0. 75
per share or at the option of IPVC the sum of $37,500.00 US dollars.
This consideration by IPVC reflects AIG's efforts in negotiating TPMD
contracts prior to product and services being ready for deployment.
EQUIPMENT SALES
A. TrueConnect Gateway Sales for Domestic and International
TPMA Rate Commission
- ----------- -------------
Per Gateway 2% of Equipment Sales
Added Gateways 1%
T/1 and/or E/1 Cards 2%
B. TrueConnect Gateway or TrueWeb Sales No Network applications
TPMA Rate: Commission
Per Site 5% of IPVC's charges per call record
This Commission will not be paid on clients, agents, customer, partners,
and distributors when network is used.and/or per minute commissions are
paid. This commission is only applicable on TrueConnect Gateway equipment
and Software licensing contracts apply.
C. Internet Origination and Terminations
<PAGE>
Rate
All minutes Originating and Terminating of IPVC's Internet Network the TPMA
will receive (To be determined by locations) paid on a per minute bases, on
all clients, subagents and Master Distributors signed by TPMA on behalf of
IPVC.
D. International and Domestic Carrier Network
Rate:
For all Call Originating and/or Terminating over any network
other then IPVC's Internet network TPMA will receive a
percentage on a per minute bases, on all clients, sub-agents
and TPMD signed by TPMA on behalf of IPVC.
Commission percentages paid for Agent Services sold (if applicable) in countries
other than those in Paragraph A, B and C above are country specific and will be
added on a country by country basis to this Agreement as deemed appropriate by
Agent and IPVC.
Should market conditions change IPVC reserves the right to change the commission
structure.
"Net Revenues" mean gross revenues actually received by IPVC or the Agent in
respect of sales of the services defined in the Agreement, services less IPVC's
cost of, but not limited to, taxes, duties, discounts, license fees, equipment,
network, labor, refunds and administrative. Both IPVC and Agent shall determine
rates for the Service switching the Territory.
In order to stay competitive and maximize return, IPVC requires in the event of
an 800-toll free access number being used, the number be changed periodically.
Agent specifically agrees to contact customers and make the required number
changes within two weeks of notice by IPVC. IPVC will give a minimum of two
weeks notice after which number change is required. IPVC may invalidate this
Agreement if Agent fails to make the required changes without agreed written
notice from Agent for delays.
IPVoice Communications, Inc.
By: /s/ Barbara S. Will
- ---------------------------
Name:Barbara S. Will
Its:President and C.O.O
Armstrong International Group, Inc.
By:/s/ Robert Armstrong
- ---------------------------
Name:Robert Armstrong
Its:President
EXHIBIT 10.16
IPVoice Communications, Inc.
TruePartner Master Agent Marketing Agreement
This Marketing Agreement (Agreement) is entered into between IPVoice
Communications, Inc., a Nevada Corporation ("IPVC"), and International
Investment Partners, Ltd. (IIP), located at 615 Centerville Road, Lancaster, PA
17601, known as TruePartner Master Agent (TPMA).
1. Non-Exclusive Territory grants to the TPMA the non-exclusive right to
market, advertise and sell the Service as defined in Appendix A (if
applicable). As used in this Agreement, Service means domestic and
international calling services, programs such as TruePartners Master
Distributors and Master Agents offered through IPVC on the date of this
Agreement, specifically, TrueConnect Products, and Services and recruiting
Distributors and Agents to sell or use international and domestic
origination and termination, 800 international service and International
outbound service. The TPMA shall also have the non-exclusive right to
market, advertise and sell the services to be offered through IPVC in the
future, the compensation for such activities to be set by agreement of the
parties when such services are made available. It is acknowledged that
although the TPMA is given a right to market the Services within the
Territory as an Agent of IPVC, may also have authority to market the
Service with the Territory using other Agents. The identical terms and
conditions of this agreement will apply to agents or partners of the TPMA.
2. TPMA's Obligations
The TPMA shall diligently promote the Programs or Service within the
Territory. The TPMA has the authority to hire agents or employees to comply
with the obligation. The TPMA shall supply documentation to Agents and
Distributors on approved promotional materials to be translated into the
major languages spoken within the Territory. The TPMD agents or partners
will comply with the terms and limitations of this Agreement. The TPMA's
agents, distributors or partners will comply with the terms and limitations
of this Agreement.
3. Compensation
In consideration for marketing, advertising, recruiting and selling the
Services and Programs as set above, the TPMA shall be paid a royalty as set
forth in Appendix B.
4. Billing and Collecting
A. The normal method of collecting will be by Pre-Payment or pre-approved
Invoicing with terms to be set forth at the time of contract. In this
instance IPVC will give the Agent prior credit approval before extending
these terms to the customer. If it is determined by IPVC that the customer
is a credit risk, the TPMA has the option of posting a Letter of Credit,
with IPVC on behalf of the customer, or asking the customer to post a
Letter of Credit directly with IPVC.
B. IPVC will, at the end of a thirty-day period, provide the TPMA with a
compilation of accrued charges. Dependent on the cycle of payment, IPVC
will forward to the TPMA a complete listing of all revenues credited to the
Agent with the associated calculation of the TPMA's royalty. In no case
will the royalty be held by IPVC for longer than thirty (30) days after
either the two weeks or month-ending account receivable cycle.
1
<PAGE>
5. Letter of Credit
The TPMA agrees to provide an Irrevocable Letter of Credit (LOC.) from a
mutually agreed upon financial institution for one and one-half times the
estimated monthly billing for those customers that IPVC will not extend
credit to. The LOC shall be adjusted periodically using IPVC procedures to
account for variations in the value of billings. In no case can the LOC be
less than one and one-half times the estimated monthly billing. The LOC
shall state that if payment is not received by IPVC within 30 calendar
days, IPVC shall have the ability to draw on the LOC for the outstanding
amount due IPVC (usage charge less TPMA's royalty).
6. Third Party Infringements
The TPMA shall initially have the sole right, in its discretion, to
initiate, prosecute or settle legal actions against any person infringing
any intellectual property rights to the Services within the Territory
(except any settlement, which would have the effect of denying to IPVC the
benefits of this Agreement). Each party shall promptly notify the other of
any actual or potential infringement, which becomes known to it. Should the
TPMA fail to take appropriate and diligent action with respect to any such
infringement by a third person, then IPVC shall have the right to take such
action, at its own expense and in its own name and the right to enforce and
collect any judgment thereon. Each party shall cooperate (including
appearance for testimony at trials and depositions) with the other party as
such party may reasonably request in regard to any legal action brought by
a party pursuant to this Section. The party requesting such cooperation
shall pay all out-of-pocket costs of the party providing such cooperation.
7. Confidentiality
Neither party shall disclose any trade secrets (if it has been designated
as such in writing at the time of its original disclosure by one party to
the other) to persons other than those bound by the terms of this Agreement
or persons who have executed Confidentiality Agreements which require such
persons to maintain the confidentiality of such trade secrets to
substantially the same extent as required by this Section. Nothing in the
foregoing sentence shall prohibit disclosure of any information, which is
publicly known at or after the time of disclosure, which is already known
to the recipient, or which is required to be disclosed by law.
8. Agreement Not to Compete
A. The TPMA agrees that during the period commencing on the date of this
Agreement and continuing until the date three (3) years after this
Agreement is terminated, it will not directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director, investor, or financier or in any other
individual or representative capacity, engage or participate in any
business which competes with the business of IPVC or any TPMA supplying the
Services to IPVC within any country being serviced by IPVC or any TPMA
supplying the Service to IPVC at the time this Agreement is terminated. The
TPMA covenants that during the term referenced above, it will not, either
for itself or for any other person or entity, except as may be required by
the terms of this Agreement either directly or indirectly: (1) call on,
solicit, take away or hire any of customers, employees principals, lessors,
distributor or suppliers of IPVC or any TPMA supplying the Services to
IPVC, (2) acquire or attempt to acquire rights for providing any product or
services in competition with IPVC or any TPMA supplying the Services to
IPVC, or (3) engage in any act which would interfere with or harm any
business relationship with any customer, lessor, employee, principal or
supplier of IPVC or any TPMA supplying the Services to IPVC.
B. The parties agree that a breach of the covenants described in this
Section will result in substantial damages to IPVC, which would be
difficult, if not impossible to ascertain. The TPMA thus agrees that in the
event of such a breach or threatened breach, IPVC shall have the right to a
Restraining Order and Injunction, both temporary and permanent, enjoining
and restraining any such breach or threatened breach. Such injunctive
relief shall be in addition to any other remedies available to IPVC at law
or in equity. Nothing in this Agreement shall be construed to prohibit or
2
<PAGE>
prevent IPVC from initiating an action or otherwise recovering any damages
as may be sustained as a result of the breach or threatened breach by the
Company. The TPMA also agrees that IPVC may pursue any remedy available to
it, and the pursuit of any one such remedy at any time will not be deemed
an election of remedies or waiver of right to pursue any other remedy.
C. Should the TPMA breach or violate any term of this Agreement at any time
when monies are due and owing to it from IPVC, then all unpaid monies due
the TPMA shall be subject to offset by the amount of any damages incurred
by IPVC, the amount of any attorney fees and other related expenses
incurred by IPVC in enforcing this Agreement, and by the amount of any
other claims IPVC may have against the TPMA.
9. No Relationship
The parties to this Agreement are independent contractors only and nothing
in this Agreement shall be construed as establishing any other relationship
between the parties.
10. Warranty
Each party represents and warrants that it has the power and authority to
execute and deliver, and to perform its obligations under this Agreement,
and that neither the execution or delivery of this Agreement nor the
performance of its obligations hereunder will constitute a breach of the
terms or provisions of any contract or violate any law or the rights of any
third party.
11. Term and Termination
The term of this Agreement will commence as of the date first above written
and shall continue until the third anniversary of the date of its
execution. If either the TPMA or IPVC commits a material breach of any
material provision of this Agreement, and such breach is not cured within
ninety (90) days after the date of which notice of breach is provided to
the breaching party, the non-breaching party shall have the right to
terminate this Agreement upon further thirty (30) day written notice.
12. Governing Law
This Agreement shall be governed and construed in accordance with the laws
of Colorado, USA (excluding any conflicts with laws or rules) and each
party submits to the jurisdiction of any state, country or federal court in
the state of Colorado, USA.
13. Entire Agreement
This Agreement sets forth the entire Agreement or any understanding between
the parties as to its subject matter and supersedes all other documents,
verbal commitments or understandings made before the conclusion of this
Agreement, and none of the terms of this Agreement may be amended or
modified except in writing signed by all the parties.
14. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party except that any party may assign this
Agreement to any successor corporation (including the surviving corporation
in any consolidation or merger) or assignee of all or substantially all of
its business. In the event of such an assignment, the assigning party shall
remain jointly and severally liable with the assignee for the full and
timely performance by such assignee of the assigning party's obligations
hereunder.
3
<PAGE>
15. Notices
Any notice, consent or approval required or permitted under this Agreement
shall be in writing and shall be delivered to the following addresses (i)
personally by hand (ii) by certified mail, postage prepaid with return
receipt requested, or (iii) by fax confirmed by such certified mail:
If to the TPMA: International Investment Partners, Ltd.
615 Centerville Road
Lancaster, PA 17601
E-mail address: [email protected]
Phone number: (717) 892-6782
Fax number: (717) 892-6853
If to; IPVoice Communications, Inc.
5901 South Middlefield Road, Suite 100
Littleton, Colorado 80123
E-mail Address: [email protected]
Phone Number: (303) 738-1266
Fax Number: (303) 738-1295
All notices shall be deemed effective upon the date delivered by hand or
sent by fax, or if mailed, as of the date which is five (5) days after the
date of mailing. Either party may change its address for notice purposes by
notifying the other party of such changes of address in accordance with the
foregoing.
16. Waivers
No waiver of any term or condition of this Agreement shall be valid except
when made by an instrument in writing expressly waiving such term or
condition signed by the waiving party. A waiver by any party of any term or
condition of this Agreement in one instance shall not be deemed a waiver of
such term or condition for any similar instance in the future or of any
subsequent breach. All rights, remedies obligations and agreements
contained in this Agreement shall be cumulative and not in limitation of
any other remedy, right, obligation or agreement of any other party.
17. Severability
If any part of this Agreement is contrary to, prohibited by or deemed
invalid under the laws of any jurisdiction, such provision shall, as to
such jurisdiction be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, without invalidation and remanded of this
Agreement of affecting the validity or enforceability of such provision in
any other jurisdiction.
18. Specific Performance
The parties acknowledge that there may be no adequate remedy at law for any
violation of Sections 1, 7 and 8 of this Agreement, and that in addition to
any other remedies which might be available, such Sections shall be
specifically enforceable in accordance with their terms.
4
<PAGE>
19. Headings
Headings contained in this Agreement are for convenience of reference only
and shall not affect the meaning or construction under the provision of
this Agreement.
20. Voluntary Agreement
Each party warrants that before signing this Agreement such party has been
fully advised of its contents and meaning, has had legal counsel explain
the meaning and legal significance of each and every provision therein, and
executes this Agreement freely and voluntarily with full knowledge and
understanding of its contents.
21. Cumulative Remedies
No remedies or election hereunder shall be deemed exclusive, but shall,
whenever possible, be cumulative with all other remedies at law or in
equity.
22. Attorney Fees
In the event any action, proceeding or litigation, judicial or
non-judicial, arises out of the subject matter of this Agreement the
prevailing party shall be entitled to payment of all costs, expenses and
attorney fees incurred.
23. Successor/Assigns
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, successors, personal
representative and assigns. The parties each agree to take such further
action and deliver such ancillary document as may be reasonable or
necessary in order to carry out the terms and provision of this Agreement.
24. Authority
Each individual executing this Agreement in a representative capacity
warrants to the other party that such person has sufficient authority to
bind the party on behalf of whom they are executing this document.
25. Duplicate Originals
Any fully executed copy of this Agreement shall be deemed for all purposes
as a duplicate original. All originals and duplicate must be signed before
a notary or will be considered invalid.
5
<PAGE>
EXECUTED by the parties effective as of the date first written above.
IPVoice COMMUNICATIONS, INC.
By: /s/ Barbara S. Will
- -----------------------------------
Barbara S. Will
President and COO
State of Colorado )
) ss.
County of Jefferson )
Subscribed and sworn to under oath before me on this 19th day of February, 1999.
/s/ Lillian M. Vader
------------------------
Notary Public
8601 Zuni #153, Denver CO 80221
My Commission Expires 8/12/99
INTERNATIONAL INVESTMENT PARTNERS, LTD.
By: /s/ (ilegible)
- -------------------
Signature
Name:
Title:
State of Colorado )
) ss.
County of Jefferson )
Subscribed and sworn to under oath before me on this 19th day of February, 1999.
/s/ Lillian M. Vader
Notary Public
8601 Zuni #153, Denver CO 80221
My Commission Expires 8/12/99
6
<PAGE>
Appendix A
Non-Exclusive of Territory
Or
Exclusive of Territory
IPVoice Communications Inc. and the TPMA have agreed that IPVC gives
non-exclusivity of territory to the TPMA.
INT BW INT (illegible)
-- -----------
IPVoice Communications Inc. and the TPMA have agreed that IPVC gives exclusivity
to the TPMA in the Following Territory. The TPMA will purchase the exclusive to
market IPVC services in their chosen country. All originating traffic,
regardless of who is responsible for the sale, will roll to the TPMA revenue
stream. With exclusivity for this/these country, state or city. The fee set
forth will entitle the TPMA to:
-Exclusive
-A Dedicated Sales and Service Contact
-On-site training for sales and service
-Training Manuals, changes and updates as they become available
-Updates on IPVC competitive advantage
-Market Overview and updates
-Detailed information on IPVC products and services
-Wholesale Pricing
-Billing and Collection guidelines
-News Latter and future product development charts
-Technical Assist
-New Letters and future product development changes
-Commission on terminating traffic from other Agents
-Yearly Agent meetings
The purchase of the exclusive territory will vary by country and market and has
been determined as follows:
1.) Exclusive Territory is granted to the TPMA and is as follows:
Territory Signing Fee
a) ________ $________
b) ________ $________
For the right to market and advertise the Services and set up an office. As
used in this Agreement, "Service" shall mean domestic, intra-country and
international calling services offered through the date of this Agreement,
specifically origination and termination in designated calling patterns,
international and calling card. The Agent shall also have the exclusive
right to market, advertise, and sell the services to be offered through
IPVC in the future, the compensation for such activities to be set by
agreement of the parties as set forth in Appendix B.
It is acknowledged that although the Agent is given (a) the right to market
a geographic territory (b) Product and Services, as an Agent on behalf of
IPVC, IPVC also gives authority to Agent to market said Territory by using
Agent's own agents or direct sales staff.
7
<PAGE>
The Agent Obligations
The Agent shall diligently promote the Service within the Territory. The
Agent has the authority to hire agents or employees to comply with the
obligations at the sole expense of the Agent. The Agent shall have
pre-approved promotional materials which must be translated into the major
languages spoken within the Territory at the cost of the Agent. The Agent's
agents or partners will comply with the terms and limitations of this
agreement. The Agent is responsible for setting up an office conclusive to
where customer calls can be answered, "IPVoice Communications (country
name)," and that sales and service can be handled in a professional manner.
Agent understands and agrees that Purchase price is due and payable at the
signing of this contract.
INT BW INT (illegible)
-- ---------
8
<PAGE>
Appendix B
Agent Compensation
This Appendix B, dated 2/19, 1999, by and between IPVoice Communications, Inc.
("IPVC"), a Nevada Corporation, and International Investment Partners, Ltd.,
(Agent), is made part of the Agreement between IPVC and the Agent dated 2/19,
1999 (the "Agreement:).
IPVC agrees to pay the following royalties, fees, and stocks for the country(s)
listed in Appendix an only to the TPMA, at the times set forth in the Agreement.
A. Pre-Sale and Recruiting TruePartners Master Distributors and Agents.
Monthlies Draw
None
EQUIPMENT SALES
A. TrueConnect Gateway Sales for Domestic and International
TPMA Rate Commission
Per Gateway 7% of Equipment Sales
B. TrueConnect Gateway or TrueWeb Sales No Network applications
TPMA Rate: Commission
Per Site 25% of IPVC's charges per call record
This Commission will not be paid on clients, agents, customer, partners,
and distributors when network is used.and/or per minute commissions are
paid. This commission is only applicable on TrueConnect Gateway equipment
and Software licensing contracts apply
C. Internet Origination and Terminations
Rate
All minutes Originating and Terminating of IPVC's Internet Network the TPMA
will receive $0.0100 per minute on all clients, sub-agents and Master
Distributors signed by TPMA on behalf of IPVC.
9
<PAGE>
D. International and Domestic Carrier Network
Rate
For all call originating and/or Terminating over any network other then
IPVC's Internet network the TPMA will receive $0.0025 per minute on all
clients, sub-agents and TPMD signed by TPMA on behalf of IPVC.
Commission percentages paid for Agent Services sold (if applicable) in countries
other than those in Paragraph A, B and C above are country specific and will be
added on a country by country basis to this Agreement as deemed appropriate by
Agent and IPVC.
Should market conditions change IPVC reserves the right to change the commission
structure.
"Net Revenues" mean gross revenues actually received by IPVC or the Agent in
respect of sales of the services defined in the Agreement, services less IPVC's
cost of, but not limited to, taxes, duties, discounts, license fees, equipment,
network, labor, refunds and administrative. Both IPVC and Agent shall determine
rates for the Service switching the Territory.
In order to stay competitive and maximize return, the Board of Directors of IPVC
requires in the event of an 800-toll free access number being used, the number
be changed periodically. Agent specifically agrees to contact customers and make
the required number changes within two weeks of notice by IPVC. IPVC will give a
minimum of two weeks notice after which number change is required. IPVC may
invalidate this Agreement if Agent fails to make the required changes without
agreed written notice from Agent for delays.
IPVoice Communications, Inc.
By:/s/ Barbara S. Will
- ----------------------------
Barbara S. Will
President and COO
International Investment Partners, Ltd.
By: /s/ (illegible)
- --------------------
Name:
Title:
10
EXHIBIT 10.17
This Marketing Agreement (Agreement) dated this 15th day of March, 1999 is
entered into between IPVoice Communications, Inc., a Nevada Corporation, known
as (IPVC) Kenneth M. Brown. residing at 2340 Highland Court, Schaumburg, IL
60194, known as TruePartner Master Agent (TPMA).
1. Non-Exclusive Territory grants to TPMA the non-exclusive right to market,
advertise and sell the Service as defined in Appendix A (if applicable). As
used in this Agreement, Service means domestic and international calling
services, programs such as TruePartners Master Distributors and Master
Agents offered through IPVC on the date of this Agreement, specifically,
TrueConnect Products, and Services and recruiting Distributors and Agents
to sell or use international and domestic origination and termination, 800
international service and International outbound service. TPMA shall also
have the non-exclusive right to market, advertise and sell the services to
be offered through IPVC in the future, the compensation for such activities
to be set by agreement of the parties when such services are made
available. It is acknowledged that although the TPMA is given a right to
market the Services within the Territory as an Agent of IPVC, TPMA also is
hereby granted the authority to market the Service with the Territory using
other Agents. The identical terms and conditions of this agreement will
apply to agents or partners of the TPMA.
2. TPMA's Obligations
TPMA shall diligently promote the Programs or Service within the Territory.
TPMA also is granted the authority to hire agents or employees to comply
with the obligation. TPMA shall supply documentation to Agents and
Distributors on approved promotional materials to be translated into the
major languages spoken within the Territory. TPMA agents or partners will
comply with the terms and limitations of this Agreement. TPMA's agents,
distributors or partners will comply with the terms and limitations of this
Agreement.
3. Compensation
In consideration for marketing, advertising, recruiting and selling the
Services and Programs as set above, the TPMA shall be paid a royalty as set
forth in Appendix B.
4. Billing and Collecting
A. Collecting will be by Pre-Payment or pre-approved Invoicing with terms
to be set forth at the time of contract. IPVC will grant the Agent prior
credit approval before extending terms to the customer. If it is determined
by IPVC that the customer is a credit risk, TPMA has the option of posting
a Letter of Credit with IPVC on behalf of the customer, or requiring the
customer to post a Letter of Credit directly with IPVC.
B. IPVC shall, at the end of a thirty-day period, provide TPMA with a
compilation of accrued charges. Depending on the cycle of payment, IPVC
will forward to TPMA a complete listing of all revenues credited to the
Agent with the associated calculation of TPMA's royalty. In no case shall
the royalty be held by IPVC for longer than thirty (30) days after either
the two weeks or month-ending account receivable cycle.
5. Letter of Credit
TPMA agrees to provide an Irrevocable Letter of Credit (LOC.) from a
mutually agreed upon financial institution for one and one-half times the
estimated monthly billing for those customers that IPVC will not extend
<PAGE>
credit to. The LOC shall be adjusted periodically using IPVC procedures to
account for variations in the value of billings. In no case shall the LOC
be less than one and one-half times the estimated monthly billing. The LOC
shall state that if payment is not received by IPVC within 30 calendar
days, IPVC shall have the ability to draw against the LOC for the
outstanding amount due IPVC (usage charge less TPMA's royalty).
6. Third Party Infringements
TPMA shall have the sole right, in its discretion, to initiate, prosecute
or settle legal actions against any person infringing any intellectual
property rights to the Services within the Territory (except any
settlement, which would have the effect of denying to IPVC the benefits of
this Agreement). Each party shall promptly notify the other of any actual
or potential infringement, which becomes known to it. Should TPMA fail to
take appropriate and diligent action with respect to any such infringement
by a third person, then IPVC shall have the right to take such action, at
its own expense and in its own name or in the name of TPMA and the right to
enforce and collect any judgment thereon. Each party shall cooperate
(including appearance for testimony at trials and depositions) with the
other party as such party may reasonably request in regard to any legal
action brought by a party pursuant to this Section. The party requesting
such cooperation shall pay all out-of-pocket costs of the party providing
such cooperation.
7. Confidentiality
Neither party shall disclose any trade secrets (if it has been designated
as such in writing at the time of its original disclosure by one party to
the other) to persons other than those bound by the terms of this Agreement
or persons who have executed Confidentiality Agreements which require such
persons to maintain the confidentiality of such trade secrets to
substantially the same extent as required by this Section. Nothing in the
foregoing sentence shall prohibit disclosure of any information, which is
publicly known at or after the time of disclosure, which is already known
to the recipient, or which is required to be disclosed by law.
8. Agreement Not to Compete
A. TPMA agrees that during the period commencing on the date of this
Agreement and continuing until the date three (3) years after this
Agreement is terminated, it will not directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director, investor, or financier or in any other
individual or representative capacity, engage or participate in any
business which competes with the business of IPVC or any TPMA supplying the
Services to IPVC within any country being serviced by IPVC or any TPMA
supplying the Service to IPVC at the time this Agreement is terminated.
TPMA covenants that during the term referenced above, it will not, either
for itself or for any other person or entity, except as may be required by
the terms of this Agreement either directly or indirectly: (1) call on,
solicit, take away or hire any of customers, employees principals, lessors,
distributor or suppliers of IPVC or any TPMA supplying the Services to
IPVC, (2) acquire or attempt to acquire rights for providing any product or
services in competition with IPVC or any TPMA supplying the Services to
IPVC, or (3) engage in any act which would interfere with or harm any
business relationship with any customer, lessor, employee, principal or
supplier of IPVC or any TPMA supplying the Services to IPVC.
B. TPMA and IPVC agree that a breach of the covenants described in this
Section will result in substantial damages to IPVC, which would be
difficult, if not impossible to ascertain. TPMA agrees that in the event of
such a breach or threatened breach, IPVC shall have the right to a
Restraining Order and Injunction, both temporary and permanent, enjoining
and restraining any such breach or threatened breach. Such injunctive
relief shall be in addition to any other remedies available to IPVC at law
<PAGE>
or in equity. Nothing in this Agreement shall be construed to prohibit or
prevent IPVC from initiating an action or otherwise recovering any damages
as may be sustained as a result of the breach or threatened breach by the
Company. TPMA also agrees that IPVC may pursue any remedy available to it,
and the pursuit of any one such remedy at any time will not be deemed an
election of remedies or waiver of right to pursue any other remedy.
C. Should TPMA breach or violate any term of this Agreement at any time
when monies are due and owing to it from IPVC, then all unpaid Monies due
TPMA shall be subject to offset by the amount of any damages incurred by
IPVC, the amount of any attorney fees and other related expenses incurred
by IPVC in enforcing this Agreement, and by the amount of any other claims
IPVC may have against TPMA.
9. Independent Contractor
The parties to this Agreement are independent contractors only and nothing
in this Agreement shall be construed as establishing any other relationship
between the parties.
10. Warranty
Each party represents and warrants that it has the power and authority to
execute and deliver, and to perform its obligations under this Agreement,
and that neither the execution or delivery of this Agreement nor the
performance of its obligations hereunder will constitute a breach of the
terms or provisions of any contract or violate any law or the rights of any
third party.
11. Term and Termination
The term of this Agreement will commence as of the date first above written
and shall continue until the third anniversary of the date of its
execution. If either TPMA or IPVC commits a material breach of any material
provision of this Agreement, and such breach is not cured within ninety
(90) days after the date of which notice of breach is provided to the
breaching party, the non- breaching party shall have the right to terminate
this Agreement upon further thirty (30) day written notice.
12. Governing Law
This Agreement shall be governed and construed in accordance with the laws
of Florida, USA (excluding any conflicts with laws or rules) and each party
submits to the jurisdiction of any state, country or federal court in the
state of Florida, USA.
13. Entire Agreement
This Agreement sets forth the entire Agreement or any understanding between
the parties as to its subject matter and supersedes all other documents,
verbal commitments or understandings made before the conclusion of this
Agreement, and none of the terms of this Agreement may be amended or
modified except in writing signed by all the parties.
14. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party except that any party may assign this
Agreement to any successor corporation (including the surviving corporation
in any consolidation or merger) or assignee of all or substantially all of
its business. In the event of such an assignment, the assigning party shall
remain jointly and severally liable with the assignee for the full and
<PAGE>
and timely performance by such assignee of the assigning party's
obligations hereunder.
15. Notices
Any notice, consent or approval required or permitted under this Agreement
shall be in writing and shall be delivered to the following addresses (i)
personally by hand (ii) by certified mail, postage prepaid with return
receipt requested, or (iii) by fax confirmed by such certified mail:
If to TPMA: Kenneth M. Brown
2340 Highland Court
Schaumburg, IL 60194
E-mail address
Phone number: 847.843.0634
Fax number: 847.843.1954
If to: IPVoice Communications, Inc.
5901 South Middlefield Road, Suite 100
Littleton, Colorado 80123
E-mail Address: [email protected]
Phone Number: 303.738.1266
Fax Number: 303.738.1295
All notices shall be deemed effective upon the date delivered by hand or
sent by fax, or if mailed, as of the date which is five (5) days after the
date of mailing. Either party may change its address for notice purposes by
notifying the other party of such changes of address in accordance with the
foregoing.
16. Waivers
No waiver of any term or condition of this Agreement shall be valid except
when made by an instrument in writing expressly waiving such term or
condition signed by the waiving party. A waiver by any party of any term or
condition of this Agreement in one instance shall not be deemed a waiver of
such term or condition for any similar instance in the future or of any
subsequent breach. All rights, remedies obligations and agreements
contained in this Agreement shall be cumulative and not in limitation of
any other remedy, right, obligation or agreement of any other party.
17. Severability
If any part of this Agreement is contrary to, prohibited by or deemed
invalid under the laws of any jurisdiction, such provision shall, as to
such jurisdiction be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, without invalidation or otherwise
affecting the validity or enforceability of such provision in any other
jurisdiction.
18. Specific Performance
The parties acknowledge that there may be no adequate remedy at law for any
violation of Sections 1, 7 and 8 of this Agreement, and that in addition to
any other remedies which might be available, such Sections shall be
specifically enforceable in accordance with their terms.
<PAGE>
19. Headings
Headings contained in this Agreement are for convenience of reference only
and shall not affect the meaning or construction under the provision of
this Agreement.
20. Voluntary Agreement
Each party warrants that before signing this Agreement such party has been
fully advised of its contents and meaning, has had legal counsel explain
the meaning and legal significance of each and every provision therein, and
executes this Agreement freely and voluntarily with full knowledge and
understanding of its contents.
21. Cumulative Remedies
No remedies or election hereunder shall be deemed exclusive, but shall,
whenever possible, be cumulative with all other remedies at law or in
equity.
22. Attorney Fees
In the event any action, proceeding or litigation, judicial or
non-judicial, arises out of the subject matter of this Agreement the
prevailing party shall be entitled to payment of all costs, expenses and
attorney fees incurred.
23. Successor/Assigns
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, successors, personal
representative and assigns. The parties each agree to take such further
action and deliver such ancillary document as may be reasonable or
necessary in order to carry out the terms and provision of this Agreement.
24. Authority
Each individual executing this Agreement in a representative capacity
warrants to the other party that such person has sufficient authority to
bind the party on behalf of whom they are executing this document.
25. Duplicate Originals
Any fully executed copy of this Agreement shall be deemed for all purposes
as a duplicate original. All originals and duplicate must be signed before
a notary or will be considered invalid.
EXECUTED by the parties effective as of the date first written above.
IPVoice Communications, Inc.
By: /s/ Barbara S. Will
- -------------------------
President and COO
State of )
County of ) ss.
Country of )
<PAGE>
Subscribed and sworn to under oath before me on this _____day of ___________,
_______.
------------------------
Notary Public
My Commission Expires:
By:/s/Kenneth M. Brown
- -----------------------
Title:
State of )
County of ) ss.
Country of )
Subscribed and sworn to under oath before me on this _____day of ___________,
_______.
------------------------
Notary Public
My Commission Expires
<PAGE>
Appendix A
Non-Exclusivity of Territory
Or
Exclusivity of Territory
1. IPVoice Communications Inc. and TPMA have agreed that IPVC grants
non-exclusivity of territory to TPMA.
INIT _______INIT _______
2. IPVoice Communications Inc. and TPMA have agreed that IPVC grants
exclusivity to TPMA in the Following Territory. TPMA does hereby purchase
the exclusive right to market IPVC services in the chosen country. All
originating traffic, regardless of who is responsible for the sale, will
roll to the TPMA revenue stream with exclusivity for its country, state or
city. The fee set forth will entitle TPMA to:
-Exclusive
-A Dedicated Sales and Service Contact
-On-site training for sales and service
-Training Manuals, changes and updates as they become available
-Updates on IPVC competitive advantage
-Market Overview and updates
-Detailed information on IPVC products and services
-Wholesale Pricing
-Billing and Collection guidelines
-News Latter and future product development charts
-Technical Assist
-New Letters and future product development changes
-Commission on terminating traffic from other Agents
-Yearly Agent meetings
The purchase of the exclusive territory will vary by country and market and has
been determined as follows:
1.) Exclusive Territory is granted to the TPMA and is as follows:
Territory Signing Fee
a) ________ $________
b) ________ $________
For the right to market and advertise the Services and set up an office. As
used in this Agreement, "Service" shall mean domestic, intra-country and
international calling services offered through the date of this Agreement,
specifically origination and termination in designated calling patterns,
international and calling card. TPMA shall also have the exclusive right to
market, advertise, and sell the services to be offered through IPVC in the
<PAGE>
Appendix A (Continued)
Non-Exclusivity of Territory
Or
Exclusivity of Territory
future, the compensation for such activities to be set by agreement of the
parties as set forth in Appendix B.
It is acknowledged that although TPMA is granted (a) the right to market a
geographic territory (b) Product and Services, as an Agent on behalf of
IPVC, IPVC also grants authority to TPMA to market said Territory by using
TPMA's own agents or direct sales staff.
TPMA Obligations
TPMA shall diligently promote the Service within the Territory. TPMA has
the authority to hire agents or employees to comply with the obligations at
the sole expense of TPMA. TPMA shall have pre-approved promotional
materials which must be translated into the major languages spoken within
the Territory at the cost of TPMA. TPMA's agents or partners will comply
with the terms and limitations of this agreement. TPMA is responsible for
setting up an office conclusive to where customer calls can be answered,
"IPVoice Communications (country name)," and that sales and service can be
handled in a professional manner.
TPMA understands and agrees that Purchase price is due and payable at the
signing of this contract.
INIT _______INIT _______
<PAGE>
Appendix B
Agent Compensation
This Appendix B, dated March 15, 1999, by and between IPVoice Communications,
Inc. ("IPVC"), a Nevada Corporation, and Kenneth M. Brown (Agent), is made part
of the Agreement between IPVC and TPMA dated March 15, 1999 (the "Agreement:).
IPVC agrees to pay the following royalties, fees, and stocks for the country(s)
listed in Appendix A and only to the TPMA, at the times set forth in the
Agreement.
A. Pre-Sale and Recruiting TruePartners Master Distributors and Agents.
Monthly Draw
None
EQUIPMENT SALES
A. TrueConnect Gateway Sales for Domestic and International
TPMA Rate Commission
Per Gateway 2% of Equipment Sales
Added Gateways 1%
T/1 and/or E/1 Cards 2%
B. TrueConnect Gateway or TrueWeb Sales No Network applications
TPMA Rate: Commission
Per Site 5% of IPVC's charges per call record
This Commission will not be paid on clients, agents, customer, partners,
and distributors when network is used.and/or per minute commissions are
paid. This commission is only applicable on TrueConnect Gateway equipment
and Software licensing contracts apply.
C. Internet Origination and Terminations
Rate
For all minutes (originating and terminating) of IPVC's Internet Network
and on all clients, sub-agents and Master Distributors signed by TPMA on
behalf of IPVC, TPMA will be paid on a per minute basis (to be determined
by location).
<PAGE>
D. International and Domestic Carrier Network
Rate:
For all calls originating and/or terminating over any network
other than IPVC's Internet network, and for all clients,
sub-agents and TPMDs signed by TPMA on behalf of IPVC, TPMA
will receive a percentage on a per minute basis.
Commission percentages paid for Agent Services sold (if applicable) in countries
other than those in Paragraph A, B and C above are country specific and will be
added on a country by country basis to this Agreement as deemed appropriate by
Agent and IPVC.
Should market conditions change IPVC reserves the right to change the commission
structure.
"Net Revenues" mean gross revenues actually received by IPVC or the Agent in
respect of sales of the services defined in the Agreement, services less IPVC's
cost of, but not limited to, taxes, duties, discounts, license fees, equipment,
network, labor, refunds and administrative. Both IPVC and Agent shall determine
rates for the Service switching the Territory.
In order to stay competitive and maximize return, IPVC requires in the event of
an 800-toll free access number being used, the number be changed periodically.
Agent specifically agrees to contact customers and make the required number
changes within two weeks of notice by IPVC. IPVC will give a minimum of two
weeks notice after which number change is required. IPVC may invalidate this
Agreement if Agent fails to make the required changes without agreed written
notice from Agent for delays.
IPVoice Communications, Inc.
By:/s/ Barbara S. Will
- ------------------------
Name: Barbara S. Will
Title: President and C.O.O
By: /s/Kenneth M. Brown
- ---------------------------
Name: Kenneth M. Brown
Title:
EXHIBIT 10.18
AGREEMENT
THIS AGREEMENT made and entered into this 1st day of April 1999, by and
between IPVoice Communications, Inc., a Nevada corporation ("IPVC") and
Netgenie.com, LLC, an Arizona corporation ("NC").
WHEREAS, IPVC is a provider of telephony services and NC is desirous of
implementing such telephony services in the United States;
WHEREAS, IPVC and NC have agreed upon a basis upon which NC shall
provide a list of thirty (30) cities in the United States within twelve (12)
months hereafter where IPVC will provide telephony services. NC will assist IPVC
to secure telephone lines, Internet connections and co-location facilities in
those cities. However; IPVC is responsible for implementing the equipment,
telephone lines, internet facilities, collocation space, costs and contracts and
so forth needed to ensure that the service is delivered in that city.
NOW THEREFORE, for and in consideration of the mutual promises,
convenience and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. The forgoing recitals and statements are true and correct and are
incorporated herein by reference.
2. NC shall market the telephony services set forth on Exhibit A hereto
(incorporated herein by reference) in those specific 30 cities with twelve
months from the date of this agreement, with a minimum of seventy five thousand
preregistered customers in said cities for the prescribed services within a
twelve month period to receive the compensation as described in section 9 (c)
and 9 (d). IPVC is responsible to "qualify" the pre-registered customers via a
live telephone call or Internet message to the customer of IPVC may choose to
use a third-party verification company. This must be completed within 30 days
from the date that the customer has pre-registered for the service. If this is
not completed within thirty days, the customer will be deemed as qualified. The
format as to what is considered "qualified" will be determined and agreed to by
both parties. IPVC has the option not to "qualify" the customer.
3. NC and IPVC shall each use its best efforts to establish and
facilitate the location and allocation of the necessary internet facilities in
each designated city.
4. NC shall pay all expenses with respect to marketing and advertising
as necessary to establish the base of pre-registered customers.
5. NC shall spend any and all time necessary to market IPVC telephony
services as set forth herein necessary to meet the terms of this agreement.
6. IPVC shall deliver the products set forth in Exhibit B (incorporated
herein by reference) so as to enable NC to market a flat rate product upon the
terms and conditions specified in Exhibit C (incorporated herein by reference).
7. NC shall be responsible for preparing and accurately presenting
telephony product information to the customer base to be established. This
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<PAGE>
information must be supplied by IPVC within 30 days of the execution of this
agreement. Under the performance terms of this Agreement, a City shall be
considered delivered by NC, when NC has fulfilled the terms and conditions set
forth in paragraph 3 & 4 of this agreement and NC has also provided one hundred
pre-registered customers as defined in paragraph two above. IPVC shall indemnify
NC against all claims, suits, civil or administrative court proceedings or
actions arising out of IPVC's performance and obligations to customers for its
telephony services arising from this Agreement. NC shall only be liable to IPVC
for the amount of the consideration transferred to NC of the value at the date
of transfer from this Agreement, and neither shall be liable to the other under
any circumstances for punitive, special or exemplary damages arising from its
performance under the terms of this Agreement.
8. IPVC in consultation with NC shall determine the actual pricing of
the product and modification thereof as required. In the event IPVC and NC are
unable to agree on such pricing issues, the decision of IPVC shall be final.
IPVC's pricing decision must be reasonable under prevailing market, technical
and economic conditions at that time.
9. IPVC shall compensate NC for its services to the forgoing,
compensation will be paid as follows:
(a..) An activation/setup fee and a monthly flat rate fee per
customer is contemplated to be established, and in the event such fees are
charged and paid by customers NC shall receive 50% of the activation/setup fee
and 15% of monthly flat rate fees charged and paid by customers, all of such
fees to be paid only for customers signed as a result of NC marketing efforts.
This fee is to be paid to NC only during the time the customer is active up to a
maximum of two (2) years from the initial activation month. IPVC shall pay NC
within thirty (30) days of actual receipt of payment by customers for the
activation/setup fee and within thirty (30) days of actual receipt of payment by
customer for the monthly fees as paid by its customers under the terms of this
Agreement. IPVC will provide a written monthly statement accounting to NC for
all such charges received and setting forth NC's fees herein.
(b.) Upon the execution of this agreement NC shall receive
from IPVC a total of 100,000 shares of restricted common stock of IPVC; provided
however, should NC fail to deliver a minimum of eight (8) cities before December
31 1999, such consideration shall be fully refunded to IPVC without delay. IN
the event that NC fails to meet these performance goals, NC shall either return
the stock shares or their equivalent value at the time of their transfer. NC's
performance, under the terms of this Agreement, is fully contingent upon the
Contract between Benae International and IPVC. In the event that the Benae
International contract is void, NC shall have the option to return these shares
to IPVC thereby returning the parties to their status quo ante with NC's further
obligations pursuant to the terms of this Agreement fully extinguished, without
legal penalty.
(c) IPVC will issue to NC the following restricted shares of
IPVC stock based on the following performance levels to be reached by NC:
1) 8 cities delivered within 90 days of execution of the
agreement = 50,000 shares
2) 15 cities delivered within 150 days of execution of the
agreement = 50,000 + shares from #1 above
3) Each additional city above the 15 delivered (from #2
above) before December 31 1999 = 10,000 shares per city
up to a total of 30 cities.
These shares will be issued within 10 business days from the time the
performance level is reached.
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<PAGE>
(d) NC will be issued the following Warrants and Options for
issuance of IPVC shares for two years at $2.50 per share based on the following
customer levels as delivered through the efforts of NC on behalf of IPVC as
follows:
(1) NC shall be issued a year $2.50 per share
warrants to purchase 30,000 (thirty
thousand) shares for every block of 5,000 (five thousand) pre-registered
customers up to achieving the goal of 75,000 pre-registered customers within a
12 month period. These warrants will be issued within 10 business days from the
time the performance level is reached.
(e) IPVC should cause an attorney's opinion letter to be sent
via facsimile to NC which outlines the terms contained herein by no later than
Thursday, April 1, 1999, 5pm. If not, this signed agreement shall become null
and void and unenforceable.
(f) Any shares issued in connection herewith shall be adjusted
for and subject to any common stock reorganization conducted by IPVC.
10. Term and Termination: This agreement shall commence on
execution date and shall be effective for a period of one calendar year. Except
as otherwise provided herein, in the event that either party hereto fails to
perform its material obligation hereunder or breaches the terms or conditions
hereof, the other Party, may at its option, give written notice to the party
which has failed to perform or has a material breach of this Agreement of its
intention to terminate this Agreement unless such material breach or failure of
performance is remedied within fifteen (15) days of such notice. Should the
breaching party fail to cure such breach within that time period, the noticing
party may terminate this agreement.
11. Dispute Resolution Policy: Binding Arbitration: The sole
and exclusive venue and jurisdiction for resolving any controversy, dispute or
claim between or involving the parties to this Agreement shall be Phoenix,
Arizona, pursuant to the Netgenie dispute resolution policy, a copy of which is
attached hereto an Exhibit "D" and incorporated herein by this reference, or, if
appropriate under the Netgenie Dispute Resolution procedures, a court of
competent jurisdiction located in the State of Arizona, Maricopa County.
IN TESTIMONY WHEREOF, witness the signatures of the parties hereto.
IPVoice COMMUNICATIONS, INC. Netgenie.com, LLC
/s/ Barbara S. Will /s/ Harry Tahliani
-------------------- ---------------------
Barbara S. Will Harry Tahliani
President/COO/Chairperson President/CEO
Anthony K. Welch
an authorized representative
Executive Vice President/Secretary
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<PAGE>
Exhibit A
Subject cities to be included:
1. Seattle
2. San Francisco
3. San Jose
4. Los Angeles
5. San Diego
6. Denver
7. Phoenix
8. Dallas
9. Houston
10. Chicago
11. Detroit
12. Atlanta
13. Washington, D.C.
14. Philadelphia
15. New York City
16. Boston
17. Salt Lake City
18. Las Vegas
19. Baltimore
20. St. Louis
21. Cincinnati
22. Orlando
23. Tampa
24. Miami
25. Newark
26. Long Island
27. Toronto
28. Vancouver
29. Calgary
30. Montreal
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<PAGE>
Exhibit B
The TrueChoice products are all prepaid. Customer may elect to pay 30 days in
advance or IPVoice and deducted the payment from their charge card.
IPVoice TrueChoice I
Residential calling prepaid
$50.00 sign up
$25.00 per month
User may call any domestic city in the USA on the IPVoice network for a
flat rate of $25.00
All cities off the network will be billed at $0.10 per minute
IPVoice TrueChoice II
Business that have average billing of $1.00 to $5000.00
Small Business Pre Paid
$250.00 sign up
$100.00 per month
User may call any domestic city in the USA on the IPVoice network for a
flat rate of $100.00
All cities off the network will be billed at $0.09 per min
IPVoice TrueChoice Calling Card
If used in conjunction with any of the above programs
$10.00 sign up fee
$10.00 per month
User may call any domestic city in the USA on the IPVoice network for a
flat rate of $10.00
All cities off the network will be billed at $0.15 per min
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<PAGE>
Exhibit C
NC will be compensated for sales under the following terms and conditions:
A. Any charge-backs or customer disputes and non-payments will be withheld from
the following month's commissions. NC will have 30 days to assist IPVC with any
customer disputes.
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<PAGE>
Exhibit D
Netgenie.com, LLC
DISPUTE RESOLUTION POLICY
If a dispute arises relating to any relationship between netgenie.com
LLC and IPVC arising out of the duties or obligations contained in the parties'
agreement, it is expected that the parties will attempt in good faith to resolve
any such dispute in an amicable and mutually satisfactory manner.
In the event such efforts are unsuccessful, either Party may serve a notice
of mediation/arbitration ("Notice of Mediation/Arbitration") on the other Party.
Notice of Mediation/Arbitration shall be personally delivered or sent by prepaid
registered airmail or air courier, and shall be effective on receipt thereof by
the Party to whom it is addressed. Proof of receipt shall be a receipt signed by
any officer or responsible official of the Party to whom it is addressed. The
Notice of Mediation/Arbitration shall be dated, and without prejudice to any
right under the Rules permitting subsequent modifications, shall specify the
claims or issues which are to be subjected to mediation/arbitration.
IF DIFFERENCES CANNOT BE RESOLVED BY MEDIATION THE PARTIES AGREE THAT IN ORDER
TO PROMOTE TO THE FULLEST EXTENT REASONABLY POSSIBLE A MUTUALLY AMICABLE
RESOLUTION OF THE DISPUTE IN A TIMELY, EFFICIENT AND COST-EFFECTIVE MANNER, THEY
WILL WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY AND SETTLE THEIR DISPUTE
BY SUBMITTING THE CONTROVERSY TO ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
RULES OF THE AMERICAN ARBITRATION ASSOCIATION (AA.A.A.@) EXCEPT THAT ALL PARTIES
SHALL BE ENTITLED TO ALL DISCOVERY RIGHTS ALLOWED UNDER THE FEDERAL RULES OF
CIVIL PROCEDURE AS THOSE RULES EXIST IN THE UNITED STATES FEDERAL COURT FOR THE
DISTRICT OF ARIZONA.
The Parties shall attempt to select a mutually agreeable
mediator/arbitrator from A.A.A.'s Panel of Mediators/Arbitrators. If no
agreement is reached within fifteen (15) days of the first written notice of
intent to mediate/arbitrate, the current Director of Professional Services for
A.A.A. in Arizona shall serve as the mediator/arbitrator.
The Arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C.
'1 et. seq., and the judgment upon the award rendered by the arbitrator may be
entered by any court having jurisdiction thereof. Either Party may elect to
participate in the arbitration telephonically. Any substantive or procedural
rights other than the enforceability of the arbitration agreement shall be
governed by Arizona law, without regards to Arizona's conflict of laws
principles.
The Parties further expressly agree that (i) the arbitrator shall only
reach his decision by applying strict rules of law to the facts, (ii) the
arbitration shall be conducted in the English language, in Maricopa County,
Arizona, (iii) the Party in whose favor the arbitration award is rendered shall
be entitled to recover costs and expenses of the arbitration including, but not
limited to, attorneys' fees and the cost and expense of administration of the
arbitration proceedings, and any costs and attorney's fees incurred in executing
on or enforcing the arbitration award, and (iv) the arbitral award shall be
issued in Maricopa County, Arizona, U.S.A.
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<PAGE>
Except as provided in the following sentences, no party shall be entitled
to commence or maintain any action in a court of law upon any matter in dispute
until such matter shall have been submitted and determined as provided herein
and then only for the enforcement of such arbitration award. Provided that,
notwithstanding this dispute resolution policy, either party may apply to a
court of competent jurisdiction in Maricopa County, Arizona, to seek injunctive
relief before or after the pendency of any arbitration proceeding. The
institution of any action for injunctive relief shall not constitute a waiver of
the right or obligation of any party to submit any claim seeking relief other
than injunctive relief to arbitration. Judgment upon the award may be entered by
the United States Federal District Court or Maricopa County Superior Court
located in the State of Arizona, or application may be made to such court for
the judicial acceptance of the award and order of enforcement, as the case may
be, if the Arbitrator's award or decision is not complied with within seven (7)
days of the Arbitrator's decision.
Arbitration shall be the sole and exclusive procedure for resolution of
disputes between the parties, including any disputes that might arise after
termination of this Agreement.
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EXHIBIT 10.19
AGREEMENT
THIS AGREEMENT made and entered into this 1st day of April 1999, by and
between IPVoice Communications, Inc., a Nevada corporation ("IPVC") and Benae
International Inc., a Nevada corporation ("BI").
WHEREAS, IPVC is a provider of telephony services and BI is desirous of
marketing such telephony services in the United States;
NOW THEREFORE, for and in consideration of the mutual promises, convenience
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. BI shall spend the time necessary to market IPVC telephony services as
set forth herein necessary to meet the terms of this agreement.
2. BI shall be responsible for preparing and accurately presenting
telephony product information. To the customer base to be established. This
information must be supplied by IPVC with 30 days of the execution of this
agreement. Under the performance terms of this Agreement, BI will pre-register a
minimum of 100 customers in the 30 cities in which IPVC plans to offer telephony
services (Exhibit A). IPVC is responsible to "quality" the pre-registered
customers via a live telephone call or Internet message to the customer of IPVC
may choose to use a third-party verification company. This must be completed
within 30 days from that date that the customer has pre-registered for the
service. If this is not completed within thirty days, the customer will be
deemed as qualified. The format as to what is considered "qualified" will be
determined and agreed to by both parties. IPVC has the option not to "qualify"
the customers. IPVC shall indemnify BI against all claims, suits, civil or
administrative court proceeding or actions arising out of IPVC's performance and
obligations to customers for its telephony services arising from this Agreement.
BI shall only be liable to IPVC for the amount of the consideration transferred
to BI of the value at the date of transfer from this Agreement, and neither
shall be liable to the other under any circumstances for punitive, special or
exemplary damages arising from its performance under the terms of this
Agreement.
3. Upon the execution of this agreement BI shall receive from IPVC a total
of 200,000 shares of unrestricted common stock of IPVC by NO LATER than April 05
1999. BI's performance, under the terms of this Agreement, is fully contingent
upon its ability to free trade the 200,000 shares of unrestricted shares which
shall be defined for the purpose of this Agreement as "stock which can be freely
traded as over the counter issue in full compliance with Federal and State
Securities Regulations and Blue Sky Laws. Should these shares not be freely
tradable, BI shall have the option to return those shares to IPVC thereby
returning the parties to their status quo ante with BI's further obligations
pursuant to the terms of this Agreement fully extinguished, without legal
penalty.
4. In the event that BI fails to meet these performance goals within 12
months from the execution of this agreement, BI shall either return the stock
shares or their equivalent value at the time it was transferred.
5. IPVC should cause an attorney's opinion letter to be issued and attached
before the execution of this Agreement by BI.
Init: HT/BW
<PAGE>
6. Dispute Resolution Policy: Binding Arbitration: The sole and exclusive
venue and jurisdiction for resolving any controversy, dispute or claim between
or involving the parties to this Agreement shall be Phoenix, Arizona, pursuant
to the Benae dispute resolution policy, a copy of which is attached hereto an
Exhibit "B" and incorporated herein by this reference, or, if appropriate under
the Benae Dispute Resolution Procedures, a court of competent jurisdiction
located in the State of Arizona, Maricopa County.
7. Term and Termination: This agreement shall commence on execution date
and shall be effective for a period of one calendar year. Except as otherwise
provided herein, in the event that either party hereto fails to perform its
material obligation hereunder or breaches the terms or conditions hereof, the
other Party, may at its option, give written notice to the party which has
failed to perform or has a material breach of this Agreement of its intention to
terminate this Agreement unless such material breach or failure of performance
is remedied within fifteen (15) days of such notice. Should the breaching party
fail to cure such breach within that time period, the noticing party may
terminate this agreement.
IN TESTIMONY WHEREOF, witness the signatures of the parties hereto.
IPVoice COMMUNICATIONS, INC. Benae International Inc.
/s/ Barbara S. Will /s/ Harry Tahiliani
- -------------------------- ------------------------------
Barbara S. Will Harry Tahiliani
President/COO/Chairperson President/CEO
/s/ Anthony K. Welch
Anthony K. Welch, an authorized representative
Executive Vice President/Secretary
<PAGE>
Exhibit A
Subject cities to be included:
1. Seattle
2. San Francisco
3. San Jose
4. Los Angeles
5. San Diego
6. Denver
7. Phoenix
8. Dallas
9. Houston
10. Chicago
11. Detroit
12. Atlanta
13. Washington, D.C.
14. Philadelphia
15. New York City
16. Boston
17. Salt Lake City
18. Las Vegas
19. Baltimore
20. St. Louis
21. Cincinnati
22. Orlando
23. Tampa
24. Miami
25. Newark
26. Long Island
27. Toronto
28. Vancouver
29. Calgary
30. Montreal
<PAGE>
Exhibit B
BENAE INTERNATIONAL INC.
DISPUTE RESOLUTION POLICY
If a dispute arises relating to any relationship between Benae
International Inc. and IPVC arising out of the duties or obligations contained
in the parties' agreement, it is expected that the parties will attempt in good
faith to resolve any such dispute in an amicable and mutually satisfactory
manner.
In the event such efforts are unsuccessful, either Party may serve a
notice of mediation/arbitration ("Notice of Mediation/Arbitration") on the other
Party. Notice of Mediation/Arbitration shall be personally delivered or sent by
prepaid registered airmail or air courier, and shall be effective on receipt
thereof by the Party to whom it is addressed. Proof of receipt shall be a
receipt signed by any officer or responsible official of the Party to whom it is
addressed. The Notice of Mediation / Arbitration shall be dated, and without
prejudice to any right under the Rules permitting subsequent modifications,
shall specify the claims or issues which are to be subjected to
mediation/arbitration.
IF DIFFERENCES CANNOT BE RESOLVED BY MEDIATION THE PARTIES AGREE THAT IN ORDER
TO PROMOTE TO THE FULLEST EXTENT REASONABLY POSSIBLE A MUTUALLY AMICABLE
RESOLUTION OF THE DISPUTE IN A TIMELY, EFFICIENT AND COST-EFFECTIVE MANNER, THEY
WILL WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY AND SETTLE THEIR DISPUTE
BY SUBMITTING THE CONTROVERSY TO ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("AAA") EXCEPT THAT ALL PARTIES
SHALL BE ENTITLED TO ALL DISCOVERY RIGHTS ALLOWED UNDER THE FEDERAL RULES OF
CIVIL PROCEDURE AS THOSE RULES EXIST IN THE UNITED STATES FEDERAL COURT FOR THE
DISTRICT OF ARIZONA.
The Parties shall attempt to select a mutually agreeable
mediator/arbitrator from A.A.A.'s Panel of Mediators/Arbitrators. If no
agreement is reached within fifteen (15) days of the first written notice of
intent to mediate/arbitrate, the current Director of Professional Services for
A.A.A. in Arizona shall serve as the mediator/arbitrator.
The Arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C.
'1 et. seq., and the judgment upon the award rendered by the arbitrator may be
entered by any court having jurisdiction thereof. Either Party may elect to
participate in the arbitration telephonically. Any substantive or procedural
rights other than the enforceability of the arbitration agreement shall be
governed by Arizona law, without regards to Arizona's conflict of laws
principles.
The Parties further expressly agree that (i) the arbitrator shall only
reach his decision by applying strict rules of law to the facts, (ii) the
arbitration shall be conducted in the English language, in Maricopa County,
Arizona, (iii) the Party in whose favor the arbitration award is rendered shall
<PAGE>
be entitled to recover costs and expenses of the arbitration including, but not
limited to, attorneys' fees and the cost and expense of administration of the
arbitration proceedings, and any costs and attorney's fees incurred in executing
on or enforcing the arbitration award, and (iv) the arbitral award shall be
issued in Maricopa County, Arizona, U.S.A.
Except as provided in the following sentences, no party shall be entitled
to commence or maintain any action in a court of law upon any matter in dispute
until such matter shall have been submitted and determined as provided herein
and then only for the enforcement of such arbitration award. Provided that,
notwithstanding this dispute resolution policy, either party may apply to a
court of competent jurisdiction in Maricopa County, Arizona, to seek injunctive
relief before or after the pendency of any arbitration proceeding. The
institution of any action for injunctive relief shall not constitute a waiver of
the right or obligation of any party to submit any claim seeking relief other
than injunctive relief to arbitration. Judgment upon the award may be entered by
the United States Federal District Court or Maricopa County Superior Court
located in the State of Arizona, or application may be made to such court for
the judicial acceptance of the award and order of enforcement, as the case may
be, if the Arbitrator's award or decision is not complied with within seven (7)
days of the Arbitrator's decision.
Arbitration shall be the sole and exclusive procedure for resolution of
disputes between the parties, including any disputes that might arise after
termination of this Agreement.
EXHIBIT 10.20
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made this 10th day of
November, 1997, by and between Condor Worldwide, Ltd., with offices located 328
Bay Street, Nassau, Bahamas ("Consultant"), and IPVoice Communbications, Inc. a
Delaware corporation with offices located at 10724 West Ontario Place.
Littleton, Colorado, 80127 ("Client").
RECITALS
A. Consultant, and its network of professionals, is experienced in providing
assistance with international telecommunication sales and marketing
management, and other related corporate advisory services and assistance to
telecommunications business organizations, institutions and firms;
B. Client is planning on becoming a publicly traded corporation;
C. Client wishes to engage the services of Consultant and its network of
professionals to include Client within the select and limited group of
clients for which Consultant and the professionals provide various business
managerial and consulting services;
D. Consultant agrees to be retained for the foregoing purposes for which
Consultant has the requisite skills, abilities and qualifications, subject
to the terms and conditions provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are expressly acknowledged, Client and
Consultant agree as follows:
1. Recitals
The foregoing recitals are true and correct and are incorporated herein by this
reference.
2. Engagement of Consultant
Client hereby appoints Consultant and Consultant's professionals (Consultant's
Professionals") to be its business and managerial, and advisor and hereby retain
and employ Consultant, pursuant to the terms and conditions of the Agreement.
Consultant accepts such appointment and agrees to perform the services pursuant
to the terms and conditions of the Agreement.
<PAGE>
3. Terms of Agreement
This Agreement shall have an initial term of six years (the "Initial Term")
commencing February 10, 1998 and shall not extend beyond the Initial Term unless
the parties enter into a separate and independent written agreement. The parties
agree not to terminate this Agreement pursuant to this section unreasonably or
in bad faith.
4. Duties of the Consultant
Condor Worldwide, Ltd. Client retains Consultant to assist Client with Client's
international acquisitions and mergers by providing the services of Consultants
and other professionals, such services to include the review of present sales
and marketing management and the recommendation of means of expanding Client's
customer base and otherwise improving Client's sales and marketing strategy and
corporate image generally. Specifically, Consultant agrees to provide the
following services related to sales, marketing and public relations:
A. acting as advisor to Client with respect to international sales
management, corporate activities, such as planning, designing,
developing, organizing, writing and distributing sales materials and
information;
B. receive, manage, and respond to all incoming sales inquiries from or
pertaining to Client's international customers;
C. assist with all sales management meetings including the preparation of
agendas, documents, materials, and presentations to be presented at
such meetings;
D. assist in the planning, preparation and distribution of marketing
materials, news releases, and related matters pertaining to marketing
of IPVoice products;
E. assist Client to make Client and Client's management, products and
activities known to appropriate international customers, and to seek
out new business acquisitions, which are consistent with Client's
strategic growth plan;
The entirety of the services to be provided by Consultant pursuant to this
Subsection 4.A, shall hereinafter collectively be referred to as the "Condor
Services".
<PAGE>
5. Duties of the Client
(a) On a regular and timely basis, Client shall provide Consultant and
Consultant's designees with all approved data and pertinent information about
Client and Client's management, products and operations. Client shall advise
Consultant of any facts which would affect the accuracy of any prior data or
information provided Consultant or Consultant's Professionals by Client.
(b) Client shall use its best efforts to promptly provide Consultant and
Consultant's Professions with full and complete copies of all product and
marketing literature and details; and copies of all product/service brochures,
sales materials, etc.
6. Representation and Indemnification
(a) Client shall be deemed to make a continuing representation of the accuracy
of any and all material facts, information and data which Client supplies to
Consultant or Consultant's Professionals, and Client acknowledges its awareness
that Consultant and Consultant's Professional will rely on such continuing
representation in disseminating such information and otherwise performing its
technical functions.
(b) Consultant, in the absence of written notice from Client, may rely upon the
continuing occurrence of material information and data supplied by Client.
(c) Client hereby agrees to indemnify Consultant against, and to hold Consultant
harmless from any claims, demands, suits, loss, damages, including legal fees
and expenses arising from Consultant's reliance upon the occurrence and
continuing accuracy of such facts, material, information and data, if and only
if, the facts, materials, information and data was provided to Consultant by
Client.
7. Compensation
A. Condor Services. For Condor services rendered, Client shall pay Consultant
and/or Consultant's designee(s) in the form of free trading common stock of
Client (the "Common Stock"" issued pursuant to Rule 504 or registered pursuant
to a Form S-8 registration statement or similar registration statement, as
follows:
B. Upon the listing of IpVoice on the over-the-counter bulletin board (OTC: BB).
Client shall convey or cause to be conveyed to Consultant or Consultant's
designee(s) six hundred thousand (600,000) shares of Client's free trading
common stock;
C. Client shall convey or cause to be conveyed to Consultant or Consultant's
designee(s) monthly compensation comprised of five thousand (5,000) dollars,
such payments to be made on or before the first (1st) calendar day of each,
month commencing December 1997.
The Common Stock to be issued to Consultant and/or Consultant's designee(s)
pursuant to this Subsection 7.A., shall be duly issued, fully paid and
nonassessable upon its conveyance to Consultant and or Consultant's designee(s).
<PAGE>
If Client should request Consultant to perform othjer services not included in
the Services listed in Section 4 herein. Client shall compensate Consultant or
consultant's designee(s) as may be agreed to by the parties in connection with
those specific services.
8. Best Efforts Basis
The parties agree that they individually and separately shall at all times
faithfully and to the best of their experience, ability, and talents, perform
all the duties that may be required of and from each other pursuant to the terms
of this Agreement. Consultant does not guarantee or warrant that its efforts
shall have any impact on Client's business or that any subsequent financial
improvement shall have any impact on Client's business or that any subsequent
financial improvement shall result from Consultant's efforts.
9. Client's Right to Approve Consultant's Actions
Client expressly retains the right to approve, in its sole discretion, the sales
and marketing services provided by Consultant that involves Client, including
with limitation, all sales activities and marketing materials. Consultant and
Client mutually agree that Consultant is not authorized to enter into agreements
on behalf of Client. Client agrees not to withhold its approval pursuant to this
section unreasonably.
10. Costs and Expenses
Consultant shall be responsible for paying all daily and ordinary expenses
incurred during and in relation to Consultant's performance under this Agreement
including, but not limited to, ordinary phone, fax, delivery, and copying
expenses. Client agrees to pay for all extraordinary expenses, if any, incurred
by Consultant in relation to Consultant's performance under this Agreement,
including without limitation, long distance travel expenses for any trips
exceeding fifty (50) miles taken on behalf of Client, and printing costs;
provided that Consultant must obtain Client's written approval of all such costs
and expenditures prior to incurring them.
11. Consultant is Not an Agent
Consultant obligations under this Agreement consist solely of the Consulting
Services described herein. In no event shall Consultant be considered to act as
the agent of Client or otherwise represent or bind Client. For the purposes of
this Agreement, Consultant is an independent contractor. All final decisions
with respect to acts of Client or its affiliate, whether or not made pursuant to
or in reliance on information or advice furnished by Consultant hereunder, shall
be those of Client or such affiliated and Consultant shall under no
circumstances be liable for any expense incurred or loss suffered by Client as a
consequence of such action or decisions.
<PAGE>
12. Non-Exclusive Services
Client acknowledges that Consultant is currently providing services of the same
or similar nature to other parties and Client agrees that Consultant is not
prevented or barred from rendering services of the same nature or a similar
nature to any other individual or entity. Consultant understands and agrees that
Client shall not be prevented or barred from retaining other persons or entities
to provide services of the same or similar nature as those provided by
Consultant. Consultant shall advise Client of Consultant's positions with
respect to any activity, employment, business arrangement or potential conflict
of interest which may be relevant to this Agreement.
13. Non-Circumvention of Consultant
Client agrees, represents and warrants hereby that it will not circumvent
Consultant with respect to any prospective customer introduced by Consultant to
Client nor with respect to any transaction, merger, acquisition, or other
business opportunity proposed by, assisted with or otherwise promoted by
Consultant for the benefit of Client pursuant to the terms of this Agreement.
14. Miscellaneous
A. Authority. The execution and performance of this Agreement has been duly
authorized by all requisite corporate action. This Agreement is a valid and
binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and in any
manner only by an instrument in writing executed by the parties hereto.
C. Waiver. All the rights and remedies of either party under this Agreement are
cumulative and not exclusive of any other rights and remedies provided by law.
No delay or failure on the part of either party in the exercise of any right or
remedy arising from a breach of this Agreement shall operate as a waiver of any
subsequent right or remedy arising from a subsequent breach of this Agreement.
The consent of any party, where required hereunder, to any act or occurrence
shall not be deemed to be a consent to any other act or occurrence.
D. Assignment. Neither this Agreement nor any right created by it shall be
assignable by either party without the prior written consent of the other.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
person, other than the parties and their successors, any rights or remedies
under this Agreement.
E. Notices. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
mails for transmittal by certified or registered mail, postage prepaid, when
deposited with a courier such as Federal Express or the like, or when sent by
facsimile transmission with a confirming copy by first class mail, provided that
such communication is addressed:
<PAGE>
In the Case of Consultant to: Condor Worldwide, Ltd.
Attn: James K. Howson
328 Bay Street
Nassau, Bahamas
In the case of Client: Barbara Will
President
IPVoice Communications, Inc.
10724 West Ontario Place
Little Rock, CO 80127
Telephone: (303) 933-1768
Facsimile: (303) 933-5968
Or to such other person or address designated by the parties hereto to receive
notice. Any such notice shall be deemed received the earlier of actual receipt
or five (5) business days following deposit of the same.
F. Headings and Captions. The headings of paragraphs are included solely for
convenience. If a conflict exists between any heading and the text of this
Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits hereto contain the entire
Agreement between the parties with respect to the transaction contemplated by
the Agreement and no other prior written or oral statement or agreement shall be
recognized or enforced. This agreement may be executed in any number of
counterparts but the aggregate of the counterparts together constitute only one
and the same instrument.
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality
of unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be construed as if it never contained any such invalid,
illegal or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State of
Delaware. Any legal action brought hereunder shall be properly commenced and
venue shall lie only in a state or federal court of competent jurisdiction
located in the State of Delaware.
J. Attorney's Fees. If any action at law or in equity, including an action for
declaratory relief, is brought to enforce or interpret the provisions of this
Agreement, the prevailing party shall be entitled to recover actual attorneys
fees from the other party. The attorneys fees may be ordered by the court in the
trial of any action described in this paragraph or may be enforced in a separate
action brought for determining attorney's fees.
K. Time is of the Essence. Time is of the essence of this Agreement and of each
and every provision hereof.
<PAGE>
L. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other and further
documents and take such other and further actions as may be necessary or
convenient to effect the transactions described herein.
M. Further Actions. At any time, and from time to time, each party hereto agrees
to take actions and to execute and deliver documents, at its own expense, as may
be reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. Client and Consultant agree to indemnify, defend and hold
each other harmless from and against all demands, claims, actions, actions,
losses, damages, liabilities, costs and expenses, including without limitation,
interest, penalties and attorneys fees and expenses asserted against or imposed
or incurred by either party by reason of or resulting from a breach of any
representation, warranty, covenant condition or agreement of the other party to
this Agreement.
O. Facsimile Counterparts. If a party signs this Agreement and transmits an
electronic facsimile of the signature page to the other party, the party who
receives the transmission may rely upon the electronic facsimile as a signed
original of this Agreement.
P. Confidentiality. Client and Consultant agree that all non-public information
furnished and to be furnished pursuant to this Agreement shall be held in strict
confidence and shall not without prior written consent of the respective party,
be disclosed in any manner whatsoever, in whole or in part, and shall not be
used by the other party for any purpose other than fulfilling the terms of this
Agreement detailed herein. The term "information" shall include, but is not
limited to, all documents, contracts, memoranda, customer names and lists,
analyses, compilations, data studies, financial data and other materials and
information exchanged hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date(s) written below.
Condor Worldwide, Ltd.
By: /s/ James K. Howson Date: 10th November 1997.
- -----------------------------
Name: James K. Howson
Title: Chairman and Chief Executive Officer
IPVoice Communications, Inc.
By: /s/ Barbara S. Will Date: 11/10/1997
- -----------------------------
Name: Barbara S. Will
Title: President and Chief Operating Officer
<PAGE>
AMENDMENT
THIS AMENDMENT dated the 29th day of July 1998, by and between IPVoice
Communications, Inc., a Nevada Corporation with offices at 5901 South
Middlefield Road, Suite 100, Littleton, Colorado 801123 ("Client") and Condor
Worldwide, Ltd., with offices located at 328 Bay Street, Nassau, Bahamas
("Consultant"), stipulates the following:
Consultant agrees to waive all rights, title and interest in item 7(A)
(illegible) of THE CONSULTING AGREEMENT made on the 10th day of November 1997,
which states:
"Upon the listing of IPVoice on the over-the-counter bulletin board,
(OTC:BB), Client shall convey or cause to be conveyed to Consultant or
Consultant's designee(s) six hundred thousand (600,000) shares of Client's free
trading common stock."
Consultant makes no claim for such shares.
CONDOR WORLDWIDE, LTD IPVoice Communications, Inc.
By:/s/ James K. Howson By: /s/ Barbara S. Will
- ---------------------------------- ----------------------------------
James K. Howson Barbara S./ Will
President
EXHIBIT 10.21
IPVoice COMMUNICATIONS, INC.
Consulting and Agent Agreement
THIS CONSULTING AGREEMENT (the "Agreement") is made this 17th day of July
1998, by and between IPVoice COMMUNICATIONS, INC., a Nevada corporation with
offices at 7804 Yorkshire Drive, Castle Rock, Colorado 80104 ("Client") and
CALPE, LTD., residing at 4560 Podoleo St., Baintown, Nassau, Bahamas
("Consultant").
RECITALS
I. Consultant, and its network of professionals, is experienced in providing
assistance with international sales, service and public relations;
II. Client has become a publicly traded corporation;
III. Client wishes to engage the services of Consultant and its network of
professionals to include Client within the select and limited group of clients
for which Consultant and the professionals provide various consulting services
as described above.
IV. Consultant agrees to be retained for the foregoing purposes for which
Consultant has the requisite skills, abilities and qualifications, subject to
the terms and conditions provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are expressly acknowledged, Client and
Consultant agree as follows:
A. Recitals
The foregoing recitals are true and correct and are incorporated herein
by this reference.
B. Engagement of Consultant
Client hereby appoints Consultant and Consultant's professionals
(Consultant's Professionals") to be its counsel/agent for the
aforementioned service and hereby retains and employs Consultant,
pursuant to the terms and conditions of the Agreement. Consultant
accepts such appointment and agrees to perform the services pursuant to
the terms and conditions of the Agreement.
C. Terms of Agreement
This Agreement shall have an initial term of three years (the "Initial
Term") commencing July 1, 1998 and shall not extend beyond the Initial
Term unless the parties enter into a separate
<PAGE>
and independent written agreement. The parties agree not to terminate
this Agreement pursuant to this section unreasonably or in bad faith.
D. Duties of the Consultant
Client retains Consultant to assist Client with Client's international
sales, service, public relations and possible acquisitions by providing
the services of Consultants and other professionals. Specifically,
Consultant agrees to provide the following services:
1. Acting as an Agent for client with respect to
international sales, service and public relations
and/or acquisitions.
2. Assist Client to make Client and Client's
management, products and activities known to
appropriate international markets and customers, and
to seek out new business acquisitions, which are
consistent with Client's strategic growth plan.
3. Consultant will represent and assist the client in
its dealings with its existing contacts in ; Greece,
Cyprus, Turkey; South America, Franch and the
Caribbean.
The entirety of the services to be provided by Consultant pursuant to
this Sub-Section E-1.
E. Duties of the Client
1. On a regular and timely basis, Client shall provide
Consultant and Consultant's designees with all approved data
and pertinent information about Client and Client's
management, products and operations. Client shall advise
Consultant of any facts which would affect the accuracy of any
prior data or information provided Consultant or Consultant's
Professionals by Client.
2. Client shall use its best efforts to promptly provide
Consultant and Consultant's Professionals with full and
complete copies of all product and marketing literature and
details; and copies of all product/service brochures, sales
materials, etc.
F. Representation and Indemnification
1. Client shall be deemed to make a continuing representation
of the accuracy of any and all material facts, information and
data which Client supplies to Consultant or Consultant's
Professionals, and Client acknowledges its awareness that
Consultant and Consultant's Professional will rely on such
continuing representation in disseminating such information
and otherwise performing its technical functions.
2. Consultant, in the absence of written notice from Client,
may rely upon the continuing occurrence of material
information and data supplied by Client.
<PAGE>
3. Client hereby agrees to indemnify Consultant against, and
to hold Consultant harmless from any claims, demands, suits,
loss, damages, including legal fees and expenses arising from
Consultant's reliance upon the occurrence and continuing
accuracy of such facts, material, information and data, if and
only if, the facts, materials, information and data was
provided to Consultant by Client.
G. Compensation
For services rendered, Client shall pay Consultant and/or Consultant's
designee(s) EightHundred Fifty Thousand (850,000) shares of IPVoice
Common Stock at a grant price of $0.10 per share. Consultant
understands and agrees that ^($62,700.00 /s/ BW) US dollars will be
deducted from commissions due the Consultant/Agent for customers who
are sold IPVoice services by the Consultant/Agent for customers who
are sold IPVoice services by the Consultant/Agent or Consultant's
designee(s). The commissions will be paid to the Consultant out of
monthly revenues generated by sales of IPVoice products and services
as well as signed distributors in Consultant's/Agent's base.
Consultant further agrees that 23,000 shares will be given/issued to
Neal Rand, Corporate Imaging, and an additional 200,000 shares with
IPVoice to do public relations promotions. This will leave Calpe
627,000 shares of IPVoice Common Stock. Client and Consultant/Agent
agree that a percentage of revenue will be deducted from Consultant's
commissions by the client for all sales made after the Consultant base
of accounts is billing in excess of $250,000 US dollars per month in
revenues. This percentage will be determined at the time of sale.
If Client should request Consultant to perform other services not
included in the Services listed in Section D herein, Client shall
compensate Consultant or Consultant's designee(s) as may be agreed to
by the parties in connection with those specific services.
H. Best Efforts Basis
The parties agree that they individually and separately shall at all
times faithfully and to the best of their experience, ability, and
talents, perform all the duties that may be required of and from each
other pursuant to the terms of this Agreement. Consultant does not
guarantee or warrant that its efforts shall have any impact on Client's
business or that any subsequent financial improvement shall have any
impact on Client's business or that any subsequent financial
improvement shall result from Consultant's efforts.
I. Client's Right to Approve Consultant's Actions
Client expressly retains the right to approve, in its sole discretion,
the sales and marketing services provided by Consultant that involves
Client, including with limitation, all sales activities and marketing
materials. Consultant and Client mutually agree that Consultant is not
authorized to enter into agreements on behalf of Client. Client agrees
not to withhold its approval pursuant to this section unreasonably.
<PAGE>
J. Costs and Expenses
Consultant shall be responsible for paying all daily and ordinary
expenses incurred during and in relation to Consultant's performance
under this Agreement including, but not limited to, ordinary phone,
fax, delivery, and copying expenses. Client agrees to pay for all
extraordinary expenses, if any, incurred by Consultant in relation to
Consultant's performance under this Agreement, including without
limitation, long distance travel expenses for any trips exceeding fifty
(50) miles taken on behalf of Client, and printing costs; provided that
Consultant must obtain Client's written approval of all such costs and
expenditures prior to incurring them.
K. Consultant is an limited Agent
Consultant obligations under this Agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be
considered to act as a legal agent of Client or otherwise represent or
bind Client. For the purposes of this Agreement, Consultant is an
independent contractor. All final decisions with respect to acts of
Client or its affiliate, whether or not made pursuant to or in reliance
on information or advice furnished by Consultant hereunder, shall be
those of Client or such affiliated and Consultant shall under no
circumstances be liable for any expense incurred or loss suffered by
Client as a consequence of such action or decisions.
L. Non-Exclusive Services
Client acknowledges that Consultant is currently providing services of
the same or similar nature to other parties and Client agrees that
Consultant is not prevented or barred from rendering services of the
same nature or a similar nature to any other individual or entity.
Consultant understands and agrees that Client shall not be prevented or
barred from retaining other persons or entities to provide services of
the same or similar nature as those provided by Consultant. Consultant
shall advise Client of Consultant's positions with respect to any
activity, employment, business arrangement or potential conflict of
interest which may be relevant to this Agreement.
M. Non-Circumvention of Consultant
Client agrees, represents and warrants hereby that it will not
circumvent Consultant with respect to any prospective customer
introduced by Consultant to Client nor with respect to any transaction,
merger, acquisition, or other business opportunity proposed by,
assisted with or otherwise promoted by Consultant for the benefit of
Client pursuant to the terms of this Agreement.
N. Miscellaneous
1. Authority. The execution and performance of this Agreement
has been duly authorized by all requisite corporate action. This
Agreement is a valid and binding obligation of the parties hereto.
<PAGE>
2. Amendment. This Agreement may be amended or modified at any
time and in any manner only by an instrument in writing executed by the
parties hereto.
3. Waiver. All the rights and remedies of either party under
this Agreement are cumulative and not exclusive of any other rights and
remedies provided by law. No delay or failure on the part of either
party in the exercise of any right or remedy arising from a breach of
this Agreement shall operate as a waiver of any subsequent right or
remedy arising from a subsequent breach of this Agreement. The consent
of any party, where required hereunder, to any act or occurrence shall
not be deemed to be a consent to any other act or occurrence.
4. Assignment. Neither this Agreement nor any right created by
it shall be assignable by either party without the prior written
consent of the other. Nothing in this Agreement, expressed or implied,
is intended to confer upon any person, other than the parties and their
successors, any rights or remedies under this Agreement.
5. Notices. Any notice or other communication required or
permitted by this Agreement must be in writing and shall be deemed to
be properly given when delivered in person to an officer of the other
party, when deposited in the mails for transmittal by certified or
registered mail, postage prepaid, when deposited with a courier such as
Federal Express or the like, or when sent by facsimile transmission
with a confirming copy by first class mail, provided that such
communication is addressed:
In the case of Client:
Barbara Will, President
IPVoice Communications, Inc.
7804 Yorkshire Drive
Castle Rock, Colorado 80104
Telephone: (303) 663-9188
Facsimile: (303) 663-9190
In the Case of Consultant
Dennis J. Sutton
Calpe, Ltd.
4560 Podoleo St.
Baintown, Nassau, Bahamas
Telephone: (242) 356 0107
Fax: (242) 322 1612
Or to such other person or address designated by the parties hereto to
receive notice. Any such notice shall be deemed received the earlier of
actual receipt or five (5) business days following deposit of the same.
6. Headings and Captions. The headings of paragraphs are included
solely for convenience. If a conflict exists between any heading and
the text of this Agreement, the text shall control.
<PAGE>
7. Entire Agreement. This instrument and the exhibits hereto contain
the entire Agreement between the parties with respect to the
transaction contemplated by the Agreement and no other prior written or
oral statement or agreement shall be recognized or enforced. This
agreement may be executed in any number of counterparts but the
aggregate of the counterparts together constitute only one and the same
instrument.
8. Effect of Partial Invalidity. In the event that any one or more of
the provisions contained in this Agreement shall for any reason be held
to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality of unenforceability shall not affect any other
provisions of this Agreement, but this Agreement shall be construed as
if it never contained any such invalid, illegal or unenforceable
provisions.
9. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Colorado, and each party
submits to the jurisdiction of any state or federal court in the State
of Colorado, U.S.A.
If any action at law or in equity, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this
Agreement, the prevailing party shall be entitled to recover actual
attorney fees from the other party. The attorney fees may be ordered by
the court in the trial of any action described in this paragraph or may
be enforced in a separate action brought for determining attorney fees.
10. Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
11. Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such
other and further documents and take such other and further actions as
may be necessary or convenient to effect the transactions described
herein.
12. Further Actions. At any time, and from time to time, each party
hereto agrees to take actions and to execute and deliver documents, at
its own expense, as may be reasonably necessary to effectuate the
purposes of this Agreement.
13. Indemnification. Client and Consultant agree to indemnify, defend
and hold each other harmless from and against all demands, claims,
actions, actions, losses, damages, liabilities, costs and expenses,
including without limitation, interest, penalties and attorneys fees
and expenses asserted against or imposed or incurred by either party by
reason of or resulting from a breach of any representation, warranty,
covenant condition or agreement of the other party to this Agreement.
14. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the other
party, the party who receives the transmission may rely upon the
electronic facsimile as a signed original of this Agreement.
15. Confidentiality. Client and Consultant agree that all non-public
information furnished
<PAGE>
and to be furnished pursuant to this Agreement shall be held in strict
confidence and shall not without prior written consent of the
respective party, be disclosed in any manner whatsoever, in whole or in
part, and shall not be used by the other party for any purpose other
than fulfilling the terms of this Agreement detailed herein. The term
"information" shall include, but is not limited to, all documents,
contracts, memoranda, customer names and lists, analyses, compilations,
data studies, financial data and other materials and information
exchanged hereunder.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
IPVoice Communications, Inc.
Client Date July 23, 1998
By: /s/ Barbara S. Will
----------------------------------
Signature
Barbara S. Will
President/COO/Chairperson
Calpe, Ltd.
Consultant/Agent Date
By: /s/ Dennis J. Sutton
-----------------------------------
Dennis J. Sutton
Director
EXHIBIT 10.22
CLIENT SERVICE AGREEMENT
THIS MARKETING AGREEMENT is made by and between THE INVESTOR
COMMUNICATIONS GROUP, INC., a GEORGIA Corporation, hereinafter sometimes
referred to as (ICG or Party) and I P VOICE COMMUNICATIONS, INC., a NEVADA
Corporation, hereinafter sometimes referred to as (the Company; or the Client;
or Party).
WITNESSETH:
WHEREAS, ICG is a financial public relations and direct marketing advertising
and consulting firm, and
WHEREAS, the Company is publicly held with its common stock trading on one or
more stock exchanges and/or Over The Counter or on NASDAQ, and
WHEREAS, the Company desires to publicize itself with the intentions of making
its name and business better known to its shareholders, investors, and brokerage
houses, and
NOW THEREFORE, in consideration of the mutual covenants herein contained, it is
agreed:
A. ENGAGEMENT: The Company hereby engages ICG to publicize the Company to
brokers, prospective investors and shareholders described in Section B of this
agreement, and subject to the further provisions of this agreement. ICG hereby
accepts the Company as a client and agrees to publicize it as described in
Section B of this agreement, but subject to the future provisions of this
agreement.
B. SERVICE PROGRAM: Consists of the following components:
1. ICG will review all of the general information and recent filings
from the Company and produce a 4-page, 2-color informative Corporate Overview
about the Company. ICG will conduct a 63,500 piece direct mailing of the
Corporate Overview and an equal number of responsive cards. The Corporate
Overviews will be prepared in brokerage style format and will be submitted to
the Company for approval prior to printing and mailing. The mailing will go out
to 60,000 investors and 3,500 registered brokers from ICG's database.
2. ICG will distribute a Corporate Overview to each current shareholder
of the Company's common stock along with a letter highlighting our
investor relations campaign.
3. ICG will produce a peer group analysis, identifying potential
institutional investors.
/s/ BW /s/ TRG
- ------------ ---------------
ICG
1
<PAGE>
4. ICG will make follow-up calls and mailing to those identified
potential institutional investors from the peer group analysis.
5. ICG will coordinate the production of a 13 week, Cable TV campaign
currently broadcast to approximately 21 million homes.
6. ICG will use its best efforts to obtain the Company exposure on
national and regional financial radio programming, in independent financial
newsletters, and various other financial related publications and media.
7. ICG will assist in writing, editing and placement of any news
releases.
8. ICG will produce a Corporate Communications and Disclosure Policy
for the Company.
9. ICG will deliver via fax or mail quarterly reports and news releases
to interested parties and shareholders.
10. ICG will develop and stage a conference call immediately following
quarterly releases.
11. ICG will write and produce a press release announcing our
engagement. Company shall be solely responsible for paying all fees associated
will all actual release(s) through Business Wire, P.R. Newswire, or any other
comparable news dissemination source.
12. ICG may, at its own discretion, and with approval of the Client, at
its own expense pay for special reports that can be published in various
financial trade publications for both public relations and lead generating
purposes.
13. ICG will coordinate an outbound/inbound broker lead generating
program.
14. ICG will produce and place up to 5 Corporate Announcements in the
Investors Business Daily.
15. ICG will write a press release announcing our engagement as
Investor Relations counsel.
16. ICG will coordinate all campaign related activities.
17. ICG will insert 30,000 Corporate Overviews in an issue of The
Investment Reporter.
18. ICG will produce a 35,000 piece E-Mail campaign.
/s/ BW /s/ TRG
- ------------ ---------------
ICG
2
<PAGE>
C. TIME OF PERFORMANCE: Services to be performed under this agreement shall
commence upon the execution of this agreement and shall continue until
completion, which generally is expected to occur within six months.
D. COMPENSATION AND EXPENSES: In consideration of the services to be performed
by ICG, the Company agrees to pay compensation to ICG as follows:
1. $75,000, payable in cash over six months in six equal payments pf
$12,500 per month, and 200,000 registered free trading shares based on
the valuation of the shares equally $1.00 per share. ICG will not
commence work until receipt of full compensation. Should the value of
the shares be less than $200,000 upon delivery of said shares to ICG,
the Company will issue additional registered free trading shares to
compensate the difference within 5 business days.
2. COMPANY shall issue to ICG, its officers, directors, employees or
assigns warrants to purchase 100,000 shares of Client's common stock at
a strike price of $2.00 per share. The warrants shall be exercisable
for a period of two years from date of actual physical issuance of the
warrants. The warrants shall have piggyback registration rights.
3. ICG agrees that all expenses incurred by ICG in performing this
contract will be paid by ICG except those specifically passed on to the
Company in this agreement.
4. ICG may transfer the shares issued to it to its officers, directors
and employees: however, ICG will not transfer the shares issued to it
except in sales through licenses NASD members at prices no less than
the highest bid price at the time of the sale and ICG will require the
same if its officers, directors, and employees. Further, ICG, its
officers and employees will not use any of the shares issued to it, or
allow a brokerage firm to use any of the shares issued to it, to sell
the Company's stock "short" or to "short the Company's stock against
the box."
5. Prior to selling any shares of the Company's common stock received
as consideration hereunder to a third party, ICG or any of its
officers, directors and employees as the case may be, agrees that prior
to completing a sale to a third party, to offer such shares of common
stock which are for sale to the Company or an agent designated by the
Company on no less favorable terms and conditions than offered to such
third party. All transactions between ICG or its assigns and the
Company or its assigns shall be settled the day following any
transactions(s). Shares exchanged shall be delivered via DTC and money
exchanged shall be wired into the appropriate account(s) as per
instructions from both parties.
E. REPRESENTATIONS AND WARRANTIES OF COMPANY: The Company represents and
warrants to ICG, each such representation and warranty being deemed to be
material that:
/s/ BW /s/ TRG
- ------------ ---------------
ICG
3
<PAGE>
1. The Company will cooperate fully and timely with ICG to enable
ICG to perform its obligations under this agreement.
2. The execution and performance of this agreement by the Company
has been duly authorized by the Board of Directors of the
Company in accordance with applicable law, to the extent
required, by the requisite number of shareholders of the
Company.
3. The performance by the Company of this agreement will not
violate any applicable court decree, law or regulation, nor
will it violate any provisions of the organizational documents
of the Company or any contractual obligation by which the
Company may be bound.
4. The Company will promptly deliver to ICG a complete due
diligence package to include the latest 10K, latest 10Q, last
six months press releases, and all other relevant materials,
including but not limited to corporate reports, brochures,
etc.
5. The Company will promptly deliver to ICG a list of names and
addresses of all known shareholders of the Company.
6. The Company will promptly deliver to ICG a list of brokers and
market makers of the Company's securities which have been
following the Company.
7. The Company will act diligently and promptly in reviewing
materials submitted to it by ICG to enhance timely
distribution of the materials and will inform ICG of any
inaccuracies contained therein prior to the projected
publication date.
8. The Company represents that all information included in the
information package furnished to ICG shall disclose all
material facts and not omit any facts necessary to make
statements made on behalf of the Company not misleading.
F. FURNISHING OF INFORMATION BY CLIENT: The Company agrees to update the
information package on a continuous basis. The Company understands that the sole
purpose of the information package is for Investor Relations. ICG is not
obligated to assess the financial responsibility of the Company. ICG may rely on
and assume the accuracy of the information submitted to them by the Company.
G. COVENANTS OF THE COMPANY: The Company covenants and warrants that any
information submitted for dissemination will be truthful, accurate, in
compliance with all copyright laws and all other applicable laws and regulations
and will not be submitted in connection with improper or illegal act or deed.
/s/ BW /s/ TRG
- ------------ ---------------
ICG
4
<PAGE>
H. CLIENT RESPONSIBLE FOR INFORMATION PROVIDED TO ICG: Company assumes and
claims all responsibility and liability for the content of all information
disseminated on behalf of the Company which have been approved by the Company.
The Company shall indemnify and hold ICG, its subsidiaries, officers and
employees harmless from and against all demands, claims or liability arising for
any reason due to the content of information disseminated on behalf of the
Company. The Company shall indemnify and hold harmless from and against all
demands, claims or liability arising for any reason due to the content of
information disseminated on behalf of the Company. This indemnity shall include
any cost incurred by ICG including, but not limited to, legal fees and expenses
incurred both in administrative proceedings at trial and appellate levels, in
settlement of claims, and payment of any judgment against ICG.
In order for the indemnity provisions of this paragraph to bind Client,
ICG must within ten (10) business days of receipt notify Client in writing of
any demands, claims or liability for which ICG claims Client is responsible and
Client shall be entitled, but shall not be obligated, to assume and/or control
defense and/or settlement of any actions, demand, claim or liability. Client
shall not be required to indemnify ICG for ICG's own negligent or intentional
acts or omissions.
I. ASSIGNMENT AND DELEGATION: Neither Party may assign any rights or delegate
any duties hereunder without Party's express written consent.
J. EARLY TERMINATION: If the Company fails to cooperate with ICG, or fails to
make timely of the compensation set forth in Section D of this agreement ICG
shall have the right to terminate any further performance under this agreement.
In such event all compensation shall become immediately due and payable and/or
deliverable, and ICG shall be entitled to receive and retain the same as liquid
damages, and not as a penalty, in lieu of all other remedies, the parties
acknowledging and agreeing that is would be too difficult currently to determine
the exact extent of ICG's damage, but that the receipt and retention of such
compensation is reasonable present estimate of such damage.
K. LIMITATION OF ICG LIABILITY: If ICG fails to perform its services hereunder,
its entire liability to the Company shall not exceed the lesser of (a) the
amount of each compensation ICG has received from the Company under Section D of
this agreement or (b) the actual damage to the Company as a result of such
nonperformance. In no event will ICG be liable for any indirect, special or
consequential damages nor for any claim against the Company by any person or
entity arising from or in any way related to this agreement, unless such damages
result from the use, by ICG of information not authorized by the Company, or
from ICG's violation of federal or state securities laws.
L. OWNERSHIP OF MATERIALS: All right, title and interest in and to materials to
be produced by ICG in connection with the agreement and other services to be
rendered under this agreement shall be and remain the sole and exclusive
property of ICG, except that if the Company performs fully and timely its
/s/ BW /s/ TRG
- ------------ ---------------
ICG
5
<PAGE>
obligations hereunder, it shall be entitled to all ownership rights of such
materials. ICG will have the right to use all materials without the need of
request.
M. CONFIDENTIALITY: Until such time as the same may become publicly known, ICG
agrees that any confidential nature will not be revealed or disclosed to any
person or entity, except in the performance of this agreement, and upon
completion of its services and upon written request of the Company all
materials, original documentation provided by the Company will be returned to
it. ICG will, however, require Confidentiality Agreements from its own employees
and from contractors ICG reasonably believes will come in contact with
confidential material.
N. ENTIRE AGREEMENT: This writing contains the entire agreement of the Parties.
No representations were made or relied upon by either Party, other than those
expressly set forth. Furthermore, the Company understands that ICG makes no
guarantees, assurances or representations in regard to the results of its
services. No agent, employee or other representative of either Party is
empowered to alter any terms, unless done in writing and signed by an executive
officer of the respective Parties.
O. CONTROLLING LAW AND VENUE: This agreement's validity, interpretation and
performance shall be controlled under the laws of the State of Georgia.
P. SEPARABILITY: If one or more of the provisions of this agreement shall be
held invalid, illegal, or unenforceable in any respect, such provision, to the
extent invalid, illegal, or unenforceable, and provided that such provisions is
not essential to the transaction provided for by this agreement, shall not
affect any other provision hereof, and the agreement shall be construed as if
such provision had never been contained herein.
Q. ARBITRATION: Any controversy or claim arising out of or relating to the
agreement, or the breach thereof, shall be settled by arbitration in accordance
with commercial arbitration rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
R. PREVAILING PARTY: In the event of the institution of any legal proceedings or
litigation, at the trial level or appellate level, with regard to this
agreement, the prevailing Party shall be entitled to receive from the
non-prevailing Party all costs, reasonable attorney fees and expenses.
S. FAILURE TO OBJECT NOT TO WAIVER: The failure of either Party to this
agreement to object to, or take affirmative action with respect to any conduct
of the other which in is violation of the terms of the agreement shall not be
construed as a waiver of the violation or breach, or of any future violation,
breach or wrongful conduct.
T. NOTICES: All notices or other documents under this agreement shall be in
/s/ BW /s/ TRG
- ------------ ---------------
ICG
6
<PAGE>
writing and delivered personally or mailed by certified mail or overnight
services, postage prepaid and addresses to the representative or company as
follows:
The Investor Communications Group, Inc. AND IP Voice Communications, Inc.
1730 Mt. Vernon Road, Suite C 7804 Yorkshire Drive
Atlanta, GA 30338 Castle Rock, CO 80104
Telephone: (770) 351-9700 Telephone: (303) 663-9188
U. HEADINGS: Headings in this agreement are for convenience only and shall not
be used to interpret or construe its provisions.
VI. MISCELLANEOUS:
1, EFFECTIVE DATE OF REPRESENTATIONS: Shall be no later than the date
ICG is prepared to distribute letters and/or Corporate Overviews pursuant to the
agreement.
2. CURRENCY: In all instances, references to dollars shall be deemed to
be United States Dollars.
3. MULTIPLE COUNTERPARTS: This agreement may be executed in multiple
counterparts, each of which shall be deemed an original.
4. SIGNATURES: All Parties agree that signatures sent by facsimile
transmission are legally binding and acceptable by each party.
5. CONDUCT: ICG agrees to abide by rules and regulations of the
Securities and Exchange Act of 1934.
EXECUTED this 15 day of July , 1998.
The Investor Communications Group, Inc. IP Voice Communications, Inc.
By: /s/Tony R. Golden By: /s/Barbara S. Will
- -------------------------- -----------------------------
Tony R. Golden, CEO Barbara S. Will, Pres./COO
7
EXHIBIT 10.23
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is made this July 29th, 1998 (the
"Effective Date"), by and between Corporate Imaging, with offices located at
11024 North 28th Drive, Suite 200, Phoenix, Arizona USA 85029 ("Consultant"),
and IP Voice Communications Inc. a Nevada corporation with offices located at
7804 Yorkshire Dr. Castle Rock, CO 80104("Client").
RECITALS
1. Consultant, and its network of professionals, is experienced in providing
business management, public and investor relations and other related
corporate advisory services and assistance to business organizations,
institutions and firms;
2. Consultant is also experienced in advising and assisting business
organizations, institutions and firms to manage, institute and otherwise
effectuate capital restructuring, such services include without limitation
the introduction of such entities to appropriate lenders and equity
investors for purpose of attracting and raising debt and/or equity capital;
3. Client will be a publicly traded corporation;
4. Client wishes to engage the services of Consultant and its network of
professionals to include Client within the select and limited group of
clients for which Consultant and the professionals provide various business
managerial and consulting services;
5. Consultant agrees to be retained for the foregoing purposes for which
Consultant has the requisite skills, abilities and qualifications, subject
to the terms and conditions provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are expressly acknowledge, Client and
Consultant agree as follows:
1. Recitals
The foregoing recitals are true and correct and are incorporated herein by
this reference.
2. Engagement of Consultant
Client hereby appoints Consultant and Consultant's professionals
(Consultant's Professionals") to be its business, managerial, and public
relations counsel and hereby retain and employ Consultant, pursuant to the terms
1
<PAGE>
and conditions of the Agreement. Consultant accepts such appointment and agrees
to perform the services pursuant to the terms and conditions of the Agreement.
3. Term of Agreement
This Agreement shall have an initial term of two years (the "Initial Term")
commencing August 1st, 1998 and shall not extend beyond the Initial Term unless
the parties enter into a separate and independent written agreement. This
Agreement may be terminated by either party upon ninety - (90) days written
notice to the other party. The parties agree not to terminate this Agreement
pursuant to this section unreasonably or in bad faith.
4. Duties of Consultant
A. Corporate Imaging Services. Client retains Consultant to assist Client
with Client's media and public relations management by providing the services of
consultants and other professionals, such services to include the review of
Client's present media and public relations management, and the recommendation
of means of Client's customer base and otherwise improving Client's corporate
image generally. Specifically, Consultant agrees to provide the following
services related to media and public relations:
i. acting as advisor to Client with respect to communications and
information distributions, such as interviews, press release,
shareholder reports, etc. as well as planning, designing, developing,
organizing, writing and distributing such communications and
information;
ii. receive, manage, and respond to all incoming telephone calls from or
pertaining to Client's shareholders and investors, and shareholder and
investor relations;
iii. assist with all shareholder meetings which are formally announced and
called to order, including the preparation of agendas, documents,
materials, and presentations to be presented at such meetings;
iv. assist in the planning, preparation and distribution, if appropriate,
if marketing materials, news releases, securities filings and
disclosures and related matters pertaining to media relations;
v. assist Client to make Client and Client's managements, products and
activities known to appropriate media and business publications,
analysts, advisors, and other members of the business community and
the public generally, and to seek out new business acquisitions, which
are consistent with Client's strategic growth plan;
vi. provide information pertaining to the trading of Client's common
stock, such as closing stock prices and trading volume.
2
<PAGE>
The entirety of the services to be provided by Consultant pursuant to this
Subsection 4 A, shall hereinafter collectively be referred to as the
"Corporate Imaging Services".
B. Financial Consulting Services. Client also retains Consultant to assist
Client to improve Client's Capital structure by providing advice and assistance
to Client regarding Client's capital structure and possible capital
reorganization, such services also to include the introduction of Client to
appropriate sources of debt and/or equity capital.
The entirety of the services to be provided by Consultant pursuant to the
Subsection 4.B., shall hereinafter collectively be referred to as the "Financial
Consulting Services".
C. Merger & Acquisition Services. Client also retains Consultants to assist
Client to identify, locate, approach, and engage suitable merger and/or
acquisition candidates which meet client's long-term growth objectives.
The entirety of such services to be provided by Consultant pursuant to this
Subsection 4.C, shall hereinafter collectively be referred to as the "M&A
Consulting Services".
5. Duties of Client
A. On a regular and timely basis, Client shall provide Consultant
and Consultant's designees with all approved data and
pertinent information about Client and Client's management,
products, and operations. Client shall advise Consultant of
any facts which would affect the accuracy of any prior data or
information provided Consultant or Consultant's Professionals
by Client.
B. Client shall use its best efforts to promptly provide
Consultant and Consultant's Professionals with full and
complete copies of all federal and state securities filings
and reports; complete copies of all shareholder reports and
communications whether or not prepared with the assistance of
Consultant or Consultant's Professional; all data and
information provided to any analysts, broker-dealers, market
makers, or other members of the financial community; and
copies of all product/service brochures, sales materials, etc.
6. Representation and Indemnification
A. Client shall be deemed to make a continuing representation of
the accuracy of any and all material facts, information and
data which Client supplies to Consultant or Consultant's
Professionals, and Client acknowledges its awareness that
Consultant and Consultant's Professionals will rely on such
continuing representation in disseminating such information
and otherwise performing its public relations functions.
3
<PAGE>
B. Consultant, in the absence of written notice from Client, may
rely upon the continuing occurrence of material information
and data supplied by Client.
C. Client hereby agrees to indemnify Consultant against, and to
hold Consultant harmless from any claims, demands, suits,
loss, damages, including legal fees and expenses arising from
Consultant's reliance upon the occurrence and continuing
accuracy of such facts, material, information and data, if and
only if, the facts, materials, information and data was
provided to Consultant by Client.
7. Compensation
A. Corporate Imaging Services. For Corporate Imaging Services
Rendered, Client shall pay Consultant and/or Consultant's
designee(s) in the form of free trading common stock of Client
(the "Common Stock") registered pursuant to a Form S-8
registration statement or similar registration statement, as
follows:
i. Upon execution of this Agreement or not more than five (5)
calendar days from the Effective Date, Client shall convey
or cause to be conveyed to Consultant or Consultant's
designee(s), Twenty three thousand (23,000) shares of
Client's free trading common stock;
ii. Client shall convey or cause to be conveyed to Consultant or
Consultant's designee(s) monthly compensation comprised of
Zero (0) shares of Client's free trading common stock, such
payments to be made on or before the first (1st) calendar
day of each, month commencing August 1st, 1998.
The Common Stock to be issued to Consultant and/or Consultant's designee(s)
pursuant to this Subsection 7.A shall be duly issued, fully paid and
nonassessable upon its conveyance to Consultant and or Consultant's designee(s).
B. Financial Consulting Services. For Financial Consulting Services
rendered and for services provided by Consultant pertaining to
the closing of any transaction or agreement which provides
capital to Client and which involves a third party introduced to
Client by Consultant, Client agrees to compensate Consultant by
paying Consultant or Consultant's designee(s) the equivalent of
five percent (5%) of the gross dollar amount of capital provided
to Client or Client's designee(s) pursuant to any transaction or
agreement executed in connection with an introduction to such
third party.
All compensation owed to Consultant or Consultant's designee(s) pursuant to
this Subsection 7.B, shall be paid to Consultant or Consultant's Designee(s)
within three (3) business days of the earlier to occur of either (i) the release
of any such proceeds or capital from escrow, or (ii) the receipt of any such
4
<PAGE>
proceeds or capital by Client or Client's designee(s).
C. M & A Consulting Services. For M&A Consulting Services rendered and
for services provided by Consultant pertaining to the closing of any
transaction or agreement (not in the ordinary course of Client's
business) involving the merger or acquisition of any enterprise or
business asset which involves a third party introduced to Client by
Consultant, Client agreed to compensate Consultant by paying
Consultant or Consultant's designee(s) the equivalent of 2% of the
total outstanding equity capital of the enterprise or company
acquired, in the event of a merger; or 2% of the fair market value of
the asset acquired, in the event of an acquisition.
If Client should request Consultant to perform other services not included
in the Services listed in Section 4 herein, Client shall compensate Consultant
or Consultant's designee(s) as may be agreed to by the parties in connection
with those specific services.
8. Best Efforts Basis
The parties agree that they individually and separately shall at all times
faithfully and to the best of their experience, ability, and talents, perform
all the duties that may be required of and from each other pursuant to the terms
of this Agreement. Consultant does not guarantee or warrant that its efforts
shall have any impact on Client's business or that any subsequent financial
improvement shall result from Consultant's efforts. Client understands and
acknowledges that the success or failure of consultant's efforts may be
predicted on Client's assets and operating results as well as Client's ability
to attract capital through the public securities markets.
9. Client's Right to Approve Consultant's Actions
Client expressly retains the right to approve, in its sole discretion, the
public relations and advisory services provided by Consultant that involves
Client, including without limitation, all press releases and marketing
materials. Consultant and Client mutually agree that Consultant is not
authorized to enter into agreements on behalf of Client. Client agrees not to
withhold its approval pursuant to this section unreasonably.
10. Costs and Expenses
Consultant shall be responsible for paying all daily and ordinary expenses
incurred during and in relation to Consultant's performance under this Agreement
including, but not limited to, ordinary phone, fax, delivery, and copying
expenses. Client agrees to pay for all extraordinary expenses, if any, incurred
by Consultant in relation to Consultant in relation to Consultant's performance
under this Agreement, including without limitation, long distance travel
expenses for any trips exceeding (50) miles taken on behalf of costs and
expenditures prior to incurring them. Client will be responsible to pay for;
news releases sent by a wire service, and up tp $1800 to produce a Due Diligence
package.
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11. Consultant is Not an Agent
Consultant obligations under this Agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be considered
to act as the agent of Client or otherwise represent or bind Client. For the
purposes of This Agreement, Consultant is n independent contractor. All final
decisions with respect to acts of Client or its affiliates, whether or not made
pursuant to or in reliance on information or advice furnished by Consultant
hereunder, shall be those of Client or such affiliated and Consultant shall
under no circumstances be liable for any expense incurred or loss suffered by
Client as a consequence of such action or decisions.
12. Non-Exclusive Services
Client acknowledges that Consultant is currently providing services of the
same or similar nature to other parties and Client agrees that Consultant is not
prevented or barred from rendering services of the same nature or a similar
nature to any other individual or entity. Consultant understands and agrees that
Client shall not be prevented or barred from retaining other persons or entities
to provide services of the same or similar nature as those provided by
Consultant. Consultant shall advise Client of Consultant's position with respect
to any activity, employment, business arrangement or potential conflict of
interest which may be relevant to this Agreement.
13. Non-Circumvention of Consultant
Client agrees, represents, and warrants hereby that it will not circumvent
Consultant with respect to any prospective lender or investors introduced by
Consultant to Client nor with respect to any transaction, merger, acquisition,
or other business opportunity proposed by, assisted with or otherwise promoted
by Consultant for the benefit of Client pursuant to the terms of this Agreement.
Client also agrees not to sell any stock on the open market without first
consulting with Consultant for the purpose of, without limitation, possibly
coordinating efforts to minimize any adverse effects of such sale upon the
market price of Client's stock.
14. Miscellaneous
A. Authority. The execution and performance of this Agreement has been
duly authorized by all requisite corporate action. This Agreement is a
valid and binding obligation hereto.
B. Amendment. This Agreement may be amended or modified at any time and
in any manner only by an instrument in writing executed by the parties
hereto.
C. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and
remedies provided by law. No delay or failure on the part of either
party in the exercise of any right or remedy arising from a breach of
this Agreement shall operate as a waiver of any subsequent right or
remedy arising from a subsequent breach of this Agreement. The consent
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of any party, where required hereunder, to any act or occurrence shall
not be deemed to be a consent to any other act or occurrence.
D. Assignment. Neither this Agreement nor any right created by it shall
be assignable by either party without the prior written consent of the
other. Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their successors,
any rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, when
deposited in the mails for transmittal by certified or registered
mail, postage prepaid, when deposited with a courier such as Federal
Express or the like, or when sent by facsimile transmission with a
confirming copy by first class mail, provided that such communication
is addressed:
In the case of Consultant to: Corporate Imaging
Attn: Neil Rand, President
11024 North 28th Street, Suite 200
Phoenix, AZ 85029
Telephone: (602) 504-9230
Facsimile: (602) 504-9252
In the case of Client to: IP Voice Communications, Inc.
Attn: Barbara S. Will
7804 Yorkshire Dr.
Castle Rock, CO 80104
Telephone: (602) 216-9600
Facsimile: (602) 216-9611
or to such other person or address designated by the parties hereto to
receive notice. Any such notice shall be deemed received the earlier
of actual receipt or five (5) business days following deposit of the
same.
F. Headings & Captions. The headings and paragraphs are included solely
for convenience. If a conflict exists between any heading and the text
shall control.
G. Entire Agreement. The instrument and the exhibits hereto contain the
entire Agreement between the parties with respect to the transaction
contemplated by the Agreement and no other prior written or oral
statement or agreement shall be recognized or enforced. This agreement
may be executed in any number of counterparts but the aggregate of the
counterparts together constitute only one and the same instrument.
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained herein in this Agreement shall for any reason to
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be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement, but this Agreement shall be constructed
as if it never contained any such invalid, illegal or unenforceable
provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the
State of Arizona. Any legal action brought hereunder shall be properly
commenced and venue shall lie only in a state or federal court of
competent jurisdiction located in Maricopa County, Arizona
J. Attorney's Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be entitled
to recover actual attorneys fees from the other party. The attorneys
fees may be ordered by the court in the trial of any action described
in this paragraph or may be enforced in a separate action brought for
determinating attorney's fees.
K. Time is of the Essence. Time is of the essence of this Agreement and
of each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each other
to achieve the purpose of this Agreement, and shall execute such other
and further documents and take such other and further actions as may
be necessary or convenient to effect the transactions described
herein.
M. Further Actions. At any time, and from time to time, each party hereto
agrees to take actions and to execute and deliver documents, at its
own expense, as may be reasonably necessary to effectuate the purposes
of this Agreement.
N. Indemnification. Client and Consultant agree to indemnify, defend and
hold each other harmless from and against all demands, claims,
actions, losses, damages, liabilities, costs, and expenses, including
without limitation, interest, penalties and attorneys fees and
expenses asserted against or imposed or incurred by either party by
reason of or resulting from a breach of any representation, warranty,
covenant condition or agreement of the other party to this Agreement.
O. Facsimile Counterparts. If a party signs this Agreement and transmits
an electronic facsimile of the signature page to the other party, the
party who receives the transmission may rely upon the electronic
facsimile as a signed original of this Agreement.
P. Confidentiality. Client and C0nsultant agree that all non-public
information furnished and to be furnished pursuant to this Agreement
shall be held in strict confidence and shall not, without the prior
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written consent of the respective party, be disclosed in any manner
whatsoever, in whole or in part, and shall not be used by the other
party for any purpose other than fulfilling the terms of this
Agreement detailed herein. The term "information" shall include, but
is not limited to, all documents, contracts, memoranda, customer names
and lists, analyses, compilations, data studies, financial data and
other materials and information exchanged hereunder.
This document is the proprietary property of Corporate Imaging and has been
prepared for the confidential and exclusive use of the client specifically named
herein. This document has been prepared for the purposes inherent to the
negotiation and execution of an agreement between the parties and is intended to
be used solely by the authorized agents and representatives of the Client. This
Agreement is for the sole purpose of memorializing the terms and conditions
stated herein is not to be copies, duplicated, or used in any other manner
without the express written consent of Corporate Imaging.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date(s)
written below.
[Consultant]
CORPORATE IMAGING
By: /s/ Neil Rand Date: July 30 - 98
- --------------------------
Neil Rand
Title: President
[Client]
IP VOICE COMMUNICATIONS, INC.,
By: /s/ Barbara S. Will Date: July 29, 1989
- -------------------------------
Name: Barbara S. Wills
Title: President
9
EXHIBIT 10.24
IPVoice COMMUNICATIONS, INC.
Consulting Agreement
THIS CONSULTING AGREEMENT (the "Agreement") is made this 21 day of September,
1998, by and between IPVoice COMMUNICATIONS, INC., a Nevada corporation with
offices at 7804 Yorkshire Drive, Castle Rock, Colorado 80104 ("Client") and
First Capital Partners, Inc. at 8279 Dunwoody Place, Atlanta, GA 30350
("Consultant"). The signing of this agreement shall supercede any and all
agreements previously entered into between IPVoice Communications, Inc. and
First Capital Partners, Inc.
RECITALS
A. Consultant, and its network of professionals, is experienced in providing and
introduction of such entities as effectuate capital restructuring, such services
include without limitation the introduction of such entities to appropriate
lenders and equity investors for the purpose of attracting and raising debt
and/or equity capital.
B. Client is a publicly traded corporation;
C. Client wishes to engage the services of Consultant and its network of
professionals to include Client within the select and limited group of clients
for which Consultant and the professionals provide various business managerial
consulting services;
D. Consultant agrees to be retained for the foregoing purposes for which
Consultant has the requisite skills, abilities and qualifications, subject to
the terms and conditions provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are expressly acknowledged, Client and
Consultant agree as follows:
A. Recitals
The foregoing recitals are true and correct and are incorporated herein by this
reference.
B. Engagement of Consultant
Client hereby appoints Consultant and Consultant's professionals (Consultant's
Professionals") to assist in identifying financing candidates (the Financing
Transactions) on terms acceptable to the Client and hereby retains and employs
Consultant, pursuant to the terms and conditions of the Agreement. Consultant
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accepts such appointment and agrees to perform the services pursuant to the
terms and conditions of the Agreement.
C. Terms of Agreement
This Agreement shall have an initial term of one year (the "Initial Term")
commencing September 1, 1998 and shall not extend beyond the Initial Term unless
the parties enter into a separate and independent written agreement. The parties
agree not to terminate this Agreement pursuant to this section unreasonably or
in bad faith.
D. Duties of the Consultant
Client retains Consultant to assist Client with Client's Financing Transaction,
including, without limitation, any debt, equity or lease financing intoduced to
and received by Client. By providing the services of Consultants and other
professionals, such services to include the review of any and/or all forms of
financial candidates by Client. The Consultant's recommendation of means of
expanding Client's financial position and otherwise improving Client's
financial/capital position to support Client's ability to operate, deploy
gateways, network under their sales and marketing strategy and corporate image
generally. Specifically, Consultant agrees to provide the following services
related to a Financing Transaction:
1. Acting as advisor to Client with respect to Financing, equity or
lease financing as planed, designing, developing, organizing, writing and
distributing such communications and information to potential investors;
2. Receive, manage, and respond to all incoming Financial inquiries
from or pertaining to Client's requested financial needs;
3. Assist with all financial or capital investors and assist in
management meetings including the preparation of agendas, documents, materials,
and presentations to be presented at such meetings;
4. Assist in the planning, preparation and distribution of Client's
budgets, use of proceeds, business plans and any and all related matters
pertaining to the financing transactions of IPVoice products;
5. Assist Client to make Client and Client's management, products and
activities known to appropriate investors or financal organizations, and to seek
out new business acquisitions, which are consistent with Client's strategic
growth plan.
The entirety of the services to be provided by Consultant pursuant to this
Sub-Section E-1.
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E. Duties of the Client
1. On a regular and timely basis, Client shall provide Consultant and
Consultant's designees with all approved data and pertinent information about
Client and Client's management, products and operations. Client shall advise
Consultant of any facts which would affect the accuracy of any prior data or
information provided Consultant or Consultant's Professionals by Client.
2. Client shall use its best efforts to promptly provide Consultant and
Consultant's Professions with full and complete copies of all product and
marketing literature, equipment requirements, network and details; and copies of
all necessary paperwork, etc.
F. Representation and Indemnification
1. Client shall be deemed to make a continuing representation of the
accuracy of any and all material facts, information and data which Client
supplies to Consultant or Consultant's Professionals, and Client acknowledges
its awareness that Consultant and Consultant's Professionals will rely on such
continuing representation in disseminating such information and otherwise
performing its technical functions.
2. Consultant, in the absence of written notice from Client, may rely
upon the continuing occurrence of material information and data supplied by
Client.
3. Client hereby agrees to indemnify Consultant against, and to hold
Consultant harmless from any claims, demands, suits, loss, damages, including
legal fees and expenses arising from Consultant's reliance upon the occurrence
and continuing accuracy of such facts, material, information and data, if and
only if, the facts, materials, information and data was provided to Consultant
by Client.
G. Compensation
For services rendered, Client shall pay Consultant and/or Consultant's
designee(s) an engagement fee but not to exceed 125,000 (one hundred twenty-five
thousand) 3 year warrants to purchase common stock with an exercised price of
one dollar per share. Warrants are only due if any form of debt, lease or equity
financing is approved and completed by the Client. All warrants referred to in
this agreement will be demand registration with piggy back registration rights.
Further the Client upon approval, agreement and completion of will compensate
for any equity placed through any entity introduced by Consultant. This will be
in stocks or a cash fee of 10% to be paid at closing out of escrow.
If Client should request Consultant to perform other services not included in
the Services listed in Section D herein. Client shall compensate Consultant or
Consultant's designee(s) as may be agreed to by Client and Consultant in
connection with those specific services.
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H. Best Efforts Basis
The parties agree that they individually and separately shall at all times
faithfully and to the best of their experience, ability, and talents, perform
all the duties that may be required of and from each other pursuant to the terms
of this Agreement. Consultant does not guarantee or warrant that its efforts
shall have any impact on Client's business or that any subsequent financial
improvement shall have any impact on Client's business or that any subsequent
financial improvement shall result from Consultant's efforts.
I. Client's Right to Approve Consultant's Actions
Client expressly retains the right to approve, in its sole discretion, the
amount of financing in connection with a Financing Transaction including without
limitation any debt, equity or lease financing presented, recommended, or
provided by Consultant that involves Client, including with limitation, all
Financing Transactions activities and materials. Consultant and Client mutually
agree that Consultant is not authorized to enter into agreements on behalf of
Client. Client agrees not to withhold its approval pursuant to this section
unreasonably. Consultant agrees that no compensation is forthcoming and no
compensation will be paid unless Client has agreed to and closed all
transactions concerning a Financing Transaction under this agreement.
J. Costs and Expenses
Consultant shall be responsible for paying all daily and ordinary expenses
incurred during and in relation to Consultant's performance under this Agreement
including, but not limited to, ordinary phone, fax, delivery, and copying
expenses. Client agrees to pay for all extraordinary expenses, if any, incurred
by Consultant in relation to Consultant's performance under this Agreement,
including without limitation, long distance travel expenses for any trips
exceeding fifty (50) miles taken on behalf of Client; provided that Consultant
must obtain Client's written approval of all such costs and expenditures prior
to incurring them.
K. Consultant is Not an Agent
Consultant obligations under this Agreement consist solely of the Consulting
Services described herein. In no event shall Consultant be considered to act as
the agent of Client or otherwise represent or bind Client. For the purposes of
this Agreement, Consultant is an independent contractor. All final decisions
with respect to acts of Client or its affiliate, whether or not made pursuant to
or in reliance on information or advice furnished by Consultant hereunder, shall
be those of Client or such affiliated and Consultant shall under no
circumstances be liable for any expense incurred or loss suffered by Client as a
consequence of such action or decisions.
L. Non-Exclusive Services
Client acknowledges that Consultant is currently providing services of the same
or similar nature to other parties and Client agrees that Consultant is not
prevented or barred from rendering services of the same nature or a similar
nature to any other individual or entity. Consultant understands and
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agrees that Client shall not be prevented or barred from retaining other persons
or entities to provide services of the same or similar nature as those provided
by Consultant. Consultant shall advise Client of Consultant's positions with
respect to any activity, employment, business arrangement or potential conflict
of interest which may be relevant to this Agreement.
M. Non-Circumvention of Consultant
Client agrees, represents and warrants hereby that it will not circumvent
Consultant with respect to any prospective group introduced by Consultant to
Client nor with respect to any transaction, merger, acquisition, or other
business opportunity proposed by, assisted with or otherwise promoted by
Consultant for the benefit of Client pursuant to the terms of this Agreement.
N. Miscellaneous
1. Authority. The execution and performance of this Agreement has been
duly authorized by all requisite corporate action. This Agreement is a valid and
binding obligation of the parties hereto.
2. Amendment. This Agreement may be amended or modified at any time and
in any manner only by an instrument in writing executed by the parties hereto.
3. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and remedies
provided by law. No delay or failure on the part of either party in the exercise
of any right or remedy arising from a breach of this Agreement shall operate as
a waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement. The consent of any party, where required hereunder, to any act
or occurrence shall not be deemed to be a consent to any other act or
occurrence.
4. Assignment. Neither this Agreement nor any right created by it shall
be assignable by either party without the prior written consent of the other.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
person, other than the parties and their successors, any rights or remedies
under this Agreement.
5. Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
mails for transmittal by certified or registered mail, postage prepaid, when
deposited with a courier such as Federal Express or the like, or when sent by
facsimile transmission with a confirming copy by first class mail, provided that
such communication is addressed:
In the case of Client: Barbara Will, President
IPVoice Communications, Inc.
7804 Yorkshire Drive
Castle Rock, CO 80104
Telephone: (303) 663-9188
Facsimile: (303) 663-9190
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In the Case of Consultant: Joel Rosenberg
First Capital Partners, Inc.
8279 Dunwoody Place
Atlanta, GA 30350
Telephone: (770) 518-6433
Facsimile: (770) 552-1064
Or to such other person or address designated by the parties hereto to receive
notice. Any such notice shall be deemed received the earlier of actual receipt
or five (5) business days following deposit of the same.
6. Headings and Captions. The headings of paragraphs are included
solely for convenience. If a conflict exists between any heading and the text of
this Agreement, the text shall control.
7. Entire Agreement. This instrument and the exhibits hereto contain
the entire Agreement between the parties with respect to the transaction
contemplated by the Agreement and no other prior written or oral statement or
agreement shall be recognized or enforced. This agreement may be executed in any
number of counterparts but the aggregate of the counterparts together constitute
only one and the same instrument.
8. Effect of Partial Invalidity. In the event that any one or more of
the provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality
of unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be construed as if it never contained any such invalid,
illegal or unenforceable provisions.
9. Controlling Law. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to recover actual
attorney fees from the other party. The attorney fees may be ordered by the
court in the trial of any action described in this paragraph or may be enforced
in a separate action brought for determining attorney fees.
10. Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
11. Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transactions described herein.
12. Further Actions. At any time, and from time to time, each party
hereto agrees to take actions and to execute and deliver documents, at its own
expense, as may be reasonably necessary to effectuate the purposes of this
Agreement.
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13. Indemnification. Client and Consultant agree to indemnify, defend
and hold each other harmless from and against all demands, claims, actions,
actions, losses, damages, liabilities, costs and expenses, including without
limitation, interest, penalties and attorneys fees and expenses asserted against
or imposed or incurred by either party by reason of or resulting from a breach
of any representation, warranty, covenant condition or agreement of the other
party to this Agreement.
14. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the other party, the
party who receives the transmission may rely upon the electronic facsimile as a
signed original of this Agreement.
15. Confidentiality. Client and Consultant agree that all non-public
information furnished and to be furnished pursuant to this Agreement shall be
held in strict confidence and shall not without prior written consent of the
respective party, be disclosed in any manner whatsoever, in whole or in part,
and shall not be used by the other party for any purpose other than fulfilling
the terms of this Agreement detailed herein. The term "information" shall
include, but is not limited to, all documents, contracts, memoranda, customer
names and lists, analyses, compilations, data studies, financial data and other
materials and information exchanged hereunder.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
IPVoice Communications, Inc. Date October 7, 1998
Client
By:/s/ Barbara S Will
- --------------------------------
Signature
Barbara S. Will
President/COO/Chairperson
First Capital Partners, Inc. Date: October 7, 1998
Consultant
By: /s/ Joel Rosenberg
- --------------------------------
Signature
Joel Rosenberg
Owner/Consultant
7
EXHIBIT 10.25
CONSULTING AGREEMENT
This Agreement is made effective as of October 20, 1998 by and between IIP Voice
Communications, Inc. of 10724 W. Ontario Place, Littleton, Colorado 80127, and
International Investment Partners, Ltd, of Richmond Business Centre, North
Brunswick St., Dublin 7, Ireland.
In this Agreement, the party who is contracting to receive services shall be
referred to as "IPVoice", and the party who will be providing the services shall
be referred to as "IIP".
IIP has a background in advising on financial matters in connection with
becoming a publicly traded company through a 'reverse-merger' and is willing to
provide services to IPVoice based on this background.
IPVoice desires to have services provided by IIP.
Therefore, the parties agree as follows:
1. DESCRIPTION OF SERVICES. Beginning on October 20, 1998, IIP will
provide the following services (collectively, the "Services"): Advise
IPVoice on raising up to $1.0m in private placement offering, assist
generally with issues following the reverse merger, assist with market
makers, lawyers, accountants, audits and general advise concerning
IPVoice status as a p8ublic company. Advise and assist IPVoice with
raising as further $2.0m, in order for IPVoice to execute it's business
plan.
2. PERFORMANCE OF SERVICES. The manner in which the Services are to be
performed and the specific hours to be worked by IIP shall be
determined by IIP. IPVoice will rely on IIP to work as many hours as
may be reasonably necessary to fulfill IIP's obligations under this
Agreement.
3. PAYMENT. IPVoice will pay a fee to IIP for the services in the amount
of $100,000.00 This fee shall be payable immediately for providing
consultant services for assistance in preparing the business plan,
stock option plans, officer compensation plans and other matters, This
amount is to be paid in common stock of IPVoice, free of restrictive
legend, at $0.10 per share.
4. ADDITIONAL COMPENSATION. In addition to the payments under the
preceding paragraph, IPVoice will make payments to IIP of $250,000.00,
for providing the public shell company and administrative activities
associated with the reverse merger, payable in 133,760 shares of stock
of IPVoice, free of restrictive legend at $0.10 per share and 106,240
shares of stock of IPVoice with restrictive legend at $0.10 per share.
In addition to the foregoing, in recognition and payment for those
services provided by IIP since March 1998, IPVoice shall provide IIP
with a three year financial consultant contract, effective immediately,
in which IIP or other designee, shall be entitled to a stock option
plan for 1,600,000 (One Million Six Hundred Thousand) shares of common
stock of IPVoice, to be issued free of restrictive legend at a cost of
$0.6c (six Cents) per share, and 350,000 shares of restricted common
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stock of IPVoice at a cost of $3.90 (three Dollars and Ninety cents)per
share. Such shares may be exercised at any time by IIP>
Additionally, IIP shall invoice IPVoice a monthly basis (Terms net 30)
as follows:
Months 6-12 following the reverse merger: $4000.00 monthly
Months 13-24 following the reverse merger: $6000.00 monthly
Months 25-36 following the reverse merger: $8000.00 monthly
Upon execution of this agreement, IIP shall have the right and option
in consideration of $100.00 paid to IPVoice simultaneously herewith, to
purchase warrants in the company equal to 5% of the Company with full
anti-dilution rights. The warrants shall be effective for a period of 5
(five) years, and exercisable at a price of $1.00 per share.
5. TERM/TERMINATION. This Agreement may be terminated by either party
upon 90 days written notice to the other party.
6. NOTICES. All notices required or permitted under this Agreement
shall be in writing and shall be deemed delivered when delivered in
person or deposited in the United States mail, postage prepaid,
addressed as follows:
IF for IPVoice: IP Voice Communications, Inc.
Barbara S. Will, President
10724 W. Ontario Place
Littleton, Colorado 80127
IF for IIP: International Investment Partners, Ltd
Harry McGinn, President
Richmond Business Centre, North Brunswick St.,
Dublin 7, Ireland
Such address may be changed from time to time by either party by
providing written notice to the other in the manner set forth above.
8. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties and there are no other parties and there are no other
promises or conditions in any other agreement whether oral or written.
This Agreement supersedes any prior written or oral agreements between
the parties.
9. AMENDMENT. This Agreement may be modified or amended if the
amendment is made in writing and is signed by both parties.
10. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited.
11.WAIVER OF CONTRACTURAL RIGHT. The failure of either party to enforce
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any provision of this Agreement shall not be construed as a waiver or
limitation of that party's right to subsequently enforce and compel
strict compliance with every provision of this Agreement.
12. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of Nevada.
Party receiving services:
IIP Voice Communications, Inc.
By: /s/ Barbara S. Will
----------------------------------
Barbara S. Will
President
Part providing services:
International Investment Partners, Ltd
By: /s/ Harry McGinn
----------------------------------
Harry McGinn
President
3
EXHIBIT 10.26
MEDIA RELATIONS AND CONSULTING AGREEMENT
This Agreement ("Agreement") is made and entered into this 13th day of
October, 1998 between IP Voice Communications, Inc., a Nevada Corporation (the
"Company") and Insidestock.com, Inc., a Florida Corporation (the "Consultant").
In consideration of and for the mutual promises contained herein, and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Purpose.
The Company hereby retains the consultant on a non-exclusive basis during the
term specified to render media relation's services and consulting advice to the
Company, as the Company may reasonably request, upon the terms and conditions as
set forth herein.
2. Term and Compensation.
This Agreement shall be effective for a term of twelve (12) months, commencing
upon the date first written above (the "Engagement period"). The Company shall
pay the Consultant a non-refundable fee upon execution of this agreement
consisting of two-hundred and seventy-five thousand (275,000) shares of free
trading, or any other applicable exemption, free trading, common stock of the
Company, and one hundred and fifty-five thousand (155,000) warrants with an
exercise price of $.645 per share for an aggregate purchase of $100,000.00. Said
warrant right will be demonstrated by a letter indicating the right and will
carry an expiration date of twelve months from the date of the initial profile.
The shares shall be 504 common stock, unless an appropriate exemption applies,
and without legend and titled in the name of Insidestock.com, Inc. and shall be
accompanied by an opinion letter from the Company's securities counsel that the
shares were issued in compliance with all applicable federal and state
securities regulations and in accordance with any rules promulgated by the
Securities and Exchange Commission, and that the shares may be sold at any time,
at the discretion of the Consultant. The Company agrees to defend Consultant
should any action relating to the issuance of the stock to the Consultant be
brought against the Consultant. Consultant shall be under no obligation to
commence services until the shares appear in its account as "Good Transfer."
The term of this agreement may be extended upon written mutual consent of all
parties for a six-month period ("Extended Engagement Period"), commencing on the
date of expiration of the initial Engagement Period. The Company and/or Third
Party shall, upon mutual written consent of the parties, pay the Consultant a
non-refundable fee consisting of shares of registered common stock. The parties
shall determine the number of shares before the end of the Engagement Period.
3. Duties of Consultant.
During the term of this Agreement, the consultant will provide the Company with
regular and customary non-exclusive media relations and non-exclusive consulting
services, provided that the Consultant shall not be required to undertake duties
not reasonably within the scope of the media relations and consulting services
contemplated by this Agreement. In performance of these duties, The Consultant
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shall provide the Company with the benefits of its best judgment and best
efforts. Its os understood and acknowledged by the parties that the value of the
Consultant's services is not measurable in any quantitative manner, and that the
consultant shall not be obligated to spend any specific amount of time providing
said services. The Consultant';s duties may include, but not necessarily be
limited to, on a non-exclusive basis, the following:
A. Develop a World Wide Web site ("Web Site") for the Company, its divisions and
subsidiaries.
NOT APPLICABLE to this agreement.
B. Maintain and update the Wb Site, with information supplied by the company,
for the term of this Agreement. Such information shall be limited to information
that is considered "public information" by the company, in its sole discretion.
Upon expiration of the term of this Agreement, the company shall assume sole
ownership of the Web Site and Domain Name and responsibility for its maintenance
, unless a new agreement is made between the parties.
C. Prepare independent analysis of the company based upon available "public
information" and meetings and/or interviews with the Company's senior
management.
D. Feature independent analysis "Company Profile") on the consultant's investor
service web site located on the World Wide Web.
E. Provide updates to the initial Company Profile, on a regular basis, based
upon new "public information", additional meetings with the Company's senior
management and additional independent analysis by the consultant. These
additional releases shall be at the sole discretion of the consultant.
F. Provide other business consulting services including introductions to capital
resources, market makers and broker/dealer forms when appropriate and available.
4. Company Profile.
The Company Profile shall include both factual information based upon available
"public information" and subjective information based upon independent analysis
performed by the Consultant.
A. Factual information shall be provided by the Company and shall be subject to
prior approval by a member of senior management. Factual information may include
information regarding the Company, including corporate structure, management's
experience, business segments, historical market prices and other "public
information". Company agrees to provide only information that is considered
"Public" and available to any or all investor upon their request.
B. Subjective information shall be provided by the Consultant and will be based
upon an independent analysis of the Company and competitive Company's both
publicly held and privately owned. The consultant will perform this analysis.
5. Consultant's Liability.
In the absence of gross negligence or willful misconduct on the part of the
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Consultant or the Consultant's breach of this Agreement, the Consultant shall
not be liable to the Company or to any officer, director, employee, stockholder
or creditor of the Company, for any act or omission in the course of or in
connection with the rendering or providing of services hereunder. Except in
those cases where gross negligence or willful misconduct of the Consultant or
the breach by the Consultant of this Agreement is alleged and proven, the
Company agrees to defend, indemnify and hold the Consultant harmless from and
against any and all reasonable costs, expenses and liability (including
reasonable attorney's fees paid in defense of the consultant) which may in any
way result from services rendered by the consultant pursuant to or in any
connection with this agreement.
6. Company's Liability.
The Consultant agrees to defend, indemnify, and hold the Company harmless from
and against all reasonable costs, expenses and liability (including reasonable
attorney's fees paid in defense of the company) which may in any way result
pursuant to its gross negligence or willful misconduct or in any connection with
any actions or statements, on behalf of the Company, made without the prior
approval or authorization of the Company.
7. Representations.
The Company represents and warrants that this agreement, including all
transactions contemplated herein, have been duly approved by the Board of
Directors of the Company, and that the Company has obtained such additional
approvals and consents (such as from shareholders, lenders, and others) as may
be required by the law of the state of its incorporation, its charter, its
bylaws or any agreement to which it is party.
8. Expenses.
The Company, upon receipt of appropriate supporting documentation, shall
reimburse the consultant for any and all pre-approved reasonable and actual
out-of-pocket expenses incurred in creation of the Company's web page, and, in
the event of default, all expenses related to Consultant's due diligence
meetings with the Company.
9. Default and Cancellation of Agreement.
In the event the Company fails to transfer to Consultant the compensation within
ten business days from the signing of this agreement, Consultant may in its sole
discretion cancel this agreement or choose to extend the amount of time for
payment. Under no circumstances shall Consultant be responsible for the
performance of any services until it has received payment.
If, after conducting due diligence on the Company, the consultant concludes that
for whatever reason the company is an unacceptable candidate for the performance
of the Consultant's regular services including the publishing of a Company
Profile on Consultant's World Wide Web site, Consultant may, at its discretion
cancel this agreement, in writing, and refund the entire compensation to the
Company.
In the event it is determined at any time that the Company is engaged in any
unlawful or improper activities, or it becomes clear that the company is acting
in a fashion inconsistent with its fiduciary duty to its shareholders, the
consultant may cancel this agreement immediately. The consultant may at its
option return any unsold shares it may hold in the Company at that time.
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10. Governing Law and Severability.
Any disputes under this Agreement shall be settled by binding arbitration in
Sarasota, Florida in accordance with the rules of the American Arbitration
Association.
This agreement has been delivered in the State of Florida and shall be construed
in accordance with the laws of Florida. Wherever possible, each provision of
this agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this agreement.
11. Miscellaneous.
A. It is understood there is no relationship, partnership, joint venture,
employment or franchise between the parties. The parties have no authority to
bind the other or incur any obligations on their behalf.
B. This agreement contains the all the terms, covenants, conditions and
representations made or entered into by and between the parties hereto. No
modification, amendment or waiver of any terms contained herein shall be valid
or binding unless in writing, executed with the formalities hereof and signed by
the party or parties effects by such writing.
C. The parties whose signatures appears below each represent and warrant that
they are authorized to enter into this agreement on behalf of the named Parties
and do so with the intention of binding those parties by the terms set forth
herein.
I.P. Voice Communications, Inc.
By: /s/ Barbara S. Will
- --------------------------------
Barbara Will
President
4
EXHIBIT 10.27
FINANCIAL PUBLIC RELATIONS
CONSULTING AGREEMENT
THIS FINANCIAL PUBLIC RELATIONS CONSULTING AGREEMENT, made this 29 day of March
1999 by and between: IPVoice Communications, Inc. , located at 5901 S.
middlefield Rd. Ste. 100, Littleton, Colorado, 80123 (herein referred to as the
"COMPANY") and BUYING POWER NETWORK, located at 3200 N. Federal Highway, Suite
221, Boca Raton, Florida 33431 engaged in providing financial public relations
services (hereinafter referred to as "CONSULTANT").
WITNESSETH THAT:
WHEREAS, the COMPANY requires financial public relations services and
desires to employ CONSULTANT to provide such services as an independent
contractor consultant, and CONSULTANT is agreeable to such employment, and the
parties desire a written document formalizing and defining their relationship
and evidencing the terms of their agreement;
NOW, THEREFORE, intending to be legally bound, and in consideration of
the mutual promises and covenants, the parties have agreed as follows:
1. APPOINTMENT. The COMPANY hereby appoints CONSULTANT as its financial
public relations counsel and hereby retains and employs CONSULTANT, on the terms
and conditions of this Agreement. CONSULTANT accepts such appointment and agrees
to perform the services upon the terms and conditions of this Agreement.
2. TERM. The term of this Agreement shall begin on Monday, March 29,
1999 and shall terminate on Wednesday, September 29,1999.
3. SERVICES
(a) CONSULTANT shall act, generally, as financial public
relations counsel, essentially acting (1) as liaison between the COMPANY and its
brokerage market; (2) as advisor to the COMPANY with respect to existing and
potential market makers, broker-dealers, and investors as well as being the
liaison between the COMPANY and such persons; and (3) as advisor to the COMPANY
with respect to communications and information (e.g., interviews, press
releases, financial media, etc.) As well as planning, designing, developing,
organizing, writing and distributing such communications and information with
the exception of Due Diligence Packages.
(b) CONSULTANT shall seek to make the COMPANY, its management,
its products, and its financial situation and prospects, known to the financial
press, publications and TV financial new programs, financial talk shows,
broker-dealers, institutional investors, market makers, investment advisors, and
other members of the financial community as well as the internet financial media
and the public generally.
(c) CONSULTANT, in providing the foregoing services, shall be
responsible for all costs of providing the services, not including out-of-pocket
expenses for postage, delivery service.
B.W. initial 1 T.R. initial
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4. LIMITATIONS ON SERVICES. The parties recognize that certain
responsibilities and obligations are imposed by federal and state securities
laws and by the applicable rules and regulations of stock exchanges, the
National Association of Securities Dealers, in-house "due diligence" or
"compliance" departments of brokerage houses, etc. Accordingly, CONSULTANT
agrees:
(a) CONSULTANT shall NOT release any financial or other
information or data about the COMPANY without the consent, approval and
signature of the COMPANY, signatures on press releases are necessary.
(b) CONSULTANT shall NOT conduct any meetings with financial
investors without informing the COMPANY in advance of the proposed meeting and
the format or agenda of such meeting and the COMPANY may elect to have a
representative of the COMPANY attend at such meeting.
(c) CONSULTANT shall NOT release any information or data about
the COMPANY to any selected or limited person(s), entity, or group if CONSULTANT
is aware that such information or data has not been generally released or
promulgated.
(d) After notice by the COMPANY of filing for a proposed
public offering of securities of the COMPANY, and during any period of
restriction on publicity, CONSULTANT shall not engage in any public relations
efforts not in the normal course without approval of counsel for the COMPANY and
of counsel for the underwriter(s), if any.
5. DUTIES OF COMPANY
(a) COMPANY shall supply CONSULTANT, on a regular and timely
basis with all approved data and information bout the COMPANY, its management,
its products, and its operations and COMPANY shall be responsible for advising
CONSULTANT of any facts which would affect the accuracy of an y prior data and
information previously supplied to CONSULTANT so that CONSULTANT may take
corrective action.
(b) COMPANY shall promptly supply CONSULTANT: with full and
complete copies of all filings with all federal and state securities agencies,
with full and complete copies of all shareholder reports and communications
whether or not prepared with CONSULTANT'S assistance; with all data and
information supplied to any analyst, broker-dealer, market maker, or other
member of the financial community; and with all product/services brochures,
sales materials, etc. (this is usually a due diligence package.)
(c) COMPANY shall promptly notify CONSULTANT of the filing of
any registration statement for the sale of securities and of any other event
which triggers any restrictions on publicity.
(d) COMPANY shall contemporaneously notify CONSULTANT if any
information or data being supplied to CONSULTANT has not been generally released
or promulgated. A signature on material will do - CONSULTANT does deliver
minimum disclosure.
6. REPRESENTATION AND INDEMNIFICATION
(a) The COMPANY shall be deemed to make a continuing
B.W. initial 2 T.R. initial
<PAGE>
representation of the accuracy of any and all material facts, material,
information, and data which it supplies to CONSULTANT and the COMPANY
acknowledges its awareness that CONSULTANT will rely on such continuing
representation in disseminating such information and otherwise performing its
public relations functions.
(b) CONSULTANT, in the absence of notice in writing from
COMPANY, will rely on the continuing accuracy of material, information, and data
supplied by the COMPANY.
(c) COMPANY hereby agrees to indemnify CONSULTANT against, and
to hold CONSULTANT harmless from, any claims, demands, suits, loss, damages, and
etc. arising out of CONSULTANT's reliance upon the accuracy and continuing
accuracy of such facts, material, information, and data, unless CONSULTANT has
been negligent in fulfilling the duties and obligations hereunder.
(d) COMPANY hereby authorizes CONSULTANT to issue, in
CONSULTANT'S sole discretion, corrective, amendatory, supplemental, or
explanatory press releases, shareholder communications and reports, or data
supplied to analysts, broker-dealers, market makers, or other members of the
financial community.
7. COMPENSATION
(a) Buying Power Network, in providing the foregoing services,
shall be responsible for all costs incurred except company will be responsible
for mailing of due diligence requests (or expenses for preparation and mailing
of due diligence packages by Buying Power Network). Your cost in expense fees
will be as follows: $40,000 shares of free-trading common stock or cash or a
combination of both upon signing contract. $30,000 shares of free trading common
stock or cash or a combination of both on 2nd contract month and $25,000 shares
of free trading common stock or cash or a combination of both 3rd contract
month. The remaining contract months will be an option program as will be
proposed under separate cover.
8. BILLING AND PAYMENT. The monthly basic fee provided for in Paragraph
7(a) shall be due and payable without billing. Billings and payments for special
services (Paragraph 7)
shall be as agreed.
9. RELATIONSHIP OF PARTIES. CONSULTANT is a Florida Corporation,
responsible for compensation of its agents, employees and representatives, as
well as all applicable withholding therefrom and taxes thereon (including
unemployment compensation) and all workmen's compensation insurance. This
Agreement does not establish any partnership, joint venture, or other business
entity or association between the parties and neither party is intended to have
any interest in the business or property of the other.
10. TERMINATION. This agreement may be terminated by either party prior
to the expiration of the term provided in Paragraph 2 above only in writing at
least five business days prior to the expiration of current contract month. If
this should happen, Company is responsible for all expenses to that date. All
stock left in B.P.N.'s account upon any cancellation date, will be returned to
Company minus expenses to that date.
11. ATTORNEY FEES. Should either party default in the terms or
conditions of this Agreement and suit be filed as a result of such default, the
prevailing party shall be entitled to recover
B.W. initial 3 T.R. initial
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all costs incurred as a result of such default including all costs and
reasonable attorney fees, expenses and court costs through trial and appeal.
12. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by the other party.
13. ASSIGNMENT. The rights and obligations of the parties under this
Agreement shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the parties.
14. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by certified mail,
return receipt requested, to the principal office of the party being notified.
15. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties and may be modified only by agreement in writing, signed by the
party against whom enforcement of any waiver, change, modification, extension or
discharge is sought. This Agreement shall be governed for all purposes by the
laws of the State of Florida. If any provision of this Agreement is declared
void, such provision shall be deemed severed from this Agreement, which shall
otherwise remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Agreement.
BUYING POWER NETWORK
By: /s/ Terry Ritchie Date 3/29/99
- ------------------------------------
Terry Ritchie, President/CEO
Buying Power Network
IP Voice Communications, Inc.
By: /s/ Barbara S. Will Date 3/30/99
- -----------------------------------
Barbara S. Will, President
IP Voice Communications, Inc.
B.W. initial 4 T.R. initial
EXHIBIT 10.28
IPVoice.com, INC.
EMPLOYMENT AGREEMENT
This Agreement is between IPVoice.com, Inc., a Nevada corporation ("Company" or
"IPVC"), and Barbara S. Will ("Employee"). Company and Employee agree as follow:
1. Recitals.
1.1 Company Name Business. IPVC is a Nevada corporation. IPVC's principal
business is telecommunications.
1.2 Agreement Purpose. IPVC desires to employ Employee and Employee desires
to accept such employment subject to the terms and conditions of this Agreement.
2. Employment. IPVC employs Employee and Employee accepts employment, subject
to the terms and condition of this Agreement.
3. Title and Duties.
3.1 Title and Reporting. Employee will serve as President & COO Employee
will have the responsibilities and duties assigned by, and will report directly
to the Board of Directors.
3.2 Duties. Employee's initial duties as President & COO are to oversee the
Company. Specific duties and responsibilities include: ___________.
4. Compensation.
4.1 Basic Compensation. IPVC will pay Employee a gross salary of One
Hundred Fifty Thousand Dollars ($150,000) annually. Compensation is payable in
accordance with IPVC regular payroll practices and is subject to withholding
tax, workman's compensation and unemployment tax, and other lawful deductions.
4.2 Bonus. IPVC will also pay Employee a bonus based on its evaluation of
Employee's performance each year, payable on February 25th of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded. IPVC's
Board of Directors will set Employee's bonus annually, at its discretion, at a
target percentage of one hundred percent (100%) up to two hundred percent (200%)
of Employee's Gross Salary upon achievement of target goals, and at a target
percentage of three hundred percent (300%) up to five hundred percent (500%) of
Employee's Gross Salary upon achievement of maximum target goals, and shall be
based on IPVC's performance. Bonus may be paid in cash or stock award, which
shall be mutually agreed upon by the Board and Employee. The target bonus
percentages and bonus criteria with respect to subsequent years shall be
determined in a similar manner.
4.3 Changes of Compensation. After the first year of the Agreement, IPVC and
Employee will meet and adjust Employee's compensation to take account of
Employee's duties for and performance at IPVC. IPVC's Board of Directors may
increase Employee's compensation, at its discretion.
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5. Term and Termination.
5.1 Initial Term. The Agreement is for a term of three (3) years commencing
January 1, 1999, so that the Agreement expires on January 1, 2003.
5.2 Automatic Renewals. Upon expiration of the initial term, the Agreement
will automatically renew for successive one-year terms unless a party gives
notice of non-renewal at least 180 days before the scheduled renewal date.
5.3 Termination. Either party may terminate this Agreement (a) for any
reason at any time by giving 60 days written notice of termination or (b) for
cause by giving written notice of termination. Termination will not affect the
obligations of Employee and IPVC which survive termination. IPVC will continue
to pay Employee his regular compensation throughout the term of this Agreement,
even if this Agreement terminates, except that IPVC is not required to continue
to pay compensation if (a) IPVC terminates this Agreement for cause,(b) Employee
terminates this Agreement, or (c) Employee dies or becomes permanently disabled.
5.4 Change of Control. For purposes of this Agreement, Barbara S. Will's
employment will be considered to have been terminated by the Company without
cause if, following a change in control of the Company, voluntarily terminated
his employment as a result of a reduction in his base salary or a material
reduction in his duties or responsibilities.
Notwithstanding any other provision of the stock option to the contrary, if a
change in control of IPVC occurs, then stock options become vested immediately.
Additionally, the amounts credited to the Employee's account shall be paid to
him or her (or, in the event he or she died, to his or her Beneficiary) in one
lump sum within two weeks of the date on which such change in control occurred.
A "Change in Control of IPVC" shall mean: (a) the purchase of other acquisition
by any person, entity, or group of persons, within the meaning of section 13(d)
or 14(d) of the Securities Exchange Act of 1934 (such Act being called in this
Section 5.4 the "Act"), as the Act and the sections thereof currently exist or
are hereafter amended or renumbered, of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Act) of more than 50% of either the
outstanding shares of common stock of IPVC or the combined voting power of
IPVC's then outstanding voting securities entitled to vote generally; (b) the
approval by the stockholders of IPVC of a reorganization, merger, or
consolidation, in each case with respect to which persons who were stockholders
of IPVC immediately prior to such reorganization, merger, or consolidation do
not, immediately thereafter, own more than 50% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged, or consolidated company's then outstanding securities; or (c) a
liquidation or dissolution of IPVC or the sale of all or substantially all of
IPVC's assets.
The Board believes it is imperative to diminish the inevitable distraction of
the Employee by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the Employee's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Employee with
compensation and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of the Employee will be
satisfied and which are competitive with those of other corporations. Therefore,
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if during the Employment Period, the Company shall terminate the Employee's
employment other than for Cause, death or disability or the Employee shall
terminate employment for Good Reason:
(i) The Company shall pay to the Employee in a lump sum in cash within
two weeks of the date on which such change in control occurred the
aggregate of the following amounts:
(A) the sum of (1) the Employee's Annual Base Salary through the date
of termination to the extent not theretofore paid, (2) the higher of
the Recent Annual Bonus and the maximum Annual Bonus payable based
upon achievement of maximum target goals, including any bonus or
portion thereof which has been earned but deferred ( and annualized
for any fiscal year consisting of less than twelve full months or
during which the Employee was employed for less than twelve full
months), for the most recently completed fiscal year during the
Employment period, if any (3) any compensation previously deferred by
the Employee (together with any accrued interest or earning thereon)
and any accrued vacation pay, and (4) any bonus earned for a fiscal
year prior to the year in which the Date of Termination occurs; and
(B) the amount of three (3) times the Employee's Annual Base Salary;
and
(C) an amount equal to the amount of the matching and other Company
contributions under the Company's qualified 401(k) savings plan and
related non-qualified plans that would be credited to the Employee
under the Savings Plans if, in addition to the Employee's actual years
of service, the Employee's employment had continued for two years
after the Date of Termination;
(i)For two years after the Employee's Date of Termination, or
such longer period as may be provided by the terms of the
appropriate plan, program practice or policy, the Company shall
continue benefits to the Employee at least equal to those which
would have been provided in accordance with the plans, programs,
practices and policies if the Employee's employment had not been
terminated, provide , however, that if the Employee becomes
reemployed with another employer and is eligible to receive
medical or other benefits under another employer provided plan,
the benefits described herein shall be secondary to those
provided under such other plan during such applicable period of
eligibility;
(ii) the Company shall, at its sole expense as incurred, provide
the Employee with outplacement services the scope and provider of
which shall be selected by the Employee in his sole discretion;
and
(iii) Employee may elect at any time (on any one or more
occasions), by written notice to the Company, to irrevocably
surrender any or all of the benefits described in subparagraphs
(ii) and (iii) above, and to receive in lieu thereof a cash
payment in an amount equivalent to the value of the surrendered
benefits, as determined by a nationally recognized certified
public accounting firm designated by the Employee.
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6. Benefits and Policies
6.1 Benefit Plans. In addition to the compensation described above,
Employee may participate in all fringe benefit plans made available to IPVC
employees from time to time.
6.2 Vacation and Sick Leave. Employee may take reasonable vacation,
holiday, and sick leave, subject to IPVC's reasonable limits and procedures. For
vacation, Employee may take five (5) weeks annual vacation (25 working days).
Vacation days do not carry over and must be used before the end of each year.
Employee must adjust any vacation and holiday schedule as necessary to satisfy
IPVC's reasonable business needs. For sick pay, Employee may take up to twelve
(12) weeks with pay, subject to IPVC's policies for sick leave.
6.3 Car Allowance. IPVC will pay Employee a car allowance up to $800.00 per
month.
6.4 Business Development. In order to assist Employee in developing IPVC's
business, IPVC will pay (a) Employee's reasonable entertainment expenses (golf,
tickets, dinners, etc.) and (b) the cost of membership in service or community
organizations approved by IPVC.
6.5 Staff Manual. All other terms of Employer's employment will be governed
by IPVC employee manual. IPVC reserves the right unilaterally to amend the
employee manual, from time to time, and Employee will be subject to changes made
so long as they are applied to all IPVC and IPVC employees.
6.6 Equity Plan. IPVC and Employee will cooperate to secure Employee an
interest in IPVC common stock consistent with the IPVC Executive Equity
Incentive Plan.
7. Expenses. Subject to IPVC's prior authorization of each expense, IPVC will
reimburse Employee for reasonable business expenses incurred on behalf of IPVC,
including reasonable travel expenses. For overseas travel, reasonable travel
expenses include business class service.
8. Confidential Information. During and after the term of Employee's employment,
Employee will keep confidential, and will not reproduce, copy or disclose to any
other person or firm, all trade secrets and other proprietary or confidential
information and data concerning IPVC, or their business ("Confidential
Information"). Employee will not, during or after the term of the Agreement, use
(either alone or with others), disclose to any person, or encourage anyone else
to disclose any Confidential Information except within the scope of Employee's
duties and responsibilities for IPVC's consent.
9. Return of Company Documents. Upon termination of this Agreement, Employee
will return to IPVC all records and documents of or pertaining to IPVC
(including, but not limited to, customer lists, names, or addresses) and will
not make, retain, or give to any other person any copy or extract of any such
record or document. "Record" includes but is not limited to, information stored
on computer.
10. Non-Solicitation. During and for one (1) year after the term of this
Agreement, Employee will not solicit, or assist others to solicit, any persons
who were employed by, or were customers of IPVC at any time during the term of
Employee's employment.
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11. Non-Compete. During and for one (1) year after the term of this Agreement,
Employee will not compete with IPVC. This competition relates to any product or
service offered by the company during the term of Employee's employment.
12. Actions. Employee acknowledges that it would be difficult to determine
damages, and IPVC will not have an adequate remedy at law, if Employee breaches
this Agreement. Accordingly, if Employee breaches this Agreement, IPVC may seek
injunctive relief to enforce this Agreement. Nothing in this section limits or
excludes any and all other rights, including rights to money damages, granted to
IPVC in law or equity.
13. Reformation and Severability. If a section of this Agreement is deemed
unreasonable as to time or scope by any court or arbitrator, then such court or
arbitrator may modify the section so that it is reasonable and must then enforce
the section as modified. If a section of this Agreement is deemed unreasonable
by a court or arbitrator and cannot be modified so that it is reasonable, such
section is severable from the remainder of this Agreement, which must be
enforced according to its terms.
14. Non-delegability of Employee's Rights. The obligations, rights and benefits
of Employee under this Agreement are personal and may not be delegated,
assigned, or transferred without written consent from IPVC.
15. Assignment by Company. IPVC may assign its rights under this Agreement to
another business that (a) is controlled by or affiliated with IPVC or (b)
acquires IPVC or the assets of IPVC used in connection with Employee's
employment. After any such assignment all references in this Agreement to IPVC
will, where appropriate, be deemed to refer to the assignee.
16. Notices. Notices under this Agreement are effective upon delivery or three
days after mailing, certified or registered mail, return receipt requested, to
the addresses stated on the signature page of this Agreement (which may be
changed by amendment of the Agreement or by notice).
17. Entire Agreement and Amendment. This Agreement is the entire agreement of
the parties with respect to Employee's employment and may be amended only by a
written document signed by both parties.
18. Governing Law. Colorado law will govern this Agreement.
19. Attorneys' Fees. In any proceeding arising out of this Agreement, the
prevailing party is entitled to reasonable attorneys' fees, costs and other
expenses incurred in connection with such proceeding.
20. Arbitration. Disputes not resolved by agreement of the parties and arising
out of this Agreement or out of Employee's employment will be submitted to
binding arbitration in the state of Florida, before a single arbitrator or, if
the parties cannot agree upon a single arbitrator, before a panel of three
arbitrators, one selected by each party (within 10 days after notice of a
dispute and failure to agree upon a single arbitrator) and a third appointed by
the arbitrators selected by the parties. The selection of arbitrators and all
arbitration proceedings will be in accordance with the rules for commercial
arbitration of the American Arbitration Association, as amended to the date of
the proceedings, and judgment upon the award may be entered in any court having
5
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jurisdiction. The arbitrators must render a decision within 30 days after their
appointment and may award the costs of arbitration as they see fit.
21. Execution and Effective Date. This Agreement is executed and effective as of
the 1st day of January, 1999.
IPVoice.com, INC.,
A Nevada corporation
By /s/ Anthony K. Welch
- --------------------------
Its:
Signers title: Secretary of Board of Directors
EMPLOYEE:
Name of Employee: Barbara S. Will
/s/ Barbara S. Will
- ----------------------
Signature
6
EXHIBIT 10.29
IPVoice.com, INC.
This Agreement is between IPVoice.com, Inc., a Nevada corporation ("Company" or
"IPVC"), and Anthony Welch ("Employee"). Company and Employee agree as follow:
1. Recitals.
1.1 Company Name Business. IPVC is a Nevada corporation. IPVC's principal
business is telecommunications.
1.2 Agreement Purpose. IPVC desires to employ Employee and Employee desires
to accept such employment subject to the terms and conditions of this Agreement.
2. Employment. IPVC employs Employee and Employee accepts employment, subject to
the terms and condition of this Agreement.
3. Title and Duties.
3.1 Title and Reporting. Employee will serve as Executive Vice President.
Employee will have the responsibilities and duties assigned by, and will report
directly to President and COO.
3.2 Duties. Employee's initial duties as Executive Vice President are to
(see attached job description). Specific duties and responsibilities include:
___________.
4. Compensation.
4.1 Basic Compensation. IPVC will pay Employee a gross salary of One
Hundred Fifty Thousand Dollars ($150,000) annually. Compensation is payable in
accordance with IPVC regular payroll practices and is subject to withholding
tax, workman's compensation and unemployment tax, and other lawful deductions.
4.2 Bonus. IPVC will also pay Employee a bonus based on its evaluation of
Employee's performance each year, payable on February 25th of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded. IPVC's
Board of Directors will set Employee's bonus annually, at its discretion, at a
target percentage of one hundred percent (100%) up to two hundred percent (200%)
of Employee's Gross Salary upon achievement of target goals, and at a target
percentage of three hundred percent (300%) up to five hundred percent (500%) of
Employee's Gross Salary upon achievement of maximum target goals, and shall be
based on IPVC's performance. Bonus may be paid in cash or stock award, which
shall be mutually agreed upon by the Board and Employee. The target bonus
percentages and bonus criteria with respect to subsequent years shall be
determined in a similar manner.
4.3 Changes of Compensation. After the first year of the Agreement, IPVC
and Employee will meet and adjust Employee's compensation to take account of
Employee's duties for and performance at IPVC. IPVC's Board of Directors may
increase Employee's compensation, at its discretion.
1
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5. Term and Termination.
5.1 Initial Term. The Agreement is for a term of three (3) years commencing
January 1, 1999, so that the Agreement expires on January 1, 2003.
5.2 Automatic Renewals. Upon expiration of the initial term, the Agreement
will automatically renew for successive one-year terms unless a party gives
notice of non-renewal at least 180 days before the scheduled renewal date.
5.3 Termination. Either party may terminate this Agreement (a) for any
reason at any time by giving 60 days written notice of termination or (b) for
cause by giving written notice of termination. Termination will not affect the
obligations of Employee and IPVC which survive termination. IPVC will continue
to pay Employee his regular compensation throughout the term of this Agreement,
even if this Agreement terminates, except that IPVC is not required to continue
to pay compensation if (a) IPVC terminates this Agreement for cause,(b) Employee
terminates this Agreement, or (c) Employee dies or becomes permanently disabled.
5.4 Change of Control. For purposes of this Agreement, Anthony Welch's
employment will be considered to have been terminated by the Company without
cause if, following a change in control of the Company, voluntarily terminated
his employment as a result of a reduction in his base salary or a material
reduction in his duties or responsibilities.
Notwithstanding any other provision of the stock option to the contrary, if a
change in control of IPVC occurs, then stock options become vested immediately.
Additionally, the amounts credited to the Employee's account shall be paid to
him or her (or, in the event he or she died, to his or her Beneficiary) in one
lump sum within two weeks of the date on which such change in control occurred.
A "Change in Control of IPVC" shall mean: (a) the purchase of other acquisition
by any person, entity, or group of persons, within the meaning of section 13(d)
or 14(d) of the Securities Exchange Act of 1934 (such Act being called in this
Section 5.4 the "Act"), as the Act and the sections thereof currently exist or
are hereafter amended or renumbered, of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Act) of more than 50% of either the
outstanding shares of common stock of IPVC or the combined voting power of
IPVC's then outstanding voting securities entitled to vote generally; (b) the
approval by the stockholders of IPVC of a reorganization, merger, or
consolidation, in each case with respect to which persons who were stockholders
of IPVC immediately prior to such reorganization, merger, or consolidation do
not, immediately thereafter, own more than 50% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged, or consolidated company's then outstanding securities; or (c) a
liquidation or dissolution of IPVC or the sale of all or substantially all of
IPVC's assets.
The Board believes it is imperative to diminish the inevitable distraction of
the Employee by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the Employee's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Employee with
compensation and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of the Employee will be
satisfied and which are competitive with those of other corporations. Therefore,
2
<PAGE>
if during the Employment Period, the Company shall terminate the Employee's
employment other than for Cause, death or disability or the Employee shall
terminate employment for Good Reason:
(i) The Company shall pay to the Employee in a lump sum in cash within two
weeks of the date on which such change in control occurred the
aggregate of the following amounts:
(A) the sum of (1) the Employee's Annual Base Salary through the
date of termination to the extent not theretofore paid, (2) the
higher of the Recent Annual Bonus and the maximum Annual Bonus
payable based upon achievement of maximum target goals, including
any bonus or portion thereof which has been earned but deferred (
and annualized for any fiscal year consisting of less than twelve
full months or during which the Employee was employed for less
than twelve full months), for the most recently completed fiscal
year during the Employment period, if any (3) any compensation
previously deferred by the Employee (together with any accrued
interest or earning thereon) and any accrued vacation pay, and
(4) any bonus earned for a fiscal year prior to the year in which
the Date of Termination occurs; and
(B) the amount of three (3) times the Employee's Annual Base
Salary; and
(C) an amount equal to the amount of the matching and other
Company contributions under the Company's qualified 401(k)
savings plan and related non-qualified plans that would be
credited to the Employee under the Savings Plans if, in addition
to the Employee's actual years of service, the Employee's
employment had continued for two years after the Date of
Termination;
(i) For two years after the Employee's Date of Termination,
or such longer period as may be provided by the terms of the
appropriate plan, program practice or policy, the Company
shall continue benefits to the Employee at least equal to
those which would have been provided in accordance with the
plans, programs, practices and policies if the Employee's
employment had not been terminated, provide , however, that
if the Employee becomes re-employed with another employer
and is eligible to receive medical or other benefits under
another employer provided plan, the benefits described
herein shall be secondary to those provided under such other
plan during such applicable period of eligibility;
(ii) the Company shall, at its sole expense as incurred,
provide the Employee with outplacement services the scope
and provider of which shall be selected by the Employee in
his sole discretion; and
(iii) Employee may elect at any time (on any one or more
occasions), by written notice to the Company, to irrevocably
surrender any or all of the benefits described in
subparagraphs (ii) and (iii) above, and to receive in lieu
thereof a cash payment in an amount equivalent to the value
of the surrendered benefits, as determined by a nationally
3
<PAGE>
recognized certified public accounting firm designated by
the Employee.
6. Benefits and Policies
6.1 Benefit Plans. In addition to the compensation described above,
Employee may participate in all fringe benefit plans made available to IPVC
employees from time to time.
6.2 Vacation and Sick Leave. Employee may take reasonable vacation,
holiday, and sick leave, subject to IPVC's reasonable limits and procedures. For
vacation, Employee may take five (5) weeks annual vacation (25 working days).
Vacation days do not carry over and must be used before the end of each year.
Employee must adjust any vacation and holiday schedule as necessary to satisfy
IPVC's reasonable business needs. For sick pay, Employee may take up to twelve
(12) weeks with pay, subject to IPVC's policies for sick leave.
6.3 Car Allowance. IPVC will pay Employee a car allowance up to $800.00 per
month.
6.4 Business Development. In order to assist Employee in developing IPVC's
business, IPVC will pay (a) Employee's reasonable entertainment expenses (golf,
tickets, dinners, etc.) and (b) the cost of membership in service or community
organizations approved by IPVC.
6.5 Staff Manual. All other terms of Employer's employment will be governed
by IPVC employee manual. IPVC reserves the right unilaterally to amend the
employee manual, from time to time, and Employee will be subject to changes made
so long as they are applied to all IPVC and IPVC employees.
6.6 Equity Plan. IPVC and Employee will cooperate to secure Employee an
interest in IPVC common stock consistent with the IPVC Executive Equity
Incentive Plan.
7. Expenses. Subject to IPVC's prior authorization of each expense, IPVC will
reimburse Employee for reasonable business expenses incurred on behalf of IPVC,
including reasonable travel expenses. For overseas travel, reasonable travel
expenses include business class service.
8. Confidential Information. During and after the term of Employee's employment,
Employee will keep confidential, and will not reproduce, copy or disclose to any
other person or firm, all trade secrets and other proprietary or confidential
information and data concerning IPVC, or their business ("Confidential
Information"). Employee will not, during or after the term of the Agreement, use
(either alone or with others), disclose to any person, or encourage anyone else
to disclose any Confidential Information except within the scope of Employee's
duties and responsibilities for IPVC's consent.
9. Return of Company Documents. Upon termination of this Agreement, Employee
will return to IPVC all records and documents of or pertaining to IPVC
(including, but not limited to, customer lists, names, or addresses) and will
not make, retain, or give to any other person any copy or extract of any such
record or document. "Record" includes but is not limited to, information stored
on computer.
4
<PAGE>
10. Non-Solicitation. During and for one (1) year after the term of this
Agreement, Employee will not solicit, or assist others to solicit, any persons
who were employed by, or were customers of IPVC at any time during the term of
Employee's employment.
11. Non-Compete. During and for one (1) year after the term of this Agreement,
Employee will not compete with IPVC. This competition relates to any product or
service offered by the company during the term of Employee's employment.
12. Actions. Employee acknowledges that it would be difficult to determine
damages, and IPVC will not have an adequate remedy at law, if Employee breaches
this Agreement. Accordingly, if Employee breaches this Agreement, IPVC may seek
injunctive relief to enforce this Agreement. Nothing in this section limits or
excludes any and all other rights, including rights to money damages, granted to
IPVC in law or equity.
13. Reformation and Severability. If a section of this Agreement is deemed
unreasonable as to time or scope by any court or arbitrator, then such court or
arbitrator may modify the section so that it is reasonable and must then enforce
the section as modified. If a section of this Agreement is deemed unreasonable
by a court or arbitrator and cannot be modified so that it is reasonable, such
section is severable from the remainder of this Agreement, which must be
enforced according to its terms.
14. Non-delegability of Employee's Rights. The obligations, rights and benefits
of Employee under this Agreement are personal and may not be delegated,
assigned, or transferred without written consent from IPVC.
15. Assignment by Company. IPVC may assign its rights under this Agreement to
another business that (a) is controlled by or affiliated with IPVC or (b)
acquires IPVC or the assets of IPVC used in connection with Employee's
employment. After any such assignment all references in this Agreement to IPVC
will, where appropriate, be deemed to refer to the assignee.
16. Notices. Notices under this Agreement are effective upon delivery or three
days after mailing, certified or registered mail, return receipt requested, to
the addresses stated on the signature page of this Agreement (which may be
changed by amendment of the Agreement or by notice).
17. Entire Agreement and Amendment. This Agreement is the entire agreement of
the parties with respect to Employee's employment and may be amended only by a
written document signed by both parties.
18. Governing Law. Colorado law will govern this Agreement.
19. Attorneys' Fees. In any proceeding arising out of this Agreement, the
prevailing party is entitled to reasonable attorneys' fees, costs and other
expenses incurred in connection with such proceeding.
20. Arbitration. Disputes not resolved by agreement of the parties and arising
out of this Agreement or out of Employee's employment will be submitted to
binding arbitration in the state of Florida, before a single arbitrator or, if
the parties cannot agree upon a single arbitrator, before a panel of three
arbitrators, one selected by each party (within 10 days after notice of a
dispute and failure to agree upon a single arbitrator) and a third appointed by
the arbitrators selected by the parties. The selection of arbitrators and all
5
<PAGE>
arbitration proceedings will be in accordance with the rules for commercial
arbitration of the American Arbitration Association, as amended to the date of
the proceedings, and judgment upon the award may be entered in any court having
jurisdiction. The arbitrators must render a decision within 30 days after their
appointment and may award the costs of arbitration as they see fit.
21. Execution and Effective Date. This Agreement is executed and effective as of
the 1st day of January, 1999.
IPVoice.com, INC.,
A Nevada corporation
By /s/ Barbara S. Will
- ----------------------
Signers title: President and COO
EMPLOYEE:
/s/ Anthony K. Welch
- --------------------------
Name of Employee:Anthony K. Welch
6
EXHIBIT 10.30
THIS AGREEMENT ("Agreement") is made and entered into this 9th day of
April, 1999, by and between Peter M. Stazzone, a married man, President of
SATLINK 3000, Inc., a Nevada Corporation ("SATLINK"), 5050 N. 19th Avenue,
Phoenix, AZ 85015 (hereinafter "Stazzone"), and IPVoice COMMUNICATIONS, INC., a
Nevada corporation (the "Company" or "IPVoice"), with offices at 5901 South
Middlefield Road, Suite 100, Littleton, Colorado 80123 (hereinafter collectively
referred to as the "Parties").
WITNESSETH:
WHEREAS, SATLINK, and Stazzone on behalf of SATLINK, the shareholders
of SATLINK and Company are presently engaged in negotiations for the exchange of
stock of SATLINK for shares of the Company pursuant to that certain Agreement
For The Exchange Of Common Stock (the "Exchange Agreement") by and between
IPVoice, as Issuer, and SATLINK and its shareholders dated April 7, 1999; and
WHEREAS, the Company desires that, as part of the contemplated
transaction under the Exchange Agreement, Stazzone assist with the acquisition
and transition of SATLINK by and into the Company, relinquish his shares in
SATLINK, and remain with and be employed by the Company pursuant to the terms
and conditions set forth herein; and
WHEREAS, Stazzone desires to assist the Company with the acquisition
and transition of SATLINK by and into the company to relinquish his shares in
SATLINK and to be employed upon the successful consummation of the acquisition
of SATLINK by the Company as contemplated under the terms of the Exchange
Agreement pursuant to the terms hereof as to be more specifically delineated in
definitive agreements and documents to be entered into by the Parties
incorporating the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, Stazzone and the Company
agree as follows:
ARTICLE I
TERM
1. Term: The Company hereby engages and employs Stazzone and Stazzone hereby
accepts, for and in consideration of the compensation, stock grant, stock
options, and benefits herein provided, the Position of Chief Financial Officer
of the Company from the date of the Closing under the Exchange Agreement (as
defined therein) until the ^ (third /s/ BW, /s/ PS) anniversary thereof, unless
sooner terminated pursuant to the parties' rights to terminate to be set forth
in more definitive agreements between the Parties, including but not limited to
a definitive Employment Agreement ("Employment Agreement").
ARTICLE II
COMPANY'S COVENANTS
2. The Company shall provide Stazzone with the following compensation,
remuneration and benefits in consideration of his services in assisting in the
acquisition and transition of SATLINK by and into the Company, relinquishment
DRAFT 04/15/99 2:56 PM INIT BW INIT PS
<PAGE>
of his shares in SATLINK, and for his duties as an officer of the Company after
the Closing under the Exchange Agreement:
(A) A beginning Monthly base salary of $5,000.00 "net" after all deductions,
withholdings, etc., which base shall be increased to an annual base salary of a
minimum of $140,000.00 on the earlier to occur of August 15, 1999, or Company
Board of Directors' approval, which shall not be unreasonably withheld, as more
specifically set forth in the Employment Agreement to be entered into by the
Parties on or after the Closing of the Exchange Agreement ("Employment
Agreement").
(B) Additional perquisites and benefits such as a company automobile, 401K Plan,
deferred compensation plan, medical/dental plans, clubs, memberships and similar
forms of compensation which are in effect for other officer/key employees or
become available and/or are approved by the Board of the Company, as more
specifically set forth in the Employment Agreement.
(C) Maintenance of Stazzone's current SATLINK medical insurance, life insurance,
long distance and cellular telephone reimbursement unless and until a more
favorable policy is adopted by the Company for such benefits, the latter of
which shall likewise be provided to Stazzone, as more specifically set forth in
the Employment Agreement.
(D) Issuance of a non-refundable and non-revocable stock grant to Stazzone for
200,000 shares of the Company's effective on the Closing under the Exchange
Agreement and delivered to Stazzone by the Company on the earlier of the first
anniversary date thereof or Stazzone's termination hereunder, regardless of
whether such termination is the result of action by Stazzone or the Company.
Such stock grant shall be deemed earned upon the Closing under the Exchange
Agreement ("Stock Grant") as more specifically set forth in the Stock Grant
Agreement to be entered into by and between the Parties on or after the Closing
under the Exchange Agreement ("Stock Grant Agreement").
(E) Issuance of stock options pursuant to a more definitive Stock Option
Agreement which shall be executed by the Company and Stazzone on or after the
Closing of the Exchange Agreement whereby Stazzone shall be issued options for a
minimum of 200,000 shares of the Company's common stock, vested over three
years,, exercisable at $1.00 per share, provided there has been execution by
Stazzone of his assigned duties, as set forth in his written job description
("Stock Option Agreement").
(F) Issuance of a Company stock bonus for a minimum of 100,000 shares of the
Company's common stock, payable by the Company to Stazzone, resulting from the
successful endeavors of the Company with Netgenie and/or Jim Giannoit, the share
amount to be determined by the Company's Board, which shall be timely and not
unreasonably withheld ("Netgenie Bonus"). Such stock bonus shall be effective
and deemed earned upon the closing under the Exchange Agreement earlier of the
first anniversary date thereof or Stazzone's termination hereunder, regardless
of whether such termination is the result of action by Stazzone or the Company,
as more specifically set forth in a Bonus Agreement to be entered into by and
between the Parties on or after the Closing under the Exchange Agreement.
("Bonus Agreement").
(G) A similar Company stock and/or cash bonus upon the successful consummation
of transactions brought about by Stazzone's identification/efforts effective
upon Board approval, which shall be timely and not unreasonably withheld
("Finder's Bonus").
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<PAGE>
(H) Stazzone to remain headquartered in his present location in Phoenix until a
final decision has been made by the Company as to permanent headquarters for the
Company.
(I) Upon such final decision as to the Company headquarters, the Company shall
pay for and/or reimburse Stazzone for all direct and indirect costs and expenses
of relocation, including but not limited to interim housing expenses of
relocation, including but not limited to interim housing expenses while securing
a new home, moving expenses in accordance with a budget approved by the
Company's Board; and
(J) Annually a four (4) week paid vacation.
ARTICLE III
TERMINATION
3.1 Termination by Company: Upon the occurrence of any of the events
set forth below, this Agreement shall, at the election of the Company, be
terminated prior to the end of the Term upon written notice of such termination
from Company to Stazzone :
(A) If Stazzone should fail to keep, observe or perform any covenant,
agreement, term or provision of his Employment Agreement; or
(B) Upon the negligence, fraud or willful misconduct of the Stazzone.
3.2 Termination Fee: In the event the Company terminates this Agreement
for reasons other than (A) or (B) setforth herein and above, and subject to
Stazzone's faithful Performance of his duties to the Company, the Company shall
pay an amount ("Termination Fee") to Stazzone equal to one (1) year's annual
salary (calculated on the basis of the immediately preceding Operating Period),
if such termination occurs during the first three (3) years of the Term, as more
specifically set forth in the Employment Agreement to be entered into by the
Parties on or after the Closing of the Exchange Agreement.
ARTICLE IV
TRANSFERABILITY
4.1 Personal Services: This Agreement is considered to be a personal
service contract with respect to Stazzone. Accordingly, except as expressly set
forth herein to the contrary, Stazzone shall not have the right to assign,
transfer or devolve upon any other person or entity, by operation of law or
otherwise, any of the rights in and to or obligations and duties under this
Agreement without the prior written consent of the Company. No assignment,
whether requiring the Company's consent or not, shall relieve or release
Stazzone of any obligations, duties or liabilities hereunder and the Company's
consent to any assignment shall not be deemed to be a consent to any subsequent
assignment.
4.2 Company: The Company may assign, transfer and convey this Agreement
and its rights, title and interests therein to any successor or assign, and in
such event, upon the transferee assuming the Company's obligations hereunder no
further liability or obligation shall thereafter accrue against the Company
hereunder.
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<PAGE>
ARTICLE V
REMEDIES
5.1 Integration: This Agreement and the Exchange Agreement are integrated each
with the other, provided however, that no default under this Agreement nor the
agreements to be entered into by the Parties in connection herewith, as
contemplated herein, shall excuse performance by the Company of its obligations
under the Exchange Agreement, which shall continue to remain in full force and
legal effect and survive the termination or cancellation of this Agreement. A
default by the Company under this Agreement may be deemed by Stazzone a default
under the Exchange Agreement and, in such event, Stazzone, at his sole
discretion, shall have all rights and remedies provided under each Agreement
against the Company.
5.2 Injunction: The parties hereto understand, accept and agree that a default
and/or breach by the Company hereunder will result in irreparable harm to
Stazzone due to the loss of his present position with SATLINK, his shares
therein and the merger of SATLINK into the Company, and that Stazzone shall have
the right, remedy and authority to seek and obtain a mandatory injunction
directing the Company to perform its obligations to Stazzone hereunder without
the requirement of posting a bond, making a showing of irreparable harm or
probable success of prevailing on the merits of such injunction proceeding.
5.3 Liquidated Damages: The parties hereto agree that it would be impossible to
quantify monetarily the damages that would be suffered by Stazzone in the event
of the breach by the Company of any one or more of its obligations to Stazzone
hereunder and therefore agree that in lieu of his injunctive remedies provided
for herein above, Stazzone may elect, at his sole discretion, to be compensated
by the Company for such breach in the liquidated damage amount of $200,000.00
which each of the parties hereto mutually agree is a fair and reasonable amount
to compensate Stazzone for the Company's breach and Stazzone's change of
position in reliance upon the Company's promises, agreements and covenants
herein.
ARTICLE VI
MISCELLANEOUS
6.1 Notices: Any notice, communication or election to be given under the terms
of this Agreement shall be in writing and delivered in person or deposited,
certified or registered, return receipt requested, in the United States Mail,
postage prepaid, addressed as follows:
If to Company: IPVoice Communications, Inc.
Attention:
Address first set forth herein and above
If to Stazzone: Peter M. Stazzone
Address first set forth herein and above
or to such other address as either party may hereafter designate by notice
hereunder. Such notices shall be considered as given or received, as the case
may be, immediately if delivered in person or seventy-two (72) hours after
deposit in the United States Mail.
6.2 Complete Agreement: This Agreement constitutes and embodies the full and
complete understanding of the parties hereto with respect to the employment and
compensation of Stazzone by the Company, and EXCEPT FOR the Exchange Agreement
provided for herein and above, supersedes all prior or contemporaneous
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<PAGE>
understandings, agreements or representations, whether oral or in writing. This
Agreement may only be amended, modified or changed by written instrument
executed by both parties hereto.
6.3 Governing Law: This Agreement shall be governed by, enforced and construed
in accordance with the laws of the State of Arizona. The parties hereto agree
that the proper jurisdiction and venue for any litigation proceeding arising
hereunder shall be the Maricopa County Superior Court for the State of Arizona
or the Federal District Court for the District of Arizona (Phoenix Division).
6.4 Headings: The Article and Section headings used herein are for convenience
and reference only and are not intended to define, limit or describe the scope
or intent of any provisions of this Agreement.
6.5 Assigns: Subject tot he provisions of Article IV, this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.
6.6 Attorneys' Fees: In the event that the Company defaults under or otherwise
breaches this Agreement, Stazzone shall have the right to recover and otherwise
be reimbursed for any and all costs and expense incurred in connection with
settling and litigating such matter hereunder, including but not limited to,
attorneys' fees, experts and witnesses' fees, court costs and disbursements.
6.7 Waiver: No waiver by Stazzone of any breach by the Company of any of its
obligations, agreements or covenants hereunder shall be a waiver of any
subsequent breach of any obligation, agreement or covenant, nor shall any
forbearance by Stazzone to seek a remedy for any breach be a waiver by Stazzone
of his rights and remedies with respect to that or any other breach.
6.8 Invalid, Illegal or Unenforceable Provisions: In case any provision of the
Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, this Agreement shall be construed as if such provision had never been
contained herein; provided, however, that this Agreement will be construed in
such a manner so as to enable Stazzone to obtain the practical realization of
all benefits and rights contemplated to be acquired and/or granted hereunder.
6.9 Execution of Documents; Actions by Parties: The Company shall execute all
documents and do all things as may be necessary to accomplish the objectives of
this Agreement. This Agreement may be executed by the parties hereto in
counterpart originals, all of which shall constitute but one instrument.
6.10 Survival: This Agreement shall survive and not be merged in the execution
and delivery of any other documents and shall specifically survive the
consummation and/or fulfillment of the Exchange Agreement. The provisions hereof
are cumulative with those contained in the Exchange Agreement or any other
documents executed or delivered in connection therewith.
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<PAGE>
IN WITNESS WHEREOF, the parties, through their duly authorized representatives
as appropriate, have executed this Agreement in multiple counterparts, each of
which shall have the force and effect of any original, as of the date and year
first above written.
PETER M. STAZZONE
/s/ Peter M. Stazzone
--------------------------------
Peter M. Stazzone
IPVOICE COMMUNICATIONS, INC.,
A Nevada Corporation
By:/s/ Barbara S. Will
----------------------------------
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EXHIBIT 10.31
OFFICE LEASE
by and between
BARCLAY ASSOCIATES,
a California General Partnership
"Landlord"
and
IP VOICE.COM
A Nevada Corporation
"Tenant"
Dated
June 21, 1999
for premises known as
CAMEL 19 OFFICE PARK
5050 NORTH 19th AVENUE
SUITE #416 and #417
PHOENIX, ARIZONA 85015
<PAGE>
<TABLE>
TABLE OF CONTENTS Page
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<S> <C> <C>
1 BASIC PROVISIONS. 2
2 LEASED PREMISES; NO ADJUSTMENTS 2
3 LEASE TERM; COMMENCEMENT DATE 2
4 SECURITY DEPOSIT 2
5 RENT; RENT TAX; ADDITIONAL RENT 3
6 OPERATING COSTS 3
7 CONDITION, REPAIRS AND ALTERATIONS 4
8 SERVICES 5
9 LIABILITY AND CASUALTY INSURANCE 5
10 CASUALTY DAMAGE 6
11 WAIVER OF SUBROGATION 6
12 LANDLORD'S RIGHT TO PERFORM TENANT OBLIGATIONS 6
13 DEFAULT AND REMEDIES 6
14 LATE PAYMENTS 7
15 SURRENDER 7
16 INDEMNIFICATION AND EXCULPATION. 8
17 ENTRY BY LANDLORD 8
18 SUBSTITUTE PREMISES 8
19 ASSIGNMENT AND SUBLETTING 9
20 USE OF LEASED PREMISES 9
21 SUBORDINATION AND ATTORNMENT 10
22 ESTOPPEL CERTIFICATE 10
23 SIGNS 10
24 PARKING 10
25 LIENS 11
26 HOLDING OVER 11
27 ATTORNEYS' FEES 11
28 RESERVED RIGHTS TO LANDLORD 11
29 EMINENT DOMAIN 11
30 NOTICES 12
31 RULES 12
32 ACCORD AND SATISFACTION 12
33 FIRST RIGHT OF REFUSAL 12
</TABLE>
<PAGE>
CAMEL 19 OFFICE PARK LEASE
1. BASIC PROVISIONS
1.1 Date June 21, 1999
1.2 Landlord: Barclay Associates
(a California General Partnership)
1.3 Landlord's Address: 300 Drakes Landing Road, Suite 100
Greenbrae, CA 94904-3123
1.4 Tenant: IP Voice.Com
(a Nevada Corporation)
1.5 Tenant's Address: 5050 No. 19th Avenue, Suite 416/417
Phoenix, AZ 85015
1.6 Property The parcel of real estate located in Maricopa
County, Arizona, described on Exhibit "A"
attached hereto and incorporated herein
by this reference.
1.7 Building That certain office building located at 5050 N.
19th Avenue, Phoenix, AZ and situated on the
Property, and the landscaping, parking
facilities, and all other improvements and
appurtenances to the Property.
1.8 Leased Premises: Approximately 3,565 rentable square feet of
office space located on the fourth floor of the
Building and commonly known as Suite 416 and
Suite 417, as outlined on the Floor Plan
attached hereto as Exhibit "B".
1.9 Permitted Use: General Office and for no other purpose
1.10 Lease Term: Twelve (12) Months
1.11 Scheduled Commencement
Date: August 1, 1999
1.12 Annual Basic Rent: August 1, 1999 thru July 31, 2000 $3,862.08 per
month based upon a rental rate of $13.00 per
rentable square foot
1.13 Security Deposit: $3,862.00 ($2,300.00 on file from previous
lease)
1.14 Base Year Costs: 1999 actual Operating Costs per rentable square
foot adjusted to reflect 95% occupancy.
1.15 Building Hours: 7:00 a.m. to 7:00 p.m., Monday through Friday,
and 8:00 a.m. to 2:00 p.m. on Saturday,
excluding recognized federal, state or local
holidays.
<PAGE>
1.16 Parking Spaces: Four (4) covered/reserved at no charge
1.17 Parking Charge: Additional covered/reserved available at
$25.00 plus tax per month
1.18 Guarantors: N/A
1.19 Broker N/A
1.20 Metropolitan Area: Phoenix
1.21 Late Charge Percentage: Ten Percent (10%)
1.22 Riders: 1 = Hazardous Materials
2 = Special Provisions
1.23 Exhibits:
-------- A = Description of the Property
B = Floor Plan
D = Location of Parking Spaces
E = Building Rules and Regulations
G = Work Letter
2. LEASED PREMISES; NO ADJUSTMENTS
2.1 Leased Premises. Landlord leases to Tenant, and Tenant leases and accepts
from Landlord, the Leased Premises, upon the terms and conditions set forth in
this Lease and any modifications, supplements or addenda to this Lease (the
"Lease"), including the Basic Provisions of Article 1 which are incorporated
into this Lease by this reference, together with the nonexclusive right to use,
in common with Landlord and others, the Building Common Areas (as defined
below). For the purposes of this Lease, the term "Building Common Areas" means
common hallways, corridors, walkways and footpaths, foyers and lobbies,
bathrooms and janitorial closets, electrical and telephone closets, landscaped
areas, and such other areas within or adjacent to the Building which are subject
to or are designed or intended solely for the common enjoyment, use and/or
benefits of the tenants of the Building.
2.2 No Adjustment. The Annual Basic Rent at the Commencement Date (as defined
below) is based on the Leased Premises containing approximately the rentable
square footage set forth in Article 1.8 above. The Annual Basic Rent shall not
be increased or decreased if the actual rentable square footage of the Leased
Premises is more or less than the rentable square footage set forth in Article
1.8.
3. LEASE TERM; COMMENCEMENT DATE
3.1 Lease Term. The Lease Term shall begin on the Commencement Date and shall be
for the period set forth in Article 1.10 above, plus any period of less than one
(1) month between the Commencement Date and the first day of the next succeeding
calendar month, unless sooner terminated in accordance with the further
provisions of this Lease. (see Rider "2")
3.2 Commencement Date. The Commencement Date shall mean the earliest of (a) the
date on which Landlord tenders possession of the Leased Premises to Tenant;
<PAGE>
(b) the date on which Landlord would have tendered possession of the Leased
Premises to Tenant but for any act or omission of Tenant, its agents,
contractors or employees, or (c) the date on which Tenant takes possession of
the Leased Premises.
3.4 Delay in Commencement Date. In the event Landlord shall be unable, for any
reason, to deliver possession of the Leased Premises to Tenant on the Scheduled
Commencement Date, Landlord shall not be liable for any loss or damage
occasioned due to such failure, nor shall such inability affect the validity of
this Lease or the obligations of Tenant. In such event, Tenant shall not be
obligated to pay Annual Basic Rent or Additional Rent until the Commencement
Date. In the event Landlord shall not have delivered possession of the Leased
Premises to Tenant within thirty (30) days after the Scheduled Commencement
Date, and if such failure to deliver possession was (a) caused solely by the
fault or neglect of Landlord, and (b) not caused by any fault or neglect of
Tenant or due to additional time required to plan for and install other work for
Tenant beyond the amount of time which would have been required if only building
standard improvements had been installed, then, as its sole and exclusive remedy
for Landlord's failure to deliver possession of the Leased Premises in a timely
manner, Tenant shall have the right to terminate this Lease by delivering
written notice of termination to Landlord at any time within thirty (30) days
after the expiration of such thirty (30) day period. Such termination shall be
effective thirty (30) days after receipt by Landlord of Tenant's notice of
termination unless Landlord shall, prior to the expiration of such thirty (30)
day period, deliver possession of the Leased Premises to Tenant. Upon a
termination of this Lease pursuant to the provisions of this Article 3.4, the
parties shall have no further obligations or liabilities to the other and
Landlord shall promptly return any monies previously deposited or paid by
Tenant.
3.5 Lease Year. Each "Lease Year" shall be a period of twelve (12) consecutive
calendar months, the first Lease Year beginning on the Commencement Date or on
the first day of the calendar month next succeeding the Commencement Date if the
Commencement Date is not on the first day of a calendar month.
4. SECURITY DEPOSIT
Tenant shall pay to Landlord, upon the execution of this Lease, the
Security Deposit set forth in Article 1.13 above as security for the performance
by Tenant of its obligations under this Lease, which amount shall be returned to
Tenant after the expiration or earlier termination of this Lease, provided that
Tenant shall have fully performed all of its obligations contained in this
Lease. The Security Deposit, at the election of Landlord, may be retained by
Landlord as and for its full damages or may be applied in reduction of any loss
and/or damage sustained by Landlord by reason of the occurrence of any breach,
nonperformance or default by Tenant under this Lease without the waiver of any
other right or remedy available to Landlord at law, in equity or under the terms
of this Lease. If any portion of the Security Deposit is so used or applied,
Tenant shall, within five (5) days after written notice from Landlord, deposit
with Landlord immediately available funds in an amount sufficient to restore the
Security Deposit to its original amount, and Tenant's failure to do so shall be
a breach of this Lease. Tenant acknowledges and agrees that in the event Tenant
shall file a voluntary petition pursuant to the Bankruptcy Code, or if an
involuntary petition is filed against Tenant pursuant to the Bankruptcy Code,
then Landlord may apply the Security Deposit towards those obligations of Tenant
<PAGE>
to Landlord which accrued prior to the filing of such petition. Tenant
acknowledges further that the Security Deposit may be commingled with Landlord's
other funds and that Landlord shall be entitled to retain any interest earnings
on the Security Deposit. In the event of termination of Landlord's interest in
this Lease, Landlord shall transfer the Security Deposit to Landlord's successor
in interest, and Landlord shall be released from liability by Tenant for the
return of such deposit or for an accounting of the Security Deposit.
5. RENT; RENT TAX; ADDITIONAL RENT
5.1 Payment of Rent. Tenant shall pay to Landlord the Annual Basic Rent set
forth in Article 1.12 above, subject to adjustment as provided for in Article
1.12. The Annual Basic Rent shall be paid in equal monthly installments, on or
before the first day of each and every calendar month during the Lease Term, in
advance, without notice or demand and without abatement, deduction or set-off.
All payments requiring proration shall be prorated on the basis of a thirty (30)
day month. In addition, all payments to be made under this Lease shall be paid
in lawful money of the United States of America to Landlord or its agent at the
address set forth in Article 1.3 above, or to such other person or at such other
place as Landlord may from time to time designate in writing.
5.2 Rent Tax. In addition to the Annual Basic Rent and Additional Rent (as
defined below), Tenant shall pay to Landlord, together with the monthly
installments of Annual Basic Rent and payments of Additional Rent, an amount
equal to any state or local sales, rental, occupancy, excise, use or
transactional privilege taxes assessed or levied upon Landlord with respect to
the amounts paid by Tenant to Landlord under this Lease, as well as all taxes
assessed or imposed upon Landlord's gross receipts or gross income from leasing
the Leased Premises to Tenant, including, without limitation, transaction
privilege taxes, education excise taxes, any tax now or subsequently imposed by
the City of Phoenix, the State of Arizona, any other governmental body, and any
taxes assessed or imposed in lieu of or in substitution of any of the foregoing
taxes. Such taxes shall not, however, include any franchise, gift, estate,
inheritance, conveyance, transfer or net income tax assessed against Landlord.
5.3 Additional Rent. In addition to Annual Basic Rent, all other amounts to be
paid by Tenant to Landlord pursuant to this Lease (including amounts to be paid
by Tenant pursuant to Article 6 below), if any, shall be deemed to be Additional
Rent, irrespective of whether designated as such, and shall be due and payable
within five (5) days after receipt by Tenant of Landlord's statement or together
with the next succeeding installment of Annual Basic Rent, whichever shall first
occur. Landlord shall have the same remedies for the failure to pay Additional
Rent as for the nonpayment of Annual Basic Rent.
6. OPERATING COSTS
6.1 Tenant's Obligation. The Annual Basic Rent does not include amounts
attributable to any increase in the amount of Taxes (as hereinafter defined) or
amounts attributable to any increase in the cost of the use, management, repair,
service, insurance, condition, operation and maintenance of the Building.
Therefore, in order that the Annual Basic Rent payable throughout the Lease Term
shall reflect any such increases, Tenant shall pay to Landlord, in accordance
with the further provisions of this Article 6, an amount per rentable square
foot of the Leased Premises equal to the difference between the Operating Costs
(as hereinafter defined) per rentable square foot and the Base Year Costs.Tenant
<PAGE>
acknowledges that the Base Year Costs does not constitute a representation by
Landlord as to the Operating Costs per rentable square foot that may be incurred
during any calendar year.
6.2 Landlord's Estimate. Landlord shall furnish Tenant an estimate of the
Operating Costs per rentable square foot for each Fiscal Year (as hereinafter
defined) commencing with the Fiscal Year in which the Commencement Date occurs.
In addition, Landlord may, from time to time, furnish Tenant a revised estimate
of Operating Costs should Landlord anticipate any increase in Operating Costs
from that set forth in a prior estimate. Commencing with the first month to
which an estimate applies, Tenant shall pay, in addition to the monthly
installments of Annual Basic Rent, an amount equal to one-twelfth (1/12th) of
the product of the rentable square footage of the Leased Premises multiplied by
the difference (but not less than zero (0)), if any, between such estimate and
the Base Year Costs; provided, however, if less than ninety-five percent (95%)
of the rentable area of the Building shall be occupied by tenants during the
period covered by such estimate, the estimated Operating Costs for such period
shall be, for the purposes of this Article 6, increased to an amount reasonably
determined by Landlord to be equivalent to the Operating Costs that would be
incurred if occupancy would be at least ninety-five percent (95%) during the
entire period. Within one hundred twenty (120) days after the expiration of each
Fiscal Year or such longer period of time as may be necessary to compile such
statement, Landlord shall deliver to Tenant a statement of the actual Operating
Costs for such Fiscal Year. If the actual Operating Costs for such Fiscal Year
are more or less than the estimated Operating Costs, a proper adjustment shall
be made; provided, however, if less than ninety-five percent (95%) of the
rentable area of the Building shall have been occupied by tenants at any time
during such period, the actual Operating Costs for such period shall be, for the
purposes of this Article 6, increased to an amount reasonably determined by
Landlord to be equivalent to the Operating Costs that would have been incurred
had such occupancy been at least ninety-five (95%) during the entire period. Any
excess amounts paid by Tenant shall be, at Landlord's option, applied to any
amounts then payable by Tenant to Landlord or to the next maturing monthly
installments of Annual Basic Rent or Additional Rent. Any deficiency between the
estimated and actual Operating Costs shall be paid by Tenant to Landlord
concurrently with the monthly installment of Annual Basic Rent next due. Any
amount owing for a fractional Fiscal Year in the first or final Lease Years of
the Lease Term shall be prorated. For the purposes of this Lease, the term
"Fiscal Year" means the fiscal year (or portion of the fiscal year) of Landlord.
The Fiscal Year currently commences on January 1 and ends on December 31;
provided, however, Landlord reserves the right to change the Fiscal Year at any
time or times, but no such change shall result in an increase in the amounts
otherwise payable by Tenant pursuant to the provisions of this Article 6.
6.3 Operating Costs - Defined. For the purposes of this Lease, "Operating Costs"
shall mean all costs and expenses accrued, paid or incurred by Landlord, or on
Landlord's behalf, in respect of the use, management, repair, service,
insurance, condition, operation and maintenance of the Building including, but
not limited to the following: (a) salaries, wages and benefits of all persons
who perform duties in connection with landscaping, parking, janitorial and
general cleaning services, security services and any and all other employees
engaged by or on behalf of Landlord; (b) payroll taxes, workmen's compensation,
uniforms and related expenses for such employees; (c) the cost of all charges
for oil, gas, steam, electricity, any alternate source of energy, heat,
ventilation, air-conditioning, refrigeration, water, sewer service, trash
collection, pest control and all other utilities, together with any taxes on
such utilities; (d) the cost of painting non-tenant space; (e) the cost of all
charges for rent, casualty, liability, fidelity and other insurance maintained
by Landlord, including any deductible amounts incurred with respect to an
insured loss; (f) the cost of all supplies (including cleaning supplies), tools,
materials, equipment and personal property, the rental of the personal property
<PAGE>
and sales, transaction privilege, excise and other taxes on the personal
property; (g) depreciation of hand tools and other moveable equipment; (h) the
cost of all charges for window and other cleaning, janitorial, and security
services; (i) the cost of charges for independent contractors; (j) the cost of
repairs and replacements made by Landlord at its expense and the fees and other
charges for maintenance and service agreements; (k) the cost of exterior and
interior landscaping; (l) costs relating to the operation and maintenance of all
real property and improvements appurtenant to the Building including, without
limitation, all parking areas, service areas, walkways and landscaping; (m) the
cost of alterations and improvements made by reason of the laws and requirements
of any public authorities or the requirements of insurance bodies; (n) all
management fees and other charges for management services and overhead costs
(including travel and related expenses), whether provided by an independent
management company, Landlord or an affiliate of Landlord, not to exceed,
however, the then prevailing range of rates charged in comparable office
buildings in the metropolitan area set forth in Article 1.20; (o) the cost of
any capital improvements or additions which improve the comfort or amenities
available to tenants of the Building, provided, however, that any such costs
shall be amortized with interest over the useful life of the improvement or
addition; (p) the cost of any capital improvements or additions which are
intended to enhance the safety of the Building or reduce (or avoid increases in)
Operating Costs, provided, however, that any such costs shall be amortized with
interest over the useful life of the improvement or addition; (q) the cost of
licenses and permits, inspection fees and reasonable legal, accounting and other
professional fees and expenses; (r) taxes (as defined below); and (s) all other
charges properly allocable to the use, management, repair, service, insurance,
condition, operation and maintenance of the Building in accordance with
generally accepted accounting principles.
6.4 Operating Costs - Exclusions. Excluded from Operating Costs shall be the fol
lowing: (a) depreciation, except to the extent expressly included pursuant to
Article 6.3 above; (b) interest on and amortization of debts, except to the
extent expressly included pursuant to Article 6.3 above; (c) leasehold
improvements, including redecorating made for tenants of the Building; (d)
brokerage commissions and advertising expenses for procuring tenants for the
Building or the Property; (e) refinancing costs; (f) the cost of any repair,
replacement or addition which would be required to be capitalized under general
accepted accounting principles, except to the extent expressly included pursuant
to Article 6.3 above; and (g) the cost of any item included in Operating Costs
under Article 6.3 above to the extent that such cost is reimbursed or paid
directly by an insurance company, condemnor, a tenant of the Building or any
other party.
6.5 Taxes - Defined. For the purposes of this Lease, "Taxes" shall mean and
include all real property taxes and personal property taxes, general and special
assessments, foreseen as well as unforeseen, which are levied or assessed upon
or with respect to the Property any improvements, fixtures, equipment and other
property of Landlord, real or personal, located on the Property and used in
connection with the operation of all or any portion of the Property, as well as
any tax, surcharge or assessment which shall be levied or assessed in addition
to or in lieu of such real or personal property taxes and assessments. Taxes
shall also include any expenses incurred by Landlord in contesting the amount or
validity of any real or personal property taxes and assessments. Taxes shall
not, however, include any franchise, gift, estate, inheritance, conveyance,
transfer or income tax assessed against Landlord.
No Waiver. The failure by Landlord to furnish Tenant with a statement of
Operating Costs shall not constitute a waiver by Landlord of its right to
require Tenant to pay excess Operating Costs per rentable square foot.
<PAGE>
7. CONDITION, REPAIRS AND ALTERATIONS
7.1 As-Is Condition. Landlord shall provide the Leased Premises to Tenant, and
Tenant accepts the Leased Premises in an "AS-IS" condition, and Landlord makes
no representations or warranties concerning the condition of the Leased Premises
and has no obligation to construct, remodel, improve, repair, decorate or paint
the Leased Premises or any improvement on or part of the Leased Premises, except
as set forth in Articles 7.4, 10 or as outlined in the "Work Letter" marked as
Exhibit "G" below. Tenant represents and warrants that it has inspected the
Leased Premises prior to execution of this Lease, and that it is relying on its
own inspection in executing this Lease and not on any statement, representation
or warranty of Landlord, its agents or employees.
7.2 Alterations and Improvements. Tenant shall not make any improvements or
other alterations to the interior or exterior of the Leased Premises (the
"Tenant Improvements") without first obtaining the written consent of Landlord
to the proposed work, including the plans, specifications and the proposed
architect and/or contractor(s) for such alterations and/or improve ments. All
such Tenant Improvements shall be at the sole cost and expense of Tenant. Tenant
acknowledges and agrees that any review by Landlord of Tenant's plans and
specifications and/or right of approval exercised by Landlord with respect to
any Tenant Improvements is for Landlord's benefit only and Landlord shall not,
by virtue of such review or right of approval, be deemed to make any
representation, warranty or acknowledgment to Tenant or to any other person or
entity as to the adequacy of Tenant's plans and specifications or any Tenant
Improvements.
7.3 Tenant's Obligations. Tenant shall, at Tenant's sole cost and expense,
maintain the Leased Premises in a clean, neat and sanitary condition and shall
keep the Leased Premises and every part of the Leased Premises in good condition
and repair except where the same is required to be done by Landlord. Tenant
waives all rights to make repairs at the expense of Landlord as provided by any
law, statute or ordinance now or subsequently in effect. All of Tenant's
Improvements are the property of the Landlord, and Tenant shall, upon the
expiration or earlier termination of the Lease Term, surrender the Leased
Premises, including Tenant's Improvements, to Landlord, broom clean and in the
same condition as when received, ordinary wear and tear excepted. Except as set
forth in Articles 7.4, 10 and the "Work Letter" marked as Exhibit "G" below,
Landlord has no obligation to construct, remodel, improve, repair, decorate or
paint the Leased Premises or any improvement on or part of the Leased Premises.
Tenant shall pay for the cost of all repairs to the Leased Premises not required
to be made by Landlord and shall be responsible for any redecorating,
remodeling, alteration, painting and carpet cleaning other than routine
vacuuming during the Lease Term. Tenant shall pay for any repairs to the Leased
Premises and/or the Building made necessary by any negligence or carelessness of
Tenant, its employees or invitees.
7.4 Landlord's Obligations. Landlord shall (a) make all necessary repairs to the
exterior walls, exterior doors, windows and corridors of the Building, (b) keep
the Building and the Building Common Areas in good condition, and (c) keep the
Building equipment such as elevators, plumbing, heating, air conditioning and
similar Building equipment in good repair, but Landlord shall not be liable or
responsible for breakdowns or interruptions in service when reasonable efforts
are made to restore such service.
7.5 Removal of Alterations. Upon the expiration or earlier termination of this
Lease, Tenant shall remove from the Leased Premises all movable trade fixtures
and other movable personal property, and shall promptly repair any damage to the
Leased Premises and/or the Building caused by such removal. All such removal and
<PAGE>
repair shall be entirely at Tenant's sole cost and expense. At any time within
fifteen (15) days prior to the scheduled expiration of the Lease Term or
immediately upon any termination of this Lease, Landlord may require that Tenant
remove from the Leased Prem ises any alterations, additions, improvements, trade
fixtures, equipment, shelving, cabinet units or movable furniture (and other
personal property) designated by Landlord to be removed. In such event, Tenant
shall, in accordance with the provisions of Article 7.2 above and Article 10
below, complete such removal (including the repair of any damage caused thereby)
entirely at its own expense and within fifteen (15) days after notice from
Landlord. All repairs required of tenant pursuant to the provisions of this
Article 7.5 and Article 10 below shall be performed in a manner satisfactory to
Landlord, and shall include, but not be limited to, repairing plumbing,
electrical wiring and holes in walls, restoring damaged floor and/or ceiling
tiles, repairing any other cosmetic damage, and cleaning the Leased Premises.
7.6 No Abatement. Except as provided herein, Landlord shall have no liability to
Tenant, nor shall Tenant's covenants and obligations under this Lease, including
without limitation, Tenant's obligation to pay Annual Basic Rent and Additional
Rent, be reduced or abated in any manner whatsoever by reason of any
inconvenience, annoyance, interruption or injury to business arising from
Landlord's making any repairs or changes which Landlord is required or permitted
to make pursuant to the terms of this Lease or by any other tenant's lease or
are required by law to be made in and to any portion of the Leased Premises or
the Building. Landlord shall, nevertheless, use reasonable efforts to minimize
any interference with Tenant's business in the Leased Premises.
8. SERVICES
8.1 Climate Control. Landlord shall provide reasonable climate control to the
Leased Premises during the Building Hours as is suitable, in Landlord's
judgment, for the comfortable use and occupation of the Leased Premises,
excluding, however, air conditioning, evaporative cooling or heating for
electronic data processing or other equipment requiring extraordinary climate
control.
8.2 Janitorial Services. Landlord shall make janitorial and cleaning services
available to the Leased Premises at least five (5) evenings per week, except
recognized federal, state or local holidays. Tenant shall pay to Landlord,
within five (5) days after receipt of Landlord's bill, the reasonable costs
incurred by Landlord for extra cleaning in the Leased Premises required because
of (a) misuse or neglect on the part of Tenant, its employees or invitees, (b)
use of portions of the Leased Premises for special purposes requiring greater or
more difficult cleaning work than office areas, (c) interior glass partitions or
unusual quantities of glass surfaces, (d) non-building standard materials or
finishes installed by Tenant or at its request, (e) removal from the Leased
Premises of refuse and rubbish of Tenant in excess of that ordinarily
accumulated in general office occupancy or at times other than Landlord's
standard cleaning times, and (f) shampooing or other forms of carpet cleaning
other than routine vacuuming.
8.3 Electricity. Landlord shall, during Building Hours, furnish reasonable
amounts of electric current as required for normal and usual lighting purposes
and for office machines and equipment such as personal computers, telecopy or
facsimile machines, typewriters, adding machines, copying machines, calculators
and similar machines and equipment normally utilized in general office use.
Tenant's use of electric energy in the Leased Premises shall not at any time
exceed the capacity of any of the risers, piping, electrical conductors and
other equipment in or serving the Leased Premises. 8.4 Water. Landlord shall
furnish cold and heated water for drinking and lavatory purposes to the Building
Common Areas.
<PAGE>
8.5 Light Bulbs. Landlord shall perform such replacement of lamps, fluorescent
tubes and lamp ballasts in the Leased Premises and in the Building as may be
required from time to time. If the lighting fixtures in the Leased Premises are
other than those furnished at the beginning of the Lease Term, Tenant shall pay
Landlord's charge for replacing the lamps, lamp ballasts and fluorescent tubes
in such lighting fixtures so installed by Tenant within ten (10) days after
receipt of Landlord's bill.
8.6 Additional Services. Tenant shall pay to Landlord, monthly as billed, as
Additional Rent, Landlord's charge for services furnished by Landlord to Tenant
in excess of that agreed to be furnished by Landlord pursuant to this Article 8,
including, but not limited to (a) any utility services utilized by Tenant during
other than Building Hours, and (b) climate control in excess of that agreed to
be furnished by Landlord pursuant to Article 8.1 above or provided at times
other than Building Hours.
8.7 Interruptions in Service. Landlord does not warrant that any of the
foregoing services or any other services which Landlord may supply will be free
from interruption. Tenant acknowledges that any one or more of such services may
be suspended by reason of accident, repairs, inspections, alterations or
improvements necessary to be made, or by strikes or lockouts, or by reason of
operation of law, or by causes beyond the reasonable control of Landlord.
Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of Annual Basic Rent or Additional Rent by reason of any
disruption of the services to be provided by Landlord pursuant to this Lease.
9. LIABILITY AND CASUALTY INSURANCE
9.1 Liability Insurance. Tenant shall, during the Lease Term, keep in full force
and effect, a policy or policies of commercial general liability insurance for
bodily injury, personal injury (including wrongful death) and damage to property
resulting from (i) any occurrence in the Leased Premises, (ii) any act or
omission by Tenant, by any subtenant of Tenant, or by any of their respective
invitees, agents, servants, contractors or employees anywhere in the Leased
Premises or the Building, (iii) the business operated by Tenant or by any
subtenant of Tenant in the Leased Premises, and (iv) the contractual liability
of Tenant to Landlord pursuant to the indemnification provisions of Article 16.1
below, which coverage shall not be less than One Million and No/100 Dollars
($1,000,000.00), combined single limit, per occurrence. The liability policy or
policies shall contain an endorsement naming Landlord as an additional insured.
9.2 Casualty Insurance. Tenant shall, during the Lease Term, keep in full force
and effect, a policy or policies of so called "All Risk" or "All Peril"
insurance, including coverage for vandalism or malicious mischief, insuring the
Tenant Improvements and Tenant's stock in trade, furniture, personal property,
fixtures, equipment and other items in the Leased Premises, with coverage in an
amount equal to the replacement cost.
9.3 Worker's Compensation Insurance. Tenant shall, during the Lease Term, keep
in full force and effect, a policy or policies of worker's compensation
insurance with an insurance carrier and in amounts approved by the Industrial
Commission of the State of Arizona.
<PAGE>
9.4 Business Interruption Insurance. If Landlord shall so require, Tenant shall,
during the Lease Term, keep in full force and effect, a policy or policies of
business interruption insurance in an amount equal to twelve (12) monthly
installments of Annual Basic Rent and Additional Rent payable to Landlord,
together with the taxes on such rent, insuring Tenant against losses sustained
by Tenant as a result of any cessation or interruption of Tenant's business in
the Leased Premises for any reason.
9.5 Insurance Requirements. Each insurance policy and certificate of such
insurance policy obtained by Tenant pursuant to this Lease shall contain a
clause that the insurer will provide Landlord with at least thirty (30) days
prior written notice of any material change, non-renewal or cancellation of the
policy. Each such insurance policy shall be with an insurance company authorized
to do business in the State of Arizona and reasonably acceptable to Landlord. A
certifi cate (e.g. Acord Form 27) evidencing the coverage under each such
policy, as well as a certified copy of the required additional insured
endorsement(s) shall be delivered to Landlord prior to commencement of the Lease
Term. All ewsurance policies required pursuant to this Article 9 shall be
written as primary policies, not contributing with or in excess of any coverage
which Landlord may carry. Tenant shall procure and maintain all policies
entirely at its own expense and shall, at least twenty (20) days prior to the
expiration of such policies, furnish Landlord with renewal certificates of such
policies. Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies maintained by Landlord or the insurance
policies required pursuant to this Article 9 or the coverage under such
policies.
9.6 Co-Insurance. If on account of the failure of Tenant to comply with the
provisions of this Article 9, Landlord is deemed a co-insurer by its insurance
carrier, then any loss or damage which Landlord shall sustain by reason of such
failure shall be borne by Tenant, and shall be paid by Tenant within ten (10)
days after receipt of a bill for such loss or damage.
9.7 Adequacy of Insurance. Landlord makes no representation or warranty to
Tenant that the amount of insurance to be carried by Tenant under the terms of
this Lease is adequate to fully protect Tenant's interests. If Tenant believes
that the amount of any such insurance is insufficient, Tenant is encouraged to
obtain, at its sole cost and expense, such additional insurance as Tenant may
deem desirable or adequate. Tenant acknowledges that Landlord shall not, by the
fact of approving, disapproving, waiving, accepting, or obtaining any insurance,
incur any liability for or with respect to the amount of insurance carried, the
form or legal sufficiency of such insurance, the solvency of any insurance
companies or the payment or defense of any lawsuit in connection with such
insurance coverage, and Tenant hereby expressly assumes full responsibility for
and all liability, if any, with respect to, Tenant's insurance coverage.
10. CASUALTY DAMAGE
10.1 Obligation to Repair. In the event of any damage to the Leased Premises,
Tenant shall promptly notify Landlord in writing. If the Leased Premises or any
part of the Building are damaged by fire or other casualty not due to the fault
or negligence of Tenant, its employees, invitees, agents, contractors or
servants, the damage to the Building and/or the Leased Premises shall be
repaired by and at the expense of Landlord, excluding any alterations or
improvements made by Tenant, unless this Lease is terminated in accordance with
the provisions of Article 10.2 below. Until such repairs by Landlord are
completed, Annual Basic Rent and Additional Rent shall be abated in proportion
to the part of the Leased Premises which is unusable by Tenant in the conduct of
<PAGE>
its business. If, however, such damage is due in whole or in part to the fault
or neglect of Tenant or any subtenant of Tenant, or any of their respective
agents, employees, servants, contractors or invitees, there shall be no
abatement of Annual Basic Rent or Additional Rent and Tenant shall be required
to repair all such damage at its sole cost and expense. There shall be no
abatement of Annual Basic Rent or Additional Rent on account of damage to the
Building or the Property unless there is also damage to the Leased Premises.
Tenant hereby waives any statute now or subsequently in effect which grants to
Tenant the right to terminate this Lease or which provides for an abatement of
rent on account of damage or destruction, including, without limitation, A.R.S.
ss. 33-343.
10.2 Landlord's Option. If the damage is not fully covered by Landlord's
insurance, or if Landlord determines in good faith that the cost of repairing
the damage is more than one-third of the then replacement cost of the Building,
or if Landlord has determined in good faith that the required repairs to the
Building cannot be made within a one hundred twenty (120) day period with out
the payment of overtime or other premiums, or in the event a holder of a
mortgage or a deed of trust against the Building or the Property requires that
all or any portion of the insurance proceeds be applied in reduction of the
mortgage debt, or if such damage occurs during the final year of the Lease Term,
then Landlord may, by written notice to Tenant within sixty (60) days after the
occurrence of such damage, terminate this Lease as of the date set forth in
Landlord's notice to Tenant. If Landlord does not elect to terminate this Lease,
Landlord shall, at its sole cost and expense, repair the Building and the Leased
Premises, excluding any alterations or improvements made by Tenant, and while
such repair work is being performed, the Annual Basic Rent and Additional Rent
shall be abated as provided above. Nothing in this Article 10 shall be construed
as a limitation of Tenant's liability for any such damage, should such liability
otherwise exist.
11. WAIVER OF SUBROGATION
Landlord and Tenant each hereby waives its rights and the subrogation rights of
its insurer against the other party and any other tenants of space in the
Building or the Property as well as their respective officers, employees,
agents, authorized representatives and invitees, with respect to any claims
including, but not limited to, claims for injury to any persons, and/or damage
to the Property, the Building or the Leased Premises and/or any fixtures,
equipment, personal property, furniture, improvements and/or alterations in or
to the Leased Premises, which are caused by or result from (a) risks or damages
required to be insured against under this Lease, or (b) risks and damages which
are insured against by insurance policies maintained by Landlord and Tenant from
time to time. Landlord and Tenant shall obtain for the other party from its
insurers under each policy required by this Lease or otherwise maintained a
waiver of all rights of subrogation which such insurers of Landlord or Tenant
might otherwise have against the other party.
12. LANDLORD'S RIGHT TO PERFORM TENANT OBLIGATIONS
All covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any abatement of Annual Basic Rent or Additional Rent. If Tenant shall
fail to pay any sum of money, other than Annual Basic Rent, required to be paid
by it under this Lease, or shall fail to perform any other act on its part to be
performed under this Lease, and such failure shall continue for ten (10) days
after notice of such failure by Landlord (or such shorter period of time as may
be reasonable in the event of an emergency), Landlord may (but shall not be
obligated to do so) without waiving or releasing Tenant from any of Tenant's
obligations, make any such payment or perform any such other act on behalf of
Tenant. All sums so paid by Landlord and all necessary incidental costs,
together with interest at the greater of (a) eighteen percent (18%) per annum
<PAGE>
or (b) the rate of interest per annum publicly announced, quoted or published,
from time to time, by Bank of America, at its Phoenix, Arizona office as its
"reference rate" plus four (4) percentage points, from the date of such payment
by Landlord until reimbursement in full by Tenant (the "Default Rate"), shall be
payable to Landlord as Additional Rent with the next monthly installment of
Annual Basic Rent; provided, however, in no event shall the Default Rate exceed
the maximum rate (if any) permitted by applicable law.
13. DEFAULT AND REMEDIES
13.1 Event of Default. If Tenant shall fail to pay any installment of Annual
Basic Rent, any Additional Rent or any other sum required to be paid by Tenant
under this Lease, and such failure shall continue for ten (10) days, or if
Tenant shall fail to perform any of the other covenants or conditions which
Tenant is required to observe and perform and such failure shall continue for
fifteen (15) days (or such shorter period of time as may be specified by
Landlord in the event of an emergency) after written notice of such failure by
Landlord to Tenant, or if Tenant makes or has made any warranty, representation
or statement to Landlord in connection with this Lease which is or was
materially false or misleading when made or furnished, or if Tenant shall commit
an Event of Default under any other agreement between Landlord and Tenant, or if
the interest of Tenant in this Lease or any of Tenant's equipment, fixtures, or
personal property located on the Leased Premises shall be levied upon under
execution or other legal process, or if any petition shall be filed by or
against Tenant or any Guarantor to declare Tenant or any Guarantor a bankrupt or
to delay, reduce or modify Tenant's or any Guarantor's debts or obligations, or
if any petition shall be filed or other action taken to reorganize or modify
Tenant's or any Guarantor's capital structure, or if Tenant or any Guarantor
shall be declared insolvent according to law, or if any assignment of Tenant's
or any Guarantor's property shall be made for the benefit of creditors, or if a
receiver or trustee is appointed for Tenant or any Guarantor or all or any of
their respective property, or if Tenant or any Guarantor shall file a voluntary
petition pursuant to the Bankruptcy Code or any successor the Bankruptcy Code or
if an involuntary petition be filed against Tenant or any Guarantor pursuant to
the Bankruptcy Code or any successor the Bankruptcy Code, then Tenant shall have
committed a material breach and default under this Lease (an "Event of
Default").
13.2 Remedies. Upon the occurrence of an Event of Default under this Lease by
Tenant, Landlord may, without prejudice to any other rights and remedies
available to a landlord at law, in equity or by statute, Landlord may exercise
one or more of the following remedies, all of which shall be construed and held
to be cumulative and non-exclusive: (a) Terminate this Lease and re-enter and
take possession of the Leased Premises, in which event, Landlord is authorized
to make such repairs, redecorating, refurbishments or improvements to the Leased
Premises as may be necessary in the reasonable opinion of Landlord acting in
good faith for the purposes of reletting the Leased Premises and the costs and
expenses incurred in respect of such repairs, redecorating and refurbishments
and the expenses of such reletting (including brokerage commissions) shall be
paid by Tenant to Landlord within ten (10) days after receipt of Landlord's
statement; or (b) Without terminating this Lease, re-enter and take possession
of the Leased Premises; or (c) Without such re-entry, recover possession of the
Leased Premises in the manner prescribed by any statute relating to summary
process, and any demand for Annual Basic Rent, re-entry for condition broken,
and any and all notices to quit, or other formalities of any nature to which
Tenant may be entitled, are hereby specifically waived to the extent permitted
by law; or (d) Without terminating this Lease, Landlord may relet the Leased
Premises as Landlord may see fit without thereby avoiding or terminating this
Lease, and for the purposes of such reletting, Landlord is authorized to make
such repairs, redecorating, refurbishments or improvements to the Leased
Premises as may be necessary in the reasonable opinion of Landlord acting in
good faith for the purpose of such reletting, and if a sufficient sum is not
realized from such reletting (after payment of all costs and expenses of such
repairs, redecorating and refurbishments and expenses of such reletting
<PAGE>
(including brokerage commissions) and the collection of rent accruing therefrom)
each month to equal the Annual Basic Rent and Additional Rent payable under this
Lease, then Tenant shall pay such deficiency each month within ten (10) days
after receipt of Landlord's statement; or (e) Landlord may declare immediately
due and payable all the remaining installments of Annual Basic Rent and
Additional Rent, and such amount, less the fair rental value of the Leased
Premises for the remainder of the Lease Term shall be paid by Tenant within ten
(10) days after receipt of Landlord's statement. Landlord shall not by re-entry
or any other act, be deemed to have terminated this Lease, or the liability of
Tenant for the total Annual Basic Rent and Additional Rent reserved under this
Lease or for any installment of Annual Basic Rent and Additional Rent then due
or subsequently accruing, or for damages, unless Landlord notifies Tenant in
writing that Landlord has so elected to terminate this Lease. After the
occurrence of an Event of Default, the acceptance of Annual Basic Rent or
Additional Rent, or the failure to re-enter by Landlord shall not be deemed to
be a waiver of Landlord's right to subsequently terminate this Lease and
exercise any other rights and remedies available to it, and Landlord may
re-enter and take possession of the Leased Premises as if no Annual Basic Rent
or Additional Rent had been accepted after the occurrence of an Event of
Default. Upon an Event of Default, Tenant shall also pay to Landlord all costs
and expenses incurred by Landlord, including court costs and attorneys' fees, in
retaking or otherwise obtaining possession of the Leased Premises, removing and
storing all equipment, fixtures and personal property on the Leased Premises and
otherwise enforcing any of Landlord's rights, remedies or recourses arising as a
result of an Event of Default
13.3 Interest on Past Due Amounts. In addition to the late charge described in
Article 14 below, if any installment of Annual Basic Rent or Additional Rent is
not paid promptly when due, it shall bear interest at the Default Rate;
provided, however, this provision shall not relieve Tenant from any default in
the making of any payment at the time and in the manner required by this Lease;
and provided, further, in no event shall the Default Rate exceed the maximum
rate (if any) permitted by applicable law.
13.4 Landlord Default. In the event Landlord should neglect or fail to perform
or observe any of the covenants, provisions or conditions contained in this
Lease on its part to be performed or observed, and such failure continues for
thirty (30) days after written notice of default (or if more than thirty (30)
days shall be required because of the nature of the default, if Landlord shall
fail to commence the curing of such default within such thirty (30) day period
and proceed diligently to completion), then Landlord shall be responsible to
Tenant for any actual damages sustained by Tenant as a result of Landlord's
breach, but not special or consequential damages. Notwithstanding any other
provisions in this Lease, any claim which Tenant may have against Landlord for
failure to perform or observe any of the covenants, provisions or conditions
contained in this Lease shall be deemed waived unless such claim is asserted by
written notice of such claim to Landlord within ten (10) days of commencement of
the alleged default or of occurrence of the cause of action and unless suit be
brought upon such claim within six (6) months subsequent to the occurrence of
such cause of action. Tenant shall have no right to terminate this Lease, except
as expressly provided elsewhere in this Lease.
14. LATE PAYMENTS
Tenant hereby acknowledges that the late payment by Tenant to Landlord of any
monthly installment of Annual Basic Rent, any Additional Rent or any other sums
due under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult and impracticable
to ascertain. Such costs include but are not limited to processing,
administrative and accounting costs. Accordingly, if any monthly installment of
Annual Basic Rent, any Additional Rent or any other sum due from Tenant
<PAGE>
shall not be received by Landlord within ten (10) days after the date when due,
Tenant shall pay to Landlord a late charge equal to the greater of the Late
Charge Percentage set forth in Article 1.21 multiplied by such overdue amount or
One Hundred and No/100 Dollars ($100.00). Tenant acknowledges that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payments by Tenant. Nothing contained in this Article 14
shall be deemed to condone, authorize, sanction or grant to Tenant an option for
the late payment of Annual Basic Rent, Additional Rent or any other sum due
under this Lease. If any check of Tenant is returned for insufficient funds,
Tenant shall pay to Landlord a Fifty and No/100 Dollars ($50.00) processing
charge, in addition to payment of the amount due plus applicable interest and
late charges.
15. SURRENDER
Tenant shall, upon the expiration or earlier termination of this Lease,
peaceably surrender the Leased Premises, including any Tenant Improvements, in a
broom clean condition and otherwise in as good condition as when Tenant took
possession, except for (i) reasonable wear and tear subsequent to the last
repair, replacement, restoration, alteration or renewal; (ii) loss by fire or
other casualty, and (iii) loss by condemnation. If Tenant shall abandon, vacate
or surrender the Leased Premises, or be dispossessed by process of law or
otherwise, any personal property and fixtures belonging to Tenant and left in
the Leased Premises shall be deemed abandoned and, at Landlord's option, title
shall pass to Landlord under this Lease as by a bill of sale. Landlord may,
however, if it so elects, remove all or any part of such personal property from
the Leased Premises and the costs incurred by Landlord in connection with such
removal, including storage costs and the cost of repairing any damage to the
Leased Premises and/or the Building caused by such removal shall be paid by
Tenant within ten (10) days after receipt of Landlord's statement. Upon the
expiration or earlier termination of this Lease, Tenant shall surrender to
Landlord all keys to the Leased Premises and shall inform Landlord of the
combination of any vaults, locks and safes left on the Leased Premises. The
obligations of Tenant under this Article 15 shall survive the expiration or
earlier termination of this Lease. Tenant shall indemnify Landlord against any
loss or liability resulting from delay by Tenant in so surrendering the
Premises, including, without limitation, any claims made by any succeeding
Tenant founded on such delay. Tenant shall give written notice to Landlord at
least thirty (30) days prior to vacating the Leased Premises for the express
purpose of arranging a meeting with Landlord for a joint inspection of the
Leased Premises. In the event of Tenant's failure to give such notice or to
participate in such joint inspection, Landlord's inspection at or after Tenant's
vacation of the Leased Premises shall be conclusively deemed correct for
purposes of determining Tenant's liability for repairs and restoration under
this Lease.
16. INDEMNIFICATION AND EXCULPATION
16.1 Indemnification. Tenant shall indemnify, protect, defend and hold Landlord
harmless for, from and against all claims, damages, losses, costs, liens,
encumbrances, liabilities and expenses, including reasonable attorneys',
accountants' and investigators' fees and court costs (col lectively, the
"Claims"), however caused, arising in whole or in part from Tenant's use of all
or any part of the Leased Premises and/or the Building or the conduct of
Tenant's business or from any activity, work or thing done, permitted or
suffered by Tenant or by any invitee, servant, agent, contractor, employee or
subtenant of Tenant in the Leased Premises and/or the Building, and shall
further indemnify, protect, defend and hold Landlord harmless for, from and
against all Claims arising in whole or in part from any breach or default in the
performance of any obligation on Tenant's part to be performed under the terms
of this Lease or arising in whole or in part from any act, neglect, fault or
omission by Tenant or by any invitee, servant, agent, employee or subtenant of
Tenant anywhere in the Leased Premises and/or the Building. In case any action
or proceeding is brought against Landlord to which this indemnification
<PAGE>
shall be applicable, Tenant shall pay all Claims resulting therefrom and shall
defend such action or proceeding, if Landlord shall so request, at Tenant's sole
cost and expense, by counsel reasonably satisfactory to Landlord. The
obligations of Tenant under this Article 16.1 shall survive the expiration or
earlier termination of this Lease. 16.2 Exculpation. Tenant, as a material part
of the consideration to Landlord, hereby assumes all risk of damage to property,
injury and death to persons and all claims of any other nature resulting from
Tenant's use of all or any part of the Leased Premises and/or the Building, and
Tenant hereby waives all claims against Landlord arising out of Tenant's use of
all or any part of the Leased Premises and/or the Building. Neither Landlord nor
its agents or employees shall be liable for any damaged property of Tenant
entrusted to any employee or agent of Landlord or for loss of or damage to any
property of Tenant by theft or otherwise. Landlord shall not be liable for any
injury or damage to persons or property resulting from any cause, including, but
not limited to, fire, explosion, falling plaster, steam, gas, electricity,
sewage, odor, noise, water or rain which may leak from any part of the Building
or from the pipes, appliances or plumbing works in the Building, or from the
roof of any structure on the Property, or from any streets or subsurface on or
adjacent to the Building or the Property, or from any other place or resulting
from dampness or any other causes whatsoever, unless caused solely by the gross
negligence or willful misconduct of Landlord. Neither Landlord nor its employees
or agents shall be liable for any defects in the Leased Premises and/or the
Building, nor shall Landlord be liable for the negligence or misconduct,
including, but not limited to, criminal acts, by maintenance or other personnel
or contractors serving the Leased Premises and/or the Building, other tenants or
third parties, unless Landlord is grossly negligent or guilty of willful
misconduct. All property of Tenant kept or stored on the Property shall be so
kept or stored at the risk of Tenant only, and Tenant shall indemnify, defend
and hold Landlord harmless for, from and against any Claims arising out of
damage to the same, including subrogation claims by Tenant's insurance carriers,
unless such damage shall be caused by the willful act or gross neglect of
Landlord and through no fault of Tenant. None of the events or conditions set
forth in this Article 16 shall be deemed a constructive or actual eviction or
result in a termination of this Lease, nor shall Tenant be entitled to any
abatement or reduction of Annual Basic Rent or Additional Rent by reason of such
events or condition. Tenant shall give prompt notice to Landlord with respect to
any defects, fires or accidents which Tenant observes in the Leased Premises
and/or the Building.
17. ENTRY BY LANDLORD
Landlord reserves and shall at any and all times have, upon twenty four (24)
hours prior written notice (except in the event of an emergency), the right to
enter the Leased Premises, to inspect the same, to submit the Leased Premises to
prospective purchasers or tenants, to post notices of non- responsibility, and
to alter, improve or repair the Leased Premises and any portion of the Building
of which the Leased Premises are a part, without abatement of Annual Basic Rent
or Additional Rent, and may for that purpose erect scaffolding and other
necessary structures where reasonably required by the character of the work to
be performed, always providing that access into the Leased Premises shall not be
blocked thereby, and further providing that the business of Tenant shall not be
interfered with unreasonably. Tenant hereby waives any claim for damages for any
injury or inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Leased Premises or any loss occasioned
thereby. For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all the doors in, upon or about the Leased
Premises, excluding Tenant's vaults and safes, and Landlord shall have the right
to use any and all means which Landlord may deem proper to open such doors in an
emergency in order to obtain entry to the Leased Premises, and any entry to the
Leased Premises obtained by Landlord by any such means or otherwise shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Leased Premises or an eviction of Tenant from
all or any portion of the Leased Premises. Nothing in this Article 17 shall be
construed as obligating Landlord to perform any repairs, alterations or
maintenance except as otherwise expressly required elsewhere in this Lease.
<PAGE>
18. SUBSTITUTE PREMISES
18.1 Relocation of Leased Premises. Landlord may, before or after the
Commencement Date, elect by notice to Tenant, to substitute for the Leased
Premises other office space in the Building (the "Substitute Premises")
designated by Landlord, provided that the Substitute Premises shall contain at
least the same useable area as the Leased Premises and have a configuration
substantially similar to the Leased Premises. Landlord's notice shall be
accompanied by a plan of the Substitute Premises. Tenant shall vacate and
surrender the Leased Premises and shall occupy the Substitute Premises promptly
(and, in any event, not later than fifteen (15) days) after Landlord has
substantially completed the work to be performed by Landlord in the Substitute
Premises pursuant to Article 18.2 below. Tenant shall pay the same rental rate
per square foot with respect to the Substitute Premises as was payable with
respect to the Leased Premises. This Lease shall remain in full force and effect
and the Substitute Premises shall subsequently be deemed to be the Leased
Premise
18.2 Compensation to Tenant. In the event Landlord shall elect to relocate
Tenant to Substitute Premises, Tenant shall not be entitled to any compensation
for any inconvenience or interference with Tenant's business, nor any abatement
or reduction of Annual Basic Rent or Additional Rent, but Landlord shall, at
Landlord's expense perform the following: (a) furnish and install in the
Substitute Premises fixtures, equipment, improvements, appurtenances and
leasehold improvements at least equal in kind and quality to those contained or
to be contained in the Leased Premises at the time such notices of substitution
is given by Landlord; (b) provide personnel to perform, under Tenant's
direction, the moving of Tenant's personal property and trade fixtures from the
Leased Premises to the Substitute Premises; (c) promptly reimburse Tenant for
Tenant's actual and reasonable out-of-pocket costs incurred in connection with
the relocation of any telephone or other communications equipment from the
Leased Premises to the Substitute Premises; and (d) promptly reimburse Tenant
for any other actual and reasonable out-of-pocket costs incurred by Tenant in
connection with Tenant's move from Leased Premises to the Substitute Premises,
provided such costs are approved by Landlord in advance which approval shall not
be unreasonably withheld. Tenant shall cooperate with Landlord so as to
facilitate the performance by Landlord of its obligations under this Article
18.2 and the prompt surrender by Tenant of the Leased Premises. Without limiting
the generality of the preceding sentence, Tenant shall provide Landlord promptly
any approvals or instructions and any plans or specifications or any other
information reasonably requested by Landlord, and Tenant shall perform promptly
in the Substitute Premises any work to be performed in the Substitute Premises
by Tenant to prepare the same for Tenant's occupancy.
19. ASSIGNMENT AND SUBLETTING
19.1 Assignment and Subletting Prohibited. Tenant shall not transfer or assign
this Lease or any right or interest under this Lease, or sublet the Leased
Premises or any part of the Leased Premises, without first obtaining Landlord's
prior written consent, which consent Landlord shall not unreasonably withhold.
No transfer or assignment (whether voluntary or involuntary, by operation of law
or otherwise) or subletting shall be valid or effective without such prior
written consent. Should Tenant attempt to make or allow to be made any such
transfer, assignment or subletting, except as stated above, or should any of
Tenant's rights under this Lease be sold or otherwise transferred by or under
court order or legal process or otherwise, then, and in any of the foregoing
events Landlord may, at its option, treat such act as an Event of Default by
Tenant. Should Landlord consent to a transfer, assignment or subletting, such
consent shall not constitute a waiver of any of the restrictions or prohibitions
<PAGE>
of this Article 19, and such restrictions or prohibitions shall apply to each
successive transfer, assignment or subletting under this Article 19, if any.
19.2 Deemed Transfers. If Tenant is a corporation, an unincorporated
association, a limited liability company or a partnership, the transfer,
assignment or hypothecation of twenty-five percent (25%) or more of any stock or
interest in such corporation, association, limited liability company or
partnership shall be deemed a transfer within the meaning of and subject to the
provisions of this Article 19.
19.3 Landlord's Consent Required. If Tenant desires at any time to assign this
Lease or sublet the Leased Premises or any portion of the Leased Premises, it
shall first notify Landlord of its desire to do so and shall submit in writing
to Landlord: (a) the name, address, telephone number and social security number
or taxpayer identification number, if applicable, of the proposed subtenant or
assignee; (b) the nature of the proposed subtenant's or assignee's business to
be carried on in the Leased Premises; (c) the terms and the provisions of the
proposed sublease or assignment; and (d) such financial information as Landlord
may reasonably request concerning the proposed subtenant or assignee. Tenant's
failure to comply with the provisions of this Article 19.3 shall entitle
Landlord to withhold its consent to the proposed assignment or subletting.
19.4 Recapture. If Tenant proposes to assign its interest in this Lease or
sublet all or any part of the Leased Premises, Landlord may, at its option, upon
written notice to Tenant within thirty (30) days after Landlord's receipt of the
information specified in Article 19.3 above, elect to recapture all or any
portion of the Leased Premises, and within sixty (60) days after notice of such
election has been given to Tenant, this Lease shall terminate as to the portion
of the Leased Premises recaptured. If all or a portion of the Leased Premises is
recaptured by Landlord pursuant to this Article 19.4, Tenant shall promptly
execute and deliver to Landlord a termination agreement setting forth the
termination date with respect to the Leased Premises or the recaptured portion
of the Leased Premises, and prorating the Annual Basic Rent, Additional Rent and
other charges payable under this Lease to such date. If Landlord doe not elect
to recapture as set forth above, Tenant may then after enter into a valid
assignment or sublease with respect to the Leased Premises, provided that
Landlord consents to such assignment or sublease pursuant to this Article 19,
and provided further, that (a) such assignment or sublease is executed within
ninety (90) days after Landlord has given its consent, (b) Tenant pays all
amounts then owed to Landlord under this Lease, (c) there is not in existence an
Event of Default as of the effective date of the assignment or sublease, (d)
there have been no material changes with respect to the financial condition of
the proposed subtenant or assignee or the business such party intends to conduct
in the Leased Premises, and (e) a fully executed original of such assignment or
sublease providing for an express assumption by the assignee or subtenant of all
of the terms, covenants and conditions of this Lease is promptly delivered to
Landlord.
19.5 Adjustment to Rental. In the event Tenant assigns its interest in this
Lease or sublets the Leased Premises, the Annual Basic Rent set forth in Article
1.12 above, as adjusted, shall be increased effective as of the date of such
assignment or subletting to the rent and other consideration payable by any such
assignee or sublessee pursuant to such assignment or sublease. Notwithstanding
the foregoing, in no event shall the Annual Basic Rent after any such assignment
or subletting be less than the Annual Basic Rent specified in Article 1.12
above, as adjusted.
19.6 No Release from Liability. Landlord may collect Annual Basic Rent and
Additional Rent from the assignee, subtenant, occupant or other transferee, and
apply the amount so collected, first to the monthly installments of Annual Basic
Rent, then to any Additional Rent and other sums due and payable to Landlord,
and the balance, if any, to Landlord, but no such assignment, subletting,
occupancy, transfer or collection shall be deemed a waiver of Landlord's rights
under this Article 19, or the acceptance of the proposed assignee, subtenant,
<PAGE>
occupant or transferee. Notwithstanding any assignment, sublease or other
transfer (with or without the consent of Landlord), Tenant shall remain
primarily liable under this Lease and neither Tenant nor any Guarantor shall be
released from performance of any of the terms, covenants and conditions of this
Lease.
19.7 Landlord's Expenses. If Landlord consents to an assignment, sublease or
other trans fer by Tenant of all or any portion of Tenant's interest under this
Lease, Tenant shall reimburse Landlord for its actual administrative expenses
and for legal, accounting and other out of pocket expenses incurred by Landlord,
all not to exceed an aggregate of Two Hundred Fifty and No/100 Dollars
($250.00).
19.8 Assumption Agreement. If Landlord consents to an assignment, sublease or
other transfer by Tenant of all or any portion of Tenant's interest under this
Lease, Tenant shall execute and deliver to Landlord, and cause the transferee to
execute and deliver to Landlord, an instrument in the form and substance
acceptable to Landlord in which (a) the transferee adopts this Lease and assumes
and agrees to perform, jointly and severally with Tenant, all of the obligations
of Tenant under this Lease, (b) Tenant acknowledges that it remains primarily
liable for the payment of Annual Basic Rent, Additional Rent and other
obligations under this Lease, (c) Tenant subordinates to Landlord's statutory
lien, contract lien and security interest, any liens, security interests or
other rights which Tenant may claim with respect to any property of transferee
and (d) the transferee agrees to use and occupy the Leased Premises solely for
the purpose specified in Article 20 and otherwise in strict accordance with this
Lease. 20. USE OF LEASED PREMISES
The Leased Premises are leased to Tenant solely for the Permitted Use set forth
in Article 1.9 above and for no other purpose whatsoever. If Tenant wishes to
change the Permitted Use set forth in Article 1.9 above, Tenant shall first seek
Landlord's prior written consent. Within thirty (30) days after receipt by
Landlord of Tenant's request for consent, Landlord shall provide Tenant written
notice that Landlord has (i) consented to the proposed change in the Permitted
Use, or (ii) decline to consent to the change, or (iii) elected to terminate
this Lease, in which event this Lease shall terminate ten (10) days following
receipt by Tenant of Landlord's Notice of Termination. Tenant shall not do or
permit anything to be done in or about the Leased Premises nor bring or keep
anything in the Leased Premises which will in any way increase the existing rate
of or affect any casualty or other insurance on the Building, the Property, or
any of their respective contents, or cause a cancellation of any insurance
policy covering the Building, the Property, or any part of the Building or the
Property, or any of their respective contents. Tenant shall not do or permit
anything to be done in or about the Leased Premises and/or the Building which
will in any way obstruct or interfere with the rights of other tenants or
occupants of the Building, or injure or annoy them. Tenant shall not use or
allow the Leased Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Leased Premises and/or the Building. In addition, Tenant
shall not commit or suffer to be committed any waste in or upon the Leased
Premises and/or the Building. Tenant shall not use the Leased Premises and/or
the Building or permit anything to be done in or about the Leased Premises
and/or the Building which will in any way conflict with any matters of record,
or any law, statute, ordinance or governmental rule or regulation now in force
or which may subsequently be enacted or promulgated, and shall, at its sole cost
and expense, promptly comply with all matters of record and all laws, statutes,
ordinances and governmental rules, regulations and requirements now in force or
which may subsequently be in force and with the requirements of any Board of
Fire Underwriters or other similar body now or subsequently constituted,
foreseen or unforeseen, ordinary as well as extraordinary, relating to or
affecting the condition, use or occupancy of the Property, excluding structural
<PAGE>
changes not relating to or affected by Tenant's improvements or acts. The
judgment of any court of competent jurisdiction or the admission by Tenant in
any action against Tenant, irrespective of whether Landlord is a party, that
Tenant has violated any matters of record, or any law, statute, ordinance or
governmental rule, regulation or requirement, shall be conclusive of that fact
between Landlord and Tenant. In addition, Tenant shall not place a load upon any
floor of the Leased Premises which exceeds the load per square foot which the
floor was designed to carry, nor shall Tenant install business machines or other
mechanical equipment in the Leased Premises which cause noise or vibration that
may be transmitted to the structure of the Building.
21. SUBORDINATION AND ATTORNMENT
21.1 Subordination. This Lease and all rights of Tenant under this Lease shall
be, at the option of Landlord, subordinate to (a) all matters of record, (b) all
ground leases, overriding leases and underlying leases (collectively referred to
as the "leases") of the Building or the Property now or subsequently existing,
(c) all mortgages and deeds of trust (collectively referred to as the
"mortgages") which may now or subsequently encumber or affect the Building or
the Property, and (d) all renewals, modifications, amendments, replacements and
extensions of leases and mortgages and to spreaders and consolidations of the
mortgages, irrespective of whether leases or mortgages shall also cover other
lands, buildings or leases. The provisions of this Article 21.1 shall be
self-operative and no further instruments of subordination shall be required. In
confirmation of such subordination, Tenant shall promptly execute, acknowledge
and deliver any instrument that Landlord, the lessor under any lease or the
holder of any mortgage or any of their respective assigns or successors in
interest may reasonably request to evidence such subordination. Any lease to
which this Lease is subject and subordinate is called a "Superior Lease" and the
lessor under a Superior Lease or its assigns or successors in interest is called
a "Superior Lessor". Any mortgage to which this Lease is subject and subordinate
is called a "Superior Mortgage" and the holder of a Superior Mortgage is called
a "Superior Mortgagee". If Landlord, a Superior Lessor or a Superior Mortgagee
requires that such instruments be executed by Tenant, Tenant's failure to do so
within ten (10) days after request for such instrument shall be deemed an Event
of Default under this Lease. Tenant waives any right to terminate this Lease
because of any foreclosure proceedings. Tenant hereby irrevocably constitutes
and appoints Landlord (and any successor Landlord) as Tenant's attorney-in-fact
to execute and deliver to any Superior Lessor or Superior Mortgagee any
documents required to be executed by Tenant for and on behalf of Tenant if
Tenant shall have failed to do so within ten (10) days after the request for
execution and delivery.
21.2 Attornment. If any Superior Lessor or Superior Mortgagee (or any purchaser
at a foreclosure sale) succeeds to the rights of Landlord under this Lease,
whether through possession or foreclosure action, or the delivery of a new lease
or deed (a "Successor Landlord"), Tenant shall attorn to and recognize such
Successor Landlord as Tenant's landlord under this Lease and shall promptly
execute and deliver any instrument that such Successor Landlord may reasonably
request to evidence such attornment.
22. ESTOPPEL CERTIFICATE
Tenant shall, from time to time, within ten (10) days after written request by
Landlord, execute, acknowledge and deliver to Landlord a statement in writing
certifying: (a) that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect); (b) the dates to which
Annual Basic Rent, Additional Rent and other charges are paid in advance, if
any; (c) that there are not, to Tenant's knowledge, any uncured defaults on the
part of Landlord under this Lease or specifying such defaults if any are
claimed; (d) that Tenant has paid Landlord the Security Deposit; (e) the
<PAGE>
Commencement Date and the scheduled expiration date of the Lease Term; (f) the
rights (if any) of Tenant to extend or renew this Lease or to expand the Leased
Premises; and (g) the amount of Annual Basic Rent, Additional Rent and other
charges currently payable under this Lease. In addition, such statement shall
provide such other information and facts Landlord may reasonably require. Any
such statement may be relied upon by any prospective or existing purchaser,
ground lessee or mortgagee of all or any portion of the Property, as well as by
any other assignee of Landlord's interest in this Lease. Tenant's failure to
deliver such statement within such time shall be conclusive upon Tenant (i) that
this Lease is in full force and effect, without modification except as may be
represented by Landlord; (ii) that there are no uncured defaults in Landlord's
performance under this Lease; (iii) that Tenant has paid to Landlord the
Security Deposit; (iv) that not more than one month's installment of Annual
Basic Rent or Additional Rent has been paid in advance; (v) that the
Commencement Date and the scheduled expiration date of the Lease Term are as
stated in the statement, (vi) that Tenant has no rights to extend or renew this
Lease or to expand the Leased Premises; (vii) that the Annual Basic Rent,
Additional Rent and other charges are as set forth in the certificate; and
(viii) that the other information and facts set forth in the certificate are
true and correct.
23. SIGNS
Landlord shall retain absolute control over the exterior appearance of the
Building and the exterior appearance of the Leased Premises as viewed from the
public halls. Tenant shall not install, or permit to be installed, any drapes,
shutters, signs, lettering, advertising, or any items that will in any way alter
the exterior appearance of the Building or the exterior appearance of the Leased
Premises as viewed from the public halls or the exterior of the Building.
Notwithstanding the foregoing, Landlord shall install, at Tenant's sole cost and
expense, letters or numerals at or near the entryway to the Leased Premises
provided Tenant obtains Landlord's prior written consent as to size, color,
design and location. All such letters or numerals shall be in accordance with
the criteria established by Landlord for the Building. In addition, Tenant's
name and suite number shall be identified on the Building directory.
24. PARKING
Tenant is allocated the number of parking spaces designated in Article 1.16
above entitling Tenant to park in parking spaces located in the Parking Facility
as designated by Landlord from time to time for use by Tenant, its employees and
licensees, and for which Tenant shall pay the monthly charges set forth in
Article 1.17 above. The parking spaces shall be available to Tenant, its
employees and licensees on a "first come, first serve" basis. Landlord reserves
the right to increase the parking charges set forth in Article 1.17 in such
reasonable amounts as Landlord deems necessary based upon increased costs of
operating and maintaining the Parking Facility. Holders of parking passes shall
not be entitled to park in visitor parking spaces so designated by Landlord, or
in any other parking spaces other than those designated by Landlord for use by
holders of parking passes.
25. LIENS
Tenant shall keep the Leased Premises free and clear of all mechanic's and
materialmen's liens. If, because of any act or omission (or alleged act or
omission) of Tenant, any mechanics', materialmen's or other lien, charge or
order for the payment of money shall be filed or recorded against the Leased
Premises, the Property, or the Building, or against any other property of
Landlord (irrespective of whether such lien, charge or order is valid or
enforceable as such), Tenant shall, at its own expense, cause the same to be
canceled or discharged of record within thirty (30) days after Tenant shall have
received written notice of the filing of such lien, or Tenant may, within such
thirty (30) day period, furnish to Landlord, a bond pursuant to A.R.S.
ss.33-1004 (or any successor statute) and satisfactory to Landlord and all
<PAGE>
Superior Lessors and Superior Mortgagees against the lien, charge or order, in
which case Tenant shall have the right to contest, in good faith, the validity
or amount of such lien.
26. HOLDING OVER
It is agreed that the date of termination of this Lease and the right of
Landlord to recover immediate possession of the Leased Premises thereupon is an
important and material matter affecting the parties hereto and the rights of
third parties, all of which have been specifically considered by Landlord and
Tenant. In the event of any continued occupancy or holding over of the Leased
Premises without the express written consent of Landlord beyond the expiration
or earlier termination of this Lease or of Tenants right to occupy the Leased
Premises, whether in whole or in part, or by leaving property on the Leased
Premises or otherwise, this Lease shall be deemed a monthly tenancy and Tenant
shall pay 150% times the Annual Basic Rent then in effect, in advance at the
beginning of the hold-over month(s), plus any Additional Rent or other charges
or payments contemplated in this Lease.
27. ATTORNEYS' FEES
Tenant shall pay to Landlord all amounts for costs (including reasonable
attorneys' fees) incurred by Landlord in connection with any breach or default
by Tenant under this Lease or incurred in order to enforce or interpret the
terms or provisions of this Lease. Such amounts shall be payable within ten (10)
days after receipt by Tenant of Landlord's statement. In addition, if any action
shall be instituted by either of the parties hereto for the enforcement or
interpretation of any of their respective rights or remedies in or under this
Lease, the prevailing party shall be entitled to recover from the losing party
all costs incurred by the prevailing party in such action and any appeal
therefrom, including reasonable attorneys' fees to be fixed by the court.
28. RESERVED RIGHTS OF LANDLORD
Landlord reserves the following rights, exercisable without liability to Tenant
for damage or injury to property, persons or business and without effecting an
eviction, constructive or actual, or disturbance of Tenant's use or possession
or giving rise to any claim: (a) to name the Building and the Property and to
change the name or street address of the Building and the Property; (b) to
install and maintain all signs on the exterior and interior of the Building and
the Property; (c) to designate all sources furnishing sign painting and
lettering; (d) during the last ninety (90) days of the Lease Term, if Tenant has
vacated the Leased Premises, to decorate, remodel, repair, alter or otherwise
prepare the Leased Premises for re-occupancy, without affecting Tenant's
obligation to pay Annual Basic Rent; (e) on reasonable prior notice to Tenant,
to exhibit the Leased Premises to any prospective purchaser, mortgagee, or
assignee of any mortgage on the Building or the Property and to others having
interest in the Leased Premises, Building and/or the Property, at any time
during the Lease Term, and to prospective tenants during the last six (6) months
of the Lease Term; (f) to take any and all measures, including entering the
Leased Premises for the purposes of making inspections, repairs, alterations,
additions and improvements to the Leased Premises or to the Building (including,
for the purposes of checking, calibrating, adjusting and balancing controls and
other parts of the Building systems) as may be necessary or desirable for the
operation, improvement, safety, protection or preservation of the Leased
Premises or the Building, or in order to comply with all laws, orders and
requirements of governmental or other authorities, or as may otherwise be
permitted or required by this Lease; provided, however, that Landlord shall
endeavor (except in an emergency) to minimize interference with Tenant's
business in the Leased Premises; (g) to relocate various facilities within the
Building and on the Property if Landlord shall determine such relocation to be
in the best interest of the development of the Building and/or the Property,
<PAGE>
provided, that such relocation shall not materially restrict access to the
Leased Premises; (h) to change the nature, extent, arrangement, use and location
of the Building Common Areas; (i) to make alterations or additions to and to
build additional stories on the Building and to build additional buildings or
improvements on the Property; and (j) to install vending machines of all kinds
in the Leased Premises and the Building, and to receive all of the revenue
derived therefrom, provided, however, that no vending machines shall be
installed by Landlord in the Leased Premises unless Tenant so requests. Landlord
further reserves the exclusive right to the roof of the Building. No easement
for light, air, or view is included in the leasing of the Leased Premises to
Tenant. Accordingly, any diminution or shutting off of light, air or view by any
structure which may be erected on the Property or other properties in the
vicinity of the Building shall in no way affect this Lease or impose any
liability upon Landlord.
29. EMINENT DOMAIN
29.1 Taking. If the whole of the Building is lawfully and permanently taken by
condemnation or any other manner for any public or quasi-public purpose, or by
deed in lieu of condemnation, this Lease shall terminate as of the date of
vesting of title in such condemning authority and the Annual Basic Rent and
Additional Rent shall be pro rated to such date. If any part of the Building or
Property is so taken, or if the whole of the Building is taken, but not
permanently, then this Lease shall be unaffected thereby, except that (a)
Landlord may terminate this Lease by notice to Tenant within sixty (60) days
after the date of vesting of title in the condemning authority, and (b) if
twenty percent (20%) or more of the Leased Premises shall be permanently taken
and the remaining portion of the Leased Premises shall not be reasonably
sufficient for Tenant to continue operation of its business, Tenant may
terminate this Lease by notice to Landlord within sixty (60) days after the date
of vesting of title in such condemning authority. This Lease shall terminate on
the thirtieth (30th) day after receipt by Landlord of such notice, by which date
Tenant shall vacate and surrender the Leased Premises to Landlord. The Annual
Basic Rent and Additional Rent shall be pro rated to the earlier of the
termination of this Lease or such date as Tenant is required to vacate the
Leased Premises by reason of the taking. If this Lease is not terminated as a
result of a partial taking of the Leased Premises, the Annual Basic Rent and
Additional Rent shall be equitably adjusted according to the rentable area of
the Leased Premises and Building remaining.
29.2 Award. In the event of a taking of all or any part of the Building or the
Property, all of the proceeds or the award, judgment, settlement or damages
payable by the condemning authority shall be and remain the sole and exclusive
property of Landlord, and Tenant hereby assigns all of its right, title and
interest in and to any such award, judgment, settlement or damages to Landlord.
Tenant shall, however, have the right, to the extent that the same shall not
reduce or prejudice amounts available to Landlord, to claim from the condemning
authority, but not from Landlord, such compensation as may be recoverable by
Tenant in its own right for relocation benefits, moving expenses, and damage to
Tenant's personal property and trade fixtures.
30. NOTICES
Any notice or communication given under the terms of this Lease shall be in
writing and shall be delivered in person, sent by any public or private express
delivery service or deposited with the United States Postal Service or a
successor agency, certified or registered mail, return receipt requested,
postage pre-paid, addressed as set forth in the Basic Provisions, or at such
other address as a party may from time to time designate by notice under this
Article 30. Notice given by personal delivery or by public or private express
delivery service shall be effective upon delivery, notice sent by mail shall be
deemed to have occurred upon deposit of the notice in the United States mail.
The inability to deliver a notice because of a changed address of which no
notice was given or a rejection or other refusal to accept any notice shall be
<PAGE>
deemed to be the receipt of the notice as of the date of such inability to
deliver or rejection or refusal to accept. Any notice to be given by Landlord
may be given by the legal counsel and/or the authorized agent of Landlord.
31. RULES AND REGULATIONS
Tenant shall abide by all rules and regulations (the "Rules and Regulations") of
the Building imposed by Landlord, as attached hereto as Exhibit "E" or as may
subsequently be issued by Landlord. The Rules and Regulations may be changed
from time to time upon ten (10) days notice to Tenant. Breach of the Rules and
Regulations, by Tenant shall constitute an Event of Default if such breach is
not fully cured within ten (10) days after written notice to Tenant by Landlord;
provided, however, no notice or opportunity to cure shall be required in
connection with a breach of rule number 39. Landlord shall not be responsible to
Tenant for nonperformance by any other tenant, occupant or invitee of the
Building of any Rules or Regulations.
32. ACCORD AND SATISFACTION
No payment by Tenant or receipt by Landlord of a lesser amount than the monthly
installment of Annual Base Rent and Additional Rent (jointly called "Rent" in
this Article 32), shall be deemed to be other than on account of the earliest
stipulated Rent due and not yet paid, nor shall any endorsement or statement on
any check or any letter accompanying any check or payment as Rent be deemed an
accord and satisfaction. Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such Rent or to pursue
any other remedy in this Lease. No receipt of money by Landlord from Tenant
after the termination of this Lease, after the service of any notice relating to
the termination of this Lease, after the commencement of any suit, or after
final judgment for possession of the Leased Premises, shall reinstate, continue
or extend the Lease Term or affect any such notice, demand, suit or judgment.
33. RIGHT OF FIRST REFUSAL
Tenant shall have a one time first right of refusal on suite 411 directly west
of suite 417. Upon notice from Landlord, Tenant shall have forty-eight (48)
hours to declare in writing that Tenant will accept expansion space at
prevailing current market rates. Should tenant not lease said expansion space
upon notice from Landlord, the first right of refusal shall expire.
34. MISCELLANEOUS
34.1 Entire Agreement, Amendments. This Lease and any Exhibits attached to and
forming a part of this Lease set forth all of the covenants, promises,
agreements, conditions and understandings between Landlord and Tenant concerning
the Leased Premises and there are no covenants, promises, agreements,
representations, warranties, conditions or understandings either oral or written
between them other than as contained in this Lease. Except as otherwise provided
in this Lease, no subsequent alteration, amendment, change or addition to this
Lease shall be binding unless it is in writing and signed by both Landlord and
Tenant..
34.2 Time of the Essence. Time is of the essence of each and every term,
covenant and condition of this Lease.
34.3 Binding Effect. The covenants and conditions of this Lease shall, subject
to the restrictions on assignment and subletting, apply to and bind the heirs,
<PAGE>
executors, administrators, personal representatives, successors and assigns of
the parties to this Lease.
34.4 Recordation. Neither this Lease nor any memorandum of this Lease shall be
recorded by Tenant.
34.5 Governing Law. This Lease and all the terms and conditions of this Lease
shall be governed by and construed in accordance with the laws of the State of
Arizona.
34.6 No Partnership. Nothing contained in this Lease shall be deemed or
construed as creating an agency, partnership or joint venture relationship
between Landlord and Tenant or between Landlord and any other party, or cause
Landlord to be responsible in any way for the debts or obligations of Tenant or
any other party.
34.7 Authority. If Tenant executes this Lease as a partnership, each individual
executing this Lease on behalf of the partnership represents and warrants that
he or she is a general partner of the partnership and that this Lease is binding
upon the partnership in accordance with its terms. If Tenant executes this Lease
as a corporation, each of the persons executing this Lease on behalf of Tenant
covenants and warrants that Tenant is a duly authorized and existing
corporation, that Tenant has and is qualified to transact business in Arizona,
that the corporation has full right, authority and power to enter into this
Lease and to perform its obligations under this Lease, that each person signing
this Lease on behalf of the corporation is authorized to do so and that this
Lease is binding upon the corporation in accordance with its terms.
34.8 No Waiver. The failure of either party to insist in any one or more
instances upon the strict performance of any one or more of the obligations of
this Lease, or to exercise any election contained in this Lease, shall not be
construed as a waiver or relinquishment for the future of the performance of
such one or more obligations of this Lease or the right to exercise such
election, but the same shall continue and remain in full force and effect with
respect to any subsequent breach, act or omission.
34.9 Severability. If any clause or provision of this Lease is or becomes
illegal or unenforceable because of any present or future law or regulation of
any governmental body or entity effective during the Lease Term, the intention
of the parties is that the remaining provisions of this Lease shall not be
affected by such determination..
34.10 Exhibits. If any provision contained in an Exhibit or Addenda to this
Lease is inconsistent with any other provision of this Lease, the provision
contained in this Lease shall supersede the provisions contained in such Exhibit
or Addenda, unless otherwise provided.
34.11 Fair Meaning. The language of this Lease shall be construed to its normal
and usual meaning and not strictly for or against either Landlord or Tenant.
Landlord and Tenant acknowledge and agree that each party has reviewed and
revised this Lease and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not apply to the
interpreta tion of this Lease, or any Exhibits, Riders or amendments to this
Lease.
34.12 No Merger. The voluntary or other surrender of this Lease by Tenant or a
mutual cancellation of this Lease shall not work as a merger and shall, at
Landlord's option, either terminate any or all existing subleases or
subtenancies, or operate as an assignment to Landlord of any or all of such
subleases or subtenancies.
<PAGE>
34.13 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes for labor or materials, governmental restrictions,
regulations or controls, judicial orders, enemy or hostile gov ernment actions,
civil commotion, fire or other casualty and other causes beyond the reasonable
control of Landlord shall excuse the Landlord's performance under this Lease for
the period of any such prevention, delay, or stoppage.
34.14 Transfer of Landlord's Interest. The term "Landlord" as used in this
Lease, insofar as the covenants or agreements on the part of the Landlord are
concerned, shall be limited to mean and include only the owner or owners of
Landlord's interest in this Lease at the time in question. Upon any transfer or
transfers of such interest, the Landlord herein named in this Lease (and in the
case of any subsequent transfer, the then transferor) shall be relieved of all
liability for the performance of any covenants or agreements on the part of the
Landlord contained in this Lease.
34.15 Limitation on Landlord's Liability. If Landlord becomes obligated to pay
Tenant any judgment arising out of any failure by the Landlord to perform or
observe any of the terms, covenants, conditions or provisions to be performed or
observed by Landlord under this Lease, Tenant shall be limited in the
satisfaction of such judgment solely to Landlord's interest in the Building and
the Property or any proceeds arising from the sale of the Building or the
Property, and no other property or assets of Landlord or the individual
partners, directors, officers or shareholders of Landlord or its constituent
partners shall be subject to levy, execution or other enforcement procedure
whatsoever for the satisfaction of any such money judgment.
34.16 Brokerage Fees. Tenant warrants and represents that it has not dealt with
any realtor, broker or agent in connection with this Lease except the Broker
identified in Article 1.19 above. Tenant shall indemnify, defend and hold
Landlord harmless for, from and against any cost, expense or liability
(including the cost of suit and reasonable attorneys' fees) for any
compensation, commission or charges claimed by any other realtor, broker or
agent in connection with this Lease or by reason of any act of Tenant.
34.18 Continuing Obligations. All obligations of Tenant under this Lease not
fully performed as of the expiration or earlier termination of this Lease shall
survive the expiration or earlier termination of this Lease, including, without
limitation, all payment obligations with respect to Annual Basic Rent,
Additional Rent and all obligations concerning the condition of the Leased
Premises.
34.19 Confidentiality. Tenant shall keep the term, rental rate and all other
provisions of this lease confidential and shall prevent the publication or other
disclosure thereof by Tenant, its shareholders, officers, directors, employees,
agents or representatives unless Tenant receives the prior written consent of
Landlord, which consent Landlord may withhold in its sole and absolute
discretion. A breach by Tenant of the provisions of this paragraph shall
constitute an Event of Default under this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the date
and year first above written.
<PAGE>
LANDLORD: TENANT:
BARCLAY ASSOCIATES, IPVOICE.COM,
a California General Partnership A Nevada Corporation
/s/ Donald I Zimmerman /s/ Peter Stazzone
- -------------------------------- ------------------------------
General Partner
<PAGE>
RIDER "1"
Rider 1 to Office Lease dated June 21, 1999, between Barclay
Associates, a California General Partnership, ("Landlord") and IP Voice.Com, a
Nevada Corporation ("Tenant")
1. Hazardous Materials Laws. "Hazardous Materials Laws" means any and all
federal, state or local laws, ordinances, rules, decrees, orders, regulations or
court decisions (including the so-called "common-law") relating to hazardous
substances, hazardous materials, hazardous waste, toxic substances,
environmental conditions on, under or about the Property, or soil and ground
water conditions, including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended, 42
U.S.C. ss.9601, et seq., the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. ss.6901, et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
ss.1801, et seq., any amendments to the foregoing, and any similar federal,
state or local laws, ordinances, rules, decrees, orders or regulations.
2. Hazardous Materials. "Hazardous Materials" means any chemical, compound,
material, substance or other matter that: (i) is a flammable explosive,
asbestos, radioactive material, nuclear medicine material, drug, vaccine,
bacteria, virus, hazardous waste, toxic substance, petroleum product, or related
injurious or potentially injurious material, whether injurious or potentially
injurious by itself or in combination with other materials; (ii) is controlled,
designated in or governed by any Hazardous Materials Law; (iii) gives rise to
any reporting, notice or publication requirements under any Hazardous Materials
Law; or (iv) gives rise to any liability, responsibility or duty on the part of
Tenant or Landlord with respect to any third person under any Hazardous
Materials Law.
3. Use. Tenant shall not allow any Hazardous Material to be used, generated,
released, stored or disposed of on, under or about, or transported from, the
Leased Premises, the Building or the Property, unless: (i) such use is
specifically disclosed to and approved by Landlord in writing prior to such use;
and (ii) such use is conducted in compliance with the provisions of this Rider
1. Landlord may approve such use subject to reasonable conditions to protect the
Leased Premises, the Building or the Property, and Landlord's interests.
Landlord may withhold approval if Landlord determines that such proposed use
involves a material risk of a release or discharge of Hazardous Materials or a
violation of any Hazardous Materials Laws or that Tenant has not provided
reasonable assurances of its ability to remedy such a violation and fulfill its
obligations under this Rider 1.
4. Compliance With Laws Tenant shall strictly comply with, and shall maintain
the Leased Premises in compliance with, all Hazardous Materials Laws. Tenant
shall obtain and maintain in full force and effect all permits, licenses and
other governmental approvals required for Tenant's operations on the Leased
Premises under any Hazardous Materials Laws and shall comply with all terms and
conditions of any Hazardous Materials laws. At Landlord's request, Tenant shall
deliver copies of, or allow Landlord to inspect, all such permits, licenses and
approvals. Tenant shall perform any monitoring, investigation, clean-up, removal
and other remedial work (collectively, "Remedial Work") required as a result of
any release or discharge of Hazardous Materials affecting the Leased Premises or
the Building, or any violation of Hazardous Materials Laws by Tenant or any
assignee or sublessee of Tenant or their respective agents, contractors,
employees, licensees, or invitees. Landlord shall have the right to intervene in
any governmental action or proceeding involving any Remedial Work, and to
approve performance of the work, in order to protect Landlord's interests.
5. Compliance With Insurance Requirements. Tenant shall comply with the
requirements of Landlord's and Tenant's respective insurers regarding Hazardous
Materials and with such insurers' recommendations based upon prudent industry
practices regarding management of Hazardous Materials.
<PAGE>
6. Notice; Reporting. Tenant shall notify Landlord, in writing, within two (2)
days after any of the following: (a) a release or discharge of any Hazardous
Material, whether or not the release or discharge is in quantities that would
otherwise be reportable to a public agency; (b) Tenant's receipt of any order of
a governmental agency requiring any Remedial Work pursuant to any Hazardous
Materials Laws; (c) Tenant's receipt of any warning, notice of inspection,
notice of violation or alleged violation, or Tenant's receipt of notice or
knowledge of any proceeding, investigation of enforcement action, pursuant to
any Hazardous Materials Laws; or (d) Tenant's receipt of notice or knowledge of
any claims made or threatened by any third party against Tenant or the Leased
Premises, the Building or the Property, relating to any loss or injury resulting
from Hazardous Materials. Tenant shall deliver to Landlord copies of all test
results, reports and business or management plans required to be filed with any
governmental agency pursuant to any Hazardous Materials Laws.
7. Termination: Expiration. Upon the termination or expiration of this Lease,
Tenant shall remove any equipment, improvements or storage facilities utilized
in connection with any Hazardous Materials and shall, clean up, detoxify, repair
and otherwise restore the Leased Premises to a condition free of Hazardous
Materials.
8. Indemnity. Tenant shall protect, indemnify, defend and hold Landlord harmless
for, from and against any and all claims, costs, expenses, suits, judgments,
actions, investigations, proceedings and liabilities arising out of or in
connection with any breach of any provisions of this Rider 1 or directly or
indirectly arising out of the use, generation, storage, release, disposal or
transportation of Hazardous Materials by Tenant or any sublessee or assignee of
Tenant, or their respective agents, contractors, employees, licensees, or
invitees, on, under or about the Leased Premises, the Building or the Property
during the Lease Term or Tenant's occupancy of the Leased Premises, including,
but not limited to, all foreseeable and unforeseeable consequential damages and
the cost of any Remedial Work. Neither the consent by Landlord to the use,
generation, storage, release, disposal or transportation of Hazardous Materials
nor the strict compliance with all Hazardous Material Laws shall excuse Tenant
from Tenant's indemnification obligations pursuant to this Rider 1. The
foregoing indemnity shall be in addition to and not a limitation of the
indemnification provisions of Rider 1 of the Lease. Tenant's obligations
pursuant to this Rider 1 shall survive the termination or expiration of this
Lease.
9. Assignment; Subletting. If Landlord's consent is required for an assignment
of this Lease or a subletting of the Leased Premises, Landlord shall have the
right to refuse such consent if the possibility of a release of Hazardous
Materials is materially increased as a result of the assignment or sublease or
if Landlord does not receive reasonable assurances that the new tenant has the
experience and the financial ability to remedy a violation of the Hazardous
Materials Laws and fulfill its obligations under this Rider 1.
10. Entry and Inspection; Cure. Landlord and its agents, employees and
contractors, shall have the right, but not the obligation, to enter the Leased
Premises at all reasonable times to inspect the Leased Premises and Tenant's
compliance with the terms and conditions of this Rider 1, or to conduct
investigations and tests. No prior notice to Tenant shall be required in the
event of an emergency, or if Landlord has reasonable cause to believe that
violations of this Rider 1 have occurred, or if Tenant consents at the time of
entry. In all other cases, Landlord shall give at least twenty-four (24) hours
prior notice to Tenant. Landlord shall have the right, but not the obligation,
to remedy any violation by Tenant of the provisions of this Rider 1 or to
perform any Remedial Work which is necessary or appropriate as a result of any
<PAGE>
governmental order, investigation or proceeding. Tenant shall pay, upon demand,
as Additional Rent, all costs incurred by Landlord in remedying such violations
or performing all Remedial Work, plus interest on such costs incurred at the
Default Rate from the date of demand until the date received by Landlord.
11. Event of Default. The release or discharge of any Hazardous Material or the
violation of any Hazardous Materials Law shall constitute an Event of Default by
Tenant under this Lease. In addition to and not in lieu of the remedies
available under this Lease as a result of such Event of Default, Landlord shall
have the right, without terminating this Lease, to require Tenant to suspend its
operations and activities on the Leased Premises until Landlord is satisfied
that appropriate Remedial Work has been or is being adequately performed and
Landlord's election of this remedy shall not constitute a waive of Landlord's
right to subsequently pursue the other remedies set forth in this Lease.
TENANT: IP Voice.Com,
A Nevada Corporation
/s/ Peter Stazzone
- ----------------------------
LANDLORD: Barclay Associates,
a California General Partnership
/s/ Donald I. Zimmerman
- ---------------------------------------
By: Donald I. Zimmerman, General Partner
<PAGE>
EXHIBIT "E"
RULES AND REGULATIONS
1. Unless otherwise specifically defined in this Exhibit, all capitalized terms
in these Rules and Regulations shall have the meaning set forth in the Lease to
which these Rules and Regulations are attached.
2. The sidewalks, driveways, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls of the Building shall not be obstructed or
encumbered or used for any purpose other than ingress and egress to and from the
premises leased to any tenant or occupant.
3. No awnings or other projection shall be attached to the outside walls or
windows of the Building. No curtains, blinds, shades, or screens shall be
attached to or hung in, or used in connection with, any window or door of the
premises leased to any tenant or occupant, without the prior written consent of
Landlord. All electrical fixtures hung in any premises leased to any tenant or
occupant must be of a type, quality, design, color, size and general appearance
approved by Landlord.
4. No tenant shall place objects against glass partitions, doors or windows
which would be in sight from the Building corridors or from the exterior of the
Building and such tenant will promptly remove any such objects when requested to
do so by Landlord.
5. The windows and doors that reflect or admit light and air into the halls,
passageways or other public places in the Building shall not be covered or
obstructed, nor shall any bottles, parcels, or other articles be placed on any
window sills.
6. No show cases or other articles shall be put in front of or affixed to any
part of the exterior of the Building nor placed in the halls, corridors,
walkways, landscaped areas, vestibules or other public parts of the Building.
7. The water and wash closets and other plumbing fixtures shall not be used for
any purposes other than those for which they were constructed, and no sweepings,
rubbish, rags or other substances shall be thrown in the water and wash closets.
No tenant shall bring or keep, or permit to be brought or kept, any inflammable,
combustible, explosive or hazardous fluid, material, chemical or substance in or
about the premises leased to such tenant or the Property.
8. No tenant or occupant shall mark, paint, drill into, or in any way deface any
part of the Building or the premises leased to such tenant or occupant. No
boring, cutting or strings of wires shall be permitted, except with the prior
consent of Landlord, and as Landlord may direct. No tenant or occupant shall
install any resilient tile or similar floor covering in the premises leased to
such tenant or occupant except in a manner approved by Landlord.
9. Any carpeting cemented down by a tenant shall be installed with a releasable
adhesive. In the event of a violation of this paragraph by a tenant, Landlord
may charge the expense incurred to remove the carpeting to such tenant.
10. No bicycles, vehicles or animals of any kind (except seeing eye dogs) shall
be brought into or kept in or about the premises leased to any tenant. No
cooking shall be done or permitted in the Building by any tenant without the
written approval of Landlord. No tenant shall cause or permit any unusual or
objectionable odors to emanate from the premises leased to such tenant.
<PAGE>
11. No space in the Building shall be used for manufacturing, for the storage of
merchandise, or for the sale of merchandise, goods or property of any kind at
auction.
12. No tenant shall make, or permit to be made, any unseemly or disturbing
noises or vibrations or disturb or interfere with other tenants or occupants of
the Building, or neighboring buildings or premises whether by the use of any
musical instrument, radio, television set broadcasting equipment or other audio
device, unmusical noise, whistling, singing, or in any other way. Nothing shall
be thrown out of any doors.
13. No additional locks or bolts of any kind shall be placed upon any of the
doors, nor shall any changes be made in locks or the mechanism of such locks.
Each tenant must, upon the termination of its tenancy, restore to Landlord all
keys of stores, offices and toilet rooms, either furnished to, or otherwise
procured by, such tenant.
14. All removals from the Building, or the carrying in or out of the Building or
from the premised leased to any tenant, of any safes, freight, furniture or
bulky matter of any description must take place at such time and in such manner
as Landlord or its agents may determine, from time to time. Landlord reserves
the right to inspect all freight to be brought into the Building and to exclude
from the Building all freight which violates any of the Rules and Regulations or
the provisions of such tenant's lease.
15. Landlord shall have the right to prohibit any advertising by any tenant or
occupant which, in Landlord's opinion, tends to impair the reputation of the
Building or its desirability as a building for offices, and upon notice from
Landlord, such tenant or occupant shall refrain from or discontinue such
advertising.
16. Each tenant, before closing and leaving the premises leased to such tenant
at any time, shall see that all entrance doors are locked and all electrical
equipment and lighting fixtures are turned off.
Corridor doors, when not in use, shall be kept closed.
17. Each tenant shall, at its expense, provide artificial light in the premises
leased to such tenant for Landlord's agents, contractors and employees while
performing janitorial or other cleaning services and making repairs or
alterations in said premises.
18. No premises shall be used, or permitted to be used for lodging or sleeping,
or for any immoral or illegal purposes.
19. The requirements of tenants will be attended to only upon application at the
office of Landlord. Building employees shall not be required to perform, and
shall not be requested by any tenant or occupant to perform, and work outside of
their regular duties, unless under specific instructions from the office of
Landlord.
20. Canvassing, soliciting and peddling in the Building are prohibited and each
tenant and occupant shall cooperate in seeking their prevention.
21. There shall not be used in the Building, either by any tenant or occupant or
by their agents or contractors, in the delivery or receipt of merchandise,
freight or other matter, any hand trucks or other means of conveyance except
those equipped with rubber tires, rubber side guards and such other safeguards
as Landlord may require.
<PAGE>
22. If Tenant causes the premises to become infested with vermin, such tenant,
at its sole cost and expense, shall cause its premises to be exterminated, from
time to time, to the satisfaction of Landlord, and shall employ such
exterminators for the extermination of the vermin as shall be approved in
writing by Landlord.
23. No premises shall be used, or permitted to be used, at any time, without the
prior written approval of Landlord, as a store for the sale or display of goods,
wares or merchandise of any kind, or as a restaurant, shop, booth, bootblack or
other stand, or for the conduct of any business or occupation which
predominantly involves direct patronage of the general public in the premises
leased to such tenant, or for manufacturing or for other similar purposes.
24. No tenant shall clean any window of the Building from the outside
25. No tenant shall move, or permit to be moved, into or out of the Building or
the premises leased to such tenant, any heavy or bulky matter, without the
specific approval of Landlord. If any such matter requires special handling,
only a qualified person shall be employed to perform such special handling. No
tenant shall place or permit to be placed, on any part of the floor or floors of
the premises leased to such tenant, a load exceeding the floor load per square
foot which such floor was designed to carry and which is allowed by law.
Landlord reserves the right to prescribe the weight and position of safes and
other heavy objects, which must be placed so as to distribute the weight.
26. With respect to work being performed by a tenant in its premises with the
approval of Landlord, the tenant shall refer all contractors, contractors'
representatives and installation technicians to Landlord for its supervision,
approval and control prior to the performance of any work or services. This
provision shall apply to all work performed in the Building including
installation of telephones, telegraph equipment, electrical devices and
attachments, and installations of every nature affecting floors, walls,
woodwork, trim, ceilings, equipment and any other physical portion of the
Building.
27. Landlord shall not be responsible for lost or stolen personal property,
equipment, money, or jewelry from the premises of tenants or public rooms
whether or not such loss occurs when the Building or the premises are locked
against entry.
28. Landlord may permit entrance to the premises of tenants by use of pass keys
controlled by Landlord employees, contractors, or service personnel directly
supervised by Landlord and employees of the United States Postal Service.
29. Each tenant and all of tenant's representatives, shall observe and comply
with the directional and parking signs on the property surrounding the Building,
and Landlord shall not be responsible for any damage to any vehicle towed
because of non-compliance with parking regulations.
30. No tenant shall install any radio, telephone, television, microwave or
satellite antenna, loudspeaker, music system or other device on the roof or
exterior walls of the Building or on common walls with adjacent tenants.
31. Each tenant shall store all trash and garbage within its premises. No
material shall be placed in the trash boxes or receptacles in the Building
unless such material may be disposed of in the ordinary and customary manner of
removing and disposing of trash and garbage and will not result in a violation
of any law or ordinance governing such disposal. All garbage and refuse disposal
<PAGE>
shall be made only through entryways and elevators provided for such purposes
and at such times as Landlord shall designate.
32. No tenant shall employ any persons other than the janitor of Landlord for
the purpose of cleaning its premises without the prior written consent of
Landlord.
33. Each tenant shall give prompt notice to landlord of any accidents to or
defects in plumbing, electrical or heating apparatus so that same may be
attended to properly.
34. No tenant shall bring into the Building any pollutants, contaminants,
inflammable, gasolines, kerosene or hazardous substances (as now or later
defined under State or Federal law).
35. Landlord reserves the right to restrict access to and from the Building
between the hours of 6:00 P.M. and 8:00 A.M. on business days and at all hours
on Saturdays, Sundays and holidays.
36. All tenant and tenant's servants, employees, agents, visitors, invitees and
licensees shall observe faithfully and comply strictly with these Rules and
Regulations and such other and further appropriate Rules and Regulations as
Landlord or Landlord's agent from time to time adopt.
37. Landlord shall furnish each tenant, at Landlord's expense, with two (2) keys
to unlock the entry level doors and two (2) keys to unlock each corridor door
entry to each tenant's premises and, at such tenant's expense, with such
additional keys as such tenant may request. No tenant shall install or permit to
be installed any additional lock on any door into or inside of the premises
leased to that tenant or make or permit to be made any duplicate of keys to the
entry level doors or the doors to such premises. Landlord shall be entitled at
all times to possession of a duplicate of all keys to all doors into or inside
of the premises leased to tenants of the Building. All keys shall remain the
property of Landlord. Upon the expiration of the Lease Term, each tenant shall
surrender all such keys to Landlord and shall deliver to Landlord the
combination to all locks on all safes, cabinets and vaults which will remain in
the premises leased to that tenant. Landlord shall be entitled to install,
operate and maintain security systems in or about the Property which monitor, by
computer, close circuit television or otherwise, persons entering or leaving the
Property, the Building and/or the premises leased to any tenant. For the
purposes of this rule the term "keys" shall mean traditional metallic keys,
plastic or other key cards and other lock opening devices.
38. Each person using the Parking Facility or other areas designated by Landlord
where parking will be permitted shall comply with all Rules and Regulations
adopted by Landlord with respect to the Parking Facility or other areas,
including any employee or visitor parking restrictions, and any sticker or other
identification system established by Landlord. Landlord may refuse to permit any
person who violates any parking rule or regulation to park in the Parking
Facility or other areas, and may remove any vehicle which is parked in the
Parking Facility or other areas in violation of the parking Rules and
Regulations. The Rules and Regulations applicable to the Parking Facility and
the outside parking areas are as follows:
The maximum speed limit within the Parking Facility shall be 5 miles per hour,
the maximum speed limit in other parking areas shall be 15 miles per hour.
All directional signs and arrows must be strictly observed
All vehicles must be parked entirely within painted stall lines.
<PAGE>
No intermediate or full-size car may be parked in any parking space reserved for
a compact car; no bicycle, motorcycle or other two or three wheeled vehicle, and
no truck, van or other oversized vehicle, may be parked in any area not
specifically designated for use by such vehicle.
No vehicle may be parked (i) in an area not striped for parking, (ii) in a space
which has been reserved for visitors or for another person or firm, (iii) in an
aisle or on a ramp, (iv) where a "no parking" sign is posted or which has
otherwise designated as a no parking area, (v) in a cross hatched area, (vi) in
an area bearing a "handicapped parking only" or similar designation unless the
vehicle bears an appropriate handicapped designation, (vii) in an area bearing a
"loading zone" or similar designation unless the vehicle is then engaged in a
loading or unloading function and (viii) in an area with a posted height
limitation if the vehicle exceeds the limitation.
Parking passes, stickers or other identification devices supplied by Landlord
shall remain the property of Landlord and shall not be transferable. A
replacement charge determined by Landlord will be payable by each tenant for
loss of any magnetic parking card or parking pass or sticker.
Garage managers or attendants shall not be authorized to make or allow any
exceptions to these Rules and Regulations.
Each operator shall be required to park and lock his or her own vehicle, shall
use the Parking Facilities at his or her own risk and shall bear full
responsibility for all damage to or loss of his or her vehicle, and for all
injury to persons and damage to property caused by his or her operation of the
vehicle.
Landlord reserves the right to tow away, at the expense of the owner, any
vehicle which is inappropriately parked or parked in violation of these Rules
and Regulations.
39. Landlord has designated the Building a "non-smoking" building in accordance
with The Smoking Pollution Control Ordinance adopted by the City of Phoenix,
Arizona as set forth in Sections 23-101, etc. of the City of Phoenix Municipal
Code. Accordingly, smoking of tobacco or any other weed plant is prohibited in
the Building Common Areas located within the Building, including the Building
lobby, public corridors, lavatories, elevators and other public areas. Further,
smoking of tobacco or any other weed plant is prohibited within the Leased
Premises.
40. Landlord reserves the right at any time and from time to time to rescind,
alter or waive, in whole or in part, any of the Building Rules and Regulations
when it is deemed necessary, desirable or proper, in Landlord's judgment for its
best interest or of the best of the tenants of the Building.
Tenant hereby acknowledges receipt of the Building Rules and Regulations.
TENANT:
IP VOICE.COM
A Nevada Corporation
/S/ Peter Stazzone
By:
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