-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JaqKyZGVfdkq7FEdk6OsHNXPaMsMgqz4j3XcUYi8pvGkM/yYTayVqBz0TXRowHTx fc73+pZSVd+I3LHo/L7TSQ== 0000946790-00-000025.txt : 20000410 0000946790-00-000025.hdr.sgml : 20000410 ACCESSION NUMBER: 0000946790-00-000025 CONFORMED SUBMISSION TYPE: 10SB12G/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20000407 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNET VIP INC CENTRAL INDEX KEY: 0001080008 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 113500919 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10SB12G/A SEC ACT: SEC FILE NUMBER: 000-26949 FILM NUMBER: 596249 BUSINESS ADDRESS: STREET 1: 1155 UNIVERSITY AVE STREET 2: SUITE 602 CITY: MONTREAL QC HEB317 STATE: E6 BUSINESS PHONE: 5148769222 MAIL ADDRESS: STREET 1: 1155 UNIVERSITY AVE STREET 2: SUITE 602 CITY: MONTREAL CANADA STATE: E6 10SB12G/A 1 10SB - AMENDMENT NO. 2 FORM 10-SB Amendment No. 2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS Under Section 12(b) or (g) of the Securities Exchange Act of 1934 INTERNET VIP, INC. ------------------------------------------------------------ (Name of Small Business Issuer in its charter) Delaware (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1155 University St., Suite 602, Montreal, Canada H3B 3A7 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Securities to be registered under Section 12(b) of the Act: Title of each class Name of each exchange on which to be so registered each class is to be registered - ---------------------------------- -------------------------------------- - ---------------------------------- -------------------------------------- Securities to be registered under Section 12(g) of the Act: Common Stock, $.0001 par value (Title of Class) PART I. Item 1. Description of Business. (a) Business Development Internet VIP, Inc. (the "Company"), a Delaware corporation, was organized on November 13, 1998. The Company has not been involved with any bankruptcy, receivership or similar proceedings. The Company has not had any material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business. (b) Business of Issuer The Company The Company was formed to sell long distance international telephone services using the new technology, Voice over Internet Protocol ("VoIP"). The Company's revenues are to be derived from two distinct, yet complementary markets: 1. (Wholesale) Providing carrier and termination services, worldwide, for other telecom companies, at ----- competitive rates; and 2. (Retail) Providing telephone calling origination and termination, at attractive prices, servicing areas of the world that currently have very expensive and/or poor quality long distance service. Competitive rates are to be achieved by using low-cost Internet Protocol gateways and taking advantage of the efficacy of VoIP technology. Currently the Company operates two IP telephony gateway centers, one in Montreal, Canada, and the second in Moscow, Russia. The two centers serve as the core switches that allow calls to be routed from anywhere in North America or from Russia to over 240 countries and territories at very low cost. The Company will initially be servicing two different groups of customers, and both groups will access the Company's technological platform in a different manner. For the first customer group, wholesale customers, the Company will receive long distance traffic in bulk at its center in Montreal to be routed and terminated, initially in Russia, and subsequently to other destinations as the Company adds centers. There is very little overhead cost to the Company for this type of customer and the Company will simply be earning a price differential as its fee for providing this service. The second group of customers will be retail. In the fist phase of operations to address this marketplace the Company has established business operations in Russia, and is focusing on outbound long distance traffic from Russia. Customers in Russia consist of two subgroups. The first customer subgroup will be from the Russian Ministry of Interior. The Ministry presently has its own telephone system. When a member of the Ministry calls the world through the Company's network, he will dial a code to access the Company's equipment that is located in the Ministry. He will then get a second dial tone and will be able to dial directly to the world. The Company's equipment takes this call and sends it over a dedicated line to the Company's switching center in Montreal using VoIP technology. In Montreal, the Company's mirror image equipment receives the call, re-packages it for normal phone transmission and then directs it through regular local phone lines to the intended parties anywhere in the world. The second type of subscriber will be individuals or corporations that will have purchased prepaid calling cards or contracts. For one of these customers to place a call from any telephone in Russia, he will dial a local access number to reach the Company's equipment and then input his card number and personal identification number ("PIN"). The Company's equipment will validate the card number and PIN and then give the caller a second dial tone allowing him to make the long distance call. The call is then processed in the same manner as described above. For both types of customers, the Company's technology and equipment will process these steps in milliseconds and the customer will be unable to detect the difference between a traditional long distance call between Moscow and the world and a call utilizing the Company's system. The process for a call to Moscow originating in North America over the Company's system operates the same way with the customer calling an "800" number to access the Company's North American platform in the same manner as if he were using a conventional calling card. All of the Company's technology is state of the art, but the Company is not dependent on any one vendor in particular. For the hardware in the switching centers in Montreal and Moscow, the Company is using a configuration and equipment designed by Ericsson Inc. For the trans-Atlantic fiber optic E-1 lines, the Company has signed a lease with Metrocom (of Russia) to provide the requisite dedicated fibre-optic circuits between these two cities. The lease is for one year and costs US$515,520 per year. The Company operates through a wholly owned Canadian subsidiary corporation, V.I. Internet Telecommunications Inc. ("V.I. Internet"). V.I. Internet owns and operates the Canadian switching center, and it owns 80% of a Russian joint-venture entity, Intertel XXI, established to manage the Company's center in Moscow. In Moscow, the remaining 20% of the Russian joint-venture company is owned by the "Special Technique and Communication Services Institute" , an agency of the Russian Ministry of Interior. The strategy of teaming with a prominent Russian government agency in Moscow should give V.I. Internet access to as many local lines as becomes necessary in Russia, and their assistance in obtaining contracts for outbound traffic from most, if not all, government and related agencies within the Russian Federation. The Company, through, V.I. Internet, has letters of intent with governmental and industrial entities expressing an interest to purchase telephone service from Russia to the world. The network has been installed and tested and is now fully functional. The Company has begun the process of converting the letters of intent to firm contracts. If the Company is successful in converting these letters to firm contracts, the Company anticipates that by the end of the first year of long distance service between Russia and the world the Company will be providing 1,500,000 minutes per month. However, there can be no assurance that such usage and/or revenue levels, if any, will be attained. The Company plans to expand its operations within Russia by opening a facility in St. Petersburg. The Company anticipates the commencement of installation of an IP switch center in St. Petersburg during July, 2000 and expects to initiate service from this center by the end of August, 2000. Our Technology Conventional telephone service (PSTN) is a circuit-switched technology. When a call is placed, the system switches open a direct connection between the sender, and then over a series of switching facilities, to the receiving party. The connection remains open during the duration of the telephone call. Since no one else can use the circuit while a call is in progress, more circuits are required, which leads to inefficiency and expense. This, together with high tariffs in many jurisdictions, are the basic reasons why telephone companies, and the intermediate switching companies, charge high prices for their services. Internet Protocol (IP) telephony is a packet-switched technology, which is the basis of all Internet communication. IP breaks network data up into small chunks or packets, which is then sent out on the Net. These packets are routed using the most expedient path available at the time, until they reach their destination. The data can consist of e-mail, video, and for our purposes--voice. Additionally, IP compression techniques allow five to ten times the number of voice calls over the same bandwidth as compared to traditional circuit-switched voice traffic, substantially reducing the cost of carrying this traffic. Thus, a caller does not have to place a conventional long-distance telephone call to reach a party anywhere in the world, since with IP telephony, every call is just a "voice" e-mail away. The caller initiates a local call to a specialized switching center or gateway connected to an IP provider. The call travels over the Internet to the receiver's geographic area and a switching center in that area completes the call over that local's telephone lines. A growing number of individuals, governments, and corporations are using this technology every day to send data, voice conversations, and even money. To avoid the congestion problems on the Net, the Company's telephone traffic does not in fact use the Net. The Company provides its calling services through dedicated secured international private lines, expandable as necessary, assuring a controlled circuit, and giving a high quality of service (QOS) both in clarity and reliability of transmission. Unlike the Internet, the routing of calls through the Company's network travel over minimal routes to arrive at the final destination and is not hindered by volume of traffic over the Net. Competition Internet Telephony in Russia has not been represented by big companies yet. However, there are several small companies (Global M, Maxima, Mos-Teleinternet) which serve several localities within Downtown Moscow. The investigation launched into their activities by the Ministry of Communications in November 1998 (the Report to Duma Communication committee on December 11, 1998) had established that all of these small companies work on a "call back" principle which is illegal under Russian law. The main problem these companies face is the necessity to get special licenses from the Ministry of Communications. They do not currently have these licenses and we believe they are unlikely to receive them in the near future as no law has been introduced in that regard. Accordingly, competitors will not be able to legally operate without great difficulty in the Russian market prior to approximately at least the year 2002 when the market may first start to become officially deregulated. Meanwhile, we have the agreement with the Ministry of Interior, which has its own telephone system independent of the Ministry of Communications. Background on the Industry in Russia. Ninety (90%) percent of Russian telecommunication systems is concentrated in the hands of the Ministry of Communication of Russia. The current Minister is Mr. M. Reiman. The previous minister, Mr. Bulgak, introduced the bulk of the current rules and regulations regulating the telecommunication industry. Mr. Bulgak also was the former deputy Prime Minister. All telecommunication activity in Russia is based on licensing. "Rostelecom", a state company with some private capital participation, has the major license. This license allows "Rostelecom", through its municipal affiliates, to concentrate telephone communication on in-country land line networks and on the use of satellites in cooperation with the major transnational networks. Internet-telephony, specifically Voice over Internet Protocol based communications, however, had not been subjected to licensing until 1999. In his meeting with Dr. Ilya Gerol on February 21, 1998, Mr. Bulgak repeated his previous stated positions that voice-over-internet-protocol did not require licensing because the policy was aimed at encouraging the development of this advanced type of telecommunications. However, in 1999, Mr. Reitman, the new Minister of Communications, changed this policy and in a letter sent through the Ministry of Communication on March 27, 1999, he stated that from that date forward internet-telephony companies operating in the Russian market are to be licensed. At that time, he signed the first and, to date, the only such license with Intertel XXI, our Russian subsidiary. Mr. Reitman's letter also announced that the licensing is the first step to the deregulation of the internet-telephony activities which is scheduled to take place in the year 2002. When asked by Dr. Gerol, Mr. Reitman explained that deregulation was necessary to bring about a more competitive market. However, the position of the Minister is that initially the license should be issued on an exclusive basis to permit this technology (internet-telephony) to prove itself in the marketplace. This second meeting took place on October 21, 1999 in Moscow. The Ministry of Interior operates its own telephone system independently of the Ministry of Communication due to the specific nature of the activities of the Ministry. The Ministry's primary functions are focused on law and order issues and on that basis, historically, in the USSR and now in Russia, the Ministry had been authorized to run its own communication system independent of the general public network, subject to different industrial and political terms. The Ministry of Interior has also been authorized, and continues to be, to run the network directly serving the government and presidential office. For that purposes the Ministry had purchased the Israel made system Tediran. By virtue of having access to this self-contained network, any agreements made by the Company with the Ministry of Interior and its wholly owned enterprise "Special Technique and Communication Services Institute" can be approved directly by the government and need not require specific permission from the Ministry of Communication. However, it was decided that since "foreign" entities are part owners of Intertel XXI, obtaining specific approval from the Ministry of Communications would be judicious. Thus, with the active support of our partners, the Ministry of Interior, Intertel XXI did in fact, obtain from the Ministry of Communications the first and only license for the specific internet-telephony activities provided by the Company. Russian Market Today Three segments of the market are targeted by our project: governmental, commercial (foreign and joint venture enterprises, Russian companies and Russian branches of non-Russian companies) and private individuals who will buy pre-paid calling cards. Estimates of the volume of Russian international communications market is placed at 900 million minutes for the year 1997, (Source: Telegeography). Over the next 2 1/2 years we hope to capture 10-15% of our targeted markets in Moscow. Terms of Payment and Currency Russian currency today is the ruble. The current conversion rate is approximately 28.5 rubles a dollar. Despite such a rate the ruble is more stable than it was after the August 17, 1998 crisis and is expected by many currency traders to continue to exchange between 25 and 32 rubles a dollar for the foreseeable future. During most of 1999, the conversion rate was between 23-28.5 rubles a dollar. The ruble is a convertible currency and can be freely exchanged into any hard currency. Money may be transferred to foreign countries as part of joint ventures without any obstacles. All payments for our services will be based on the pre-payment principle as exists today throughout the Soviet Federation. Payments will be automatically transferred from the Central Bank in Moscow on a daily basis, as per instructions. Our Moscow partner is the Special Technical and Communication Services Institute of the Ministry of Interior of Russia. The Russian Ministry of the Interior is the strongest and most stable organization within the Russian structure with its own telephone lines and communication services that include governmental, presidential and other segments. Our Moscow partner contributes the following: *The premises where the equipment is housed with complete security; *Proper distribution system through already existing channels within the Ministry's telephone network covering the governmental segment; *Unlimited fiber optic access to the Moscow telephone network: and *A level of credibility that is very important for commercial success. The leading executives of our Moscow JV partner are Major-General V. Khimitchev, V. Martinov and R. Mananov, all of whom hold PhD degrees and have done post graduate studies in the US and are specialists in Russia in the field of communications. Messrs. Khimitchev, Martynov and Mannanov are the senior executives of the Russian state enterprise "Technique and Communications" within the structure of the Ministry of Interior. Mr. Khimitchev is the Director General of this enterprise as well as being the Senior Communication Executive of the Ministry of Interior. Messrs. Martynov and Mannanov are his deputies. This enterprise is the owner of 20% of Intertel XXI, the Company's Russian JV operating entity. The activities of our joint ventures have been negotiated according to the Russian Law of Joint Ventures and Law of Investments. Acording to the evaluation of IMF (statement of M. Comdecu, the president of IMF on January 17 in the interview to the Russian news agency, Interfax Agency) these laws are the most liberal laws of that kind in Europe. However, while problems may exist for many enterprises involved with joint ventures, In our case, the joint venture is with the Ministry of Interior which is reputable and is much better organized than the average Russian partner in a joint venture. The Russian Law of Joint Ventures of March 1995 sets the basic regulations on which joint ventures between foreign companies and Russian companies are to operate. The law does not limit a joint venture with regard to the presence of Russian or foreign capital. The law also does not limit the foreigners' participation on Executive Boards or other executive functions. The law states, however, that the economic and financial activities of joint ventures are generally based on Russian law, by-laws and regulations, provided that they do not contradict the basic principals of international law. Intertel XXI, the name of the actual joint venture entity, has 80% of North-American capital and 20% of the Russian participation and, consequently, is run by the Executive Board consisting of North-American members. This entity does not violate the Russian laws of joint ventures. The law of foreign investments provides, in theory, a proper protection for investments and investors similar to the investment laws of European countries such as France, Italy or Poland. In practice, however, the problems in the implementation of the law could at times be complicated by the huge and often corrupt bureaucratic apparatus of Russia. However, in the case of Intertel XXI, the problem has been minimized because our partners are the leading communication team in Russia that contain members that are senior officers in the Ministry of Interior of the Russian Federation, whose primary responsibility is to fight corruption. At present, a marketing plan for the Company's Russian operations is being developed in Moscow by Iskra Service, a prominent advertising and marketing company in Moscow. The plan is to capture Industrial usage of long distance needs; and commence the introduction of an economical pre-paid telephone card to the general public. Our joint venture partners will assist in promoting and selling the pre-paid card to all government agencies, through billboards, television media and print media. An extremely important feature of the Company's anticipated revenue stream is that, after an initial introductory period, all sales will be prepaid by the customers on a monthly basis and customers will be required to sign Usage Commitment Contracts. The Company is in the process of analyzing the long distance traffic between Russia and Europe. However, there can be no assurance that any business will develop in this market. On the North American side, the Company has entered into a Maintenance and Operating Agreement with Bridgepoint Enterprises Inc., a Montreal, Quebec corporation. The contract commenced on March 1, 1999. Pursuant to the Agreement, after the Company purchases the necessary equipment to establish a switching center, Bridgeport will build and install the Company's center in its facility and will continue to operate and maintain the center for a monthly fee of $8,000. In April 1999, Bridgeport completed the installation of the Company's equipment and the center became operational. In June 1999, the Company entered into a one year renewable contract with Metrocom, a closed joint stock company, to provide a Trans-Atlantic Fiber Optic E-1 Line for dedicated circuits at an annual cost of $515,520. The contract provides for the fee to be reduced if international tariffs for Trans-Atlantic Lines decline. The Company currently anticipates that rates will decline by the spring of 2000 due to world-wide market conditions. If this occurs, it should lower the Company's expenses and ease the burden of its cash flow requirements. The founders and principals of the Company believe that they have put together a team having the experience and the extensive network of contacts to build and operate a premier long distance service between the former Soviet Union countries, North America and Europe. Their proven entrepreneurial record and motivated energy will hopefully establish the Company as a prominent telecommunications company, especially in the former Soviet Union countries, resulting in a commercially successful enterprise. The Company, including its Russian subsiiary, currently has three full time employees and eight part time employees. The Company anticipates hiring ten additional employees over the next six months. The Company does not expect to incur any material costs in complying with environmental laws. Item 2. Plan of Operation. Management's Discussion and Analysis As noted in Item 1 above, the Company has installed its equipment and built the network required for the first phase of its business objectives, its network centers. The Company has begun the process of signing up users and anticipates revenues to begin in May, 2000. During 1999 the Company completed private offerings aggregating approximately $1,200,000. The bulk of the proceeds were used to purchase and install equipment for our facilities in Moscow and Montreal, Canada, to finance trips to develop the Company's business in Russia, and network leasing costs. The Company does not expect to conduct any product research and development and we have purchased all the equipment we need to install in our current facilities. The Company intends to retain marketing and public relations consultants as necessary, and to hire additional staff if warranted by its sales volume on an as needed basis. As discussed above, the Company intends to expand its operations into St. Petersburg once the Moscow facility is operational using cash flows generated by the Moscow facility and additional financing. We have issued a purchase order for the necessary equipment and anticipate installation to commence in the summer of 2000. While the Company will not have to pay for the equipment for six months and believes it will be able to pay for the equipment out of then existing cash flows, the Company anticipates requiring approximately $125,000 to finance startup costs for the new facility. The Company is planning an additional private placement of up to $1,500,000. Total costs for each new facility including equipment, installation, marketing and office personnel is currently estimated at $300,000. The balance of this funding, if successful will be utilized for advertising and marketing to address the retail prepaid phone card market. To date, the Company has not spent any funds on any additional facilities. The Company's business plan currently calls for expansion into other markets, such as Mexico, Cuba, India and Vietnam, if and when opportunities present themselves and as funding permits. During the next twelve months, the Company intends to use the same formula for financing any expansions, i.e., external funding for startup costs and internal financing for operations. Other than as described, the Company does not currently anticipate funding its growth with additional public financings, except in the event an unexpected and unusual opportunity is presented. Year 2000 Disclosure The Company only has a limited number of computers that it uses for mostly word processing, bookkeeping and general administrative purposes. We do not believe that we will be significantly effected by the "Year 2000 problem." In any event, we have the ability to save all of our internal data on discs which will preserve the data in the event problems occur with our system. The Company has not experienced any Y2K problems during the first three months of 2000 and does not, therefore, anticipate encountering any problems. Item 3. Description of Property. The Company maintains its corporate offices at 1155 University Street, Suite 602, Montreal, Canada where we have approximately 1,550 square feet at an annual rental of US $24,000, including all utilities. The property is subleased from an entity controlled by one of our directors by a two year lease expiring January 31, 2001. The sublet may be terminated by the Company at the end of any year without penalty. Our Moscow facility is comprised of approximately 160 square meters (approximately 1,750 sq.ft.) and is located at 19-7 Starovagankovski Perealok, Moscow, Russia where we pay US$4,354 per month under a three year lease. The Montreal property is leased from an entity controlled by Dr. Gerol and Mr. Makarov, directors of the Company, at a rate the Company believes is the going rate for similar space. Item 4. Security Ownership of Certain Beneficial Owners and Management. The following table sets forth information as of January 31, 2000 regarding the beneficial ownership of the Company's Common Stock, $.0001 par value, as of the date hereof and after the Offering by (i) each person known by the Company to own beneficially more than five percent of the Company's outstanding shares of Common Stock, (ii) each director and executive officer of the Company who owns shares and (iii) all directors and executive officers of the Company as a group. Unless otherwise indicated, all shares of Common Stock are owned by the individual named as sole record and beneficial owner with exclusive power to vote and dispose of such shares. None of the people listed below owns any other securities of the Company. There are no arrangements which may result in a change in control of the Company. - -------------------------------------- --------------------------------- --------------------------------- Shares Owned Beneficially Percentage - -------------------------------------- --------------------------------- --------------------------------- - -------------------------------------- --------------------------------- --------------------------------- Ilya Gerol (1) 2,508266 10.75% - -------------------------------------- --------------------------------- --------------------------------- - -------------------------------------- --------------------------------- --------------------------------- Viatscheslav Makarov (1) 2,508266 10.75% - -------------------------------------- --------------------------------- --------------------------------- - -------------------------------------- --------------------------------- --------------------------------- Derek Labell (1) 2,808,266 12.04% - -------------------------------------- --------------------------------- --------------------------------- - -------------------------------------- --------------------------------- --------------------------------- Michael MacInnis (1) 1,144,169 4.90% - -------------------------------------- --------------------------------- --------------------------------- - -------------------------------------- --------------------------------- --------------------------------- Natalia Maloshina (1) 2,000,000 8.57% - -------------------------------------- --------------------------------- --------------------------------- - -------------------------------------- --------------------------------- --------------------------------- Nais Corp. 1,297,401 5.56% 94 Washington Ave. Lawrence, NY 11559 - -------------------------------------- --------------------------------- --------------------------------- - -------------------------------------- --------------------------------- --------------------------------- Howard Salamon 1,767,401 7.58% 20 Margaret Ave. Lawrence, NY 11559 - -------------------------------------- --------------------------------- --------------------------------- - -------------------------------------- --------------------------------- --------------------------------- All Executive Officers and Directors 8,968,967 38.45% as a Group - -------------------------------------- --------------------------------- ---------------------------------
1 Uses Company's address. Item 5. Directors, Executive Officers, Promoters and Control Persons. (a) Directors and Executive Officers. Name Age Position Dr. Ilya Gerol 59 Chairman Derek Labell 39 Vice-President, Director of Sales and Marketing (North America) Michael MacInnis 51 Chief Financial Officer and Director Viatcheslav Makarov 44 VP-Sales and Marketing (Russia) and Director Christian P. Richer 50 President and Director Dr. Ilya Gerol: Chairman Dr. Ilya Gerol is an expert in communications with over 28 years of experience. A Canadian of Russian descent, Dr. Gerol is Chairman of the Board of Directors. He has consulted to the Economic Council of Canada, and has researched and analyzed international information and economic trends, specializing in energy, communications, and the world economy. From 1965 through 1973, Dr. Gerol was an Editor, a Senior Editor, and then Editor-in-Chief of Radio Broadcasting Atlantica International in Riga, Latvia (former Soviet Union). From 1973 to 1979 he was an Editor of SM Newspaper in Riga. From 1980 through 1981, he was an associate teaching assistant at the University of British Columbia. From 1981 through 1984 he was a syndicated columnist at The Province Vancouver and an associate Editor at the International Business Magazine. From 1984 through 1990 he was a Foreign Editor and Syndicated Columnist on international affairs and international business at the Ottawa Citizen. From 1988 through 1991 he was a visiting professor of Political Science at the State University of Winnipeg. From 1991 to 1994 he was a consultant on Eastern Europe and Commonwealth of Independent States to Economic Counsel of Canada for Amberoute International Group. From 1994 to 1997 Dr. Gerol was vice president international, newsletter D.A. & G. Information and Analysis and Editor-in-Chief. Dr. Gerol has been on staff and/or visiting professor for over 14 universities throughout the world including State University of Winnipeg, University of British Columbia, Moscow State University, Hebrew University, and others. Christian P. Richer, President and Director Mr. Christian Richer is the President of the Company, and is an authority in the field of telecommunications, and a marketing expert directed towards the international marketplace. Mr. Richer has 25 years of experience with Bell Canada and several of its many subsidiaries, working mostly in sales and marketing. Recently he formed his own company, C2 Marketing International, selling specialty telecommunications products. Mr. Richer brings to the Company extensive international contacts. Mr. Richer has a D.E.C. diploma from the University of Quebec. Derek Labell: Vice-President and Director of Sales and Marketing (North America) Mr. Derek Labell is Vice-President and Director of Sales and Marketing (North America) and comes to the Company with over 20 years experience in sales, marketing and management. Mr. Labell has an in-depth knowledge of the North American telecommunications long distance telephone card market, including card marketing, applications, production, distribution, franchising and card application platforms. In 1994, Mr. Labell participated in the initial groundwork to bring prepaid phone cards to Canada by conducting a comprehensive study on behalf of a company which eventually became Canada's number one prepaid phone card company. From 1986 to 1990 Mr. Labell was Director-Property Management of The Marine Group's real estate division, Montreal, Quebec, managing the real estate portfolio in Montreal, Windsor, Ontario and Fort Lauderdale, Florida. From 1991 to 1993 he established a Limited Partnership, operating foreign currency exchange offices in Montreal, Quebec for which he negotiated the North American rights to sell and distribute the leading European automated foreign currency exchange vending machine. During the same period he was instrumental in concluding the acquisition of AVF, a carriage trade asset management firm in Frankfurt, Germany. During 1994 he represented Pascals Realties Ltd. leasing and managing their corporate office property in Old Montreal. From 1995 to 1997 Mr. Labell provided consulting services to Monit International Inc. (a privately held Montreal Real Estate company owning and managing more than sixty properties throughout Eastern Canada and United States) on leasing and tenant improvement construction issues. From 1997 to present he has been director of leasing for Tidan, a privately held Montreal Real Estate company owning and managing more than fifty properties throughout Eastern Canada and in the United States. Michael MacInnis: Chief Financial Officer Mr. Michael MacInnis is the Chief Financial Officer. Mr. MacInnis received his Chartered Accountant designation in 1972 and started his own firm in 1974 where he specialized in corporate finance, income taxation and reorganizations. In addition, he has operated and consulted to many corporations throughout Canada and has successfully raised funding in excess of an aggregate of $200 million for various commercial projects. Also, he specializes in Public Corporations listed on the NASD Bulletin Board. During the last five years Mr. MacInnis has focused his efforts on developing a franchised consulting concept and providing consulting services to various companies seeking financing. Viatcheslav Makarov: Vice President and Director of Sales and Marketing (Russia) Mr. Viatcheslav is Vice-President and Director of Sales and Marketing (Russia). Mr. Makarov was trained as an engineer and his initial career was as an avionics scientist in the former Soviet Union. From 1989 through 1995 he became the chief representative of Volvo (automotive) in Russian and, as well, worked as a member of Renault bureau in Moscow. Since 1996, Mr. Makarov moved to Canada where he established and currently operates, the Interservice Group, a group of companies that consult to U.S., Canadian and European business circles on financial and industrial development within Eastern European and C.I.S. countries utilizing the many contacts and connections that he has cultivated in the last ten years in both the Russian government and industry. (b) Significant Employees Mr. Christian P. Richer is the President of the Company and currently its only full time employee. (c) Family Relationships There are no family relationships among directors or executive officers of the Company. (d) Involvement in Certain Legal Proceedings. None. Item 6. Executive Compensation. (a) General Commencing April 1, 2000, Mr. Richer's salary is $90,000 per annum. Commencing January 1, 1999, the Company has agreed to pay Dr. Gerol and Messrs. MacInnis and Makarov an annual salary of $24,000. Mr. Labell receives the same salary commencing May 1, 1999. Except for Mr. Richer, none of the Company's other executive officers provide services on a full-time basis. No executive officer or employee of the Company is paid more than $100,000 per year in salary and benefits. Except for Mr. Richer, the Company does not currently provide any benefits to its executive officers. A car and cellular telephone allowance amounting to approximately $600 a month is expected to be provided for in Mr. Richer's formal employment contract. (b) Summary Compensation Table SUMMARY COMPENSATION TABLE Name and Other Long-term Principal Position Year(1) Salary Bonus Compensation Compensation:Options Dr. Ilya Gerol 1999 $4,000 0 0 0 Chairman & Chief Executive Officer Michael McInnis 1999 $4,000 0 0 0 Chief Financial Officer & Director Viatcheslav Makarov 1999 $4,000 0 0 0 VP-Sales and Marketing (Russia) & Director Derek Labell 1999 0 0 0 0 Vice-President Sales and Marketing (North America) (1) Covers the period from inception (November 13, 1998) to the fiscal year end on February 28, 1999. (c) Options/SAR Grants Table None. (d) Aggregated Option/SAR Exercises and Fiscal Year End Option/SAR Value Table None (e) Long Term Incentive Plan ("LTIP") Awards Table None (f) Compensation of Directors None (g) Employment Contracts and Termination of Employment, and Change-in-Control Arrangements The Company has no written employment contracts with any of its executive officers. However, the Company anticipates concluding a formal employment agreement with Mr. Richer before April 30, 2000. The contract is expected to be for one year and provide for an annual salary of $90,000, as well as stock awards and options. There are no provisions for compensation to be paid to any executive officer or director of the Company upon the termination of their services by either party or by the actions of a third party. (h) Report on Repricings of Options/SARs None. Item 7. Certain Relationships and Related Transactions. The Company rents space in Montreal from Interservice Group which is owned by two of the Company's directors, Dr. Gerol and Mr. Makarov. The lease is for two (2) years at an annual rental of US$ 24,000. The Company believes the rent is at fair market value. In December 1998, the Company entered into a four year consulting agreement with Nais Corp., a shareholder, pursuant to which Nais Corp. will provide financial and business public relations consulting services. Item 8. Description of Securities. (a) Common or Preferred Stock The Company is authorized to issue 50,000,000 shares of Common Stock, $0.0001 par value, of which 23,327,032 shares were issued and outstanding as of January 31, 2000. Each outstanding share of Common Stock is entitled to one (1) vote, either in person or by proxy, on all matters that may be voted upon the owners thereof at meetings of the stockholders. The holders of Common Stock (i) have equal ratable rights to dividends from funds legally available therefore, when and if declared by the Board of Directors of the Company; (ii) are entitled to share ratably in all of the assets of the Company available for distribution to holders of Common Stock upon liquidation, dissolution or winding up of the affairs of the Company; (iii) do not have preemptive, subscription or conversion rights, or redemption or sinking fund provisions applicable thereto; and (iv) are entitled to one non-cumulative vote per share on all matters on which stockholders may vote at all meetings of stockholders. Holders of Shares of Common Stock of the Company do not have cumulative voting rights, which means that the individuals holding Common Stock with voting rights to more than 50% of eligible votes, voting for the election of directors, can elect all directors of the Company if they so choose and, in such event, the holders of the remaining shares will not be able to elect any of the Company's directors. (b) Debt Securities. The Company has not issued any debt securities to date. The Company has short term loans of $100,000 of which, $90,000 are convertible, at the option of the lender, into Common Stock. (c) Other securities to be Registered None. PART II Item 1. Market Price for Common Equity and Related Stockholder Matters. (a) Market Information There is no public trading market for the Company's securities. The Company has $90,000 in short term loans that are convertible into its Common Stock. The Company also has 600,000 warrants outstanding which are exercisable until December 31, 2002 into Common Stock at a price of $1.00 per share. No stockholder has any registration rights. Of the 23,327,032 shares of common stock outstanding, 21,665,732 are currently subject to the resale restrictions and limitations of Rule 144. (b) Holders There are 129 holders of the Company's common stock. (c) Dividends The Company has had no earnings to date, nor has the Company declared any dividends to date. The payment by the Company of dividends, if any, in the future, rests within the discretion of its Board of Directors and will depend, among other things, upon the Company's earnings, its capital requirements and its financial condition, as well as other relevant factors. The Company has not declared any cash dividends since inception, and has no present intention of paying any cash dividends on its Common Stock in the foreseeable future, as it intends to use earnings, if any, to generate growth. Item 2. Legal Proceedings None Item 3. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure. None. Item 4. Recent Sales of Unregistered Securities. In November 1998, the Company sold 1,184,000 shares of common stock at a price of $0.05 per share. All of such shares were sold to Canadian residents pursuant to the exemption contained in Regulation S. During the first part of 1999, the Company sold an aggregate of 1,661,300 shares of common stock at a price of $0.50 per share. All of such shares were sold pursuant to the exemption contained in Regulation D, Rule 504. In February 1999, the Company issued 200,000 shares of restricted common stock to Global Asset Management Fund as payment for financial consulting services. These shares were issued pursuant to the exemption from registration contained in Section 4(2) of the Act. In June 1999, the Company issued 475,000 shares of restricted common stock to 2745-2515 QUEBEC INC., as payment for public relations services. These shares were issued pursuant to the exemption from registration contained in Section 4(2) of the Act. In November 1999, the Company issued 267,500 shares of restricted common stock as payment for preparation of business plans and other related work. These shares were issued pursuant to the exemption from registration contained in Section 4(2) of the Act. In November 1999, the Company issued 50,000 shares of restricted common stock to a non-affiliate as interest payment for a loan to the Company. These shares were issued pursuant to the exemption from registration contained in Section 4(2) of the Act. During the period commencing August 1, 1999 until January 31, 2000, the Company sold 716,630 shares of restricted common stock at $0.50 per share in reliance on exemption from registration under Regulation S and Regulation D, Rule 506. In December the Company issued 600,000 warrants to purchase common shares to 9002-6493 Quebec Inc in lieu of payment for software programming provided to the Company. The exercise price of the warrants is $1.00 per share. No commissions or discounts were paid or given to any person or entity in any of the Company's sales of securities. There were no underwriters or securities brokers or securities dealers involved in the offering in any way; the shares were sold by management on a best efforts basis. Item 5. Indemnification of Directors and Officers. Section 145 of the Delaware General Corporation Law, as amended, authorizes the Company to Indemnify any director or officer under certain prescribed circumstances and subject to certain limitations against certain costs and expenses, including attorney's fees actually and reasonably incurred in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative, to which a person is a party by reason of being a director or officer of the Company if it is determined that such person acted in accordance with the applicable standard of conduct set forth in such statutory provisions. The Company's By-Laws extends such indemnities to the full extent permitted by Delaware law. The Company may also purchase and maintain insurance for the benefit of any director or officer which may cover claims for which the Company could not indemnify such persons. PART F/S The financial statements are included at the end of this Registration Statement, prior to the signature page. PART III Item 1. Index to Exhibits. EXHIBIT PAGE 2.1 Certificate of Incorporation* 2.2 By-Laws* 6.1 Lease for Montreal space* 6.2 Lease for Moscow space** 6.3 Joint Venture Agreement between V.I. Internet Telecommunications Inc. and Specialized Technic and Communications of The Ministry of Interior of Russian Federation* 6.4 Facilities Management Agreement with BridgePoint Enterprises 6.5 Agreement between Metrocom and V. I. Internet Telecommunications Inc. to provide telecommunications services 27 Financial Data Schedule - ------------------- * Previously filed **To be filed by amendment Item 2. Description of Exhibits. 2.1 Certificate of Incorporation 2.2 By-Laws 6.1 Lease for Montreal space 6.2 Lease for Moscow space 6.3 Joint Venture Agreement between V.I. Internet Telecommunications Inc. and Specialized Technic and Communications of The Ministry of Interior of Russian Federation 6.4 Facilities Management Agreement with BridgePoint Enterprises 6.5 Agreement between Metrocom and V. I. Internet Telecommunications Inc. to provide telecommunications services 27 Financial Data Schedule REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders of Internet VIP, Inc.: We have audited the accompanying consolidated balance sheet of Internet VIP, Inc. (a Delaware corporation) and subsidiary as of February 28, 1999, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for the period from inception (November 13, 1998) to February 28, 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 audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Internet VIP, Inc. and subsidiary as of February 28, 1999, and the results of their operations and their cash flows for the period from inception (November 13, 1998) to February 28, 1999, in conformity with generally accepted accounting principles. As discussed in Note 1 to the financial statements, the Company is in the development stage and its continued existence is dependent on obtaining additional financing for its operations. The Company's plans in regards to these matters are also described in Note 1. In addition, the Company faces risks as a development stage company. The success of the Company's operations is influenced by these risks as more fully described in Note 1. These matters raise substantial doubt about the Company's ability to continue as a going concern. The accompanying 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. /s/Arthur Anderson, LLP New York, New York June 1, 1999 INTERNET VIP, INC. AND SUBSIDIARY (a development stage company) CONSOLIDATED BALANCE SHEET FEBRUARY 28, 1999 (in U.S. dollars) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 223,624 Other current assets 801 -------------- Total current assets 224,425 DEPOSIT ON ACCOUNT OF PROPERTY AND EQUIPMENT 25,000 -------------- Total assets $ 249,425 ============== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accrued expenses $ 68,258 -------------- Total current liabilities 68,258 -------------- STOCKHOLDERS' EQUITY: Common Stocks, $0.0001 par value; 50,000,000 shares authorized; 20,874,800 shares issued and outstanding 2,087 Additional paid-in capital 498,090 Deferred compensation (100,000) Accumulated deficit (219,010) -------------- Total stockholders' equity 181,167 -------------- Total liabilities and stockholders' equity $ 249,425 ============== The accompanying notes are an integral part of this balance sheet. INTERNET VIP, INC. AND SUBSIDIARY (a development stage company) CONSOLIDATED STATEMENT OF OPERATIONS FOR THE PERIOD FROM INCEPTION (NOVEMBER 13, 1998) TO FEBRUARY 28, 1999 (in U.S. dollars) OPERATING EXPENSES: Travels $ 95,447 Professional fees 84,337 Salaries and related expenses 14,667 Other 24,559 -------------- Total operating expenses 219,010 -------------- Net loss $ (219,010) ============== BASIC AND DILUTED NET LOSS PER SHARE $ (0.01) ============== WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED 20,143,332 ============== The accompanying notes are an integral part of this statement. INTERNET VIP, INC. AND SUBSIDIARY (a development stage company) CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE PERIOD FROM INCEPTION (NOVEMBER 13, 1998) TO FEBRUARY 28, 1999 (in U.S. dollars) Common Stock Additional Total Number of Paid-in Deferred Accumulated Stockholders' Shares Amount Capital Compensation Deficit Equity BALANCE, November 13, 1998 - $ - $ - $ - $ - $ - Issuance of common stocks to founders 18,772,600 1,877 - - - 1,877 Issuance of common stocks in a private placement ($0.05 per share) 1,184,000 118 59,082 - - 59,200 Issuance of common stocks for consulting services 200,000 20 99,980 (100,000) - - Issuance of common stocks in a private placement ($0.5 per share), net of issuance costs of $20,000 718,200 72 339,028 - - 339,100 Net loss - - - - (219,010) (219,010) ------------ --------- ----------- ------------ ------------ ------------- BALANCE, February 28, 1999 20,874,800 $ 2,087 $ 498,090 $ (100,000) $ (219,010) $ 181,167 ============ ========= =========== =========== ============ ===========
The accompanying notes are an integral part of this statement. INTERNET VIP, INC. AND SUBSIDIARY (a development stage company) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM INCEPTION (NOVEMBER 13, 1998) TO FEBRUARY 28, 1999 (in U.S. dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (219,010) Adjustments to reconcile net loss to net cash used in operating activities Changes in operating assets and liabilities- Other current assets (801) Accrued expenses 68,258 -------------- Net cash used in operating activities (151,553) -------------- CASH FLOWS FROM INVESTING ACTIVITIES: Deposit on account of property and equipment (25,000) -------------- Net cash used in investing activities (25,000) -------------- CASH FLOWS FROM FINANCING ACTIVITIES: Stockholders' capital contribution, net 400,177 -------------- Net cash provided by financing activities 400,177 -------------- Net increase in cash and cash equivalents 223,624 CASH AND CASH EQUIVALENTS, beginning of period - ------------- CASH AND CASH EQUIVALENTS, end of period $ 223,624 ============== NONCASH FINANCING ACTIVITIES: Common stock issued for consulting services $ 100,000 ==============
The accompanying notes are an integral part of this statement. INTERNET VIP, INC. AND SUBSIDIARY (a development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 28, 1999 (in U.S. dollars) INTERNET VIP, INC. AND SUBSIDIARY (a development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 28, 1999 (in U.S. dollars) 1. ORGANIZATION Internet VIP, Inc. was incorporated in the state of Delaware on November 13, 1998. Internet VIP, Inc. and its wholly owned subsidiary, V.I. Internet Telecommunications, Inc., a Canadian corporation (together, the "Company") were formed to sell long distance international telephone services using the new technology, VIP-Voice over Internet Protocol. From its strategically located switching center in Montreal, Canada, calls can be routed from anywhere in North America to anywhere in the world using the Internet as the main carrier. The first phase of operations will encompass calls from Montreal to St. Petersburg and Moscow, and vice versa. Initially Internet VIP Inc. will operate through its wholly owned Canadian subsidiary corporation, V.I. Internet Telecommunications Inc. ("V.I. Internet"). V.I. Internet will own and operate the Canadian switching centers. Additionally, V.I. Internet will own 80% of a Russian joint-venture entity, which was established to manage the Company's center in Moscow. The remaining 20% of the Russian joint-venture companies are owned by the Division of the Russian Ministry of Interior. The Company is in the development stage. It is not currently generating any revenues from operations and is therefore dependent on external sources for financing its operations. The Company completed, subsequent to February 28, 1999, a private placement. Subsequent net proceeds from the issuance of the equity were approximately $450,000. Management expects these proceeds together with its estimated revenues for the year ending February 28, 2000 to be sufficient to finance the Company's operations through February 28, 2000. However, there can be no assurance that the Company will succeed in executing its plan and obtaining the financing necessary for its operations. The Company faces risks as a development stage company. These risks include, among others, uncertainty of product acceptance, sales and distribution risk, competition, risk of errors, and quality and price of its products compared to alternative products and service. Additionally, other factors such as loss of key personnel could impact the future results of operations or financial condition of the Company. All of the aforementioned matters raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Internet VIP, Inc. and its wholly owned subsidiary, V.I. Internet and its Russian joint-ventures. Material intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Foreign Currency The Company accounts for foreign currency in accordance with Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign Currency Translation," for operating subsidiaries. The functional currency of the Company's wholly owned subsidiary is the U.S. dollar. Per Share Data SFAS No. 128, "Earnings per Share," establishes new standards for computing and presenting earnings per share (EPS). The standard requires the presentation of basic EPS and diluted EPS. Basic EPS is calculated by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding adjusted to reflect potentially dilutive securities. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Fair Value of Financial Instruments The carrying value of cash and cash equivalents approximates fair value. Organizational and Development Costs Organizational and development costs are expensed as incurred. Income Taxes The Company accounts for income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes." Under the asset and liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS No. 109, the effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period in which the tax rate change takes place. Recently Issued Accounting Standards Additionally, in June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information." This statement establishes standards for the way the public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. This statement is effective for financial statements for periods beginning after December 15, 1997, and need not be applied to interim periods in the initial year of application. Comparative information for earlier years presented is to be restated. The Company currently believes that it operates in one segment and that the adoption of this statement will not have an impact on the Company's financial statement. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes accounting and reporting standards requiring that every derivative instrument be recorded in the balance sheet as either an asset or liability measured at its fair value. SFAS No. 133 requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. SFAS No. 133 is effective for fiscal years beginning after June 15, 1999. The Company currently does not use derivatives and, therefore, this new pronouncement is not applicable. 3. PRIVATE PLACEMENT In January 1999, the Company offered to sell, in a private placement, up to 1,900,000 shares of its Common Stock, $0.0001 par value, at a price of $.50 per share, of which 718,200 shares were sold by February 28, 1999. Proceeds from the offering are held in an unrestricted escrow account and transferable to the Company upon demand. At February 28, 1999, $115,000 held in escrow are included in cash and cash equivalents. Subsequent to February 28, 1999, the Company issued an additional 943,100 shares in connection with this offering. 4. INCOME TAXES At February 28, 1999, the Company has net operating losses available to offset future income for book and tax purposes of approximately $200,000. The loss carryforwards expire in February 2019. The annual utilization of these loss carryforwards will be substantially limited if there are changes in the Company's ownership. The Company has provided a valuation allowance for the full amount of the tax benefit associated with the loss carryforwards due to the uncertainty surrounding their realization. 5. COMMITMENTS AND CONTINGENCIES Lease Commitment The Company leases office space from an affiliated company (an entity owned by the Company's shareholders), for the period ending January 2001, under an operating lease. Future minimum annual lease payments are as follows: For the year ending February 28: 2000 $ 48,600 2001 44,550 ---------- $ 93,150 Rent expense for the period from inception (November 13, 1998) to February 28, 1999 was $4,050. Consulting Agreements In December 1998, the Company entered into a four-year consulting agreement with Nais Corp., a shareholder, according to which Nais Corp. will provide the Company with financial and business public relations consulting services. Future minimum annual fees are as follows: For the year ending February 28: 2000 $ 72,000 2001 72,000 2002 72,000 2003 60,000 ----------- $ 276,000 In February 1999, the Company entered into a one-year consulting agreement with Global Asset Management Group, Inc. ("Global Asset"), a Florida corporation. According to the contract, Global Asset will provide the Company with financial consulting services in consideration to 200,000 shares of the Company's common stock, the fair market value of which was $100,000 at the date of the contract. The Company recorded the consulting fees as deferred compensation, which will be amortized over the contract period (one year). Equipment Purchase Agreement The Company purchased revenue generating equipment in the amount of $280,000, of which $25,000 was paid in advance by February 28, 1999. The equipment was received and installed by the Company subsequent to February 28, 1999. Facilities Management Agreement In February 1999, the Company entered into a five-year agreement with Bridgepoint Enterprises ("Bridgepoint"), according to which Bridgepoint will provide the Company with facilities for its equipment as well as maintenance and technical support for such equipment for variable monthly consideration. Future estimated minimum annual fees are as follows: For the year ending February 28: 2000 $ 96,000 2001 96,000 2002 96,000 2003 96,000 2004 96,000 ------------ $ 480,000 Telecommunication Service Agreement In June 1999, the Company entered into a one-year service agreement with Metrocom, a Russian company, according to which Metrocom will provide telecommunication services to the Company for a monthly charge of approximately $40,000. 6. RELATED PARTIES --------------- The Company received consulting services from a shareholder. Fees paid for such services were approximately $14,000 in the period from inception (November 13, 1998) to February 28, 1999. BALANCE SHEET INTERNET VIP, INC. AND SUBSIDIARIES (A development stage company) CONSOLIDATED BALANCE SHEET AS OF MAY 31, 1999 (Unaudited) (U.S. $) ASSETS CURRENT ASSETS Cash and equivalents $ 227,452 Other current assets 9,444 -------------- Total current assets 236,896 PROPERTY AND EQUIPMENT 223,542 ------------ TOTAL ASSETS $ 460,438 ======= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 15,000 ------------ Total current liabilities 15,000 STOCKHOLDERS' EQUITY Common Stocks, $0.0001 par value; 50,000,000 shares authorized; 21,922,895 shares issued and outstanding 2,192 Additional paid-in capital 1,022,032 Deferred compensation (75,000) Accumulated deficit (503,786) ------------- Total Stockholders' equity 445,438 ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 460,438 ======= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE BALANCE SHEET STATEMENT OF OPERATION INTERNET VIP, INC. AND SUBSIDIARIES (A development stage company) CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 31, 1999 AND FOR THE PERIOD FROM INCEPTION (NOVEMBER 13, 1998) TO MAY 31, 1999 (Unaudited) (U.S. $) For the For the Three Period from Months ended Inception to May 31, 1999 May 31,1999 Operating Expenses Management salaries and fee related expenses $ 36,040 $ 50,707 Marketing and advertising expenses 35,900 41,130 Travel 28,328 123,775 Professional fees 124,989 209,325 Amortization of deferred compensation 25,000 25,000 Other 34,519 53,849 ---------------- ----------- TOTAL 284,776 503,786 ---------------- ---------- Net loss for the period $ (284,776) $ (503,786) ========= ========= BASIC AND DILUTED NET LOSS PER SHARE (0.01) ====== WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - Basic and diluted 21,500,981 ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT CASH FLOWS INTERNET VIP, INC. AND SUBSIDIARIES (A development stage company) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MAY 31, 1999 AND FOR THE PERIOD FROM INCEPTION (NOVEMBER 13, 1998) TO MAY 31, 1999 (Unaudited) (U.S. $) For the For the Three Period from Months ended Inception to May 31, 1999 May 31,1999 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (284,776) $ (503,786) Adjustments to reconcile net loss to net cash used in operating activities Amortization of deferred compensation 25,000 25,000 Noncash consulting fees 100,000 100,000 Changes in operating assets and liabilities Other current assets (8,643) (9,444) Accrued expenses (53,258) 15,000 -------- ---------- Net cash used in operating activities (221,677) (373,230) --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (198,542) (223,542) ----------- ------------- Net cash used in investing activities (198,542) (223,542) ----------- CASH FLOWS FROM FINANCING ACTIVITIES Stockholders' capital contribution, net 424,047 824,224 ------------ Net cash provided by financing activities 424,047 824,224 ---------- ----------- Net increase in cash and cash equivalents 3,828 227,452 CASH AND CASH EQUIVALENTS, beginning of period 223,624 0 --------- ------- CASH AND CASH EQUIVALENTS, end of period $ 227,452 $ 227,452 ======= ======= NONCASH FINANCING ACTIVITIES: Common stock issued for consulting services $ 100,000 $ 200,000 ========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS NOTES INTERNET VIP, INC. and SUBSIDIARIES (a development stage company) NOTES TO CONSLIDATED FINANCIAL STATEMENTS AS OF MAY 31, 1999 (unaudited) (U.S. $) BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary for a fair representation of the Company's financial position at May 31, 1999 and the results of its operations and cash flows for the three-month period ended May 31, 1999. All such adjustments are of a normal recurring nature. Interim financial statements are prepared on a basis consistent with the Company' annual financial statements. Results of operations for the three-month period ended May 31, 1999 are not necessarily indicative of the operating results that may be expected for the year ending February 29, 2000. For further information, refer to the consolidated financial statements for the fiscal year ended February 28, 1999 and notes thereto included in the Company's Form 10-SB file with the Securities and Exchange Commission. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. SIGNATURES In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant caused this registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized. /s/Dr. Ilya Gerol Dr. Ilya Gerol Chairman Date: April 6, 2000 /s/Michael MacInnis CFO and Director Date: April 6, 2000 Michael MacInnis (Chief Financial Officer) /s/Christian Richer President and Director Christian Richer (Chief Executive Officer) Date: April 6, 2000 /s/Viatscheslav Makarov VP-Sales & Marketing Viatscheslav Makarov and Director Date: April 6, 2000 LIST OF EXHIBITS 2.1 Certificate of Incorporation 2.2 By-Laws 6.1 Lease for Montreal space 6.2 Lease for Moscow space 6.3 Joint Venture Agreement between V.I. Internet Telecommunications Inc. and Specialized Technic and Communications of The Ministry of Interior of Russian Federation 6.4* Facilities Management Agreement with BridgePoint Enterprises 6.5* Agreement between Metrocom and V. I. Internet Telecommunications Inc. to provide telecommunications services 27* Financial Data Schedule * Filed herewith EX-10 2 BRIDGEPOINT AGREEMENT EXHIBIT 6.4 VIP Internet Inc. Contract Data Summary The Client customization form January 5, 1999 Section 1: General Information ------------ ---------------------------------------------- --------------------------------------------------- Section Field Data ------------ ---------------------------------------------- --------------------------------------------------- Full The Client Name VIP Internet Inc. ------------ ---------------------------------------------- --------------------------------------------------- Effective Date - Day 1 ------------ ---------------------------------------------- --------------------------------------------------- Effective Date - Month February ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Effective Date - Year 1999 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- The Client Head-Office Address 1155 University street, suite 602, Montreal, Quebec, Canada, H3B 3A7 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- The Client Inc. State or Province the state of Delaware ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Short The Client Name VIP Internet Inc. ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- RFS Date - Day 15th ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- RFS Date - Month March ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- RFS Date - Year 1999 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Term - Years Five (5) ------------ ---------------------------------------------- --------------------------------------------------- Term - Renewal Period Yrs One (1) ------------ ---------------------------------------------- --------------------------------------------------- Term - Termination Notice Three (3) ------------ ---------------------------------------------- --------------------------------------------------- Term - Number of Renewals One (1) ------------ ---------------------------------------------- --------------------------------------------------- Third Party Insurance $500,000 ------------ ---------------------------------------------- --------------------------------------------------- Country Region Canada ------------ ---------------------------------------------- --------------------------------------------------- Site Street Address 1155 University street, suite 300 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Site City Montreal ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Site State/Province Site State/Province ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Site Portal Code H3B 3A7 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Site Country Canada ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Site Comment BridgePoint Center no. 1 ------------ ---------------------------------------------- --------------------------------------------------- Governing State province of Quebec ------------ ---------------------------------------------- --------------------------------------------------- Client Notice Contact Data VIP Internet Inc. 1155 University street, suite 602 Montreal, Quebec, Canada Canada 514-876-9222 Attention: Mr. Ilya Gerol ------------ ---------------------------------------------- --------------------------------------------------- Client Failure Contact Name Mr. Ilya Gerol ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Client Failure Contact Telephone 514-876-9222 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Client Failure Contact Facsimile to be provided at a later time ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Client Failure Contact Pager to be provided at a later time ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Client NOC Contact Name to be provided at a later time ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Client NOC Contact Telephone to be provided at a later time ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- Client NOC Contact Facsimile to be provided at a later time ------------ ---------------------------------------------- --------------------------------------------------- Client NOC Contact Pager to be provided at a later time ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- BPE First Contact Name Montreal Center Manager ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- BPE First Contact Telephone 514-878-1555 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- BPE First Contact Facsimile 514-878-1295 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- BPE First Contact Pager 514-994-6886 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- BPE NOC Contact Name BridgePoint NOC Manager ------------ ---------------------------------------------- --------------------------------------------------- BPE NOC Contact Telephone 514-878-1555 ------------ ---------------------------------------------- --------------------------------------------------- BPE NOC Contact Facsimile 514-878-1295 ------------ ---------------------------------------------- --------------------------------------------------- ------------ ---------------------------------------------- --------------------------------------------------- BPE NOC Contact Pager 514-992-5862 ------------ ---------------------------------------------- --------------------------------------------------- ------------ -------------------------------------------------------------------------------------------------- Section Summary of other changes to contract text ------------ -------------------------------------------------------------------------------------------------- ------------ -------------------------------------------------------------------------------------------------- Deposit of 1 month to be applied to 13th month = $1,460 ------------ -------------------------------------------------------------------------------------------------- ------------ -------------------------------------------------------------------------------------------------- Advance payment of 3 months applied to first tree months = $5,380 ------------ -------------------------------------------------------------------------------------------------- ------------ -------------------------------------------------------------------------------------------------- All charges are in US currency 1.8 and 7.7 and Annex 3 ------------ -------------------------------------------------------------------------------------------------- ------------ -------------------------------------------------------------------------------------------------- 3.2 BPE can be mandated to install ------------ -------------------------------------------------------------------------------------------------- ------------ -------------------------------------------------------------------------------------------------- 3.3 Equipment vendors can train ------------ -------------------------------------------------------------------------------------------------- ------------ -------------------------------------------------------------------------------------------------- 4.5 added reasonable care of equipment ------------ -------------------------------------------------------------------------------------------------- ------------ --------------------------------------------------------------------------------------------------
Section 2: Pricing Data ------------ --------------------------------------- Section Field ------------ --------------------------------------- ---------------------------- Charge - Total Monthly $1,460.00 ------------ --------------------------------------- ---------------------------- ------------ --------------------------------------- ---------------------------- Charge - Total Onetime $1,000.00 ------------ --------------------------------------- ---------------------------- ------------ --------------------------------------- ---------------------------- ---------------------------- Initial Term Renewal Terms ------------ --------------------------------------- ---------------------------- ---------------------------- ------------ --------------------------------------- ---------------------------- ---------------------------- Charge - Cabinet Monthly $700.00 $900.00 ------------ --------------------------------------- ---------------------------- ---------------------------- ------------ --------------------------------------- ---------------------------- ---------------------------- Charge - Cabinet Onetime $500.00 $640.00 ------------ --------------------------------------- ---------------------------- ---------------------------- ------------ --------------------------------------- ---------------------------- ---------------------------- Charge - Square Foot Monthly $15.00 $18.00 ------------ --------------------------------------- ---------------------------- ---------------------------- Charge - Square Foot Onetime $2.50 $3.00 ------------ --------------------------------------- ---------------------------- ---------------------------- 1 Cabinet (Lockable) per month $30.00 $40.00 ------------ --------------------------------------- ---------------------------- ---------------------------- Charge - Tech Support On Site Off Site ------------ --------------------------------------- ---------------------------- ---------------------------- ------------ -------------- ------------------------ ---------------------------- ---------------------------- Level 1 Business Hours $85.00 $115.00 ------------------------ ---------------------------- ---------------------------- ------------------------ ---------------------------- ---------------------------- Off-Hours $125.00 $150.00 ------------ -------------- ------------------------ ---------------------------- ---------------------------- ------------ -------------- ------------------------ ---------------------------- ---------------------------- Level 2 Business Hours $125.00 $150.00 ------------------------ ---------------------------- ---------------------------- ------------------------ ---------------------------- ---------------------------- Off-Hours $150.00 $175.00 ------------ -------------- ------------------------ ---------------------------- ---------------------------- ------------ --------------------------------------- ---------------------------- ---------------------------- Free Tech Support h/period One (2) week ------------ --------------------------------------- ---------------------------- ---------------------------- ------------ --------------------------------------- --------------------------------------------------------- Charge - Mileage/Km Rate $0.40/km ------------ --------------------------------------- --------------------------------------------------------- ------------ --------------------------------------- --------------------------- ----------------------------- Charge - Circuit Management: On-Site only (In Facility) Terminating outside Facility ------------ --------------------------------------- --------------------------- ----------------------------- ------------ ---------------- ---------------------- --------------------------- ----------------------------- Monthly $15.00 $35.00 ------------ ---------------- ---------------------- --------------------------- ----------------------------- ------------ ---------------- ---------------------- --------------------------- ----------------------------- Onetime $50.00 $150.00 ------------ ---------------- ---------------------- --------------------------- ----------------------------- ------------ ---------------- ---------------------- --------------------------------------------------------- DSX Monthly Charge $10.00 ------------ ---------------- ---------------------- --------------------------------------------------------- ------------ --------------------------------------- ----------------- ------------------- ------------------- Charge - Supplemental Power: Generator 5KVA + 5KVA UPS + 5KVA @ -48VD/C ------------ --------------------------------------- ----------------- ------------------- ------------------- ------------ -------------------- ------------------ ----------------- ------------------- ------------------- 15 amp circuit Cabinet 1 1 0 ------------------ ----------------- ------------------- ------------------- ------------------ ----------------- ------------------- ------------------- included per 20 Square Foot 1 1 0 ------------ -------------------- ------------------ ----------------- ------------------- ------------------- ------------ -------------------- ------------------ ----------------- ------------------- ------------------- Supplement Monthly $25.00 $70.00 $100.00 ------------------ ----------------- ------------------- ------------------- ------------------ ----------------- ------------------- ------------------- per 15 amp circuit Onetime $200.00 $200.00 $100.00 ------------ -------------------- ------------------ ----------------- ------------------- -------------------
FACILITIES MANAGEMENT AGREEMENT THIS AGREEMENT ("Agreement") is made on this day 1 of February, 1999, BETWEEN: 3407276 CANADA INC., operating under the name BRIDGEPOINT ENTREPRISES, a company duly constituted under the laws of Canada, having its head office at 1155 University Street, Suite 300, Montreal, Quebec, Canada, H3B 3A7(hereinafter referred to as "BridgePoint") AND: VIP Internet Inc., a company duly constituted under the laws of the state of Delaware, having its head office at 1155 University street, suite 602, Montreal, Quebec, Canada, H3B 3A (hereinafter referred to as "The Client") WHEREAS, The Client has selected BridgePoint to house certain equipment required for its communications network and to provide certain services in relation to the operation and maintenance of the network; and WHEREAS, The Client and BridgePoint desire to define the terms and conditions under which BridgePoint is to house the equipment and provide facility management services to the Client; NOW, THEREFORE, the parties hereto agree as follows: ARTICLE 1: DEFINITIONS In this Agreement, unless the context otherwise requires: 1.1 Agreement - means this agreement dated as of the date hereof, as well as any rider, amendment, modification or intervention which might be made or added thereto in writing; the Agreement is also sometimes designated by the expressions "hereof", "herein" and "hereunder"; 1.2 Equipment - means the equipment and software provided by the Client to be installed in the Facilities specified in Annex 1, as it may be amended from time to time. 1.3 Facilities - means the floor space, lighting, air conditioning and commercial electric power required for the accommodation and operation of the Equipment. 1.4 Services - means the services and operations described in this Agreement including in Annex 2, to be provided by the BridgePoint in accordance with its methods and procedures manual, as they may be amended from time to time. 1.5 Additional Services - means any services not included in the Services as defined in article 3.1 above; 1.6 Site - means the premises at which the Services and Facilities are to be provided. 1.7 Telecom - means the provider of telecommunications transmission circuits to the Site. 1.8 Charges - means the amounts as set out in Annex 3 and payable to BridgePoint by the Client. All Charges presented in this agreement are in US currency. 1.9 Effective Date - means the date on which both parties shall have signed this Agreement, however, if the parties sign it on different dates, the later date shall be deemed the "Effective Date" hereof. 1.10 Ready-For-Service Date or RFS Date - means the date on which the Site preparation is to be completed and the Facilities are ready to accommodate the operation of the Equipment as defined in article 3. ARTICLE 2: SCOPE 2.1 This Agreement is for the provision of the Site, Facilities, and Services by BridgePoint to The Client. 2.2 The Site of the provision of the Facilities and Services shall be the following Canadian locations: 1155 University street, suite 300 Montreal Site State/Province H3B 3A7 BridgePoint Center no. 1 ARTICLE 3: RESPONSIBILITIES OF BRIDGEPOINT 3.1 During the term of this Agreement BridgePoint shall perform the Services as defined in Annex 2 hereof. 3.2 BridgePoint shall prepare the Site and provide the Facilities in accordance with the Site Preparation Guidelines set forth in Annex 2 hereof for March 15th, 1999, herein referred to as the "Ready-To-Service Date" or "RFS Date," unless otherwise agreed upon by both parties in writing. Upon the completion by BridgePoint of its site preparation obligations, The Client may conduct a site survey of the Site to confirm the satisfactory completion of site preparation in accordance with the Site Preparation Guidelines. Thereafter, The Client shall provide and deliver the Equipment to the Site, if this task is not mandated to BridgePoint. The Client, or BridgePoint if mandated by the Client, shall install the Equipment at the Site and the date of completion of such installation shall henceforth be deemed the "Installation Date." 3.3 The Client, directly or through its Equipment suppliers, shall provide training to BridgePoint during installation as follows. The Client, or its Equipment suppliers, will provide sufficient training to enable BridgePoint to perform first level maintenance on the Equipment, also referred to in this document as Level 1 Technical Support. This is defined as participating in the isolation and identification of hardware failures, and the replacement of boards in the Equipment under the direction of The Client. Training shall include but not be limited to: i) familiarization with all Equipment controls and indicators; ii) procedures for applying power or resetting the Equipment; iii) procedures for replacing modules supplied by The Client and stored at the terminal. BridgePoint shall have a representative present during installation in fulfillment of BridgePoint's obligation hereunder to undergo training. The failure of said representative to attend installation shall not be deemed sufficient reason to delay or defer installation. However, the failure of BridgePoint to make a representative available for such training shall obligate BridgePoint to attend training at its own expense within sixty (60) days of the Installation Date. 3.4 BridgePoint shall commence performance of the Services on the Installation Date unless otherwise requested by The Client in writing. 3.5 BridgePoint shall obtain all necessary governmental and other approvals, certificates, and authorizations necessary to allow the provision of the Site and Facilities, and the performance of the Services under this Agreement. The Client shall obtain all necessary governmental and other approvals, certificates, and authorizations necessary to conducts its business in the Site and Facilities. 3.6 Notwithstanding any other provision of this Agreement, if BridgePoint is provided from The Client under this Agreement, any equipment, software, technical data or specifications, or any direct product thereof, BridgePoint shall not export, directly or indirectly, to any other entity within the country of import or to any country to which the Canadian Government, U.S. Government or any agency thereof at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from The Client and the Department of Commerce or other agency of the Canadian or U.S. Government when required by an applicable statute or regulation. At the request of The Client, BridgePoint shall provide, if required, end user certificates and all other documents required by the Canadian or United States Department of Commerce, Office of Export Administration from end users, such as a Written Assurance Statement to said Departments of Commerce. ARTICLE 4: TERM OF AGREEMENT, TERMINATION 4.1 The Initial Term of this Agreement shall be for Five (5) year(s) from the Effective Date of this Agreement. After the expiration of the Initial Term, this Agreement shall automatically renew for One (1) subsequent One (1) year(s) Renewal Term(s). Either party may at any time terminate the automatic renewal of this Agreement for any reason during the Initial Term or any Renewal Term by providing a Three (3) month(s)' written notice of termination to the other party. 4.2 In the event that either party materially or repeatedly defaults in the performance of any of its duties or obligations under this Agreement and, within thirty (30) days after written notice is given to the defaulting party specifying the default, (i) such default is not substantially cured, or (ii) the defaulting party does not obtain the approval of the other party to a plan to remedy the default, then the party not in default may terminate this Agreement by giving written notice to the defaulting party. 4.3 Notwithstanding the foregoing, BridgePoint may terminate the Agreement by giving a written notice if The Client is in default of making any payment hereunder for more than thirty (30) days from the due date of such payment. 4.4 If either party becomes or is declared insolvent or bankrupt, is the subject of any proceedings relating to its liquidation, insolvency or for the appointment of a receiver or similar officer for it, makes a general assignment for the benefit of all or substantially all of it creditors, or enters into an agreement for the composition, extension or readjustment of all or substantially all of its obligations, then the other party, within the conditions of applicable law, may immediately terminate this Agreement by giving written notice. 4.5 Upon the termination of the Agreement, The Client will have thirty (30) days to recuperate its Equipment at its own cost. The Equipment is hereby granted as security to BridgePoint in order to cover all amounts owed or which could be owed to BridgePoint under this Agreement and The Client will only be allowed to recuperate the Equipment upon full payment of all such amounts. The Client undertakes to execute upon BridgePoint's request all documents necessary to give effect to the security granted hereunder. If required by BridgePoint, BridgePoint can disassemble and relocate for safekeeping at the cost of The Client the Equipment until all amounts due hereunder have been paid. In any event, BridgePoint must agree in writing as to the timing and measures taken to recuperate the Equipment. BridgePoint will take all reasonable measures to protect the Equipment from harm, but BridgePoint will not be responsible for any damage that could be done during the removal of the Equipment in accordance with this Section. ARTICLE 5: ACCESS TO SITE AND DATA 5.1 The Client and its duly authorized contractors, agents, and employees may have access, twenty four (24) hours a day, seven (7) days a week to the area of the Site where the Equipment is housed and to all data and information available to BridgePoint relating to the performance of this Agreement. 5.2 Access to the Site by The Client shall be contingent upon the observance of BridgePoint's standard safety and security procedures as defined in its Methods and Procedures Manuel. ARTICLE 6: OWNERSHIP AND CONFIDENTIALITY 6.1 For the purposes of this Article, references to the Equipment shall not be limited to the Equipment specified in Annex 1 but shall also include any other Equipment which The Client may provide to BridgePoint from time to time for the purposes of this Agreement, in which event Annex 1 shall be deemed to be amended accordingly. 6.2 The Client shall retain title to the Equipment and shall bear all risks in relation thereto, unless loss or damage is due to the negligence or willful misconduct of BridgePoint, its officers, employees or agents. 6.3 BridgePoint shall take reasonable precautions for the security of the Equipment and shall not alienate it or use it for purposes other than purposes in relation to this Agreement. 6.4 BridgePoint shall maintain an inventory of the Equipment and, unless already marked by The Client, mark the Equipment as belonging to The Client. 6.5 The Client, by providing fifteen (15) days prior written notice to BridgePoint may replace, remove, or dispose of any of the Equipment as may be called for by its network requirements, in which event Annex 1 shall be deemed to be amended accordingly. 6.6 During the term of this Agreement, and for a period of three (3) years after the expiration of the term of this Agreement, proprietary or confidential information (Information) of any kind pertaining to both parties' businesses, and all written Information marked by ether party as "Confidential" or "Proprietary" shall be treated by the the other party as secret and confidential and accorded the same protection as the parties give to their own Information of a similar nature. Verbally disclosed Information which is to be treated as confidential or proprietary by a party shall be confirmed as such in writing by the party within thirty (30) days of such disclosure. 6.7 Notwithstanding the foregoing, Confidential Information does not include information which: 6.7.1 has been published or is otherwise readily available to the public other than by breach of this Agreement; 6.7.2 has been rightfully received by the Receiving Party from a third party without breach of any confidentiality obligations; 6.7.3 has been independently developed by the Receiving Party's personnel without access to, or use of, the other party's Confidential Information; 6.7.4 was known to the Receiving Party prior to its first receipt from the other party and which the Receiving Party has documented prior to the date hereof; or 6.7.5 is required to be disclosed by law whether under an order of a court or government, tribunal or other legal process. In such cases, the Receiving Party must immediately notify the other party of the disclosure requirement, in order to allow the other party a reasonable opportunity to obtain a court order to protect its rights, or otherwise to protect the confidential nature of the Confidential Information. ARTICLE 7: CHARGES 7.1 Commencing on the first day of the month immediately following the month during which the Installation Date occurs and continuing every month thereafter during the term of this Agreement, and provided the Site and Facilities have been prepared and the Services have been performed in accordance with the terms of this Agreement, BridgePoint shall invoice The Client for the Facility Management Charges stated in Annex 3 hereof. All Circuit Management Charges, Customer Premises Service Call Charges, After Hours Call Out Charges, and any other Charges authorized in advance in writing by The Client shall be invoiced by BridgePoint in arrears in the month following the month during which such Charges were incurred. Facility Management Charges shall be invoiced by BridgePoint in advance, in the month prior to the month during which such Charges are to be incurred. The above Charges shall constitute The Client's total liability for BridgePoint's provision of the Site, Facilities, and Services and The Client shall have no obligation to pay utilities or taxes or any other miscellaneous fees or expenses arising from this Agreement. 7.2 All Additional Services will be invoiced monthly based on a time and material basis. In the event third party services or materials are required, the Client shall, in addition to the payment of the cost thereof, pay to BridgePoint a fifteen percent ( 15 % ) management fee on such services and materials. 7.2 The Client shall pay all invoices complying with this Article and Annex 3 within thirty (30) days of receipt. 7.3 During the term of this Agreement, and subject to BridgePoint's written consent, which consent shall not be withheld unreasonably, The Client may request that the amount or nature of Equipment to be housed and maintained, or the nature or amount of Services to be provided by BridgePoint be increased. Annex 1, Annex 2 and Annex 3 hereof shall be amended from time to time to reflect any such increases. 7.4 Any amount past due by The Client to BridgePoint under this Agreement shall bear interest from the due date until paid in full at an annual rate of twenty percent (20%) or the maximum rate allowed by law, whichever is greater. 7.5 The Client shall provide to BridgePoint advance payment equal to three (3) months of all the Facility Management Charges on the Effective Date of this Agreement. This advance payment shall be applied against the first three (3) months' payments of this Agreement. 7.6 The Client shall provide to BridgePoint a security deposit equal to one (1) months of all the Facility Management Charges on the Effective Date of this Agreement. This security deposit shall be applied against the thirteenth (13th) months' payments of this Agreement. 7.7 All charges in this agreement are stated in legal currency of the United States of America. ARTICLE 8: TAXES BridgePoint shall assume responsibility for, and hold The Client harmless from all taxes, duties, or similar liabilities arising under this Agreement including but not limited to those arising from BridgePoint's provision of space and Services with respect thereto, under any present or future tax laws. ARTICLE 9: LIABILITY, INDEMNITY, WARRANTIES, AND INSURANCE 9.1 The Client shall indemnify BridgePoint and hold it harmless against and in respect to any and all claims, damages, losses, costs, expenses, obligations, liabilities, actions, suits, including without limitation, interest and penalties, reasonable attorneys' fees and costs and all amounts paid in settlement of any claim, action or suit that may be asserted against BridgePoint or that BridgePoint shall incur or suffer, that arise out of, result from or relate to: (a) the nonfulfillment of any agreement, covenant or obligation of The Client in connection with this Agreement; (b) any breach of any representation or warranty made by The Client hereunder; (c) any claim of any nature whatsoever brought by any third person or entity who may suffer damages of any sort as a direct or indirect result of BridgePoint activities pursuant to the Agreement relating to or in connection with the Equipment; or (d) any claims of infringement that arise out of, result from or relate to any use or misuse of the Equipment in connection with the provision of the Services or Additional Services. 9.2 Furthermore, in the case where a claim of infringement is made against BridgePoint as described in Section 14.1(d) above, The Client must procure for BridgePoint the right to continue using the Equipment or modify promptly the Equipment to make such use non infringing. Until then, BridgePoint will not be required to render the BridgePoint Services 9.3 BridgePoint warrants that it will perform its obligations under this Agreement in a professional and workmanlike manner. In the event BridgePoint is liable to The Client on account of BridgePoint's performance or nonperformance of its obligations under this Agreement, whether arising by negligence or otherwise, (i) the amount of damages recoverable against BridgePoint for all events, act or omissions will not exceed in the aggregate the Charges paid by The Client for the last twelve (12) months and (ii) in no event will BridgePoint be responsible for any indirect, consequential, incidental or punitive damages of any party, including third parties, or for lost profits. In connection with the conduct of any litigation with third parties relating to any liability of BridgePoint to The Client or to such third parties, BridgePoint will have all rights to accept or reject settlement offers and to participate in such litigation. Notwithstanding any provision in this Agreement, BridgePoint will have no liability for any loss or destruction of The Client's data beyond BridgePoint obligations respecting safeguarding thereof. BridgePoint does not warrant that the Installations and the BridgePoint Services or Additional Services will permit the Equipment to function without default or interruption. BridgePoint and The Client expressly acknowledge that the limitations contained in this Section have been the subject of active and complete negotiation between the parties and represent the parties' agreement. 9.4 Subject to Articles 9.1, 9.2 and 9.3 hereof, both Parties shall be responsible for damage to, or loss of their own property, both real and personal, and that each shall be responsible for insuring his own property, with an insurance policy providing extended coverage, including but not limited to perils of fire together with insurance against flood, theft, vandalism, malicious mischief, sprinkler leakage and damage, and boiler and pressure vessel insurance. The Client will also subscribe to and maintain additional insurance covering damages for up to $500,000 to third party equipment and personnel caused by the use of the Equipment and any other insurance coverage which would seem appropriate in the context of this Agreement. The Client shall furnish BridgePoint, upon request to such effect, with certificates of insurance evidencing such coverage. ARTICLE 10: EXCUSABLE DELAY 10.1 If either party is unable to perform any of its obligations hereunder due to Force Majeure, the failure to perform by such party shall not constitute a basis for termination or default under this Agreement provided that notice thereof is given to the other party within seven (7) days after the party becomes aware of such event. The Client shall not be required to make any payment to BridgePoint pursuant to Article 7 during the period of BridgePoint's inability, as a result of an event of Force Majeure, to provide the Services and Facilities. 10.2 For the purposes of this Agreement, Force Majeure shall be understood to be any cause beyond the reasonable control of the non-performing party and without its fault or negligence and includes, without limiting the generality of the foregoing, acts of God or of the public enemy, acts of any Government or any State or Territory, or any agency thereof, in its sovereign capacity, fires, floods, epidemic, quarantine restrictions, unusually severe weather conditions, extraordinary vehicle traffic conditions, or mechanical malfunctions ARTICLE 11: TRANSFERRING OF EQUIPMENT 11.1 BridgePoint can, during the term of this Agreement, require that the Equipment be moved from any other area of the Facility where the Equipment is located, to any other location in the Facility, provided The Client has been notified thereto with a three (3) months prior written notice. All reasonable fees and expenses for such transfer will be assumed by BridgePoint. 11.2 If The Client requests the installation of additional Equipment in the Facility, BridgePoint will be permitted to move the existing Equipment in order to locate all the Equipment in the same area of the Facility. In this case, all fees and expenses related to the transfer of the Equipment in a new area of the Facility will be assumed by The Client. The Client will also be responsible for any damages created by the transfer of the Equipment. 11.3 Without limiting in any way the rights of BridgePoint described in Section 11.1, BridgePoint will exert all reasonable efforts in order to consult The Client with respect to the period during which the transfer of the Equipment will be executed such that the transfer will cause minimum interruption in the use of the Equipment. ARTICLE 11: ARBITRATION All disputes, controversies, claims or differences which may arise between the parties, out of or in relation to or in connection with this Agreement, or for the breach thereof, shall be finally settled by arbitration in Montreal, Quebec, Canada, pursuant to the applicable provisions of the Code of Civil Procedure (Quebec), except to the extent modified by the following provisions: 11.1 The matter shall be submitted to arbitration before an arbitrator to be agreed upon by the parties. The arbitrator will be an expert in the field of telecommunication. 11.2 If the parties cannot agree to a common arbitrator in a reasonable amount of time, the matter shall be submitted to arbitration before three arbitrators, the party requesting the arbitration (the "Initiating Party") appointing one arbitrator, the other party (the "Responding Party") appointing the second arbitrator and the third arbitrator being jointly appointed by the first two arbitrators so appointed; 11.3 The Initiating Party must send the Responding Party an arbitration notice which shall specify the name of its designated arbitrator and the matter to be arbitrated (the "Arbitration Notice"); 11.4 Upon written request by one party to the other party, all matters substantially identical or related to the matters identified in the Arbitration Notice shall be heard and judged at the same time, before the same arbitrators; 11.5 Within ten (10) days of the sending of the Arbitration Notice, the Responding Party shall designate the second arbitrator and shall provide his name to the Initiating Party. If no such appointment is made within the stipulated period, the Responding Party shall be deemed to have agreed that the arbitration board shall be composed of a single arbitrator and to have recognised the independence and impartiality of the arbitrator designated by the Initiating Party; therefore, the arbitration board shall in such case be constituted only of the arbitrator designated by the Initiating Party; 11.6 Subject to Section 11.5, the third arbitrator shall be designated by the first two arbitrators within ten (10) days of the designation of the second arbitrator failing which the designation shall be made by a competent court at the request of any party to the arbitration. The third arbitrator shall be a member of the Quebec Bar; 11.7 The arbitration sessions shall be held in Montreal, Province of Quebec. 11.8 The single arbitrator or arbitrators (either option defined as the "Arbitration Board") shall have the power to establish their own procedure and to impose monetary damages or penalties according to the applicable rules of law and this Agreement; 11.9 The Arbitration Board shall render its decision in writing and notify the parties thereof within forty-five (45) days following the time at which the Arbitration Board reserves judgment; 11.10 The decision of the Arbitration Board shall be final and not subject to appeal and shall be binding on the parties to the arbitration, and the provisions of sections 946 and 946.6 inclusive of the Code of Civil Procedure (Quebec) concerning the homologation of arbitration awards shall be applicable; and 11.11 The arbitration fees and cost shall be borne by the party against which the decision is rendered unless the Arbitration Board rules otherwise. ARTICLE 12: NOTICES Any notice or communication under this Agreement shall be in writing and shall be hand delivered, given by fax or sent by registered mail return receipt requested, postage prepaid, to the other party's designated representative, receiving such communication at the address specified herein, or such other address or person as either party may in the future specify to the other party. Such notice shall be deemed to be received upon delivery or, by fax, on the next business day following transmission provided electronic evidence of transmission is produced at point of origin or, if mailed, on the fourth business day following the date of mailing. If to The Client: VIP Internet Inc. 1155 University street, suite 602 Montreal, Quebec, Canada Canada 514-876-9222 Attention: General Counsel If to BridgePoint: BridgePoint Enterprises 1155 University, suite 300 Montreal, Quebec, Canada H3B 3A7 Attention: General Counsel ARTICLE 13: MISCELLANEOUS 13.1 Neither party may assign or transfer all or any part of its rights under this Agreement, without the prior written consent of the other, except when assigning all of their rights and obligations to any legal entity controlling, controlled by, or under common control with it, but with thirty (30) days' prior notice to the other party. 13.2 BridgePoint can assign this Agreement or any obligations hereunder to a third party. If any obligations of BridgePoint are assigned to a subcontractor, BridgePoint will remain responsible for such obligations under this Agreement. 13.2 This Agreement is not intended to create, nor shall it be construed to be, a joint venture, association, partnership, franchise, or other form of business relationship. Neither party shall have, nor hold itself out as having, any right, power or authority to assume, create, or incur any expenses, liability, or obligation on behalf of the other party, except as expressly provided herein. 13.3 If any provision of this Agreement is held invalid, illegal or unenforceable in any respect, such provision shall be treated as severable, leaving the remaining provisions unimpaired, provided that such does not materially prejudice either party in their respective rights and obligations contained in the valid terms, covenants, or conditions. 13.3 There are no intended third party beneficiaries to this Agreement. 13.4 The failure of either party to require the performance of any of the terms of this Agreement or the waiver by either party of any default under this Agreement shall not prevent a subsequent enforcement of such term, nor be deemed a waiver of any subsequent breach. 13.5 This Agreement may not be modified, supplemented, or amended or default hereunder waived except upon the execution and delivery of a written agreement signed by the authorized representative of each party. 13.6 Both parties represent and warrant that each has the full authority to perform its obligations under this Agreement and that the person executing this Agreement has the authority to bind it. 13.7 This Agreement shall be governed by and construed in accordance with the laws of the Province of Quebec and the applicable federal laws of Canada therein, and the parties irrevocably attorn and submit to the jurisdiction of the courts of the Province of Quebec, city of Montreal 13.8 The Parties have requested that this Agreement and all documents and communications pursuant to or in connection with this Agreement be drawn up in the English language. Les Parties ont requis que cette Convention ainsi que tous documents ou communications en vertu de cette Convention ou s'y rapportant, soient rediges en langue anglaise. 13.9 The provisions of Sections 4.5, 6.6, 6.7 and 9 shall survive the expiration or termination of this Agreement for any reason. 13.10 This Agreement, together with the Exhibits hereto, constitutes the final and full terms of understanding between the parties and supersedes all previous agreements, understandings, negotiations, and promises, whether written or oral, between the parties with respect to the subject matter hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year set forth below. BRIDGEPOINT ENTERPRISES VIP Internet Inc. - -------------------------- ------------------------------ Signature Signature - -------------------------- ------------------------------ Printed Name Printed Name - -------------------------- ------------------------------ Title Title Date Date ANNEX 1 EQUIPMENT SCHEDULE Cabinet List (including Racks and Standalone Equipment) - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ Reference Total Length Width Height Leased Preferred Number Weight (inches) (Inches) (Feet) from Position Description (Lbs) BridgePoin(Next to (Y/N) Cab. Ref#) - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ Cabinet - Servers Used to house AXI Voice Gateway no1, C1 Site Keeper no 1 and IVR/Billing Server 150 28 28 7 Y Next to 2 no 1 - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ Cabinet - Network & Mngmnt. Used to house NetKeeper no 1, 10BaseT C2 Hub no 1, Router No 1, CSU/DSU, Shared 150 28 28 7 Y Next to 1 console hub - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ Console - Management Interface C3 Used as interface to all servers on 20 20 16 16 N In Control site (Screen, mouse, keyboard) Room - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ Storage On-Site Standby Equipment Storage N/A N/A N/A N/A Y N/A Location managed by BridgePoint - ------------- ----------------------------------------- ---------- --------- -------- --------- --------- ------------ Equipment List (Rack or Cabinet Mountable, including Standalone Equipment) - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- UPS Reference Total Total Total Total provided Location Number Weight Amps BTU amps by (Cabinet Description (Lbs) A/C -48V BridgePoint Ref @ D/C (Y/N) #) 110V - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- E1 AXI Voice Gateways no 1 Y C1 - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- E2 Site Keeper no 1 Y C1 - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- E3 IVR/Billing Server no 1 Y C1 - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- E4 NetKeeper no 1 Y C2 - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- E5 10BaseT hub no 1 Y C2 - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- E6 Router No 1 Y C2 - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- E7 CSU/DSU no 1 Y C2 - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- E8 Shared Console Hub Y C2 - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ---------- Shared Management Console (screen, In E9 keyboard, mouse) Y control room - ------------- ----------------------------------------- ---------- --------- -------- --------- ----------- ----------
ANNEX 2 SERVICES AND FACILITIES 1. FACILITY MANAGEMENT SERVICES 1.1. Site Preparation Guidelines - BridgePoint is to prepare the Facilities to its own standards and to meet the specifications outlined below: 1.1.1. Space Provide adequate space for the Equipment layout defined in the Client provided reference document entitled "Space Layout Guidelines"; this document is attached to this Agreement. 1.1.2. Electrical Provide adequate power supply for the Equipment as defined in the Client provided reference document entitled "Power Requirement Guidelines"; this document is attached to this Agreement. 1.1.3. Air conditioning Provide adequate heat dissipation capacity for the Equipment as defined in the Client provided reference document entitled "Air Conditioning Guidelines"; this document is attached to this Agreement. 1.1.4. Additional Requirements Prepare the site so that it also meet the Additional Requirements as defined in the Client provided reference document entitled "Additional Requirement Guidelines"; this document is attached to this Agreement. 1.2. Provision of Facilities - BridgePoint is to secure and maintain the Facilities to include space, electricity, UPS, air conditioning and access control. 1.3. Spare Parts Storage - BridgePoint shall be responsible for the storage of all spare parts, which The Client shall provide free of charge to BridgePoint. Such spare parts shall be utilized exclusively as replacement parts in performing repair of the Equipment (Equipment Repair). In those cases where BridgePoint removes damaged parts from the Equipment in conducting Equipment Repairs, BridgePoint shall package and send said parts to a The Client-designated repair facility. The Client shall be responsible for the reasonable shipment expense incurred by BridgePoint. The Client understands spare part storage capacity is proportionate to the space occupied by the Equipment in the Facility. 1.4. Site Documentation - BridgePoint shall maintain site communication and updated site configuration documentation, to include information about the Equipment, spare parts, telephone circuits and customer port assignments. A copy of this documentation will be kept accessible to the Equipment, and a copy will be provided to The Client. 1.5. Daily Inspections - BridgePoint shall carry out routine visual inspection daily during business days to determine whether there is evidence of malfunction, such as non-working indicator lights or meters, smoke, fire or unusual noise emission, and will provide maintenance and remedy therefor. In those cases where The Client is the first party to become aware of failure of the Equipment, The Client shall notify BridgePoint as follows: Montreal Center Manager 514-878-1555 514-878-1295 514-994-6886 In those cases where BridgePoint is the first party to become aware of failure of the Equipment, BridgePoint shall notify The Client as follows: 24 hours - 7 days/week: to be provided at a later time to be provided at a later time to be provided at a later time to be provided at a later time 2. TECHNICAL SUPPORT BridgePoint shall make a technician available, upon Customer's request, to provide assistance with respect to the Equipment in the Facility 24 hours a day, 7 days a week. Assistance shall be invoiced at either Level I or Level II charges, as determined by BridgePoint in consideration of the complexity associated with the work order presented by the Client. 2.1. TECHNICAL SUPPORT LEVEL I Level I support includes all work orders that do not require operating knowledge of a customer's platforms or coordination with network operators. Support Level I consists of the following types of intervention: 2.1.1. Responding to questions from the Client as to status of visual displays on the Equipment. 2.1.2. Manipulating external switches on the Client's Equipment, as directed by the Client. 2.1.3. Providing the Client authorized subcontractors with controlled access to the Client Area. 2.1.4. Removing or replacing components and cards ("Components") identified by the Client in the Client's Equipment, as directed by the Client and to the extent such work can be performed without tools or specialized knowledge by the representatives of BridgePoint. 2.1.5. Moving patch cords or plugs on the Client's Equipment, as directed by the Client. 2.1.6. Typing simple commands on a typewriter-style keyboard on the Client's Equipment, as directed by the Client. BridgePoint shall be the sole judge of whether a command is simple or not. 2.1.7. Packaging small parts, such as circuit packs, for shipment and call any applicable shipper to pick-up the package, as directed by the Client and all costs related thereto to be borne by the Client. 2.2. TECHNICAL SUPPORT LEVEL II Level II Support shall apply when the BridgePoint technician must manipulate the Equipment without step by step directions from the Client or when BridgePoint is requested to act as a representative of the Client with third parties. Support Level II includes, but is not limited to: 2.2.1. Co-ordinations of circuit adds, moves and deletes with the Client and third party suppliers. 2.2.2. Representing the Client as a local contact for suppliers. 2.2.3. Assisting the Client in testing or replacing Equipment components 2.2.4. Configuring the Equipment without step by step guidance from the Client 2.2.5. Troubleshooting performance issues on the Equipment or on circuits connected to it. 2.3. SCHEDULE FOR BRIDGEPOINT TECHNICAL SUPPORT SERVICES BridgePoint shall respond to The Client's requests for technical support within one (1) hour of notification from The Client during Business Hours, from 0900 to 1700hrs on business days. During Off-Hours, from 17h01 to 08:59hrs, BridgePoint shall respond to The Client's requests for technical support within two (2) hours of notification from The Client. 2.4. AFTER HOURS TECHNICAL SUPPORT For After Hours Technical Support, defined as those calls placed between 1701hrs and 0859hrs local time, requests shall be directed to BridgePoint by the Client as follows: BridgePoint NOC Manager 514-878-1555 514-878-1295 514-992-5862 2.5. OFF-SITE SERVICE CALLS BridgePoint shall make service calls to The Client's customers or to other locations where the Client maintains equipment or Telecom circuits as may be reasonably requested by The Client from time to time. The time of these service calls will be coordinated with BridgePoint, The Client and the customer. 2.6. CIRCUIT MANAGEMENT SERVICE Circuit management can be given as a responsibility to BridgePoint for individual circuits or for all circuits terminating on the Equipment. This management service includes circuit order processing, facilitating Telecom installation at the Facilities and circuit maintenance. 2.7. SPECIFIC TECHNICAL SUPPORT MANDATE BridgePoint will execute specifically defined procedures and operational functions for the Client as specified in contract Addendums entitled "Technical Support Mandate Addendum"; these documents are attached to this Agreement. ANNEX 3 CHARGES 1. Facility Management Charges The Client shall pay BridgePoint the sum of $1,460.00 per month during the Initial Term for the provision of the Facility Management Services set forth in Article 1 of Annex 2 hereof and the associated, one-time, installation charges of $1,000.00. These charges reflect the application of the rate tables below to the Equipment described in Annex 1. 1.1. Space: Type of space leased Initial Term Renewal Terms --------------------------------------------------------- ------------------------- ------------------------- 1 Cabinet space per month $700.00 $900.00 --------------------------------------------------------- ------------------------- ------------------------- --------------------------------------------------------- ------------------------- ------------------------- 1 Cabinet space installation (onetime) * $500.00 $640.00 --------------------------------------------------------- ------------------------- ------------------------- --------------------------------------------------------- ------------------------- ------------------------- 1 Square Foot per month $15.00 $18.00 --------------------------------------------------------- ------------------------- ------------------------- 1 Square Foot installation (onetime) $2.50 $3.00 --------------------------------------------------------- ------------------------- ------------------------- --------------------------------------------------------- ------------------------- ------------------------- 1 Cabinet (Lockable) per month $30.00 $40.00 --------------------------------------------------------- ------------------------- ------------------------- * The Client provides its own secure Equipment mounting solution, preferably a lockable cabinet. The Client can also lease a cabinet from BridgePoint (see last item). 1.2. Power: ----------------------------------------------- -------------------- ---------------------- ----------------- Included Power Generator Only Generator + UPS -48VD/C ----------------------------------------------- -------------------- ---------------------- ----------------- --------------------- ------------------------- -------------------- ---------------------- ----------------- 15 amp circuit 1 Cabinet 1 1 0 ------------------------- -------------------- ---------------------- ----------------- ------------------------- -------------------- ---------------------- ----------------- included per 20 Square Foot 1 1 0 --------------------- ------------------------- -------------------- ---------------------- ----------------- ----------------------------------------------- -------------------- ---------------------- ----------------- Supplemental Power Charge Generator Only Generator + UPS -48VD/C ** ----------------------------------------------- -------------------- ---------------------- ----------------- -------------------------- -------------------- -------------------- ---------------------- ----------------- Supplement Monthly $25.00 $70.00 $100.00 -------------------- -------------------- ---------------------- ----------------- -------------------- -------------------- ---------------------- ----------------- per 15 amp circuit Onetime $200.00 $200.00 $100.00 -------------------------- -------------------- -------------------- ---------------------- ----------------- ** is BridgePoint Facilities where D/C power is available
All charges are legal currency of the United States of America. 2. Circuit Management Charges For all circuits paid for by The Client where BridgePoint management is requested, a Circuit Management Service fee will be charged for coordination functions provided, in-Facility wiring and the use of conduit capacity. Type of circuit managed ------------------------------- ----------------------------------- On-Site only (In Facility) Terminating outside Facility ------------------------------- ----------------------------------- --------------------------- ------------- ------------------------------- ----------------------------------- Circuit Management Monthly $15.00 $35.00 --------------------------- ------------- ------------------------------- ----------------------------------- --------------------------- ------------- ------------------------------- ----------------------------------- Onetime $50.00 $150.00 --------------------------- ------------- ------------------------------- ----------------------------------- --------------------------- ------------- ------------------------------------------------------------------- Use of BridgePoint DSX Monthly $10.00 Charge --------------------------- ------------- -------------------------------------------------------------------
All leased lines (circuits) paid for by BridgePoint on behalf of The Client in the performance of Circuit Management Services under this Agreement shall be invoiced monthly to The Client by BridgePoint at cost plus 15% to cover expenses incurred. 3. In-Facility and Off-Site Technical Support Charges For each in or off-site service call performed by BridgePoint in accordance with Article 2 of Annex 2 hereof, The Client shall pay BridgePoint the hourly rate presented in the table below plus $0.40/km for the distance from BridgePoint's place of business to the off-site location in the case of off-site calls. ----------------------------------------- ----------------------------- --------------------------- Service Call charges In Facility (On Site) Off Site ----------------------------------------- ----------------------------- --------------------------- ---------------- ------------------------ ----------------------------- --------------------------- Level 1 Business Hours $85.00 $115.00 ------------------------ ----------------------------- --------------------------- ------------------------ ----------------------------- --------------------------- Off-Hours $125.00 $150.00 ---------------- ------------------------ ----------------------------- --------------------------- ---------------- ------------------------ ----------------------------- --------------------------- Level 2 Business Hours $125.00 $150.00 ------------------------ ----------------------------- --------------------------- ------------------------ ----------------------------- --------------------------- Off-Hours $150.00 $175.00 ---------------- ------------------------ ----------------------------- --------------------------- ----------------------------- --------------------------- Minimum Hours charged 1/2 h 1 h ----------------------------------------- ----------------------------- --------------------------- ----------------------------- --------------------------- Billing Increment (Hours) 1/4 h 1/2 h ----------------------------------------- ----------------------------- ---------------------------
During the Initial and Renewal Terms the Client will receive One (2) hour of Technical Support Level I free of charge per week. These free hours are non-cumulative across periods. All charges are legal currency of the United States of America. EX-99 3 METROCOM AGREEMENT EXHIBIT 6.5 AGREEMENT METROCOM AGREEMENT FOR PROVISION OF TELECOMMUNICATION SERVICES of June 09, 1999 Closed joint stock company METROCOM (hereafter referred to as "METROCOM") in the person of R. U. Khalikov, General Director, acting in the strength of the Charter and VI Internet Telecommunications Inc. (hereafter referred to as "Customer") in the person of Derek J. Labell, CEO, acting in the strength of Charter, have made this Agreement to the following 1. SUBJECT OF AGREEMENT METROCOM will provide telecommunication services (hereafter referred to as "the Service") to Customer in accordance with the terms and conditions below. The Service type, specifications and performance standards are defined in Exhibit B to this Agreement. 2. TERM OF AGREEMENT The Term of the Agreement shall commence on the date of its signing by the Parties and shall continue thereafter to the expiration of the Service Term as defined in paragraph 3.3 and in Supplementary Agreements. 3. SERVICE 3.1. Service Description: - ------- ----------------------------------------------- ----------- ------------- ------------------------- N Service Interface Installation time Service ---------- Type - ------- ----------------------------------------------- ----------- ------------- ------------------------- - ------- ----------------------------------------------- ----------- ------------- ------------------------- 1 International transmission circuit "Russia, E1 G.703 4 weeks
Moscow, Metrocom POP - Canada, Montreal, Quebec, Teleglobe Canada POP" (full circuit) Circuit Identifier: Moscow/MTC - Montreal/Teleglobe NP1 Installation date above is subject to the condition that not later than twenty (20) days before the commencement of the Service Term the Customer will pay one-time non-recurring fee and one month monthly recurring fee according to articles 4.1, 4.2 of Agreement to METROCOM. 3.2. Service Term The Initial Term for the Service is one (1) year from the date of execution of the Work Acceptance Certificate by the Parties. Not later than () days before expiration of the Initial Term, Customer may request a renewal term under the same terms and conditions. If METROCOM does not receive the appropriate notification from Customer, the Agreement shall be deemed terminated for particular Service and METROCOM will have the right to disconnect Customer from METROCOM network. 3.3. Service Expansion and Renewal Additional services requested by Customer shall be executed as Exhibits that shall be an integral part of this Agreement when signed by the Parties. 4. PAYMENTS 4.1 Installation Charge The Customer agrees to pay METROCOM a one-time non-recurring fee equivalent to USD 7,500 (Seven thousand five hundred US Dollars) plus VAT (20%). Customer will be billed for the Installation Charge with the commencement of the Term of the Agreement 4.2 Monthly Recurring Charge for E1(2,048 Mbps) Service The Customer agrees to pay METROCOM for use of the Service the monthly recurring fee in amount equivalent to USD 35,800 (Thirty five thousand eight hundred US dollars)plus VAT (20%). Customer will be billed for recurring charge on month in advance basis during the entire Service Term. 4.3. Terms of Payment All amounts due under the present Agreement are payable in US dollars. All amounts indicated above and any other payments including VAT and other taxes and fees imposed according to the legislation in force under this Agreement and any Additional Agreements to it are due and payable by Customer within 15 days from the date of invoice receiving from METROCOM. Late payments will be subject to a late payment charge computed by 0.05% for each day after the due date until the date of payment. If Customer has not paid the Monthly Recurring Charge within 60 days METROCOM can switch off the services. Reconnection will be performed after Customer's full payment of due amount. The structure of payments is provided in Exhibit D to this Agreement. 5. METROCOM RESPONSIBILITIES 5.1 METROCOM will provide Customer with the Services described in Section 3 and will maintain their performance within the limits detailed in Exhibit B ("Service Description and Performance Standards"). 5.2. METROCOM will use reasonable efforts to repair and maintain the Service as a result of any failure, interruption or impairment which requires immediate remediation. METROCOM will provide trouble clearance notification to Customer assigned technical representatives upon resolution. 5.3. Customer may request changes or modifications to the Service by delivering to METROCOM a notice detailing the maintenance requirements and a preferred time for completing such work. METROCOM will perform changes or modifications with prior notification to Customer of the price and date of such maintenance. Service modification does not involve change in the Service type. 5.4. METROCOM will from time to time schedule and perform without interruption to the Service required maintenance tests, repairs, and adjustments which are necessary to maintain the Service performance. When interruption is necessary, METROCOM will provide Customer at least forty-eight (48) hours advance notice of such work. 5.5. Customer shall be entitled to credit for any period of thirty (30) minutes and more when the Service remains unavailable according to definitions of Exhibit B unless the interruption is caused by the acts of Customer or is expressly permitted by this Agreement. The credit shall be equal to the amount charged to Customer for delivering the Service during the interruption period calculated by 30 minute increments. No credit shall be allowed for interruptions less than 30 minutes long or for any time required to make tests or adjustments of the equipment. Note: If Customer fails by any reason to provide access for METROCOM staff to the equipment for trouble examination and resolution at any time including night time, weekends and holidays, the interruption credit is calculated as from the moment of actual METROCOM access to the equipment. 6. CUSTOMER RESPONSIBILITIES 6.1. Customer agrees to send signed Work Acceptance Certificate or motivated Work Acceptance rejection within ten (10) days from the date of receiving of Work Acceptance Certificate from METROCOM. If Customer within defined period would not sign Work Acceptance Certificate and would not present motivated rejection METROCOM has the right to draw up unilateral Work Acceptance Certificate, which would be the reason for payments by this Service Agreement. 6.2. Customer will bear all expenses for connecting additional equipment required for matching the provided channels with the equipment used by Customer. 6.3. Customer may use the Service for any purpose permitted by the Russian Laws, for which it is intended, provided that Customer will not use the Service so as to interfere with or impair service over any of the facilities and associated equipment comprising the METROCOM network and associated equipment, or to impair the privacy of any communications over the METROCOM network facilities and associated equipment. 6.4. Customer shall not perform any maintenance and repair to METROCOM equipment or facilities, and Customer shall prohibit the access of unauthorized persons to the Service and equipment. Customer shall immediately report any failure, interruption or impairment of the Service to the METROCOM's ITMC at +7 812 118-3288. 7. OWNERSHIP Customer agrees that all rights, title and interest in the transmission equipment and associated materials provided by METROCOM hereunder shall at all times remain exclusively with METROCOM. Customer shall not create or permit to be created any violation of property rights for METROCOM's equipment. Upon termination of Service, METROCOM shall have the right, but not the obligation, to remove all METROCOM facilities from any applicable premises 8. CANCELLATION OF AGREEMENT 8.1. Customer may cancel this Agreement before commencement of the Service Term by reimbursing to METROCOM within thirty (30) days for all expenses incurred with installation of the Service. 8.2. Customer may cancel this Agreement after commencement of the Service Term provided the Customer has paid all charges to date, by delivering to METROCOM a cancellation payment equal to 25% of aggregate monthly payments for the remaining part of the Term of the particular Service 8.3. Either party may cancel the Agreement in the event of default. The following events will be events of default under this Agreement: (a) failure by Customer to pay any sum payable under this Agreement in the agreed amount within sixty (60) calendar days from the due day of payment as stipulated in Paragraph 4.3 of this Agreement; (b), failure by either party to perform any non-monetary obligation under this Service Agreement within thirty (30) days after notice from the other party specifying the failure or within such additional period agreed by both Parties as reasonably necessary to cure such failure if the failure cannot be cured within thirty (30) days. Upon occurrence of an event of default, the non-defaulting party may terminate the Agreement. Upon termination, all of Customer's rights to the Service shall immediately cease. 9. WARRANTY AND LIABILITY The Interruption Credit described above in paragraph 5.5 shall be METROCOM's sole obligation and Customer's sole remedy for any loss or damage sustained as a result of any interruption or failure of the Service, any facilities used in providing the Service, or for any error, omission or delay for any reason. METROCOM makes no warranty of merchantability or fitness for a particular purpose with respect to the service or any equipment provided under this Agreement. In no event shall METROCOM be liable to Customer or any third party for any indirect, special or consequential damages including, without limitation, those based on loss of revenues, profits, or business opportunities, whether or not METROCOM had or should have had any knowledge, actual or constructive, that any such damages might be incurred. 10. ASSIGNMENT Neither party may assign this Agreement to a third party without the express written consent of the other party, except (a) to any subsidiary, parent company or affiliate or (b) pursuant to any sale of all the business related to this Service Agreement. 11. CONFIDENTIALITY If either party provides confidential information to the other in writing and identified as such, the receiving party shall protect the confidential information from disclosure to third parties with the same degree of care accorded its own confidential and proprietary information, except that neither party shall be required to hold confidential information which becomes publicly available other than through the recipient or which is required to be disclosed by a state or judicial order or which is independently developed by the disclosing party. Confidentiality obligations shall survive for a period of one (1) year following expiration or termination of this Agreement. If the parties have entered into a Confidentiality Agreement, its terms and obligations shall be in addition to the terms and obligations of this Paragraph. 12. NOTICES All notices shall be in writing and addressed as provided in Paragraph 17 of this Agreement. Notices forwarded by delivery service (courier service or by registered mail) shall be deemed given five (5) days after documented delivery to the appropriate service, or if by facsimile, on the date indicated on the receiving party's transmitted copy. The notice delivered by messenger shall be deemed given on the date inscribed on its copy by the receiving party staff Note: Repeated notices if requested by either party shall be forwarded under cash on delivery terms. 13. SETTLEMENT OF DISPUTES If the Parties are unable to independently resolve any dispute pursuant to this Service Agreement, the dispute shall be settled by the Arbitration Court of the Chamber of Commerce of the Russian Federation. 14. FORCE MAJEUR The parties will not be held responsible for partial or complete failure to execute provisions of this Service Agreement if such failure is caused by acts of fire, flood, earthquake, war, ban of export or import, higher than acceptable level of radiation or any other cause considered by International Arbitration as Force Majeur as long as this acts were immediately affecting execution of the Agreement. The fulfillment of obligations under this Agreement by the Parties shall be extended correspondingly for a period during which such circumstances last. Shall Force Majeur circumstances or its consequences continue for 4 (four) months the Parties agree to meet to discuss appropriate measures. However, if during the following 2 (two) months the Parties will not resolve the related issues each party has the right to refuse from further execution of the obligations under this Agreement and neither of the Parties will have the right for reimbursement of any possible damages by the other Party. 15. PUBLICITY Neither Party shall use the other Party name in publicity or press releases without prior consent. 16. GENERAL PROVISIONS These terms and conditions constitute the entire agreement between the Parties and supersede any other verbal or written understandings regarding the Service described in this Agreement. It is expressly understood that commercial representatives of METROCOM, have no authority to bind METROCOM or to alter the terms and conditions of this Agreement. Failure of either party to insist on strict performance of any of these terms and conditions shall not be deemed a waiver thereof. If any provisions of this Agreement are held to be unenforceable, the remaining provisions of this Agreement shall remain in effect. This Agreement shall be governed by the laws of Russian Federation. 17. LEGAL ADDRESSES OF THE PARTIES CUSTOMER: VI Internet Telecommunications Inc. Address: 1155 University, Suite 602, Montreal, Quebec, Canada H3B 3A7 Tel. (514) 876-9222 Fax: (514) 876-1001 Banking Bank of Montreal Address: 119 St.Jacques Street West, Montreal, Quebec, Canada H2Y 1L6 Account # 4623785 Swift METROCOM: Legal Address: 198013, SPb, Moskovsky pr.,28 Address: 191025, Russia, Saint-Petersburg, Nevsky pr., 80 Phone: (812) 118-3131 Fax: (812) 118-3112 Banking Bank of New York Account #890 -0060-166 SWIFT: ICSPRU2P Industry Construction Bank, Construction Branch Account # 40702840572005000270 7809001184 - ---------------------------------------------------------- List of Exhibits: ?. List of Customer Assigned Contacts (1 page) B. Performance Standards (1 page) C. Approved Contractual Price Protocol ( page) VI Internet Telecommunications Inc. METROCOM Name Derek J. Labell Name Ravil Khalikov Title CEO Title General Director acting in the strength of the Charter Acting in the strength of Chapter Signature Signature Date Date Exhibit A to Agreement of June 09, 1999 LIST OF CUSTOMER ASSIGNED CONTACTS FOR IMPLEMENTATION OF AGREEMENT - ------------------------------------------ ---------------------------------- ---------------------------------- Name Position Phone/Fax - ------------------------------------------ ---------------------------------- ---------------------------------- - ------------------------------------------ ---------------------------------- ---------------------------------- Administrative Representative: - ------------------------------------------ ---------------------------------- ---------------------------------- - ------------------------------------------ ---------------------------------- ---------------------------------- Derek Labell Chief Executive Officer Office: 514-876-9222 Cell: 514-947-5700 Fax: 514-876-1001 Email: djlabell@supernet .ca - ------------------------------------------ ---------------------------------- ---------------------------------- - ------------------------------------------ ---------------------------------- ---------------------------------- Technical Representative: - ------------------------------------------ ---------------------------------- ---------------------------------- - ------------------------------------------ ---------------------------------- ---------------------------------- Gilles Lochet Director of Operations-Montreal Office: 514-878-1555 Pager: 514-997-8978 888-275-0792 514-997-8979 Fax: 514-878-1295 gilles.lochet@bpe.net - ------------------------------------------ ---------------------------------- ---------------------------------- - ------------------------------------------ ---------------------------------- ---------------------------------- LIST OF METROCOM ASSIGNED CONTACTS FOR IMPLEMENTATION OF AGREEMENT - ------------------------------------------- ------------------------------ ------------------------------------- Name Position Phone/Fax - ------------------------------------------- ------------------------------ ------------------------------------- - ------------------------------------------- ------------------------------ ------------------------------------- Administrative Representative: - ------------------------------------------- ------------------------------ ------------------------------------- - ------------------------------------------- ------------------------------ ------------------------------------- Paul Tereshchenko Deputy M&D Director Phone +7 812 118-3140 Fax +7 812 118-3123 e-mail: teresch@metrocom.ru - ------------------------------------------- ------------------------------ ------------------------------------- - ------------------------------------------- ------------------------------ ------------------------------------- Technical Representative: - ------------------------------------------- ------------------------------ ------------------------------------- - ------------------------------------------- ------------------------------ ------------------------------------- Tech on Duty (24 hours) Phone +7 812 118-3288 Fax +7 812 118-3222 e-mail: operator@metrocom.ru - ------------------------------------------- ------------------------------ -------------------------------------
VI Internet Telecommunications Inc. METROCOM Name Derek J. Labell Name Ravil Khalikov Title CEO Title General Director Signature Signature Date Date Exhibit B to Agreement of June 09, 1999 SERVICE DESCRIPTION AND Performance Standards 1. 256 kbps Service 256 kbps service is a digital line, which may be used for simultaneous two-way transmission of voice, data, or other digitally encoded information signals. 256 kbps service provided by METROCOM is designed to provide an average performance of at 99.95% error free seconds of transmission over a continuous twenty-four (24) period. Error probability of a single symbol in the channel provided by METROCOM does not exceed 1x10-10 2. E1 Service E1 Service is a digital line, which may be used for simultaneous two-way transmission of voice, data, or other digitally encoded information signals. E1 (2,048 Mbps transmission rate) service provided by METROCOM is designed to provide an average performance of at 99.95% error free seconds of transmission over a continuous twenty-four (24) period. Error probability of a single symbol in the channel provided by METROCOM does not exceed 1x10-10 3. Error Free Second An error free second is defined as any one-second time period in which there are no bit errors during the transmission of data. 4. Service Availability Criteria of availability or unavailability of the provided channel comply with Rec.G.821 ITU VI Internet Telecommunications Inc. METROCOM Name. Derek J. Labell______ Name. Ravil U. Khalikov Title: CEO Title: General Director Signature:_____________________________________ Signature:__________________ Date:__________________________________________ Date:_______________________ Exhibit C to Agreement of June 09, 1999 CONTRACTUAL PRICE APPROVAL PROTOCOL All equivalent amounts stipulated in this Protocol are payable in US dollars I. Charges Installation Charge: - -------------------------------------------------------------------------------- Equivalent charge - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $7,500 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Total installation charge: $ 7,500 (Seven thousand five hundred US Dollars) plus VAT (20%) - -------------------------------------------------------------------------------- Monthly Recurring Charge: - -------------------------------------------------------------------------------- Equivalent charge for the Service - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $ 35,800 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Total monthly charge: $ 35,800 (Thirty five thousand eight hundred US Dollars) plus VAT (20%) - -------------------------------------------------------------------------------- II. Payee: Joint Stock Company METROCOM ------ VI Internet Telecommunications Inc. METROCOM Name_____ Derek J.Labell Name_____ Ravil Khalikov Title CEO Title____ General Director Acting in the strength of the Charter acting in the strength of Charter Signature Signature Date Date EX-27 4 FDS --
5 0001080008 Internet VIP, Inc. 4-MOS FEB-28-1999 NOV-13-1998 FEB-28-1999 223,624 0 0 0 0 801 25,000 0 249,425 68,258 0 0 0 2,087 179,080 249,425 0 0 0 219,010 0 0 0 (219,010) 0 (219,010) 0 0 0 (219,010) (0.01) (0.01)
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