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FILE # 333-89769
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
GOLDENACCESS.COM, INC.
(Exact name of Registrant as specified in its charter)
FLORIDA 7372 65-0769954
(State of Incorporation) (Primary Standard Industrial (IRS Employer
Classification Code Number) Identification Number)
6161 BLUE LAGOON DRIVE, SUITE 190
MIAMI, FLORIDA, 33126
(305) 264-2401
(Address and telephone number of
and principal place of business)
MR. CLIFFORD Y. PIERCE, PRESIDENT
GOLDENACCESS.COM, INC.
1440 KENNEDY CAUSEWAY, SUITE 301
NORTH BAY VILLAGE, FL 33141
(305) 861-2766
(Name, address and telephone number
of agent for service)
Copies to:
MR. GARY APPELBLATT, ESQ.
LAW OFFICES OF GARY M. APPELBLATT
3610 AMERICAN RIVER DRIVE, SUITE 112
SACRAMENTO, CA 95864
(916) 486-4200
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----------------
Approximate date of commencement of proposed distribution to public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on the Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [XX]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
THE REGISTRANT SHALL AMEND THIS REGISTRATION STATEMENT ON THAT DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION SHALL BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8 (a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON THAT DATE AS THE COMMISSIONER, ACTING PURSUANT TO SECTION 8
(a), MAY DETERMINE.
CALCULATION OF REGISTRATION FEE
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===================================================================================================================
Title of each class Number of shares Proposed maximum price Proposed maximum Amount of
of securities to be to be registered per share aggregate price for Registration fee
registered this registration
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares 500,000(1) $8.50(2) $4,250,000(2) $1211.25(1)
===================================================================================================================
</TABLE>
(1) Dollar amounts of shares to be registered and registration fee
computations based upon the estimated market value asking price of
$8.50 per share for the 500,000 common shares registered. Additional
fees, should the price rise, will be paid by amendment.
(2) There is currently no offering price. Of the securities registered,
129,300 shares will be distributed to the shareholders and agent of
Cardiac Control services, Inc., a Delaware corporation, as a stock
dividend. The remaining 370,700 shares are registered for future sale
by their holders. These sales, if sold, shall be made through NASD
members at normal mark ups, mark downs, or brokerage commissions. See
"Selling securityholders".
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GOLDENACCESS.COM, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Page
Items in Form SB-2 Location Number
<S> <C> <C>
1. Front of Registration Statement Same 1
and Outside Front Cover of
Prospectus
2. Inside Front and Inside Back Cover Page 2
Outside Back Cover Pages of Prospectus
3. Summary Information Summary; 4
Risk Factors Risk Factors 7
4. Use of Proceeds Not Applicable
5. Determination of Offering Not Applicable
Price
6. Dilution Not Applicable
7. Selling Securityholders Risk Factors; 7
Selling Securityholders 46
8. Plan of Distribution The Distribution 19
9. Legal Proceedings Same 61
10. Directors, Executive Management and Board of 49
Officers, Promoters Directors;
and Control Persons Principal Shareholders 47
Management
11. Security Ownership Principal Shareholders 46
Of Certain Beneficial
Owners and Management
</TABLE>
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<TABLE>
<S> <C> <C>
12. Description of Securities Same 57
13. Interests of Named Not Applicable
Experts and Counsel
14. Disclosure of Commission Limitation of Liability of 54
Position on Indemnification Directors and Officers
for Securities Act Liabilities
15. Organization within
Last Five Years Business-The Company 32
16. Description of Business Same 25
17. Plan and Results of Same 20
Operations
18. Certain Relationships Not Applicable
19. Market for Common Equity Risk Factors - No Prior 17
and Related Stockholder Matters Trading Market
20. Executive Compensation Same 50
21. Financial Statements Same F1
22. Changes in and Disagreement Not Applicable
with Accountants on Accounting
and Financial Disclosure
</TABLE>
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITY AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE IN WHICH THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED FEBRUARY 16, 2000
PROSPECTUS
[LOGO] GOLDENACCESS.COM, INC.
500,000 SHARES OF COMMON STOCK
No Public Market Currently Exists for the Shares
We are registering 385,100 shares for future sale by our founding shareholders.
In addition, we are registering 114,900 shares owned by Cardiac Control Systems,
Inc. that will be distributed to their shareholders as a stock dividend
following the effective date of the registration statement of which this
prospectus is a part. All of the shares that are being registered will be sold
by the selling shareholders at their discretion.
We will have no control over the timing of any sales and are not receiving any
of the proceeds of the sales of these shares.
We anticipate that the Shares will be quoted on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") Bulletin Board Market
under the symbol "GLDA", or the Pacific Stock Exchange under the symbol "GAC".
THE SECURITIES OFFERED ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 9.
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
The date of this Prospectus is __________, 2000.
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Left Blank for color page insertion
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[LOGO]GOLDENACCESS
TABLE OF CONTENTS
<TABLE>
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Summary ................................................................ 4
Our Company ............................................................ 5
Risk Factors ........................................................... 7
Distribution ........................................................... 19
Plan and Results of Operations ......................................... 20
Year 2000 Readiness Disclosure ......................................... 23
Capitalization ......................................................... 24
Business................................................................ 25
Recent Acquisitions .................................................... 43
Selling Securityholders ................................................ 46
Principal Shareholders ................................................. 47
Management ............................................................. 49
Description of Securities .............................................. 57
Shares Eligible ........................................................ 58
Dividend Policy ........................................................ 61
Stock Transfer Agent ................................................... 61
Experts ................................................................ 61
Legal Matters .......................................................... 61
Available Information .................................................. 61
Index to Financial Statements .......................................... F1
</TABLE>
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SUMMARY
THE DISTRIBUTION
DISTRIBUTED COMPANY GoldenAccess.Com, Inc. a Florida corporation, was
merged with CathTech Group, Inc., a Florida
corporation and the surviving legal entity is
CathTech Group, Inc., which succeeded to the name
GoldenAccess.Com, Inc. See "Summary -- Corporate
History".
DISTRIBUTION RATIO Each of Cardiac Control Systems, Inc., shareholders
will receive one (1) of our common shares, par
value $0.001 per share, for each 51 shares of
Cardiac Control Systems, Inc., common stock.
SHARES TO BE DISTRIBUTED No underwriting discounts or commissions will be
allowed or paid on the 114,900 shares distributed
as a stock dividend to the shareholders of Cardiac
Control Systems, Inc.
DISTRIBUTION DATE Upon the effective date of the registration
statement of which this prospectus is a part or as
soon thereafter as practical.
SHARES OF SELLING
SECURITYHOLDERS 385,100 shares are also being registered on behalf
of 4 of our shareholders, which equals a total of
500,000 shares of common stock being registered in
this prospectus, representing 17.4% of our
securityholder's respective holdings, all of which
will be available for resale by shareholders
subject to specific limitations. The amount of
discounts or commissions, if any, which may be paid
by the selling security holders on future resale of
the shares registered is not now known See "Selling
Securityholders".
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OUR COMPANY
GOLDENACCESS.COM, INC. specializes IN INVENTIVE APPROACHES TO INTERNET PROTOCOL
("IP") TELEPHONY, WHICH IS A group of technical standards for internet
communications, that allows computers to exchange information or telephone calls
through the internet. Our products and services OFFER A COMPLETE, FULLY
INTEGRATED SOLUTION TO IP TELEPHONY SYSTEMS THAT INCLUDES:
- - IP TELEPHONY GATEWAY, WHICH acts as an interface between telephone
communication and the internet. This equipment and integrated software
allows for telephone calls to be carried over the internet instead of
traditional wire, fiber optic, or satellite transmission.
- - NETWORK MANAGEMENT, WHICH functions to monitor the "health", presence and
quality of a set or series of gateways.
- - BILLING SOFTWARE
- - GLOBAL NETWORK FOR CALL TERMINATION, WHICH is a network of gateways and
management systems software that spreads around the globe, providing
worldwide access to telephone communications.
THIS "ONE-STOP" SOLUTION ALLOWS ITS CUSTOMERS AND SERVICE PROVIDERS OF ANY SIZE
TO ESTABLISH A SERVICE OR RAPIDLY LAUNCH A REVENUE SERVICE WITH MINIMAL
INVESTMENT OR INFRASTRUCTURE, WITHOUT THE NEED TO PURCHASE ADDITIONAL SUPPORTING
SOFTWARE, HARDWARE AND NETWORK DELIVERY CONTRACTS. THIS IS THE GOLDEN ACCESS
BREAKTHROUGH.
We are currently operating in Beirut, Lebanon; Buenos Aires and Cordoba,
Argentina; Cali, Columbia; Hong Kong, China; Madrid, Spain; Mexico City, Mexico;
Sao Paulo, Brazil; Praga, Czech Republic; Los Angeles, CA and Miami, FL, USA.
Over the next 120 days, we will deploy the IP Telephony GATEWAYS in the
following locations: in Bogota, Medellin and Baranquilla, Columbia; Santiago,
Chile; Amsterdam, Holland; Caracas, Venezuela; Quito, Ecuador; Lima, Peru;
Montevideo, Uruguay; Manaos and Rio de Janeiro, Brazil; Panama City, Panama;
Paris, France; Frankfurt, Germany; Phillipines, Taiwan, Dominican Republic,
Costa Rica, Rome, Italy; Moscow, Russia; Beijing, China; Arlington, TX, Orlando,
FL, USA., and establish appropriate distribution channels to service each
country.
Our current offices are located at 6161 Blue Lagoon Drive, Suite 190, Miami, FL
33126, and the telephone number is (305) 264-2401. We also have offices in
Cordoba, Argentina.
Information contained on our World Wide Web site, http://www.GoldenAccess.com,
does not constitute a part of this prospectus.
Unless otherwise indicated, the information in this prospectus, irrespective of
the date referenced, assumes that there is no exercise of outstanding options or
warrants to purchase additional shares.
All references in this prospectus to "us", "we", or the issuer include
GoldenAccess.com, Inc. and its predecessors.
Neither GoldenAccess.Com, Inc., nor any of its officers, directors or employees
had any prior or subsequent affiliation with Cardiac Control Systems, Inc. For
accounting purposes, the merger will be treated as a reverse acquisition with
GoldenAccess.Com, Inc. being treated as the acquiree for financial reporting
purposes.
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SELECTED FINANCIAL DATA
The selected financial data below is for the years ended June 30,1998 and 1999,
and for the six months ending December 31, 1999, and 1998 have been derived from
our financial statements. We have never declared or paid any cash dividends on
our shares of capital stock. The selected financial data should be read in
conjunction with the financial statements and related notes and other financial
information appearing elsewhere in this prospectus and the discussion under the
caption "PLAN OF OPERATIONS." The statement of earnings data and the balance
sheet data for 1999 and 1998 are a part of our financial statements prior to our
merger with CathTech Group, Inc., which are included in their entirety elsewhere
in this prospectus. June 30, 1999 and 1998 reflects the effects of the merger on
August 26, 1999.
SELECTED FINANCIAL DATA
<TABLE>
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Years Ended Six Months Ended
June 30, 1998 June 30,1999 12/31/98 12/31/99
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Sales 0 6,386 112,320
Research and development 11,385 28,902 34,979 5,897
Consulting 0 1,050 329,752
Depreciation 0 948 518 98,409
Other 363 6,729 3,185 207,084
Net losses (11,748) (31,243) 38,682 (528,822)
Net loss per share (.03) (.09) (0.02) (0.18)
Weighted average shares 345,800 345,800 2,872,500 2,872,500
Outstanding 2
BALANCE SHEET DATA
Working capital (deficit) (48,043) (48,737) (338,458)
Total assets 17,601 4,937 1,465,405
Liabilities 54,592 49,367 468,276
Stockholder's deficit 36,991 50,430 (571,813)
</TABLE>
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RISK FACTORS
These securities are highly speculative and involve substantial risks. You
should carefully consider the following risk factors before making an investment
decision. If any of the following risks actually occur, our business, financial
condition or results of operations could be materially adversely affected. In
that event, the trading price of our shares could decline, and you may lose part
or all of your investment.
RISKS RELATED TO OUR FINANCIAL CONDITION AND OUR BUSINESS
1. OUR LIMITED OPERATING HISTORY MAKES EVALUATING OUR BUSINESS DIFFICULT, WHICH
MAY SUBJECT YOU TO MORE RISKS THAN ANTICIPATED.
GoldenAccess.Com, Inc was incorporated in Florida in 1997 to provide innovative
software solutions to meet the growing demands of the nascent Internet Protocol
(IP) telecom industry. Because of this, we have only a limited operating history
with which you may evaluate our business. You must consider the numerous risks
and uncertainties an early stage company like ours faces in the new and rapidly
evolving market for Internet-related services or in forecasting our future
operating results.
If we are unsuccessful in addressing these risks, sales of our products and
services, as well as our ability to maintain or increase our customer base, will
be substantially diminished.
2. BECAUSE WE HAVE NO OPERATING HISTORY, WE MAY NOT BE ABLE TO SUCCESSFULLY
CONDUCT OUR BUSINESS OR ACHIEVE PROFITABILITY.
We first recorded revenue in June of 1999, but did not begin shipping our
principal product, VTS, until July of 1999.
In addition, we cannot forecast operating expenses based on our historical
results because they are limited, and we are required to forecast expenses in
part on future revenue projections. We may not successfully address any of these
risks.
3. BECAUSE OUR PRESENCE IN THE NEW AND RAPIDLY EVOLVING INTERNET TELEPHONY
INDUSTRY SUBJECTS US TO RAPID TECHNOLOGICAL CHANGE, OUR PRODUCTS COULD BECOME
OBSOLETE OR UNMARKETABLE SOONER THAN WE ANTICIPATE.
Our Internet telephony markets are characterized by rapid technological change
which may cause us to incur significant development costs and prevent us from
attracting new customers The market for our products is characterized by rapid
technological change, frequent new product introductions and enhancements,
uncertain product life cycles and changing end-user customer demands. The
introduction of products embodying new technologies and the emergence of new
industry standards could render existing products obsolete or unmarketable and
cause us to incur significant development costs.
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4. WE HAVE NEVER BEEN PROFITABLE AND EXPECT OUR LOSSES TO CONTINUE FOR THE
FORESEEABLE FUTURE.
We have never been profitable on an annual or quarterly basis. We had an
accumulated deficit of approximately $571,813 as of December 31, 1999. We expect
to continue to incur operating losses for the foreseeable future. Our operating
and marketing expenses have continuously increased since inception and we expect
them to continue to increase significantly during the next several years.
Accordingly, we will need to generate significant revenue to achieve
profitability. We may not be able to do so. Even if we do achieve profitability,
we cannot assure you that we will be able to sustain or increase profitability
on a quarterly or annual basis in the future.
We intend to continue to make significant investments in our research and
development, marketing, services and sales operations. We anticipate that these
expenses could significantly precede any revenues generated by the increased
spending.
Our operating results have varied significantly from quarter to quarter and may
continue to do so in the future depending upon a number of factors affecting us
or our industry described below and elsewhere in this prospectus, including many
that are beyond our control. As a result, we believe that period-to-period
comparisons of our operating results are not necessarily meaningful, and you
should not rely on them as an indication of our future performance. In addition,
our operating results in a future quarter or quarters may fall below
expectations of securities analysts or investors and, as a result, the price of
our common stock may fluctuate. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
5. WE CAN NOT FORECAST OUR REVENUES ACCURATELY BECAUSE OUR PRODUCTS HAVE
VARIABLE SALES CYCLES AND BECAUSE WE DO NOT KNOW WHEN OUR POTENTIAL END-USER
CUSTOMERS WILL PLACE ORDERS AND FINALIZE CONTRACTS.
The sales cycle for our products may cause license revenue and operating results
to vary significantly from period to period. To date, the sales cycle for our
products to our Corporate and ISP customers has taken up to three months in
foreign countries, while our Telco customers inherently will take longer to
evaluate/decide and could take up to 6-9 months for a final decision. Our sales
cycle has required pre-purchase evaluation by a significant number of
individuals in our customers' organizations. Since distributors and resellers
will have more direct exposure to many of our customers initially, and third
parties jointly market our software with us, we invest significant amounts of
time and resources educating and providing information to our prospective
customers regarding the use and benefits of our products. These channels will
determine the overall length of our sales cycles.
6. WE MAY HAVE DIFFICULTIES MANAGING OUR EXPANDING OPERATIONS, MULTIPLE
TECHNOLOGIES AND TECHNOLOGICAL CHANGE, WHICH COULD HARM OUR FUTURE PRODUCT
DEMAND AND MAY REDUCE OUR CHANCES OF ACHIEVING PROFITABILITY.
Our future performance will depend, in part, on our ability to manage our growth
effectively. To that end, we will have to succeed in developing our operating,
administrative, and financial and
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accounting systems and controls. If we are not profitable, since we have not
identified outside sources of financing, we may be unable to continue
operations.
7. OUR SOFTWARE MAY NOT OPERATE CORRECTLY ON EVOLVING VERSIONS OF HARDWARE AND
SOFTWARE PLATFORMS, PROGRAM LANGUAGES, DATABASE ENVIRONMENTS AND OTHER SYSTEMS
THAT OUR CUSTOMERS USE.
To improve coordination among our engineering, accounting, finance, marketing
and operations personnel, we must enhance our management personnel and
information system's capabilities.
If we cannot accomplish these tasks, we will diminish our chances of achieving
profitability.
Our products are designed to work on a variety of hardware and software
platforms used by our customers. For example, the server component of the
current version of our products runs on the Windows NT operating system from
Microsoft. If we cannot successfully develop products in response to a change in
customer demands, our business could suffer.
If we fail to modify or improve our products in response to evolving industry
standards, our products could rapidly become obsolete, which would harm our
business.
8. OUR PROSPECTS FOR OBTAINING ADDITIONAL FINANCING, IF REQUIRED, ARE UNCERTAIN
AND FAILURE TO OBTAIN NEEDED FINANCING COULD AFFECT OUR ABILITY TO PURSUE FUTURE
GROWTH.
We may need to raise additional funds to develop or enhance our products,
services or strategic alliances, to fund expansion, to successfully implement
our growth strategy, to respond to changing business conditions and competitive
pressures or to acquire complementary products, opportunities, businesses or
technologies.
We do not have a long enough operating history to know with certainty whether
our existing cash, or if cash generated from operations, or cash from the sale
of licenses or received from strategic partners, or from royalties, or from
short term and contract financing, will be sufficient to finance our anticipated
growth. Additional financing may not be available on terms that are acceptable
to us. If we raise additional funds through the issuance of equity or
convertible debt securities, the percentage ownership of our stockholders would
be reduced and these securities might have rights, preferences and privileges
senior to those of our current stockholders. If adequate funds are not available
on acceptable terms, our ability to fund our expansion, take advantage of
unanticipated opportunities, develop or enhance our products and services would
be impaired.
Since we have small cash resources and no existing firm commitments for ongoing
funding, a disruption in our anticipated revenue stream and/or our inability to
achieve profitability would render us unable to conduct our business and you
could lose your investment in our Company. Obtaining additional financing will
be subject to a number of factors, including market conditions, our operating
performance and investor sentiment. These factors may make the timing, amount,
terms and conditions of additional financing unattractive to us. If we are
unable to raise additional capital, our growth could be impeded. Even if we
continue in business unprofitably, our shares may become virtually worthless,
and you could still lose your investment in our Company.
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9. COMPETITION COULD REDUCE OUR MARKET SHARE, DECREASE OUR REVENUE AND CAUSE
PRICING PRESSURES WHICH MAY LESSEN OUR COMPETITIVE PRICING ADVANTAGE.
The market for our services has been extremely competitive. The market that we
are competing in falls into several categories:
VoIP ("Voice over Internet Protocol") Gateway products,
VoIP Gatekeeper products, depending on the device responsible for the
Authentication, authorization, and accounting in the ITSP.
VoIP Billing products,
Enhanced IP Services, and
Transmission Services.
Gatekeepers are depending on the device responsible for the authentication,
authorization, and accounting in the ITSP.
Since we are offering a totally integrated solution that encompasses all of
these markets, it creates a highly competitive environment for us as we must
differentiate our product against those that specialize in either one or more of
the above mentioned areas.
Many companies offer products and services like ours, and many of these
companies have a substantial presence in this market. Future competition could
come from a variety of companies in the Internet equipment and service arena,
traditional network equipment providers and the telecommunications service
industry. These industries include companies who have greater resources and
larger subscriber bases than we have and which have been in operation for many
years.
Existing internet companies; currently offer particular portions of the complete
communications solution provided by us and through ongoing consolidation and
partnerships, may be able to provide the total solution within a relatively
short period of time.
Major competitors may be able to bundle their services and products that are not
offered by us, which could place us at a significant competitive disadvantage.
Many of our competitors enjoy economies of scale that can result in lower cost
structure for transmission and related costs, which could cause significant
pricing pressure within the industry. When compounded with decreasing rates for
international termination and the subsequent increased price competition, this
may result in a further reduction of prices, profit margins and market share.
Unauthorized copying, use of reverse engineering of our products could
materially adversely affect our business, results of operations or financial
condition.
In addition, a number of large telecommunications and equipment providers have
announced that they intend to offer similar products. We expect these products
to allow live voice communications over the Internet between parties using a
personal computer and a telephone and between two parties using telephones.
These large companies could distribute an acceptable product into the
marketplace more quickly than we could due to their grater resources and more
established distribution channels. This is true whether or not their products or
services are more or less effective or adaptable than ours. We may be unable to
compete with such marketing efforts, on a `head-to-head' basis, and therefore be
unable to generate sufficient revenue to achieve profitability.
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10. OUR ABILITY TO PROVIDE ONGOING DISCOUNTED LONG DISTANCE SERVICES, ESPECIALLY
IN OUR PRIMARY INTERNATIONAL MARKETS, MAY CEASE TO BE ENOUGH OF A COMPETITIVE
ADVANTAGE TO ATTRACT NEW CUSTOMERS AND MAINTAIN EXISTING ONES.
Our success is based on our ability to provide discounted international and
domestic long distance services by taking advantage of cost savings achieved by
carrying voice traffic over the Internet, as compared to carrying calls over
long distance networks, similar to those owned by AT&T, Sprint and MCI. In
recent years, the price of long distance calls has fallen. In response, we have
lowered the price of our service offerings. The price of long distance calls may
decline to a point where we no longer have a price advantage over these
traditional long distance services. We would then have to rely on factors other
than price to differentiate our product and service offerings, which we may not
be able to do.
We expect competition for our software products to increase significantly in the
future due to the relatively low barriers to entry in this market. In addition,
because our industry is new and evolving and characterized by rapid
technological change, it is difficult for us to predict whether, when and by
whom new competing technologies or new competitors may be introduced into our
markets. Currently, our competition comes from several different market
segments, including computer telephony platform developers, computer telephony
applications software developers and telecommunications equipment vendors. We
cannot assure you that we will be able to compete effectively against current
and future competitors.
Further, increased competition or other competitive pressures may result in
price reductions, reduced margins or loss of market share, any of which could
have a material adverse effect on our business, financial condition or results
of operations. See "Business--competitive analysis".
11. WE DEPEND ON OUR INTERNATIONAL OPERATIONS, WHICH SUBJECT US TO UNPREDICTABLE
RISKS FROM REGULATORY, FINANCIAL, OPERATIONAL AND POLITICAL SITUATIONS, AS WELL
AS FLUCTUATIONS IN THE VALUE OF FOREIGN CURRENCIES, WHICH IN ITSELF COULD RESULT
IN LOSSES.
As of September 30, 1999, 100% of our customers were based outside of the United
States, generating 100% of our revenues during the twelve months ended on that
date. A significant component of our strategy is to continue to expand
internationally. We cannot assure you that we will be successful in expanding
into additional international markets. In addition to the uncertainty regarding
our ability to generate revenue from foreign operations and expand our
international presence, there are particular risks inherent in doing business on
an international basis. Changing regulatory requirement including changing tax
consequences and legal uncertainty regarding liability, tariffs and other trade
barriers will effect the success of our company. International markets and the
success of our company will also be effected by political and economical
instability, language barriers and the adoption of our software products to
their local alphabet.
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12. WE MAY BE UNABLE TO SUCCESSFULLY DEVOTE SUFFICIENT MANAGEMENT ATTENTION AND
FINANCIAL RESOURCES IN THE ESTABLISHMENT OF FUND DISTRIBUTION / SALES CHANNELS,
AND THE HIRING OF ADDITIONAL PERSONNEL, TO SUCCESSFULLY OPERATE OUR BUSINESS.
To date, our products have been licensed outside North America primarily in
Latin America, the Middle East and Asia. The United States installations are for
the support of other countries at this time. Our Los Angeles Gateway will
initiate a revenue stream within three months. We are currently expanding our
marketing efforts into Europe and intend to continue to expand our international
operations and enter additional international markets. Revenues from
international expansion may be inadequate to cover the expenses of international
expansion.
13. BECAUSE THE MAJORITY OF OUR REVENUES ARE EXPECTED TO BE GENERATED FROM THE
INTERNATIONAL MARKETPLACE, SUBSTANTIAL FLUCTUATIONS IN EXCHANGE RATES BETWEEN
THE US DOLLAR AND OTHER CURRENCIES WOULD DECREASE OUR CASH FLOW.
Our international revenues are generally denominated in U.S. Dollars, but our
international expenses are generally denominated in local foreign currencies.
Although foreign currency translation gains and losses have been immaterial to
date, fluctuations in exchange rates between the U.S. Dollar and other
currencies could have a material adverse effect on our business, financial
condition or results of operations, and particularly on our operating margins.
To date, we have not sought to hedge the risks associated with fluctuations in
exchange rates, but we may undertake to do so in the future. Any hedging
techniques we implement in the future may not be successful. Exchange rate
fluctuations could also make our products more expensive than competitive
products not subject to these fluctuations, which could adversely affect our
revenues and profitability in international markets.
14. ALL OF THE TELEPHONE CALLS MADE BY OUR CUSTOMERS ARE CONNECTED THROUGH LOCAL
TELEPHONE COMPANIES AND, AT LEAST IN PART, THROUGH LEASED NETWORKS THAT MAY
BECOME UNAVAILABLE.
We are not a local telephone company or a registered local exchange carrier.
Accordingly, we must route parts of some domestic and international calls made
by our customers over leased transmission facilities. Further, because our
network does not extend to homes or businesses, we must route calls through a
local telephone company to reach our network and, ultimately, to reach their
final destinations.
In many of the foreign jurisdictions in which we conduct or plan to conduct
business, the primary provider of significant intra-national transmission
facilities is the national telephone company. Accordingly, our partners or
customers in those foreign jurisdictions may have to lease transmission capacity
at artificially high rates from a monopolistic provider and, consequently, they
may not be able to generate a profit on those calls. In addition, national
telephone companies may not be required by law to lease necessary transmission
lines to them or, if applicable law requires national telephone companies to
lease transmission facilities to them, they may encounter delays in negotiating
leases and interconnection agreements and commencing operations. Additionally,
disputes may result with respect to pricing terms and billing. These situations
could cause us to suffer a delay in the recognition in revenues, even after our
products or software are installed at a customers facility.
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In the United States, the providers of local telephone service are generally the
incumbent local telephone companies, including the regional Bell operating
companies. The permitted pricing of local transmission facilities that we lease
in the United States is subject to uncertainties. The Federal Communications
Commission has issued an order requiring incumbent local telephone companies to
price those facilities at total element long-run incremental cost, and the
United States supreme court recently upheld the FCC's jurisdiction to set a
pricing standard for local transmission facilities provided to competitors.
However, the incumbent local telephone companies can be expected to bring
further legal challenges to the FCC's total element long-run incremental cost
standard and, if they succeed, the result may be to increase the cost of
incumbent local transmission facilities obtained by us. Depending on the size
and extent of such an increase, we could reduce our operating profit
substantially or unable to generate a profit given our operating cost structure.
15. WE MAY NOT BE ABLE TO HIRE OR RETAIN THE PERSONNEL THAT WE NEED TO SUSTAIN
OR BUSINESS, AND THIS MAY RESULT IN OUR INABILITY TO EXECUTE OUR BUSINESS
STRATEGIES.
We depend on the continued services of our executive officers and other key
personnel. We need to attract and retain other highly-skilled technical and
managerial personnel for whom there is intense competition. If we are unable to
attract and retain qualified technical and managerial personnel, we may never
achieve profitability. We have applied for key man life insurance policies on
the current and prospective officers stated above in the amount of $1.0 million
each, which policies should be effective shortly after the effective date of
this prospectus.
The integration of our new management personnel as we expand, including our
hiring of a new CEO, a new CFO, Mr. Pierce will relinquish that position, a new
COO, Mr. Callihoo may concentrate on International Marketing, a new Director of
Technical Development, and a new Director of Sales, as well as new Executive
Vice Presidents and Vice Presidents, as needed, into our management team may
interfere with our operations.
We have recently entered into agreements with a number of new officers,
including our Executive Vice President of International Marketing and Chief
Operating Officer, Paul Callihoo, who joined us in June of 1999 on a part time
basis. Our future success depends to a significant degree on the skills,
experience and efforts of our senior management. The loss of the services of any
of these individuals could harm our business and operations. If any of our key
employees left or was seriously injured and unable to work and we were unable to
find a qualified replacement, our business could be harmed.
Since Clifford Pierce, our President and Founder, owns a majority of the shares
of our company, if we were unable to locate a replacement with the incentives
which we anticipate offering to such an executive, any additional incentives
could include stock and/or warrant packages which could substantially dilute our
shareholders.
We intend to at least triple our sales, marketing, engineering, professional
services and product management personnel over the next 12 months. Competition
for qualified individuals is intense, and we may not be able to attract,
assimilate or retain highly qualified personnel in the future. Our business
cannot continue to grow if we cannot attract qualified personnel. Our failure to
attract and retain the highly trained may limit the rate at which we can develop
and install new products or
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product enhancements, which would harm our business. We will need to increase
our staff to support new customers and the expanding needs of our existing
customers, without compromising the quality of our customer service. Since our
inception, no full time employees have left or have been terminated, although we
expect to lose employees in the future. Hiring qualified professional services
personnel, as well as sales, marketing, administrative and research and
development personnel, is very competitive in our industry, particularly in
Miami and Argentina, where we are headquartered, due to the limited number of
people available with the necessary technical skills.
Our financial success depends to a large degree on the ability of our resellers
and our direct sales force to increase sales to a level required to adequately
fund marketing and product development activities. Because of this, our ability
to increase revenues in the future depends considerably upon our success in
recruiting, training and retaining additional resellers direct sales personnel
and the success of the resellers and direct sales force.
16. OUR BUSINESS DEPENDS ON THE ACCEPTANCE OF OUR PRODUCTS AND SERVICES, AND IN
PART ON OUR ABILITY TO MAINTAIN AND IMPROVE OUR CURRENT PRODUCTS AND DEVELOP NEW
PRODUCTS, AND IT IS UNCERTAIN WHETHER THE MARKET WILL ACCEPT OUR PRODUCTS AND
SERVICES.
Our total revenue was $6,386 for the twelve months ended June 30, 1999, and
$112,320 for the six months ending December 31, 1999. We are not assured that
our target customers will widely adopt and deploy our products and services. Our
future financial performance will depend on the successful development,
introduction and customer acceptance of new and enhanced versions of our
products and services. In the future, we may not be successful in marketing our
products and services or any new or enhanced products.
To be competitive, we must develop and introduce on a timely basis new products
and product enhancements. Any failure to do so could harm our business. Product
delays may result in cancellation of orders, loss of revenue, negative publicity
and customer lawsuits.
We believe that our future business prospects depend in large part on our
ability to maintain and improve our current products and to develop new products
on a timely basis. We are continuing to update the VTS software as we deploy
more gateways. At this time, there are no identified new releases scheduled.
Significant delays in the general availability of new releases of our products
or significant problems in the installation or implementation of new releases of
our products could have a material adverse effect on our business, financial
condition or results of operations.
17. OUR GOLDEN ACCESS NETWORK CONTROL CENTER COULD FAIL AND THE INTERNET
CONNECTIONS COULD BE INADEQUATE.
Should the Golden Access Network Control Center system fail, a temporary
disruption to services would result. The network's design is redundant to ensure
that the outage of any one system does not disrupt the overall operation of the
network and its users. We have established a multi-node Network Control Center
in Miami, and we are establishing a facility in Los Angeles, which offers
redundant operations to keep the network functioning. Such interruptions could
cause our customers to seek other providers of service and we would lose
revenues accordingly.
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If any of the individual VtS Gateways experience an outage, the Network Control
Center will automatically re-route traffic destined for that location to an
alternate Gateway for termination, thus providing a seamless transition, totally
invisible to the customer. If this system does not operate as planned, the
customers would experience outages or delays, and could seek other service
providers.
However, since the inherent nature of the public Internet relies on sufficient
bandwidth and capacity to support a viable Voice over IP service, which exists
in North America, Western Europe and some parts of Asia, the quality of service
that will be offered by Golden Access in locations where the infrastructure for
Internet is quite poor, as in many developing countries, may result in serious
quality and access issues, and reduce our chances of successfully deploying the
VtS Gateway system in those markets as rapidly as we would otherwise plan. This
could occur in markets in which we have already deployed equipment and/or
gateways such as Lebanon, mainland China, and Colombia, where, dependent upon
the local foreign service providers and/or local telephone companies, an
end-user's ability to deploy and utilize our software or equipment could be
substantially diminished. Should such circumstances persist, such customers may
wish to return their equipment and or software and we may be faced with
additional expenses to recover equipment as well as the loss of revenues.
18. IF THIRD PARTIES COPY OR OTHERWISE OBTAIN AND USE OUR TECHNOLOGY WITHOUT
AUTHORIZATION, WE MAY NOT BE ABLE TO PROTECT OUR PROPRIETARY RIGHTS OR
AUTHORIZED TRANSACTIONS.
We regard our software products as proprietary. To protect our proprietary
rights, we rely primarily on a combination of copyright, patent and trade secret
laws, as well as licensing and other agreements with strategic partners,
resellers, consultants, suppliers, end-user customers, and employee and
third-party non-disclosure agreements. Laws and agreements provide only limited
protection of our proprietary rights. We have not signed agreements containing
protective provisions in every case, and the contractual provisions that are in
place and the protection they provide vary and may not provide us with adequate
protection in all circumstances. Although we have recently filed patent
applications on our "In and Out" software, a time management for service
businesses and billing package software, and on our voicemail product, and we
are in the process of filing applications for registered trademarks for our VtS
product and our "GoldenAccess.Com" logo and design, we currently have no
patent, trademarks, or registered copyrights. It may be possible for a third
party to copy or otherwise obtain and use our technology without authorization.
It would therefore be both difficult and expensive for us to enforce the
unauthorized use of our technology and the proliferation of this unauthorized
utilization would materially harm our future business.
A third party could also develop similar technology independently. In addition,
the laws of some countries in which we sell our products do not protect our
software and intellectual property rights to the same extent as the laws of the
United States. Furthermore, the validity, enforceability and scope of protection
of intellectual property in Internet-related industries is uncertain and still
evolving. The laws of some foreign countries are uncertain or do not protect
intellectual property rights to the same extent as do the laws of the United
States.
None of our trademarks on application is registered outside of the United
States, nor do we have any trademark applications pending outside of the United
States. Despite precautions that we have taken we may run into software pirates,
ineffective protection in foreign countries, and common
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law trademarks rights of our competitors. All of these factors could effect the
profitability of our company and ability to compete effectively.
19. OUR BUSINESS CAN BE DISRUPTED IF WE MUST DEFEND OR LITIGATE INTELLECTUAL
PROPERTY INFRINGEMENT CLAIMS, AND WE MAY NOT HAVE SUFFICIENT CAPITAL TO
ADEQUATELY MOUNT AN ADEQUATE DEFENSE.
We cannot be assured that our internet telephony products do not or will not
infringe upon valid patents, trademarks, copyrights or other intellectual
property rights held by third parties. We may be subject to legal proceedings
and claims from time to time relating to the intellectual property of others in
the ordinary course of our business. We may incur substantial expenses in
defending against these third-party infringement claims, regardless of their
merit. Successful infringement claims against us may result in substantial
monetary liability or may materially disrupt the conduct of our business. A
third party could claim that our internet telephony technology infringes its
proprietary rights. As the number of software products in our target markets
increases and the functionality of these products overlap, we believe that
software developers may face infringement claims. For example, various patent
rights have been asserted against interfaces between PBX hardware and computer
network systems.
Although we believe that our products do not infringe any of these patents
because, among other reasons, they are based on open standards published by the
International Telecommunications Union (ITU), however, if these patents were
interpreted broadly, claims of infringement of these patents could have a
material adverse affect on us.
Infringement claims, even if without merit, can be time consuming and expensive
to defend. A third party asserting infringement claims against us or our
customers with respect to our current or future products may require us to enter
into costly royalty arrangements or litigation, or otherwise materially
adversely affect us. See "Business--Product - Trademark - Patent."
RISKS RELATED TO OUR INDUSTRY
20. IF THE USE OF THE INTERNET AND DEMAND FOR INTERNET TELEPHONY DOES NOT
CONTINUE TO GROW AS A MEDIUM FOR VOICE COMMUNICATIONS, OUR BUSINESS WILL SUFFER
AND DEMAND FOR OUR PRODUCTS AND SERVICES WILL DECLINE.
The technology that allows voice communications over the Internet is still in
its early stages of development. Historically, the sound quality of Internet
calls was poor. As the industry has grown, sound quality has improved, but the
technology requires further refinement. The Internet's capacity constraints may
impede the acceptance of Internet telephony. Callers could experience delays,
errors in transmissions or other interruptions in service. Because the Internet
telephony market is new and evolving, predicting the size of this market and its
growth rate is difficult.
Our products and services are primarily sold to organizations that transmit and
receive large volumes of telephone calls, especially international calls.
Consequently, our future revenues and profits, if any, substantially depend upon
the continued acceptance and use of the Internet, which is evolving as a medium
of communication.
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Moreover, companies that have already invested significant resources in other
methods of communications with customers, such as call centers, may be reluctant
to adopt a new strategy that may limit or compete with their existing
investments. If businesses do not continue to accept the Internet as a medium of
communication, our business would suffer.
RISKS RELATED TO THIS REGISTRATION
21. SINCE NO PRIOR PUBLIC MARKET HAS EXISTED FOR OUR SHARES, AND AN ACTIVE
TRADING MARKET MAY NOT DEVELOP OR BE SUSTAINED, YOU MAY NOT BE ABLE TO READILY
RESELL YOUR SHARES.
Before this registration, there has been no public market for our common stock.
We cannot assure you that an active trading market will develop or be sustained
after the effective date of this registration. You may not be able to resell
your shares at or above the price at which the shares initiate trading. The
initial trading price will be determined through negotiations between the market
makers who initiate the trading, and any placement agents and underwriters, to
the extent there are agents or underwriters, and us. See "Distribution".
22. OUR STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE AND COULD DROP UNEXPECTEDLY.
IF OUR STOCK PRICE IS VOLATILE, WE MAY BECOME SUBJECT TO SECURITIES LITIGATION,
WHICH IS EXPENSIVE AND COULD DIVERT OUR RESOURCES.
In the past, following periods of the market's volatility in the price of a
company's securities, some security holders have instituted class action
litigation. Many companies in our industry have been subject to this type of
litigation. If the market value of our stock experiences adverse fluctuations,
and we become involved in this type of litigation, regardless of the outcome,
we could incur substantial legal costs and our management's attention could be
diverted, causing our business to suffer.
We have operated as a research and development company, and have just recently
generated revenues, have not been profitable, and may not be profitable in the
future, which may reduce the trading price of our common stock. Moreover, if an
active market develops, the trading price of our common stock may fluctuate
widely as a result of a number of factors, many of which are outside our
control. In addition, the stock market has experienced extreme price and volume
fluctuations that have affected the market prices of many technology and
computer software companies, particularly Internet-related companies, and which
have often been unrelated or disproportionate to the operating performance of
these companies.
Declines in the market price of our common stock could also materially adversely
affect employee morale and retention, our access to capital and other aspects of
our business.
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FORWARD LOOKING STATEMENTS
This prospectus contains "forward-looking statements." These forward-looking
statements include any and all statements about our market opportunity,
strategies, competition, expected activities and expenditures as we pursue our
business plan, and the adequacy of our available cash resources. These
forward-looking statements are not historical facts but rather are based on
current expectations, estimates and projections about our industry, our beliefs,
and our assumptions. Our actual results could differ materially from those
expressed or implied by these forward-looking statements as a result of various
factors, including the risk factors described above and elsewhere in this
prospectus.
The following words; "anticipates", "expects", "intends", "plans", "believes",
"seeks" and "estimates", and variations of these words and similar expressions,
are intended to identify forward-looking statements. These statements are not
guarantees of future performance and are subject to risks, uncertainties and
other factors, some of which are beyond our control, are difficult to predict
and could cause actual results to differ materially from those expressed or
forecasted in the forward-looking statements. These risks and uncertainties
include those described in "Risk Factors" and elsewhere in this prospectus.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect our management's view only as of the date of this
prospectus. Except as required by law, we undertake no obligation to update any
forward-looking statement, whether as a result of new information, future events
or otherwise.
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THE DISTRIBUTION
CathTech Group, Inc., a new Florida corporation, ("CTG"), was formed as a
subsidiary of Cardiac Control Systems, Inc., ("CCS") a publicly held Delaware
Corporation, to acquire GoldenAccess.Com, Inc., a Florida corporation ("GAC"),
which was incorporated in June of 1997, and has been in business continuously
since that time. Subsequent to filing an Agreement of Merger with the Secretary
of State of Florida on August 26, 1999, and Articles of Merger filed with the
Florida Corporation Commission on August 26, 1999, GAC was merged into CTG in a
transaction in which Cardiac Control Systems, Inc, issued 87.5% of the issued
and outstanding common stock of CTG to the shareholders of GAC issued and
outstanding common stock.
All shares, except as provided by applicable laws, will be registered in book
entry format by the transfer agent and registrar, and shareholders shall be
credited their respective shares on the effective date of the registration
statement of which this prospectus is a part or as soon thereafter as is
possible.
Potter Financial, Inc., as an agent of CCS, is acting in an administrative
capacity to assist the transfer agent in distributing, subsequent to the
effective date of this prospectus, the 114,900 shares retained by CCS, to its
shareholders of record as of August 26, 1999, to ensure the accuracy as an
agent, on behalf of CCS, of the distribution in an expeditious and timely manner
and to administer the details involved in locating shareholders, coordinating
with brokerage firms and clearing houses where CCS shareholders currently have
stock on deposit, in administering to any shares owned by CCS that cannot be
distributed due to any inability to locate shareholders, and to insure that CCS
complies with any State and Federal laws regarding the retention of securities
which cannot be distributed for any reason. These sales, if sold, shall be made
through NASD members at normal mark ups, mark downs, or brokerage commissions.
Any shares that cannot be distributed shall be retained by CCS for future sale.
As a result of the Distribution, we will become a public company with
approximately 700 shareholders and will file and report under the Securities
Exchange Act of 1934. As a reporting company, we intend to have our shares
traded in the public marketplace so as to facilitate and enhance potential
future acquisitions and the valuation for potential future offerings.
Shareholders of Cardiac Control Systems, Inc., that receive shares will receive
these shares as a stock dividend. No holder of Cardiac Control Systems, Inc.,
stock will be required to pay cash or other consideration for the shares
received in the Distribution or surrender or exchange Cardiac Control Systems,
Inc., stock in order to receive shares. We are paying the expenses of the
Distribution which include legal, accounting, consulting, transfer agent and
filing fees.
We are applying for admission to quotation of the shares on the Nasdaq Over The
Counter Bulletin Board ("OTCBB") and on the Pacific Stock Exchange; however,
there can be no assurance that the shares will be so listed. See "Risk Factors -
No Prior Trading Market" and Description of Securities - Exchange Listing".
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PLAN AND RESULTS OF OPERATIONS
We have experienced substantial changes to, and expansion of, our business and
operations since we began our operations in June of 1997. We expect to continue
to expand our business and user base, which will require us to increase our
personnel, develop software, purchase equipment and license content, which will
result in increasing expenses.
The following discussion is based on and should be read in conjunction with the
supplement consolidated financial statements included elsewhere in this
prospectus.
OVERVIEW OF RESULTS
Until June 1999, we were a development stage company. Our operations consisted
primarily of research and development. In May 1999, we began receiving design
and consulting income relating to radio re-broadcasting via the Internet. In
June 1999, we received our first Internet Telephony income. To date, we have
received most of our revenue from Internet Telephony sales. There was no revenue
in 1997 and 1998. Total sales through September 30, 1999 were $13,612.
PARTIAL COMMERCIAL SERVICE WAS RECENTLY LAUNCHED IN OCTOBER, 1999, with a
marketing promotion aimed at expanding our network of Foreign Service Providers
(FSP). A Foreign Service Provider is an internet service provider resident
outside of the US. Therefore, it facilitates the ability of their subscribers
to interact with one-another who are subscribers of other ISP's or FSP's.
We had a net loss of $11,748 for the year ending June 30th, 1998 and a loss of
$31,243 for the year ending June 30th, 1999. The loss in 1999 primarily resulted
from expenditures related to R&D and consulting expenses. We had a net loss of
$38,682 for the six months ending December 31st, 1998 and a loss of $528,822
for the six months ending December 31st, 1999. The losses primarily resulted
from expenditures related to R&D and consulting expenses.
Our operations and R&D expenditures have been primarily funded by our strategic
partners and shareholders. We expect our strategic partners and shareholders to
continue to fund our operations. We may require additional financing from
outside sources or from a public offering.
We recognize revenues upon satisfaction of the requirements of AICPA STATEMENT
OF POSITION 97-2, which generally occurs in the same quarter that the order is
received. As a result, our quarterly revenues and operating results depend
primarily on the size, quantity and timing of orders received for our products
during each quarter.
BETWEEN MAY 1999 AND JANUARY 2000, THE FOLLOWING EVENTS OCCURRED:
1. Established a functioning gateway in 11 cities around the world.
2. Our customers are completing up to twenty thousand calls per months per
Gateway.
3. Signed agreements in China, Hong Kong, and Los Angeles, CA.
4. Began to recruit and interview to expand our sales, marketing and
engineering.
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5. Completed testing and ran commercial trials of software
6. Ended limited commercialization and initiated full commercialization
7. Rollouts in target countries
8. Purchased assets, trademarks, software, contracts and agreements
9. Merged with CathTech Group, Inc., retained our name.
10. Expanded board of directors and management team
11. Initiated Hiring of additional key personnel and expanded reselling
network and distributors.
PLAN OF OPERATIONS
We believe our investments in Research and Development, and our upcoming
investments in Sales, Marketing and Engineering will be the basis for our
growth. We have plans to increase our efforts in these areas. We anticipate our
operating expenses will increase substantially for the foreseeable future.
Accordingly, we anticipate our revenue to increase. We are now installing our
products both in customer locations and in locations in which strategic and/or
marketing partners are arranging for our software to be utilized. As such, we
expect our revenues to increase more rapidly than in the past when we were
spending more time and resources developing our products. Our sales distributors
and resellers are reporting favorable responses to new installations, and to
date we have had no installation cancelled or reversed due to product failure or
dissatisfaction on the part of a customer. We cannot assure you when and if we
will achieve profitability, or that we will be able to sustain profitability. We
believe our operating results are not necessarily meaningful, and you should not
rely on them as an indication of our future performance.
BETWEEN FEBRUARY, 2000, AND DECEMBER, 2000, WE EXPECT THE FOLLOWING TO OCCUR:
1. To expand the management team and other personal to accommodate our
growth.
2. Sign distributors in Asia, Europe, Eastern Europe, Scandinavia and
Africa.
3. Increase distributors in South America
4. We are installing gateways in Bogota, Medellin and Baranquilla,
Columbia; Santiago, Chile; Amsterdam, Holland; Caracas, Venezuela;
Quito, Ecuador; Lima, Peru; Montevideo, Uruguay; Manaos and Rio de
Janeiro, Brasil; Panama City, Panama; Paris, France; Frankfurt,
Germany; Phillipines; Taiwan; Dominican Republic; Costa Rica; Rome,
Italy; Moscow, Russia; Beijing, China; Arlington, TX, and Orlando, FL,
USA.
5. Develop strategic alliances with partners who have existing networks
utilizing complimentary technology products.
6. Create a global Internet Telephony Network including Asia, US, Europe
and South America.
7. Expand engineering staff in both Miami and Argentina.
8. Roll out software products through the distribution network.
9. Create an image of GoldenAccess.com as a creative, innovative Internet
and Software Company, as well as an Internet Telephony Company.
10. Create a separate sales staff to market software applications already
developed or being developed
11. Develop a software program for specific Cisco hardware as requested by
Cisco on a non-exclusive basis.
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We will devote all of our resources over the next twelve months to the
accomplishment of these plans.
We expect our cash requirements necessary to successfully initiate or complete
these actions over the next year will primarily be generated from customer
revenues, vendor and customer expense sharing, strategic partners, shareholders
paid in capital, and and subordinated loans, and to the extent available, short
term contract and/or equipment financing. To date, our strategic partners and
shareholders have advanced us approximately $510,000. There are no commitments
which bind them to continue such funding. If we do not receive additional funds
from them in the future, and we were forced to rely on the revenue generated
from our existing Gateways, and scheduled Gateways whose total expense of
installation was being borne by the customer, we would be operative, but
unprofitable for a longer period of time. If we were unable to fund our
expansion from sources outside of our strategic partners and shareholders, we
could be forced to merge with a better capitalized company or sell our assets.
Although institutions operating in the capital markets have been active in
providing funding for companies similar to ours in the recent past, we may not
be able to attract such funding, and therefore our plan of operation would be
significantly adversely impacted.
At this time, we have no plans to accelerate our plan of operation, however,
competitive pressures or acquisition opportunities could force us to modify our
plans. A modification could require us to seek additional outside funding from
vendors, strategic partners, institutions that regularly invest in Internet
related companies, or seek public financing. Since we have not identified any
sources, there is no assurance that we would be successful in obtaining
financing when we needed it.
RESEARCH AND DEVELOPMENT
Enhancements to our products in the voice/video sector are scheduled within the
next six months. Costs to complete these projects are estimated at $250,000.
Since our strategic partners and shareholders have already advanced us more than
this amount in the past quarter, we anticipate that any shortfall in near term
revenues over the next six months would also be met to provide such funding. If
funding is not available, we would be forced to delay enhancements to our
products until revenues were generated to allow for such expenses. These events
could place us at a competitive disadvantage.
In connection with our other products, although we have budgeted applications
and any additional equipment required at a cost estimate of $2,750,000, we
currently expect all of these costs to be born directly or indirectly by our
clients, strategic partners, or shareholders. Should these funds not be
generated or provided in a timely basis, we will be unable to develop our new
products such as WebSurvey, Interactive Voice Mail, and Internet Follow Me.
These events could place us at a competitive disadvantage.
From inception to December 31, 1999, approximately $502,000 in expenditures was
directly or indirectly related to research and development.
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NEED FOR ADDITIONAL PERSONNEL
It is anticipated that the number of employees will triple during the next
twelve months, even with our outsourcing many tasks.
YEAR 2000 READINESS DISCLOSURE
YEAR 2000 COMPLIANCE. The Year 2000 issue involves the potential for system and
processing failures of date-related data resulting from computer-controlled
systems using two digits rather than four to define the applicable year. For
example, computer programs that contain time-sensitive software may recognize a
date using two digits of "00" as the year 1900 rather than the year 2000. This
could result in system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar ordinary business activities.
OUR STATE OF READINESS. We have defined Year 2000 compliance as follows:
Information technology time and date data processes, including, but not limited
to, calculating, comparing and sequencing data from, into and between the 20th
and 21st centuries contained in our software and services offered through the
U.S., will function accurately, continuously and without degradation in
performance and without requiring intervention or modification in any manner
that will or could adversely affect the performance of these products or the
delivery of software and services as applicable at any time.
Our internal systems include both information technology systems and
non-information technology systems. All of our material information technology
system vendors have replied to inquiry letters sent by us stating that they are
Year 2000 compliant. Our internal software and hardware systems functioned
properly with respect to dates in the Year 2000 and thereafter. Nonetheless,
there can be no assurance in this regard that these systems will continue to be
operational in the Year 2000 without any unanticipated problems. We are in the
process of contacting all of our significant suppliers to determine the extent
to which our interface systems are vulnerable to those third parties' failure to
make their own systems continue to be Year 2000 compliant.
Accordingly, to the extent the systems of our suppliers are not fully Year 2000
compliant, there can be no assurance that potential system interruptions or the
cost necessary to update software will not have a material adverse affect on our
business, results of operation or financial condition.
THE COSTS TO ADDRESS YEAR 2000 ISSUES. We have incurred no expenses in
connection with Year 2000 compliance since our formation through September 30,
1999. The additional costs to make any other software or services Year 2000
compliant by December 31, 1999 will be expensed as incurred, but are not
expected to be material.
We may experience material unexpected costs caused by undetected errors or
defects in the technology used in our systems or because of the failure of a
material supplier to be Year 2000 compliant.
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We are also subject to external Year 2000-related failures or disruptions that
might generally affect industry and commerce, that being utility or
transportation company Year 2000 compliance failures and related service
interruptions. Moreover, participating vendors in our services might experience
substantial slow-downs in business if consumers avoid products and services such
as air travel after January 1, 2000 arising from concerns about reliability and
safety because of the Year 2000 issue. All of these factors could have a
material adverse effect on our business, financial condition and results of
operations.
CONTINGENCY PLANS. We have identified our worst-case scenario as the
interruption of our business resulting from Year 2000 failure of the electric
company or our Internet service providers to provide services.
CAPITALIZATION
This table represents the capitalization of the GoldenAccess.Com, Inc. as of
December 31, 1999 as adjusted for the merger, and June 30, 1999 proforma as
adjusted for the merger.
Stockholder's Equity: 2,872,500 shares issued: common stock: [[$0.001]] par
value
<TABLE>
<CAPTION>
December 31, 1999 June 30, 1999
<S> <C> <C>
ADDITIONAL PAID-IN CAPITAL 1,566,069 5,996
ACCUMULATED DEFICIT (571,813) (42,991)
TOTAL STOCKHOLDER'S EQUITY 997,129 36,991
SHARES ISSUED AND OUTSTANDING 2,872,500 4,000
<CAPTION>
LEASES
- ------
<S> <C> <C>
SHARES ISSUED AND OUTSTANDING AS/OF
AUGUST 26, 1999, THE DATE OF THE MERGER 2,872,500 2,872,500
</TABLE>
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BUSINESS
THE INDUSTRY
The rapid progress of digital communications technology, specifically the
Internet, and the continued liberalization of global telecom markets have
created exciting new opportunities, which Golden Access intends to exploit. As
witnessed recently with the explosive growth of the World Wide Web (WWW) and
Internet based technologies in general, the telecommunications industry is
ready for a change in how voice, data and video services are transported and
offered around the world.
Traditionally, service providers have used switched central offices and
dedicated International Private Leased Circuits (IPLCs) to carry voice, data
and video traffic, however, with new computer technology and the emergence of
the public Internet as a viable transport medium, an opportunity exists to
by-pass the current high-overhead, government regulated telecommunications
networks in use around the world today.
IP TELEPHONY
Voice over the Internet has significant appeal, especially to markets where
long distance rates are comparatively high, and due to this, expanded markets
should develop rapidly. IDC, International Data Corp., forecasted revenues for
IP Telephony in 1999 to be $1.89 billion on 5.84 billion minutes of use,
expanding to $24.39 billion and 151.7 billion minutes in 2002, which would
represent 11% of total call volume worldwide. Some forecasts estimate that IP
Telephony could grow to represent over 20% of the total call volume during this
same period. Telephone companies, big and small, have undertaken their own
Internet Telephony initiatives and will be offering them to consumers. Internet
communication takes advantage of a key economic principle that shared resources
are more efficient and less expensive than dedicated resources. This provides a
strong business model for all service providers and has resulted in an
explosion of hardware and software solutions to meet the demands of this
growing market.
DEMOGRAPHICS AND DEMAND
The forecasted size of the global international long distance market for a
recent 12-month period was approximately 62 billion minutes and will continue
to grow to over 100 billion minutes in 1999.
The top 15 traffic producing countries by the end of 1999 represent
approximately 70% of the world's total traffic.
The top 15 countries, outside of the USA and Canada , based on traffic volumes
from TeleGeography are: Germany, U.K., France, Italy, Switzerland, Hong Kong,
China, Netherlands, Belgium, Japan, Spain, Mexico, Austria, Singapore, and
Sweden. Some of these are not necessarily good targets for us since the
international rates for countries like the UK and Sweden are so low that there
is no margin opportunity. These can be replaced by other markets in Indonesia,
Philippines, Thailand, India, Portugal, and the larger Latin American
countries, where the traffic volumes may be lower, but the margins are
significantly higher.
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TECHNICAL PROBLEMS THAT CHALLENGE THE INDUSTRY AND THE BUSINESS.
The success of our internet telephony service depends on the efficient and
uninterrupted operation of our own and outsource computer and communications
hardware and software systems. These systems and operations are vulnerable to
damage or interruption from human error, natural disasters, telecommunications
failures, power loss, break-ins, sabotage, computer viruses, intentional acts
of vandalism and similar adverse events. We will be entering into an
Internet-hosting agreement with UUNET to maintain our Internet connections to
the Company's operation center. Our operations depend on their ability to
maintain the Internet connectivity to our operations center free of
interruption. UUNET does not guarantee that our Internet access will be
uninterrupted, error-free or secure. We have no formal disaster recovery plan
in the event of damage or interruption, and our insurance policies may not
adequately compensate us for any losses that we may incur. Any system failure
that causes an interruption in our service or a decrease in responsiveness
could harm our relationships with our customers and result in reduced revenues.
Our success depends on our ability to provide efficient and uninterrupted,
high-quality services. The occurrence of any or all of these events could hurt
our reputation and cause us to lose customers.
MARKET TRENDS
The Internet is a collection of computer networks connecting millions of public
and private computers around the world. In its formative stages, the Internet
was used by government agencies and academic institutions to exchange
information, publish research and transfer e-mail. A number of factors,
including the proliferation of communication enabled personal computers, the
availability of intuitive graphical user interface software and the wide
accessibility of an increasingly robust network infrastructure, have combined
to allow users to easily access the Internet and, in turn, have produced rapid
growth in the number of Internet users.
THE EMERGENCE OF THE WEB. The graphical multimedia environment of the Internet,
has resulted in the development of the Internet as a new mass communications
medium. The case and speed of publishing, distributing and communicating text,
graphics, audio and video over the Internet has led to a proliferation of
Internet-based services, including chat rooms, online magazines, news feeds,
interactive games and a wealth of educational and entertainment information, as
well as the development of online communities. In addition, by eliminating many
of the costs involved in executing routine commercial transactions, such as
simple banking services and retail purchases, the Internet is rapidly providing
individuals and organizations with a new medium for conducting business.
GROWTH OF THE INTERNET MARKET. The consumer online and Internet services
industry is now in an early stage of an evolution that is embracing both
consumers and businesses. It is estimated that the today's number of Internet
users exceeds 240 million and could double in the year 2000. This growth is
created by the Internet's ability to provide, in a more appealing, cost and
time effective manner, many of the functions now provided by mail, telephone
and television. It is widely recognized that the evolution of the Internet
industry will have enormous implications for the way individuals communicate,
work learn, and entertain themselves.
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Morgan Stanley Research estimates the demand for online and Internet services
to closely follow personal computer ("PC") penetration within the home and
office. PC penetration recently reached a rate of nearly one-third of all
United States households. This penetration rate is similar to the household TV
penetration level in the early 1960s and is expected to increase to a level
close to the current TV household penetration level of 98% within the next 10
to 20 years.
Today, the world is populated by some 200 million computers. It is estimated
that by the year 2002 this figure will increase to 500 million. Combining these
figures with the dramatically expanding use of the Internet, it becomes clear
that we are experiencing a never-before-seen phenomenon: the development of a
pervasive worldwide communication network which transcends borders and which
fundamentally changes the way the world communicates.
Any information and statistics not otherwise specifically referenced as to
source in the preceding sections above entitled "The Industry", and "Market
Trends" was obtained from issues of three magazines; "Internet Telephony",
"Computer Telephony", or "CTI", published between December, 1998, and December,
1999.
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TARGET MARKET
Our target customers in these markets will include Internet Service Providers
(ISP), large corporate networks and telecom service providers that presently or
plan to carry international telecom traffic.
On an average basis, our price will be at least 50% of the lowest off-peak
rate currently offered in most foreign countries. This should attract
significant market share and as rates continue to decrease, we will be
positioned to aggressively compete with these lower rates and ensure
continued growth in market share. Each market will be addressed on an
individual basis due to their unique rate and regulatory structures, but
it is expected that gross margins will range from 30%-55%.
GOLDEN ACCESS PERCEIVES THE FOLLOWING MARKET SECTORS FOR IP TELEPHONY:
1. Internet Service Providers (ISPs) who wish to move from a narrow
margin dial-up market which averages $20/month per subscriber or the
corporate leased-circuit provider to the expansive international
telephone market with minimal investment while using their existing
IP and Telephony infrastructure.
THE BENEFIT TO THE INTERNET SERVICE PROVIDER IS THAT THEY ARE ABLE TO
ENTER AN ENTIRELY NEW BUSINESS, WITH SUBSCRIBER'S MONTHLY BILLINGS RAISED
EXPONENTIALLY OVER THEIR EXISTING ISP REVENUE BY BECOMING AN INTERNET
TELEPHONY SERVICE PROVIDER (ITSP). A COMPANY THAT HAS AN ITSP HAS A
GATEWAY AND SELLS CALLING CARDS AND OTHER TELEPHONY OVER THE INTERNET
SERVICES.
2. Telecommunications service providers generally provide communications
lines and internet access. They are either a facilities-based carrier
or re-seller, who wish to reduce their cost of international
transport by migrating their voice traffic from PSTN to data
networks, thus increasing the efficiency of their network
utilization. In markets where telecommunication services are
de-regulated, Golden Access allows carriers to offer low-priced
international long distance service to counter a competitive
environment and offer new value added services to increase customer
satisfaction.
THE BENEFIT TO THE TELECOMMUNICATIONS SERVICE PROVIDER IS THAT THEY ARE
ABLE TO REDUCE THEIR INTERNATIONAL TERMINATION COST SIGNIFICANTLY PER
REVENUE MINUTE, THUS INCREASING MARGINS OR PROVIDING RATE FLEXIBILITY TO
COUNTER COMPETITIVE FORCES. IN ADDITION, THEY CAN PROVIDE AN ENTIRE SUITE
OF NEW PRODUCTS AND APPLICATIONS TO COMPLIMENT THEIR EXISTING SERVICE
OFFERING.
3. The Corporate Service customer with operations in multiple
countries will appreciate the cost savings and reliability offered
by combining voice and data on an existing network. By linking
remote PBXs -- a simple box that connects the phone company
external lines to the internal lines -- over corporate Wide Area
Networks (WANS) -- a network that covers distances between cities
or more --, inter-office communications can be sent using Golden
Access. In addition, video conferencing and other value added
services become viable tools in the corporate market.
THE BENEFIT TO THE CORPORATE SERVICE CUSTOMER IS THE REDUCED LONG HAUL
INTER-OFFICE COSTS AND ACCESS TO A COST-EFFECTIVE GLOBAL NETWORK FOR
INTERNATIONAL LONG DISTANCE. ALSO, GOLDEN ACCESS'S SUITE OF VALUE ADDED
PRODUCTS, CAN BE SUITED TO MEET SPECIFIC REQUIREMENTS OF INDIVIDUAL
CORPORATIONS.
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OUR COMPANY
CORPORATE HISTORY
On July 30, 1999 we purchased particular assets of various foreign entities,
including a distributor base, contracts and agreements, software, hardware, and
other equipment. On August 26, 1999, we merged with CathTech Group, Inc., and
retained our name and business. CathTech, Inc., a Florida Corporation, was
formed on August 20th, 1999, to acquire GoldenAccess.com, Inc. Subsequent to
filing an Agreement of Merger with the Secretary of State of Florida on August
26, 1999, and Articles of Merger filed with the Florida Corporation Commission
on August 26, 1999, GoldenAccess.com, Inc. was merged into CathTech, Inc., in
a transaction in which Cardiac Control Systems, Inc.("CCS"), issued 87.5% of
the issued and outstanding common stock of CathTech, Inc., to the shareholders
of GoldenAccess.com, Inc. issued and outstanding common stock. Upon the
effective date of its merger with GoldenAccess.Com, Inc., the name of CathTech
Group, Inc. was changed to GoldenAccess.Com, Inc.
CCS formed CathTech as an acquisition entity to facilitate entry into a new
business and obtain an interest in this business through the merger and the
future stock dividend distribution to its shareholders. This was done to
enhance shareholder value by declaring a stock dividend to its shareholders of
GoldenAccess.Com shares. GoldenAccess.Com was seeking assistance in their
desire to become a public reporting company with an adequate group of board of
directors, advisers, and an exchange eligible shareholder base. The amount of
cash paid to CCS and the amount of stock dividend distribution shares was an
arbitrary amount arrived at through arm's length negotiation between the
parties, based on market conditions, the fairness opinions and the value of the
assets expected to be shown in the audit. The fairness opinions related to the
value of some of the assets in August 1999, and the value of GAC before the
merger with CathTech as of June 30, 1999. Neither the board of directors of GAC
or CathTech (pre-merger) required a separate opinion on the merger transaction
since GAC is an early development stage company. None of the parties at GAC had
any relationships with CCS or Cathtech prior to being introduced. The financial
statements filed with this Prospectus include a June 30th audit for GAC.
CathTech had no liabilities and only organizational expenses, but brought its
related entity's (CCS) advisers, board members, shareholder base and
management's experience to GAC's assistance.
GoldenAccess.com, Inc. was incorporated on June 13, 1997 by Clifford Y. Pierce.
In July, 1999, we acquired the assets, software and business contracts and
agreements of several entities predominantly controlled by Mr. Pierce.
CURRENT OPERATIONS
We are based in Miami, Florida with offices in Argentina and our organization
is structured into three functional groups: Sales & Marketing, Operations and
Technical Support, and Engineering. Since November of 1999, we have been
leasing an office facility of 4500 square feet on a year to year basis for
$5,488 per month, plus applicable sales tax, for administration, technical
support, and customer service. The facilities are adequate for our current
needs and suitable additional space, should it be needed, is expected to be
available to accommodate expansion of our operations on commercially reasonable
terms.
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Our offices in Argentina are in Cordoba, where we occupy 2000 sq. ft. and pay
$700 per month. We have seven computers and 2 functioning Gateways in our
Cordoba office, one of which is utilized to continuously upgrade software, and
one is an operating Gateway. The other assets represent office equipment and
furniture.
PRESENT STATUS
OUR 1ST PHASE WAS SUCCESSFULLY COMPLETED IN EARLY 1999, when Golden Access
demonstrated the product between the U.S. and Argentina.
OUR 2ND PHASE OF MARKET ENTRY consisted of establishing a limited number of
international Commercial Service Agreements (CSA) in Argentina, Lebanon,
Columbia, and Uruguay and commenced a market trial period of 90 days which
confirmed the results of the first phase, and new product enhancements that
resulted. Load testing of the full functionality of the IP Telephony system,
the Gateway software and GateKeeper Network Management software under revenue
service conditions provided a window of opportunity for Golden Access to
fine-tune the network during this period. The Gatekeeper Network Management is
the device that tests the communication links between the gateways and manages
the availability of the gateways. See "Overview of Results".
Golden Access's product development philosophy has been to bundle the key
functionality of the IP Telephony system into two proprietary software
packages, Gateway and GateKeeper, which are designed to reside on a Windows NT
operating system under the product name VtS.
We maintain our proprietary Network Control Center in Miami, and are developing
a back up system in Los Angeles, which is not yet functioning as a control
center. Our Miami control center allows us to not only monitor the worldwide
network of Gateways, and switch or route calls as necessary, but allows us to
add and/or delete services through Gateways to specific customers, and even to
end users, who are the customers of our customers.
WHAT DO WE DO AND WHY ARE WE DIFFERENT?
We provide:
- - AN INTEGRATED IP Telephony hardware product;
- - INTEGRATED software products;
- - a GLOBAL telecommunications network.
- - HIGH QUALITY VOICE reception and transmission
- - A TURNKEY system inclusive of installation and training
We are unique in offering a total turnkey solution to the service provider that
will enable them to deploy a fully operational system quickly and
cost-effectively.
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INTERNATIONAL SERVICES
We will be focusing on establishing a global network of VtS Gateways to carry
international voice traffic at rates approximately 50% the lowest rate that is
currently being offered by the traditional telecom carriers. This international
service will be built upon the deployment of VTS Gateways into countries
outside the U.S. through our network of distributors and resellers where we
will offer global termination for the voice traffic of each VtS Gateway. For
destinations where we have a Gateway deployed, the calls will be delivered
entirely via the Internet at an approximate 50% savings to the customer. This
type of traffic will be referred to as "On-Net" traffic. For destinations where
we do not have a Gateway deployed, the calls will be routed via the Internet to
the Network Control Center(s) in the U.S. and then delivered over the regular
IDD network at competitive rates. This type of traffic will be referred to as
"Off-Net" traffic.
BILLING SERVICES
We provide Billing Services to the operators of the VtS Gateways in the form of
a monthly reconciliation or settlement which will require that we generate a
Call Detail Record (CDR) report and invoice based on the calls and charges that
were originated by each VtS Gateway operator for that period. Additionally,
each VtS Gateway operator will generate a CDR report and invoice based on the
calls and charges that were terminated by their respective systems for that
period. A subsequent settlement will take place where the amounts for
originating and terminating traffic are calculated and a single invoice amount
will result for that period.
PRODUCTS AND SERVICES
HOW OUR VTS PRODUCTS WORK
The Golden Access VtS product is an IP Telephony system that provides quality
voice communication over the public Internet.
The hardware requirement for a user is a multimedia PC, which is a PC that has
a sound card, microphone, and speakers. The software runs on a regular PC with
Dialogic boards called DM3 IP link. The VtS product is real-time communication
and also has the capability for e-mail and data.. The requirements for a
Gateway are 256 MEG RAM, 6.4 Gig harddrive, Intel Pentium III, 200 to 300 MHz
processor.
Its flexible architecture allows for configurations ranging from 4 port analog
systems which can support 48,000 minutes/month of traffic, predominantly older
key systems for a limited number of phones and users of the phone system for
very small businesses -- up to a 60 port digital (2 x E1) system which can
support 720,000 minutes/month, predominantly newer, sophisticated digital phone
systems with tie ins to specialized or dedicated phone lines,. Additional
systems can be added to expand the total capacity of the service provider as
traffic volumes increase.
There are several applications that can be supported with VTS:
- - PHONE TO PHONE
- - PHONE TO PC
- - PC TO PHONE
- - WEB BROWSER TO PHONE
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The description of how these applications work is detailed on the inside front
cover page of this prospectus. To communicate from PC to phone, the user either
types the telephone number or speaks into the PC microphone where the number is
dialed and the user is talking into the microphone. When communicating from
phone to PC, the user receives the call via the output speakers on the PC and
the microphone is used to respond. The operation of PC to phone or Phone to PC
is operated through Microsoft Netmeeting, which is a Microsoft program that
allows communication between multimedia PCs. This program comes at no charge
with Windows 98, which can also be downloaded for free.
Gateway is the application software that performs the actual IP Telephony
function and GateKeeper is the application software that performs the Network
Management functions such as user authentication, routing, billing,
administration, and subscriber management for the service provider.
THE GATEWAY SOFTWARE OFFERS:
- - Support for Phone to Phone, PC to Phone, Phone to PC and Web to Phone
applications
- - Bandwidth management adapted to internet/WAN quality and negotiated to
meet the limitations of the weaker party.
- - Flexible call termination and destination blocking for Customers and
Gateways
THE GATEKEEPER SOFTWARE OFFERS:
- - Integrated Authorization, Authentication and Accounting
- - Integrated Debit/Credit Billing System for Customers and Gateway Network
- - Calling Card Support
- - Manages Customers and Gateways by Groups including multiple price lists
- - Comprehensive Network Monitoring and Management system that measures and
continuously reports the status of the internet links, remote sites and
telephone calls and provides alternate routing/backup in the event of an
outage.
GateKeeper allows the Service Provider the capability to administer their
subscribers, route their calls, perform billing and accounting and monitor the
status of the system, subscriber activity and network connections. The
GateKeeper is graphics based and offers the Service Provider easy-to-use
screens from which they can operate their service. In addition, GateKeeper
provides the interface to Golden Access's Network Control Center, which manages
the entire network of Service Provider systems. The software-intensive
architecture is characterized by very low incremental cost, both for repeat
systems and for expansion of systems already installed.
To ensure authorized use of the product, continued operation will be dependent
upon a hard-lock that is specific to each licensed system and a
challenge-response exchange over IP every 5 minutes.
THE CHALLENGE/RESPONSE EXCHANGE FEATURE IS software which continuously requires
the incoming communication software to have an embedded code which the network
control center recognizes and continues to monitor on an ongoing basis while
information is routed through the Gateways. In the event that someone attempts
to make unauthorized copies of the Golden Access software or reverse-engineer,
these processes will ensure that it is impossible to do so.
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PRODUCT DEVELOPMENT PLAN
OTHER PRODUCTS
Golden Access will continue to develop and offer internet-related products and
applications that will be marketed in conjunction with the main product line.
We intend to use the VtS product as a market entry tool for the sale of
"value-added" software applications developed by us. To complement the core
IP Telephone system, we are offering other proprietary software products. We
may have to update customer servers to incorporate these software products for
them to utilize our services. These products and services are profitable and
the cost of the sale is low
These include the following products that are currently available:
- - Internet Video Broadcast - which allows the subscriber to receive live
television broadcasts or taped video transmissions over the internet via
their multimedia PC from anywhere in the world
- - Internet Audio Broadcast - which allows the subscriber to receive live or
taped audio broadcasts over the internet via their multimedia PC from
anywhere in the world
- - Video Conferencing - allows the subscriber to conduct face to face
meetings over the internet via their multimedia PC
- - In and Out - an employee activity tracking application specifically suited
for the service industry. "In and Out" software combines a time management
for service businesses and billing package, with telephone call in
features and applications.
These include the following products that will be available within the next
four months:
- - WebSurvey - a security system using webcams and the Internet to transmit
images to a central monitoring location. Multiple locations can be
simultaneously monitored from anywhere in the world. This will be
available by June 30, 2000.
- - Interactive Voice Mail - allows the subscriber to have a "virtual"
mailbox, where they can send and retrieve messages from anywhere in the
world. This will be available by the end of May, 2000.
- - Internet Follow Me - allows calls to be forwarded "real-time" to the
subscriber anywhere in the world. This will be available by the end of
July, 2000.
There are no further research and development costs or events associated with
the commercialization of these products, other than the ordinary labor costs of
testing, fine-tuning and writing corrective program codes.
A MORE TECHNICAL DESCRIPTION OF THE GOLDEN ACCESS PRODUCT
The VtS product is an IP Telephony Gateway platform running proprietary
Golden Access software using a standard type of driver known as an Open
DataBase Connectivity (ODBC) on an MS Windows NT operating system. An ODBC
acts as an interface to allow data to be moved into or out of the
database. ODBC is a standard created by Microsoft to allow any language to
access any database. Therefore the user specifies what information is
needed, and the system automatically retrieves it.
The VtS hardware platform is based on standard PC hardware to ensure
serviceability worldwide and the newest Dialogic DM3/IPLink, (a brand name)
family of IP/Telephony modules. Dialogic's DM3/IP Link Telephony is a broad
width digital signal processors that handles the conversion between analog
phone signals to IP data packets on both ways. Dialogic Inc.,
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who is a wholly owned subsidiary of Intel, with 5% owned by MicroSoft, is
a strategic marketing and engineering partner to Golden Access. The
Digital Signal Processing (DSP) by hardware ensures high scalability,
meaning it can expand very easily, without the requirement for larger and
more powerful hardware and supports from 2 to hundreds of analog or
digital (E1/T1) telephone lines on a single VTS Gateway. Internet
telephony standards are set by the International Telecommunications Union
(ITU), and VTS is section H.323 compatible with industry standard coders
from G.723.1 with silence compression to GSM and G.711 A/Mu Law. GSM is a
protocol applied to all international cellulars.
VTS currently runs only on Microsoft Windows NT-Registered
Trademark-servers and does not operate, in a dos environment. In addition,
our products use other Microsoft Corporation technologies, including
Microsoft Exchange Server-Registered Trademark- and Microsoft
SQLServer-Registered Trademark-. A decline in market acceptance for
Microsoft technologies or the increased acceptance of other server
technologies could cause us to incur significant development costs and
could have a material adverse effect on our ability to market our current
products. Although we believe that Microsoft technologies will continue to
be widely used by businesses, we cannot assure you that businesses will
adopt these technologies as anticipated or will not in the future migrate
to other computing technologies that we do not currently support. In
addition, our products and technologies must continue to be compatible
with new developments in Microsoft technologies.
We maintain a special Gateway in Cordoba, Argentina which is utilized
exclusively to upgrade software and to test new features and applications.
All of our VtS products have completed all of their commercial testing and
have been fully functional in customer utilization since October, 1999.
All of our other add-on products are also in commercial utilization. Those
products which we identified above as being in development are still being
tested as development continues.
HARDWARE PLATFORM AVAILABILITY.
The hardware platform we utilize is based on the latest industrial grade PC
technology available and integrated with the industry leading Dialogic
DM3/IPLink telephony and IP interfaces. Dialogic Inc., who is a subsidiary of
Intel, with 5% owned by MicroSoft, is one of our strategic marketing and
engineering partners. Dialogic's Partner Program is used to mutually increase
product sales through joint marketing and development areas. As we sell more
VTS Gateways, Dialogic sells more product. Substitution of their hardware could
adversely affect our competitiveness until similar functioning equipment were
available.
HANDLING A LARGE NUMBER OF SIMULTANEOUS CALLS.
We expect the volume of simultaneous calls to increase significantly as we
expand our operations. Our network hardware and software may not be able to
accommodate this additional volume. If we fail to maintain an appropriate level
of operating performance, or if our service is disrupted, our reputation could
be hurt and we could lose customers. At this time, several of our gateways are
handling between 10,000 and 20,000 calls per month, many of which are
simultaneous.
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PRODUCTS - TRADEMARK AND PATENTS
Standards for IP Telephony, recently adopted H.323, are published by the
International Telecommunications Union "ITU", and the protocol is available to
anyone. Because these standards are published in the public domain, no patent
protection is believed to be available, nor can it be obtained by anyone else.
We have recently filed patent applications on our "IN AND OUT" software, and on
our voicemail software, and we are in the process of filing for registered
trademarks for "VtS", and for our "GOLDENACCESS.COM" logo and design. We do not
have any trademark applications pending outside the United States.
The Golden Access product is mainly software and physical replication is easy.
A software license agreement and hard-lock will be part of any sale, but the
ultimate protection will be the fact that all the IP gateways will be connected
to the Internet and the Golden Access Network Control Center. A
challenge/response exchange will be embedded in the software at the Golden
Access Network Control Center. In order to continue to operate, the information
flowing through the Gateways must have the appropriate authorizations or the
communications will not be allowed.
PRODUCT DEFECT LIABILITY
Our license agreements with our end-user customers typically contain provisions
designed to limit our exposure to potential product liability and some contract
claims. There could be claims relating to damages to our customers' internal
systems. A product liability, warranty, or other claim, whether or not
successful, could harm our business by increasing our costs, damaging our
reputation and distracting our management.
Our products may contain errors or defects, especially when first introduced or
when new versions are released. Despite internal product testing, we have in the
past discovered software errors in some of our products after their
introduction. Errors in new products or releases could be found after
commencement of commercial shipments. Any errors could adversely impact our
company's profitability.
Because our solution consists of our software running on a Windows
NT-Registered Trademark server and Dialogic digital signal/telephony
processing boards, it is inherently more prone to performance interruptions for
our end-user customers than traditional non-software based products.
Performance interruptions at our end-user customer sites, most of which
currently do not have back-up systems, could affect demand for our products or
give rise to claims against us.
DISTRIBUTION METHODS
Our objective is to provide a complete suite of IP telephony products and
services that will be marketed to internet service providers, telecom service
providers and corporate network providers, who in turn, can resell the service
to their respective retail/corporate markets.
Golden Access has several channels to market, which are not mutually exclusive:
1) Direct Wholesale Traffic Carrier (FSP).
To establish a global network of gateways through direct Commercial
Service Agreements with service providers in countries outside the United
States. Golden Access will sell the IP Telephony Gateway(s) in addition to
providing access to our global network at rates billed on
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per minute usage that will allow the foreign service provider (FSP) to
offer a low cost international telephone service to its customers. This
global network will provide service to anywhere in the world either via IP
through our FSP network or via PSTN from our international gateway
facilities in the U.S. Each FSP will also provide a rate table to Golden
Access for termination into their respective territories, which will allow
us to terminate traffic from the other FSPs on the network direct via IP
at a reduced cost. A monthly reconciliation based on traffic volumes and
rate tables will be conducted between Golden Access and each FSP, in which
we will act as a clearing and settlement house. The FSPs will deal only
with Golden Access and not directly with each other.
2) Regional Marketing Partnerships (RMP) & Distribution
To establish a global network of distributors/regional marketing partners
to license the VtS software from Golden Access and integrate into a total
system solution for their customers, who would include ISP's, telecom
service providers and corporations. This is by far the most attractive
channel since the RMP will be responsible for the frontline sales and
technical support of the VtS Gateway customers as well as for the
marketing and promotional costs in their respective markets. We will only
be responsible to provide the software licenses and higher level
technical/sales support as required. The VtS customers from this channel
will have access to our global network and billing reconciliation, with
the advantage in that the RMP would be entitled to a commission on the
total revenue generated by the traffic of its customers over our network.
This will provide added incentive to the RMP's to continue the promotion
of Golden Access after the initial sales since they will be beneficiaries
of a recurring revenue stream from the resultant traffic volumes.
In instances where an ISP, telecom service provider or corporation wishes
to establish a domestic network or Virtual Private Network (VPN) based on
Golden Access's technology and not access our global network, a purchase
agreement, including software license, will be established. The VPN is a
wide area network that use some public segments as well as private
network, with encryption and security. However, the cost of the software
license will be higher than if they were using our network since we will
not be collecting the same level of revenues from the traffic. The
software license may include a formula based on performance that will
provide us with royalties for the first year of traffic that is carried
over the private network.
3) Marketing in regions outside of North America
This will be accomplished through licensing agreements with strongly
capitalized parties capable of financing initial orders. Licensing
agreements for several markets are already in place.
4) Reseller Risks
If we hire a reseller who fails to market our products and services
effectively, we could lose market share. Additionally, if a reseller
provides poor customer service, we could lose brand equity. We must
maintain and hire additional resellers throughout the world that are
capable of providing high-quality sales and service efforts to assure
brand equity. If we lose a reseller in a key market, or if a current or
future reseller fails to adequately provide customer support, our
reputation will suffer and sales of our products and services and our
customer base will be substantially diminished.
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Our ability to achieve revenue growth in the future will depend in part on
our success in maintaining successful relationships with our existing and
future resellers and in recruiting and training additional resellers. We
rely primarily on resellers to market and support our products. We are
still developing and refining our reseller distribution network and may be
unable to attract additional resellers with both voice and data expertise
that will be able to market our products effectively and that will be
qualified to provide timely and cost-effective customer support and
service. We generally do not have long-term or exclusive agreements with
our resellers, and the loss of specific larger resellers or a significant
number of resellers could materially adversely affect our business,
financial condition or results of operations.
COMPETITIVE ANALYSIS
While all our competitors have products grouped by their status as an End-User,
Equipment Provider and/or Network Provider, we have integrated all these
components into one solution.
The comprehensive nature of the Golden Access VTS product, further
differentiates our products in which a fully integrated solution consolidates
the following functionality into a single product offering at a very low price
- - IP Telephony Gateway
- - IP Telephony GateKeeper
- - Global Network
Our small Gateways sell for approximately $15,000 and larger, more
sophisticated systems sell for over $100,000. Although none of our competitors
currently offer an integrated product for direct comparison, a self-integrated
group of components and software from several vendors which would compete with
our smallest Gateway would cost approximately $50,000 to have all the same
features, and approximately $35,000 for a VoIP only system with no features.
There are numerous companies offering only the Gateway functionality, Cisco
Systems, Nuera and Array Telecom, however it is necessary to obtain 3rd party
GateKeeper software to deploy these products in a managed network
configuration. Secondly, without the Global Network connectivity,
communications is limited to those locations where the actual nodes would be
located.
There are others that offer both the Gateway and GateKeeper capability: Vocaltec
Communications, Ascend Communications, Ericsson, Siemens, Inter-Tel and
Nortel. However, they lack the Global Network connectivity and are priced at
least 50% higher than Golden Access.
There are a few companies that offer Global Network connectivity similar to
Golden Access such as Lucent, Franklin Telecom, ITXC, Delta Three and VtS
Calling. However, it is only Lucent and Franklin that use their own platforms
to offer this service, while the others use 3rd party platforms.
The key competitive factors that will allow Golden Access to establish itself
within a market dominated by large companies such as Lucent, Cisco, Nortel and
Siemens will be price, voice quality, and our ability to adapt quickly to the
dynamic nature of this nascent technology. We write our own code, we write code
for large companies like Cisco, and yet our low overhead structure allows us to
be very responsive to a business customer's requirements. We are currently
writing special software for several of our new Gateway customers, and we
foresee that more large multinational companies are demanding more specific
solutions to their circumstances rather than pre-packaged solutions.
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In instances where we will also be the On-Net carrier of the voice and fax
transmissions, functioning as an Internet Telephony Exchange Carrier ("ITXC"),
we will offer the long distance rate portion of our service at approximately a
50% reduction in the rates our business customers are currently paying at this
time.
IP Telephony products currently offered do not have the full capabilities of
Golden Access. This represents a tremendous potential in terms of traffic and
market share with relatively few solutions identified at this stage, let alone
in commercial service. Golden Access is well positioned to lead the market
direction through its "first-in-the-door" approach to the markets as well as
its partnership with Dialogic (Intel/Microsoft), Cisco, and Nortel.
COMPETITIVE ISSUES
The market that we are competing in falls into several categories:
- - VOIP GATEWAY PRODUCTS
- - VOIP GATEKEEPER PRODUCTS
- - VOIP BILLING PRODUCTS
- - ENHANCED IP SERVICES
- - TRANSMISSION SERVICES
Since we are offering a totally integrated solution that encompasses all of
these markets, it creates a highly competitive environment for us as we must
differentiate our product against those that specialize in either one or more
of the above mentioned areas.
The primary competitive factors that will determine success in these markets
are:
- - QUALITY OF SERVICE
- - THE ABILITY TO MEET AND ANTICIPATE CUSTOMER NEEDS THROUGH MULTIPLE SERVICE
OFFERINGS
- - RESPONSIVE CUSTOMER SUPPORT SERVICES
- - PRICE
Future competition could come from a variety of companies in the Internet
equipment and service arena, traditional network equipment providers and the
telecommunications service industry. These industries include companies who
have greater resources and larger subscriber bases than we have and which have
been in operation for many years.
Internet companies such as Net2Phone, NetSpeak, Vocaltec, Clarent and Lucent
all currently offer individual portions of the complete communications solution
provided by us and through ongoing consolidation and partnerships that is
becoming prevalent in this industry, will be able to provide the total solution
within a relatively short period of time.
Many Internet service companies such as ITXC, VIP Calling, RSL Communications,
USA Global Link, iPASS and GRIC have all established global IP-based networks
which are rapidly expanding in terms of traffic volumes and coverage. By
partnering with some of the larger equipment providers like Vocaltec, Clarent
and Cisco, they are positioned to become dominant influences on the Internet
services landscape.
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Networking companies such as Cisco, Motorola, Nortel, Siemens, Ericsson and
Nokia are able to build upon their existing large base of customers,
traditionally in the PTT/Telco market by offering products that can be easily
added to existing infrastructures and switching networks in the forms of IP
upgrades. Additionally, Motorola, Ericsson, Qualcomm and Nokia are focusing on
the emergence of wireless IP applications, which is projected to be a
significant part of the 3G 3rd generation IP services.
Traditional telecommunications carriers like AT&T, Sprint, MCI, Frontier and
USA West are all in the process of implementing strategies to offer enhanced
Internet services including VoIP and Unified Messaging. Due to their extensive
network infrastructure, specifically in the area of IP bandwidth, and their
large traffic base, they are extremely well positioned to obtain the
technologies they need either through acquisition or partnering. These carriers
will be the driving force behind the growing trend towards consolidation within
the industry since they represent a major portion of the telecommunications
market and have substantially greater financial, technical and marketing
resources.
These and other competitors may be able to bundle their services and products
that are not offered by us, which could place us at a significant competitive
disadvantage. Many of our competitors enjoy economies of scale that can result
in lower cost structure for transmission and related costs, which could cause
significant pricing pressure within the industry. When compounded with
decreasing rates for international termination and the subsequent increased
price competition, this may result in a further reduction of prices, profit
margins and market share.
Many of our current and potential competitors have longer operating histories,
significantly greater financial, technical, marketing, customer service and
other resources, greater name recognition and a larger installed base of
customers than we do. As a result, these competitors may be able to respond to
new or emerging technologies and changes in customer requirements faster and
more effectively than we can, or to devote greater resources to the
development, promotion and sale of products than we can. Current and potential
competitors have established, and may in the future establish, cooperative
relationships among themselves or with third parties, including mergers or
acquisitions, to increase the ability of their products to address the needs of
our current or prospective end-user customers. If these competitors were to
acquire a significant market share, it could have a material adverse effect on
our business, financial condition or results of operations.
STRATEGIC PARTNERS
We have recently entered into a contract with Cisco Voice Application Partner
(CVAP). Cisco's interest in Golden Access is directly linked to the
Gatekeeper/Billing software that is integrated onto the VTS product, which, they
would like to have integrated to work with their standard Router Product line.
Eventually, they would like it to be integrated to work with their VTS Router
product. This represents a unique opportunity for Golden Access to develop an
interface for our existing software so that it works with the Cisco products.
Cisco's intent would be to provide their Router customers with a list of CVAPs
that can be contacted to provide them with the network level software package
for management and billing. This potentially creates another revenue stream from
the sales of software licenses to Cisco Router customers; allows us to carry
their international traffic over our global termination network once they have
installed our software onto their Cisco networks; and provides enhanced
visibility and credibility through our association
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with Cisco. Our written agreement with Cisco pertains also to the writing and
purchasing of software and rights to set the ultimate resale price.
We have a similar agreement with Dialogic, where we are also a member of their
"Partner Program" which is used to mutually increase product sales through
joint development and marketing.
International Telephone Company (ITC) has agreed to operate an international
database and provide us with real-time billing and comprehensive transactional
analysis. They will also assist us in determining the number of vendors
contingent upon the geographical regions.
We also have strategic relationships with Nortel, Inc., Joss Maru, Inc., the
GoldenAccess Group and Microsoft from whom we licensed a number of software
programs upon which our platform is utilized, and others. We utilize these
relationships to distribute our products, to pay some of our development costs,
to increase our product awareness acceptance in the marketplace and to build
cooperative joint efforts which would potentially give us a competitive
advantage to our existing and potential customers.
We believe that these relationships are a significant benefit and gives us a
leveraged position competitively. We believe that our success in the software
and internet telephony industry depends, in part, on our ability to develop and
maintain strategic relationships with leading Internet companies and computer
hardware and software companies, as well as key marketing distribution partners.
If any of our strategic relationships are discontinued, sales of our products
and services and our ability to maintain or increase our customer base may be
substantially diminished.
Further success is dependent on our distribution agreements with DISCAR SRL,
CTI-PRO, PL DATA TEKNIC A/S, and INTEGRATED COMMUNICATIONS GROUP, in that we
have agreed to extend credit when their invoices exceed $25,000. Part of our
success depends on our ability to ensure that our billing statements are paid
in full.
GOVERNMENT REGULATION
At present there is little government regulation of the Internet industry. If
governmental regulations are passed it may slow its growth, resulting in
decreased demand for our products and services and increased costs of doing
business.
To date, governmental regulations have not materially restricted use of the
Internet in our market. However, there is ample regulations pertaining to
telephones and the legal and regulatory environment that pertains to the
Internet is uncertain and may change. New regulations could increase our costs
of doing business and prevent us from delivering our products and services over
the Internet. This could delay growth in demand for our products and services
and limit the growth of our revenue.
In addition to new regulations being adopted, existing laws may be applied to
the Internet.
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FEDERAL
We provide Internet services, in part, through data transmissions over public
telephone lines. These transmissions are governed by regulatory policies
establishing charges and terms for wire line communications. We currently are
not subject to direct regulation by the FCC or any other governmental agency,
other than regulations applicable to businesses generally. However, in the
future we could become subject to regulation by the FCC or another regulatory
agency as a provider of basic telecommunication services. For example, a number
of long distance telephone carriers recently filed a petition with the FCC
seeking a declaration that Internet telephone service is a "telecommunication
service" subject to common carrier regulation. If a declaration were enacted it
would create substantial barriers to our entry into the Internet telephone
market. The FCC has requested comments on this position, but has not set a
deadline for issuing a final decision. Also, a number of local telephone
carriers have asked the FCC to levy access charges on "enhanced service
providers," which may be deemed to include ISPs. Although the Chairman of the
FCC has indicated his opposition to levying service charges against ISPs, local
interconnection charges could be levied in the future. Moreover, the public
service commissions of individual states are exploring the adoption of
regulations that might subject ISPs to state regulation.
The FCC regulates the licensing construction, operation and acquisition of
wireless telecommunications systems in the U.S. under the 1934 Act, as amended
and the roles, regulations and policies promulgated by the FCC. Included in the
regulations is the use of the electromagnetic spectrum in the United States,
including the frequency band currently used by our radio products. Part 15 of
the FCC regulations defines frequency bands in which unlicensed operation of
radio equipment that meets specific technical and operational requirements is
permitted. We utilize CDPD for the majority of our wireless transmissions which
is currently under FCC regulations.
In the international markets, there are various categories of government
regulations. In those countries that have accepted specified worldwide
standards, similar to the FCC rulings or those from the European
Telecommunications Standards Institute, we are not expected to experience
significant regulatory issues in bringing our products to market. Approval in
these markets involves retaining local testing agencies to verify specific
product compliance. However, many developing countries, including the large
markets in India and China, have not fully developed or have no frequency
allocation, equipment certification or telecommunications regulatory standards.
In these types of markets, we will actively work both directly and with
industry standard bodies, to conform regulations to worldwide standards.
STATE AND LOCAL
The scope of the regulatory authority covers many matters as the terms and
conditions of interconnection between Local Exchange Carriers ("LECs") and
wireless carriers with respect to intrastate services, customer billing
information and practices, billing disputes, other consumer protection matters,
facilities construction issues, transfers of control, the bundling of services
and equipment and requirements relating to the availability of capacity on a
wholesale basis. In these areas, particularly, the terms and conditions of
interconnection between LECs and wireless providers, the FCC and state
regulatory authorities share regulatory responsibilities with respect to
interstate and intrastate issues, respectively.
The FCC and a number of state regulatory authorities have initiated proceedings
or indicated their intention to examine access charge obligations, mutual
compensation arrangements for interconnections between local exchange carriers
and wireless providers, the pricing of transport
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and switching facilities provided by LECs to wireless providers, the
implementation of number portability to permit customers to retain their
telephone numbers when they change service providers, and alterations in the
structure of universal service funding among other matters.
We may become an active participant in proceedings before the FCC and before
state regulatory authorities. Proceedings with respect to the previously stated
policy issues before the FCC and state regulatory authorities could have
significant impacts on the competitive market structure among wireless
providers and the relationships between wireless providers and other carriers.
We are unable at this point to predict the scope, pace, or financial impact of
policy changes which could be adopted in these proceedings. To keep it apprised
of developments in this area, we will retain special FCC counsel in the event
we deem it necessary.
RECENT EVENTS
In September 1998, two regional Bell operating companies advised Internet
telephony providers that these companies would impose access charges on
Internet telephony traffic. One of these operating companies also petitioned
the FCC for a declaratory ruling that providers of interstate Internet
telephony must pay federal access charges, and has petitioned the public
utilities commissions of Nebraska and Colorado for similar rulings concerning
payment of access charges for intrastate Internet telephone calls. The outcome
of these proceedings is uncertain but should the regional Bell operating
companies be successful it will have an adverse effect on our company.
The 1996 Act mandates significant changes in existing regulation of the
telecommunications industry to promote competitive development of new service
offerings, to expand public availability of telecommunications services and to
streamline regulation of the industry. The 1996 Act provides that implementing
its legislative objectives will be the task of the FCC, the state public
utilities commissions and a federal-state joint board. The FCC released a
tentative implementation schedule on February 12, 1996. Much of this
implementation must be completed in numerous virtually simultaneous proceedings
with short, 6 to 18 month, deadlines. These proceedings are expected to address
issues and proposals already before the FCC in pending rule making proceedings
affecting the wireless industry as well as additional areas of
telecommunications regulation not previously addressed by the FCC and the
states.
The primary purpose and effect of the new law is to open all telecommunications
markets to competition including the local wireline loop. The 1996 Act makes
all state and local barriers to competition unlawful, whether they are direct
or indirect. It directs the FCC to hold notice and comment proceedings and to
preempt all inconsistent state and local laws and regulations. Only narrow
powers are left to state and local authorities. Each state retains the power to
impose competitively neutral requirements that are both consistent with the
1996 Act's universal service provision and necessary for universal service,
public safety and welfare, continued service quality and consumer rights. While
a state may not impose requirements that effectively function as barriers to
entry or create a competitive disadvantage, the scope of state authority to
maintain existing or adopt new requirements under this section is not clearly
spelled out. Before it preempts a state or local requirements as violating the
entry barrier prohibition, the FCC must hold a notice and comment proceeding.
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The recently enacted Telecommunications Act contains specific provisions that
lift, or establish procedures for lifting specific restrictions relating to the
RBOCs' ability to engage directly in the Internet access business. The
Telecommunications Act also makes it easier for national long distance carriers
such as AT&T to offer local telephone service. In addition, the
Telecommunications Act allows the RBOCs to provide electronic publishing of
information and databases. Competition from these companies could have an
adverse effect on our business.
Future regulation of the Internet may slow its growth, resulting in decreased
demand for our products and services and increased costs of doing business.
Due to the increasing popularity and use of the Internet, it is possible that
state, federal and foreign regulators could adopt laws and regulations that
impose additional burdens on those companies that conduct business online. It
would cover issues such as content, user privacy, pricing, libel, intellectual
property protection and infringement and technology export and other controls.
These laws and regulations could discourage communication by IP or other
Web-based communications, which could inhibit the use of Internet-based
communication and reduce demand for our products and services.
The adoption of any additional laws or regulations may decrease the expansion
of the Internet. A decline in the growth of the Internet, particularly as it
relates to online communication, could decrease demand for our products and
services and increase our costs of doing business, or otherwise harm our
business. Our costs could increase and our growth could be harmed by any new
legislation or regulation, the application of laws and regulations from
jurisdictions whose laws do not currently apply to our business, or the
application of existing laws and regulations to the Internet and other online
services.
Changes in the regulatory environment relating to the Internet access
industry, Including regulatory changes that directly or indirectly affect
telecommunications costs or increase the likelihood or scope of competition
from regional telephone companies or others, could have a material adverse
effect on us. See "Risk Factors -- Competition."
RECENT ACQUISITION OF ASSETS
On July 30th 1999, we purchased, without restriction and unconditionally,
certain non operating business equipment and computer hardware from our
majority shareholder, Clifford Pierce, non operating developed software,
various customer contracts and agreements, as well as applicable pending
trademarks, which constitute the majority of the resources upon which we are
building our distribution network. These contracts and agreements were
dependent upon our ability to integrate the software and hardware systems into
full commercial utilization. At the time of our purchase, this had not yet been
accomplished. We purchased the equipment for $877,000, our historical cost
basis less depreciation; the software and related intellectual property for
$540,100, our historical cost basis less depreciation and any ancillary research
and development expenses; and the discounted present value of the customers'
contracts and agreements for $9,154,000, for a total purchase price of
$10,571,100. See the sections entitled "Products-Trademarks and Patents", and
"Proprietary Information" for a more detailed explanation of what can be
protected. We paid for this purchase with 2,166,700 shares of our common stock.
We may make downward adjustments to the value of the purchase pursuant to our
asset purchase agreement, as a result of the final
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valuations we are receiving concerning these assets, although no such
adjustment is currently contemplated.
The computer hardware we acquired consisted of specially adapted pc's; servers;
various types of routers--a device that routes input and output from
transmitting and receiving pc's or servers-modems; various types of sound
boards and data boards that are inserted into servers or pc's, allowing a user
to hear or transmit sounds or to receive or transmit data; specially adapted
communications monitoring and testing equipment; and a number of operating and
testing Gateways.
We also acquired 11 distributor and/or wholesaler agreements, licenses or
contracts and 9 customer agreements, licenses or contracts in 12 countries in
North, Central and South America, in Asia, China, Europe, and the Middle East.
Because the majority of the assets were under the common control of our
majority share holder, Clifford Pierce, we are forced to book the cost basis
for the development of software and intellectual property, rather than its
arm's length market value that would reasonably be expected to be paid in a
non-affiliated transaction. In addition, we cannot book any value for the
discounted revenue stream created by the acquired licenses, contracts and
agreements, although, their value, either to us or to an arm's length third
party were we to liquidate such assets, is essentially greater than zero. Due
to these constraints, our balance sheet will not reflect any amount of market
or liquidation value that could be realized if we sold our software, licenses,
contracts, agreements and/or intellectual property to a disinterested , arms
length third party, or if we liquidated our assets.
The software encompassing our proprietary technology was developed in segments,
which were originally subcontracted and written by numerous parties in various
components. It was subsequently integrated prior to our acquisition, but
remained untested in full commercial operation until July 1999, and further
modified in October 1999. A description of our proprietary software and hardware
products, as well as our "linked" services, is further described in the section
entitled "Business", under the sub headings entitled "Present Status", " What we
do", "Products and Services", "GoldenAccess.Com products", and "Other Products".
We also assumed two leases, one in Miami and one in Cordoba, Argentina. We
assumed no other liabilities as part of the asset purchase.
FUTURE ACQUISITIONS
In the future we may pursue other internet or software acquisitions to
diversify our product offerings and customer base or for other strategic
purposes. We have no prior history of making acquisitions and we cannot assure
you that any future acquisitions will be successful. The following are some of
the risks associated with acquisitions that could have a material adverse
effect on our business, financial condition or results of operations.
We cannot ensure that any acquired businesses will achieve anticipated
revenues, earnings or cash flow.
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We may be unable to integrate acquired businesses successfully and realize
anticipated economic, operational and other benefits in a timely manner,
particularly if we acquire a business in a market in which we have limited or
no current expertise, or with a corporate culture different from our own. If we
are unable to integrate acquired businesses successfully, we could incur
substantial costs and delays or other operational, technical or financial
problems.
Acquisitions could disrupt our ongoing business, distract management, divert
resources and make it difficult to maintain our current business standards,
controls and procedures.
We may finance future acquisitions by issuing common stock for some or all of
the purchase price. This could dilute the ownership interests of our
stockholders. We may also incur additional debt or be required to recognize
amortization expense related to goodwill and other intangible assets purchased
in future acquisitions. We would be competing with other firms, many of which
have greater financial and other resources, to acquire attractive companies. We
believe this competition will increase, making it more difficult to acquire
suitable companies on acceptable terms.
PROPRIETARY INFORMATION
We have developed custom designed software for use with Internet access, and
rely on a combination of copyright, trademark, and trade secrets and
contractual restrictions to establish and protect our licensed and trademarked
technology. It is our policy to execute agreements with employees and
consultants upon the commencement of their relationships with us. These
agreements provide that confidential information developed or made known during
the course of a relationship with us is to be owned by the GoldenAccess.Com,
Inc. or its respective subsidiaries and kept confidential and not disclosed to
third parties except in specific circumstances. There can be no assurance that
the steps taken by us will be adequate to prevent misappropriation of our
technology or that our competitors will not independently develop technologies
that are substantially equivalent or superior to our technology.
EMPLOYEES
As of April 1, 2000, we will employ a staff of 21 of whom 19 will be employees,
4 of whom are in Argentina, 5 of whom are in management, 3 in administration, 2
in marketing, 2 in customer service, 2 on the technical staff, and 2 outside
consultants.
None of our employees will be represented by a labor union. We have not
experienced any work stoppage and expect relations with our employees to be
good. As of the date of this prospectus, much of our work has been completed
under consulting arrangements with Josh Maru, Inc. and the Golden Access Group,
Inc., for which we have accounted and accrued on our financial statements
attached as part of this prospectus.
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SELLING SECURITYHOLDERS
We have agreed to register shares of some of our current stockholders for
resale at the same time as the 114,900 shares representing the stock dividend
distribution in this prospectus and to pay all offering expenses. These
shareholders are selling 385,100 shares, making the total shares being
registered 500,000 shares.
We will not receive any of the proceeds of their sales.
Although our shares will initiate trading at a price set by our market makers
in deference to market demand and other factors, the shares will trade at
various prices in open market transactions, and selling stockholders are free
to sell at any price they desire. Sales by selling stockholders could adversely
impact our ability to sell our stock in the future.
The following table sets forth the name of each selling shareholder and the
number of their shares being sold in connection with this prospectus. None of
the selling shareholders has held any position with, or has maintained any
material relationship with us or any of our officers.
<TABLE>
<CAPTION>
===========================================================================================
NUMBER OF RESTRICTED
NUMBER OF SHARES SHARES HELD IN TOTAL SHARES OWNED
NAME BEING REGISTERED ADDITION TO SHARES & PERCENTAGE AFTER
BEING REGISTERED THE OFFERING
===========================================================================================
<S> <C> <C> <C>
Potter Financial, Inc. 143,000 0 0
- -------------------------------------------------------------------------------------------
Dorf Financial, Inc 97,000 46,000 46,000 /// 1.6%
- -------------------------------------------------------------------------------------------
Barry Potter 118,200 0 0
- -------------------------------------------------------------------------------------------
The Tory Trust 26,900 24,800 24,800
- -------------------------------------------------------------------------------------------
Cardiac Control Systems, Inc. 114,900 0 0
- -------------------------------------------------------------------------------------------
Total 500,000 70,800 70,800 /// 2.5%
===========================================================================================
</TABLE>
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PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of our common stock as of December 31, 1999, by (i) each person
including any "group" as that term is used in Section 13(d)(3) of the
Securities Act of 1934 (the "Exchange Act") who is known by us to own
beneficially 5% or more of the common stock, (ii) our directors, and (iii) all
directors and executive officers as a group. Unless otherwise indicated, all
persons listed below have sole voting power and investment power with respect
to these shares. The total number of shares authorized is 10,000,000 shares of
common stock, each of which is $.001 per share par value. 2,872,500 shares of
common stock have been issued and are outstanding as follows:
5% OR MORE
Clifford Pierce owns 2,170,700 shares representing 75.6% of the outstanding
shares plus 120,000 options--See "Stock Options"--representing 62.9% of the
fully diluted shares, not inclusive of options reserved but not yet granted
Barry Potter owns 118,200 shares, and has five year options for 500,000 shares
at $5 per share exercisable 90 days subsequent to the effective date of this
prospectus. In addition he is a principal and part owner of Potter Financial,
Inc., which owns 143,000 shares, of which he is the beneficial owner of 47,000
shares and he disclaims beneficial ownership of 96,000 shares which is the
balance of Potter Financial, Inc. holdings. His current and indirect beneficial
interest share holdings represent 5.75% of the outstanding shares and,
inclusive of his options, represents 18.3% of the fully diluted shares, not
inclusive of options reserved but not yet granted.
<TABLE>
<CAPTION>
=========================================================================================
NUMBER OF REGISTERED NUMBER OF SHARES
SHAREHOLDER SHARES WITH THIS THAT REMAIN TOTAL SHARES
REGISTRATION RESTRICTED
=========================================================================================
<S> <C> <C> <C>
Clifford Y. Pierce(1) 0 2,170,700 2,170,700(2)
- -----------------------------------------------------------------------------------------
Paul Callihoo(1) 0 0 0(3)
- -----------------------------------------------------------------------------------------
Nigel Gray(1) 0 0 0(4)
- -----------------------------------------------------------------------------------------
David Heath(1) 0 0 0(5)
- -----------------------------------------------------------------------------------------
Owen Goldwyn(1) 0 0 0(5)
- -----------------------------------------------------------------------------------------
Barry Potter 165,200 0 165,200(6)
- -----------------------------------------------------------------------------------------
All Management and Directors
as a Group 0 2,170,700 2,170,000(7)
=========================================================================================
All other small shareholders
as a group 334,800 201,800 536,600(8)
=========================================================================================
</TABLE>
(1) DIRECTORS AND OFFICERS
(2) HAS OPTIONS FOR 120,000 SHARES (SEE "STOCK OPTIONS" AND "CERTAIN
TRANSACTIONS")
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(3) HAS OPTIONS FOR 50,000 SHARES (SEE "STOCK OPTIONS" AND "CERTAIN
TRANSACTIONS")
(4) HAS OPTIONS FOR 50,000 SHARES (SEE "STOCK OPTIONS" AND "CERTAIN
TRANSACTIONS")
(5) HAS OPTIONS RESERVED WITHIN THE RESERVED BLOCK OF OPTIONS, BUT NOT YET
ALLOCATED, IN AN UNDETERMINED AMOUNT.
(6) HAS OPTIONS FOR 500,00 SHARES (SEE "STOCK OPTIONS" AND "CERTAIN
TRANSACTIONS")
(7) AS FOOTNOTED ABOVE.
(8) HAVE OPTIONS FOR 50,000 SHARES (SEE "STOCK OPTIONS" AND "CERTAIN
TRANSACTIONS")
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MANAGEMENT AND BOARD OF DIRECTORS
There are currently five (5) authorized and occupied seats on the board of
directors. The following tables set forth information with respect to the
directors and executive officers.
All directors will hold office until the expiration of their respective terms,
and until their successors have been elected or qualified or until their death,
resignation, retirement, removal, or disqualification. Vacancies on the board
will be filled by a majority vote of the remaining directors. Officers of
GoldenAccess.Com, Inc serve at the discretion of the board of directors.
Mr. Heath and Mr.Goldwyn, as outside directors, serve on the audit committee.
BOARD OF DIRECTORS
<TABLE>
<CAPTION>
======================================================
NAME AGE COMMENCED TERM
======================================================
<S> <C> <C> <C>
Clifford Pierce 60 June 1997 Sept 2002
------------------------------------------------------
Paul Callihoo 42 August 1999 Sept 2001
------------------------------------------------------
Nigel Gray 45 August 1999 Sept 2001
------------------------------------------------------
David Heath 43 August 1999 Sept 2000
------------------------------------------------------
Owen Goldwyn 59 January 2000 Sept 2000
======================================================
</TABLE>
MANAGEMENT
The senior management team has excellent credentials and a proven performance
record in product development, telecommunications networking and global
marketing.
<TABLE>
<CAPTION>
==========================================================================
NAME AGE OFFICE COMMENCED
==========================================================================
<S> <C> <C> <C>
Clifford Pierce 60 Chairman, President & Chief June 1997
Financial Officer
- --------------------------------------------------------------------------
Paul Calihoo 42 Executive VP of International June 1999
Marketing & Chief Operating
Officer
- --------------------------------------------------------------------------
Nigel Gray 45 Vice President December 1998
==========================================================================
</TABLE>
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THE OFFICERS AND DIRECTORS OF GOLDENACCESS.COM, INC. ARE SET FORTH BELOW.
CLIFFORD Y. PIERCE, 60. Mr. Pierce is President, CFO, and Chairman of the board
of directors of GoldenAccess.com. As GoldenAccess.Com, Inc. founder, he
integrated the resources and technology into the platform that supports our
products' rollout to its distributor base. Mr. Pierce's business background
includes over 35 years of related experience in establishing and maintaining
start-up businesses involved in manufacturing, sales and marketing, network
marketing, and finance. He is a Certified Public Accountant, licensed in the
State of Florida. Receiving his certification on September 23, 1973. He
received his Bachelor of Science from Long Island University in 1962, and
completed most of his pre-doctoral studies. Mr. Pierce was elected to the
National Honor Society - Pi Gamma Mu.
He worked for major accounting firms and developed a wide area of expertise,
before forming his own firm in 1975. Mr. Pierce is a founder and director of
several companies and is President of a computer component import-export firm
which has sales volume of over $10,000,000 annually. Mr. Pierce currently acts
to coordinate our research and development team with the needs of the
marketplace.
PAUL CALLIHOO, EXECUTIVE VICE PRESIDENT, DIRECTOR, 42. Paul joined Golden
Access to establish the business development and sales & marketing programs,
while developing a global distribution and sales channel network by partnering
with key system integration companies within Asia, North America, Latin America
and Europe. He developed the business model that defines our line of products
and services. Paul directed the market trial and commercial launch phases of
VtS. Prior to joining us, he served as Executive VP, Sales & Marketing, for
CYBERFAX INC/TELSTAR COMMUNICATIONS, in Montreal, Canada; as VP, for
International Business Development for ALPHANET TELECOM INC., of Toronto,
Ontario, Canada, where he launched a next generation telecommunications service
using Voice over TS (VOTS) and developed strategic acquisitions, joint ventures
and partnerships; as Director, Business Development, for CANADIAN MARCONI
COMPANY (CMC) of Kanata, Ontario, Canada, where he had P/L responsibility for
the Commercial Communications Division with annual revenues of over $30M.
Previously, he implemented and supported online operations of AIR CANADA's
reservations system in Winnipeg, Manitoba, Canada; and served over 5 years in
the Department of Defense, in Ottawa, Ontario, Canada, as a systems engineer
maintaining various levels of communications equipment.
He received his degree in Electrical Engineering from Ryerson Polytechnical
University, Toronto, Ontario. He intends to devote full time to
GOLDDENACCESS.COM INC acting in an executive capacity.
NIGEL J. GRAY, MARKETING DIRECTOR, 45. Nigel Gray is presently the marketing
director but worked part time during the development stage of Golden
Access.Com. His background in the computer industry dates from 1974. He started
as a general manager of one of the first Apple distributors in the country and
worked for many successful firms like Miami Micro Distributors, Ameritech
Exports, Jair Electronics Corporation, and U.S, Computers. After graduating
from Colorado State University, Mr. Gray completed his master's at Florida
International University. His twenty-five years experience in the computer
software and hardware industry has pioneered network development and new state
of the art products.
DAVID W. HEATH, DIRECTOR, 43. David Heath, through Heath & Company, provides
operational and development consulting services for the real estate industry.
Mr. Heath has an extensive hospitality management background having worked for
more than ten years in various management capacities in hotel and restaurant
operations. He managed the Florida hospitality consulting practice of Arthur
Andersen LLP, and directed numerous consulting engagements in Florida and the
Caribbean. Mr. Heath's areas of
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<PAGE> 55
specialization and expertise include the analysis of operational effectiveness;
the design, development and implementation of automated labor productivity
management systems; and strategic planning, market repositioning and workouts
for distressed companies. For the BOCA RATON RESORT & CLUB in Boca Raton, FL, a
963-room resort, he implemented a new automated productivity management system.
For the FOUR SEASONS RESORT & CLUB, in Irving, Texas, he developed a plan for
the resort's $10 million expansion.
Mr. Heath graduated from University of Massachusetts and completed his MBA at
North Eastern University.
OWEN GOLDWYN, DIRECTOR, 59. Mr. Goldwyn is chief executive officer of IRG
GROUP, Inc, a marketing company specializing in the leisure vacation industry,
for the last six years. Previously he was senior partner in Goldwyn Weinberg &
Co, a certified public accounting firm. Mr. Goldwyn has been a certified public
accountant in Florida and New York since 1966 including several years as a
manager for the international accounting firm of Touche Ross & Co. Mr. Goldwyn
graduated New York University in 1962 with a bachelor of science degree,
majoring in accounting.
DIRECTOR'S COMPENSATION
Our employee directors receive no compensation for their services as directors.
Our outside directors shall receive compensation for their services as
prescribed by our board of directors. As of the date of this filing, no Board
member has received compensation for his role on the Board. Members of the
Executive Advisory Board will receive payment for their services, as well as
reimbursement for travel and other expenses incurred in connection with
attendance at each meeting.
EXECUTIVE ADVISORY BOARD
We will establish an informal Executive Advisory Board, appointed by Mr. Pierce
and Mr. Callihoo. The role of the Executive Advisory Board is to be available
to assist our management with general business and strategic planning advice
upon request from time to time. Accordingly, the Executive Advisory Board
Members intend to devote themselves part-time to our affairs as needed. To
date, we have asked Barry Potter and Ross, Forster, Scillia & Brooks, Inc.,
respectively, to act in these capacities.
After the effective date, our executive officers, directors, and their
affiliates will together control approximately 75.6% of the outstanding common
stock, and on a fully diluted basis, 66.6%, not inclusive of options reserved
but not granted. If all reserved options are granted, 54.2%. As a result, these
stockholders, if they act together, will be able to control all matters
requiring approval of a majority of our stockholders, including the election of
directors and significant corporate transactions. This concentration of
ownership may delay, prevent or deter a change in control of
GoldenAccess.Com,Inc., which could deprive our stockholders of an opportunity
to receive a premium for their common stock as part of a sale of its assets and
might affect the market price of our common stock.
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<PAGE> 56
EXECUTIVE COMPENSATION
Through June 30, 1999, no officer or director received any remuneration because
an insignificant amount of services were provided by any member of management
during the year ended 6/30/99.
<TABLE>
<CAPTION>
===============================================================================
NAME AND POSITION YEAR SALARY BONUS OTHER ANNUAL
COMPENSATION
===============================================================================
<S> <C> <C> <C> <C>
Clifford Pierce 2000 96,000 None in 2000(2) (1)(4)
President
- -------------------------------------------------------------------------------
Paul Callihoo 2000 60,000 None in 2000(2)(3) (1)(3)(4)
Vice President
- -------------------------------------------------------------------------------
Nigel Gray
Vice President of 2000 48,000 None in 2000(2) (1)(3)(4)
Marketing
- -------------------------------------------------------------------------------
</TABLE>
FOOTNOTES:
1. ALSO INCLUDED IN THE YEAR 2000 COMPENSATION PACKAGE IS UP TO $18,000 PER
ANNUM FOR REIMBURSEMENTS OF AUTOMOBILE EXPENSES AND APPROXIMATELY $12,000
PER ANNUM FOR PREMIUM PAYMENTS ON THE GOLDEN ACCESS.COM INC'S GROUP HEALTH
AND DENTAL POLICY. OTHER EMPLOYEES RECEIVE AUTOMOBILE REIMBURSEMENTS TO
THIS EXTENT ALTHOUGH MOST EMPLOYEES ARE REIMBURSED FOR ONLY SOME
AUTOMOBILE RELATED EXPENSES. NO OTHER EMPLOYEES AT THIS TIME HAVE ANY
PORTION OF THEIR PERSONAL OR FAMILY COVERAGE PAID FOR BY US AND THEY
CONTRIBUTE TO THE FULL COST OF THE PLAN THEY SELECT.
2. FUTURE BONUSES WILL BE COMPRISED OF SUBJECTIVE AND PROFITABILITY BONUSES.
THE SUBJECTIVE BONUS IS GENERALLY COMPOSED OF QUALITATIVE PERFORMANCE
OBJECTIVES RESET BY THE BOARD OF DIRECTORS ON AN ANNUAL BASIS, AND WOULD
VARY FROM YEAR TO YEAR BOTH IN NATURE AND AMOUNT TO BE EARNED. FISCAL 2000
IS THE FIRST YEAR FOR WHICH MR. PIERCE WILL BE ELIGIBLE FOR THIS KIND OF
BONUS FEATURE. THE PROFITABILITY BONUS IS EARNED BY THE ATTAINMENT OF
BOARD OF DIRECTOR PRESCRIBED REVENUES AND PROFITS, AND CAN BE MODIFIED ON
AN ANNUAL BASIS BOTH IN NATURE AND AMOUNT.
3. ALSO COMPRISED OF COMMISSIONS AND COMMISSION OVERRIDES.
4. AS OF THE DATE OF THIS FILING, NO BOARD MEMBER HAS RECEIVED COMPENSATION
FOR HIS ROLE ON THE BOARD.
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EMPLOYMENT AGREEMENTS
We plan to enter into employment agreements with each of Messrs. Pierce,
Callihoo, and Gray which provide for an annual base compensation of $96,000,
$60,000, and $48,000, respectively, and other bonuses as the board of directors
may from time to time determine. When we hire our new CFO, Director of Sales,
and any other Key executives, we will execute appropriate agreements for each
upon their employment, however they will be in effect subsequent to the
effective date of this prospectus.
<TABLE>
<CAPTION>
===========================================================================================
CLIFFORD PIERCE PAUL CALLIHOO NIGEL GRAY
===========================================================================================
<S> <C> <C> <C>
Term 3 3 3
- -------------------------------------------------------------------------------------------
Annual Compensation $96,000 $60,000 $48,000
- -------------------------------------------------------------------------------------------
CPI Adjustments No No No
- -------------------------------------------------------------------------------------------
Deferred Compensation Yes Yes Yes
- -------------------------------------------------------------------------------------------
Subjective Bonus Up to $100,000 Up to $100,000 Up to $50,000
- -------------------------------------------------------------------------------------------
Profitability Bonus $50,000 plus a $50,000 plus a $10,000 plus a
percentage percentage percentage
- -------------------------------------------------------------------------------------------
Benefits Yes Yes Yes
- -------------------------------------------------------------------------------------------
Automobile Yes Yes Yes
- -------------------------------------------------------------------------------------------
Health and Dental Coverage Yes Yes Yes
- -------------------------------------------------------------------------------------------
Health/Dental Premium None None None
Paid By Employee
===========================================================================================
</TABLE>
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STOCK OPTIONS
We have not adopted any formal stock options plans to reward and provide
incentives to our officers, directors, employees, consultants and other
eligible participants, but we anticipate doing so as follows: (a) the Executive
Stock Incentive Plan, (b) the 1999 Incentive Stock Option Plan, and (c) the
1999 Stock incentive Plan. We have reserved 1,720,000 shares for issuance under
the plans. Awards under each plan may be in the form of incentive stock options
or non-qualified stock options. The plans will be administered by our board of
directors, which is authorized to select the plan recipients, the time or times
at which awards may be granted and the number of shares to be subject to each
option awarded. We have granted some of these already, despite not having a
fully documented plan at this time.
The Company will record compensation expense for any difference, if any,
between the exercise price of the options and the estimated fair market value
of the shares purchased at the time of the approval of the grant, as determined
by the Company's Board of Directors.
Five Year Options to purchase stock @ $3.75, exercisable 180 days subsequent to
the effective date of our first registration statement, granted July 30, 1999.
Clifford Pierce 120,000 shares
Reserved for other Executives 630,000 shares
Five Year Options to purchase stock @ $3.75, 20% of which may be exercised
August 1, 2000, and 80% may be exercised August 1, 2001,but not earlier than
180 days subsequent to the effective date of our first registration statement,
granted July 30, 1999.
Paul Callihoo 50,000 shares
Nigel Gray 50,000 shares
500,000 Five Year Options to purchase stock @ $5.00, exercisable 90 days
subsequent to the effective date of our first registration statement, granted
July 30, 1999 to Barry Potter.
50,000 Five Year Options to purchase stock @ $3.75, exercisable 90 days
subsequent to the effective date of our first registration statement, granted
July 30, 1999 to Southeastern Venture Corporation.
Reserved for Non-Key and Technical employees 220,000 shares
INDEMNIFICATION OF OFFICERS AND DIRECTORS
At present we have not entered into individual indemnity agreements with our
officers or directors. However, we shall indemnify, to the fullest extent under
Florida law, our directors and officers against liabilities incurred with
respect to their service in these capacities.
Indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons under the
previously stated provisions, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission, that indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and because of this, is unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by us of expenses
incurred or paid by a director, officer or controlling person in the
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successful defense of any action, suit or proceeding) is asserted by a
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether indemnification by it is against public policy as
expressed in the Securities Act of 1933, as amended, and we will be governed by
the final adjudication of these cases.
DIRECTORS AND OFFICERS INSURANCE
We are exploring the possibility of obtaining directors and officers ("D&O")
liability insurance. We have obtained several premium quotations but have not
entered into any contract with any insurance company to provide said coverage
as of the date of this prospectus. There is no assurance that we will be able
to obtain this kind of insurance.
KEYMAN LIFE INSURANCE
Keyman Life Insurance is expected to be purchased after the effective date of
this prospectus in amounts up to $1 million, 50% payable to GoldenAccess.Com,
Inc. and 50% payable to family beneficiaries. We are planning to purchase
insurance towards the cross purchase of shares from the estate of an officer or
director and to provide us with the capital to replace the executive loss
executive search for successor, etc.
LIABILITY INSURANCE
Although we carry general liability insurance, our insurance may not cover
specific potential claims from use of our software or may not be adequate to
indemnify us for all liability that may be imposed. Any imposition of liability
that is not covered by insurance or is in excess of insurance coverage could
have a material adverse effect on our business, operating results and financial
condition.
CERTAIN TRANSACTIONS
On June 13,1997, the board of directors authorized the issuance of an aggregate
of 4,000 shares of common stock as founder's stock at a price of $.001 per
share, to Clifford Pierce.
On August 20, 1999, the board of directors of CathTech, Group, Inc., authorized
the issuance of an aggregate of 2,872,500 shares of common stock as founder's
stock to its founders, employees, and advisors at a price of $.001 per share
par value, to approximately 8 individuals or other entities, of which,
2,166,700 shares were exchanged for the assets acquired by us, from our
president, in July of 1999. See "Recent Acquisition of Assets".
This group consists of the following eight individuals or entities, all of whom
received their shares as founders in August, 1999, as that term is defined
under section 230.405 of the General Rules and Regulations of the Securities
Act of 1933.: Dorf Financial - 143,000 shares in August, 1999, purchased for
par value; Alan Rabin-1,000 shares in August, 1999, purchased for par value;
Barry Potter - 57,000 shares in August, 1999, purchased for par value and
86,000 shares purchased for $3.75 per share; The Tory Trust - 26,900 shares in
August, 1999, purchased for par value; Potter Financial Corporation - 143,000
shares in August, 1999, purchased for $3.75 per share; Lindsey
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A. Gertner - 131,000 shares in August, 1999, purchased for $3.75 per share;
Clifford Pierce - 2,166,700 shares in August, 1999, exchanged for assets, as
well as Cardiac Control Services, Inc., who retained 129,300 shares for its
services and its provision of access to its shareholder base, directors and
advisors to GoldenAccess.Com, Inc., of which 113,900 shares on behalf of their
shareholders as a group, prior to distribution of the stock dividend. The stock
dividend distribution cannot be made until this prospectus is effective.
These shareholders, except Cardiac Control Systems, Inc. and Alan Rabin, have
indicated a willingness to provide us with additional capital for developmental
requirements in the near future if we must pay for such expenditures prior to
the receipt of sufficient revenues or other funds to pay them. These
contributions will either be made as additional paid-in capital or may be
unsecured shareholder loans to us. We do not plan to issue any additional stock
or options to these shareholders for any such contributions contemplated at this
time, other than their future purchase of additional stock should we ever make a
new offer of securities in the future.
On August 26, 1999, we merged with CathTech, Inc., and retained our name and
business. On the effective date of this prospectus, 129,300 shares of our stock
will be distributed as a stock dividend to the shareholders of Cardiac Control
Systems, Inc., and their agent, of record of August 26, 1999.
Our strategic partner Joss Maru, Inc., has contributed approximately $254,935
through December 31, 1999 in unsecured affiliated party loans and in addition
through February 15, 2000 approximately another $100,000.
Our shareholders Potter Financial, Inc., Lindsey Gertner, the Tory Trust, and
our president Clifford Pierce, as a group advanced us approximately $ 35,000 in
unsecured shareholders loans between January, 2000 and February 15, 2000. There
are no written agreements with Joss Maru, Inc. or any other strategic partner,
or our above noted shareholders that forms any commitment on their part to
provide us with funding in the near future, however, they are aware of the
extent of our short term capital needs and if we are unable to arrange
traditional short term institutional contract and or equipment financing may
continue to advance us such funding. There is no assurance that this will
continue.
We have adopted a policy that all future transactions between the
GoldenAccess.Com, Inc. and officers, directors and 5% shareholders will be on
terms no less favorable that could be obtained from unaffiliated third parties
and will be approved by a majority of our independent, disinterested directors.
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<PAGE> 61
DESCRIPTION OF SECURITIES
All material provisions of our capital stock are summarized in this prospectus.
However the following description is not complete and is subject to applicable
Florida law and to the provisions of our articles of incorporation and bylaws.
We have filed copies of these documents as exhibits to the registration
statement related to this prospectus.
COMMON STOCK
We are authorized to issue 10,000,000 shares of common stock, at a par value
$.001 per share. As of the date of this prospectus, there are 2,872,500 shares
of common stock outstanding. After giving effect to the exercise of all
outstanding options and warrants of 1,720,000 shares, our issued and
outstanding capital stock would consist of 4,592,500 shares of common stock.
YOU HAVE THE VOTING RIGHTS FOR YOUR SHARES. You and all other holders
of common stock are entitled to one vote for each share held of record on all
matters to be voted on by stockholders. You have no cumulative voting rights
with respect to the election of directors, with the result that the holders of
more than 50% of the shares voting for the election of directors can elect all
of the directors then up for election.
YOU HAVE DIVIDEND RIGHTS FOR YOUR SHARES. You and all other holders of
common stock are entitled to receive dividends and other distributions when, as
and if declared by the board of directors out of funds legally available, based
upon the percentage of our common stock you own. We will not pay dividends. You
should not expect to receive any dividends on shares in the near future. This
investment may be inappropriate for you if you need dividend income from an
investment in shares.
YOU HAVE RIGHTS IF WE ARE LIQUIDATED. Upon our liquidation,
dissolution or winding up of affairs, you and all other holders of our common
stock will be entitled to share in the distribution of all assets remaining
after payment of all debts, liabilities and expenses, and after provision has
been made for each class of stock, if any, having preference over our common
stock. Holders of shares of common stock, have no conversion, preemptive or
other subscription rights, and there are no redemption provisions applicable to
the common stock. All of the outstanding shares of common stock are, and the
shares of common stock being offered, when issued in exchange for the
consideration paid as set forth in this prospectus, will be, fully paid and
non-assessable. Our directors, at their discretion, may borrow funds without
your prior approval, which potentially further reduces the liquidation value of
your shares.
YOU HAVE NO RIGHT TO ACQUIRE SHARES OF STOCK BASED UPON THE PERCENTAGE
OF OUR COMMON STOCK YOU OWN WHEN WE SELL MORE SHARES OF OUR STOCK TO OTHER
PEOPLE. This is because we do not provide our stockholders with preemptive
rights to subscribe for or to purchase any additional shares offered by us in
the future. The absence of these rights could, upon our sale of additional
shares of common stock, result in a dilution of our percentage ownership that
you hold.
YOU HAVE NO RIGHT TO ELECT AN ENTIRE NEW BOARD OF DIRECTORS IN ANY
GIVEN YEAR. Provisions of our certificate of incorporation, our bylaws and
Florida law
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could make it more difficult for a third party to acquire us, even if doing so
would be beneficial to our stockholders. For example, our articles of
incorporation provide for a classified board of directors, meaning that only
approximately one-third of our directors will be subject to re-election at each
annual stockholder meeting.
SHARES ELIGIBLE FOR FUTURE SALE
We have 2,872,500 shares of common stock issued and outstanding. The shares of
common stock registered in this prospectus will be freely transferable without
restrictions or further registration under the Securities Act, except for any
of our shares purchased by an "affiliate" as that term is defined under the Act
who will be subject to the resale limitations of Rule 144 promulgated under the
Act.
There will be approximately 2,372,500 shares of common stock outstanding that
are "restricted securities" as that term is defined in Rule 144 promulgated
under the Securities Act, of which 2,170,700 are owned by our President.
201,800 restricted shares are owned by shareholders who could sell their shares
under Rule 144 after a one year holding period has elapsed.
The shares of common stock owned by insiders, officers and directors are deemed
"restricted securities" as that term is defined under the Securities Act and in
the future may be sold under Rule 144, which provides, in essence, that a
person holding restricted securities for a period of one (1) year may sell
every three (3) months, in brokerage transactions and/or market maker
transactions, an amount equal to the greater of (a) one percent (1%) of our
issued and outstanding common stock or (b) the average weekly trading volume of
the common stock during the four (4) calendar weeks prior to its sale. Rule 144
also permits, under specific circumstances, the sale of shares without any
quantity limitation by a person who is not an affiliate of GoldenAccess.Com,
Inc. and who has satisfied a two (2) year holding period. Additionally, shares
underlying employee stock options granted, to the extent vested and exercised,
may be resold beginning on the ninety-first day after the Effective Date of a
prospectus, or Offering Memorandum under Rule 701 promulgated under the
Securities Act.
As of this date and upon effectiveness of this prospectus, none of our shares
of common stock, other than those which are qualified by the SEC in connection
with this registration, are available for sale under Rule 144. Future sales
under Rule 144 may have an adverse effect on the market price of the shares of
common stock. Our officers, directors and some of our security holders have
agreed not to sell, transfer or otherwise dispose of their shares of our common
stock or any securities convertible into common stock for a period of 12 months
from this date.
Under Rule 701 of the Securities Act, persons who purchase shares upon exercise
of options granted prior to the date of this prospectus are entitled to sell
these shares after the 90th day following the date of this prospectus in
reliance on Rule 144, without having to comply with the holding period
requirements of Rule 144 and, in the case of non-affiliates, without having to
comply with the public information, volume limitation or notice provisions of
Rule 144. Affiliates are subject to all Rule 144 restrictions after this 90-day
period, but without a holding period. All of the option holders for the future
exercise of shares of our common stock have the right to require us to register
their shares of common stock with the Securities and Exchange Commission. In
addition, in the future we intend to register all shares of our common stock
that we may issue under
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our stock option plans and employee stock purchase plan. Once we register these
shares, they can be freely sold in the public market upon issuance, in some
instances subject to lock-up agreements. If these holders cause a large number
of securities to be sold in the public market, the sales could materially and
adversely affect the market price of our common stock. In addition, any of
these sales could impede our ability to raise needed capital.
There has been no public market for our common stock. With a relatively minimal
public float and without a professional underwriter, there is little or no
likelihood that an active and liquid public trading market, as that term is
commonly understood, will develop, or if developed that it will be sustained,
and accordingly, an investment in our common stock should be considered highly
illiquid. Although we believe a public market will be established in the
future, there can be no assurance that a public market for the common stock
will develop. If a public market for the common stock does develop at a future
time, sales of shares by shareholders of substantial amounts of our common
stock in the public market could adversely affect the prevailing market price
and could impair our future ability to raise capital through the sale of our
equity securities.
These sales also might make it difficult for us to sell equity securities in
the future at a time and at a price that we deem appropriate. Moreover, the
perception in the public market that our existing stockholders might sell
shares of common stock could depress the market price of the common stock.
These sales, or the perception of these sales, could make it more difficult for
us to sell equity or equity-related securities in the future at a time and
price that we deem appropriate.
The price of our common stock that will prevail in the market after the
effective date will fluctuate, and may be lower than the price at which the
stock initiates trading on the effective date.
ANTITAKEOVER PROVISIONS
Antitakeover provisions in our organizational documents and Florida law make
any change in control of us more difficult, may discourage bids at a premium
over the market price and may adversely affect the market price of our stock.
Our certificate of incorporation, our bylaws and Florida law make it difficult
for a third party to acquire us, despite the possible benefit to our
stockholders.
Provisions of our certificate of incorporation, our bylaws and Florida law
could make it more difficult for a third party to acquire us, even if doing so
would be beneficial to our stockholders. For example, our articles of
incorporation provides for a classified board of directors, meaning that only
approximately one-third of our directors will be subject to re-election at each
annual stockholder meeting. These provisions could discourage takeover attempts
and could materially adversely affect the price of our stock.
After the effective date, the board of directors will have the authority to
issue up to 1,000,000 shares of preferred stock. Moreover, without any further
vote or action on the part of the stockholders, the board of directors will
have the authority to determine the price, rights, preferences, privileges and
restrictions of the preferred stock. This preferred stock, if issued, might
have preference over and harm the rights of the holders of common stock.
Although the issuance of this preferred stock will provide us with flexibility
in connection with possible acquisitions and other corporate purposes, this
issuance may make it more difficult for a
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third party to acquire a majority of our outstanding voting stock. We currently
have no plans to issue preferred stock.
Our certificate of incorporation, bylaws and equity compensation plans include
provisions that may deter an unsolicited offer to purchase us. These
provisions, coupled with the provisions of the Florida General Corporation Law,
may delay or impede a merger, tender offer or proxy contest. These factors may
further delay or prevent a change of control of GoldenAccess.Com, Inc.
EXCHANGE LISTING
It is currently anticipated that our common stock will be eligible for listing
on Nasdaq 's OTC Bulletin Board ("OTCBB") coincident with the effective date of
this prospectus. We are also filing applications for listing on at least one
regional stock exchange. To continue to be listed on Nasdaq's OTCBB, we must
maintain current filings with the SEC, and we do not anticipate being
delinquent with such filings. The failure to meet these requirements in the
future may result in the delisting of our securities from Nasdaq's OTCBB, and
trading, if any, in our securities would thereafter be conducted on
the electronic version of the pink sheets, published by the National Quotation
Bureau, Inc. As a result of delisting, an investor could find it more
difficult to dispose of our securities, and our market value may fluctuate
widely, as is the case with many electronic pink sheet securities.
If our common stock were to become delisted from trading on any regional
exchange, and the trading price of the common stock were to fall below $5.00
per share on the date our securities were delisted, trading in these securities
would also be subject to the requirements of specific rules promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
require additional disclosure by broker-dealers in connection with any trades
involving a stock defined as a penny stock generally, any non-Nasdaq,
non-exchange listed equity security that has a market price of less than $5.00
per share, subject to specific exceptions. These rules require the delivery,
prior to any penny stock transaction, of a disclosure schedule explaining the
penny stock market and the risks associated therewith, and impose various sales
practice requirements on broker-dealers who sell penny stocks to persons other
than established customers and accredited investors -- generally institutions.
For these types of transactions, the broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to sale. The additional burdens
imposed upon broker-dealers by requirements may discourage broker-dealers from
effecting transactions in our securities, which could severely limit the market
price and liquidity of these securities and the ability of purchasers in this
offering to sell their securities in the secondary market. Disclosure is also
required to be made about commissions payable to both the Broker/Dealer and the
registered representative and current quotations for the securities. Finally,
monthly statements are required to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market
in penny stocks.
The penny stock restrictions described above will not apply to our securities
if these securities are listed on a regional exchange and have specific price
and buying information provided on a current and continuing basis or meet
specific minimum net tangible assets or average revenue
Page 60
<PAGE> 65
criteria. Otherwise we will remain subject to Section 15(b)(6) of the Exchange
Act governing these penny stock restrictions.
DIVIDEND POLICY
We have never declared or paid cash dividends on our common stock and
anticipate that all future earnings will be retained for development of our
business. The payment of any future dividends will be at the discretion of our
board of directors and will depend upon, among other things, future earnings,
capital requirements, our financial condition and general business conditions.
STOCK TRANSFER AGENT
Our transfer agent and registrar of the common stock is Sun Trust Bank, Mail
Code 258, PO box 4625, Atlanta, Georgia 30302.
EXPERTS
Our financial statements (development stage companies) as of and for the years
ending June 30, 1998 and 1999, have been audited by Kingery, Crouse & Hohl,
P.A., CPAs, Tampa, our independent auditors, as set forth in their report
included in this prospectus is incorporated by reference. These financial
statements have been included based on reliance upon the reports given upon
their authority as experts in accounting and auditing.
LEGAL MATTERS
There is no past, pending or, to our knowledge, threatened litigation or
administrative action which has or is expected by our management to have a
material effect upon our business, financial condition or operations, including
any litigation or action involving our officers, directors, or other key
personnel.
The Law Offices of Gary M Appelblatt, Esq., 3610 American River Dr., Suite 112,
Sacramento, Ca. 95864 [E-mail Address: [email protected]], will pass upon
specific legal matters relating to this prospectus.
AVAILABLE INFORMATION
WE HAVE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") A
REGISTRATION STATEMENT ON FORM SB-2 RELATING TO THE COMMON STOCK BEING
REGISTERED. THIS PROSPECTUS, WHICH IS PART OF THE REGISTRATION STATEMENT, DOES
NOT CONTAIN ALL OF THE INFORMATION INCLUDED IN THE REGISTRATION STATEMENT AND
THE EXHIBITS AND SCHEDULES. FOR FURTHER INFORMATION WITH RESPECT TO US, OR THE
COMMON STOCK BEING REGISTERED, REFERENCE IS MADE TO THE REGISTRATION STATEMENT,
INCLUDING THE EXHIBITS AND SCHEDULES. STATEMENTS CONTAINED IN THIS PROSPECTUS
CONCERNING THE PROVISIONS OR CONTENTS OF ANY CONTRACT, AGREEMENT OR ANY OTHER
DOCUMENT REFERRED TO WITH IN THIS PROSPECTUS ARE NOT NECESSARILY COMPLETE. WITH
RESPECT TO EACH CONTRACT, AGREEMENT OR DOCUMENT FILED AS AN EXHIBIT TO THE
REGISTRATION STATEMENT, REFERENCE IS MADE TO THE EXHIBITS FOR A MORE COMPLETE
DESCRIPTION OF THE MATTERS INVOLVED.
Page 61
<PAGE> 66
THE REGISTRATION STATEMENT, INCLUDING THE EXHIBITS AND SCHEDULES, MAY BE
INSPECTED AND COPIED AT PRESCRIBED RATES AT THE PUBLIC REFERENCE FACILITIES
MAINTAINED BY THE COMMISSION AT 450 FIFTH STREET, N.W., WASHINGTON, DC 20549
AND AT THE COMMISSION'S REGIONAL OFFICES AT 7 WORLD TRADE CENTER, 13TH FLOOR,
NEW YORK, NEW YORK 10048 AND 500 WEST MADISON STREET, SUITE 1400, CHICAGO,
ILLINOIS 60661. YOU MAY OBTAIN INFORMATION ON THE OPERATION OF PUBLIC REFERENCE
ROOM BY CALLING THE SEC AT 1-800-SEC-0330. THE COMMISSION ALSO MAINTAINS A WEB
SITE THAT CONTAINS REPORTS, PROXY AND INFORMATION STATEMENTS AND OTHER
INFORMATION REGARDING REGISTRANTS THAT FILE ELECTRONICALLY WITH THE COMMISSION,
INCLUDING GOLDENACCESS.COM, INC. THE ADDRESS OF THE SITE IS
[HTTP://WWW.SEC.GOV].
WE INTEND TO FURNISH TO OUR SHAREOWNERS ANNUAL REPORTS CONTAINING AUDITED
CONSOLIDATED FINANCIAL STATEMENTS CERTIFIED BY INDEPENDENT PUBLIC ACCOUNTANTS
FOR EACH FISCAL YEAR AND QUARTERLY REPORTS CONTAINING UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS FOR THE FIRST THREE QUARTERS OF EACH FISCAL YEAR. FOR A
PERIOD OF AT LEAST ONE YEAR FOLLOWING THE EFFECTIVE DATE OF THIS PROSPECTUS, WE
WILL BE REQUIRED BY THE SECURITIES EXCHANGE ACT OF 1934 TO FILE PERIODIC
REPORTS AND OTHER INFORMATION WITH THE SECURITIES AND EXCHANGE COMMISSION. ALL
MATERIALS MAY BE INSPECTED AT THE COMMISSION'S PRINCIPAL OFFICERS AT 450 FIFTH
STREET N.W., WASHINGTON, D.C. 20459 AND COPIES OBTAINED ON PAYMENT OF SPECIFIC
FEES PRESCRIBED BY THE COMMISSION.
WE WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHO RECEIVES A PROSPECTUS, UPON
WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE INFORMATION THAT WAS INCORPORATED
BY REFERENCE IN THE PROSPECTUS--NOT INCLUDING EXHIBITS TO THE INFORMATION THAT
IS INCORPORATED BY REFERENCE UNLESS THE EXHIBITS ARE THEMSELVES SPECIFICALLY
INCORPORATED BY REFERENCE. REQUESTS SHOULD BE DIRECTED TO OUR CHIEF FINANCIAL
OFFICER AT OUR OFFICES IN MIAMI.
Page 62
<PAGE> 67
GOLDENACCESS.COM, INC.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Financial statements:
Balance Sheet as of December 31, 1999 F-2
Statements of Operations for the three and six months ended December 31, 1999 and 1998 F-3
Statements of Stockholders' (Deficit) Equity for the six months ended December 31, 1999 F-4
Statements of Cash Flows for the three and six months ended December 31, 1999 and 1998 F-5
Notes to Financial Statements F-6
</TABLE>
- --------------------------------------------------------------------------------
F-1
<PAGE> 68
GOLDENACCESS.COM
BALANCE SHEET AS OF DECEMBER 31, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 28,958
Accounts receivable 95,015
Prepaid rent 5,845
-----------
Total current assets 129,818
Equipment and software (net of accumulated
depreciation and amortization of $99,358) 1,329,742
Other assets - deposit 5,845
-----------
TOTAL $ 1,465,405
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued expenses $ 152,841
Secured notes 60,500
Stockholder advances 254,935
-----------
Total current liabilities 468,276
-----------
Stockholders' Equity:
Common stock - $.001 par value 10,000,000 shares
authorized; 2,872,500 shares issued and outstanding 2,873
Additional paid-in capital 1,566,069
Deficit (571,813)
-----------
Total Stockholders' Equity 997,129
-----------
TOTAL $ 1,465,405
===========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
F-2
<PAGE> 69
GOLDENACCESS.COM, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Telephone service $ 1,403 $ 3,746
Sale of Gateway Products 96,574 108,574
---------- ---------- ---------- ----------
Total revenues 97,977 112,320
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Consulting fees - related party 134,925 328,502
Other consulting fees 1,250
Cost of services 71,056 122,534
Research and development 4,500 $ 8,504 5,897 $ 34,979
Travel 10,738 41,524
Office and administration 18,512 278 27,725 1,040
Occupancy and equipment 66,426 113,710 518
Organization costs 1,358 1,358
Professional fees
Advertising 787 787
---------- ---------- ---------- ----------
Total operating expenses 306,157 1,169 641,142 38,682
---------- ---------- ---------- ----------
NET LOSS $ 208,180 $ 1,169 $ 528,822 $ 38,682
========== ========== ========== ==========
NET LOSS PER SHARE:
Basic $ 0.07 $ 0.00 $ 0.18 $ 0.01
========== ========== ========== ==========
Weighted average number of shares -
Basic and dilutive 2,872,500 2,872,500 2,872,500 2,872,500
========== ========== ========== ==========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
F-3
<PAGE> 70
GOLDENACCESS.COM, INC.
STATEMENT OF STOCKHOLDERS' (DEFICIT) EQUITY
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in
Shares Amount Capital Deficit Total
--------- ------ ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
Balances at June 30, 1999 345,800 $ 346 $ 5,654 $ (42,991) $ (36,991)
Issuance of common stock
For equipment and software 2,166,700 2,167 1,414,933 1,417,100
Issuance of common stock
At $0.25 per share 360,000 360 89,640 90,000
Forgiveness of stockholder
Advances 54,592 54,592
Contributed capital 1,250 1,250
Net loss for the six months
Ended December 31, 1999 (528,822) (528,822)
--------- ------ ---------- --------- -----------
Balances at December 31, 1999 2,872,500 $2,873 $1,566,069 $(571,813) $ 997,129
========= ====== ========== ========= ===========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
F-4
<PAGE> 71
GOLDENACCESS.COM, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
--------- --------- --------- --------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(208,180) $ (11,169) $(528,822) $(38,682)
Adjustment to reconcile net loss to net cash used by
operating activities:
Non-cash consulting expense 91,252
Depreciation expense 58,927 242 98,409 518
Increase in accounts receivable (83,015) (92,615)
Increase in prepaid expenses and other assets (11,690) (11,690)
Increase in accrued expenses 87,840 152,840
--------- --------- --------- --------
NET CASH USED IN OPERATION ACTIVITIES (156,118) (10,927) (290,626) (38,164)
--------- --------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES-
Purchase of equipment (2,986) (2,986)
--------- --------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock
Advances from shareholder 120,547 2,243 254,935 38,126
Proceeds from the issuance of secured notes 60,500 60,500
--------- --------- --------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 181,047 2,243 315,435 38,126
--------- --------- --------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 24,929 (11,670) 24,809 (3,024)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,029 12,300 4,149 3,654
--------- --------- --------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 28,958 $ 630 $ 28,958 $ 630
========= ========= ========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
INFORMATION - INTEREST AND TAXES $ 0 $ 0 $ 0 $ 0
========= ========= ========= ========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
F-5
<PAGE> 72
GOLDENACCESS.COM, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
GoldenAccess.Com, Inc. (the "Company") was incorporated under the laws of the
state of Florida on June 13, 1997. The Company, which was in the development
stage as defined in Financial Accounting Standards Board Statement No. 7, from
June 13, 1997 through June 30, 1999, provides a complete, fully integrated
solution to IP Telephony systems. The Company is based in Miami, Florida and has
an office in Argentina. On August 26, 1999, the Company merged with another
Florida entity, CathTech Group, Inc. ("CathTech"). CathTech became the surviving
legal entity, which succeeded to the name GoldenAccess.Com, Inc. CathTech had no
operations and was formed in 1999 for the purpose of acquiring a private company
desiring to become public. For accounting purposes, the merger has been treated
as a reverse acquisition with the Company being treated as the acquiree for
financial statement purposes.
The Company is not currently required to prepare its financial statements
pursuant to the rules and regulations of the SEC; however, it is the intent of
the Company to become a qualified SEC filer and therefore the financial
statements included herein have been prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange Commission ("SEC"). Certain
information and footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. These
condensed financial statements should be read in conjunction with the financial
statements and the notes thereto included in the Company's registration
statement on Form SB-2 as of and for the year ended June 30, 1999. In the
opinion of management, all adjustments (consisting of normal and recurring
adjustments) considered necessary to present fairly the financial position of
the Company as of December 31, 1999 and the results of its operations and its
cash flows for the three months then ended have been included. Operating results
for the six and three-months ended December 31,1999 are not necessarily
indicative of the results that may be expected for the fiscal year ending June
30, 2000.
NOTE B - GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has accumulated
571,813 deficit through December 31, 1999 and is anticipating that it will incur
a net loss for the fiscal year ending June 30, 2000. In addition, the Company
will require a significant amount of capital to implement its business plan. The
Company's ability to continue as a going concern is dependent upon its ability
to secure an adequate amount of capital to finance its anticipated losses and
implement its business plan. However, there is no assurance they will be
successful in these efforts. These factors, among others, may indicate that the
Company will be unable to continue as a going concern for a reasonable period of
time.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
F-6
<PAGE> 73
NOTE C - NET LOSS PER SHARE
The Company computes net loss per share in accordance with SFAS No. 128
"Earnings per Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98
("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic net loss per
share is computed by dividing the net loss available to common stockholders for
the period by the weighted-average number of common shares outstanding during
the period. Diluted net loss per share is computed by dividing the net loss for
the period by the number of common and common equivalent shares outstanding
during the period. As of December 31, 1999 there are no dilutive shares.
NOTE D - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
During the six months ended December 31, 1999, stockholder advances of $54,592
were forgiven and reclassified to additional paid-in capital.
On July 30, 1999, the Company issued 2,166,700 shares of its common stock to its
President and majority stockholder as consideration for certain equipment,
software, customer contracts and related agreements, and the rights to pending
patents and trademarks. The Company has recorded the value of these assets at
such stockholders approximate historical cost of $1,417,000.
NOTE E - STOCK OPTIONS
During the six months ended December 31, 1999, the Company granted to its
President and key employee five-year options to purchase 320,000 share of stock
at $3.75 per share, exercisable 180 days subsequent to the effective date of the
Company's first registration statement. In addition, the Company granted to a
consultant, five-year options to purchase 50,000 share of stock at $3.75 per
share, exercisable 90 days subsequent to the effective date of the Company's
first registration statement. Also during the six-months ended December 31,
1999, the Company granted to a consultant, five-year options to purchase 500,000
share of stock at $5.00 per share, exercisable 90 days subsequent to the
effective date of the company's first registration statement. The granting of
these options resulted in no compensation expense to the Company as $3.75 per
share was estimated to be the fair market value of the options at the grant
date.
NOTE F - OTHER RELATED PARTY TRANSACTIONS
During the six months ended December 31, 1999, the Company's president and
majority stockholder advanced approximately $254,935 to the Company. The
advances are unsecured, non-interest bearing and due on demand.
During the three and six months ended December 31, 1999, the Company paid
consulting fees of approximately $134,900 and $328,500 respectively, to a
Company related to the president.
F-7
<PAGE> 74
NOTE G - COMMITMENTS
On October 15, 1999, the Company entered into a lease agreement with an
affiliate for certain office space. The lease term, which commences on November
1, 1999 and terminates on February 14, 2001, requires monthly payments of $5,488
plus applicable sales tax.
NOTE H - PROMISSORY NOTE
During the three months ended December 31, 1999, the Company issued promissory
notes to five individuals in the amount of $60,500. The notes are secured by the
Company's stock, are due on demand and accrue interest at 10% annually.
NOTE I - SUBSEQUENT EVENTS
During January 2000, the Company entered into two operating leases for telephone
software testing equipment. The lease agreements have terms of 30 months each
and require monthly payments of approx. $4,220 and $2,500.
- --------------------------------------------------------------------------------
F-8
<PAGE> 75
GOLDENACCESS.COM, INC.
(A Development Stage Enterprise)
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report F-9
Financial Statements as of and for the year ended June 30, 1999 and for the
respective periods June 13, 1997 (date of incorporation) to June 30, 1998 and
1999:
Balance Sheet F-10
Statements of Operations F-11
Statements of Stockholder's Deficit F-12
Statements of Cash Flows F-13
Notes to Financial Statements F-14
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 76
[Letterhead of Kingery, Crouse & Hohl, P.A.]
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of GoldenAccess.Com, Inc.:
We have audited the accompanying balance sheet of GoldenAccess.Com, Inc., a
development stage enterprise (the "Company"), as of June 30, 1999 and the
related statements of operations, stockholder's deficit and cash flows for the
year then ended, and for the respective periods June 13, 1997 (date of
incorporation) to June 30, 1998 and 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and the disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates
made by management, as well as the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position of the Company, as of June 30,
1999 and the results of its operations and its cash flows for the year then
ended, and for the respective periods June 13, 1997 (date of incorporation) to
June 30, 1998 and 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company has generated recurring losses from operations
and has a stockholder's deficit as of June 30, 1999. In addition, the Company
will require a significant amount of capital to proceed with its business plan.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note B. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Kingery, Crouse & Hohl P.A.
November 12, 1999
F-9
<PAGE> 77
GOLDENACCESS.COM
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET AS OF JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents $ 4,149
Receivables 2,400
Equipment (net of accumulated
depreciation of $948) 11,052
--------
TOTAL $ 17,601
========
LIABILITIES AND STOCKHOLDER'S DEFICIT
LIABILITIES -
Stockholder advances $ 54,592
--------
STOCKHOLDER'S DEFICIT:
Common stock - $.001 par value 10,000,000 shares
authorized; 4,000 shares issued and outstanding 4
Additional paid-in capital 5,996
Deficit accumulated during the development stage (42,991)
--------
Total stockholder's deficit (36,991)
--------
TOTAL $ 17,601
========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
F-10
<PAGE> 78
GOLDENACCESS.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period For the period
June 13, 1997 June 13, 1997
For the (date of (date of
year ended incorporation) incorporation)
June 30, to June 30, to June 30,
1999 1998 1999
------- ------- -------
<S> <C> <C> <C>
REVENUES:
Telephone service $ 2,857 $ 2,857
Consulting - related party 3,000 3,000
Design 529 529
------- -------
Total revenues 6,386 6,386
------- -------
OPERATING EXPENSES:
Research and development - related party 28,902 $11,385 40,287
Organization costs 3,235 159 3,394
Depreciation 948 948
Professional fees 1,050 1,050
Advertising 787 787
Office and administration 1,540 204 1,744
Travel 1,167 1,167
------- ------- -------
Total operating expenses 37,629 11,748 49,377
------- ------- -------
NET LOSS $31,243 $11,748 $42,991
======= ======= =======
NET LOSS PER SHARE:
Basic $ 0.09 $ 0.03 $ 0.12
======= ======= =======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
F-11
<PAGE> 79
GOLDENACCESS.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' DEFICIT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage Total
------ ------ ------- -------- --------
<S> <C> <C> <C> <C> <C>
Balances at June 13, 1997
(date of incorporation) 0 $ 0 $ 0 $ 0 $ 0
Issuance of common stock 4,000 4 5,996 6,000
Net loss for the period June 13,
1997 (date of incorporation)
to June 30, 1998 (11,748) (11,748)
----- ------ ------ -------- --------
Balances at June 30, 1998 4,000 4 5,996 (11,748) (5,748)
Net loss for the year ended
June 30, 1999 (31,243) (31,243)
----- ------ ------ -------- --------
Balances at June 30, 1999 4,000 $ 4 $5,996 $(42,991) $(36,991)
===== ====== ====== ======== ========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
F-12
<PAGE> 80
GOLDENACCESS.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period For the Period
June 13, 1997 June 13, 1997
(date of (date of
For the Year incorporation) incorporation)
Ended June 30, to June 30, to June 30,
1999 1998 1999
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(31,243) $(11,748) $(42,991)
Adjustment to reconcile net loss to net cash used by
operating activities:
Depreciation 948 948
Increase in receivables (2,400) (2,400)
-------- -------- --------
NET CASH USED BY OPERATING ACTIVITIES (32,695) (11,748) (44,443)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES -
Purchases of equipment (10,162) (1,838) (12,000)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 6,000 6,000
Advances from stockholder 43,352 11,240 54,592
-------- -------- --------
CASH PROVIDED BY FINANCING ACTIVITIES 43,352 17,240 60,592
-------- -------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 495 3,654 4,149
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,654 0 0
-------- -------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,149 $ 3,654 $ 4,149
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Interest and taxes paid $ 0 $ 0 $ 0
======== ======== ========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
F-13
<PAGE> 81
GOLDENACCESS.COM, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
GoldenAccess.Com, Inc. (the "Company") was incorporated under the laws of the
state of Florida on June 13, 1997. The Company, which is considered to be in the
development stage as defined in Financial Accounting Standards Board Statement
No. 7, intends to provide a complete, fully integrated solution to IP Telephony
systems. The Company is based in Miami, Florida and has an office in Argentina.
On August 26, 1999, the Company merged with another Florida entity, CathTech
Group, Inc. ("CathTech"). CathTech became the surviving legal entity, which
succeeded to the name GoldenAccess.Com, Inc. (see NOTE G).
NOTE B - GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company generated net losses
of $31,243 and $11,748 for the respective periods ended June 30, 1999 and 1998,
and is anticipating that it will incur a net loss for the fiscal year ending
June 30, 2000. In addition, the Company will require a significant amount of
capital to implement its business plan. The Company's ability to continue as a
going concern is dependent upon its ability to secure an adequate amount of
capital from its stockholder and/or certain strategic partners to finance its
anticipated losses and planned principal operations. However, there is no
assurance they will be successful in these efforts. These factors, among others,
may indicate that the Company will be unable to continue as a going concern for
a reasonable period of time.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements. The
reported amounts of revenues and expenses during the reporting period may be
affected by the estimates and assumptions management is required to make. Actual
results could differ from those estimates.
Equipment
Equipment is stated at cost. Major additions are capitalized, while minor
additions and maintenance and repairs, which do not extend the useful life of an
asset, are expensed as incurred. Depreciation is computed using the
straight-line method over the assets estimated useful lives of five years.
F-14
<PAGE> 82
Income Taxes
Income taxes are computed in accordance with Financial Accounting Standards
Statement No. 109 "Accounting for Income Taxes" ("SFAS 109"). Under SFAS 109,
deferred taxes are recognized for the tax consequences of temporary differences
by applying enacted statutory rates applicable to future years to differences
between the financial statement carrying amounts and the tax basis of existing
assets and liabilities. Also, the effect on deferred taxes of a change in tax
rates is recognized in income in the period that included the enactment date.
Statement of Cash Flows
For purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.
Net Loss Per Share
The Company computes net loss per share in accordance with SFAS No. 128
"Earnings per Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98
("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic net loss per
share is computed by dividing the net loss available to common stockholders for
the period by the weighted-average number of common shares outstanding during
the period. For calculation of loss per share, the Company has used 345,800
shares, which reflects the shares outstanding as if the merger, discussed in
NOTE A, had occurred at inception. The diluted net loss per share is computed by
dividing the net loss for the period by the number of common and common
equivalent shares outstanding during the period. As of June 30, 1999 there are
no dilutive shares.
NOTE D - COMMITMENTS
At June 30, 1999, the Company had obligated itself under a three-year operating
lease agreement for office space in Argentina. The lease, which expires in May
2002, requires monthly rental payments of approximately $700. Future minimum
lease payments under this lease, and a lease entered in October 1999 (see NOTE
G), are approximately as follows:
<TABLE>
<CAPTION>
Years Ending
June 30, Amounts
-------- -------
<S> <C>
2002 $ 54,800
2002 54,800
2002 7,700
--------
Total $117,300
========
</TABLE>
Management anticipates that the Company will enter three-year employment
agreements with its President and stockholder, as well as two other officers.
The employment agreements, which are expected to require total base salaries of
approximately $204,000 for each of the three years ending June 30, 2000 through
2002, are also expected to contain provisions for bonuses, other incentives and
fringe benefits.
On July 2, 1999, the Company engaged a stockholder of CathTech to provide
certain consulting services under a one-year consulting agreement. As
consideration for such consulting services, the Company granted such entity
options to purchase 500,000 shares of its common stock for $5.00 per share (see
NOTE G). The options expire on December 31, 2002.
F-15
<PAGE> 83
NOTE E - INCOME TAXES
During the year ended June 30, 1999, the Company recognized losses for both
financial and tax reporting purposes. Accordingly, no deferred taxes have been
provided for in the accompanying statement of operations. The significant
components of the deferred tax asset as of June 30, 1999, assuming an effective
income tax rate of 34%, are approximately as follows:
<TABLE>
<S> <C>
Deferred Income Tax Asset -
Net operating loss carryforwards $ 14,000
--------
Deferred income tax asset 14,000
Less valuation allowance (14,000)
--------
Total deferred income tax asset $ 0
========
</TABLE>
The Company established a valuation allowance to fully reserve the deferred
income tax asset as of June 30, 1999 as the realization of the asset did not
meet the required asset recognition standard established by Financial Accounting
Standards Statement No. 109 "Accounting for Income Taxes." Accordingly, the
Company has not recorded any benefits for deferred income taxes in the
accompanying statements of operations.
At June 30, 1999, the Company had net operating loss carryforwards of
approximately $40,000 for income tax purposes. These carryforwards will be
available to offset future taxable income through the year 2019.
NOTE F - OTHER RELATED PARTY TRANSACTIONS
During the year ended June 30, 1999 and the period June 13, 1997 (date of
incorporation) to June 30, 1998, the Company's President and stockholder
provided various equipment, services and a portion of his home in Florida for
office space for no consideration. The value of this equipment and office space,
as well as the services rendered are considered to be insignificant and as such
no expense has been recorded in the accompanying statements of operations. The
Company estimates that from inception to June 30, 1999, no more than 100 hours
have been dedicated solely to the business of the Company by the president or
any other individual.
During the year ended June 30, 1999 and the period June 13, 1997 (date of
incorporation) to June 30, 1998, the Company paid research and development costs
of approximately $28,000 and $11,000, to an individual that subsequent to June
30, 1999 became an optionholder.
During the year ended June 30, 1999 and the period June 13, 1997 (date of
incorporation) to June 30, 1998, the Company's President and stockholder
advanced various funds to the Company. These advances, which were unsecured and
non-interest bearing, were converted to equity in July 1999.
During the year ended June 30, 1999, the Company earned $3,000 in consulting
revenues from an entity affiliated through common ownership.
F-16
<PAGE> 84
NOTE G - SUBSEQUENT EVENTS
Stock Option Plan
The Company has reserved 1,720,000 shares of its common stock for issuance under
certain stock option plans it anticipates adopting. In addition to the options
discussed at NOTE D, subsequent to June 30, 1999, the Company has granted
certain key employees and a consultant, five-year options to purchase 370,000
shares of its common stock for $3.75 per share, which is the estimated fair
market value of the shares at the grant date.
Acquisition of Assets
On July 30, 1999, the Company issued 2,166,700 shares of its common stock to its
President and majority stockholder as consideration for certain equipment,
software, customer contracts and related agreements, and the rights to pending
trademarks. The Company has recorded the value of these assets at such
stockholders' approximate historical cost basis.
Merger
On August 26, 1999, the Company merged with CathTech, which became the surviving
entity but retained the name of GoldenAccess.Com, Inc. Upon the effective date
of the merger, the issued and outstanding shares of the surviving corporation
were owned 87.5% by the then existing common stockholders of the Company and
12.5% by the stockholders of CathTech. In connection with this merger, the
Company paid $90,000 to the public parent of CathTech. For accounting purposes,
the merger will be treated as a reverse acquisition with the Company being
treated as the acquiree for financial statement purposes.
Leases
On October 15, 1999, the Company entered into a lease agreement with an
affiliate for certain office space. The lease term, which commences on November
1, 1999 and terminates on February 14, 2001, requires monthly payments of $5,488
plus applicable sales tax.
Proposed Registration of Common Stock
The Company plans to register 500,000 shares of its common stock. 114,400 of
these shares will be distributed, subsequent to the effective date of the
registration statement, to stockholders of the previous parent of CathTech as a
stock dividend. The remaining 385,100 shares will be registered for future sale
by the holders thereof. Accordingly, the Company will not receive any proceeds
from the offering.
- --------------------------------------------------------------------------------
F-17
<PAGE> 85
NO DEALER, SALESPERSON OR ANY OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS PROSPECTUS
AND, IF GIVEN OR MADE, THE INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY US. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE
SECURITIES OFFERED BY THIS PROSPECTUS, OR AN OFFER TO SELL OR SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH THE OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IS UNLAWFUL. THE DELIVERY OF THIS
PROSPECTUS SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION PROVIDED IS CORRECT SUBSEQUENT TO THE DATE OF THE PROSPECTUS. THIS
PROSPECTUS MAY BE USED BY US OR BY ANY BROKER-DEALER WHO MAY PARTICIPATE IN
SALES OF THE SHARES.
UNTIL ________________, 2000 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS) ALL
BROKER-DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS
WITH RESPECT TO SALES EFFECTED BY THEM.
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY ........................................ 4
OUR COMPANY .................................... 5
RISK FACTORS ................................... 7
DISTRIBUTION ................................... 24
PLAN AND RESULTS
OF OPERATIONS .................................. 25
YEAR 2000 READINESS DISCLOSURE ................. 27
CAPITALIZATION ................................. 28
BUSINESS ....................................... 29
RECENT ASSETS ACQUISITION ...................... 43
SELLING SECURITYHOLDERS ........................ 45
PRINCIPAL SHAREHOLDERS ......................... 46
MANAGEMENT ..................................... 47
DESCRIPTION OF SECURITIES ...................... 55
SHARES ELIGIBLE FOR FUTURE SALE ................ 56
DIVIDEND POLICY ................................ 59
STOCK TRANSFER AGENT ........................... 59
EXPERTS ........................................ 59
LEGAL MATTERS .................................. 59
AVAILABLE INFORMATION ......................... 59
INDEX TO FINANCIAL STATEMENTS .................. F1
</TABLE>
GOLDENACCESS.COM, INC.
500,000 SHARES COMMON STOCK
(PAR VALUE $.001 PER SHARE)
[LOGO]GOLDENACCESS.COM
GOLDENACCESS.COM, INC.
6161 BLUE LAGOON DRIVE, SUITE 190
MIAMI, FL. 33126
305-264-2401
<PAGE> 86
PART II-INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS
THE INFORMATION REQUIRED BY THIS ITEM IS INCORPORATED BY REFERENCE TO
"INDEMNIFICATION" IN THIS PROSPECTUS.
Section 607.0850 of the Florida Business Corporation Act empowers a corporation
to indemnify its directors and officers and to purchase insurance with respect
to liability arising out of their capacity or status as directors and officers
provided that this provision shall not eliminate or limit the liability of a
director (1) for any breach of the director's duty to loyalty to the
corporation or its stockholders (2) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3) arising
under Section 607.0850 of the Florida Business Corporation Act, or (4) for any
transaction from which the director derived an improper personal benefit.
The Florida Business Corporation Act provides further that the indemnification
permitted shall not be deemed exclusive of any other rights to which the
directors and officers may be entitled under the corporation's by-laws, any
agreement, vote of shareholders or otherwise.
At the time of this filing, we have not entered into individual indemnity
agreements with our officers and directors. However, this is anticipated and
its effect will be to require us to indemnify our officers and directors for
any claim arising against them in their official capacities if they acted in
good faith and in a manner that they reasonably believed 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 their conduct
was unlawful.
Indemnification for liabilities arising under the securities act of 1933, as
amended, may be permitted to our directors, officers, or persons under these
provisions, but we have been informed that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding,
is asserted by any of our directors, officers or controlling persons in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question of whether such
indemnification by us is against public policy as expressed in the Securities
Act of 1933, as amended, and we will be governed by the final adjudication of
such case.
II-1
<PAGE> 87
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses we will pay in connection
with the issuance and distribution of the securities being registered by this
registration statement.
<TABLE>
<S> <C>
SEC Registration Fee $ 1211.25
NASD Registration Fee $ 925.00
Printing Expenses, including stock certificates $ 127,000.00(1)
Accounting Fees and Expenses $ 24,500.00(1)
Legal Fees and Expenses $ 45,000.00
Blue Sky Fees and Expenses $ 7,300.00(1)
Miscellaneous $ 5,300.00(1)
Travel and Due Diligence Meeting Expenses $ 23,000.00(1)
Total Estimated Expenses $ 134,236.25(1)
- -----------------------------------------------------------------------
</TABLE>
1. These expenses, except for the SEC and NASD fees, are estimated.
II-2
<PAGE> 88
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
(A) UNREGISTERED SECURITIES SOLD
The following table sets out, for all sales of our securities within the three
years last preceding this registration statement without registration, under
the Securities Act of 1933, (1) the date, title and amount of securities sold
(2) names of underwriters, if any (3) the persons to whom the securities were
sold (4) the consideration paid for the securities, whether cash or non-cash
and (5) all the issued securities below were effected without registration under
the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon
the exemption from registration contained in Section 4(2) of the Securities
Act:
<TABLE>
<CAPTION>
======================================================================================================================
Name of Option Holders(1) Cardiac Control Other Purchaser By Stock Other Founders(3)
Purchaser Services, Inc. for Cash(2) Exchange
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Securities
- ----------------------------------------------------------------------------------------------------------------------
Class of Stock Common Common Common Common Common
- ----------------------------------------------------------------------------------------------------------------------
Dates Acquired 7/99-8/99 8/26/99 8/97 - 11/97 8/99
- ----------------------------------------------------------------------------------------------------------------------
Amount 1,720,000 129,300 4,000 2,166,700 719,100
- ----------------------------------------------------------------------------------------------------------------------
Consideration Founder Shares(5) $60,592 Founder Shares(4)
- ----------------------------------------------------------------------------------------------------------------------
Exemption Section 4(2) Section 4(2) Section 4(2) Section 4(2) Section 4(2)
Claimed
======================================================================================================================
</TABLE>
All investors had the opportunity to ask questions and receive answers from all
of our officers, directors and employees. In addition, they had access to
review all of our corporate records and material contracts and agreements.
1. Option holders consist of the following five individuals: Clifford Pierce,
(President, Chief Financial Officer and Chairman of the Board) 120,000 - shares
granted in July, 1999, however, these option shares may not be exercised until
180 days subsequent to the effective date of our first registration statement.
The exercise price of the stock is twenty-five cents per share. There are
another 420,000 option shares, twenty percent of which shares can not be
exercised until one year after the effective date of our first registration
statement at an option price of twenty-five cents per share. The remaining
eighty percent of the shares may not be exercised until two years after the
effective date of our first registration statement. Paul Callihoo (Executive
Vice President of International marketing and current Chief Operating Officer
and director) has been granted 50,000 of these options and Nigel Gray (Vice
President of Technical and Business Development and director) 50,000 options.
There are 220,000 remaining of these option shares designated for various key
and non-key employees who each earn less than one hundred thousand dollars per
annum. Southeastern Venture Corporation was granted 50,000 options at
twenty-five cents per share, in August, 1999, exercisable 90 days after the
effective date of this registration statement. There are 630,000 option shares
remaining designated and reserved for the new Chief Executive Officer, the new
Chief Operating Officer and the new Chief Financial Officer. Barry Potter was
granted 500,000 option shares in July, 1999, at an exercise price of $5.00 per
share, which may be exercised 90 days after the effective date of this
registration statement.
2. Clifford Pierce, President.
3. This group consists of the following six individuals or entities, all of
whom received their shares as founders in August, 1999, as that term is defined
under section 230.405 of the General Rules and Regulations of the Securities
Act of 1933.: Dorf Financial - 143,000 shares in August, 1999, purchased for
par value; Alan Rabin - 1,000 shares in August, 1999, purchased for par value;
Barry Potter - 57,000 shares in August, 1999, purchased for par value and
86,000 shares purchased for $3.75 per share; The Tory Trust - 26,900 shares in
August, 1999, purchased for par value; Lindsey A. Gertner - 131,000 shares in
August, 1999, purchased for $3.75 per share; Potter Financial Corporation -
143,000 shares in August, 1999, purchased for $3.75 per share; Clifford Pierce
- - 2,166,700 shares in August, 1999, exchanged for assets, as well as Cardiac
Control Services, Inc. on behalf of their shareholders as a group, prior to
distribution of the stock dividend.
4. Both Cardiac Control services, Inc. and the other five individual and/or
entity founders, described in footnote 3, obtained their shares as a result of
their contribution and efforts in forming CathTech, Inc. and the subsequent
merger with GoldenAccess.Com, Inc. in August, 1999.
5. CathTech, Inc. was incorporated under the laws of the State of Florida in
August, 1999, by Cardiac Control services, Inc. and the other five individual
and/or entity founders. They retained their shares in the August, 1999, merger
with GoldenAccess.Com, Inc., continuing their "founder's" status, which can be
characterized as a Section 4(2) exemption by an issuer not involving a public
offering.
II-3
<PAGE> 89
EXHIBITS
INDEX TO EXHIBITS "TBPBA" = TO BE PROVIDED BY AMENDMENT
LIST OF EXHIBITS
<TABLE>
<S> <C> <C>
1 Underwriting agreement Not Applicable
2 Plan of acquisition, reorganization, arrangement, Not Applicable
liquidation or succession
3.1 Articles of Incorporation of GAC.com Attached*Previously
Filed
3.1A Articles of Incorporation of Cath Tech Attached*Previously
Filed
3.2 By-laws GAC Attached*Previously
Filed
3.2A By-laws Cath Tech and Certification Attached*Previously
Filed
4 Instruments defining the rights of holders, including Attached*Previously
indentures (See 3.2) Common stock Specimen Filed
Certificate
4.1 Option Agreements Attached** Filed
Herewith due to
modification
5 Opinion re: legality Attached*Previously
Filed
6 No exhibit required Not Applicable
7 Opinion re: liquidation preference (See 3.2) Not Applicable
8 Opinion re: tax matters Not Applicable
9 Voting trust agreement Not Applicable
10 MATERIAL CONTRACTS
10.1 Form of IP Gateway Purchase Agreement Attached*Previously
Filed
10.2 Form of IP Gateway Commercial Service Agreement Attached*Previously
Filed
10.3 Lease for office in Argentina (Dated) Attached*Previously
Filed
10.3A Lease for office in Miami Attached*Previously
Filed
</TABLE>
II-4
<PAGE> 90
<TABLE>
<S> <C> <C>
10.4 Discar Distribution Agreement Attached*Previously
Filed
10.5 Carrier Agreement with Easton Telecom (Frontier TBPBA
Communication) Pending
10.6 Carrier Agreement with International Telecom Attached*Previously
Communications Filed
10.7 Purchase Agreement and Bill of Sale Attached**Filed
Herewith
10.8 CTI-PRO Distribution Agreement for Central and Attached*Previously
Eastern Europe Filed
10.9 Partner Program Agreements with Cisco Attached**Filed
Herewith
10.10 Partner Program with Dialogic Attached*Previously
Filed
10.11 Employment Agreement dated October 1, 1999 Attached*Previously
With Clifford Y. Pierce (President) Filed
10.12 Employment Agreement dated October 1, 1999 Attached*Previously
With Paul Callihoo (Executive Vice-President) Filed
10.13 Employment Agreement dated October 1, 1999 Attached*Previously
With Nigel Gray (Vice-President) Filed
10.14 PL Data Teknik Distribution Agreement for Denmark Attached*Previously
(Pending) Filed
10.15 Integrated Communications Group Distribution Attached*Previously
Agreement for Hong Kong Filed
10.16 Beijing Agreements Attached**Filed
Herewith
10.17 Hertford Agreements Attached**Filed
Herewith
11 Statement re: computation of per share earnings Not Applicable
12 No exhibit required Not Applicable
13 Annual or quarterly reports, Form 10-Q Not Applicable
14.1 Material Patents: Internet accessible database with Attached**
telephone entry capability Filed Herewith
14.2 Material Patent: Long distance data communication Attached**Filed
having local telephone connection access Herewith
15 Letter on unaudited interim financial information (See Not Applicable
page F-19)
16 Letter on change in certifying accountant Not Applicable
</TABLE>
II-5
<PAGE> 91
<TABLE>
<CAPTION>
<S> <C> <C>
17 Letter on director resignation Not Applicable
18 Letter on change in accounting principles Not Applicable
19 Reports furnished to security holders Not Applicable
19.1 Letter to Shareholders dated TBPBA
20 Other documents or statements to security holders Not Applicable
20.1 State of Florida Merger Filings Attached*Previously
Filed
20.2 Plan and Articles of Merger Attached*Previously
Filed
21 Subsidiaries of the registrant Not Applicable
22 Published report regarding matters submitted to vote Not Applicable
23 Consent of experts and counsel Attached*Previously
Filed
23.1 Consent of counsel Attached*Previously
Filed
23.2 Consent of accountant Attached**Filed
herewith
24 Power of attorney Not Applicable
25 Statement of eligibility of trustee Not Applicable
26 Invitations for competitive bids Not Applicable
27.1 Financial Data Schedule Templates Attached**Filed herewith
27.2 Financial Data Schedule Templates Attached**Filed herewith
28 Information from reports furnished to state insurance Not Applicable
regulatory authorities
</TABLE>
II-6
<PAGE> 92
ITEM 28. UNDERTAKINGS
(a) RULE 415 OFFERING
The undersigned Registrant will:
(1) File, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(a) Include any prospectus required by section 10(a)(3) of the Securities
Act;
(b) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement; any increase or decrease in volume of securities offered, if the
total dollar value of securities offered would not exceed that which was
registered, and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(c) Include any additional or changed material information on the plan of
distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of the
Securities that remain unsold at the end of the offering.
(e) Request for acceleration of effective date.
SUBJECT TO THE TERMS AND CONDITIONS OF SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934, THE UNDERSIGNED REGISTRANT UNDERTAKES TO FILE WITH THE SECURITIES
AND EXCHANGE COMMISSION ANY SUPPLEMENTARY AND PERIODIC INFORMATION, DOCUMENTS,
AND REPORTS AS MAY BE PRESCRIBED BY ANY RULE OR REGULATION OF THE COMMISSION
HERETOFORE OR HEREAFTER DULY ADOPTED UNDER THE AUTHORITY CONFERRED TO THAT
SECTION.
Indemnification for liabilities arising under the Securities Act of 1933 (the
"Act") may be permitted to our directors, officers and controlling persons
pursuant to these provisions, or otherwise, but we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is unenforceable. In the
event that a claim for indemnification against such liabilities, other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding, is asserted by any of our directors, officers or
controlling persons in connection with the Securities being registered, we
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-7
<PAGE> 93
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS OF FILING ON FORM SB-2 AND AUTHORIZED THIS
REGISTRATION STATEMENT TO BE SIGNED ON OUR BEHALF BY THE UNDERSIGNED, IN THE
CITY OF MIAMI, STATE OF FLORIDA, ON FEBRUARY 16, 2000.
(REGISTRANT) GOLDENACCESS.COM, INC.
BY: //SS//
------------------------------------
CLIFFORD Y. PIERCE, PRESIDENT, CFO, AND
CHAIRMAN OF THE BOARD OF DIRECTORS
IN ACCORDANCE WITH THE SECURITIES ACT OF 1933 THIS REGISTRATION WAS SIGNED BY
THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
(SIGNATURE) //SS// (DATE) FEBRUARY 16, 2000
-----------------------------------
NIGEL GRAY
VICE PRESIDENT, DIRECTOR
//SS//
(SIGNATURE) ----------------------------------- (DATE) FEBRUARY 16, 2000
PAUL CALLIHOO
EXECUTIVE VICE PRESIDENT, DIRECTOR
//SS//
(SIGNATURE) ----------------------------------- (DATE) FEBRUARY 16, 2000
DAVID W. HEATH
DIRECTOR
//SS//
(SIGNATURE) ----------------------------------- (DATE) FEBRUARY 16, 2000
OWEN GOLDWYN
DIRECTOR
WHO MUST SIGN: THE SMALL BUSINESS ISSUER, ITS PRINCIPAL EXECUTIVE OFFICER OR
OFFICERS, ITS PRINCIPAL FINANCIAL OFFICER, ITS CONTROLLER OR PRINCIPAL
ACCOUNTING OFFICER AND AT LEAST THE MAJORITY OF DIRECTORS OR PERSONS PERFORMING
SIMILAR FUNCTIONS.
II-8
<PAGE> 94
EXHIBITS
INDEX TO EXHIBITS "TBPBA" = TO BE PROVIDED BY AMENDMENT
LIST OF EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
1 Underwriting agreement Not Applicable
2 Plan of acquisition, reorganization, arrangement, Not Applicable
liquidation or succession
3.1 Articles of Incorporation of GAC.com Attached*Previously
Filed
3.1A Articles of Incorporation of Cath Tech Attached*Previously
Filed
3.2 By-laws GAC Attached*Previously
Filed
3.2A By-laws Cath Tech and Certification Attached*Previously
Filed
4 Instruments defining the rights of holders, including Attached*Previously
indentures (See 3.2) Common stock Specimen Filed
Certificate
4.1 Option Agreements Attached** Filed
Herewith due to
modification
5 Opinion re: legality Attached*Previously
Filed
6 No exhibit required Not Applicable
7 Opinion re: liquidation preference (See 3.2) Not Applicable
8 Opinion re: tax matters Not Applicable
9 Voting trust agreement Not Applicable
10 MATERIAL CONTRACTS
10.1 Form of IP Gateway Purchase Agreement Attached*Previously
Filed
10.2 Form of IP Gateway Commercial Service Agreement Attached*Previously
Filed
10.3 Lease for office in Argentina (Dated) Attached*Previously
Filed
10.3A Lease for office in Miami Attached*Previously
Filed
10.4 Discar Distribution Agreement Attached*Previously
Filed
10.5 Carrier Agreement with Easton Telecom (Frontier TBPBA
Communication) (Pending)
</TABLE>
II-9
<PAGE> 95
<TABLE>
<S> <C> <C>
10.6 Carrier Agreement with International Telecom Attached*Previously
Communications Filed
10.7 Purchase Agreement and Bill of Sale Attached*Previously
Filed
10.8 CTI-PRO Distribution Agreement for Central and Attached*Previously
Eastern Europe Filed
10.9 Partner Program Agreements with Cisco Attached**Filed
Herewith
10.10 Partner Program with Dialogic Attached*Previously
Filed
10.11 Employment Agreement dated October 1, 1999 Attached*Previously
With Clifford Y. Pierce (President) Filed
10.12 Employment Agreement dated October 1, 1999 Attached*Previously
With Paul Callihoo (Executive Vice-President) Filed
10.13 Employment Agreement dated October 1, 1999 Attached
With Nigel Gray (Vice-President) *Previously Filed
10.14 PL Data Teknik Distribution Agreement for Denmark Attached*Previously
(Pending) Filed
10.15 Integrated Communications Group Distribution Attached*Previously
Agreement for Hong Kong Filed
10.16 Beijing Agreements Attached**
Filed Herewith
10.17 Hertford Agreements Attached**Filed
Herewith
11 Statement re: computation of per share earnings Not Applicable
12 No exhibit required Not Applicable
13 Annual or quarterly reports, Form 10-Q Not Applicable
14.1 Material Patents:Internet accessible database with Attached**
telephone entry capability Filed Herewith
14.2 Material Patent: Long distance data communication Attached**
having local telephone connection access Filed Herewith
15 Letter on unaudited interim financial information (See Not Applicable
page F-19)
16 Letter on change in certifying accountant Not Applicable
17 Letter on director resignation Not Applicable
18 Letter on change in accounting principles Not Applicable
19 Reports furnished to security holders Not Applicable
</TABLE>
II-10
<PAGE> 96
<TABLE>
<S> <C> <C>
19.1 Letter to Shareholders dated TBPBA
20 Other documents or statements to security holders Not Applicable
20.1 State of Florida Merger Filings Attached*Previously
Filed
20.2 Plan and Articles of Merger Attached*Previously
Filed
21 Subsidiaries of the registrant Not Applicable
22 Published report regarding matters submitted to vote Not Applicable
23 Consent of experts and counsel Attached*Previously
Filed
23.1 Consent of counsel Attached*Previously
Filed
23.2 Consent of accountant Attached**Filed
herewith
24 Power of attorney Not Applicable
25 Statement of eligibility of trustee Not Applicable
26 Invitations for competitive bids Not Applicable
27 Financial Data Schedule Templates Attached
**Filed herewith
28 Information from reports furnished to state insurance Not Applicable
regulatory authorities
</TABLE>
II-11
<PAGE> 1
Exhibit 4.1
WRITTEN CONSENT
OF THE DIRECTORS
OF GOLDENACCESS.COM, INC.
IN LIEU OF SPECIAL MEETING
The undersigned, being the sole director of GOLDENACCESS.COM, INC., a
Florida corporation (the "Corporation"), hereby consents, in lieu of a special
meeting and pursuant to Section 607.0821 of the Florida Business Corporation
Act, to the adoption of the following resolutions, and directs the Secretary of
the Corporation to file this Consent in the minute book of the Corporation:
WHEREAS, Clifford Y. Pierce ("Pierce") is the Chairman of the
Corporation;
WHEREAS the Corporation desires to issue to Pierce an option to acquire
120,000 shares of common stock of the Corporation at a strike price of three
dollars and seventy-five cents ($3.75) per share exercisable for five years from
the date of the option agreement, but not first exercisable until the completion
of 6 consecutive months after the effective date of the first registration
statement of the Company.
RESOLVED, that the officers of the Corporation are hereby authorized
and directed to execute that certain Option Agreement in the form attached
hereto as EXHIBIT A, and to do and perform any and all other acts, and execute
any and all other documents that, in their sole discretion, are necessary or
appropriate in connection therewith.
WHEREAS, Paul Callihoo ("Callihoo") is a key person in the Corporation;
WHEREAS, the Corporation desires to issue to Callihoo, as key
personnel, an option to acquire 50,000 shares of common stock of the Corporation
at a strike price of three dollars and seventy-five cents ($3.75) per share,
exercisable for five years after the date of the option agreement, but with the
restriction that an option to acquire only 10,000 shares may be exercised after
the completion of one year following the effective date of the first
registration statement of the Corporation, and that an option to acquire the
other 40,000 shares may be exercised after the completion of two years following
the effective date of the first registration statement of the Corporation, and
with the further restriction that Callihoo be employed by the Corporation at the
time of any exercise of options.
RESOLVED, that the officers of the Corporation are hereby authorized
and directed to execute that certain Option Agreement in the form attached
hereto as EXHIBIT B, and to do and perform any and all other acts, and execute
any and all other documents that, in their sole discretion, are necessary or
appropriate in connection therewith.
WHEREAS, Nigel Gray ("Gray") is a key person in the Corporation;
WHEREAS, the Corporation desires to issue to Gray, as key personnel, an
option to acquire 50,000 shares of common stock of the Corporation at a strike
price of three dollars and seventy-five cents ($3.75) per share, exercisable for
five years after the date of the option agreement, but with the
<PAGE> 2
restriction that an option to acquire only 10,000 shares may be exercised only
after the completion of one year following the effective date of the first
registration statement of the Corporation, and that an option to acquire the
other 40,000 shares may be exercised only after the completion of two years
following the effective date of the first registration statement of the
Corporation, and with the further restriction that Gray be employed by the
Corporation at the time of any exercise of options.
RESOLVED, that the officers of the Corporation are hereby authorized
and directed to execute that certain Option Agreement in the form attached
hereto as EXHIBIT C, and to do and perform any and all other acts, and execute
any and all other documents that, in their sole discretion, are necessary or
appropriate in connection therewith.
FURTHER RESOLVED, that the Corporation is hereby authorized to issue to
"executive management personnel" of the Corporation options to acquire an
additional 680,000 shares of common stock of the Corporation at a strike price
of three dollars and seventy-five cents ($3.75) per share, exercisable for five
years from the date of the option agreement, but not first exercisable until the
completion of 6 consecutive months after the effective date of the first
registration statement of the Corporation, and that the officers of the
Corporation are hereby authorized and directed to execute such agreements, and
to do and perform any and all other acts that, in their sole discretion, are
necessary or appropriate in connection therewith.
FURTHER RESOLVED, that the Corporation is hereby authorized to issue to
"key personnel" of the Corporation options to acquire an additional 220,000
shares of common stock of the Corporation at a strike price of three dollars and
seventy-five cents ($3.75) per share, exercisable for five years from the date
of the option agreement, provided that 20 percent of any option grant may be
exercised after one year has elapsed following the effective date of the first
registration statement of the Corporation and that 80 percent thereof may be
exercised after two years have elapsed following such effective date, and
further provided that the employee to whom the option is granted is employed by
the Corporation at the time of exercise. The officers of the Corporation are
hereby authorized and directed to execute such agreements, and to do and perform
any and all other acts that, in their sole discretion, are necessary or
appropriate in connection therewith.
Dated as of:
----------------------
-------------------------------------------
Clifford Y. Pierce, as Chairman, President
- ----------------------------------
Secretary
<PAGE> 3
EXHIBIT A
---------
Option Agreement for Clifford Pierce
<PAGE> 4
EXHIBIT B
---------
Option Agreement for Paul Callihoo
<PAGE> 5
EXHIBIT C
---------
Option Agreement for Nigel Gray
<PAGE> 6
OPTION AGREEMENT
DATED
____________, 2000
PARTIES:
-------
Goldenaccess.com, Inc., a Florida corporation (the "Corporation"), with an
address at _______________________________________________________________.
Paul Callihoo ("Callihoo"), with an address at ___________________________
__________________________________________.
RECITALS:
--------
WHEREAS, Callihoo is a key employee of the Corporation.
WHEREAS, the Corporation desires to grant to Callihoo an option to
acquire 50,000 shares of the common stock of the Corporation at the price and
upon the terms hereinafter set forth.
NOW THEREFORE, in consideration of the receipt of $1.00, Callihoo's
continued employment with the Corporation and other good and valuable
consideration, the sufficiency and/or receipt of which is hereby acknowledged,
the parties hereby agree upon the following terms.
TERMS:
-----
1. OPTION.
Callihoo is hereby granted the right to acquire FIFTY THOUSAND (50,000)
shares of the common stock of the Corporation, during the period commencing on
the date of this Option Agreement and ending on the fifth anniversary of the
date of this Agreement (the "Option Period") at a price of three dollars and
seventy-five cents ($3.75) per share (the "Option").
2. RESTRICTION ON EXERCISE.
The exercise of the Option described in Section 1 is subject to the
following restrictions:
(a) No Option may be exercised under this Option Agreement, either in
whole or in part, until the first anniversary of the effective date of the first
Registration Statement of the Corporation.
<PAGE> 7
(b) An Option to acquire up to 10,000 shares under this Option
Agreement may be exercised beginning on the first anniversary of the effective
date of the first Registration Statement of the Corporation.
(c) An Option to acquire all remaining shares under this Option
Agreement may be exercised beginning on the second anniversary of the effective
date of the first Registration Statement of the Corporation.
3. MINIMUM EXERCISE.
Subject to the terms of Section 2, above, the Option may be exercised
in whole or in part, from time to time and at any time and at multiple times
during the Option Period, but for an amount of no less than 5,000 shares at any
one time.
4. PAYMENT OF THE PURCHASE PRICE OF SHARES.
Payment for the purchase of shares pursuant to the Option shall be made
by cashier's check, attorney's trust account check, or wire transfer, at a
closing to be held no later that 30 days after delivery of notice of exercise of
rights under the Option.
5. ADJUSTMENT OF OPTION SHARES AND OPTION PRICE.
The number of shares subject to the Option shall be adjusted for any
stock dividend, subdivision, split-up or combination or exchange of common stock
of the Corporation, and the purchase price of each share shall be adjusted
accordingly.
6. TRANSFERABILITY.
This Agreement and all rights hereunder shall not be transferable by
Callihoo at any time without the prior written consent of the Corporation. This
Agreement and all the rights hereunder shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
transferees.
7. FORFEITURE.
If Callihoo's employment with the Corporation should terminate at any
time during the Option Period, voluntarily or involuntarily, for any reason
whatsoever, including but not limited to death or disability, termination with
or without cause, or Callihoo's resignation, Callihoo shall forfeit the right to
exercise any portion of the Option remaining at the time of such termination.
8. GOVERNING LAW.
This Agreement is executed and delivered in, and shall be governed by
and construed in accordance with, the laws of the State of Florida.
9. AMENDMENT.
<PAGE> 8
This Agreement, or any provision hereof, may not be amended, changed or
modified without the written consent of each of the parties hereto.
10. NOTICES.
Any notice to be given hereunder shall be in writing, and shall be
delivered personally, or by a service obtaining a receipt for delivery, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party at the address shown above or such changed address as to
which notice has previously been given hereunder, and deemed given when so
delivered or 3 days after such mailing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
WITNESSES: GOLDENACCESS.COM, INC., a
Florida corporation
- --------------------------------- By:
-------------------------------
Clifford Y. Pierce, President
- ---------------------------------
Print Name:
----------------------
- ---------------------------------
Print Name:
----------------------
As to the Corporation
- --------------------------------- ----------------------------------
Paul Callihoo
Print Name:
----------------------
- ---------------------------------
Print Name:
----------------------
As to Paul Callihoo
[signature page to option agreement between goldenaccess.com. inc.
and Paul Callihoo]
-3-
<PAGE> 9
OPTION AGREEMENT
DATED
____________, 2000
PARTIES:
Goldenaccess.com, Inc., a Florida corporation (the "Corporation"), with an
address at _______________________________________________________________.
Nigel Gray ("Gray"), with an address at _____________________________________.
RECITALS:
WHEREAS, Gray is a key employee of the Corporation.
WHEREAS, the Corporation desires to grant to Gray an option to acquire
50,000 shares of the common stock of the Corporation at the price and upon the
terms hereinafter set forth.
NOW THEREFORE, in consideration of the receipt of $1.00, Gray's continued
employment with the Corporation and other good and valuable consideration, the
sufficiency and/or receipt of which is hereby acknowledged, the parties hereby
agree upon the following terms.
TERMS:
1. OPTION.
Gray is hereby granted the right to acquire FIFTY THOUSAND (50,000)
shares of the common stock of the Corporation, during the period commencing on
the date of this Option Agreement and ending on the fifth anniversary of the
date of this Agreement (the "Option Period") at a price of three dollars and
seventy-five cents ($3.75) per share (the "Option").
2. RESTRICTION ON EXERCISE.
The exercise of the Option described in Section 1 is subject to the
following restrictions:
(a) No Option may be exercised under this Option Agreement, either in
whole or in part, until the first anniversary of the effective date of the first
Registration Statement of the Corporation.
<PAGE> 10
(b) An Option to acquire up to 10,000 shares under this Option
Agreement may be exercised beginning on the first anniversary of the effective
date of the first Registration Statement of the Corporation.
(c) An Option to acquire all remaining shares under this Option
Agreement may be exercised beginning on the second anniversary of the effective
date of the first Registration Statement of the Corporation.
3. MINIMUM EXERCISE.
Subject to the terms of Section 2, above, the Option may be exercised
in whole or in part, from time to time and at any time and at multiple times
during the Option Period, but for an amount of no less than 5,000 shares at any
one time.
4. PAYMENT OF THE PURCHASE PRICE OF SHARES.
Payment for the purchase of shares pursuant to the Option shall be made
by cashier's check, attorney's trust account check, or wire transfer, at a
closing to be held no later that 30 days after delivery of notice of exercise of
rights under the Option.
5. ADJUSTMENT OF OPTION SHARES AND OPTION PRICE.
The number of shares subject to the Option shall be adjusted for any
stock dividend, subdivision, split-up or combination or exchange of common stock
of the Corporation, and the purchase price of each share shall be adjusted
accordingly.
6. TRANSFERABILITY.
This Agreement and all rights hereunder shall not be transferable by
Gray at any time without the prior written consent of the Corporation. This
Agreement and all the rights hereunder shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
transferees.
7. FORFEITURE.
If Gray's employment with the Corporation should terminate at any time
during the Option Period, voluntarily or involuntarily, for any reason
whatsoever, including but not limited to death or disability, termination with
or without cause, or Gray's resignation, Gray shall forfeit the right to
exercise any portion of the Option remaining at the time of such termination.
8. GOVERNING LAW.
This Agreement is executed and delivered in, and shall be governed by
and construed in accordance with, the laws of the State of Florida.
9. AMENDMENT.
<PAGE> 11
This Agreement, or any provision hereof, may not be amended, changed or
modified without the written consent of each of the parties hereto.
10. NOTICES.
Any notice to be given hereunder shall be in writing, and shall be
delivered personally, or by a service obtaining a receipt for delivery, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party at the address shown above or such changed address as to
which notice has previously been given hereunder, and deemed given when so
delivered or 3 days after such mailing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
WITNESSES: GOLDENACCESS.COM, INC., a Florida
corporation
- ------------------------------------ By:
--------------------------------
Print Name: Clifford Y. Pierce, President
------------------------
- -----------------------------------
Print Name:
------------------------
As to the Corporation
- ------------------------------------ -----------------------------------
Nigel Gray
Print Name:
-------------------------
- -----------------------------------
Print Name:
------------------------
As to Nigel Gray
[signature page to option agreement between goldenaccess.com. inc.
and Nigel Gray]
-3-
<PAGE> 12
OPTION AGREEMENT
DATED
____________, 2000
PARTIES:
-------
Goldenaccess.com, Inc., a Florida corporation (the "Corporation"), with an
address at ______________________________________________________________.
Clifford Y. Pierce ("Pierce"), with an address at ________________________.
RECITALS:
--------
WHEREAS, Pierce is Chairman & President of the Corporation.
WHEREAS, the Corporation desires to grant to Pierce an option to
acquire 120,000 shares of the common stock of the Corporation at the price and
upon the terms hereinafter set forth.
NOW THEREFORE, in consideration of the receipt of $1.00 and other good
and valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, the parties hereby agree upon the following terms.
TERMS:
-----
1. OPTION.
Pierce is hereby granted the right to acquire ONE HUNDRED AND TWENTY
THOUSAND (120,000) shares of the common stock of the Corporation, during the
period commencing on the date of this Option Agreement and ending on the fifth
anniversary of the date of this Option Agreement (the "Option Period") at a
price of three dollars and seventy-five cents ($3.75) per share (the "Option").
2. RESTRICTION ON TIME OF EXERCISE.
The Option may not be exercised, in whole or in part, until the date
that is six (6) months following the effective date of the first Registration
Statement of the Corporation.
3. MINIMUM EXERCISE.
Subject to the terms of Section 2, above, the Option may be exercised
in whole or in part, from time to time and at any time and at multiple times
during the Option Period, but for an amount of no less than 5,000 shares at any
one time.
<PAGE> 13
4. PAYMENT OF THE PURCHASE PRICE OF SHARES.
Payment for the purchase of shares pursuant to the Option shall be made
by cashier's check, attorney's trust account check, or wire transfer, at a
closing to be held no later that 30 days after delivery of notice of exercise of
rights under the Option.
5. ADJUSTMENT OF OPTION SHARES AND OPTION PRICE.
The number of shares subject to the Option shall be adjusted for any
stock dividend, subdivision, split-up or combination or exchange of common stock
of the Corporation, and the purchase price of each share shall be adjusted
accordingly.
6. TRANSFERABILITY.
This Agreement and all rights hereunder shall not be transferable by
Pierce at any time without the prior written consent of the Corporation. This
Agreement and all the rights hereunder shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
transferees.
7. GOVERNING LAW.
This Agreement is executed and delivered in, and shall be governed by
and construed in accordance with, the laws of the State of Florida.
8. AMENDMENT.
This Agreement, or any provision hereof, may not be amended, changed or
modified without the written consent of each of the parties hereto.
9. NOTICES.
Any notice to be given hereunder shall be in writing, and shall be
delivered personally, or by a service obtaining a receipt for delivery, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party at the address shown above or such changed address as to
which notice has previously been given hereunder, and deemed given when so
delivered or 3 days after such mailing.
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
WITNESSES: GOLDENACCESS.COM, INC., a Florida
corporation
- ---------------------------------- By:
-------------------------------------
Clifford Y. Pierce, President
Print Name:
----------------------
- ---------------------------------
Print Name:
----------------------
As to the Corporation
- --------------------------------- ----------------------------------------
Clifford Y. Pierce
Print Name:
----------------------
- ---------------------------------
Print Name:
----------------------
As to Clifford Y. Pierce
[signature page to option agreement between goldenaccess.com. inc.
and Clifford Y. Pierce]
-3-
<PAGE> 1
Exhibit 10.7
AGREEMENT FOR SALE AND PURCHASE
OF ASSETS
THIS AGREEMENT (the "Agreement"), made as of the 30th day of July,
1999, by and between GOLDENACCESS.COM, INC., a Florida corporation ("Buyer"),
and Clifford Y. Pierce ("Seller").
RECITALS:
WHEREAS, Buyer is a corporation engaged in the business of developing
and marketing computer software and technology;
WHEREAS, Seller desires to sell to Buyer certain of its assets;
WHEREAS, Buyer desires to acquire such assets, and
WHEREAS, the parties have reached certain agreements concerning the
sale and purchase of the assets, as set forth in this Agreement and in
instruments referenced herein.
NOW, THEREFORE, in consideration of the Recitals and of the mutual
covenants, conditions and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, it is hereby agreed as follows:
ARTICLE 1
THE ACQUISITION
Section 1.1 Covenants of Sale and Purchase. At the Closing (as defined
in Section 2.1), and upon and subject to the terms and conditions of this
Agreement, Seller and Buyer mutually covenant and agree as follows:
(a) Seller will sell, convey and assign to Buyer all right,
title and interest of Seller in and to the Acquired Assets (as defined in
Section 1.2) on an "as is" and "where is" basis, free and clear of all liens,
pledges, security interests, charges, restrictions or encumbrances of any nature
whatsoever; and
(b) Buyer will purchase the Acquired Assets from Seller in
exchange for the Purchase Price as defined by Section 1.4.
Section 1.2 The Acquired Assets. In this Agreement, the phrase
"Acquired Assets" means and shall include all of the following:
<PAGE> 2
(a) Intellectual Property. All items of intellectual property,
including but not limited to computer software, set forth or described on
Schedule 1.2(a) attached hereto, which the parties have agreed have an aggregate
value of $540,100.
(b) Hard Assets. All of the items of hard assets set forth or
described on Schedule 1.2(b) attached hereto, which the parties have agreed have
an aggregate value equal to $877,000.
(c) Contracts. All contracts, memoranda of understanding and
letters of intent set forth or described on, or attached to, Schedule 1.2(c)
attached hereto, which the parties have agreed have an aggregate discounted
present value equal to $9,154,000.
(d) Trademarks and Patents. All trademarks, trademark
applications, patents and patent applications set forth or described on, or
attached to, Schedule 1.2(d), which the parties have agreed have an aggregate
value equal to $________ TO BE DETERMINED BY ADJUSTMENT.
(e) Lease Obligation. All of Seller's right, title and interest
in and under the lease identified on and attached hereto as Schedule 1.2(e) (the
"Lease"). Buyer shall assume all obligations of Seller under the Lease except
that Buyer shall not be responsible for any rent due under the lease prior to
the Closing Date. Buyer shall be responsible for any costs associated with the
termination of such lease, or associated with any sublease of the space.
Section 1.3 Adjustments. Buyer and Seller agree that the values for the
assets set forth in Section 1.2(a) through (e) are based upon the best
information currently available. Buyer and Seller further agree to adjust the
value of any one or more of those assets consistent with a final audit or
valuation to be conducted and/or completed subsequent to the Closing.
Section 1.4 Payment of Purchase Price. Buyer shall pay to Seller the
Purchase Price solely by issuing to Seller TWO MILLION ONE HUNDRED SIXTY-SIX
THOUSAND SEVEN HUNDRED AND 00/100 (2,166,700) shares of common stock of Buyer
(the "Shares").
Section 1.5 No Assumed Liabilities. On the Closing Date, Seller shall
deliver to Buyer the Acquired Assets, free and clear of any and all liens and
encumbrances. Buyer shall assume no obligations of Seller relative to the
Acquired Assets or otherwise, except for any and all obligations under or
attendant to the Lease attached to Schedule 1.2(e).
ARTICLE 2
CLOSING, ITEMS TO BE DELIVERED,
FURTHER ASSURANCES, AND EFFECTIVE DATE
Section 2.1 Closing. The consummation of the purchase and sale of
assets under this Agreement (the "Closing") will take place at 1:00 p.m. (EST)
on July 30th, 1999 (the "Closing Date"), at the offices of Fowler, White,
Burnett, Hurley, Banick & Strickroot, 100 S.E. Second
<PAGE> 3
Street, Seventeenth Floor, Miami, Florida, 33131, or at such other date, time or
place is agreed to in writing by the parties hereto.
Section 2.2 Conveyance and Delivery by Seller. On the Closing Date,
Seller will surrender and deliver possession of the Acquired Assets to Buyer and
take such steps as may be required to put Buyer in actual possession and
operating control of the Acquired Assets, and in addition shall deliver to Buyer
such bill of sale and assignments and other good and sufficient instruments and
documents of conveyance, in form reasonably satisfactory to Buyer and its
counsel, as shall be necessary and effective to transfer and assign to, and vest
in, Buyer all of Seller's right, title and interest in and to the Acquired
Assets free and clear of any lien, charge, pledge, security interest,
restriction or encumbrance of any kind.
Section 2.3 Delivery by Buyer. On the Closing Date, Buyer will issue to
Seller, in the name of Seller, one or more original stock certificates
representing, in the aggregate, the Shares.
Section 2.4 Mutual Performances. At or prior to the Closing, the
parties hereto shall also deliver to each other the agreements, opinions,
certificates, and other documents and instruments required hereunder.
Section 2.5 Third Party Consents. To the extent that Seller's rights
under any agreement or other Acquired Asset to be assigned to Buyer hereunder
may not be assigned without the consent of another person which has not been
obtained, this Agreement shall not constitute an agreement to assign the same if
an attempted assignment would constitute a breach thereof or be unlawful, and
Seller, at its expense, shall use its best efforts to obtain any such required
consent(s) as promptly as possible. If any such consent shall not be obtained or
if any attempted assignment would be ineffective or would impair Buyer's rights
under the Acquired Asset in question so that Buyer would not in effect acquire
the benefit of all such rights, Seller, to the maximum extent permitted by law
and the Acquired Asset, shall act after the Closing as Buyer's agent in order to
obtain for it the benefits thereunder and shall cooperate, to the maximum extent
permitted by law and the Acquired Asset, with Buyer in any other reasonable
arrangement designed to provide such benefits to Buyer.
Section 2.6 Further Assurances. Seller from time to time after the
Closing, at Buyer's reasonable request, will execute, acknowledge and deliver to
Buyer such other instruments of conveyance and transfer and will take such other
actions and execute and deliver such other documents, certifications and further
assurances as Buyer may reasonably require in order to vest more effectively in
Buyer, or to put Buyer more fully in possession of, any of the Acquired Assets.
Each of the parties hereto will cooperate with the other and execute and deliver
to the other parties hereto such other instruments and documents and take such
other actions as may be reasonably requested from time to time by any other
party hereto as necessary to carry out, evidence and confirm the intended
purposes of this Agreement.
Section 2.7 Effective Date. The Effective Date of the Agreement and all
related instruments executed at the Closing shall be July 30TH, 1999, unless
otherwise agreed.
-3-
<PAGE> 4
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to Buyer as follows:
Section 3.1 Authority. Seller has the requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been, and the other agreements,
documents and instruments required to be delivered by Seller in accordance with
the provisions hereof (the "Seller's Documents") will be, duly executed and
delivered by Seller, and this Agreement constitutes, and Seller's Documents when
executed and delivered will constitute, the legal, valid and binding obligations
of Seller, enforceable against Seller in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, or similar laws from time to
time in effect which offset creditors' rights generally and general equitable
principles (regardless of whether the issue of enforceability is considered in a
proceeding in equity or in law).
Section 3.2 Consents and Approvals; No Violations. Except as set forth
in Schedule 3.2, neither the execution, delivery, or performance of this
Agreement by Seller nor the consummation by him of the transactions contemplated
hereby nor compliance by him with any of the provisions hereof will (i) require
any filing with, or permit authorization, consent, or approval of, any court,
arbitral tribunal, administrative agency or commission, or other governmental or
other regulatory authority or agency (a "Governmental Entity"), (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation, or acceleration) under, any of the terms, conditions, or
provisions of any note, mortgage, indenture, lease, license, contract,
agreement, or other instrument or obligation to which Seller is a party or by
which Seller or any of his properties or assets may be bound, or (iii) violate
any order, writ, injunction, decree, statute, rule, or regulation applicable to
Seller or any of his properties or assets, except in the case of (ii) or (iii)
for violations, breaches, or defaults that would not, individually or in the
aggregate, have a material adverse effect on Seller.
Section 3.3 No Third Party Options. There are no existing agreements,
options, commitments, or rights with, of or to any person to acquire any of
Seller's assets, properties or rights included in the Acquired Assets or any
interest therein.
Section 3.4 Absence of Certain Changes. There have been no events or
changes having an adverse effect on the Acquired Assets.
Section 3.5 Software. The computer software of Seller included in the
Acquired Assets (the "Software") performs in accordance with the documentation
and other written material used in connection with the Software, is in
machine-readable form, contains all current revisions of such software, and
includes all computer programs, materials, tapes, know-how, object and source
codes, other written materials, know-how and processes related to the Software.
Seller has delivered to Buyer complete and correct copies of all user and
technical documentation related to the Software.
-4-
<PAGE> 5
Neither Seller nor, to the best knowledge of Seller, any employee or
agent thereof has developed or assisted in the enhancement of the Software
except for enhancements included in the Software as delivered to Buyer pursuant
thereto or the development of any program or product based on the Software or
any part thereof. All copies of the Software embodied in physical form are being
delivered to Buyer at or prior to the Closing.
Section 3.6 Litigation. Except as disclosed in Schedule 3.6 there is no
suit, claim, action, proceeding, or investigation pending or, to the best
knowledge of Seller threatened against, Seller. Except as disclosed in Schedule
3.6, Seller are is not subject to any outstanding order, writ, injunction, or
decree which, insofar as can be reasonably foreseen, individually or in the
aggregate, in the future would have an adverse effect on such party or the
Acquired Assets or would prevent such party from consummating the transactions
contemplated hereby. No voluntary or involuntary petition in bankruptcy,
receivership, insolvency, or reorganization with respect to Seller, or petition
to appoint a receiver or trustee of Seller's property, has been filed by or
against Seller, nor will Seller file such a petition prior to Closing Date or
for one hundred days thereafter, and if such petition is filed by others, the
same will be promptly discharged. Seller is solvent on the date hereof and will
be solvent on the Closing Date. Seller has not and at the Closing Date will not
have made any assignment for the benefit of creditors, or admitted in writing
insolvency or that their property at fair valuation will not be sufficient to
pay his debts, nor will Seller permit any judgment, execution, attachment or
levy against him or against any of his properties to remain outstanding or
unsatisfied for more than ten (10) days.
Section 3.7 No Misrepresentations. None of the representations and
warranties of Seller set forth in this Agreement or in the attached exhibits and
schedules, notwithstanding any investigation thereof by Buyer, contains or will
contain any untrue statement of a material fact, or omits or will omit the
statement of any material fact necessary to render the same not misleading,
either at the date hereof or on the Closing Date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 4.1 Organization. Buyer is a corporation organized, validly
existing and in active status under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority and all
necessary governmental approvals to own, lease, and operate its properties and
to carry on its business as now being conducted except where failure to be so
organized, valid, or active would not, in the aggregate, have a material adverse
effect on Buyer. Buyer is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the property owned, leased, or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so duly
qualified or licensed and be in good standing would not in the aggregate have a
material adverse effect on Buyer.
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<PAGE> 6
Section 4.2 Authority. Buyer has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement, and the consummation of the Agreement and the other transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of Buyer and no other corporate proceeding on the part of Buyer is
necessary to authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly executed and delivered by Buyer and,
assuming this Agreement constitutes a valid and binding obligation of Seller,
constitutes a valid and binding obligation of the Buyer, enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization or similar laws from time to time in effect which offset
creditors' rights generally and general equitable principles (regardless of
whether the issue of enforceability is considered in a proceeding in equity or
in law).
Section 4.3 Consents and Approvals; No Violations. Except as set forth
in Schedule 4.3, and except for filings, permits, authorizations, consents, and
approvals as may be required under, and other applicable requirements of, the
Securities Act of 1933, as amended (the "Securities Act") or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), neither the execution,
delivery, or performance of this Agreement by Buyer nor the consummation by
Buyer of the transactions contemplated hereby nor compliance by Buyer with any
of the provisions hereof will (i) conflict with or result in any breach of any
provision of the Articles of Incorporation or the Bylaws of Buyer, (ii) require
any filing with, or permit authorization, consent, or approval of any court,
arbitral tribunal, administrative agency or commission, or other governmental or
other regulatory authority or agency (a "Governmental Entity"), except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings would not have a material adverse effect on Buyer, (iii) result in
a violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation, or acceleration) under, any of the terms, conditions, or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement, or other instrument or obligation to which Buyer is a party or by
which Buyer or its properties or assets may be bound, or (iv) violate any order,
writ, injunction, decree, statute, rule, or regulation applicable to Buyer or
any of its properties or assets, except in the case of (iii) or (iv) for
violations, breaches, or defaults that would not, individually or in the
aggregate, have a material adverse effect on Buyer.
Section 4.4 Compliance with Applicable Law. Buyer holds all permits,
licenses, variances, exemptions, orders, and approvals of all Governmental
Entities necessary for the lawful conduct of its business (the "Buyer Permits"),
except for failures to hold such permits, licenses, variances, exemptions,
orders, and approvals that would not have a material adverse effect on Buyer.
Buyer is in compliance with the terms of the Buyer Permits, except where the
failure so to comply would not have a material adverse effect on Buyer. To the
best knowledge of Buyer, the business of Buyer is not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity, except
for possible violations that do not, and, insofar as reasonably can be foreseen,
in the future will not, have a material adverse effect on Buyer. Except as set
forth in Schedule 4.4, as of the date of this Agreement no investigation or
review by any Governmental Entity with respect to Buyer is pending or, to the
best knowledge of Buyer, threatened, nor has any Governmental Entity indicated
an intention to conduct the same other than, in each case, those the
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<PAGE> 7
outcome of which, as far as reasonably can be foreseen, in the future will not
have a material adverse effect on Buyer.
Section 4.5 No Misrepresentations. None of the representations and
warranties of Buyer set forth in this Agreement or in the attached exhibits and
schedules, notwithstanding any investigation thereof by Seller, contains or will
contain any untrue statement of a material fact, or omits or will omit the
statement of any material fact necessary to render the same not misleading,
either at the date hereof or at the Closing Date.
ARTICLE 5
COVENANTS OF SELLER
During the period from the Effective Date of this Agreement and
continuing until the Closing Date, Seller agrees that (except as expressly
contemplated or permitted by this Agreement or to the extent that all the other
parties hereto shall otherwise consent in writing), notwithstanding the fact
that such action might otherwise be permitted pursuant to this Article 5, Seller
shall not take any action that would, or is reasonably likely to, result in any
of its representations and warranties set forth in this Agreement being untrue,
or in any of the conditions set forth in Article 7 not being satisfied.
ARTICLE 6
ADDITIONAL AGREEMENTS
Section 6.1 Access to Information. Upon reasonable notice, Seller shall
afford to the officers, employees, accountants, counsel, and other authorized
representatives of Buyer full access during the period prior to the Closing
Date, to all its books, contracts, commitments and records to the extent that
such is reasonably necessary to protect Buyer's interest under this Agreement.
Each party shall furnish promptly to the other party all other information
concerning its business, properties, and personnel and access for discussions
with such of its management personnel as such other party may reasonably
request. Unless otherwise required by law, the parties will hold any such
information which is nonpublic in confidence, will not use such information in
its business if the transaction does not close and will return such information
if the transaction does not close.
Section 6.2 Expenses. Whether or not the transaction is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses.
Section 6.3 Brokers or Finders. Each of the Seller and Buyer
represents, as to itself, its subsidiaries and its affiliates, that no agent,
broker, investment banker, financial advisor, or other firm or person is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee in connection with any of the transactions contemplated by this Agreement,
and each of Buyer and Seller agree to indemnify and hold the other harmless from
and against any and all claims,
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<PAGE> 8
liabilities, or obligations with respect to any other fees, commissions, or
expenses asserted by any person on the basis of any act or statement alleged to
have been made by such party or its affiliate.
Section 6.4 Additional Agreements; Best Efforts. Subject to the terms
and conditions of this Agreement each of the parties hereto agrees to use its
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper, or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including cooperating fully with the other parties.
ARTICLE 7
CONDITIONS
Section 7.1 Conditions to Obligations of Seller. Except to the extent
otherwise provided in this Agreement, the obligations of Seller to effect this
acquisition are subject to the satisfaction of the following conditions, unless
waived by Seller:
(a) Approvals. All authorizations, consents, orders, or
approvals of, or declarations or filings with, or expirations of waiting periods
imposed by, any Governmental Entity, the failure to obtain which would have a
material adverse effect on Buyer shall have been filed, occurred, or been
obtained.
(b) Representations and Warranties. The representations and
warranties of Buyer set forth in this Agreement shall be true and correct as of
the Effective Date and Seller shall have received a certificate signed on behalf
of Buyer by an executive officer of Buyer to such effect.
(c) Performance of Obligations by Buyer. Buyer shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Seller shall have
received a certificate signed on behalf of Buyer by an executive officer of
Buyer to such effect.
(d) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction, or other order issued by any court
of competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transaction, shall be in effect.
Section 7.2 Conditions to Obligations of Buyer. Except to the extent
otherwise provided in this Agreement, the obligations of Buyer to effect this
acquisition are subject to the satisfaction of the following conditions, unless
waived by Buyer:
(a) Approvals. All authorizations, consents, orders, or
approvals of, or declarations or filings with, or expirations of waiting periods
imposed by, any Governmental Entity, the failure to obtain which would have a
material adverse effect on Seller shall have been filed, occurred, or been
obtained.
-8-
<PAGE> 9
(b) Representations and Warranties. The representations and
warranties of Seller set forth in this Agreement shall be true and correct as of
the Effective Date and Buyer shall have received a certificate signed by Seller
to such effect.
(c) Performance of Obligations by Seller. Seller shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Buyer shall have
received a certificate signed by Seller to such effect.
(d) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction, or other order issued by any court
of competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transaction, shall be in effect.
ARTICLE 8
TERMINATION AND AMENDMENT
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual consent of Buyer and Seller; or
(b) by either Buyer or Seller if there shall have been a
material breach of any representation, warranty, covenant or agreement on the
part of the other set forth in this Agreement which breach shall not have been
cured, in the case of a representation or warranty, prior to the Closing or, in
the case of a covenant or agreement, within two business days following receipt
by the breaching party of notice of such breach; or
(c) by either Buyer or Seller if any permanent injunction or
other order of a court or other competent authority preventing the consummation
of the acquisition shall have become final and nonappealable.
Section 8.2 Effects of Termination. In the event of a termination of
this Agreement by either party as provided in Section 8.1, this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of Buyer or Seller, or any of their respective officers or directors, except to
the extent that such termination results from the willful breach by a party
hereto of any of the representations, warranties, covenants, or agreements set
forth in this Agreement.
Section 8.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of Buyer and Seller.
Section 8.4 Extension; Waiver. At any time prior to the Closing Date,
the parties hereto may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part
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<PAGE> 10
of a party hereto to any such extension or waiver shall be valid only if set
forth in a written instrument signed on behalf of such party.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (if confirmed), or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses or at such other
address for a party as shall be specified by like notice):
(a) If to Buyer, to
GoldenAccess.com, Inc.
1915 Brickell Avenue
Unit C-PH1
Miami, Florida
(b) If to Seller, to
Clifford Y. Pierce
1400 John F. Kennedy Causeway
North Bay Village, Florida
Section 9.2 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 9.3 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
Section 9.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida without regard to
any applicable conflicts of law.
Section 9.5 Publicity. Except as otherwise required by law or the rules
of the SEC, neither Seller nor Buyer shall issue or cause the publication of any
press release or other public announcement with respect to the transactions
contemplated by this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing, Buyer
may respond to routine inquiries from securities analysts in connection with the
transactions contemplated hereby.
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<PAGE> 11
Section 9.7 Assignment. Neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by the parties
and their respective successors and assigns.
Section 9.8 Joint Efforts. This Agreement is the result of the joint
efforts and negotiations of the parties hereto, with each party being
represented, or having the opportunity to be represented, by legal counsel of
its own choice, and no singular party is the author or drafter of the provisions
hereof. Each of the parties assumes joint responsibility for the form and
composition of each-and all of the contents of this Agreement and each party
agrees that this Agreement shall be interpreted as though each of the parties
participated equally in the composition of this Agreement and each and every
provision and part hereof. The parties agree that the rule of judicial
interpretation to the effect that any ambiguity or uncertainty contained in an
agreement is to be construed against the party that drafted the agreement shall
not be applied in the event of any disagreement or dispute arising out of this
Agreement.
IN WITNESS WHEREOF, the parties have signed or caused this Agreement to
be signed by their respective officers hereunto duly authorized as of the date
first written above.
WITNESSES: SELLER:
- ------------------------------------ -------------------------------------
Clifford Y. Pierce
- ------------------------------------
as to Seller
BUYER
- ------------------------------------ GOLDENACCESS.COM, INC., a Florida
corporation
- ------------------------------------ By:
as to Buyer Title:
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<PAGE> 12
SCHEDULE 1.2 (A)
INTELLECTUAL PROPERTY
VIP
A fully integrated solution that allows Internet Telephony Service Providers,
Carriers, and Private corporations to inexpensively route Voice communications
over the Internet. Golden Access's ViP Gateway provides all of the elements -
IP Gateway, Gatekeeper, Global Network and Billing on one easy to configure
platform.
IN & OUT
The In&Out(TM) service lets businesses track the job activities of their
off-site employees or subcontractors in real-time. With specialized
communications technology, the location and job status of field workers can be
monitored with up the minute information using only regular telephone service
and the Internet. The enables businesses to accurately bill customers for
services provided, without the need to invest in costly computer systems.
I'M AVAILABLE
This is the reverse of In&Out. Individuals who perform services can use the
system to indicate that they are available by clocking in to I'm available.
Users view the Website to find persons who are to perform jobs or services for
them. Services can be grouped by type and geographic locations. Graphical maps
can also be incorporated so that the person seeking a service can find the
available person closest to them.
AUDIO BROADCAST
This product provides radio stations anywhere in the world with the capability
to broadcast their content over the Internet. By the use of our server located
in the U.S., and the ability to capture real-time or taped audio broadcasts, we
can create a global presence for any radio station.
VIDEO BROADCAST
Through the use of sophisticated technology and Internet capabilities, any type
of programming can be captured either live, via satellite or on submitted
videotape and held on our RealPlayer Server for customers to view at any time.
<PAGE> 13
VOICE MAIL
Allows a subscriber to send and retrieve voice mail messages from anywhere in
the world via the Internet. This provides an inexpensive way staying in touch
with business, family or friends. The subscriber would purchase a prepaid voice
message calling car for $19.95 a month, which allows the user to have a voice
mail account with Golden Access. The user can leave unlimited voice mail
messages of up to 5 minutes each.
FOLLOW ME
Offers the same functionality as the Voice Mail plus the capability to have
calls forwarded to you anywhere in the world, thus providing the subscriber
with a greater degree of privacy. With these forwarded calls, the subscriber
has the option of receiving the call or having it transferred to your mailbox.
IP TELEPHONY GATEWAY & GATEKEEPER
The Gateway is connected to the Internet and to the regular local telephone
lines. Gateways are placed in numerous cities and countries. A person who wants
to make an inexpensive long distance call dials the local gateway phone number.
The gateway then routes the call over the internet to the gateway in the local
calling areas of the destination. The destination gateway the places a local
call to the destination number and the connection between the caller and
recipient is established. Since the local calls and the Internet route have no
charge, the calls can be priced very inexpensively.
VIDEO CONFERENCING
Allows the subscriber to conduct face to face meetings over the internet via
their multimedia PC.
WEBSURVEY
A security system using webcams and the Internet to transmit images to a
central monitoring location. Multiple locations can be simultaneously monitored
from anywhere in the world.
<PAGE> 14
SCHEDULE 1.2(b)
Hard Assets
<PAGE> 15
SCHEDULE 1.2(c)
Contracts
<PAGE> 16
SCHEDULE 1.2(d)
Trademarks and Patents
<PAGE> 17
SCHEDULE 1.2(e)
Lease
<PAGE> 18
SCHEDULE 3.2
Seller Consents and Approvals
None.
<PAGE> 19
SCHEDULE 3.6
Litigation
None.
<PAGE> 20
SCHEDULE 4.3
Buyer Consents and Approvals
None.
<PAGE> 21
SCHEDULE 4.4
Governmental Inquiry
None.
<PAGE> 22
BILL OF SALE
This BILL OF SALE is given by CLIFFORD Y. PIERCE ("Seller"), to
GOLDENACCESS.COM, INC., a Florida corporation ("Buyer").
WHEREAS, Seller and Buyer are parties to a certain Agreement For Sale
and Purchase of Assets dated July 30, 1999 (the "Agreement"), providing for the
sale, assignment, transfer, conveyance and delivery by Seller to Buyer of all of
the Acquired Assets (as defined in the Agreement).
NOW, THEREFORE, in consideration of the issuance by Buyer to Seller of
the Shares (as defined in the Agreement) and in further consideration of the
premises, terms and conditions contained in the Agreement, the receipt and
sufficiency of such consideration being hereby acknowledged, Seller does hereby
sell, assign, transfer and deliver to Buyer, as of the date set forth below, on
an "as is" and "where is" basis, all of Seller's right, title and interest in
and to all of the Acquired Assets. All of Seller's representations, warranties
and agreements and all of the limitations in the Agreement relating to the
Acquired Assets are incorporated herein by reference.
EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENT, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES AND EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND
WARRANTIES WHATSOEVER RELATING TO THE ASSETS, WHETHER WRITTEN OR ORAL, EXPRESS
OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OR MERCHANTABILITY OR OF
FITNESS FOR A PARTICULAR PURPOSE.
IN WITNESS WHEREOF, the undersigned has caused this Bill of Sale to be
duly executed this 30TH day of July, 1999.
By:
---------------------------
Clifford Y. Pierce
<PAGE> 1
EXHIBIT 10.9
(CISCO SYSTEMS LOGO)
CISCO SYSTEMS, INC.
CISCO VOICE APPLICATION PARTNER
MULTI-THEATRE SYSTEMS INTEGRATOR AGREEMENT
This CISCO VOICE APPLICATION PARTNER (CVAP) Multi-Theatre Systems Integrator
Agreement (the "Agreement") by and between Cisco Systems, Inc., ("Cisco") a
California corporation having its principal place of business at 170 West
Tasman Drive, San Jose, California, 95134, and Golden Access.com,
("Integrator") a Florida corporation having its principal place of business at
6161 Blue Lagoon Drive., Suite 190, Miami, Florida 33126 is entered into as of
the date last written below ("the Effective Date").
This Agreement consists of this signature page and the following attachments,
which are incorporated in this Agreement by this reference:
1. CVAP Multi-Theatre Systems Integrator Agreement Terms and Conditions
2. EXHIBIT A: Integrator Profile
3. EXHIBIT B: Discount Schedule
4. EXHIBIT C: N/A
5. EXHIBIT D: Support Exhibit
6. EXHIBIT E: Ordering and Shipping Terms
7. EXHIBIT F: Shipping
8. EXHIBIT G: Networked Commerce Enrollment Addendum
9. EXHIBIT H: Integrator Affiliates
10. EXHIBIT S: Software License Agreement
This Agreement is the complete agreement between the parties hereto concerning
the subject matter of this Agreement and replaces any prior oral or written
communications between the parties. There are no conditions, understandings,
agreements, representations, or warranties, expressed or implied, which are not
specified herein. This Agreement may only be modified by a written document
executed by the parties hereto. Any orders accepted or Products delivered by
Cisco after the date this Agreement is signed by Integrator but before the
Effective Date, shall upon the Effective Date be deemed covered by the terms
and conditions of this Agreement, except for any deviation in price.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed. Each party warrants and represents that its respective signatories
whose signatures appear below have been and are on the date of signature duly
authorized to execute this Agreement.
<TABLE>
<S> <C>
GOLDEN ACCESS.COM ("INTEGRATOR") CISCO SYSTEMS, INC. ("CISCO")
/s/ Clifford Y. Pierce, President A.P. Cailes
- --------------------------------- ----------------------------------------
Authorized Signature Authorized Signature
/s/ Clifford Y. Pierce, President A.P. Cailes, Director W.W. Sales Finance
- --------------------------------- ----------------------------------------
Name Name
- --------------------------------- ----------------------------------------
Date Date
</TABLE>
Page 1
<PAGE> 2
MULTI-THEATRE SYSTEMS INTEGRATOR AGREEMENT
TERMS AND CONDITIONS
1. DEFINITIONS.
Products are those products identified as the VCO 4K, 5300, 5800 and AccessPath
product families in Cisco's then current global price list. To the extent
Integrator desires to purchase and/or license other Cisco products and Cisco
agrees to sell and/or license such products to Integrator, any such sale(s)
and/or license(s) shall be governed by Cisco's standard terms and conditions,
at prices to be negotiated by the parties.
Added Value is the non-Cisco component portion of Integrator's total solution,
which Integrator provides to End User. Providing financing options is not
considered Added Value.
Affiliates means a corporation, partnership or venture, more than fifty (50)
percent of whose voting stock or ownership interest is owned directly or
indirectly by Integrator.
Canadian Price List is Cisco's published Price List, revised to include freight
charges and published in Canadian currency.
CIP, ...named place of destination (Carriage and Insurance Paid to, ...)
(INCOTERMS 1990)
Cisco Connection Online (CCO) is Cisco's on-line, Internet-based communications
medium, and successor media as Cisco may introduce from time to time.
Documentation is the Cisco documentation made available in hard copy or in
electronic form with the Products or otherwise under this Agreement.
DDU, ...named place of destination (Delivered Duty Unpaid, ...) (INCOTERMS 1990)
Cisco Certified Network Professional ("CCNP") is the status granted to
Integrator employees who successfully complete the then-current CCNP Curriculum
offered by Cisco.
End User is the entity to which Integrator sells or licenses Product for such
entity's own internal use.
FCA, ...named place (Free Carrier, ...named place) (INCOTERMS 1990)
Hardware is the tangible Products made available to Integrator by Cisco.
Integrator is the legal entity, which signs this Agreement.
Price List is Cisco's published global price list.
Product is Hardware and/or Software.
Purchase Order is a written or electronic order from Integrator to Cisco for
Hardware, Software or services to be purchased, licensed or provided under this
Agreement.
Sales Expert is the status granted to Integrator employees who successfully
complete the then-current Sales Expert training curriculum offered by Cisco.
Software is the machine readable (object code) version of the computer programs
listed from time to time on the Price List and made available by Cisco for
license by Integrator, and any copies, updates to, or upgrades thereof.
Spare Parts means those items of Hardware designated as spare parts in the
Price List.
Territory is comprised of those regions or countries listed on Exhibit A.
2. SCOPE.
2.1 This Agreement sets forth the terms and conditions for Integrator's
purchase of Hardware and license of Software during the term of this Agreement
solely for:
A. Integrator's Internal Business Use.
Integrator may purchase Products listed in Cisco's then-current Price
List for its internal business use in the Territory during the term of
this Agreement.
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<PAGE> 3
B. Commercial Integration and Resale.
B.1 Cisco grants Integrator a non-exclusive, nontransferable right to
resell Hardware and distribute Software as a component of a total
solution of Products and additional significant Integrator Added
Value to End Users in the vertical market segments in the
Territory. Integrator agrees not to solicit Product orders,
engage salesmen, establish warehouses or other distribution
centers outside of the Territory, except to the extent
advertising is placed in a particular advertising medium which is
distributed both inside and outside the Territory. Integrator
further agrees that Integrator's Added Value shall, at all times,
be the primary reason for the End User's purchase of Products
from Integrator.
B.2 Notwithstanding the foregoing, for any Products included in the
Price List, including but not limited to Products which become or
have become Cisco Products as a result of an acquisition by Cisco
of another entity, Cisco may impose certification, installation,
or training requirements on Integrator prior to allowing
Integrator to purchase Products for resale, and may require
on-going fulfillment of certification requirements to retain the
right to buy, resell and/or support such Products.
2.2 Integrator certifies that except as set forth in Section 2(A) hereof, it
is acquiring the Products solely for resale to End Users, in accordance with
this Agreement, and that Integrator intends to resell the Products as part of
an Added Value solution.
2.3 Integrator will not distribute the Products to the United States Federal
Government either directly or indirectly, or through General Services
Administration ("GSA").
2.4 Cisco does not accept any flowdown provisions including but not limited
to United States Government Federal Acquisition Regulations ("FARs"), Defense
FARs, or NASA FARs notwithstanding the existence of such provisions on
Integrator's Purchase Orders or supplementary documentation or Cisco's
acceptance of such Purchase Orders or documentation.
2.5 GSA, California Multiple Award Schedule ("CMAS"), and other schedule
contracts: This Agreement shall not be construed by Integrator as a
representation that Cisco will furnish supplies needed by Integrator to fulfill
any of Integrator's GSA, CMAS, or similar contract obligations under any
schedule.
2.6 Affiliates of Integrator listed on Exhibit H may purchase Products from
Cisco under this Agreement. Integrator hereby guarantees the performance by
such Affiliates of the financial and other contractual obligations set forth in
this Agreement and represents and warrants that it is empowered to enter into
this Agreement on behalf of such Affiliates, and to bind such Affiliates to the
terms and conditions of this Agreement. Cisco may require certain of the listed
Affiliates to execute an agreement with an affiliate of Cisco such that the
legal relationship shall be between Cisco's affiliate and Integrator's
affiliate.
3. MULTINATIONAL DEPLOYMENT POLICY.
If Integrator chooses to purchase Product for either internal or resale use in
locations where Integrator cannot provide sales and/or support, purchases shall
be made through Cisco's then-current Global Solution Services (GSS) Program. A
copy of such program is available to Integrator upon request.
4. PRICES.
4.1 Prices for Products shall be those specified in Cisco's then current
Price List less the applicable discounts specified in Exhibit B of this
Agreement. Purchase Orders shall be placed in accordance with the terms and
conditions specified in Exhibit E. Cisco may change prices for the Products at
any time by issuance of a revised Price List (including via electronic posting)
or other announcement of price change. Purchase Orders received before the date
of the announcement of price increases, and those received within thirty (30)
days thereafter which specify a delivery date within ninety (90) days of the
date of announcement, will be invoiced to Integrator without regard to the
price increase. Price decreases will be effective for all Purchase Orders
accepted by Cisco after the date of issuance or announcement of revised prices.
4.2 Integrator is free to determine its own resale prices unilaterally.
Integrator understands that neither Cisco nor any employee or representative of
Cisco may give any special treatment (favorable or unfavorable) to Integrator
as a result of Integrator's selection of resale prices. No employee or
representative of Cisco or anyone else has any authority to determine what
Integrator's resale prices for the Products must be or to inhibit in any way
Integrator's pricing discretion with respect to the Products.
4.3 Except where expressly agreed to the contrary, all stated prices are
exclusive of any taxes, fees and duties or other amounts, however designated,
and including without limitation value added and withholding taxes which are
levied or based upon such charges, or upon this Agreement. Integrator shall pay
any taxes
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related to Products purchased or licensed pursuant to this Agreement.
Integrator shall present an exemption certificate acceptable to the taxing
authorities. Applicable taxes shall be billed as a separate item on the
invoice, to the extent possible.
5. ORDERS.
5.1 Integrator shall purchase Products by issuing a written or electronic
Purchase Order signed (or sent in the case of an electronic order) by an
authorized representative, indicating specific Products, quantity, price, total
purchase price, shipping instructions, requested delivery dates, bill-to and
ship-to addresses, tax exempt certifications, if applicable, and any other
special instructions, and shall identify the End User for each Product. A
signed copy of the Networked Commerce Agreement (Exhibit F) must be on file
with Cisco customer service prior to acceptance of electronic Purchase Orders
via the Cisco Internetworking Product Center (IPC). Any contingencies contained
on such Purchase Order are not binding upon Cisco. The terms and conditions of
this Agreement prevail regardless of any conflicting terms on the Purchase
Order or other correspondence. All Purchase Orders are subject to approval and
acceptance by the Cisco customer service order administration office of the
Cisco entity which shall supply the Products, and no other office is authorized
to accept orders on behalf of Cisco.
5.2 Integrator has the right to defer Product shipment for no more than
thirty (30) days from the scheduled shipping date, provided written notice is
received by Cisco at least ten (10) days prior to the originally scheduled
shipping date. Canceled orders, rescheduled deliveries or Product configuration
changes made by Integrator within ten (10) days of the original shipping date
will be subject to (a) acceptance by Cisco, and (b) a charge of fifteen percent
(15%) of the total invoice amount. Cisco reserves the right to reschedule
delivery in cases of configuration changes made within ten (10) days of
scheduled shipment.
5.3 Integrator shall pay all invoices issued by the appropriate Cisco entity.
In the event that Integrator issues an order to an entity other than the entity
indicated in Exhibit E, Cisco may either a) require orders to be resubmitted to
the appropriate Cisco entity, or b) assign such orders to the appropriate Cisco
entity. The legal relationship with respect to orders shall be between
Integrator and the Cisco entity listed in Exhibit E which shall be subject to
all the terms and conditions of this Agreement as if entered into between
Integrator and the Cisco entity.
6. SHIPPING AND DELIVERY.
6.1 Shipping dates will be established by Cisco upon receipt of Purchase
Order from Integrator. Shipping dates will be assigned as close as practicable
to the Integrator's requested date, based on Cisco's then current lead-times
for the Product(s). Cisco will use commercially reasonable efforts to notify
Integrator of the actual scheduled shipping date within five (5) days by
posting such notification on CCO, or provide written notification within ten
(10) working days after receipt of order. Unless given written instruction by
Integrator, Cisco shall select the carrier.
6.2 In no event shall Cisco have any liability in connection with shipment,
nor shall the carrier be deemed to be an agent of Cisco. Cisco shall not be
liable for damage or penalty for delay in delivery or for failure to give
notice of any delay.
6.3 During the term of this Agreement, Cisco may make the Products, which are
to be supplied outside of the United States available for order in and delivery
from an alternate central location and/or a Cisco affiliate, if it chooses. In
the event that Cisco does so, Integrator will order the Products according to
the procedures set forth at the time such delivery becomes available. At such
time, Purchase Orders in conformance with Cisco's policies will be shipped
according to the availability and expedited lead-times described in the
procedures. Cisco shall have the right to change delivery terms and include
additional charges, if any, at the time such alternate order and delivery
process is implemented by Cisco.
7. PAYMENT.
Upon and subject to credit approval by Cisco, payment terms shall be net thirty
(30) days from shipping date. All payments shall be made in U.S. currency,
excepting orders originating in and shipping to Canada, or in the event a Local
Currency Agreement (LCA) is appended to this Agreement. In such cases, payment
shall be made in Canadian currency, or as agreed to in the LCA. If at any time
Integrator is delinquent in the payment of any invoice or is otherwise in
breach of this Agreement, Cisco may, in its discretion, and without prejudice
to its other rights, withhold shipment (including partial shipments) of any
order or may, at its option, require Integrator to prepay for further
shipments. Any sum not paid by Integrator when due shall bear interest until
paid at a rate of 1.5% per month (18% per annum) or the maximum rate permitted
by law, whichever is less. Integrator grants Cisco a security interest in
Products purchased under this Agreement to secure payment for those Products
purchased. If requested by Cisco, Integrator agrees to execute financing
statements to perfect this security interest.
8. INTEGRATOR OBLIGATIONS.
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In a manner satisfactory to Cisco and at Integrator's sole expense, Integrator
shall:
A. employ competent and aggressive sales, technical support, and
maintenance organizations, employees of which shall be full-time direct
employees of Integrator who sell, install, secure acceptance of, and
maintain the Products;
B. purchase Demonstration/Evaluation/Lab Units for each appropriate selling
location as mutually agreed to by the parties;
C. within nine (9) months of the effective date of the Agreement, qualify
for, and then maintain throughout the term of this Agreement, the sales,
support and training/certification requirements at a a minimum of Level
3 Voice Development Partner as described in the Channel Tier Incentive
Section of Exhibit B;
D. maintain at least one (1) Cisco trained technical support person per
servicing location;
E. maintain adequate manpower and facilities to ensure prompt handling of
inquiries, orders, and shipments for Products;
F. validate End User network configuration design and associated components
and assist End User with system design;
G. keep Cisco informed as to any problems which involve Cisco Products and
technologies and require Cisco's support or impact Integrator's ability
to deliver service or solutions to the End User, to communicate such
problems promptly to Cisco, and to assist Cisco in the resolution of
such problems;
H. participate in quarterly business meetings with Cisco to review the
progress of the relationship and Integrator's achievement as related to
commitments such as, but not limited to: volume purchases, training and
certification, support, and reporting;
I. appoint a relationship manager whose primary responsibility will be to
work with the designated Cisco channel sales manager to manage the
implementation of the Agreement, act as the focal point for day-to-day
channel business issues and problem escalations, and participate in
Cisco channel-related activities, and;
J. on a monthly basis, prepare and forward a non-binding forecast for the
subsequent three (3) month period; in a format as reasonably specified
by Cisco. Cisco may also reasonably require additional reports.
K. within nine (9) months of signing the Agreement, integrator will
complete the training requirements commensurate with the appropriate
program level as stated in the then-current Cisco Voice Applications
Partner Program requirements.
9. PROPRIETARY RIGHTS AND SOFTWARE LICENSING.
9.1 Subject to the terms and conditions of this Agreement, Cisco grants to
Integrator a non-exclusive, non-transferable license (a) to use the Software
for Integrator's internal business use under the terms of Part (i) of Exhibit
S, and (b) during the term of this Agreement, to market and distribute the
Software, solely as permitted by Section 2 of this Agreement, in the Territory.
The license granted herein shall be for use of the Software in object code
format only and solely as provided in Part (i) of Exhibit S. Integrator may not
sublicense to any person or entity (including its affiliates) its rights to
distribute the Software.
9.2 Integrator shall provide a copy of the Software License Agreement
(inclusive of Parts (i) and (ii)) (a copy of which is attached hereto as
Exhibit S) to each End User of the Software prior to the installation.
Integrator agrees to notify Cisco promptly of any breach of the Software
License Agreement and further agrees that it will diligently pursue or, at
Cisco's request, assist Cisco to diligently pursue, an action against any third
parties in breach of the license.
10. LIMITED WARRANTY
10.1 Hardware. Cisco warrants that for a period of twelve (12) months from the
date of shipment from Cisco that the Hardware will be free from defects in
material and workmanship under normal use. This limited warranty extends only
to Integrator as original purchaser. Integrator's sole and exclusive remedy and
the entire liability of Cisco and its suppliers under this limited warranty
will be, at Cisco's or its service center's option, shipment of an advance
replacement within five (5) working days at Cisco's expense, or a refund of the
purchase price if the Hardware is returned to the party supplying it to
Integrator, if different than Cisco, freight and insurance prepaid. Cisco
replacement parts used in Hardware repair may be new or equivalent to new. All
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articles must be returned in accordance with Cisco's then-current Return
Material Authorization (RMA) procedure.
Software. Cisco warrants that for a period of twelve (12) months from the date
of shipment from Cisco: (a) the media on which the Software is furnished will
be free of defects in materials and workmanship under normal use; and (b) the
Software substantially conforms to its published specifications. Except for the
foregoing, the Software is provided AS IS. This limited warranty extends only
to Integrator as the original licensee. Integrator's sole and exclusive remedy
and the entire liability of Cisco and its suppliers under this limited warranty
will be, at Cisco or its service center's option, repair, replacement, or
refund of the Software. In no event does Cisco warrant that the Software is
error free or that Integrator will be able to operate the Software without
problems or interruptions.
Notwithstanding any other provision hereof except as set out in Section 10.2,
Cisco's sole and exclusive warranty and obligation with respect to the Products
sold hereunder are set forth in Cisco's Limited Warranty Statement delivered
with the Product. INTEGRATOR SHALL NOT MAKE ANY WARRANTY COMMITMENT, WHETHER
WRITTEN OR ORAL, ON CISCO'S BEHALF. Integrator shall indemnify Cisco for any
warranties made in addition to Cisco's standard warranty and for any
misrepresentation of Cisco's reputation or Cisco's Products.
10.2 Cisco represents that Products which it has designated as "Year 2000
Compliant," as set forth in the "Compliance Table" (including accompanying
Notes) located in Cisco's "Year 2000 Compliance" web pages beginning at
http://www.cisco.com (the "Year 2000 Pages") are "Year 2000 Compliant," meaning
that, as delivered to Integrator:
A. The Products accurately process data and time calculations before
and during the years 1999 and 2000;
B. All manipulation of time-related data yields the desired results
for valid date values within the application domain;
C. Date elements in those Products use four digit storage and
indicate century to eliminate the chance for errors;
D. If a date element exists without a century indication, the
correct century continues to be unambiguous and produces accurate
results; and
E. Software accurately processes date and time data when used in
conjunction with other Year 2000 compliant software products.
Should a Product that is so identified as "Year 2000 Compliant" not be Year
2000 Compliant or should Cisco otherwise breach the foregoing representation,
Cisco will, as Integrator's sole and exclusive remedy, repair or replace the
Product so that it becomes Year 2000 Compliant or, if Cisco is unable to repair
or replace the Product to make it Year 2000 Compliant, Cisco will refund the
purchase price of the Product paid to Cisco by Integrator as depreciated or
amortized by an equal annual amount over the lifetime of the Product, as
established by Cisco, provided that Integrator returns the Product to Cisco as
originally delivered by Cisco (except for normal wear and tear) and pursuant to
Cisco's then-current RMA policy. The foregoing representation and remedy shall
only apply to Products returned prior to January 31, 2001, or to Products
returned before the Products are no longer supported pursuant to Cisco's
standard support policies, whichever event first occurs. Integrator
acknowledges that: (i) the Internet URL address and the web pages referred to
above may be updated by Cisco from time to time and (ii) each Product ordered
will be subject to Cisco's then-current "Year 2000 Pages."
10.3 CISCO DISCLAIMS ALL OTHER WARRANTIES AND CONDITIONS, EXPRESSED OR
IMPLIED, INCLUDING THOSE OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
OR AGAINST INFRINGEMENT, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE
PRACTICE.
11. TRADEMARK USAGE.
11.1 Integrator is permitted to use the name, logo, trademarks, and other
marks of Cisco (collectively, the "Marks") for all proper purposes in the sale
of Cisco Products to End Users and the performance of Integrator's duties
hereunder only so long as this Agreement is in effect. Integrator's use of such
Marks shall be in accordance with Cisco's policies including, but not limited
to trademark usage and advertising policies, and be subject to Cisco's
approval. Integrator agrees not to attach to any Products any trademarks, trade
names, logos, or labels other than an aesthetically proper label identifying
the Integrator, its location and its relationship to Cisco. Integrator further
agrees not to affix any Cisco Marks to products other than genuine Products.
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11.2 Integrator shall have no claim or right in the Marks, including but not
limited to trademarks, service marks, or trade names owned, used or claimed now
or in the future by Cisco. Integrator shall not make any claim to the Cisco
Marks or lodge any filings with respect to such Marks or marks confusingly
similar to the Marks, whether on behalf of Cisco or in its own name or
interest, without the prior written consent of Cisco.
12. CONFIDENTIAL INFORMATION.
12.1 Integrator acknowledges that, in the course of selling the Products and
in connection with this Agreement and its relationship with Cisco, it may
obtain information relating to the Products or to Cisco, which is of a
confidential and proprietary nature ("Confidential Information"). Such
Confidential Information may include, but is not limited to, trade secrets,
know how, inventions, techniques, processes, programs, schematics, software
source documents, data, customer lists, financial information, and sales and
marketing plans or information which Integrator knows or has reason to know is
confidential, proprietary or trade secret information of Cisco, as well as any
information posted on CCO. Integrator shall at all times, both during the term
of this Agreement and for a period of at least three (3) years after its
termination, keep in trust and confidence all such Confidential Information,
and shall not use such Confidential Information other than as expressly
authorized by Cisco under this Agreement, nor shall Integrator disclose any
such Confidential Information to third parties without Cisco's written consent.
Integrator further agrees to immediately return to Cisco all Confidential
Information (including copies thereof) in Integrator's possession, custody, or
control upon termination of this Agreement at any time and for any reason. The
obligations of confidentiality shall not apply to information which (a) has
entered the public domain except where such entry is the result of Integrator's
breach of this Agreement; (b) prior to disclosure hereunder was already
rightfully in Integrator's possession; or (c) subsequent to disclosure
hereunder is obtained by Integrator on a nonconfidential basis from a third
party who has the right to disclose such information to the Integrator.
12.2 Neither party shall disclose, advertise, or publish the terms and
conditions of this Agreement without the prior written consent of the other
party. Any press release or publication regarding this Agreement is subject to
prior review and written approval of the parties.
13. PATENT AND COPYRIGHT INDEMNITY.
13.1 Cisco will have the obligation and right to defend any claim, suit or
proceeding brought against Integrator so far as it is based on a claim that any
Product supplied hereunder infringes a United States copyright or an existing
United States patent (issued as of the Effective Date). Cisco's obligation
specified in this paragraph will be conditioned on Integrator's notifying Cisco
promptly in writing of the claim and giving Cisco full authority, information,
and assistance for the defense and settlement thereof. If such claim has
occurred, or in Cisco's opinion is likely to occur, Integrator agrees to permit
Cisco, at its option and expense, either to: (a) procure for Integrator the
right to continue using the Product; (b) replace or modify the same so that it
becomes non-infringing; or (c) if neither of the foregoing alternatives is
reasonably available, immediately terminate Cisco's obligations (and
Integrator's rights) under this Agreement with regard to such Products, and, if
Integrator returns such Product to Cisco refund to Integrator the price
originally paid by Integrator to Cisco for such Products as depreciated or
amortized by an equal annual amount over the lifetime of the Products as
established by Cisco.
13.2 Notwithstanding the foregoing, Cisco has no liability for, and
Integrator will indemnify Cisco against, any claim based upon (a) the
combination, operation, or use of any Product supplied hereunder with
equipment, devices, or software not supplied by Cisco; (b) alteration or
modification of any Product supplied hereunder; or (c) Cisco's compliance with
Integrator's designs, specifications or instructions.
13.3 Notwithstanding any other provisions hereof, Cisco shall not be liable
for any claim based on Integrator's use of the Products as shipped after Cisco
has informed the Integrator of modifications or changes in the Products
required to avoid such claims and offered to implement those modifications or
changes, if such claim would have been avoided by implementation of Cisco's
suggestions.
13.4 THE FOREGOING STATES THE ENTIRE OBLIGATION OF CISCO AND ITS SUPPLIERS
AND THE EXCLUSIVE REMEDY OF INTEGRATOR, WITH RESPECT TO INFRINGEMENT OF
PROPRIETARY RIGHTS. THE FOREGOING IS GIVEN TO INTEGRATOR SOLELY FOR ITS BENEFIT
AND IN LIEU OF, AND CISCO DISCLAIMS, ALL WARRANTIES OF NON-INFRINGEMENT WITH
RESPECT TO THE PRODUCTS.
14. TERM AND TERMINATION.
14.1 This Agreement shall commence on the Effective Date and continue
thereafter for a period of one (1) year. Without prejudice to either party's
right to terminate this Agreement as set forth in Section 14.2, Cisco may by
written notice to Integrator given at least thirty (30) days prior to the end
of the then-current term of the Agreement, extend the term of the Agreement for
the period set forth in such notice, up to a maximum of one (1) year beyond the
then-current expiration date. Any extension shall be on the same terms and
conditions then in force except as may be mutually agreed in writing by the
parties.
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14.2 Either party may terminate this Agreement by providing the other party
with forty-five (45) days prior written notice of termination. Cisco may, upon
twenty (20) days written notice, terminate this Agreement in the event (a)
there is a change of ownership of Integrator (i.e. purchase or sale by one
person or other entity) of ten percent (10%) or more of Integrator's market
valuation, (b) there is an acquisition or transfer of a controlling interest in
Integrator, or (c) there is any investment in Integrator by a competitor of
Cisco.
14.3 This Agreement may be terminated immediately by either party through
written notice under any of the following conditions:
A. Either party ceases to carry on business as a going concern,
either party becomes the object of the institution of voluntary
or involuntary proceedings in bankruptcy or liquidation, or a
receiver is appointed with respect to a substantial part of its
assets.
B. Either party breaches any of the material provisions of this
Agreement and fails to remedy such breach within thirty (30) days
after written notification by the other party of such breach, or,
except in the case of breach of payment obligations, such longer
period as may be reasonably required to cure the breach, up to a
maximum of forty five (45) days, provided that the breaching
party within thirty days of receiving the notice commenced
diligent efforts to cure the breach.
14.4 Notwithstanding the foregoing, this Agreement may be terminated
immediately by Cisco in the event of Integrator's breach of Section 9,
Proprietary Rights and Software Licensing, or Section 12, Confidential
Information.
14.5 Upon termination of this Agreement, (a) Cisco reserves the right to cease
all further deliveries due against existing orders unless Integrator agrees to
pay for such deliveries by certified or cashier's check prior to shipment, (b)
all outstanding invoices immediately become due and payable by certified or
cashier's check, and (c) subject to Section 24.6, all rights and licenses of
Integrator hereunder shall terminate except that Integrator may continue to
distribute, in accordance with normal business practices and the terms of this
Agreement, Products shipped to it by Cisco prior to the date of termination.
14.6 Additionally, upon termination, Integrator shall immediately return to
Cisco all Confidential Information and data (including all copies thereof) then
in Integrator's possession or custody or control including, without limitation:
A. All technical materials and business plans supplied by Cisco;
B. All manuals covering Products; and
C. Any customer or prospect lists provided by Cisco
retaining only sufficient material to fulfill remaining orders and to service
the installed base of customers as mutually agreed upon by Cisco and
Integrator.
14.7 INTEGRATOR AGREES IN THE EVENT OF TERMINATION OF THIS AGREEMENT FOR ANY
REASON, IT SHALL HAVE NO RIGHTS TO DAMAGES OR INDEMNIFICATION OF ANY NATURE
RELATED TO SUCH TERMINATION (BUT NOT LIMITING ANY CLAIM FOR DAMAGES IT MIGHT
HAVE ON ACCOUNT OF CISCO'S BREACH OF THIS AGREEMENT, EVEN IF THE BREACH GAVE
RISE TO TERMINATION, SUCH LIABILITY BEING GOVERNED BY AND SUBJECT TO THE
LIMITATIONS SET FORTH ELSEWHERE IN THIS AGREEMENT), SPECIFICALLY INCLUDING NO
RIGHTS TO DAMAGES OR INDEMNIFICATION FOR COMMERCIAL SEVERANCE PAY, WHETHER BY
WAY OF LOSS OF FUTURE PROFITS, EXPENDITURES FOR PROMOTION OF THE CISCO
PRODUCTS, OR OTHER COMMITMENTS IN CONNECTION WITH THE BUSINESS AND GOOD WILL OF
INTEGRATOR. INTEGRATOR EXPRESSLY WAIVES AND RENOUNCES ANY CLAIM TO COMPENSATION
OR INDEMNITIES FOR ANY TERMINATION OF A BUSINESS RELATIONSHIP.
15. SUPPORT.
Integrator shall provide support to End Users and shall meet all requirements
set forth in Exhibit D. Cisco reserves the right to directly support any End
User. Attached as Exhibit D are the terms and conditions of the support that
Cisco shall make available to Integrator.
16. AUDIT.
Integrator shall keep full, true, and accurate records and accounts, in
accordance with generally-accepted accounting principles, of each Product
purchased and distributed, including information regarding Software usage and
export. Integrator shall make these records available for audit by Cisco upon
fifteen (15) days prior written notice, during regular business hours at
Integrator's principal place of business.
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17. EXPORT LAW COMPLIANCE.
17.1 Integrator hereby acknowledges that the Products and technology or
direct products thereof (hereafter referred to as "Products and Technology"),
supplied by Cisco hereunder are subject to export controls under the laws and
regulations of the United States (U.S.). Integrator shall comply with such laws
and regulations and agrees not to export, re-export or transfer Products and
Technology without first obtaining all required U.S. Government authorizations
or licenses. Cisco and Integrator each agree to provide the other such
information and assistance as may reasonably be required by the other in
connection with securing such authorizations or licenses, and to take timely
action to obtain all required support documents.
A. End-Use/User: Integrator hereby certifies that none of the
Products and Technology supplied by Cisco to Integrator hereunder
will be exported, re-exported, or otherwise transferred by
Integrator:
A.1 to a U.S. embargoed or highly restricted destination, (15
United States Code of Federal Regulations ("CFR") Part
746)
A.2 for use by or for any military end-user, or in any
military end-use located in or operating under the
authority of any country identified in Country Group D1
under 15 CFR, Supplement No. 1 to Part 740, (15 CFR Part
740)
A.3 to, or made available by Integrator for use by or for, any
entity that is engaged in the design, development,
production, stockpile or use of nuclear, biological or
chemical weapons or missiles, (15 CFR Part 744)
A.4 to parties on any of the U.S. Government's lists of denied
persons, (15 CFR Part 764)
without first obtaining all required U.S. Government
authorizations or licenses.
B. Integrator's obligation under this clause shall survive the
expiration or termination of this Agreement.
C. Integrator agrees to maintain a record of exports, re-exports,
and transfers of the Products and Technology for five years and
to forward within that time period any required records to Cisco
or, at Cisco's request, the U.S. Government. Integrator agrees to
permit audits by Cisco or the U.S. Government as required under
the regulations to ensure compliance with this Agreement.
18. FORCE MAJEURE.
Except for the obligation to pay monies due and owing, neither party shall be
liable for any delay or failure in performance due to events outside the
defaulting party's reasonable control, including without limitation acts of
God, earthquake, labor disputes, shortages of supplies, riots, war, fire,
epidemics, or delays of common carriers or other circumstances beyond its
reasonable control. The obligations and rights of the excused party shall be
extended on a day to day basis for the time period equal to the period of the
excusable delay.
19. PRODUCT CHANGES.
Modifications which do not affect the form, fit or function of a Product or
which Cisco deems necessary to comply with specifications, changed safety
standards or governmental regulations, to make the Product non-infringing with
respect to any patent, copyright or other proprietary interest, or to otherwise
improve the Product may be made at any time by Cisco without prior notice to or
consent of Integrator and such altered Product shall be deemed fully
conforming. Cisco shall employ commercially reasonable efforts to announce,
including by electronic posting, Product discontinuance or changes other than
those set forth in the previous sentence at least ninety (90) days prior to the
effective date of the changes (the "Announcement Period"). Integrator may make
a last-time purchase of such Products within the Announcement Period.
20. COMPLIANCE WITH LAWS
Integrator shall obtain all licenses, permits and approvals required by any
government and shall comply with all applicable laws, rules, policies and
procedures including requirements applicable to the use of Products under
telecommunications and other laws and regulations, of any government where the
Products are to be sold, used or deployed (collectively "Applicable Laws").
Integrator will indemnify and hold harmless Cisco for any violation or alleged
violation of any Applicable Laws. Integrator hereby represents and warrants
that: (a) it shall comply with all Applicable Laws; (b) this Agreement and each
of its terms are in full conformance and in compliance with such laws; and (c)
it shall not act in any fashion or take any action or permit or authorize any
action which will render Cisco liable for a violation of the U.S. Foreign
Corrupt Practices Act, which prohibits the offering, giving or promising to
offer or give, directly or indirectly, money or anything of value to any
official of a government,
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political party or instrumentality thereof in order to assist it or Cisco in
obtaining or retaining business and (i) it will not violate or cause Cisco to
violate such act in connection with the sale or distribution of Cisco Products
and/or services; and (ii) it will notify Cisco in writing if any of its owners,
partners, principals, officers, and employees are or become during the term of
this Agreement officials, officers or representatives of any government or
political party or candidates for political office. Integrator shall use its
best efforts to regularly and continuously inform Cisco of any requirements of
laws, statutes, ordinances, governmental authorities directly or indirectly
affecting this Agreement, the sale, use and distribution of Products, or
Cisco's trade name, trademarks or other commercial, industrial or intellectual
property interests, including, but not limited to, certification of the
Products from the proper authorities in the Territory.
21. LIMITATION OF LIABILITY.
EXCEPT WITH RESPECT TO CLAIMS OR CAUSES OF ACTION INVOLVING DEATH, PERSONAL
INJURY, OR DAMAGE TO TANGIBLE PERSONAL PROPERTY, ALL LIABILITY OF CISCO AND ITS
SUPPLIERS UNDER THIS AGREEMENT OR OTHERWISE SHALL BE LIMITED TO THE MONEY PAID
TO CISCO UNDER THIS AGREEMENT DURING THE SIX (6) MONTH PERIOD PRECEDING THE
EVENT OR CIRCUMSTANCES GIVING RISE TO SUCH LIABILITY. THIS LIMITATION OF
LIABILITY IS CUMULATIVE AND NOT PER INCIDENT.
22. CONSEQUENTIAL DAMAGES WAIVER.
IN NO EVENT SHALL CISCO OR ITS SUPPLIERS BE LIABLE FOR ANY INCIDENTAL, SPECIAL,
OR CONSEQUENTIAL DAMAGES, LOST PROFITS, OR LOST DATA, OR ANY OTHER INDIRECT
DAMAGES, WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
EVEN IF CISCO OR ITS SUPPLIERS HAVE BEEN INFORMED OF THE POSSIBILITY THEREOF.
23. NOTICE.
All notices required or permitted under this Agreement will be in writing and
will be deemed given: (a) when delivered personally; (b) when sent by confirmed
facsimile (followed by the actual document in air mail/air courier); (c) three
(3) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid (or six (6) days for international mail); or (d) one
(1) day after deposit with a commercial express courier specifying next day
delivery (or two (2) days for international courier packages specifying 2-day
delivery), with written verification of receipt. All communications will be
sent to the addresses set forth on the signature page of this Agreement or such
other address as may be designated by a party by giving written notice to the
other party pursuant to this paragraph.
24. GENERAL.
24.1 CHOICE OF LAW. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State of
California, United States of America, as if performed wholly within the state
and without giving effect to the principles of conflict of law. The parties
specifically disclaim the UN Convention on Contracts for the International Sale
of Goods.
24.2 NO WAIVER. No waiver of rights under this Agreement by either party
shall constitute a subsequent waiver of this or any other right under this
Agreement.
24.3 ASSIGNMENT. Neither this Agreement nor any rights under this Agreement,
other than monies due or to become due, shall be assigned or otherwise
transferred by Integrator (by operation of law or otherwise) without the prior
written consent of Cisco. Cisco shall have the right to assign all or part of
this Agreement without Integrator's approval. This Agreement shall bind and
inure to the benefit of the successors and permitted assigns of the parties.
24.4 SEVERABILITY. In the event that any of the terms of this Agreement
become or are declared to be illegal or otherwise unenforceable by any court of
competent jurisdiction, such term(s) shall be null and void and shall be deemed
deleted from this Agreement. All remaining terms of this Agreement shall remain
in full force and effect. Notwithstanding the foregoing, if this paragraph
becomes applicable and, as a result, the value of this Agreement is materially
impaired for either party, as determined by such party in its sole discretion,
then the affected party may terminate this Agreement by written notice to the
other.
24.5 ATTORNEYS' FEES. In any suit or proceeding relating to this Agreement
the prevailing party will have the right to recover from the other its costs
and reasonable fees and expenses of attorneys, accountants, and other
professionals incurred in connection with the suit of proceeding, including
costs, fees and expenses upon appeal, separately from and in addition to any
other amount included in such judgment. This provision is intended to be
severable from the other provisions of this Agreement, and shall survive and
not be merged into any such judgment.
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24.6 NO AGENCY. This Agreement does not create any agency, partnership, joint
venture or franchise relationship. Neither party has the right or authority to,
and shall not, assume or create any obligation of any nature whatsoever on
behalf of the other party or bind the other party in any respect whatsoever.
24.7 URL. Integrator hereby confirms that it has the ability to access, has
accessed and has read, the information made available by Cisco at all of the
world wide web sites/URLs/addresses/pages referred to anywhere throughout this
Agreement (including any of the Exhibits hereto).
24.8 SURVIVAL. Sections 10, 12, 13, 14, 16, 17, 18, 21, 22 and 24, and the
license to use the Software set out in Section 9 and Part (i) of Exhibit S
(subject to the termination provisions set forth in Part (i) of Exhibit S)
shall survive the termination of this Agreement.
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EXHIBIT A
INTEGRATOR PROFILE
INTEGRATOR'S ASSIGNED SALES TERRITORY:
World Wide.
INTEGRATOR'S ADDED VALUE PRODUCTS AND SERVICES:
Software Development company with fully integrated IP Telephony Software
packages and value added IP applications. ITSP Software Applications
Development, Network of existing ITSPs, Clearing house for ITSP minute traffic
payments, Web based applications Software Developer for VoIP and other
functions.
VERTICAL MARKETS ADDRESSED BY INTEGRATOR'S ADDED VALUE PRODUCTS AND SERVICES:
Internet Telephony Service Providers (ITSPs), Internet Service Providers
(ISPs), Corporate Virtual Private Networks, NextGen Telcos
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EXHIBIT B -- DISCOUNT SCHEDULE
The discount schedule set forth below shall be applied to all Product purchased
from Cisco by Integrator during the term of this Agreement.
===============================================================================
<TABLE>
<S> <C>
BASE DISCOUNT: 26%
VOLUME INCENTIVE:
Volume Achievement (see matrix below)
Forecast: $ 250,000. 0%
---------
CHANNEL TIER INCENTIVE:
Level 1 - Global Voice Solutions Partner (5%)
LEVEL 2 - VOICE SOLUTIONS PARTNER (4%)
Level 3 - Voice Development Partner (2%) 4%
IC/POS (1%): 1%
TOTAL VALUE ADDED RESALE DISCOUNT - GENERAL (NON FOCUS AREAS) AND INTERNAL USE: 31%
AUSTRALIA ONLY: (FOR PURCHASES MADE OFF OF GLOBAL LIST PRICE)(1)
TOTAL VALUE ADDED RESALE DISCOUNT - GENERAL (NON FOCUS AREAS) AND INTERNAL USE: 21%
FOCUS INCENTIVE:
Integrator's Focus Areas: Indicate one (1) or both below: (6%)
1) Service Provider (SERVICE PROVIDER)
-------------------
2) Voice Market (VOICE MARKET)
-------------------
Total Focus Incentive discount points: +6%
TOTAL VALUE ADDED RESALE DISCOUNT - RESALES TO FOCUS AREA(S): 37%
AUSTRALIA ONLY: (FOR PURCHASES MADE OFF OF GLOBAL LIST PRICE)(2)
TOTAL VALUE ADDED RESALE DISCOUNT - RESALES TO FOCUS AREA(S): 27%
</TABLE>
===============================================================================
Additionally, Integrator's discount for the following types of purchases, as
described in detail below shall be:
NON-VALUE ADDED RESALE 10%
DEMONSTRATION/EVALUATION EQUIPMENT 45%
LAB DEVELOPMENT SWITCH PRODUCT 65%
(1), (2) Discount for purchases to be made utilizing Global List Price for
shipment to and deployment in Australia is ten percent (10%) less than other
applicable discount. Integrator may choose to amend Agreement to allow for
purchases to be made utilizing Australian Price List upon request. In such case,
all Purchase Orders will be placed with and fulfilled through Cisco Systems
Australia Pty. Ltd., and payment shall be made in Australian currency.
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VOLUME INCENTIVE MATRIX:
Total annual volume of Products forecasted to be purchased from Cisco by
Integrator for resale in accordance with this Agreement:
Applicable to the List Price:
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------
Actual Net Purchase Forecast/Achieved Volume Incentive
$1,000,000 or greater +1%
$2,000,000 or greater +2%
$3,000,000 or greater +3%
$4,000,000 or greater +4%
===============================================================================
</TABLE>
The above discounts are based on Integrator's mutually agreed total volume
forecast.
Cisco reserves the right to adjust the volume incentive discount for the second
six (6) month period of the initial term and of any subsequent year of the
Agreement based on the actual volume of Products purchased for distribution in
accordance with this Agreement and delivered during the first six (6) month
period of the initial term or subsequent years of the Agreement. Changes in
discount level are not retroactive.
CHANNEL TIER INCENTIVE*:
(Refer to Cisco's then current Channel Tier Incentive Program for Complete
Details)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
GLOBAL VOICE VOICE SOLUTIONS VOICE
SOLUTIONS PARTNER DEVELOPMENT
PARTNER PARTNER
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SUPPORT
- - Availability of support 24x7 (manned 24x7 (pager Local Business
site access) access) Hours
- - Response time 1 hour 2 hour 4 hour
Same day Next day 48 hours
- - On-site support
In place In place In place
- - Must maintain upgraded
development In place and maintenance
Lab with Cisco equipment fully
configured to represent all
solutions offered (applies to
partners who develop
applications for specific Cisco
Hardware platforms)
In place In place In place
- - Defined escalation procedure for
Level 1 & 2 support
- -------------------------------------------------------------------------------------------------
TRAINING & INDIVIDUAL PERSONNEL
CERTIFICATION REQUIREMENTS
ESMBU HARDWARE PLATFORMS
- - Maintenance & Operations
trained/certified personnel 6 4 2
- - Application Development
trained/certified personnel 6 4 2
Voice Product Line (Access Path in
all it's configurations, 5200, 5300,
5400) 4 CCNP (Cisco 3 CCNP 2 CCNP
Certified
Network
- -------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
(Professional)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GEOGRAPHIC SALES & SUPPORT
COVERAGE ** Global Regional Regional
- -------------------------------------------------------------------------------------------------
</TABLE>
* Eligibility for Channel Tier Discount to be verified by Cisco.
** REGIONAL: Serves primarily a regional geographic location (e.g. N.A.,
Europe, SE Asia, etc.); GLOBAL: serves all regions (Americas, EMEA, ASIA)
through 3+ major sales and support organizations
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IC/POS:
IC (Internet Commerce)/POS (Point of Sale). Cisco will apply one (1) additional
discount point when Integrator commits to and actually meets, the following
requirements:
Ninety percent (90%) of Integrator's orders shall be submitted
electronically, and; Ninety percent (90%) of Integrator's orders shall
contain POS information
"Submitted electronically" means Integrator uses IC or EDI (Electronic
Data Interchange) technology in a format agreed in advance with Cisco to
submit orders electronically, and collect and transmit relevant End User
information.
POS information must include the following:
1. Integrator's Purchase Order number.
2. Cisco's Product name and number.
3. End User (name of business or organization), ship-to and bill-to address
(country, state or province (US and Canada only), zip or postal code),
phone number.
Cisco may withdraw the applicability of the IC/POS discount point to all
unshipped and/or future orders if it determines that the commitment has not
been fulfilled in any three (3) month period. Restoration of any withdrawn
point shall be at Cisco's sole discretion. Cisco shall have the right to verify
the information so provided and shall be provided with reasonable proof
(shippers' documentation, invoices, etc.) confirming the information on
request.
FOCUS INCENTIVE:
Integrator must qualify for one or both of the two (2) Focus areas (as defined
below or such other medium of communication as Cisco may elect) during the term
of the Agreement and subject to Territory. Focus Incentive applies only to
Products which either:
1. Integrator sells to an End-User located in the in the U.S. whose primary
business, as classified by the North American Industry Classification
System (NAIC) (http://www.ntis.gov/yellowbk/1nty205.htm), qualifies such
primary business as eligible for inclusion in one of Cisco's specified
Focus area, or sells to an End User located elsewhere which is deemed by
Cisco to qualify in accordance with classification criteria equivalent to
those set forth by the NAIC, and such Focus area has been selected as one
of Integrator's Focus areas (Focus Incentive applies to all Product on the
Purchase Order), or;
2. are part of a product set that Integrator has selected in accordance with
the applicable requirements for Focus Areas as one of Integrator's Focus
areas (Focus Incentive applies to only those Products which are included
in the product set).
No more than one Focus Incentive may be applied against an individual line item
on a Purchase Order, including in the event such Product qualifies for Focus
Incentive based on the End User's primary business and is also part of a
selected and qualified Focus area based on product set.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
VERTICAL MARKET - U.S. DEFINITION
- ---------------------------------------------------------------------------
<S> <C>
Service Provider Companies involved in providing telephone, internet,
wireless and radio communications services.
- ---------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PRODUCT SET - U.S. DEFINITION
- ---------------------------------------------------------------------------
<S> <C>
Voice Market VCO4/K Programmable Switch, 5300, 5800,
Access Path, VSC
- ---------------------------------------------------------------------------
</TABLE>
Cisco may change the availability or definition of Focus areas. Any such
changes shall not affect this Agreement during the balance of the initial term.
Cisco reserves the right to audit End User information to verify the
information reported regarding sales made for a specified Focus area. In the
event Cisco determines, in its sole discretion, that Integrator has reported
sales as being within a Focus area whereas they were not, Cisco may, without
prejudice to any other rights under the Agreement, withdraw Focus Incentive
points to be applied to any future purchase and reclaim points falsely claimed.
Such misrepresentation shall be deemed a material breach of the Agreement.
Cisco may change the availability or definition of Focus areas. Any such
changes shall not affect this Agreement during the balance of the initial term.
Cisco reserves the right to audit End User information to verify the
information reported regarding sales made for a specified Focus area. In the
event Cisco determines, in its sole discretion, that Integrator has reported
sales as being within a Focus area whereas they were not, Cisco may, without
prejudice to any other rights under the Agreement, withdraw Focus
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Incentive points to be applied to any future purchase and reclaim points
falsely claimed. Such misrepresentation shall be deemed a material breach of
the Agreement.
INTERNAL USE:
Integrator shall be entitled to purchase Product from Cisco for internal use at
the established "Total Value Added Resale Discount (General)". No focus area
discount incentive points shall apply to Product purchased for internal use.
NON-VALUE ADDED DISCOUNT:
In the event that Cisco determines in its sole discretion that Integrator is
selling Cisco Product without significant added value as defined in the
Agreement, the total discount for any such opportunity will be reduced to a
total of ten percent (10%) off of Cisco's List Price. This remedy is without
prejudice to and in addition to all other rights and remedies available to
Cisco at law.
DEMONSTRATION/EVALUATION PRODUCT:
To assist Integrator in its sales and marketing efforts, Integrator shall be
entitled to a discount of forty-five percent (45%) for a maximum of twenty-five
(25) demonstration/evaluation units per year. Integrator agrees to use such
units solely for demonstration/evaluation (non-production) purposes and any
software received with or for such units may not be distributed further, and
software for such units which is upgraded by Integrator is licensed to
Integrator solely for use for demonstration and evaluation purposes.
LAB DEVELOPMENT SWITCH PRODUCT:
Cisco shall provide a sixty five percent (65%) discount on Hardware and
Software components for VCO/4K switches that are being installed in a
laboratory environment, and any subsequent Hardware and Software purchased for
such laboratory units.
POS REPORTING:
In the event Integrator does not provide POS information at the time of order
entry, Integrator shall prepare and forward such POS information to Cisco on a
monthly basis in a format as reasonably specified by Cisco. The information
shall include all that which is set forth above under "IC/POS". Cisco shall
have the right to verify the information in such reports and shall be provided
with reasonable proof (shippers' documentation, invoices, etc.) confirming the
information on request.
Such reports are due by the twentieth of the following month to Cisco at the
following address:
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134-1706
Attention: Reporting Coordinator, Channel Operations
Fax: 408.527.2022
or such other address as Cisco may specify.
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EXHIBIT C
(EXHIBIT C DOES NOT APPLY TO THIS AGREEMENT)
EXHIBIT D
CVAP SUPPORT EXHIBIT
This CVAP Support Exhibit ("Exhibit") supplements the CISCO VOICE APPLICATION
PARTNER (CVAP) Multi-Theatre Systems Integrator Agreement, ("the Agreement")
and all the terms and conditions of the Agreement apply to this Exhibit;
provided, this Exhibit supersedes any prior or contemporaneous agreement that
covers the same subject matter. Further, to the extent there is a conflict
between the Agreement and this Exhibit, the terms of this Exhibit shall take
precedence over the terms and conditions of the Agreement with regard to the
subject matter described herein.
1. DEFINITIONS.
1.1. "ADVANCE REPLACEMENT" means a service to ship replacement
Service Parts in advance of receipt of failed Product.
1.2. "CATEGORY A, B, C AND D" means Cisco-determined Product
categories used for assessment of service fees. Refer to CCO
for details on the categorization of each Product.
1.3. "CATEGORY S" means Cisco's non-embedded/stand alone Application
Software Products. Refer to CCO for details on the
categorization on each product.
1.4. "CCO" means Cisco Connection Online, Cisco's online information
web server (www.cisco.com).
1.5. "FIRST LEVEL SUPPORT" means the ability to provide general
Product information (pre-sales and post-sales), Hardware and
Software configuration, installation, and upgrade support;
collect relevant technical problem identification information;
perform base problem determination; provide basic support on
the standard protocols and features; provide regular problem
resolution status reports to the End User; maintain knowledge
of the End User's network.
1.6. "HARDWARE" means tangible Cisco Product made available to
Integrator.
1.7. "MAINTENANCE RELEASE" means an incremental release of Cisco
Software that provides maintenance fixes and may provide
additional Software features. Maintenance releases are
designated by Cisco as a change in the digit(s) to the right of
the tenths digit of the Software version number [x.x.( x)].
1.8. "MAJOR RELEASE" means a release of a Cisco Software product
that is designated by Cisco as a change in the ones digit of
the Software version number [(x).x.x].
1.9. "OTHER PRODUCT" means Product an End User acquired from sources
other than Integrator.
1.10. "PRODUCT" means both Cisco Hardware and/or Software.
1.11. "RMA" means Return Material Authorization.
1.12. "SECOND LEVEL SUPPORT" means First Level Support plus the
ability in relation to the Products to resolve the majority of
misconfigurations, troubleshoot and simulate complex
configuration, Hardware, and Software problems, support problem
isolation and determination of Product specification defects;
provide lab simulation and interoperability and compatibility
testing for new Software and Hardware releases prior to being
deployed into an End User's production network; define a
problem resolution action plan; do preliminary analysis of
traces and log files, diagnose problems remotely and provide
Cisco with complete steps to reproduce problems which cannot be
resolved at 1st or 2nd level.
1.13. "SERVICE PART" means a component or sub-assembly of a Product
and is also referred to as Field Replaceable Unit (FRU).
1.14. "SOFTWARE" means the machine-readable object code Software
programs licensed by Cisco.
1.15. "STANDARD BUSINESS HOURS" means 6:00 AM to 6:00 PM Pacific
Standard Time, Monday through Friday, excluding Cisco-observed
holidays.
1.16. "TAC" means Cisco's Technical Assistance Center.
1.17. "THIRD LEVEL SUPPORT" means fixing or generating workarounds
for Hardware and Software bugs and troubleshooting bugs that
were not diagnosed or resolved during Second Level Support;
providing advanced support on all protocols and features and
analysis of traces, log files and core dumps.
1.18. "UPDATE" means Maintenance Releases, Version Releases and/or
Major Releases which contain the same configuration as
originally acquired.
1.19. "VERSION RELEASE" means an incremental release of Cisco
Software that provides maintenance fixes and additional
Software features. Version releases are designated by Cisco as
a change in the tenths digit(s) of the Software version number
[x.(x.).x].
2. SCOPE
2.1. SUPPORT SERVICES. The support hereunder is intended for an
Integrator who support End Users. Cisco will provide services
described hereunder to Integrator as backup to its technical
capabilities; provided however,
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that Integrator will retain primary responsibility for
providing support to its End Users and Cisco shall have no
obligation to provide support directly to End Users.
2.2. CERTIFICATION. Integrator must be certified in Cisco's channel
certification program in order to participate in the support
program described herein and must have individual personnel
certified in the following courses:
1. VCO/Series 20 and 80-System Configuration and Management;
2. VCO/4K System Configuration and Management;
3. Advanced Troubleshooting;
4. Introductory Software and the Summa API;
5. ISDN Templates, Commands and Reports; and
6. Appropriate SS7 courses may also be required.
3. CISCO RIGHTS AND OBLIGATIONS. In consideration of the service fee paid
by Integrator, Cisco will provide the following services to Integrator:
3.1. TECHNICAL SUPPORT.
3.1.1. Cisco shall provide 24-hour 7-day a week access to Cisco's TAC.
Cisco will use its best endeavors to respond to Integrator
within one (1) hour for all calls received during Standard
Business Hours and to Priority 1 and 2 calls received outside
Standard Business Hours. For Priority 3 and 4 calls received
outside Standard Business Hours, Cisco will respond no later
than the next business day.
3.1.2. Cisco will provide Third Level Support on all Category A
Products.
3.1.3. Cisco will supply the appropriate level of technical resources
based on problem priority and elapsed time to assist Integrator
with problem resolution and to ensure adherence to Cisco's
Problem Prioritization and Escalation Guideline as described in
Appendix A. If mutually agreed that Cisco on-site technical
resources are required for resolution, Cisco will dispatch the
necessary level of technical support to assist Integrator.
3.2. SOFTWARE SUPPORT.
3.2.1. SOFTWARE RELEASES. Cisco will make available Software Updates as
follows:
3.2.1.1. All major releases, version releases and maintenance
releases, if released by Cisco, will be provided to
Integrator upon request.
3.2.2. RELEASE SUPPORT. Cisco will support each Major Release and
Version Release for a period of thirty-six (36) months from the
first commercial shipment of that release. Cisco, in meeting
any support obligations, may require an upgrade to a subsequent
release.
3.2.3. SOFTWARE PATCHES. When required, Cisco will provide new
Software to Integrator to correct a problem.
3.3. HARDWARE SUPPORT. Cisco will provide Advance Replacement
service for Hardware as follows:
3.3.1. Cisco shall provide Advance Replacement service as follows:
Cisco will ship the replacement non-configured Service Part the
same business day providing the request for shipment is made
prior to 3:00 PM, Pacific Standard Time, Monday through Friday,
excluding Cisco-observed holidays. For requests after 3:00 PM
Pacific Standard Time, the Advance Replacement will be shipped
the following Cisco business day. The Advance Replacement will
be shipped, with shipping instructions, to arrive the next
business day. Standard Advanced Replacement service will be
available on VCO 4K, SS7 and later hardware products.
3.3.2. All replacements are shipped using Cisco's preferred carrier,
freight prepaid by Cisco.
3.3.3. Product used for replacement may be new or equivalent to new,
at Cisco's discretion.
3.3.4. The Advance Replacement Service described in Section 3.3.1 for
Product supported by Integrator which was purchased prior to
the effective date of this Exhibit will take effect thirty (30)
days after the Effective Date, provided that Cisco may refuse
to provide such service for any Product where Cisco in its sole
discretion is not satisfied that all required support fees with
respect to such Product have been paid.
3.4. CCO ACCESS. Cisco will provide an appropriate level of
Integrator access to CCO. CCO is available to End Users upon
approval by Integrator pursuant to the process in Appendix B
("Partner Initiated Customer Access" "PICA").
3.5. SPECIAL REQUIREMENTS. For some Products added to the Price
List, including Products which become Cisco Products as a
result of an acquisition by Cisco of another entity, Cisco may
impose certification, installation, or training requirements on
Integrator prior to allowing Integrator to buy and/or support
such Products from Cisco.
3.6. Notwithstanding anything in the Agreement to the contrary,
Cisco reserves the right to provide support directly to End
Users, even if Integrator is providing support to such End
Users.
4. INTEGRATOR RIGHTS AND OBLIGATIONS.
4.1. STAFF. Integrator shall maintain minimum requirements of
certified and trained technical support personnel who are
full-time direct employees to provide Software and Hardware
support. Integrator shall maintain at least one (1) trained
technical support person per servicing location.
4.2. SERVICES TO END USERS. Integrator shall provide the following
services to its End Users:
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4.2.1. SERVICE TIME PERIOD. Integrator shall provide services to End
Users in accordance with local business hours.
4.2.2. TECHNICAL SUPPORT.
4.2.2.1. Integrator will provide First Level Support and Second
Level Support to End Users on all Products.
4.2.2.2. During local business hours Integrator shall provide
telephone call back to the End User within one (1)
hour. For calls received outside local business hours,
Integrator will respond to the End User within one (1)
hour for Priority 1 and 2 calls, and no later than the
next business day for Priority 3 and 4 calls.
4.2.2.3. Integrator shall establish problem priorities with End
Users consistent with Cisco's problem priority
definitions described in Appendix A and will report
unresolved cases to Cisco as follows:
PRIORITY 1: No later than four (4) hours from
initial End User notification to Integrator.
PRIORITY 2: No later than three (3) business days
from initial End User notification to Integrator.
PRIORITY 3: No later than five (5) business days
from initial End User notification to Integrator.
PRIORITY 4: No later than ten (10) business days
from initial End User notification to Integrator.
4.2.3. ADVANCE REPLACEMENT: Integrator shall offer next business day
Advance Replacement to its End Users.
4.2.4. INSTALLATION. Integrator shall offer installation services to
each End User who purchases Products.
4.2.5. WARRANTY SERVICE. Integrator shall provide to the End User, at
no charge, all warranty service for a minimum of the warranty
period set forth in the then-current published Product
warranty.
4.3. CCO ACCESS. Integrator will administer CCO access for its
employees including disabling CCO access upon employee
termination. Additionally, Integrator will be responsible for
administering and authorizing registered End-User access to CCO
pursuant to the process in Appendix B. In no event shall
Integrator disclose its level of CCO access information.
4.4. Integrator shall facilitate access to the Products included
herein such that problems may be diagnosed and corrected
remotely via the internet or via modem access.
4.5. ON-SITE PROBLEM RESOLUTION. Integrator will have the ability to
go to the End User's site to provide problem resolution.
4.6. SOFTWARE SUPPORT.
4.6.1. DUPLICATION RIGHTS.
4.6.1.1. For the Releases specified in Section 3.2.1.1, no
duplication rights of any kind are granted by Cisco.
4.6.2. DISTRIBUTION RIGHTS. Cisco grants Integrator the right to
distribute software only to End Users currently licensed to use
the Software.
4.6.3. REASONABLE EFFORT. Integrator will use reasonable efforts to
(i) generate work-around solutions to reported Software
problems or (ii) implement a Cisco-developed patch to the
Software.
4.7. SERVICE PARTS INVENTORY. Integrator shall maintain a sufficient
Service Parts inventory to support its End User base. Service
Parts may only be used for remedial maintenance purposes. Cisco
may periodically request a Service Parts inventory report from
Integrator. Integrator is responsible for maintaining up to
date revisions of service parts inventory.
4.8. ADVANCE REPLACEMENT. Integrator shall request Advance
Replacement by using Cisco's Service order Agent on CCO.
4.9. RECEIPT OF REPLACEMENTS. Integrator is responsible for the
following when receiving replacement Product:
4.9.1. Importation import duties, taxes, fees, inspections and any
other import requirements applicable to the country of import.
4.9.2. Testing to verify any damage in transit and reporting Product
failures and/or mis-shipments to Cisco within ten (10) business
days of receipt.
4.10. RETURNS COORDINATION.
4.10.1. Integrator shall return all failed Product that has been
Advance Replaced within ten (10) business days of receipt of
the replacement Product; otherwise, Advance Replacement
Products will be invoiced to Integrator at the then current
list price.
4.10.2. Integrator shall coordinate the return of all failed Product,
freight and insurance prepaid, to the Cisco designated
location.
4.10.3. Integrator shall comply with the following RMA procedure:
4.10.3.1. Integrator will ensure all Products are properly
packaged prior to being shipped, and will include a
written description of the failure and specification
of any changes or alterations made to the Product.
Product returned to Cisco will conform in quantity and
serial number to the RMA request.
4.10.3.2. Integrator shall tag each Product returned with the
RMA transaction number and a brief description of the
problem.
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4.10.3.3. Cisco will not accept any Product returned which is
not accompanied by an RMA number.
4.11. INTEGRATOR SUPPORT FOR OTHER PRODUCT. Integrator may receive
support service from Cisco hereunder for Other Product under
the following conditions: Integrator provides Cisco a request
to support Other Product and a list including the Product(s)
and serial number(s) to be supported, and pays the fees set
forth in this Agreement for Other Product. Cisco reserves the
right to approve or reject such request.
4.12. FOCAL POINTS. Integrator will identify individuals to serve as
focal points for Cisco's monitoring of support services
provided under this Exhibit and any day-to-day service issues,
including escalations under the Prioritization and Escalation
Guideline (Appendix A).
4.13. RECORDS. Integrator will maintain records of Product in use at
all End User sites.
4.14. CUSTOMER SATISFACTION SURVEY. Cisco reserves the right to
survey End Users under Integrator support for Cisco Products
for the limited purpose of ensuring customer satisfaction with
Cisco Products and Integrator support. For such purposes,
Integrator agrees to provide End User contact information.
5. SERVICES NOT COVERED UNDER THIS AGREEMENT.
5.1. Any customization of or labor to install Software.
5.2. Major Releases and Version Releases for Category S Product.
5.3. On-site Support. Cisco shall not be required to perform any
on-site support under this Agreement. If Cisco is requested to
perform on-site diagnostic and remedial maintenance, except
where mutually agreed under Section 3.1.3, integrator shall
reimburse Cisco for all labor and travel expenses at Cisco's
then-current time and material rates.
5.4. Support or replacement of Product that is altered, modified,
mishandled, destroyed or damaged by natural causes or damaged
during unauthorized use.
5.5. Services to resolve software or hardware problems resulting
from third party product or causes beyond Cisco's control.
5.6. Services for non-Cisco software installed on any Cisco Product.
5.7. Any Hardware upgrade required to run new or updated Software.
6. CISCO SERVICE FEE, PAYMENT TERMS AND CHANGES.
6.1. INTEGRATOR SHALL PAY THE FOLLOWING FEES:
6.1.1. For Category A Product, subject to Section 6.5 below (including
all such Products supported by Cisco under any predecessor
version of this Exhibit) a recurring annual fee, charged on
Integrator's cumulative net purchases billed quarterly.
Cumulative net purchases includes; (i) product purchased under
this Agreement or previously, (ii) Product purchased by
Integrator from a supplier other than directly from Cisco, and
(iii) Other Product; regardless of when Product or Other
Product was purchased. All products covered under this CVAP
support exhibit are Category A.
6.1.2. For Category B, C, D and S Product a one-time fee charged on
Integrator's net purchases. Net purchase includes; (i) Product
purchased under this Agreement (in which case the fee shall be
charged upon Product purchase), (ii) Product purchased by
Integrator from a supplier other than directly from Cisco (iii)
Other Product. In cases of (ii) and (iii) the fee shall be due
thirty (30) days after invoice date of such fee.
<TABLE>
<CAPTION>
CATEGORY MAINTENANCE FEE. % OF NET PAYMENT SCHEDULE
-------- ------------------------- ----------------
<S> <C> <C>
Category A 5.5% Annual recurring
Category B 10% One-time as per 6.1.2.
Category C 7.5% One-time as per 6.1.2.
Category D 2% One-time as per 6.1.2.
Category S 2.5% One-time as per 6.1.2.
</TABLE>
6.1.3. Within thirty (30) days after invoicing of such amount by
Cisco, Integrator will pay the amount due for any quarterly
billings remaining on Product purchased by Integrator as an
authorized Integrator prior to the Effective Date of this
Exhibit, up to the total of the twelve quarterly installments
required to be paid for such Product under the System
Integrator Support Exhibit to which Integrator was a party
prior to the Effective Date of this Exhibit, notwithstanding
that such prior Exhibit is replaced by this Exhibit. Such fees
shall be due for all such Product with respect to which
Integrator has provided support, even if such Product was
originally purchased by Integrator from a source other than
directly from Cisco, and with respect to Other Product, the fee
due shall be the fee applicable to Other Product under the
prior System Integrator Support Exhibit. Any such fees
remaining on Product will be billed as a one-time fee.
6.2. For Product purchased from a supplier other than Cisco,
Integrator will be charged the applicable maintenance fee in
accordance with Section 6.1, except that such fee will be
calculated on the then-current Product list price (as of the
date of purchase by Integrator) less Integrator's discount.
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6.3. In the cases described in this Section 6.3, the recurring fees
specified in Section 6.1.2 for Category A Product will not be
charged and the one-time fee for Categories B,C,D and S
specified in Section 6.1.2 will not be charged and, if already
paid, will be subject to refund in accordance with Section 6.5
below:
6.3.1. Support on Product in Integrator's installed base is
transferred to another Cisco authorized Integrator under the
following conditions:
6.3.1.1. Integrator provides Cisco with a notification
including the Product(s) (i) and serial number(s) on
which support is being transferred, (ii) the date of
the transfer and the Cisco Integrator to whom support
is being transferred and (iii) letter from the End-User
stating the End User's request to have service
transferred to another Cisco Integrator.
6.3.1.2. Cisco receives confirmation of such transfer and
payment of the service fee for those Products from the
Cisco Integrator who will be assuming support.
6.4. For Other Product an administration fee of 10% of the fee
described in 6.1.1 and 6.1.2 for such Other Product.
Additionally, an inspection fee may be charged per unit, if
applicable, as determined by Cisco at the then-current time and
material rates.
6.5. For Category A Product only, support fee will not be charged if
(i) Product has reached end-of-maintenance and Cisco no longer
offers support services for the Product or (ii) Integrator
provides Cisco a letter from End-user stating that product has
been permanently removed from the network.
6.6. The one-time maintenance fees specified in Section 6.1.2 paid
by Integrator will be refunded for the situations described in
section 6.3.1 as follows:
6.6.1. Integrator will receive a 100% refund of the one-time service
fee for affected Product in Category B, C, D, and S if the
event described in Sections 6.3.1 occurs during the initial 12
months after Product shipment from Cisco.
6.6.2. Integrator will receive a 60% refund of the one-time service
fee for affected Product in Category B, C, D, and S if the
event described in Sections 6.3.1 occurs during the period more
than 12 months and less than 24 months after the date of
Product shipment from Cisco.
6.6.3. There will be no refund if the event described in Sections
6.3.1 occurs after the initial 24 month period after Product
shipment from Cisco.
6.7. With respect to Product purchased, resold or supported by
Integrator prior to becoming an authorized Integrator,
Integrator shall pay all applicable fees hereunder within
thirty (30) days of invoice by Cisco.
6.8. Cisco will provide information necessary for prompt issuance of
a purchase order or similar document by Integrator, where
required. Integrator will provide (i) a purchase order for the
services defined herein no later fifteen (15) days from Cisco's
request; and (ii) a blanket purchase order for the purpose of
billing non-returned Products and time and materials services,
if any.
6.9. Integrator is responsible for all applicable taxes, fees and
duties associated with the delivery of services under this
Exhibit.
7. TERMINATION/SUSPENSION OF PERFORMANCE. In addition to all rights and
remedies which it may have under the Agreement, Cisco may suspend its
performance or services hereunder for all Products covered under this
Exhibit, whether the Products were purchased prior to or subsequent to
the Effective Date of this Exhibit, immediately upon Notice if (i)
Integrator fails to pay for the Services when due and fails to make
such payment within fifteen (15) days after Notice from Cisco of such
past due payment, or (ii) if Integrator breaches the provisions of
Section 9, or hereof (iii) for particular Products, if Cisco ends
support for such Products or (iv) the Agreement terminates. Upon
expiration or termination as specified in the Agreement, (i) all rights
and licenses of Integrator hereunder shall terminate, (ii) Integrator
shall immediately discontinue all representations that it provides
Cisco-supported maintenance services for Cisco Product, and (iii) End
User access to CCO shall terminate.
8. SOFTWARE LICENSE. Integrator acknowledges that it may receive Software
as a result of services provided under this Exhibit. Integrator agrees
that it is licensed to distribute such Software only on Product covered
under this Exhibit and subject to the terms and conditions of the
Software license granted with the original purchase of the Product and
with respect to which all applicable fees have been paid. Integrator
shall not copy, in whole or in part, Software or documentation; modify
the Software, reverse compile or reverse assemble all or any portion of
the Software; or rent, lease, distribute, sell, or create derivative
works of the Software. Integrator shall not upgrade to a feature set
other than that which was licensed at the time of original Product
purchase unless applicable license fees are paid.
9. GENERAL.
9.1. DISCLOSURE OF CONTRACT INFORMATION. Integrator acknowledges and
agrees that in no event shall any of the information contained
in this Exhibit, Integrator's Agreement number, or CCO access
information be disclosed to any third party. Such information
shall be considered Confidential Information under the
Agreement.
9.2. REPRESENTATIONS AND WARRANTIES. Integrator shall not make any
representations or warranties on behalf of Cisco, except as
expressly authorized herein or as expressly authorized by Cisco
in writing. Neither Integrator nor Cisco will make any
obligation to provide services to End Users on behalf of the
other, nor commit the resources of the other to End Users.
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<PAGE> 23
9.3. SERVICE MARKS. Cisco support provided to Integrator is not in
any way to be considered or presented as a service from Cisco
directly to the End User. Integrator will not use Cisco's
service marks in any manner except as mutually agreed upon in
writing.
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APPENDIX A
CISCO PROBLEM PRIORITIZATION AND ESCALATION GUIDELINE
To ensure that all problems are reported in a standard format, Cisco has
established the following problem priority definitions. These definitions will
assist Cisco in allocating the appropriate resources to resolve problems.
Integrator must assign a priority to all problems submitted to Cisco.
PROBLEM PRIORITY DEFINITIONS:
PRIORITY 1: An existing network is down or there is a critical
impact to the End User's business operation. Cisco,
Integrator and End User will commit full-time resources
to resolve the situation.
PRIORITY 2: Operation of an existing network is severely
degraded, or significant aspects of the End User's
business operation are being negatively impacted by
unacceptable network performance. Cisco, Integrator and
End User will commit full-time resources during
Standard Business Hours to resolve the situation.
PRIORITY 3: Operational performance of the network is impaired
while most business operations remain functional.
Cisco, Integrator and End User are willing to commit
resources during Standard Business Hours to restore
service to satisfactory levels.
PRIORITY 4: Information or assistance is required on Cisco
product capabilities, installation, or configuration.
There is clearly little or no impact to the End User's
business operation. Cisco, Integrator and End User are
willing to provide resources during Standard Business
Hours to provide information or assistance as
requested.
Cisco encourages Integrator to reference this guide when Integrator-initiated
escalation is required. If Integrator does not feel that adequate forward
progress or the quality of Cisco service is satisfactory, Cisco encourages
Integrator to escalate the problem ownership to the appropriate level of Cisco
management by asking for the TAC Duty Manager.
CISCO ESCALATION GUIDELINE:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Elapsed
Time Priority 1 Priority 2 Priority 3 Priority 4
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Customer
1-Hour Engineering Manager
- --------------------------------------------------------------------------------------------
Technical Support Customer Engineering
4-Hour Director Manager
- --------------------------------------------------------------------------------------------
Vice President Technical Support
24-Hour Customer Advocacy Director
- --------------------------------------------------------------------------------------------
President (CEO) Vice President
48-Hour Customer Advocacy
- --------------------------------------------------------------------------------------------
Customer Engineering
72-Hour Manager
- --------------------------------------------------------------------------------------------
President (CEO) Technical Support Customer
96-Hour Director Engineering
Manager
- --------------------------------------------------------------------------------------------
</TABLE>
NOTE: Priority 1 problem escalation times are measured in calendar hours 24
hours per day, 7 days per week. Priority 2, 3 and 4 escalation times
correspond with Standard Business Hours.
The Cisco Manager to which the problem is escalated will take ownership
of the problem and provide the Integrator with updates. Cisco
recommends that Integrator-initiated escalation begins at the Customer
Engineering Manager level and proceeds upward using the escalation
guideline shown above for reference. This will allow those most closely
associated with the support resources to correct any service problems
quickly.
ACCESSING TAC:
North America, South America: +1-800-553-2447 (within the United States)
+1-408-526-7209
Europe, Middle East, and Africa: +32-2-778-4242
Asia Pacific: +1-800-805-227 (within Australia)
+61-2-9935-4107
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APPENDIX B
CISCO CONNECTION ONLINE
PARTNER INITIATED CUSTOMER ACCESS (PICA)
INTEGRATOR RESPONSIBILITY
Integrator shall nominate two (2) employees to enable End User CCO access
using CCO administration tools.
Integrator shall forward the following information to Cisco (via
electronic mail to "[email protected]"), as soon as practicable, for the
nominated persons:
1. Current Service Agreement number with Cisco
2. CCO user ID(s)
3. Internet email addresses (if established)
The Integrator's two (2) employees will be responsible for:
1. Providing CCO access to End Users
2. Assisting Cisco in verifying CCO users previously registered,
whereby Integrator submitted End User CCO Access Requests on behalf
of their End Users. Assist in moving End Users from the older
process to the PICA process.
3. Integrator is responsible for disabling End User's PICA access when
the End User is no longer eligible.
4. Integrator shall be responsible for ensuring that End User only
downloads software for use with Products for which applicable
support fees have been paid, and shall pay to Cisco applicable
support fees for any Products for which support is received through
use of the procedures described in this Appendix B, regardless of
whether or not such Product was originally sold by Integrator to
End User.
INTEGRATOR EMPLOYEE REGISTRATIONS
Employees within the Integrator organization must continue to use the
existing system of registering (i.e. with their Service Agreement
number). To ensure correct access, Integrator employees should never use
a special PICA account number for registering online.
END USER ELIGIBILITY FOR CCO ACCESS
End User eligibility for CCO access commences when the End User has
purchased a Cisco Product, or service for Cisco Product(s) from the
Integrator, and has a support agreement with that Integrator.
PICA PROCESS OVERVIEW
1. Cisco will assign a unique account number prefix to the nominated
person(s) if one does not already exist.
2. This prefix is the basis of the new account numbering scheme for
End Users (i.e. FJLxxxx). Each End-User will have a different
number following the prefix (i.e. FJL2001, FJL2004, FJL2035 etc.)
3. If the Integrator wishes to entitle End User access to CCO, the
nominated person logs onto CCO and uses the PICA administration
tool to entitle End-User.
4. This option is selected and 3 fields will appear. The first field
is an input field for the name of the End User, the second field is
a selectable list of countries and the third is a selectable field
for Software download entitlement for this End User [yes|no].
5. When correctly entered, selected and executed, CCO will generate a
unique account number just for that End User, and display it on
screen. e.g. FJL1012
6. After it is generated online, the account number may only be
published within the End User organization. Only one number per End
User organization is normally permitted.
7. Any number of End User employees may register on CCO with that
account number e.g. FJL1012. A unique user ID will be generated for
each user that registers.
8. For security reasons, generic or group accounts are not permitted
under any circumstances.
9. For each registration performed, an email can be sent to the
nominated person automatically with the newly registered user's
online entered details.
10. Disabling End User CCO access will also be an online option.
CONFIDENTIALITY. Integrator acknowledges that, in the course of performing its
duties, Integrator or the End Users to whom Integrator authorizes CCO access
may obtain information relating to the Products and to Cisco which is of a
confidential and proprietary nature ("Proprietary Information"). Such
Proprietary Information may include, but is not limited to, trade secrets, know
how, invention techniques, processes, programs, schematics, Software source
documents, data, financial information, and sales and marketing plans.
Integrator shall at all times keep in trust and confidence all such Proprietary
Information, and shall not use such Proprietary Information other than in the
course of its duties under the Agreement, nor shall Integrator disclose any
such Proprietary Information without Cisco's written consent. Integrator
further agrees to immediately return to Cisco all Proprietary Information
(including copies thereof) in Integrator's possession, custody, or control upon
termination of this Agreement at any time and for any reason. Integrator will
indemnify Cisco for unauthorized disclosures of Proprietary Information by
Integrator or its End User.
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EXHIBIT E
ORDERING AND SHIPPING TERMS
<TABLE>
<CAPTION>
Discount
Ordering Locations: Price List: Schedule: Place Orders With: Shipping terms:
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
United States, Mexico, Central Global Price List Exhibit B Cisco Systems, Inc. FCA, San Jose, CA
America, Latin America, Asia, San Jose, CA, U.S.A.
New Zealand, Japan, Australia***
EU Countries* Global Price List** Exhibit B Cisco Systems International B.V. CIP, duty paid, named
destination Amsterdam, Netherlands
Norway, Switzerland Global Price List** Exhibit B Cisco Systems International BV CIP, duty unpaid, named
destination Amsterdam, Netherlands
Other countries in Cisco's Europe, Global Price List** Exhibit B Cisco Systems International BV DDU, Border-Port of Entry
Middle East, and Africa theatre, Amsterdam, Netherlands
Pakistan
Canada Canadian Price List Exhibit B Cisco Systems Company Ltd. CIP, duty unpaid, named
destination Toronto, Canada in Canada
</TABLE>
*E/U Countries - Austria, Belgium, Denmark, Finland, France, Germany, Greece,
Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United
Kingdom
**Actual price will be based on currency, freight, and applicable duties, taxes
and fees.
***Please note: The discount for purchases to be shipped to and deployed in
Australia is ten percent (10%) less than Integrator's other applicable
discount.
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EXHIBIT F
SHIPPING TERMS AND CHARGES
DEFINITIONS
DEFINITION OF GOLD AND PLATINUM SERVICES FOR CISCO PRODUCTS TRANSITING THE
EUROPEAN LOGISTICS CENTER (FOR DELIVERY IN EU, NORWAY, SWITZERLAND ONLY) OR
DIRECTLY FULFILLED FROM OUR EUROPEAN MANUFACTURING SITE (UK):
GOLD SERVICE is defined as shipment designed to achieve 1-3 business day
delivery from the European Logistics Center/ European Manufacturing Site to the
customer delivery site. Variation in business delivery days is possible
depending on country of destination or geographical location within the country
or other factors.
PLATINUM SERVICE is defined as shipment ordered for next day delivery Monday
through Friday for EU countries only from the European Logistics Center/
European Manufacturing Site to the customer delivery site. Norway and
Switzerland Platinum Service is defined as shipment for next day delivery
Monday through Friday assuming import arrangements are made in advance.
DEFINITION OF CONSOLIDATION AND DIRECT SERVICES FOR CISCO PRODUCTS TRANSITING
THE CROSS DOCK / MERGE CENTER OR DIRECTLY FULFILLED FROM THE EUROPEAN
MANUFACTURING SITE (USA/UK):
CONSOLIDATION SERVICE is defined as shipment via the next available freight
forwarder airfreight consolidation to the destination country.
DIRECT SERVICE is defined as shipment via the next available air freight
carrier to the destination country.
DEFINITION OF PIKPAK:
Within the ELC Cisco intends to hold a limited Build to Stock inventory, which
is available to order for those partners within the EU, Norway or Switzerland
and who are using Cisco's ELC delivery logistics services program. PikPak
requests must be stated on the order, but will be fulfilled subject to
availability. The PikPak uplift charge described below applies where the order
has specified PikPak and the fulfillment was through the PikPak stock, even if
the Product originated in the European Manufacturing facility.
DEFINITION OF MERGE IN TRANSIT:
MERGE IN TRANSIT (MiT) is a customer driven logistics program that will provide
Cisco's customers in the EMEA with a way to receive shipments from a single
purchase order on the same day, in the same delivery, regardless of the number
of factories involved in building the order. The MiT uplift charge described
below applies where the order has specified Merge in Transit.
FREIGHT UPLIFT CHARGE:
THE FOLLOWING DESTINATION COUNTRIES WILL TRANSIT THE EUROPEAN LOGISTICS CENTER
(ELC) IN THE NETHERLANDS FOR DELIVERY OF PRODUCT OR BE FULFILLED DIRECTLY FROM
THE EMEA MANUFACTURING SITE:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Terms of Delivery
-----------------
<S> <C> <C> <C>
Austria Belgium Denmark CIP, Duty Paid**/Duty Unpaid
----------------------------
Finland France Germany 1.0% + duty Gold Service Level
Greece Ireland Italy 1.3% + duty Gold Service Level + MiT
Luxembourg Netherlands Portugal 1.5% + duty Platinum Service Level
Spain Sweden United Kingdom 1.8% + duty Platinum Service Level + MiT
- -----------------------------------------------------------------------------------------------------
</TABLE>
Duty paid or Duty unpaid election, which must be on purchase order, applies to
EU countries ONLY. Shipments outside EU are available only as duty unpaid.
**= plus duty rates applicable according to the Brussels Nomenclature and other
European Union regulation, if duty paid option is selected. Please note that
all products shipped from our European Manufacturing site (UK) will be in EU
(duty) free circulation (i.e. duty, if any, is paid for by Cisco), even if they
are merged in transit, and the duty rate will only apply to the portion
originating outside the EU.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Terms of Delivery - CIP, Duty Unpaid
------------------------------------
<S> <C> <C>
Norway Switzerland 1.0% Gold Service Level
1.3% Gold Service Level + Mit
1.5% Platinum Service Level
1.8% Platinum Service Level + Mit
- ----------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 28
For all other destinations in the EMEA, products will ship via our Cross-dock /
Merge center in Amsterdam to the customer. Delivery Terms for these countries
are DDU (INCOTERMS 1990) (Border-Port of Entry) and subject to the uplift
charge as indicated below.
CONSOLIDATED 2.1%
CONSOLIDATED + MIT 2.4%
DIRECT 3.4%
DIRECT + MIT 3.7%
THESE CHARGES ARE SUBJECT TO CHANGE UPON ANNOUNCEMENT BY CISCO, INCLUDING BY
ELECTRONIC POSTING.
ELC Terms as of November 9, 1998
Page 28
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EXHIBIT G
NETWORKED COMMERCE ENROLLMENT ADDENDUM
This Networked Commerce Agents Enrollment Addendum ("Addendum") supplements the
Agreement and all the terms and conditions of the Agreement apply to this
Addendum; provided, that to the extent that there is conflict between the
Agreement and this Addendum, the terms of this Addendum shall take precedence
over the terms and conditions of the Agreement with regards to the subject
matter described herein.
TERMS AND CONDITIONS
1. Integrator may enroll in Cisco's MarketPlace Internetworking Product
Center (the "Program") by returning the form set forth in Attachment 1
indicating the users of Integrator who are authorized to submit
electronic orders on behalf of Integrator ("Authorized Users"). Upon
execution of the Agreement by Cisco and Integrator, Cisco will entitle
those users to submit electronic orders. The Program allows direct
Integrators and partners to configure, price, and route orders and
then submit them electronically.
2. Integrator agrees that the person using the Program address/password
is an Authorized User and has the capacity and authority to place
orders for Cisco Products and services on behalf of Integrator, and
Program password security is the responsibility of Integrator. Cisco
and Integrator agree that an order placed through the Program is the
equivalent of a signed purchase order.
3. Integrator shall have the right to change, add or delete Authorized
Users upon written notification, with verification of receipt, to
Cisco. Cisco agrees to implement such changes, additions or deletions
within twenty-four (24) hours of receipt of such written notification.
4. Integrator's participation in the Program may be terminated by Cisco,
with or without cause, upon fifteen (15) days written notice to
Integrator.
5. Cisco reserves the right to accept or decline any purchase order
submitted via the Program.
6. Integrator agrees that a Cisco invoice may be the only documentation
provided by Cisco for purchase and payment of Cisco's Products and
services ordered via the Program.
8. The parties agree that Cisco shall not be liable for any incidental,
consequential or special damages arising from, or as a result of, the
electronic transmission of orders or other information even if Cisco
has been advised of the possibility of such damages.
9. Integrator agrees to waive any future challenge to the validity and
enforceability of any order submitted via the Program on the grounds
that it was electronically transmitted and authorized.
10. Integrator is responsible for all costs and charges, including without
limitation, phone charges and telecommunications equipment, incurred
in order to use the Program.
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ATTACHMENT 1
NETWORKED COMMERCE AGENTS ENROLLMENT ADDENDUM
INTEGRATOR AUTHORIZED USER FORM
Please indicate the names of the users of Integrator who are authorized to
submit electronic orders on behalf of Integrator (i.e. Authorized Users) under
the Program. If there are any special circumstances or restrictions that apply
to an Authorized User, please indicate in the area provide at the bottom of the
page.
<TABLE>
<S> <C> <C>
NAME (FIRST & LAST) JOB TITLE USER ID
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
Special Instructions/Restrictions:
- -------------------------------------------------------------------------------
Page 30
<PAGE> 31
EXHIBIT H
INTEGRATOR AFFILIATES
Name: Country: Primary Contact:
- -------------------------------------------------------------------------------
Page 31
<PAGE> 32
EXHIBIT S
SOFTWARE LICENSE AGREEMENT
PART (i)
PLEASE READ THIS SOFTWARE LICENSE AGREEMENT CAREFULLY BEFORE DOWNLOADING,
INSTALLING OR USING CISCO OR CISCO-SUPPLIED SOFTWARE.
BY DOWNLOADING OR INSTALLING THE SOFTWARE, OR USING THE EQUIPMENT THAT CONTAINS
THIS SOFTWARE, YOU ARE CONSENTING TO BE BOUND BY THIS AGREEMENT. IF YOU DO NOT
AGREE TO ALL OF THE TERMS OF THIS AGREEMENT, DO NOT DOWNLOAD, INSTALL OR USE
THE SOFTWARE. YOU MAY RETURN THE SOFTWARE FOR A FULL REFUND. IF THE SOFTWARE IS
SUPPLIED AS PART OF ANOTHER PRODUCT, YOU MAY RETURN THE ENTIRE PRODUCT FOR A
FULL REFUND. YOUR RIGHT TO RETURN AND REFUND EXPIRES 30 DAYS AFTER PURCHASE
FROM CISCO OR AN AUTHORIZED CISCO RESELLER. THE RIGHT TO RETURN AND REFUND
EXTENDS ONLY TO THE ORIGINAL PURCHASER.
The following terms govern your use of the Software except to the extent a
particular program (a) is the subject of a separate written agreement with
Cisco or (b) includes a separate "click-on" license agreement as part of the
installation process.
SINGLE USER LICENSE. Subject to the terms and conditions of this Agreement,
Cisco Systems, Inc. ("Cisco") and its suppliers grant to Customer ("Customer")
a nonexclusive and nontransferable license to use the specific Cisco program
modules, feature set(s) or feature(s) for which Customer has paid the required
license fees (the "Software"), in object code form only solely as embedded in
Cisco equipment, on a single hardware chassis, or on a single central
processing unit, as applicable, owned or leased by Customer.
Customer may make and use in accordance with the foregoing up to the number of
copies of the Software specified on the master copy of such Software provided
by Cisco, or for which Customer has received a product authorization key
("PAK"), provided Customer has paid Cisco the required license fee for such
master copy or PAK.
MULTI-USER LICENSE. If Customer has purchased a multi-user license from Cisco,
then, subject to the terms and conditions of this Agreement, Cisco and its
suppliers grant to Customer a nonexclusive and nontransferable license to use
the Software, in object code form only, in ONLY ONE of the following manners:
installed in a single location on a hard disk or other storage device of up to
the number of Customer's computers or simultaneous users authorized under such
license and for which Customer has paid Cisco the required license fee
("Permitted Number of Computers" or "Permitted Number of Users", as
applicable); or
provided the Software is configured for network use, installed on a single file
server for use on a single local area network for either (but not both) of the
following purposes: (a) permanent installation onto a hard disk or other
storage device of up to the Permitted Number of Computers or Permitted Number
of Users, as applicable; or (b) use of the Software over such network, provided
the number of computers or users connected to the server does not exceed the
Permitted Number of Computers or Permitted Number of Users, as applicable.
NOTE: For evaluation or beta copies for which Cisco does not charge a license
fee, the above requirement to pay a license fee does not apply.
LIMITATIONS. Except as otherwise expressly provided under this Agreement,
Customer shall have no right, and Customer specifically agrees not to:
(i) transfer or sublicense its license rights to any other person, or use
the Software on unauthorized or secondhand Cisco equipment;
(ii) make error corrections to or otherwise modify or adapt the Software nor
create derivative works based upon the Software, or to permit third parties to
do the same; or
(iii) copy, in whole or in part, decompile, decrypt, reverse engineer,
disassemble or otherwise reduce the Software to human-readable form.
To the extent required by law, at Customer's request, Cisco shall provide
Customer with the interface information needed to achieve interoperability
between the Software and another independently created program, on payment of
Cisco's applicable fee. Customer shall observe strict obligations of
confidentiality with respect to such information.
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<PAGE> 33
UPGRADES AND ADDITIONAL COPIES. For purposes of this Agreement, "Software"
shall include (and the terms and conditions of this Agreement shall apply to)
any upgrades, updates, bug fixes or modified versions (collectively,
"Upgrades") or backup copies of the Software licensed or provided to Customer
by Cisco or an authorized distributor for which Customer has paid the
applicable license fees. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT:
(1) CUSTOMER HAS NO LICENSE OR RIGHT TO USE ANY SUCH ADDITIONAL COPIES OR
UPGRADES UNLESS CUSTOMER, AT THE TIME OF ACQUIRING SUCH COPY OR UPGRADE,
ALREADY HOLDS A VALID LICENSE TO THE ORIGINAL SOFTWARE; (2) USE OF UPGRADES IS
LIMITED TO CISCO EQUIPMENT FOR WHICH CUSTOMER IS THE ORIGINAL END USER
PURCHASER OR LESSEE OR WHO OTHERWISE HOLDS A VALID LICENSE TO USE THE SOFTWARE
WHICH IS BEING UPGRADED; AND (3) USE OF ADDITIONAL COPIES IS LIMITED TO BACKUP
PURPOSES ONLY.
PROPRIETARY NOTICES. Customer agrees to maintain and reproduce all copyright
and other proprietary notices on all copies, in any form, of the Software in
the same form and manner that such copyright and other proprietary notices are
included on the Software. Except as expressly authorized in this Agreement,
Customer shall not make any copies or duplicates or any Software without the
prior written permission of Cisco. Customer may make such backup copies of the
Software as may be necessary for Customer's lawful use, provided Customer
affixes to such copies all copyright, confidentiality, and proprietary notices
that appear on the original.
PROTECTION OF INFORMATION. Customer agrees that aspects of the Software and
associated documentation, including the specific design and structure of
individual programs, constitute trade secrets and/or copyrighted material of
Cisco. Customer shall not disclose, provide, or otherwise make available such
trade secrets or copyrighted material in any form to any third party without
the prior written consent of Cisco. Customer shall implement reasonable
security measures to protect such trade secrets and copyrighted material. Title
to Software and documentation shall remain solely with Cisco.
RESTRICTED RIGHTS. Cisco's commercial software and commercial computer software
documentation is provided to United States Government agencies in accordance
with the terms of this Agreement, and per subparagraph "(c)" of the "Commercial
Computer Software - Restricted Rights" clause at FAR 52.227-19 (June 1987). For
DOD agencies, the restrictions set forth in the "Technical Data-Commercial
Items" clause at DFARS 252.227-7015 (Nov 1995) shall also apply.
TERM AND TERMINATION. This Agreement is effective until terminated. Customer
may terminate this Agreement at any time by destroying all copies of Software
including any Documentation. Customer's license rights under this Agreement
will terminate immediately without notice from Cisco if Customer fails to
comply with any provision of this Agreement. Upon termination, Customer must
destroy all copies of Software in its possession or control.
PART (ii)
LIMITED WARRANTY. If Customer obtained the Software directly from Cisco, then
Cisco warrants that for a period of ninety (90) days from the date of shipment
from Cisco: (i) the media on which the Software is furnished will be free of
defects in materials and workmanship under normal use; and (ii) the Software
will substantially conform to its published specifications. This limited
warranty extends only to Customer as the original licensee. Customer's sole and
exclusive remedy and the entire liability of Cisco and its suppliers under this
limited warranty will be, at Cisco or its service center's option, repair,
replacement, or refund of the Software if reported (or, upon request, returned)
to Cisco or its designee. Except as expressly granted in this Agreement, the
Software is provided AS IS. Cisco does not warrant that the Software is error
free or that Customer will be able to operate the Software without problems or
interruptions.
This warranty does not apply if the Software (a) is licensed for beta,
evaluation, testing or demonstration purposes for which Cisco does not receive
a license fee, (b) has been altered, except by Cisco, (c) has not been
installed, operated, repaired, or maintained in accordance with instructions
supplied by Cisco, (d) has been subjected to abnormal physical or electrical
stress, misuse, negligence, or accident, or (e) is used in ultrahazardous
activities.
If Customer obtained the Software from a Cisco distributor, the terms of any
warranty shall be as provided by such distributor, and Cisco provides Customer
no warranty with respect to such Software. DISCLAIMER. EXCEPT AS SPECIFIED IN
THIS WARRANTY, ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS, AND
WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OR CONDITION OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT,
SATISFACTORY QUALITY OR ARISING FROM A COURSE OF DEALING, USAGE, OR TRADE
PRACTICE, ARE HEREBY EXCLUDED TO THE EXTENT ALLOWED BY APPLICABLE LAW.
IN NO EVENT WILL CISCO OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT,
OR DATA, OR FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE
DAMAGES HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY ARISING OUT OF
THE USE OF OR INABILITY TO USE THE SOFTWARE EVEN IF CISCO OR ITS SUPPLIERS HAVE
BEEN ADVISED OF THE
Page 33
<PAGE> 34
POSSIBILITY OF SUCH DAMAGES. In no event shall Cisco's or its suppliers'
liability to Customer, whether in contract, tort (including negligence), or
otherwise, exceed the price paid by Customer. The foregoing limitations shall
apply even if the above-stated warranty fails of its essential purpose. BECAUSE
SOME STATES OR JURISDICTIONS DO NOT ALLOW LIMITATION OR EXCLUSION OF
CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU.
CUSTOMER RECORDS. Customer grants to Cisco and its independent accountants the
right to examine Customer's books, records and accounts during Customer's
normal business hours to verify compliance with this Agreement. In the event
such audit discloses non-compliance with this Agreement, Customer shall
promptly pay to Cisco the appropriate licensee fees.
EXPORT. Software, including technical data, is subject to U.S. export control
laws, including the U.S. Export Administration Act and its associated
regulations, and may be subject to export or import regulations in other
countries. Customer agrees to comply strictly with all such regulations and
acknowledges that it has the responsibility to obtain licenses to export,
re-export, or import Software.
GENERAL. This Agreement shall be governed by and construed in accordance with
the laws of the State of California, United States of America, as if performed
wholly within the state and without giving effect to the principles of conflict
of law. If any portion hereof is found to be void or unenforceable, the
remaining provisions of this Agreement shall remain in full force and effect.
This Agreement constitutes the entire agreement between the parties with
respect to the use of the Software.
Page 34
<PAGE> 1
CONTRACT
ORIGINAL NO.:99ST8471055USDL
DATE: SEP. 8, 1999
THE BUYERS: SINOTRANS INTERNATIONAL TRADING COMPANY
F1.12,A-Tower Sinotrans Plaza, A-43,
Xizhmen Beidajie Beijing 100044, China
TEL: 86 10 62295807 FAX: 86 10 62295816
THE SELLERS: GOLDENACCESS GROUP
1865 Brickell Avenue A-1609, Miami, FLA 33129
TEL: FAX: 1 305 859 9892
This Contract is made by and between the Buyers and the Sellers,
whereby the Buyers agree to buy the Sellers agree to sell the under-mentioned
goods on the terms and conditions stated below:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
1) NAME OF COMMODITY, SPECIFICATIONS,
QUALITY, PACKING TERM AND SHIPPING MARKS 2) QUANTITY 3) UNIT PRICE 4) TOTAL AMOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GoldenAccess VIP IP telephony Gateway 1 set CIF USD 12,000.00
Configuration of 4-Port System (new and Beijing Airport
unused sample) USD12,000
Packing: the packing shall be meet the
demands for long distance air
transportation.
Shipping Mark: N/M
- ----------------------------------------------------------------------------------------------------------
</TABLE>
5) COUNTRY OF ORIGIN AND MANUFACTURERS: U.S.A., GOLDEN ACCESS GROUP
6) TIME OF SHIPMENT: BEFORE SEPTEMBER 30, 1999.
7) PORT OF LOADING: MIAMI, U.S.A.
8) PORT OF DESTINATION: BEIJING AIRPORT, P.R.C.
9) INSURANCE:
To be effected by the Sellers for 110% of invoice value against All Risks
according to P.I.C.C. (1/1/81).
<PAGE> 2
10) TERM OF PAYMENT:
A. The buyers shall pay $5,00 deposit by T/T terms upon arrival of the
said product and the acquirement of necessary documents for T/T
remittance abiding by Chinese regulations.
B. At the issuance of Acceptance Certificate, the buyers shall remit the
remaining $7,000 to the sellers by T/T terms.
11) DOCUMENTS:
The sellers shall provide commercial invoice, packing list (if available),
airway bill to the buyers as required documents to enable him realize T/T
payment. 12) TERMS OF SHIPMENT:
A. Terms of CIF Delivery: The Sellers shall undertake to ship the
contracted goods from the port of loading to the port of destination
on a direct line, with no transshipment allowed.
B. In case the product is to be returned to the sellers, the sellers
shall cover the freight.
13) ADVICE OF SHIPMENT:
The Sellers shall, upon completion of loading, advise the Buyers within 24
hours by telex of fex of the Contract No., name of commodity, number of
packages, gross and net weights, invoice No. and value, name of vessel and
loading date.
14) INSPECTION AND CLAIMS:
If the buyer is not satisfied with the product, he has the right to refuse
to issue the Acceptance Certificate and reject the product but shall preserve
the intactness of the product. Upon receiving the returned product, the sellers
shall remit the $5,000 deposit back to the buyers. The trial period is 60 days
after the completion of installment and the buyers shall, if accepting the
product, issue the Acceptance of Certificate within 5 working days after the
completion of the trial period.
15) FORCE MAJEURE:
In case of Force Majeure, the Sellers shall not be held responsible for
delay in delivery or non-delivery of the goods but shall notify immediately the
Buyers by telex or fax and deliver to the Buyers by registered mail a
certificate issued by government authorities or chamber of commerce as evidence
thereof. If the shipment is delayed over one month as the consequence of the
said Force Majeure, the Buyers shall have the right to cancel this Contract.
Occurrences such as storms, earthquakes, flood, hurricane, fire and acts that
are unforeseeable when signing the contract and inevitable or unconquerable
accidents or incidents shall be viewed by both parties, if resulting in delay or
non-performance of the contract, as Force Majeure. Seller's inability in
obtaining export license shall not be considered as Force Majeure.
16) DELAYED DELIVERY AND PENALTY:
Should the Sellers fail to effect delivery on time as stipulated in this
Contract owing to cause other than Force Majeure as provided for in clause (15)
of this Contract, the Buyers shall have the right to cancel the relative
quantity of the contract. Or, alternatively , the Sellers may, with the Buyers'
consent, postpone delivery on payment of penalty to the Buyers. The Buyers may
agree to grant the Sellers a grace period of 15 days. Penalty shall be charged
at the rate of 1% of the total value for every 10 days, odd days less than 10
days should be counted as 10 days. The total penalty shall be calculated from
the 16th day shall not be exceed 5% of the total value of the goods involved.
<PAGE> 3
17) ADDITIONAL CLAUSE:
If any of the above-mentioned Clause(s) is/are inconsistent with the
following additional Clause(s), the former shall prevail.
Technical requirements, training terms, service and other related items
shall follow GOLDEN ACCESS GROUP IP Telephony Gateway Purchase Agreement &
Appendix A and Appendix B signed between Golden Access Group and Sinotrans
Information Management Center.
The Sellers: The Buyers:
Golden Access Group Sinotrans International Trading Co.
//ss// //ss//
<PAGE> 4
AMENDMENT TO CONTRACT NO.:99ST8471055USDL
Date: Sep. 24, 1999
THE BUYERS: SINOTRAN INTERNATIONAL TRADING COMPANY
THE SELLERS: GOLDEN ACCESS GROUP
This amendment is made by and between the Buyers and the Sellers as an integral
part of the Contract (No.:99ST8471055USDL) and shall be abided by both parties
herewith. If any of the original clauses in the Contract is found inconsistent
with this amendment, this amendment shall prevail. The rest of the Contract and
its effect remain unchanged.
AMENDMENT I: referred to Clause 9) in the aforesaid Contract
9) Insurance: To be effective by the Sellers for 100% of invoice value
against all risks.
AMENDMENT II: referred to Item A Clause 12) in the aforesaid Contract
12) Terms of Shipment:
A. Terms of CIF Delivery:
The Sellers shall undertake to ship the contracted goods from the
port of loading to the port of destination in one shipment, but with
transshipment allowed.
THE SELLERS: THE BUYERS:
//SS// //SS//
<PAGE> 1
EXHIBIT 10.17
GOLDENACCESS.COM
IP TELEPHONY GATEWAY PURCHASE AGREEMENT
This Purchase Agreement (hereinafter called the "Agreement") entered as of
February 15, 2000 between Hertford Enterprises L.L.C., Texas, USA (hereinafter
called "Customer") and Golden Access.com of Miami, Florida, USA (hereinafter
called "Golden Access") establishes the terms and conditions under which Golden
Access will supply the IP Telephony Gateway (hereinafter called "Product") to
the Customer.
Golden Access agrees to sell the Product as follows:
1. Golden Access ViP Internet Telephony Gateway configuration
of:
o 4-Port System - $US 12,000.00
This system can be upgraded to an 8 port system for an
additional $US 4,000.00 at anytime during the term of this
Agreement.
2. Payment Terms are 25% downpayment upon signing of this
Agreement and 75% upon delivery by certified cheque, bank
transfer or an irrevocable Letter of Credit from a financial
institution acceptable to Golden Access.
3. Golden Access grants the Customer a personal, non-exclusive,
non-transferable license to use the IP Telephony Gateway
software solely for the operation of the Customer's IP
Telephone services to its subscribers. Under the terms of
this license, the Customer shall not:
o modify or copy the software
o reverse compile or reverse engineer all or any
portion of the software
o distribute, disclose or transferthe software to any
third party
4. Golden Access will provide remote product support on a
Mon.-Fri. (9am EST - 6pm EST) basis and access to new
software releases for a period of 1 year at no additional
charge to the Customer. The Customer will provide Golden
Access with all the necessary information and cooperation
required for its technical support personnel to remotely
access the system for maintenance and troubleshooting
purposes. These procedures are outlined in Appendix C,
attached hereto. If the Customer should request on-site
technical support, this will be provided at the prices and
terms listed in Appendix C.
5. Golden Access can offer annual extensions of the technical
support/software update package to the Customer and these are
available at the rates outlined in Appendix C.
6. Golden Access will provide one (1) set of all the necessary
technical documentation, including User Manuals, etc.
associated with the Product.
7. Golden Access will make available to the Customer, training
in the installation and operation of the Product with a
schedule and location to be agreed upon between both parties.
All travel and related expenses shall be borne by the
Customer. In the event that the Customer elects to have
Golden Access perform the initial installation as per
paragraph 8 below, and wants the training conducted during
the installation period, the Customer will be responsible for
any additional living expenses associated with said training.
8. Golden Access can provide On-site Installation at a rate of
$750 per day plus all travel and related expenses.
1
<PAGE> 2
GOLDENACCESS.COM
COMMERCIAL SERVICE AGREEMENT
This Commercial Service Agreement (hereinafter called the "Agreement") entered
as of February 15, 2000 between Hertford Enterprises L.L.C., Texas (hereinafter
called "Customer") and Golden Access.com of Miami, Florida, USA (hereinafter
called "Golden Access") establishes the terms and conditions under which Golden
Access will provide international IP Telephony termination service (hereinafter
called "Service") to the Customer.
A. NATURE OF SERVICES
Golden Access will provide non-exclusive termination service for
international telephone traffic originating from the Customers' IP
Telephony Gateway purchased from Golden Access under the IP Telephony
Gateway Purchase Agreement. The destinations and rates offered are
outlined in Appendix B, attached hereto.
B. CUSTOMER OBLIGATIONS
Customer will be responsible to supply all the equipment and
connection services required to interface the IP Telephony Gateway to
the local PSTN network and the Internet. All associated costs are
borne solely by the Customer, including recurring connection charges,
throughout the term of this Agreement. Customer is solely responsible
for the all administrative and technical support aspects of their
subscribers, including billing and collection.
C. GOLDEN ACCESS OBLIGATIONS
Golden Access will provide remote technical support on a 24 x 7 basis
at no charge to the Customer. The Customer will provide Golden Access
with all the necessary information and cooperation required for its
technical support personnel to remotely access the system for
maintenance and troubleshooting purposes. These procedures are
outlined in Appendix C, attached hereto.
If the Customer should request additional on-site technical support,
this will be provided at the prices and terms listed in said Appendix
C.
In the event that a Service Interruption occurs and a resolution has
not been provided by Golden Access within 24 hours of the problem
being reported, the Customer may, at its discretion, invoke Clause
6.1 of the General Terms and Conditions herein. A Service Interruption
will be deemed to have occurred only if the entire service becomes
unusable to the Customer as a result of failure of Golden Access's
Product used to provide the Service and only where the interruption is
not the result of a) the negligence or acts of the Customer or its
agents; b) the failure or malfunction of non-Golden Access equipment
or systems not provided by Golden Access; c) circumstances or causes
beyond the control of Golden Access; or d) a service interruption
caused by scheduled service maintenance, alteration or implementation.
The foregoing states the Customer's sole remedy for service
interruption under the Agreement, and in no event shall Golden Access
be liable for any indirect, consequential or special loss or damage
suffered which, for the avoidance of doubt, shall include loss of
profits and contracts.
2
<PAGE> 3
D. BILLING
In consideration of the services rendered by Golden Access, Customer
shall pay termination fees as outlined in Appendix B which may be
adjusted from time to time at the discretion of Golden Access and the
new rate table shall be effective upon 15 days notice, unless interim
rate changes are necessary to improve Quality of Service.
In order to secure payment for these services, the Customer agree to
deposit prior to the performance of any services an amount of
$2,500.00 to cover one times the estimated average monthly sales
volume. This deposit shall be either as Cash, Certified Cheque, Bank
transfer and/or an irrevocable Letter of Credit from a financial
institution acceptable to Golden Access. Said deposit shall be subject
to offset by Golden Access in the event payment of the outstanding
account balance is not made after 7 days from receipt of invoice.
Golden Access reserves the right to review the deposit from time to
time and adjust the required amount necessary based upon invoiced
amounts for previous billing periods.
A bi-weekly financial settlement will take place between Golden Access
and the Customer. This settlement will be based upon the CDR (Call
Detail Records) produced by the Service which indicate the necessary
accounting information required to calculate the amount due. Golden
Access will prepare the invoice and a settlement report detailing each
transaction from the CDRs collected by its Network Control Center.
Should there be any discrepancies in the call detail reports, the
items in question shall be deferred to a further review process. These
discrepancies shall in no way delay the settlement process as a whole
and will be treated as a separate deficiency to be reconciled within a
period of 30 days. A 10% discount on the rates in Appendix B will be
offered to the Customer for the first 3 months of this Agreement,
after which time, the regular rates will apply unless there is a
mutual agreement to extend the discount. The discount will be applied
against the total due for each billing period.
E. TERM OF AGREEMENT
The initial term of this Agreement is for a period of two (2) years
and shall be extended on an annual basis thereafter unless terminated
under the terms of Clause 6 of the General Terms and Conditions of
this Agreement.
3
<PAGE> 4
GENERAL TERMS AND CONDITIONS
CLAUSE 1 - COPYRIGHT AND CONFIDENTIALITY
1.1 Each Party agrees to maintain in strict confidence all plans, designs,
drawings, trade secrets and other proprietary information of the other
Party which is disclosed pursuant to this Agreement.
1.2 Golden Access retains title to all portions, excluding third party
licenses, of the software associated with the Product. A
Non-Disclosure Agreement, as per Appendix A, shall be signed by both
Parties.
CLAUSE 2 - PRICES/PAYMENT TERMS
2.1 All prices are FOB Miami, FLA., USA
2.2 Golden Access reserves the right to charge interest on all delinquent
payments at an annualized rate of 2 percentage points above the
commercial rate as listed by its banking institution.
2.3 The Golden Access prices do not include the cost to Golden Access or
its employees of any taxes, duties, levies or other like charges
payable by them or any of them under the laws or regulations in force
in countries other than the United States and to the extent that such
taxes, duties, levies and other like charges are required to be paid,
these shall be borne solely by the Customer.
CLAUSE 3 - WARRANTY
3.1 Golden Access warrants that the Product shall be free of defects and
perform in accordance with Golden Access's specifications for a period
of ninety (90) days from delivery to the Customer. Golden Access's
sole obligation under this warranty shall be to provide remote
Technical Support as outlined in Appendix A in an effort to remedy the
defect. The warranties in this article will be voided if the Product is
modified in any way by the Customer and/or its agents without written
authorization from Golden Access. GOLDEN ACCESS DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OF IMPLIED, INCLUDING BUT NOT LIMITED TO THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
CLAUSE 4 - LIABILITY
4.1 Under no circumstances shall Golden Access, its employees or
contractors be liable for any direct, indirect, incidental, special,
punitive or consequential damages that may result in any way from the
negligence or acts of the Customer or its agents, the failure or
malfunction of non-Golden Access equipment, the Customer's (or
Customer's authorized users) use of, or inability to use the Product
or any part thereof, resulting from errors, omissions, interruptions,
delays in operation or transmission, or any failure of performance of
the Internet and/or PSTN networks.
4.2 Neither Golden Access or its third party licensors will be liable for
indirect, incidental, special or consequential damages including but
not limited to lost data or lost profits, however arising, even if it
has been advised of the possibility of such damages. The liability of
Golden Access and its third party licensors for damages under this
agreement shall in no event exceed the amount paid by the Customer to
Golden Access under this Agreement for the Product as to which the
claim arose.
CLAUSE 5 - FORCE MAJEURE
5.1 GOLDEN ACCESS shall not be liable for any delay or failure in
performance of any part of this Agreement to the extent such delay or
failure is caused by an event of Force Majeure, including but not
limited to, fire, flood, explosion, accident, war, strike, embargo,
government requirement, civil or military authority, Act of God,
inability to secure materials, labour or transportation, acts of
omissions of common carrier or
4
<PAGE> 5
warehouseman, or any other causes beyond their reasonable control. Any
such delay or failure shall suspend the Agreement until the Force
Majeure condition ceases and the Term shall be extended by the length
of the suspension.
CLAUSE 6 - SUSPENSION/TERMINATION
6.1 Either Party may, by written notice to the other Party, suspend or
terminate its obligations under the Agreement
a) in the event that either Party shall have failed to pay or
authorize payment of any sum to the other Party when due
under the Agreement; or
b) in the event that either Party is in breach of the Agreement
and shall fail after receiving not less than thirty (30) days
written notice to take effective steps to remedy such breach;
or
c) in the event that either Party goes into liquidation except
for the purposes of corporate re-organization or otherwise
ceases trading.
Any suspension or termination as a result of the foregoing, does not
absolve the Customer from its obligations to pay any outstanding
invoices due under the Agreement.
CLAUSE 7 - EFFECTIVE DATE OF AGREEMENT
7.1 This Agreement shall become effective on that date which it is duly
initialed, signed and dated by authorized representatives of Golden
Access and the Customer. Neither Party may assign, transfer the whole
or any part of this Agreement to anyone without written consent by the
other Party.
CLAUSE 8 - ARBITRATION AND JURISDICTION
8.1 All differences and disputes between the Parties arising from this
Agreement which cannot be settled by mutual agreement shall be finally
settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce (ICC). The arbitration proceeding
shall take place at Miami, Florida and the language of the arbitration
proceeding, the award and all documents filed or submitted in
connection therewith shall be in English.
8.2 This Agreement shall be governed, construed and interpreted in
accordance with the laws of the State of Florida, USA.
8.3 All correspondence relevant to the performance of this Agreement shall
be in English and when given to Golden Access, should be addressed to:
Golden Access.com
6161 Blue Lagoon Drive, Suite 190
Miami, FLA 33126
and when given to the Customer, should be addressed to:
Hertford Enterprises LLC
403 Lillard Rd., Suite B
Arlington, Texas 76012
This Agreement supersedes all other prior discussions and negotiations between
the Customer and Golden Access and sets forth the understanding between both
Parties as to the intent of this Agreement. It may be modified in writing only,
provided it is signed by a duly authorized representative of both Parties.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date herein;
Golden Access.com Customer
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<PAGE> 6
APPENDIX A
CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
This agreement is entered into as of January 12, 2000 between Hertford
Enterprises LLC and Golden Access.com, WHEREAS, each entity executing this
agreement (hereinafter "Party") agrees that for the purpose of evaluating a
potential business relationship, the parties will disclose and receive
information under the terms and conditions specified below:
NOW THEREFORE, the parties hereby agree as follows:
1. All communications or data, in any form, which are disclosed by one
Party or any of its subsidiary, parent or associate companies
("Disclosing Party") to the other Party or any of its subsidiary,
parent or associate companies ("Receiving Party") and which are to be
protected hereunder against unrestricted disclosure or competitive use
by the Receiving Party shall be deemed to be "Confidential
Information".
2. All Confidential Information, if in writing or other tangible form,
shall be labeled as "Confidential" at the time of its delivery, and,
if oral, shall be identified as "confidential" prior to disclosure.
3. Confidential Information of the Disclosing Party shall be treated as
confidential and safeguarded hereunder by the Receiving Party for a
period of two (2) years from the date of disclosure unless earlier
waived in writing by the Disclosing Party.
4. The Receiving Party agrees that (a) any Confidential Information
disclosed hereunder shall be used by the Receiving Party solely for
the purpose set forth above and (b) except as may be required by
applicable law or legal process, the Receiving party will not disclose
or disseminate such Confidential Information to anyone, except to
those employees (including employees of its parent, subsidiaries and
affiliates) and professional advisers who have the need to know such
Confidential Information for the purpose for which it is disclosed,
unless and until such time as such Confidential Information:
a) is available generally to the public, other than as a result
of a breach of this Agreement; or,
b) is disclosed lawfully to the Receiving Party by a third party
who is free lawfully to disclose the same; or,
c) is developed independently by the Receiving Party; or,
d) The applicable period of confidentiality pursuant to
paragraph 3 has ended.
e) is already in the possession of the Receiving Party and is
subject to an existing agreement of confidence between the
parties.
6. The Receiving Party shall use reasonable safeguards against the
unauthorized disclosure of confidential and proprietary information
and shall advise all of its employees and professional advisers having
access to Confidential Information of the obligations hereunder.
7. Upon expiration of the period of confidentiality, or sooner upon
written request of the Disclosing Party, all Confidential Information
in the possession of the Receiving Party shall be returned to the
Disclosing Party or destroyed, at the option and instruction of the
Disclosing Party.
8. It is understood that this Agreement is not intended to, and does not,
obligate either Party to enter into any further agreements or to
proceed with any relationship or other transaction.
9. This agreement shall be governed by and construed in accordance with
the laws of the State of Florida, USA.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date herein.
Company: Hertford Enterprises LLC Golden Access.com
Signature:
------------------------- ------------------------------
Name:
------------------------------ ------------------------------
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<PAGE> 7
APPENDIX B
GOLDEN ACCESS RATE TABLE ATTACHED
1.11.1999 HERTFORD ENTERPRISES LLC RATES
7
<PAGE> 1
Exhibit 14.1
INTERNET ACCESSIBLE DATABASE WITH TELEPHONE
ENTRY CAPABILITY
THE FIELD OF THE INVENTION
--------------------------
The present invention relates generally to an internet access database
with telephone entry capability. More specifically, the present invention
relates to a system and method for storing and manipulating data received from a
remotely located employee in an internet accessible database.
BACKGROUND OF THE INVENTION
---------------------------
Throughout the United States and the world, there are various companies
and businesses (companies) which have employees that perform work at locations
remote from a centralized business location of the company. For example,
cleaning services provide employees that travel to various remote locations to
clean a home or business, etc. Likewise, repair services and installation
services provide employees which travel to various locations to repair
previously installed products, such as appliances, or install new products,
respectively. Similarly, a building company or building contractor provides
employees that travel to various locations to construct all or a portion of a
building, such as a home or a work facility.
With all of the above-discussed companies, it is difficult for the
company to maintain accurate records regarding the amount of time worked by
employees at a specific location or job. Since employees of these companies work
outside of a single location, these employees are not capable of "punching in"
at the beginning of the day and "punching out" at the end of the day. Rather,
employees must manually keep track of their hours worked and enter these hours
either manually (through use of paper and pen) or electronically (through use of
a computer) into some type of system, such as an accounting system of the
company. In these types of businesses, there is inherently the chance for error,
either intentionally or unintentionally, in the record keeping process of an
1
<PAGE> 2
employee. These errors may result in an employee receiving unjustified
compensation and clients being overcharged.
Companies which have employees that work at remote locations have a
desire to keep accurate records of their employees such that an employee is
properly compensated for work performed and such that clients are properly
billed for work performed. Therefore, there is a need for a system which
employees can access from remote locations to maintain precise records of time
spent working on various jobs such that the employees are properly compensated
and customers are properly billed for work performed.
SUMMARY OF THE INVENTION
------------------------
The present invention provides a system and method for manipulating
data relating to an employee of a business. The system and method includes an
internet accessible database having telephone entry capabilities. The method of
the present invention further includes accessing a data storage system through
use of a telephone via a first connection, which can be a telephone line
connection and/or an internet connection. Data is provided to the data storage
system regarding a remotely located employee via the first connection. In one
preferred embodiment, specific data relating to the identity of the employee,
the location from which the employee is accessing the data storage system, and
the exact time and data the employee accessed the data storage system is
provided to the data storage system. The data storage system can also be
accessed through use of a computer via a second connection, which can be a local
area network (LAN) connection and/or an internet connection. The data provided
via the first connection can be monitored and manipulated via the second
connection. In one preferred embodiment, the provided data can be exported to a
spreadsheet and further manipulated, forwarded to a printer, or used for billing
or payroll purposes.
In another preferred embodiment, a data collecting device and method
for collecting and manipulating various data relating to at least one employee
of a business located at a remote location from the data collector is described.
The
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device includes an employee location identifier for identifying a location of an
employee based upon a telephone number from which the employee is calling into
the device via a telephone line and/or an internet connection. An employee
identifier identifies the employee calling into the data collector. A real time
identifier identifies the time at which the device receives the telephone
communication from the employee. An event identifier identifies the event
represented by the telephone communication from the employee. An elapsed time
identifier calculates a time period that the employee is located at the remote
location. A storage module stores information relating to the identification of
the employee, the location of the employee, and the time period which the
employee is located at the remote location.
In yet another preferred embodiment, a system for receiving and
manipulating data relating to at least one employee of a business is disclosed.
The system includes an operator module for entering and storing data relating to
the identification of an employee. The system also includes a password module
for changing a password associated with an employee and a user module for
displaying all time spent by an employee at a location relating to at least one
job during a specified time period. The system further includes a caller
identification modular which displays all telephone numbers from which the
employee has called into the system and a billing module which displays an
itemized list of all time spent by the employee at all locations during a
specific time period. The system further includes an events module for
displaying an itemized list of each time at least one employee accesses the
system to begin or end a job. The system still further includes a clear module
for clearing information from the system and a log out module for exiting the
system.
BRIEF DESCRIPTION OF THE DRAWINGS
---------------------------------
Figure 1 is a block diagram illustrating an embodiment of the present
invention.
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Figure 2 is a block diagram illustrating an alternate embodiment of the
present invention.
Figure 3 is a flow chart illustrating a method of the present
invention.
Figure 4 is a block diagram illustrating various options of the present
invention.
Figure 5-19 are various computer-generated screens which are generated
via a computer portraying various aspects of the present invention.
DESCRIPTION OF THE PREFERRED EMBODIMENTS
----------------------------------------
The present invention is a system and method for storing and
manipulating data relating to an employee of a business. The system and method
includes an internet accessible database having telephone entry capabilities.
Figure 1 is a block diagram illustrating system 50 incorporating the
present invention. System 50 includes telephone 52, computer 54, data storage
system 56, printer 58, payroll system 60, and billing system 62. System 50 is a
telephone line and network-based application which permits a company to keep
track of various employees' time as they perform jobs for clients at locations
remote from a central location. System 50 also provides information about the
activities, locations, and productivity of a workforce of a company. System 50
utilizes regular telephone lines; therefore, system 50 is economical and easy to
use.
System 50 accomplishes several tasks and provides many benefits to its
users. A telephone call by employee 64 from telephone 52 permits employee 64 to
clock in and clock out of data storage system 56 from jobs or projects that they
are working on, regardless of their locations. Data storage system 56 stores
various data relating to the identity of employee 64 and the location of
employee 64. Employee 64 is connected to data storage system 56 via telephone 52
and connection 68. In the embodiment shown in Figure 1, connection 68 is a
standard telephone line connection. Information relating to the identification
of employee 64, the location of employee 64, and the specific time of the
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communication between employee 64 and data storage system 56 are automatically
captured by data storage system 56, as will be later described in detail.
Employee 66, via computer 54 and connection 70, can access various data
within data storage system 56. In one preferred embodiment, connection 70
between computer 54 and data storage system 56 is a local area network (LAN)
connection. In another preferred embodiment, connection 70 can be a network
connection which includes an internet connection. As will be later described in
detail, employee 66 can review and/or manipulate various data within data
storage system 56. For example, employee 66 may forward various data from data
storage system 56 to printer 58, payroll system 60, and billing system 62. In
one preferred embodiment, the desired data is formatted into a spread sheet
program, such as the Microsoft Excel program, prior to forwarding the data to
its final destination. The data or information can be printed out via printer
58, used to assist in the calculation of the salary of employee 64 via payroll
system 60, and/or used to assist in the billing of a client for work completed
by employee 64 via billing system 62. Desired information is forwarded to
printer 58, payroll system 60, and billing system 62 via connections 72, 74, and
76, respectively. Connections 72, 74, and 76, similar to connection 70,
represent connections within a LAN system or a network connection which includes
an internet connection.
Figure 2 is a block diagram illustrating another embodiment of the
present invention. In particular, Figure 2 shows system 90, which is similar to
system 50 of Figure 1. Similar components and features of systems 50 and 90 have
been labeled as such. System 90 of Figure 2 differs from system 50 of Figure 1
in that remotely located employee 64 accesses data storage system 56 via
telephone 52, satellite system 92, and connections 94 and 96. While connection
68 of Figure 1 represents a standard telephone line connection, connections 94
and 96 each represent a combination of a telephone line connection and/or an
internet connection. Satellite system 92 represents any
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type of system which facilitates an internet connection between telephone 52 and
data storage system 56. In one preferred embodiment, employee 64 is only
required to dial a local (non-long distance) telephone number. The call is then
routed via internet connection 96 to data storage system 56, regardless of the
location of employee 64 with respect to data storage system 56. Other than the
discussion with respect to connection 68, all discussion relating to system 50
of Figure 1 applies to system 90 of Figure 2.
Figure 3 is a flow chart which describes the method of which an
employee, such as employee 64 shown in Figures 1 and 2, utilizes systems 50 or
90 from a location remote from data storage system 56. At step 100, employee 64
accesses data storage system 56 via telephone line connection 68 or a combined
telephone line connection 94 and internet connection 96. At step 102, the
specific location of employee 64 is provided to data storage system 56 via a
caller identification system connected to data storage system 56. The caller
identification system provides the name of an individual or business to which
the telephone number from which employee 64 is calling is assigned. Caller
identification systems have become standard devices known in the art which
provide information regarding an incoming telephone call. The information can
include the telephone number at the location of an incoming call, the
identification of the person or business associated with the telephone number,
and the time and date of the incoming call.
At step 104, a specific time of the telephone call initiated by
employee 64 via telephone 52 to data storage system 56 is provided to data
storage system 56 by the caller identification system. At step 106, an
identifying characteristic of employee 64 is provided to data storage system 56.
In particular, employee 64 inputs a personal identification number (PIN) via the
keypad of telephone 52 which uniquely identifies employee 64. At step 108, a
customer identification code is provided to data storage system 56. In
particular, employee 64 enters a series of numbers via the keypad of telephone
52 which uniquely identifies the customer or project which employee 64 is
performing. It is necessary to
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manually enter the customer number since several telephone numbers may be
assigned to a single business. Depending on the businesses telephone set-up, a
caller identification system may or may not properly identify the business.
At step 110, the data described with reference to steps 102-108 is
stored within data storage system 56. If employee 64 is not presently clocked in
to data storage system 56 as activity working on a job or project, data storage
system 56 automatically indicates a clocked in mode. Conversely, if employee 64
is already clocked in to data storage system 56, data storage system 56
automatically clocks out employee 64.
Figure 4 is a block diagram illustrating various modules associated
with systems 50 and 90 shown in Figures 1 and 2. All modules shown in Figure 4
are part of data storage system 56 and can be accessed via computer 54. Employee
66 first logs in to system 50 or 90 via computer 54. Computer 54 displays a
screen (later described) which requests information from employee 66 to log in
to data storage system 56 (login module 122). Employee 66 provides a customer
number representing the company for which employee 66 is employed, an operator
identification code which uniquely identifies operator 66 to data storage system
56, and a password unique to operator 66. At this point, employee 66 is
presented with a computer screen which welcomes employee 66 to data storage
system 56, identifies employee 66, and provides the date and time at which
employee 66 logged in to data storage system 56. Once employee 66 is logged into
data storage system 56, employee 66 has various options. Particularly, employee
66 can access various modules such as operators module 124, change password
module 126, users module 128, caller identification module 130, billing module
132, events module 134, clear module 136, and log out module 138. Modules
124-138 will further be described with reference to Figures 5-19.
Employee 66 can add operators, update operators, or delete operators by
accessing modules 140, 142, and 144 via operators module 124. Similarly,
employee 66 can manually clock in or clock out employees, update user
information for employees, add new employees, change the status of an
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employee with respect to administrative rights, and export text to printer 58,
payroll system 60, and billing system 62. Employee 66 can achieve these tasks by
accessing various modules via user's modules 128 such as clocked in/clocked out
employees module 146, update user information module 148, add employees module
150, change status 152, and export text module 154, respectively. Likewise, via
billing module 132, employee 66 can select a specific time period to view data
and export data to printer 58, payroll system 60, billing system 62 by accessing
select time period module 156 and export text 154, respectively. Additionally,
employee 66 can access select time period module 158 via clear module 136.
Modules 122-158 will further be described with reference to Figures
5-19. Figures 5-19 show various computer-generated screens which employee 66 can
access via computer 54.
Figure 5 is a replica of a computer-generated screen which is displayed
on computer 54 prior to logging into data storage system 56, shown in Figures 1
and 2. Figure 5 illustrates login screen 160 which represents login module 122
of Figure 4. Login screen 160 includes customer input block 162, operator input
block 164, password block 166, and login icon 168. In order for an employee to
access data storage system 56 via computer 54, employee 66 must enter a customer
identification number, an operator identification number, and a password. A
customer number is a unique alphanumeric code which identifies the company for
which employee 66 is employed. An operator number is a unique alphanumeric code
which identifies employee 66. A password is a unique alphanumeric code which
confirms the identity of employee 66. In one preferred embodiment, the operator
number and password codes are case sensitive (i.e., upper and lower case
letters).
Once employee 66 enters a customer identification number, an operator
identification number, and a password, employee 66 would utilize a mouse or
mouse-like device connected to computer 54 to position a cursor on top of login
icon 168 and single click on login icon 168, as is well known in the computer
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field. Completing this process permits employee 66 to access data storage system
56 and the screen shown in Figure 6 is displayed on computer 54.
Figure 6 illustrates computer-generated welcome screen 170. Once
employee 66, shown in Figures 1 and 2, properly accesses data storage system 56
via computer 54, welcome screen 170 would appear on computer 54. Welcome screen
170 includes customer identification 172, operator identifications 174A and
174B, date 176, time 178, and navigation menu 180. Customer identification 172
identifies the company for which operator 174 is employed, while operator
identifications 174A and 174B identify the operator logged in to data storage
system 56 (i.e. employee 66). Date and time 174 and 176 represent the precise
date and time which operator 174 logged into data storage system 56.
Navigation menu 180 is shown on the left side of welcome screen 170.
However, it is understood in the art that navigation menu 180 can be positioned
at various locations on welcome screen 170 without deviating from the present
invention. Navigation menu 180 includes several options which permit employee 66
to access various modules of data storage system 56. In particular, employee 66
can access operators module 124, change password module 126, users module 128,
caller identification module 130, billing module 132, events module 134, clear
module 136, or log-out module 138 (modules 124-138 are shown in Figure 4) by
moving a cursor on top of operators icon 182, change password icon 184, user
icon 186, caller identification 188, billing icon 190, events icon 192, clear
icon 194, or log-out icon 196, and single clicking on the mouse associated with
the computer 54. As previously discussed, utilizing a mouse or mouse-like device
connected to computer 54 to move a cursor about a screen and click on various
icons is known to those in the art. It is also known to single click or double
click (depending upon the design of the computer and/or the mouse) the mouse
once a cursor is positioned on top of an icon to go a module associated with the
icon.
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Figure 7 illustrates computer-generated screen 200, which corresponds
to operator's module 124 shown in Figure 4. Employee 66 can view screen 200 via
computer 54 and determine which employees have administrative rights and which
employees do not have administration rights. Administration rights allow an
employee to enter and further manipulate information within data storage system
56. Employee 66 can gain access to screen 200 by clicking on operators icon 182
of navigation menu 180. Screen 200 includes customer identification 172,
operator identification 174A, navigation menu 180, data lines section 202, and
add icon 204.
The first time a company accesses systems 50 or 90, shown in Figures 1
and 2, employee 66 will want to add operators and set their passwords and
administration rights. If this were the first time an employee of ABC
Corporation accessed data storage system 56, no operator names would appear in
data lines section 202. Rather, a single line would be shown which includes
Operator No. 1 with the word "default" listed under the description and with a
"Y" listed under administrative rights indicating that Operator No. 1 has
administrative rights to add additional operators. To add operators, employee 66
clicks on add icon 204 such that screen 210 of Figure 8 appears. Alternatively,
to update information regarding a specific user, such as altering their
administration rights, employee 66 clicks on the number in the "Operator" column
associated with a specific person and screen 230 of Figure 9 would appear.
Figure 8 illustrates computer-generated screen 210 which represents an
add operator screen of data storage system 56 shown in systems 50 or 90 and
corresponds to add operators module 140 of Figure 4. To add an operator,
employee 66 clicks on description box 212. Employee 66 then enters the name of
the operator to be added to the system. After the name was entered in
description box 212, employee 66 advances to administrative box 214.
Administration box 214 permits employee 66 to select whether the new operator
either has or does not have administration rights. Employee 66 clicks on the
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down arrow button within administrative box 214 and either selects a letter `Y,'
thereby granting full administrative rights to the newly added operator, or
selects a letter `N,' thereby not granting administrative right to the newly
added operator.
An operator with full administrative rights can create other operators
(users) within data storage system 56, can view all data within data storage
system 56, and can clear data from data storage system 56. Conversely, an
operator with no administrative rights cannot change any data in data storage
system 56 except for changing their own password.
Once the administrative rights for an operator has been selected,
employee 66 enters an initial password for this particular operator in password
box 216. The password is then confirmed in password box 218. In one preferred
embodiment, the password can be alpha numeric and is case sensitive (i.e., upper
and lower case letters). After all information has been entered, employee 66
clicks on update icon 220, and the new operator is entered into data storage
system 56. Data storage system 56 assigns the next consecutive operator number.
To review the newly added operator information, employee 66 clicks on operators
icon 182 of navigation menu 180.
Figure 9 illustrates computer-generated screen 230 which represents an
update operators screen of data storage system 56 shown in system 50 or 90 and
corresponds to update operators module 142 of Figure 4. Specific operator
information can be changed through screen 230. More specifically, to change
information, employee 66 positions a mouse associated with computer 54 over the
information to be changed and deletes the information. The new information is
then typed over the old information. Once the information to be changed has been
properly entered, employee 66 clicks on update icon 220 to update data storage
system 56. If all information relating to a specific operator is to be deleted,
employee 66 simply clicks on delete icon 232 and the operator information shown
on screen 230 is deleted from data storage system 56. For example, as shown in
Figure 9, if delete icon 232 is pressed, all information
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corresponding to Jane Doe would be deleted from data storage system 56. Only
operators having administrative rights can change their password through screen
230. Operators who do not have administrative rights must use computer-generated
screen 240 shown in Figure 10.
Figure 10 illustrates computer-generated screen 240 which represents a
change password screen of data storage system 56 shown in systems 50 or 90 and
corresponds to change password module 126 of Figure 4. An operator without
administrative rights can change his/her password via computer-generated screen
240. Computer-generated screen 240 is accessed via change password icon 184 of
navigation menu 180. Computer-generated screen 240 shows various information
including customer identification 172, operator identification 174A, operator
number 242, description 244, data entry box 246, data entry box 248, and change
icon 250.
Screen 240 allows operators who do not have full administrative rights
to change their password. This feature provides increased security in the event
that an operator suspects that their password has been compromised. To change a
password, employee 66 clicks on data entry box 246 and types in their existing
password. Employee 66 then clicks on data entry box 248 and enters a new
password. As previously discussed, in one preferred embodiment, a password can
be alpha numeric and case sensitive. Once the old and new passwords are entered,
employee 66 clicks on change icon 250 to complete the procedure, thereby
updating data storage system 56.
Figure 11 illustrates computer-generated screen 260 which represents a
users screen of data storage system 56 shown in systems 50 or 90 and corresponds
to users module 128 of Figure 4. Computer-generated screen 260 includes customer
identification 172, operator identification 174A, navigation menu 180, clocked
in box 262A, clocked out box 262B, OK icon 262C, user column 264, description
column 266, caller identification column 268, caller name column 270, stamp in
column 272, elapsed time column 274, estimated
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time column 276, user identification column 278, billing column 280, change
status column 282, data rows 284 and 286, and export icon 288.
Computer-generated screen 260 represents a user list page of data
storage system 56. The users are the employees of ABC Corporation who will be in
the field performing jobs or tasks for ABC Corporation. In order to check or
uncheck clocked in and clocked out boxes 262A and 262B, employee 66 positions a
mouse over a specific box and clicks on the mouse, thereby changing the check
marker (i.e., from checked to unchecked, or from unchecked to checked).
With both clocked in box 262A and clocked out box 262B checked,
employees 66 can click on OK button 262C to view information relating to all
users and their current job status. To see only information relating to clocked
in employees, employee 66 checks clocked in box 262A and unchecks clocked out
box 262B. Conversely, to see only information relating to clocked out employees,
employee 66 unchecks clocked in box 262A and checks clocked out box 262B.
Screen 260 includes various information such as a user (employee)
number under user column 264, the name of the user under description column 266,
a caller identification of the phone number from which an employee called when
they were clocked in under caller identification column 268, and a name of the
location from which the employee called under caller name 270. Screen 260 also
shows the date and time that the employee clocked in under stamped in column
272, the time elapsed since the employee clocked in under elapsed time column
274, an estimated time that the job will take under estimated time column 276,
and a user identification number under user identification column 278 which, as
previously discussed, uniquely identifies an employee.
Employee 66 can manipulate the information shown on screen 260 in
various ways. First, employee 66 can export the information shown on screen 260
to printer 58 via export icon 288. By clicking on export icon 288, the
information shown on screen 260 will be supplied to printer 58 via connection
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72 (shown in Figures 1 and 2). Second, employee 66 can access detailed billing
information regarding a specific employee by positioning a cursor associated
with computer 54 on top of the word "billing" associated with a specific
employee and clicking the mouse. Third, employee 66 can clock out an employee
which is presently clocked in to data storage system 56 by clicking on the
phrase "clock out" under change status column 282 of any employee that is
currently clocked in to the system. This feature can be used when an employee
clocks in to system 56, but forgets to clock out of system 56 upon completion of
a job.
Computer-generated screen 290, shown in Figure 12, represents an add
user screen of data storage system 56 shown in systems 50 or 90 and corresponds
to add employees module 150 of Figure 4. Employee 66 accesses screen 290 by
clicking on add icon 289, shown in Figure 11. Screen 290 permits employee 66 to
enter new users or employees into data storage system 56. Data storage system 56
automatically assigns the next available numeric user number in user box 292.
Employee 66 must enter a user identification number in user identification box
294. The user identification number must be numeric and long enough to be
difficult to randomly duplicate but short enough for the employee to remember.
The user identification number entered into box 294 is the code which the
assigned employee types on the telephone touch pad when he/she calls to check in
or check out of data storage system 56. The user identification number functions
as the personal identification number (PIN) for that employee. Finally, employee
66 enters the name of the employee in description box 296 and clicks on update
icon 298 to update data storage system 56.
Computer-generated screen 300, shown in Figure 13, represents an update
user information screen of data storage system 56 shown in systems 50 and 90 and
corresponds to update user information module 148 of Figure 4. Screen 300
permits an employee to modify user (employee) information in data storage system
56. Employee 66 accesses screen 300 by clicking on the user
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number associated with an employee on the user page represented by
computer-generated screen 260, shown in Figure 11. Screen 300 permits employee
66 to modify user (employee) information in the system. Both the user
identification code in box 304 and the description code in box 306 can be
modified. To make changes, employee 66 highlights and deletes the data to be
modified in either user identification box 304 or description box 306 and types
in the new data. By clicking on update icon 308, the changes are stored in data
storage system 56. To delete the selected user from the system, employee 66
clicks on delete icon 310 and the user (Joe Smith) is removed from data storage
system 56.
Computer-generated screen 320, shown in Figure 14, represents a billing
screen of data storage system 56 shown in systems 50 and 90 and corresponds to
billing module 132 of Figure 4. Screen 320 illustrates various billing
information about a particular employee, for example, Jane Doe.
Computer-generated screen 320 is accessed by clicking on the billing link
associated with an employee on the user list page shown in Figure 11 on
computer-generated screen 260. By clicking on the billing link associated with a
user on computer-generated screen 260, computer-generated screen 320 appears. It
is a log of all time spent at each job that a specific employee has performed
during a specific time period chosen by employee 66. Computer-generated screen
320 is also accessed via billing icon 190 of navigation menu 180.
Screen 320 includes various information including customer
identification 172, operator identification 174A, navigation menu 180, export
icon 288, user information 322, starting date 324, ending date 326, okay icon
328, billing column 330, stamp in column 332, stamp out column 334, caller
identification column 336, caller name column 338, extra data column 340, lapsed
time column 342, information rows 344-352, number of callers 354, and elapsed
time 356.
To select a time period for which to review job data for an employee,
start date 324 and ending date 326 are provided via pull-down menus. Once the
selected time period has been chosen, employee 66 clicks on OK icon 328 and
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data storage system 56 will display only job data for the selected employee
(Jane Doe) performed during the date range specified. This feature gives data
storage system 56 the benefit of flexibility in calculating hours worked by an
employee without having to clear other historical data not in the selected time
frame. In addition, with respect to calculating payroll for an employee, such as
employee Jane Doe, data storage system 56 eliminates any extra job data that may
have been collected prior to or after the desired pay period. The data shown in
computer-generated screen 320 is easily exported to a spreadsheet, such as an
Excel spreadsheet, for manipulation, tabulation of hours, or payroll
calculations, through use of export icon 288.
Number of calls 354 indicates the total number of jobs performed during
a specified time period, while elapsed time 356 indicates the total amount of
time spent on all jobs during the specified time period. Extra data column 340
can be used to input additional information about a particular job. In one
preferred embodiment, a billing rate of an employee may be entered under extra
data column 340. In another preferred embodiment, the estimated time for which
the time should take to complete may be entered and displayed under extra data
column 340.
Computer-generated screen 360, shown in Figure 15, represents a caller
identification screen of data storage system 56 shown in systems 50 or 90 and
corresponds to caller identification module 130 of Figure 4. Screen 360 provides
a list of all caller identifications that data storage system 56 has collected.
Screen 360 includes various information including customer identification 172,
operator identification 174A, navigation menu 180, clocked in box 262A, clocked
out box 262B, OK icon 262C, caller identification column 362, caller name column
364, user column 366, stamped in column 368, elapsed time column 370, billing
column 372, change status column 374, and data information rows 376-386. Screen
360 can be accessed by clicking on caller identification icon 188 of navigation
menu 180. To utilize the caller identification aspect of data storage system 56,
the various caller identifications
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and names of the locations from which employees (users) will be calling from
must be initially entered into data storage system 56. Data storage system 56
will then reject any calls made from caller identification locations which have
not been entered into the system. In another preferred embodiment, where the
various caller identification information has not been initially entered into
data storage system 56, data storage system 56 will collect caller
identification information and add this information to data storage system 56
automatically. However, data storage system 56 will not have the ability to
recognize an incoming call from an invalid location.
When a call comes in to data storage system 56 from employee 64,
various information is stored in data storage system 56. Examples of stored
information include a phone number from which employee 64 is calling is stored
under caller identification column 362. The name of the company from which
employee 64 is calling is stored under caller name column 364.
Screen 360 also includes a stamped in time under stamped in column 368
which indicates the date and precise time when an employee calls in to data
storage system 56 at the start of a job. Screen 360 also includes an elapsed
time under elapsed time column 370 which indicates the amount of time an
employee has been clocked into data storage system 56. If an employee initially
calls into data storage system 56 at the start of a job and then calls in a
second time at the completion of the job, no information will be shown under
columns 366, 368, 370, and 374. Change status column 374 permits employee 66 to
manually clock out another employee, such as Jane Doe in Figure 15. This clock
out feature would be used in situations where it appears that an employee had
clocked into data storage system 56 at the beginning of a job, but failed to
clock out of data storage system 56 at the end of the job.
Billing column 372, shown in Figure 15, enables employee 66 to see the
exact time billed at each caller identification location. This can be done by
clicking on the word "billing" icon in the row associated with the location
which it is desired to see the exact time billed. By clicking on the billing
link of a
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particular row, computer-generated screen 390, shown in Figure 16 will be
displayed on computer 54.
Screen 390 displays a list of all jobs performed at a particular caller
identification location. Screen 390 shows the billing sequence number under
column 330, the time the employee called to clock into data storage system 56
under stamp in column 332, and the time the employee called to clock out of the
data storage system 56 under stamp out column 334. Screen 390 also includes the
name and employee number of the user (employee) who performed the job under user
column 394, the company name at which the job was performed under caller name
column 338, and the time spent on the job under elapsed time column 342. As
previously discussed, extra data column 340 can be used to input additional
information about a particular job. In one preferred embodiment, a billing rate
of an employee may be entered under extra data column 340. In another preferred
embodiment, the estimated time for which the time should take to complete may be
entered and displayed under extra data column 340.
Computer-generated screen 390 permits employee 66 to easily tabulate
the number of visits to each location and the time spent at a location for
billing purposes. To export the data from screen 390, employee 66 clicks on
export icon 288 to forward the data in rows 395 and 397 to a spreadsheet as
previously discussed. The information is easily then manipulated. The
information can also be transported to printer 58, payroll system 60, or billing
system 62, as shown in Figures 1 and 2.
Computer-generated screen 400, shown in Figure 17, represents a billing
screen of data storage system 56 shown in systems 50 and 90 and corresponds to
billing module 132 of Figure 4. Screen 400 can be accessed by clicking on
billing icon 190 of navigation menu 180. Screen 400 is a log of all time spent
on all completed jobs by all employees (users) during a specific time period. To
select the desired time period, start date box 324 and end date box 326 include
a pull down menu for a user to set the "from date" and the "to date" of the
desired
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information. Screen 400 further includes billing column 330, stamp in column
332, stamp out column 334, user column 394, caller ID column 336, caller name
column 338, extra data column 340, elapsed time column 342, information rows
402-408, number of calls 410, elapsed time 412, and export icon 288.
The billing feature shown on screen 400 provides a user the benefit of
reviewing total hours worked by all employees during a specified time period
without having to clear historical data at time periods other than the specified
time period. Therefore, the number of hours worked by all employees in a
specified time period can be analyzed for a specific company. In addition, the
data shown in screen 400 can be exported to a spread sheet within data storage
system 56, or can be exported to printer 58, payroll system 60, or billing
system 62 for further analysis and manipulation via export icon 288. Finally, at
the bottom of screen 400 is the total number of calls made during the specified
time period, represented by numeric 410, as well as the total hours worked on
jobs during the specified time period, as represented by numeric 412.
Computer-generated screen 420, shown in Figure 18, represents an events
screen of data storage system 56 shown in systems 50 and 90 and corresponds to
events module 134 of Figure 4. Screen 420 can be accessed by clicking on events
icon 192 of navigation menu 180. Screen 420 shows various information including
customer identification 172, operator identification 174, navigation menu 180,
export icon 288, start date 352, end date 354, start date boxes 324, end date
boxes 326, okay icon 328, stamped column 372, user column 394, location column
422, extra data column 340, caller name column 338, caller identification column
336, user identification column 424, and data communication columns 426-442.
Screen 420 provides a list of all checked in and checked out activity for all
employees of a specified company for a specific date range. Screen 420 provides
all information pertaining to employee activity on a real time basis. Screen 420
ensures that employees (users) are using the system properly and consistently.
The information on screen 420 provides the time a call was made, the user who
made the call, a location code from where the
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call was made, any extra data specific to the company being evaluated, the
location from where the call was made, the phone number from which the call was
made, and a user identification of the employee who made the call. As previously
discussed, the specific range of dates can be chosen utilizing starting date
boxes 324 and ending date boxes 326.
A location code, which would be listed under location column 422, can
be used to specify a location where an employee is working where a business has
multiple caller identifications corresponding to multiple internal telephones.
However, a single company is to be billed for all jobs performed at specified
locations. Extra data information, which can be entered under extra data column
340 can be specific codes for a specific customer. For example, extra data could
include a work order number used to assign a specific job.
Computer-generated screen 450, shown in Figure 19, represents a clear
data screen of data storage system 56 shown in systems 50 and 90 and corresponds
to clear module 136 of Figure 4. This screen can be accessed via clear icon 194
of navigation menu 180, and permits removal of event and billing information for
selected date ranges.
Once specific data has been either been saved or exported to an
external source, such as printer 58, payroll system 60, or billing system 62,
computer-generated screen 450 can be used to clear unwanted information from
data storage system 56.
Screen 450 includes various information including customer
identification 172, operator identification 174B, navigation menu 180, starting
date boxes 452, ending date boxes 454, billing boxes 456, events box 458, and
okay icon 460. To clear event data, click on the event box 458 and a check mark
will appear in the box. To clear the check box, click on event box 458 again and
the check mark will disappear. When event box 458 is checked, the specific
starting and ending dates of event information to be cleared can be entered via
starting date boxes 452 and ending date boxes 454. Clicking on okay icon 460
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will clear the specified information from data storage system 56. This process
can be repeated with respect to billing check box 456.
To exit data storage system 56, a user can click on log out icon 196 of
navigation menu 180. Computer 54 would then exit data storage system 56 and
computer 54 would return to the original login screen, represented by
computer-generated screen 160, shown in Figure 5.
In summary, the present invention is a system and method for storing
and manipulating data relating to an employer of a business. The system and
method includes an internet accessible database having telephone entry
capabilities. More particularly, a method of collecting and monitoring data
relating to an employee of a business at a remote location is disclosed. The
method includes accessing a data storage system via a first connection through
use of a telephone line. Data is provided to the data storage system regarding
an employee located remote from the data storage system via the first
connection. The data storage system can also be accessed via a second connection
through use of a computer. The provided data can be monitored and manipulated
via the second connection.
The present invention also includes a data collecting device for
collecting and manipulating various data relating to an employee of a business
located at a remote location from the data collecting device. The data
collecting device includes an employee location identifier for identifying a
location of an employee based upon a telephone number from which the employee is
calling into the data collecting device via a telephone line and an employee
identifier for identifying the employee calling into the data collecting device.
The data collecting device further includes a real time identifier for
identifying the time at which the data collecting device receives a telephone
communication from the employee and an event identifier for identifying the
event represented by the telephone communication from the employee.
Additionally, the data collecting device includes an elapsed time identifier for
calculating a time period which the employee is located at the remote location
and a storage module for storing information relating to the identification of
the employee, the location of the
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employee, and a time period which the employee is located at the remote
location.
Finally, the present invention includes a method of collecting and
manipulating data relating to an employee at a remote location. The method
includes identifying a location of an employee based upon a telephone number
from which the employee is communicating and identifying the identity of the
employee. The method further includes identifying a time of a telephone
communication and identifying an event represented by a telephone communication.
The method further includes calculating a time period which the employee is
located at the remote location. The method still further includes storing
information relating to the identification of the employee, the location of the
employee, and a time period which the employee is located the remote location.
Although specific embodiments have been illustrated and described
herein for purposes of description of the preferred embodiment, it will be
appreciated by those of ordinary skill in the art that a wide variety of
alternate and/or equivalent implementations calculated to achieve the same
purposes may be substituted for the specific embodiments shown and described
without departing from the scope of the present invention. Those with skill in
the chemical, mechanical, electro-mechanical, electrical, and computer arts will
readily appreciate that the present invention may be implemented in a very wide
variety of embodiments. This application is intended to cover any adaptations or
variations of the preferred embodiments discussed herein. Therefore, it is
manifestly intended that this invention be limited only by the claims and the
equivalents thereof.
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WHAT IS CLAIMED IS:
- -------------------
1. A method of collecting and monitoring data relating to an employee of a
business at a remote location, the method comprising:
accessing a data storage system via a first connection through use of a
telephone line;
providing data to the data storage system regarding an employee located
remote from to the data storage system via the first
connection;
accessing the data storage system via a second connection through use
of a computer; and
monitoring the provided data via the second connection.
2. The method of claim 1, wherein the step of providing data to the data
storage system further comprises:
providing an identifying characteristic of the employee to the data
storage system.
3. The method of claim 1, wherein the step of providing data to the data
storage system further comprises:
providing data to the data storage system via a caller identification
system.
4. The method of claim 3, wherein the step of providing data to the data
storage system further comprises:
providing a specific geographic location to the data storage system.
5. The method of claim 3, wherein the step of providing data to the data
storage system further comprises:
providing a specific time to the data storage system.
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6. The method of claim 1, and further comprising:
accessing the data storage system via a combination of a telephone line
connection and an internet connection; and
providing data regarding the remotely located employee to the data
storage system via the combination of the telephone line
connection and the internet connection.
7. The method of claim 1, and further comprising:
entering a customer identification code via the first connection.
8. The method of claim 1, and further comprising:
entering a user identification code via the first connection.
9. The method of claim 1, and further comprising:
providing a time in entry representing a specific time which the
employee begins working at the remote location.
10. The method of claim 1, and further comprising:
providing a time out entry representing a specific time which the
employee finishes working at the remote location.
11. The method of claim 1, and further comprising:
exporting the provided data via the second connection to a spreadsheet
formatted file.
12. The method of claim 1, and further comprising:
manipulating the provided data via the second connection to generate a
desired report.
13. The method of claim 1, and further comprising:
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generating a bill based upon the provided data.
14. The method of claim 1, and further comprising:
generating an employee payroll report based upon the provided data.
15. A data collecting device for collecting and manipulating various data
relating to an employee of a business located at a remote location from the data
collecting device, the data collecting device comprising:
an employee location identifier for identifying a location of an
employee based upon a telephone number from which the employee
is calling into the data collecting device via a telephone
line;
an employee identifier for identifying the employee calling into
the data collecting device via the telephone line;
a real time identifier for identifying the time at which the data
collecting device receives a telephone communication from
the employee;
an event identifier for identifying the event represented by the
telephone communication from the employee;
an elapsed time identifier for calculating a time period which the
employee is located at the remote location; and
a storage module for storing information relating to the
identification of the employee, the location of the employee,
and the time period which the employee is located at the
remote location.
16. A method of collecting and manipulating data relating to an employee at
a remote location, the method comprising:
identifying a location of an employee based upon a telephone number
from which the employee is communicating via a telephone line;
identifying the employee calling into the data collector via the
standard telephone line;
identifying a time of a telephone communication from the employee;
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<PAGE> 26
identifying an event represented by the telephone communication from
the employee;
calculating a time period which the employee is located at the remote
location; and
storing information relating to the identification of the employee,
the location of the employee, and the time period which the
employee is located at the remote location.
17. The method of claim 16, wherein the step of identifying a location of
an employee further comprises:
identifying the location of an employee via a caller identification
system.
18. The method of claim 16, wherein the step of identifying a time of the
telephone communication further comprises:
identifying the time of the telephone communication via a caller
identification system.
19. A system for receiving and manipulating data relating to at least one
employee of a business, the system comprising:
an operator module for entering and storing data relating to an
identification of an employee;
a password module for changing a password associated with the
employee;
a user module for displaying all time spent by the employee at a
location relating to at least one job during a specified time
period;
a caller identification module for displaying all telephone numbers
from which the employee has called into the system;
a billing module for displaying an itemized list of all time spent
by the employee at all locations relating to all jobs
during a specified time period;
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an events module for displaying an itemized list of each time at least
one employee accesses the system to begin or end a job;
a clear module for clearing information from the system; and
a log out module for exiting from the system.
20. The system of claim 19, and further comprising:
an add operator module for adding additional employees into the system.
21. The system of claim 19, and further comprising:
an update module for updating information relating to an employee.
22. The system of claim 19, and further comprising:
a change password module for changing a password for an employee.
23. The system of claim 19, and further comprising:
a time period modular for displaying a time log at which an employee
works on a specific job.
24. The system of claim 19, and further comprising:
an employee log out modular for logging out an employee from the
system.
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<PAGE> 28
INTERNET ACCESSIBLE DATABASE WITH TELEPHONE
ENTRY CAPABILITY
ABSTRACT OF THE DISCLOSURE
--------------------------
A system and method for storing and manipulating data relating to an
employee of a business is disclosed. The system and method includes an internet
accessible database having telephone entry capabilities. The method includes
accessing a data storage system through use of a telephone via a first
connection. Data regarding a remotely located employee is provided to the data
storage system via the first connection. The data storage system can also be
accessed through use of a computer via a second connection to view the provided
data. The provided data can be monitored via the second connection. Various
functions can be performed on the provided data via the second connection.
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<PAGE> 1
Exhibit 14.2
LONG DISTANCE DATA COMMUNICATION HAVING LOCAL
TELEPHONE CONNECTION ACCESS
THE FIELD OF THE INVENTION
--------------------------
The present invention relates generally to a data communications
system, and more specifically to a data communications system for conveying at
least one data communication between a plurality of data communication devices
located in different area codes by accessing a data storage and relay system via
local communication links.
BACKGROUND OF THE INVENTION
---------------------------
Throughout the United States and the world, communication between
individuals located remotely from each other has become a necessity. Regardless
of whether the communication is work-related or of a personal nature, people
located in different cities or countries need to communicate with each other.
From a business point of view, a specific company may have employees located
around the world who need to communicate with each other. In addition, employees
of a specific company often need to communicate with customers or business
associates located throughout the world.
From a personal point of view, due to the nature of people in the
twenty-first century, people often have family, friends, or acquaintances
located throughout the world. In both instances, business and personal, it is
often both difficult and expensive to communicate with acquaintances located at
remote locations. In particular, the accessibility and cost of long distance
telephone calls often prohibits individuals from communicating with each other.
Some people do not have access to a long distance telephone carrier or account
which enables them to communicate with others located remotely from them. In
other instances, with respect to certain individuals, it is difficult to
determine the precise location which an individual can be reached. For example,
a person who
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<PAGE> 2
travels a great deal of time, either for work or pleasure, is not associated
with a single telephone number from which they can be reached.
Therefore, there is a need for a system and method which will permit
two or more individuals located remotely from each other in different area codes
to communicate with each other without the inconvenience and expense of
utilizing a long distance telephone carrier. In particular, a system and method
is needed which will permit multiple individuals located remotely from one
another to communicate with each other in a secure, reliable, and efficient
manner.
SUMMARY OF THE INVENTION
------------------------
The present invention is a system and method for a first individual to
communication with a second individual. More particularly, the present invention
is a data communication system for conveying at least one data communication
between a plurality of data communication devices. The system of the present
invention includes a first data communication link associated with a first area
code, the first data communication link capable of transmitting a data
communication from a first data communication device. In one preferred
embodiment, the first data communication device is a telephone. In another
preferred embodiment, the first data communication device is a computer. A
second data communication link is associated with a second area code, wherein
the second code differs from the first area code. The second data communication
link is capable of transmitting a data communication from a second data
communication device. In one preferred embodiment, the second data communication
device is a telephone. In another preferred embodiment, the second data
communication device is a computer. A server is in data communication with the
first and second data communication links. The server is capable of storing a
data communication received from the first data communication device at a
distinct location based upon an identifying code transmitted in association with
the data communication. The server is also capable of transmitting the data
communication received from the first data
2
<PAGE> 3
communication device to the second data communication device upon receipt of the
identifying code from the second data communication device.
In one preferred embodiment, the first and second data communication
links may each include a telephone line link, an internet link, a local area
network link, a satellite link, a broadband cable link, an ethernet link, or any
combination thereof. Also, in one preferred embodiment, the data communication
is an audio communication, such as a voicemail message. Conversely, in another
preferred embodiment, the data communication is a data message generated by the
associated data communication device, such as a telephone or a computer.
In one preferred embodiment, the server is capable of storing a
plurality of data communications at the distinct location from a plurality of
data communication devices based upon receipt of the identifying code. The
server is also capable of transmitting a plurality of data communications
between the first and second data communication devices, each data communication
transmitted upon receipt of the identifying code. In one preferred embodiment,
the identifying code is a personal identification code associated with either a
pre-paid telephone card or a computer accessible account. The pre-paid telephone
card or computer accessible account provides access to the server for either a
pre-determined time period or a pre-determined amount of time.
The present invention also includes a method for a first individual to
communication with a second individual. The method includes the first individual
accessing a data storage and relay system through use of a first data
communication device in communication with the data storage and relay system via
a first data communication link. The first data communication link is associated
with a first area code. The first individual provides an identifying code to the
data storage and relay system via the first data communication device. The
individual then provides a data communication to the data storage and relay
system. The data communication is stored at a distinct location in the data
storage and relay system based upon the identifying code. The second individual
may access the data storage and relay system through use of a second
3
<PAGE> 4
data communication device in communication with the data storage and relay
system via a second data communication link. The second data communication link
is associated with a second area code. The second individual provides the
identifying code to the data storage and relay system and retrieves the data
communication.
In one preferred embodiment, the first and second data communication
devices are telephones associated with distinct area codes. In another preferred
embodiment, the first and second data communication devices are computers
associated with distinct area codes. The data communication may be stored at a
distinct location on a server within the data storage and relay system based
upon the identifying code.
In one preferred embodiment, the method further includes the second
individual providing a second data communication to the data storage and relay
system via the second data communication device. The second data communication
is stored at the distinct location in the data storage and relay system. A first
individual may then access the data storage and relay system for a second time
via the first data communication device. The first individual provides the
identifying code to the data storage and relay system and retrieves the second
data communication from the data storage and relay system. This overall
repetitive process may continue, such that several data communications are
stored and retrieved.
BRIEF DESCRIPTION OF THE DRAWINGS
---------------------------------
Figure 1 is a block diagram illustrating one preferred embodiment of
the overall system of the present invention.
Figure 2 is a block diagram illustrating another preferred embodiment
of the overall system of the present invention.
Figure 3 is a block diagram illustrating yet another preferred
embodiment of the overall system of the present invention.
Figure 4 is flow chart illustrating a method of the present invention.
4
<PAGE> 5
DESCRIPTION OF THE PREFERRED EMBODIMENTS
----------------------------------------
The present invention is a data communications system and method for
conveying at least one data communication between a plurality of data
communication devices located in different area codes by accessing a data
storage and relay system via local communication links.
Figure 1 is a block diagram illustrating one preferred embodiment of
the overall system of the present invention. Data communication system 50 (also
known as data storage and relay system 50), shown in Figure 1, includes
telephones 52 and 54, communication links 56 and 58, server 60 having PIN
(personal identification number) recognition module 62 and storage module 64.
The present invention permits two or more individuals located in distinct area
codes to communicate with each other by accessing local communication links.
While only two individuals, individuals 66 and 68, are shown in Figure 1, it is
understood that any number of individuals can be interconnected with each other
through use of additional telephones and communication links.
In order to utilize system 50, an individual, such as individual 66,
purchases telephone card 70 from a vendor associated with system 50. Telephone
card 70 may be purchased for a specific fee and includes an identifying code,
such as a PIN, which permits individual 66 to access system 50. In one preferred
embodiment, the use of telephone card 70 and its associated identifying code
permits access to system 50 over a specific time period. For example, through
use of telephone card 70, individuals may access system 50 for a period of one
month regardless of the number of times or the length of time for which the
individuals access system 50. In another preferred embodiment, telephone card 70
permits individuals to access system 50 for a specific duration of time. For
example, telephone card 70 would permit access to system 50 for sixty minutes,
to be used at the discretion of the individuals.
In order to utilize system 50, individual 66 accesses system 50 by
dialing a local telephone number associated with system 50 on telephone 52.
System 50 then prompts individual 66 to enter a PIN. Once individual 66 properly
enters
5
<PAGE> 6
the PIN associated with telephone card 70, individual 66 is prompted by system
50 to either record a data communication or review previously stored data
communications associated with the PIN of telephone card 70.
In one preferred embodiment, individual 66 may transmit a data
communication to be stored by system 50. More specifically, individual 66 may
leave a voice message or communication. Alternatively, individual 66 may enter a
data communication through use of the keypad of telephone 52.
The data communication is transmitted from telephone 52 to server 60
via communication link 56. Server 60 represents a single server accessible
throughout the world. Communication link 56 provides the accessibility to server
60. Communication link 56 is any of a variety of communication links, such as a
telephone line link, an internet link, a local area network link, a satellite
link, a broadband cable link, an ethernet link, or any other communication link.
In some instances, communication link 56 represents a combination of two or more
of the previously mentioned links. For example, communication link 56 may
represent a local telephone line link and an internet link. Therefore,
individual 66 need only dial a local telephone number to be connected to server
60, which may be located anywhere throughout the world. Thus, no long distance
telephone charges are incurred and no long distance telephone carrier is
required.
PIN recognition module 62 of server 60 receives the PIN entered by
individual 66 and verifies that it is associated with an active telephone card
(telephone card 70). If individual 66 elects to transmit a data communication to
server 60, that data communication is stored within storage 64. More
specifically, the data communication is stored within one of stored sections
64A, 64B, 64C, or 64D. Storage 64 and its sub-sections are specifically
associated with telephone card 70 and its associated PIN. While Figure 1
specifically shows four storage sections (64A, 64B, 64C, and 64D), it is
understood that any number of storage sections may be associated with telephone
card 70. In addition, while a single storage is shown (storage 64), it is also
understood that multiple storages may be functioning within server 60 and
associated with
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<PAGE> 7
multiple telephone cards. A single storage (storage 64) is shown for clarity
purposes.
In order to fully utilize system 50, individual 66 disperses the PIN
associated with telephone card 70 to one or more individuals, such as
individuals 68. While only two individuals are shown in Figure 1, it is
understood that any number of individuals may access system 50 as long as each
individual has knowledge of the PIN associated with telephone card 70.
Individual 68 can access system 50 similar to that described above.
Specifically, individual 68 uses telephone 54 and communication link 58 to gain
access to server 60. Individual 68 would enter a local telephone number
associated with system 50, and then enter the PIN associated with telephone card
70.
Once individual 68 has properly accessed server 60, system 50 will
permit individual 68 to either review data communications stored within server
60 or enter a new data communication to be stored on server 60.
Similar to communication link 56, communication link 58 is any of a
variety of communicational links. For example, communication link 58 may be a
telephone line link, an internet link, a local area network link, a satellite
link, a broadband cable link, an ethernet link, or any other communication link.
In addition, communication link 68 represents two or more of the above mentioned
links in combination.
While individual 68 is located in a different area code from individual
66, individual 68 merely enters a local telephone number to initially access
system 50. Once individuals 66 and 68 each have knowledge of the PIN associated
with telephone cards 70, individuals 66 and 68 have the ability to access system
50, retrieve various data communications from server 60, and transmit various
communications to server 60.
System 50, shown in Figure 1, provides a data communications system for
conveying one or more data communications between a plurality of data
communication devices, such as telephones 52 and 54. Telephones 52 and 54 are
associated with different area codes. The data communications can be conveyed
via server 60 which represents a data storage and relay sub-component
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<PAGE> 8
of system 50. Communication links 56 and 58 represent one of a variety of
communication links or a combination thereof which permits multiple individuals,
such as individuals 66 and 68, to access system 50 via a local telephone
communication.
Figure 2 is a block diagram illustrating another preferred embodiment
of the overall system of the present invention. System 100, shown in Figure 2,
is similar to system 50, shown in Figure 1. Components of system 100 which are
similar to identical components of system 50, shown in Figure 1, have been
labeled with identical numbers.
System 100 includes communication links 56 and 58 and server 60 which
operate as previously discussed with respect to Figure 1. System 100 differs
from system 50 in that individuals 66 and 68 do not access system 100 through
use of a telephone, but rather through use of a computer.
In the embodiment shown in Figure 2, rather than purchasing a telephone
card, individual 66 accesses a website which permits individual 66 to purchase
access to system 100. Similar to the purchase of telephone card 70, individual
66 gains access to system 100 via computer during a specific time period, for
instance, one month. In another preferred embodiment, individual 66 may purchase
access to system 100 for a specific duration of time, such as sixty minutes. As
previously discussed with reference to system 50 of Figure 1, individuals 66 and
68 access server 60 and either retrieve storage data communications or transmit
new data communications to server 60. In the embodiment shown in Figure 2,
individuals 66 and 68, rather than transmitting a voice message, may transmit a
data communication via computers 102 and 104, respectively. The data
communication from computers 102 and 104 can be any type of communication which
computers 102 and 104 are capable of generating. For example, a data
communication from either computers 102 or 104 to server 60 may be a visual,
audio, or combination communication.
Figure 3 is yet another preferred embodiment of the overall system of
the present invention. System 150, shown in Figure 3, includes data
communication devices 152 and 154, communication links 156, 158, 170, and 172,
local servers
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<PAGE> 9
160 and 164 having PIN recognition modules 162 and 168, respectively, and
centralized server 174 having storage 176.
Similar to systems 50 and 100, shown in Figures 1 and 2, system 150 of
Figure 3 permits two or more individuals to communicate with each other, wherein
each individual can access system 150 via a local communication link.
Data communication devices 152 and 154 represent any type of data
communication device capable of transmitting a data communication to centralized
server 174. For example, data communication devices 152 and 154 may be a
telephone or a computer. Communication links 156, 158, 170, and 172, as
previously discussed, represent any of a number of communication links, such as
a telephone line link, an internet link, a local area network link, a satellite
link, a broadband cable link, an ethernet link, or any other communication link.
Communication links 156, 158, 170, and 172 also represent any combination of two
or more of the above mentioned communication links. For example, communication
links 156 and 158 may represent a satellite link and an internet link.
Specifically, if either of data communication devices 152 or 154 are a wireless
telephone, a satellite link would at least be a portion of communication links
156 and 158.
System 150 differs from systems 50 and 100 in that communication links
156 and 158 do not directly interact with centralized server 174. Rather,
communication links 156 and 158 are in communication with local servers 160 and
164, respectively. A local server, similar to local servers 160 and 164, are
located in each local area code which system 150 is operating. Therefore, when
individuals 66 or 68 utilize a local telephone number, data communication
devices 152 and 154 accesses local servers 160 or 164 via communication links
156 or 158. Thus, communication links 156 and 158 are local communication links.
PIN recognition modules 162 and 168 verify that the PIN entered by individuals
66 and 68 is associated with an active account. Upon verification of the PIN,
local servers 160 and 164 communicate with centralized server 174 via
communication links 170 and 172, respectively. Centralized server 174 includes
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<PAGE> 10
storage 176 which stores data communications at specific locations based upon a
PIN.
Externally, system 150, shown in Figure 3, provides the identical
capabilities as that described with reference to systems 50 and 100 shown in
Figures 1 and 2. However, the internal routing of data communications differs in
that system 150 includes numerous local servers associated with numerous area
codes in data communication with one centralized server.
Figure 4 is a flow chart illustrating the method of the present
invention. Method 200 includes step 202 at which an individual purchases access
to a data storage and relay system, such as systems 50, 100, or 150, shown in
Figures 1, 2, and 3, respectively. At step 204, an individual accesses the data
storage and relay system via a first data communication device, such as data
communication device 152 shown in Figure 3. At step 206, the first individual
provides an identifying code to the data storage and relay system via the first
data communication device. In one preferred embodiment, the identifying code is
a PIN.
At step 208, a first data communication is transmitted to the data
storage and relay system via the first data communication device. The first data
communication may be an audio communication or may be a data message generated
by the associated data communication device. At step 210, the first data
communication is stored at a distinct location within the data storage and relay
system based upon the identifying code. For example, the first data
communication may be stored at storage component 176A, shown in Figure 3.
At step 212, the data storage and relay system is accessed via a second
data communication device. In one preferred embodiment, the second data
communication device is data communication device 154, shown in Figure 3. At
step 214, the identifying code is provided to the data storage and relay system
via the second data communication device. At step 216, the second data
communication device retrieves the first data communication. At step 218, a
second data communication is transmitted to the data storage and relay system
via the second data communication device.
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At step 220, the data storage and relay system is accessed via the
first data communication device for a second time. At step 220, the identifying
code to the data storage and relay system is provided via the first data
communication device. At step 224, the second data communication is retrieved
via the first data communication device.
The first and second data communication devices described with
reference to method 200 are located in distinct area codes. However, it is also
understood that the first and second data communication devices may be located
in a single area code without deviating from the present invention. In addition,
it is understood that access to the data storage and relay system may be gained
by purchasing a telephone card, or it may be gained by purchasing access via a
website associated with the system through use of a computer.
The present invention is a data communication system for conveying at
least one data communication between a plurality of data communication devices.
The present invention does not necessitate the use of a long distance telephone
carrier. Rather, local area telephone access is used to interact with a data
storage and relay system.
Although specific embodiments have been illustrated and described
herein for purposes of description of the preferred embodiment, it will be
appreciated by those of ordinary skill in the art that a wide variety of
alternate and/or equivalent implementations calculated to achieve the same
purposes may be substituted for the specific embodiments shown and described
without departing from the scope of the present invention. Those with skill in
the mechanical, electro-mechanical, electrical, and computer arts will readily
appreciate that the present invention may be implemented in a very wide variety
of embodiments. This application is intended to cover any adaptations or
variations of the preferred embodiments discussed herein. Therefore, it is
manifestly intended that this invention be limited only by the claims and the
equivalents thereof.
11
<PAGE> 12
WHAT IS CLAIMED IS:
- -------------------
1. A data communication system for conveying at least one data
communication between a plurality of data communication devices, the system
comprising:
a first data communication link associated with a first area
code, the first data communication link capable of
transmitting a data communication from a first data
communication device;
a second data communication link associated with a second area
code, the second data communication link capable of
transmitting a data communication from a second data
communication device; and
a server in data communication with the first and second data
communication link, the server capable of storing a data
communication at a distinct location based upon an identifying
code transmitted in association with the data communication,
the server also capable of transmitting the data communication
received from the first data communication device to the
second data communication device upon receipt of the
identifying code from the second data communication device.
2. The system of claim 1, wherein the first and second data communication
links each include a telephone line link.
3. The system of claim 1, wherein the first and second data communication
links each include an internet link.
4. The system of claim 1, wherein the first and second data communication
links each include a local area network link.
5. The system of claim 1, wherein the first and second data communication
links each include a satellite link.
12
<PAGE> 13
6. The system of claim 1, wherein the first and second data communication
links each include a broadband cable link.
7. The system of claim 1, wherein the first and second data communication
links each include an ethernet link.
8. The system of claim 1, wherein the data communication is an audio
communication.
9. The system of claim 1, wherein the data communication is a data message
generated by the associated data communication device.
10. The system of claim 1, wherein the first data communication device is a
telephone.
11. The system of claim 1, wherein the second data communication device is
a telephone.
12. The system of claim 1, wherein the first data communication device is a
computer.
13. The system of claim 1, wherein the second data communication device is
a computer.
14. The system of claim 1, wherein the server is capable of storing a
plurality of data communications at the distinct location from a plurality of
data communication devices based upon receipt of the identifying code.
15. The system of claim 1, wherein the server is capable of transmitting a
plurality of data communications between the first and second
13
<PAGE> 14
data communication devices, each data communication transmitted upon receipt of
the identifying code.
16. The system of claim 1, wherein the identifying code is a personal
identification code associated with a prepaid telephone card.
17. The system of claim 14, wherein the prepaid telephone card provides
access to the server for a predetermined time period.
18. A method for a first individual to communicate with a second
individual, the method comprising the steps of:
accessing a data storage and relay system by the first individual
through use of a first data communication device in
communication with the data storage and relay system via a
first data communication link, the first data communication
link associated with a first area code;
providing an identifying code to the data storage and relay system via
the first data communication device;
providing a data communication to the data storage and relay system via
the first data communication device;
storing the data communication at a distinct location in the data
storage and relay system based upon the identifying code;
accessing the data storage and relay system by the second individual
through use of a second data communication device in
communication with the data storage and relay system via a
second data communication link, the second data communication
link associated with a second area code;
providing the identifying code to the data storage and relay system
via the second data communication device; and
retrieving the data communication from the data storage and relay
system.
14
<PAGE> 15
19. The method of claim 18, wherein the step of accessing a data storage
and relay system by the first individual further comprises the step of:
accessing the data storage and relay system through use of a telephone
associated with the first area code.
20. The method of claim 18, wherein the step of accessing the data storage
and relay system by the second individual further comprises the step of:
accessing the data storage and relay system through use of a telephone
associated with the second area code.
21. The method of claim 18, wherein the step of accessing a data storage
and relay system by the first individual further comprises the step of:
accessing the data storage and relay system through use of a computer
associated with the first area code.
22. The method of claim 18, wherein the step of accessing a data storage
and relay system by the second individual further comprises the step of:
accessing the data storage and relay system through use of a computer
associated with the second area code.
23. The method of claim 18, wherein the step of storing the data
communication further comprises:
storing the data communication at a distinct location on a server
within the data storage and relay system based upon the
identifying code.
24. The method of claim 18, and further comprising the steps of:
providing a second data communication to the data storage and relay
system via the second data communication device; and
storing the second data communication at the distinct location in the
data storage and relay system.
15
<PAGE> 16
25. The method of claim 24, and further comprising the steps of:
accessing the data storage and relay system by the first individual for
a second time;
providing the identifying code to the data storage and relay system;
and
retrieving the second data communication from the data storage and
relay system.
26. The method of claim 18, and further comprising the step of:
purchasing a telephone card associated with the data storage and relay
system, the telephone card having the associated identifying
code.
16
<PAGE> 17
LONG DISTANCE DATA COMMUNICATION HAVING LOCAL
TELEPHONE CONNECTION ACCESS
ABSTRACT OF THE DISCLOSURE
--------------------------
A system and method for conveying data communications between a
plurality of data communication devices located in distinct area codes through
use of a plurality of local telephone communications is disclosed. The data
communication system includes a first data communication link associated with a
first area code, the first data communication link capable of transmitting a
data communication from a first data communication device. A second data
communication link is associated with a second area code and is capable of
transmitting a data communication from a second data communication device. A
server is in data communication with both the first and second data
communication devices. The server can store at least one data communication from
either the first or the second data communication device at a distinct location
based upon an identifying code transmitted in association with the data
communication. The server is capable of transmitting a data communication
received from the first data communication device to the second data
communication device upon receipt of the identifying code from the second data
communication device. The server is also capable of transmitting a data
communication received from the second data communication device to the first
data communication device upon receipt of the identifying code from the first
data communication device.
17
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form SB-2 of our
report dated February 16, 2000 relating to the financial statements of
GoldenAccess.Com, Inc., as of and for the year ended June 30, 1999 and for the
respective June 30, 1998 and 1999 through December 31, 1998 and 1999. We also
consent to the reference to us under the headings "Experts"in such Registration
Statement.
Kingery, Crouse & Hohl, P.A.
Tampa, Florida
February 16, 2000
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