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ACCESSPOINT CORPORATION
------------------------------------------------------------------
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ACCESSPOINT CORPORATION
3003-3011 S. Valley View Blvd., Ste. 190,
Las Vegas, NV 89102
NOTICE AND PROXY STATEMENT
October ___, 2004
Dear Stockholder:
We are pleased to invite you to the Annual Meeting of Stockholders of
Accesspoint Corporation ("Accesspoint" or the "Company"). The meeting will be
held on November ___, 2004 at 11:00 a.m., at J. W. Marriot Hotel, 221 North
Rampart, Las Vegas, Nevada 89117. The matters expected to be acted upon at the
meeting are described in detail in the following Notice of Special Meeting and
Proxy Statement.
You will also hear an overview of Accesspoint's current and prior year
operations from senior management to be followed by a question and answer
session open to all stockholders. Our Annual Report, which is available online
at www.sec.gov, contains other detailed information about Accesspoint, including
its audited financial statements for the year ended December 31, 2003.
Stockholders are urged to carefully read this Proxy Statement in its entirety
before voting on the proposals. This Proxy Statement and the enclosed proxy card
are being mailed to stockholders on or about October ___, 2004.
We hope you can join us on November ___, 2004. Regardless of whether you expect
to attend the meeting in person, please read the Proxy Statement. When you have
done so, please mark your votes on the enclosed proxy card, sign and date it,
and return it to us in the enclosed postage-paid envelope. It is important that
your shares be represented, and your promptness will assist us in making
necessary preparations for the meeting.
Sincerely,
----------------
Gene C. Valentine,
Chairman of the Board
1
ACCESSPOINT CORPORATION
Notice of Annual Meeting of Stockholders
To be held November ___, 2004
Accesspoint Corporation will hold its Annual Meeting of Stockholders on November
___, 2004 at 11:00 a.m., Pacific Standard Time, at J. W. Marriot Hotel, 221
North Rampart, Las Vegas, Nevada 89117.
We are holding this meeting to consider and act upon the following matters that
are more fully described in the accompanying Proxy Statement:
PROPOSAL 1. INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
-------------------------------------------------------
Amend Article Fourth of the Company's Articles of Incorporation, as
amended, to increase the total number of authorized shares of the Company's
$.001 par value common stock from the present number of 25,000,000 shares to
50,000,000 shares, as set forth on the Certificate of Amendment attached hereto
as Exhibit A. The remainder of Article Fourth to remain as is.
PROPOSAL 2. INCREASE IN SIZE OF BOARD OF DIRECTORS.
---------------------------------------
Amend Article III, Section 2 of the Company's Bylaws to increase the
authorized number of directors on the Board from five (5) to seven (7) members.
The remainder of Article III, Section 2 to remain as is.
PROPOSAL 3. ELECTION OF NEW DIRECTORS.
--------------------------
Elect the following persons to the Board of Directors to serve until
the next annual meeting of stockholders, and until their successors have been
duly elected and qualified:
GENE C. VALENTINE
JOSEPH BYERS
MICHAEL SAVAGE
PROPOSAL 4. APPROVAL OF SETTLEMENT AGREEMENT.
---------------------------------
Approve and ratify the settlement of the certain cases against the
Company, as described herein on the terms and conditions set forth in the
Settlement Agreement attached hereto as Exhibit B and hereinafter referred to as
the "Bentley/Djokovich Lawsuits;" that Settlement Agreement contains other
important provisions as well.
PROPOSAL 5. APPROVAL AND RATIFICATION OF BOARD OF DIRECTORS ACTIONS.
--------------------------------------------------------
Approve and ratify the actions of our directors for the last fiscal
year and for the period from the fiscal year end through the date of the annual
shareholder meeting.
2
PROPOSAL 6. RATIFY THE APPOINTMENT OF CERTIFIED PUBLIC ACCOUNTANTS.
-------------------------------------------------------
The Board has appointed Mendoza Berger & Company, LLP, Certified Public
Accountants, as auditors to examine the consolidated financial statements of
Accesspoint for the fiscal year ending December 31, 2004, and to perform other
appropriate audit and advisory services and is requesting ratification of such
appointment by the stockholders.
AND TO CONSIDER SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT OF THE MEETING.
The Board of Directors has selected August 27, 2004 as the record date for
determining stockholders entitled to notice of and to vote at the meeting and
any adjournment of the meeting. A list of stockholders as of the record date
will be available for inspection at the corporate headquarters of Accesspoint
for ten days before the meeting.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING,
PLEASE DATE, SIGN, AND MAIL PROMPTLY THE ENCLOSED
PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
A copy of Accesspoint's 2003 Annual Report is available for review online at
www.sec.gov. Please read the Annual Report in its entirety.
By Order of the Board of Directors,
------------------------
Gene C. Valentine, Secretary
Las Vegas, Nevada
October ___, 2004
3
ACCESSPOINT CORPORATION
Annual Meeting of Stockholders
To Be Held November ___, 2004
This Proxy Statement is furnished to stockholders of Accesspoint for use at the
Annual Meeting of Stockholders to be held at 11:00 a.m., Pacific Standard Time,
at offices of the Company, or at any postponements or adjournments of the
meeting for the purposes set forth in the accompanying Notice of Annual Meeting
of Stockholders. The approximate date on which this Proxy Statement and the
enclosed proxy card are first being sent to stockholders is October ___, 2004.
1. GENERAL INFORMATION Q: Who is soliciting my proxy?
A: We, the Board of Directors of Accesspoint (the "Board"), are sending you this
Proxy Statement in connection with our solicitation of proxies for use at
Accesspoint's Annual Meeting of Stockholders. Specified directors, officers, and
employees of Accesspoint may also solicit proxies on our behalf by mail, phone,
fax, or in person.
Q: Who is paying for this solicitation?
A: Accesspoint will pay for the solicitation of proxies, including the cost of
preparing, assembling, and mailing this Proxy Statement, the proxy card, the
Annual Report and all other materials which may be sent to stockholders in
connection with this solicitation.
Q: On what am I voting?
A: You will have the chance to vote on, specifically:
o An Increase in Number of Authorized Shares of Common Stock
from 25,000,000 shares to 50,000,000 shares;
o An Increase in Authorized Membership of our Board of Directors
from five (5) to seven (7) members;
o Election of Gene C. Valentine, Joseph Byers and Michael Savage
to the Board of Directors;
o Approval of Settlement Agreement to settle
the"Bentley/Djokovich Lawsuits" which includes the sale of our
remaining merchant accounts portfolio in exchange for the
cancellation of the Company's debt to Ameropa Ltd. in the
approximate amount of $1,500,000, and the issuance of shares
resulting to a controlling interest to Mr. Barber, our former
officer and director;
o Approve and ratify the actions of our directors for the last
fiscal year and for the period from the fiscal year end
through the date of the annual shareholder meeting; and
o Ratify the appointment of Mendoza Berger & Company, LLP,
Certified Public Accountants.
Q: Who can vote?
A: Only holders of Accesspoint's Common Stock at the close of business on August
27, 2004, the record date for the Annual Meeting, can vote. If you beneficially
owned any Common Stock on the record date, you have one vote per share of Common
Stock.
4
Q: How do I vote?
A: You may vote your shares either in person or by proxy. To vote by proxy, you
should mark, date, sign, and mail the enclosed proxy card in the postage-paid
envelope. Granting a proxy will not affect your right to vote your shares if you
attend the Annual Meeting and want to vote in person; by voting in person you
will revoke your proxy. You may also revoke your proxy at any time before the
vote at the meeting by providing Accesspoint's Secretary written notice of your
revocation or by submitting a later-dated proxy. If you return your proxy but do
not mark your voting preferences, our designated proxy holders will vote your
shares FOR all the proposals described herein.
Q: What constitutes a quorum?
A: On the record date, Accesspoint had 24,163,965 shares of Common Stock issued
and outstanding. In order for the Annual Meeting to be properly held, a majority
of the outstanding shares (a quorum) must be present at the meeting or
represented by proxy.
Q: What vote is required to approve each proposal?
A: For the election of directors, the affirmative vote of a plurality of the
votes cast at the meeting is required for the election of directors. A properly
executed proxy card marked WITHHOLD AUTHORITY with respect to the election of
one or more directors will not be voted with respect to the director or
directors indicated, although it will be counted for purposes of determining
whether there is a quorum. For all matters other than the election of directors,
the affirmative vote of a majority of the votes cast by person or by proxy at
the Annual Meeting is required for approval of such matter. A properly executed
proxy marked ABSTAIN with respect to any other matter will not be voted,
although it will be counted for purposes of determining whether there is a
quorum. Accordingly, if there are any other items on which the stockholders vote
at the Annual Meeting, an abstention will have the effect of a negative vote on
such other item.
Q: What if my shares are held in "street name?"
A: If you hold your shares in "street name" through a broker or other nominee,
your broker or nominee may only exercise voting discretion with respect to
matters deemed routine by NASD, such as the election of directors and the
selection of independent auditors. On a non-routine matter, a broker or other
nominee cannot cast a vote (a so-called "broker non-vote"). Broker non-votes
will not be treated as votes cast, and therefore, will not affect the outcome of
the matters referred to above.
Q: Can I vote on other matters?
A: The matters presented at an annual meeting are limited to those properly
presented by the Board and those properly presented by stockholders. We have not
received notice from any stockholder as to any matter to come before the Annual
Meeting other than as set forth herein. If any other matter is presented at the
Annual Meeting, your signed proxy gives the proxy holders, authority to vote
your shares.
Q: How does the Board recommend I vote on the proposals?
A: Unless you give other instructions on your proxy card, the proxy holders will
vote in accordance with the recommendations of the Board. The Board recommends a
vote FOR:
o An Increase in Number of Authorized Shares of Common Stock
from 25,000,000 shares to 50,000,000 shares;
o An Increase in the Authorized Membership of our Board of
Directors from five (5) to seven (7) members;
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o Election of Gene C. Valentine, Joseph Byers and Michael Savage
to the Board of Directors;
o Approval of Settlement Agreement to settle the
"Bentley/Djokovich Lawsuits" which provides for the sale of
our remaining merchant accounts portfolio in exchange for the
cancellation of the Company's debt Ameropa Ltd. in the
approximate amount of $1,500,000, and the issuance of shares
resulting to a controlling interest to Mr. Barber, our former
officer and director; and
o Approval and ratification of the actions of our directors for
the last fiscal year and for the period from the fiscal year
end through the date of the annual shareholder meeting; and
o Ratification of the appointment of Mendoza Berger & Company,
LLP, Certified Public Accountants.
With respect to any other matter that properly comes before the meeting, the
proxy holders will vote as recommended by the Board, or if no recommendation is
given, in their own discretion.
Q: How do I get copies of the exhibits filed with Accesspoint's Reports on Form
10-KSB?
A: A copy of Accesspoint's Annual Report for 2003 and 2002, which contain
Accesspoint's Form 10-KSB for those years and consolidated financial statements,
is available online at www.sec.gov. Accesspoint will provide to any stockholder
as of the record date, who so specifically requests in writing, copies of the
exhibits filed with Accesspoint's Form 10-KSBs for a reasonable fee. Requests
for such copies should be directed to Accesspoint's Corporate Secretary,
Accesspoint Corporation, 3003-3011 S. Valley View Blvd., Ste. 190, Las Vegas, NV
89102.
We hereby incorporate by reference into this Proxy Statement the following
documents filed with the Commission pursuant to Section 13 or 15(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"):
(a) The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2003;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
2004
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2004; and
(d) All other Reports and other documents filed by the Company pursuant to
Section 13(e) or 15(d) of the Exchange Act subsequent to June 30, 2004 and prior
to the date of the Meeting or such later date or dates to which the Meeting may
be adjourned.
2. PROPOSALS FOR SHAREHOLDER ACTION
PROPOSAL 1. INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
--------------------------------------------------------
Amend Article Fourth of the Company's Articles of Incorporation, as
amended, to increase the total number of authorized shares of the Company's
$.001 par value common stock from the present number of 25,000,000 shares to
50,000,000 shares, as set forth on the Certificate of Amendment attached hereto
as Exhibit A. The remainder of Article Fourth to remain as is.
6
PURPOSE OF INCREASING AUTHORIZED COMMON STOCK
Our Board of Directors believes it is desirable to increase our
authorized common stock. Our purpose in increasing our authorized common stock
will increase the total value of the corporation and better position us to take
advantage possible future financings and other corporate opportunities and
purposes as the board of directors determines in its discretion to be in the
best interest of the corporation, and which may include future stock splits,
stock dividends or other distributions, acquisitions and stock options and other
equity benefits under employee benefit plans. This action is also necessary to
accommodate the terms of the Settlement Agreement, described herein at Proposal
4, which allows for the issuance to William Barber, our former officer and
director, a controlling interest in the shares of our common stock, as
consideration for his past assistance to us in restructuring our debts and
enabling us to position our financial affairs such that we hope that we will be
able to move forward with our business. Without his assistance, we believe that
we would have been forced to cease operations and seek bankruptcy protection;
therefore, his assistance has been integral to our continued existence. To that
end we are increasing the number of authorized shares of common stock, which we
believe will enable us to promptly take advantage of future favorable
opportunities that may present themselves without the delay and expense
associated with holding additional special meetings of stockholders.
RECOMMENDATION OF THE BOARD.
The Board recommends that stockholders vote FOR the proposal 1.
PROPOSAL 2. INCREASE IN SIZE OF BOARD OF DIRECTORS.
--------------------------------------
Amend Article III, Section 2 of the Company's Bylaws to increase the
authorized number of directors on the Board from five (5) to seven (7) members.
The remainder of Article III, Section 2 to remain as is.
PURPOSE OF INCREASING THE AUTHORIZED SIZE OF THE BOARD OF DIRECTORS
Our Board of Directors believes it is desirable to allow for the future
contingency of expanding the allowable size of our board of directors in the
event that we are able to recruit additional members to our board.
RECOMMENDATION OF THE BOARD.
The Board recommends that stockholders vote FOR the proposal 2.
PROPOSAL 3. ELECTION OF NEW DIRECTORS.
-------------------------
NOMINEES: GENE C. VALENTINE, JOSEPH BYERS AND MICHAEL SAVAGE.
At the Annual Meeting, you and the other stockholders will re-elect 3
individuals to serve as directors until the next annual meeting of stockholders
to be held in 2005, until their successors are duly elected or appointed or
until their death, resignation, or removal. These nominees are currently members
of the Board, and one is currently serving as one of our executive officers.
The individuals named as proxies will vote the enclosed proxy for the
election of all nominees, unless you direct them to withhold your votes. If any
nominee becomes unable to serve as a director before the Annual Meeting, an
event that is not presently anticipated, discretionary authority may be
exercised by the persons named as proxies to vote for substitute nominees
proposed by the Board.
7
Standing for re-election as directors are:
MR. EUGENE C. VALENTINE, Chairman of the Board, Member of the Audit Committee,
Member of the Compensation Committee. Mr. Valentine joined the Board in October
2002. Mr. Valentine is the founder and CEO of the Financial West Group, based in
Los Angeles. Mr. Valentine founded the Financial West Investment Group, Inc. in
1985 and has served as its CEO since that time. A firm with over 300 registered
sales representatives in 52 offices throughout the United States. Mr.
Valentine's experiences included serving from 1982 to 1985 as Vice President of
Marketing for Christopher Weil & Co., a NASD registered broker/dealer, and from
1980 to 1982, he was director of Real Estate Acquisitions for Windfarms, Ltd.,
an alternative energy subsidiary of Chevron USA. From 1978 to 1982, he also
served as a stockholder and officer of Horizon Realty, a real estate brokerage
firm located in San Francisco, following service from 1972 to 1978 as an officer
in the U.S. Navy. He is a NASD registered securities principal, and holds NASD
licenses, including Series 22, 39, 7, 24 and 63. He received a BS degree in
Psychology from Bethany College in 1972 and minors in Economics and
International Affairs, and attended the University of Vienna, Austria. Mr.
Valentine, through the Financial West Group is a shareholder of Accesspoint. Mr.
Valentine is also the chairman of the Audit Committee. As an active participant
in the securities industry, we have determined that Mr. Valentine is a financial
expert and is independent as that term is used in Item 7(d)(3)(iv) of Schedule
14A under the Exchange Act.
MR. MICHAEL SAVAGE joined the Board in January 2003. Mr. Savage has been the
founder of more than 15 successful companies, including Capital Reserve
Corporation of Los Angeles. He has extensive business experience in equipment
leasing, technology and the development of new marketplaces. Mr. Savage is
expected to focus his energies on the development of our affinity cards. Mr.
Savage is currently a consultant for Step Strategy, Inc., located in Century
City, California. From 2002 to 2004, Mr. Savage served as the president of
Leasing Express, LLC, a leasing company; from 1999 to 2004, he was a partner
with Sterling & Company Mergers and Acquisitions Inc., a Bahamian corporation.
From 1999 to 2001, Mr. Savage was the president of TransAmerican Holdings, Inc.,
a Nevada corporation traded on the OTCBB as TAHI. Mr. Savage attended Washington
State College from 1943 to 1944, where he studied electronics and
administration, the University of Southern California's School of Architecture
from 1940 to 1941, and served in the U.S. Army Air Corps from 1943 to 1946. Mr.
Savage is not a shareholder of Accesspoint.
MR. JOE BYERS, Member of the Audit Committee, Member of the Compensation
Committee. Mr. Byers joined the Board in January 2002. Mr. Byers has more than
40 years of experience in the banking business and was most recently Senior Vice
President of First National Bank based in Los Angeles, where he served from 2000
to 2001. Prior to that, Mr. Byers served as First Vice President of Prime Bank
from 1999 to 2000, when it was sold to East West Bank. Prior to that, from 1987
to 1997, Mr. Byers was Branch Manager of the Beverly Hills Branch of Sterling
Bank; upon its sale to Pacific Bank of San Francisco, he remained as Brach
Manager, until the branch was sold to and closed by City National Bank in 1999.
Mr. Byers has a California financial lenders license, having served as a lender
and broker with six institutions during his career. Mr. Byers attended the
University of Kentucky and studied civil engineering while serving in the U.S.
Army, and served from 1942 to 146 in the Air Corps Army Engineers. Mr. Byers
focuses his time and attention on developing additional processing platforms and
financial relationships for us. Mr. Byers is not a shareholder of Accesspoint.
8
The executive officers and directors of Accesspoint Corp as of December 31, 2003
were as follows:
------------------------------------- ---------- --------------------------------------------------
NAME AGE POSITION
------------------------------------- ---------- --------------------------------------------------
Gene Valentine 55 Chairman of the Board of Directors
------------------------------------- ---------- --------------------------------------------------
William B. Barber* 59 CEO, President, Director
------------------------------------- ---------- --------------------------------------------------
Joseph Byers 80 Director
------------------------------------- ---------- --------------------------------------------------
Michael Savage 82 Director
------------------------------------- ---------- --------------------------------------------------
*Mr. Barber resigned the indicated positions on August 30, 2004. Mr. Barber is
not standing for re-election as director. Mr. Barber's resignation was not the
result of any disagreement with us on any matter relating to our operations,
policies or practices.
RECOMMENDATION OF THE BOARD.
The Board withholds any recommendation in regard to Proposal 3.
PROPOSAL 4. APPROVAL OF SETTLEMENT AGREEMENT.
---------------------------------
Approve and ratify the settlement of the following cases against the
Company on the terms and conditions set forth in the Settlement Agreement
attached hereto as Exhibit B and hereinafter referred to as the
"Bentley/Djokovich Lawsuits;"
A. That certain lawsuit entitled JAMES M. BENTLEY V. WILLIAM R. BARBER,
et al., and numbered 02CC04690 in the files of that Court concerning
stockholder derivative claims for Breach of Contract; Breach of
Fiduciary Duty; Misappropriation of Trade Secrets Pursuant to Civil
Code Section 3426, et seq.; Recovery of Personal Property Pursuant to
Civil Code Section 3426, et seq.; Imposition of a Constructive Trust or
an Accounting; Unfair Competition; Conversion; Unfair Business
Practices; and Usurpation of Corporate Opportunity against certain of
the Defendants;
B. That certain lawsuit entitled JAMES W. BENTLEY, AS TRUSTEE OF THE
BENTLEY FAMILY TRUST C V. ACCESSPOINT CORPORATION, et al., and numbered
02CC06709 in the files of that Court concerning claims for Breach of
Contract, Common Count, and Declaratory Relief, against Defendant
Accesspoint Corporation;
C. That certain lawsuit entitled MARY ANN BENTLEY, AS TRUSTEE OF THE
BENTLEY FAMILY 1995 TRUST V. ACCESSPOINT CORPORATION, et al., and
numbered 02CC06571 in the files of that Court concerning claims for
Breach of Contract, Common Count, and Declaratory Relief, against
Defendant Accesspoint Corporation;
D. That certain lawsuit entitled THE BENTLEY FAMILY LIMITED PARTNERSHIP
V. ACCESSPOINT CORPORATION, et al., and numbered 02CC06710 in the files
of that Court concerning claims for Breach of Contract, Common Count,
and Declaratory Relief, against Defendant Accesspoint Corporation; and
E. That certain lawsuit entitled ACCESS HOLDINGS LIMITED PARTNERSHIP,
ETC., ET AL. V. ACCESSPOINT CORPORATION, etc., et al., and numbered
03CC09039 in the files of that Court concerning a declaratory relief
claim seeking, among other things, return of certain consideration
tendered by Access Holdings Limited Partnership and Tom Djokovich under
the loan agreement between Accesspoint and Net Integrated Systems, Inc.
9
Another pertinent provision of the Settlement provides for the sale of
the Company's Merchants Accounts Portfolios ("Accounts") at the best price
available as soon as commercially feasible, specifically, that the offer of
Merchants Billing Services, Inc. ("MBS"), a company owned by two former officers
and directors of the Company, be accepted and that Merchants Accounts Portfolios
be sold to MBS in exchange for the cancellation of the debt of Accesspoint to
Ameropa Ltd. in the approximate amount of $1,500,000.
The actual value of the Accounts shall be determined by multiplying the
net monthly earnings over the last 6 months by a multiplier of 10-12; we
estimate that this will yield a valuation of between $500,000 and $600,000.
Since MBS has agreed to cancellation of our debt of approximately $1,500,000,
these terms of this transaction favor the Company, especially since we believe
there is likely no other market for these Accounts, due to the peculiarities of
the credit card processing industry. We estimate that the Accounts represent
about two-thirds of the remaining assets of the Company, and after their sale,
we will still have as an asset the $250,000 security deposit held by Chase
Merchants Services LLC/Chase Manhattan Bank which is refundable to the Company.
According to the Settlement Agreement, this asset is pledged to repay certain of
the plaintiffs. There is no present relationship between the Company and MBS,
although MBS for a time managed our business, and MBS is owned by two of our
former officers and directors, namely William Barber and Becky Takeda.
Finally, the Settlement provides for the issuance of a controlling
interest in shares of our common stock to one individual, and requires the
passage of our increase in authorized shares of common stock, described herein
as Proposal 1. The Settlement provides for the issuance to William Barber, our
former officer and director, a controlling interest in the shares of our common
stock, as consideration for his past assistance to us in restructuring our debts
and enabling us to position our financial affairs such that we hope that we will
be able to move forward with our business. Without his assistance, we believe
that we would have been forced to cease operations and seek bankruptcy
protection; therefore, his assistance has been integral to our continued
existence.
PURPOSE OF ACCEPTING THE SETTLEMENT AGREEMENTS
Our Board of Directors believes it is desirable and in the best
interests of the Company to accept the terms of the Settlement Agreement, which
will allow us move forward and refocus our management's attention on our
business. Without shareholder ratification of the Settlement Agreement, we
believe that we would not be able to continue operations and our ability to
generate revenues would be harmed.
RECOMMENDATION OF THE BOARD.
The Board recommends that stockholders vote FOR the proposal 4.
PROPOSAL 5. APPROVAL AND RATIFICATION OF BOARD OF DIRECTORS ACTIONS.
-------------------------------------------------------
Approve and ratify the actions of our directors for the last fiscal
year and for the period from the fiscal year end through the date of the annual
shareholder meeting.
RECOMMENDATION OF THE BOARD.
The Board recommends that stockholders vote FOR the proposal 5.
10
PROPOSAL 6. RATIFICATION OF INDEPENDENT AUDITORS
------------------------------------
The Board has appointed Mendoza Berger & Company, LLP, Certified Public
Accountants, as auditors to examine the consolidated financial statements of
Accesspoint for the fiscal year ending December 31, 2004, and to perform other
appropriate audit and advisory services and is requesting ratification of such
appointment by the stockholders. In the event that the stockholders do not
ratify the appointment of Mendoza Berger & Company, LLP, Certified Public
Accountants, the adverse vote will be considered as a direction to the Board to
select other auditors for the next fiscal year. However, because of the
difficulty and expense of making any substitution of auditors after the
beginning of the current fiscal year, it is contemplated that the appointment
for the fiscal year ending December 31, 2004 will be permitted to stand, unless
the Board finds other reasons for making a change. It is understood that even if
the selection of Mendoza Berger & Company, LLP, Certified Public Accountants is
ratified, the Board, in its discretion, may direct the appointment of a new
independent accounting firm at any time during the year if the Board feels that
such a change would be in the best interests of Accesspoint and its
stockholders.
Representatives of Mendoza Berger & Company, LLP, Certified Public Accountants
will be present at the Annual Meeting, will have an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions. This proposal will be approved if it receives the
affirmative vote of holders of a majority of the shares of Common Stock voted or
represented and entitled to vote at the Annual Meeting.
RECOMMENDATION OF THE BOARD.
The Board recommends that stockholders vote FOR the proposal to ratify the
appointment of Mendoza Berger & Company, LLP, Certified Public Accountants as
Accesspoint's independent auditors for fiscal year 2004.
AUDIT FEES: During 2003 and 2002 we accrued or paid Mendoza Berger & Company LLP
a total of $22,000 and $40,360 for professional services rendered in connection
with performance of our independent audits for the years ending December 31,
2003 and 2002, respectively.
ALL OTHER FEES: During 2003 and 2002 we paid Mendoza Berger & Company LLP a
total of $32,923 for professional services rendered in connection with the
reviews of the March 31, 2003, June 30, 2003 and September 30, 2003, Forms
10-QSB.
TAX FEES: We paid Mendoza Berger & Company LLP $1,800 and $4,750 for tax related
services for the years ended December 31, 2003 and 2002, respectively.
PRE-APPROVAL POLICIES AND PROCEDURES. Prior to engaging its accountants to
perform a particular service, our Board of Directors obtains an estimate for the
service to be performed. All of the services described above were approved by
the Board of Directors in accordance with its procedures.
11
3. BENEFICIAL OWNERSHIP OF CERTAIN STOCKHOLDERS, DIRECTORS, NOMINEES, AND
EXECUTIVE OFFICERS
The following table sets forth information as of August 27, 2004, with respect
to directors, nominees, named executive officers of Accesspoint and each person
who is known by Accesspoint to own beneficially more than 5% of our Common
Stock, and with respect to shares owned beneficially by all directors, nominees,
and executive officers of Accesspoint as a group.
TITLE OF CLASS NAME OF BENEFICIAL OWNER AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER CLASS
--------------------- -------------------------------------------------- ----------------------------- -------------
Common Stock Eugene Valentine 607,400
3003-3011 S. Valley View Blvd., Ste. 190 Acting Chief Executive
Las Vegas, NV 89102 Officer, Director 2.5%
Common Stock Joseph Byers 13,000 shares
3003-3011 S. Valley View Blvd., Ste. 190 Director <0.1%
Las Vegas, NV 89102
Common Stock Michael Savage 20,000 shares
3003-3011 S. Valley View Blvd., Ste. 190 Director <0.1%
Las Vegas, NV 89102
Common Stock Access Holdings LP (2) 1,905,037 shares 7.9%
26482 Valpariso
Mission Viejo, Ca. 92677
Common Stock Accesspoint Corporation 5,192,735 shares 21.5%
3003-3011 S. Valley View Blvd., Ste. 190
Las Vegas, NV 89102
Common Stock Tom Djokovich 3,608,257 shares 14.9%
23332 Vista Carillo
Laguna Niguel, Ca 92677
Common Stock All directors and named executive officers as a 640,400 shares 2.7%
group
(1) Owns 6,900 shares through an IRA held by Financial West Group
and 601,500 as the controlling owner of Paradox Holdings, Inc.
the holding company for Financial West Investment Group, dba
Financial West Group.
(2) For the benefit of James W. Bentley and Mary Ann Bentley and
family.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. In accordance with Securities and Exchange
Commission rules, shares of our common stock which may be acquired upon exercise
of stock options or warrants which are currently exercisable or which become
exercisable within 60 days of the date of the table are deemed beneficially
owned by the optionees. Subject to community property laws, where applicable,
the persons or entities named in the table above have sole voting and investment
power with respect to all shares of our common stock indicated as beneficially
owned by them.
12
CHANGES IN CONTROL. Our management is not aware of any arrangements which may
result in "changes in control" as that term is defined by the provisions of Item
403(c) of Regulation S-B, except as described herein. In the event that the
Settlement Agreement is ratified by the shareholders, the resulting share
ownership structure will approximate the following:
AMOUNT AND NATURE OF PERCENT OF
TITLE OF CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNER CLASS*
--------------------- -------------------------------------------------- ----------------------------- -------------
Common Stock Eugene Valentine (1) 607,400 shares
3003-3011 S. Valley View Blvd., Ste. 190 Acting Chief Executive
Las Vegas, NV 89102 Officer, Director 1.5%
Common Stock Joseph Byers 13,000 shares
3003-3011 S. Valley View Blvd., Ste. 190 Director <0.1%
Las Vegas, NV 89102
Common Stock Michael Savage 20,000 shares
3003-3011 S. Valley View Blvd., Ste. 190 Director <0.1%
Las Vegas, NV 89102
Common Stock Access Holdings LP (2) 1,905,037 shares 4.8%
26482 Valpariso
Mission Viejo, Ca. 92677
Common Stock Accesspoint Corporation no shares (3) 0%
3003-3011 S. Valley View Blvd., Ste. 190
Las Vegas, NV 89102
Common Stock Tom Djokovich 3,608,257 shares 9.2%
23332 Vista Carillo
Laguna Niguel, Ca 92677
Common Stock William Barber (4) 20,465,499 shares (3)
c/o3003-3011 S. Valley View Blvd., Ste. 190 Former Officer and Director 52%
Las Vegas, NV 89102
Common Stock All directors and named executive officers as a 640,400 shares 1.6%
group
*BASED ON AN ESTIMATED 39,356,729 SHARES THAT WOULD BE ISSUED AND
OUTSTANDING AFTER GIVING EFFECT TO THE TERMS OF THE SETTLEMENT
AGREEMENT, WHICH WOULD RESULT IN THE ISSUANCE OF ADDITIONAL SHARES TO
MR. BARBER.
(1) Owns 6,900 shares through an IRA held by Financial West Group and
601,500 as the controlling owner of Paradox Holdings, Inc. the holding
company for Financial West Investment Group, dba Financial West Group.
(2) For the benefit of James W. Bentley and Mary Ann Bentley and family.
(3) The Settlement Agreement provides that Mr. Barber shall be issued
shares to give him a 52% ownership in the Company; the Company's
5,192,735 shares would be transferred to Mr. Barber as part of the
Settlement Agreement, and to arrive at the prescribed percentage, an
additional 15,192,654 shares of the Company's common stock would need
to be issued to comply with the terms of the Settlement Agreement.
Additional shares may be issuable under the terms of a non-dilution
agreement that will accompany the Settlement Agreement, in the event
that any of our outstanding warrants or options are exercised.
(4) Mr. Barber currently holds 80,000 shares.
13
4. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under U.S. securities laws, directors, executive officers and persons holding
more than 10% of Common Stock must report their initial ownership of Common
Stock and any changes in that ownership to the SEC. The SEC has designated
specific due dates for such reports and Accesspoint must identify in this Proxy
Statement those persons who did not file such reports when due.
Based solely upon a review of Forms 3 and 4 and any amendments furnished to
Accesspoint during our fiscal year ended December 31, 2003, and Form 5 and any
amendments furnished to Accesspoint with respect to the same fiscal year, we
believe that our directors, officers, and greater than 10% beneficial owners did
not comply with the applicable Section 16 filing requirements, in a timely
manner, as no such reports have been filed.
5. EQUITY COMPENSATION PLAN INFORMATION
In March 1999, our stockholders approved the Accesspoint Corporation 1999 Stock
Incentive Plan ("the Plan"), which superseded and incorporated, in all respects,
the Accesspoint Corporation 1997 Stock Option Plan. Under the Plan, incentive or
non-statutory stock options may be granted to employees, directors, and
consultants. The options, option prices, vesting provisions, dates of grant and
number of shares granted under the plans are determined primarily by the Board
of Directors or the committee authorized by the Board of Directors to administer
such plans. The Plan also permits payment in shares of our common stock for
options to be exercised. The maximum number of shares of our common stock
available for issuance under the Plan is six million (6,000,000) shares.
Proceeds received by us from exercise of stock options are credited to common
stock and additional-paid-in capital. Additional information with respect to the
Plan's stock option activity is as follows:
-------------------------------------------------- ------------------------------ ---------------------------
Weighted Average
Number of Shares Exercise Price
-------------------------------------------------- ------------------------------ ---------------------------
Outstanding at December 31, 2001 3,629,000 $.59
-------------------------------------------------- ------------------------------ ---------------------------
Granted 0 0
-------------------------------------------------- ------------------------------ ---------------------------
Exercised 0 0
-------------------------------------------------- ------------------------------ ---------------------------
Cancelled (1,852,555) $.81
-------------------------------------------------- ------------------------------ ---------------------------
Outstanding at December 31, 2002 1,776,445 $.35
-------------------------------------------------- ------------------------------ ---------------------------
Granted 0 0
-------------------------------------------------- ------------------------------ ---------------------------
Exercised 0 0
-------------------------------------------------- ------------------------------ ---------------------------
Cancelled 0 0
-------------------------------------------------- ------------------------------ ---------------------------
Outstanding at December 31, 2003 1,776,445 $.35
-------------------------------------------------- ------------------------------ ---------------------------
Stock options exercisable at December 31, 2003:
-------------------------------------------------- ------------------------------ ---------------------------
Range of Exercise Prices Number of Shares Weighted Average Exercise
Exercisable Price
-------------------------------------------------- ------------------------------ ---------------------------
$0.32-0.37 1,776,445 $.35
-------------------------------------------------- ------------------------------ ---------------------------
No other stock option plans are in place as of the date of this filing.
14
6. BOARD AND COMMITTEE MATTERS
REMUNERATION OF DIRECTORS.
For the fiscal year ended December 31, 2003, there was no standing compensation
arrangement for board of director members.
We have an audit committee, compensation, and corporate governance committees.
MEETINGS OF THE BOARD AND ITS COMMITTEES FOR THE FISCAL YEAR 2003
During the fiscal year 2003, Accesspoint held 13 Board meetings, and 7 actions
taken by written consent without a meeting.
COMMUNICATION WITH THE BOARD
Shareholders may communicate with the Board of Directors, including the
non-management directors, by sending a letter to the Accesspoint Board of
Directors, c/o Corporate Secretary, Accesspoint Corporation, 3003-3011 S. Valley
View Blvd., Ste. 190, Las Vegas, NV 89102. The Corporate Secretary has the
authority to disregard any inappropriate communications or to take other
appropriate actions with respect to any such inappropriate communications. If
deemed an appropriate communication, the Corporate Secretary will submit your
correspondence to the Chairman of the Board or to any specific director to whom
the correspondence is directed.
AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors has determined that Mr. Valentine is qualified as an
"audit committee financial expert" as defined by the SEC rules adopted pursuant
to the Sarbanes-Oxley Act of 2002.
7. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table furnishes compensation information for the year ended
December 31, 2003, for the Chief Executive Officer and Chief Financial Officer.
No executive officers earned more than $100,000 during the year ended December
31, 2003. There were no options granted to the Named Executive Officers during
the year ended December 31, 2003. There were no options exercised by the Named
Executive Officers during the year ended December, 31 2003, nor were there any
awards made to the Named Executive Officers by us of stock options under any
Long-Term Incentive Plan during the year 2003.
===============================================================================================================================
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------- ------ ---------------------------------- --------------------------------------- ------------------
AWARDS PAYOUTS ALL OTHER
COMPENSATION
-------------------------- ------ -------- -------- ---------------- ------------ ---------------- --------- ------------------
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING LTIP
NAME AND PRINCIPAL YEAR SALARY BONUS COMPENSATION STOCK OPTIONS/SARS PAYOUTS
POSITION ($) ($) ($) AWARDS ($) (#) ($)
-------------------------- ------ -------- -------- ---------------- ------------ ---------------- --------- ------------------
Gene Valentine, acting 2003 None None None None None None None
CEO, president, chief 2004 None None None None None None None
financial officer
-------------------------- ------ -------- -------- ---------------- ------------ ---------------- --------- ------------------
William B. Barber, 2003 None None None None None None None
former CEO, president, 2004 None None None None None None None
chief financial officer
========================== ====== ======== ======== ================ ============ ================ ========= ==================
DIRECTOR COMPENSATION.
We do not pay any compensation to our directors, including those who are also
our officers.
RELATED PARTY TRANSACTIONS.
We have entered into a number of relationships that fit the definition provided
by Statement of Financial Accounting Standards No. 57, "Related Party
Disclosures". An entity that can control or significantly influence the
management or operating policies of another entity to the extent one of the
entities may be prevented from pursuing its own interests.
Mr. William R. Barber, our former President and Chief Executive Officer and
Director, served in those positions from November 2002 through August 2004. The
transactions described below occurred both before and after Mr. Barber commenced
to serve as an officer and director.
Mr. Barber is the principal owner of Ameropa, Inc. ("Ameropa"), a Bahamas
corporation. Ameropa owned two Bermuda corporations, Internet Online Services,
Inc. ("IOS") and Network Integrated Systems, Ltd. ("NIS"). NIS agreed to provide
funding to Accesspoint. Accordingly we entered into a written Secured Loan
Agreement and associated Revolving Line of Credit Secured Promissory Note
(together "Line of Credit") with NIS on December 14, 2001. Concurrently, on
December 14, 2001, we also entered into a written Management Agreement with NIS.
Under the Line of Credit NIS agreed to advance to us from time to time in its
discretion advances not to exceed $5,000,000. All outstanding balances would
bear interest at six percent (6%) per annum. NIS had the right to call the loan
at any time. The Line of Credit is secured by a blanket security interest in all
of our assets. Under the Line of Credit, we have granted to NIS certain powers
of attorney for the protection and perfection of NIS's security interest in the
collateral. Notwithstanding the rights that we granted to NIS, NIS had the right
to demand payment from us and have access to our collateral only after NIS has
exhausted other sources of repayment. In connection with the Line of Credit,
three of our shareholders, Tom M. Djokovich, Access Holdings Limited
Partnership, and Alfred Urcuyo (together "Option Shareholders"), granted to NIS
an option to purchase a total of 7,131,688 shares of our common stock at $2.00
per share. If NIS elected to exercise its option, then the Option Shareholders
had the right whether to contribute the option proceeds to us for repayment of
the Line of Credit. If the Option Shareholders elect to contribute the proceeds
to us, then NIS may not have recourse to our assets as a source of repayment.
However, if we do not receive such option proceeds, then NIS may proceed against
the collateral. Further, after 18 months, the Option Shareholders have the right
to "call" the options. If NIS exercises the options, then the Option
Shareholders are obligated to contribute the proceeds to us for repayment of the
Line of Credit. If NIS refuses to exercise the options, then the options expire
and NIS would have recourse to our assets for repayment of the Line of Credit.
15
We also entered into a Management Agreement, dated December 14, 2001, with NIS.
We appointed NIS as our general manager, with the duty and authority (subject to
the approval of our board of directors) to manage the day-to-day operations of
the business, including our financial affairs. Under this Management Agreement,
we were obligated to pay NIS $10,000 per month, but this "fee shall accrue and
only be payable to the extent the Company shall have current operating profits
reasonably sufficient to pay such fee." In addition, if we terminate the
Management Agreement without cause, then we are obligated to pay NIS all amounts
then owing, plus the sum of $1.0 million. However, we also have the right to
terminate the Management Agreement for cause. The term "cause" includes the
"filing of a voluntary or involuntary application for or appointment of a
receiver" for NIS. Mr. Barber owns 50% of Net Integrated Systems ("NIS") and
serves as one of its three directors.
NIS appointed Ameropa as its agent to manage the relationship between NIS and us
under the terms of the Line of Credit. In February 2002, Ameropa began to
provide cash management services to us by sweeping our operating accounts on a
daily basis and funding the same accounts as items were presented for payment.
Through October 2002 we dealt exclusively with Ameropa for the funding of the
Line of Credit. During this time, the debt was assigned by NIS to Ameropa.
During the year ended December 31, 2002 there were more than 300 such
transactions, none of a material size, between Ameropa and our various operating
accounts. As of December 31, 2003 and 2002 we were indebted to AL under the Line
of Credit in the amount of $1,379,277 and 1,260,789, respectively. We have made
no payments on this balance. During the period in which Ameropa managed the
relationship between NIS and us, Mr. Barber did not have an operational role
with us and he was not an officer or a member of the Board of Directors.
In October 2002, Mr. Barber, as a Director of NIS and 50% owner, placed NIS into
receivership in Bermuda. Thereupon, we terminated the Management Agreement with
NIS. NIS is currently in receivership in Bermuda and we have not received any
indication from the receiver on behalf of NIS, of an intention to assert a claim
against us. However we cannot guarantee that a claim will not be asserted in the
future. On February 4, 2003, the Supreme Court of Bermuda entered an Order that
NIS "be wound up". On the same day, the Supreme Court of Bermuda entered an
Order consenting to the withdrawal by the other two directors of NIS of a
challenge to the appointment of a receiver for NIS.
In October 2002, we entered into a Master Support Services Agreement ("Services
Agreement") with Merchants Billing Services, Inc. ("MBS"). The Agreement calls
for MBS to provide underwriting, administrative support, customer support and
technical support services as well as a source of financing, liquidity and cash
management services to us. MBS is a Nevada corporation majority owned by Mr.
Barber. On November 1, 2002 MBS assumed responsibility for the payment of all of
our employees as well as the assumption of their related accrued vacation and
sick time. On November 1, 2002 MBS established a series of control accounts for
the receipt and management of our cash. These control accounts are designated
"For the Benefit Of" and are segregated from the operating accounts of MBS.
Authority to move and withdraw funds from these accounts resides exclusively
with us. MBS had also acquired, at market values, portions of the Company's
merchant account portfolios from time to time.
On April 1, 2004, the Company entered into an agreement with 2C Processor USA,
LLC, ("2CP"), whereby 2CP remits its net profits to us in return for shares of
our common stock. The agreement may be terminated by us upon 90 days' notice to
2CP.
16
There are no other related party transactions, except as specified in the
information included herein or as included in other filings by the Company with
the Securities and Exchange Commission. With regard to any future related party
transaction, we plan to fully disclose any and all related party transactions,
including, but not limited to, the following:
o disclose such transactions in prospectuses where required;
o disclose in any and all filings with the Securities and
Exchange Commission, where required;
o obtain disinterested directors' consent; and
o obtain shareholder consent where required.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors,
______________________
Gene C. Valentine
President, Chief Executive Officer and
Chairman of the Board
October ___, 2004
17
ACCESSPOINT CORPORATION
PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER ___, 2004
The undersigned hereby appoints ____________, to represent and to vote as
designated all shares of Common Stock which the undersigned would be entitled to
vote at the Annual Meeting of Stockholders of Accesspoint Corporation, to be
held November ___, 2004 at 11:00 a.m., at J. W. Marriot Hotel, 221 North
Rampart, Las Vegas, Nevada 89117, or any adjournment thereof.
1. An Increase in Number of Authorized Shares of Common Stock
from 25,000,000 shares to 50,000,000 shares;
|_| FOR |_| AGAINST |_| ABSTAIN
2. An Increase in Authorized Membership of our Board of Directors
from five (5) to seven (7) members;
|_| FOR |_| AGAINST |_| ABSTAIN
3. Election of Directors
|_| Gene C. Valentine
|_| Joseph Byers
|_| Michael Savage
|_| FOR |_| AGAINST |_| ABSTAIN
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH OR OTHERWISE STRIKE THE NOMINEE'S NAME.
4. Approval of Settlement Agreement to settle
the"Bentley/Djokovich Lawsuits" which includes the sale of our
remaining merchant accounts portfolio in exchange for the
cancellation of the Company's debt to Ameropa Ltd. in the
approximate amount of $1,500,000, and the issuance of shares
resulting to a controlling interest to Mr. Barber, our former
officer and director;
|_| FOR |_| AGAINST |_| ABSTAIN
5. Approve and ratify the actions of our directors for the last
fiscal year and for the period from the fiscal year end
through the date of the annual shareholder meeting; and
|_| FOR |_| AGAINST |_| ABSTAIN
6. Ratify the appointment of Mendoza Berger & Company, LLP,
Certified Public Accountants.
|_| FOR |_| AGAINST |_| ABSTAIN
|_| If you plan to attend the Annual Meeting, please check here.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED
FOR THE ELECTION OF ALL NOMINEES TO ACCESSPOINT'S BOARD OF DIRECTORS AND FOR THE
RATIFICATION AND APPROVAL OF THE OTHER PROPOSALS.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and the accompanying Proxy Statement.
Please sign exactly as name appears hereon and date. If the shares are jointly
held, each holder should sign. When signing as an attorney, executor,
administrator, trustee, or as an officer signing for a corporation, please give
full title under signature.
_____________________________________
Date: _______________
_____________________________________
Date: _______________
Signatures of Stockholder(s)
(PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE)
EXHIBITS
A. Proposed Certificate of Amendment to our Articles of Incorporation
B. Settlement Agreement
EXHIBIT A
Certificate of Amendment
(Pursuant to NRS 78.385 and 78.390)
CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION
-----------------------------------------------------
FOR NEVADA PROFIT CORPORATIONS
------------------------------
(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)
1. Name of corporation: Accesspoint Corporation.
2. The articles have been amended as follows (provide article numbers, if
available):
FOURTH: The aggregate number of shares the corporation shall have the
authority to issue shall be FIFTY MILLION (50,000,000) shares of common
stock, par value one mil ($.001 ) per share, each share of common stock
having equal rights and preferences, voting privileges and preferences.
The remainder of Article Fourth to remain as is.
3. The vote by which the stockholders holding such shares in the
corporation entitling them to exercise at least a majority of the
voting power, or such greater proportion of the voting power as may be
required in the case of a vote by classes or series, or as may be
required by the provisions of the * articles of incorporation have
voted in favor of the amendment is: _________
4. Effective date of filing (optional): __________________________________
5. Officer Signature (required):__________________________________________
*If any proposed amendment would alter or change any preference or any relative
or other right given to any class or series of outstanding shares, then the
amendment must be approved by the vote, in addition to the affirmative vote
otherwise required, of the holders of shares representing a majority of the
voting power of each class or series affected by the amendment regardless of
limitations or restrictions on the voting power thereof.
IMPORTANT: Failure to include any of the above information and submit the proper
fees may cause this filing to be rejected.
EXHIBIT B
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
---------------------------------------
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE (the "Agreement") is made
as of this 30th day of June, 2004 between James M. Bentley, James W. Bentley, as
an individual and as Co-Trustee of The Bentley Family Trust C, Mary Ann Bentley,
as an individual and as Co-Trustee of The Bentley Family 1995 Trust, The Bentley
Family Limited Partnership, and Access Holdings Limited Partnership
(collectively, the "Bentleys") and Tom Djokovich (the Bentleys and Tom Djokovich
are sometimes collectively referred to as the "Plaintiffs") on the one hand, and
Accesspoint Corporation, a Nevada corporation, Processing Source International,
Inc., a California corporation (collectively, the "Company" and/or
"Accesspoint"), Net Integrated Systems, Ltd. ("NIS"), Intellitech Web Solutions,
Inc., Merchant Billing Services, Inc. ("MBS"), Ameropa Limited, Inc., a Nevada
corporation ("Ameropa"), William R. Barber ("Barber"), Christine E. Crocker,
Ronald J. Penna, and Marcia Allen (collectively, the "Defendants") on the other
hand, all of whom may hereafter be referred to as "Party" or the "Parties."
RECITALS
--------
A. There is now pending in the Superior Court of the State of
California, County of Orange, the following matters:
.1 That certain lawsuit entitled JAMES M. BENTLEY V. WILLIAM
R. BARBER, ET AL., and numbered 02CC04690 in the files of that Court concerning
shareholder derivative claims for Breach of Contract; Breach of Fiduciary Duty;
Misappropriation of Trade Secrets Pursuant to Civil Code Section 3426, et seq.;
Recovery of Personal Property Pursuant to Civil Code Section 3426, et seq.;
Imposition of a Constructive Trust or an Accounting; Unfair Competition;
Conversion; Unfair Business Practices; and Usurpation of Corporate Opportunity
against certain of the Defendants;
.2 That certain lawsuit entitled JAMES W. BENTLEY, AS TRUSTEE
OF THE BENTLEY FAMILY TRUST C V. ACCESSPOINT CORPORATION, ET AL., and numbered
02CC06709 in the files of that Court concerning claims for Breach of Contract,
Common Count, and Declaratory Relief, against Defendant Accesspoint Corporation;
.3 That certain lawsuit entitled MARY ANN BENTLEY, AS TRUSTEE
OF THE BENTLEY FAMILY 1995 TRUST V. ACCESSPOINT CORPORATION, ET AL., and
numbered 02CC06571 in the files of that Court concerning claims for Breach of
Contract, Common Count, and Declaratory Relief, against Defendant Accesspoint
Corporation;
.4 That certain lawsuit entitled THE BENTLEY FAMILY LIMITED
PARTNERSHIP V. ACCESSPOINT CORPORATION, ET AL., and numbered 02CC06710 in the
files of that Court concerning claims for Breach of Contract, Common Count, and
Declaratory Relief, against Defendant Accesspoint Corporation; and
.5 That certain lawsuit entitled ACCESS HOLDINGS LIMITED
PARTNERSHIP, ETC., ET AL. V. ACCESSPOINT CORPORATION, ETC., ET AL., and numbered
03CC09039 in the files of that Court concerning a declaratory relief claim
seeking, among other things, return of certain consideration tendered by Access
Holdings Limited Partnership and Tom Djokovich under the loan agreement between
Accesspoint and NIS (the "Declaratory Relief Action").
Initials
--------
----- ----- ----- ----- ----- -----
B-1
The above actions are hereafter collectively referred to as the
"Actions."
B. On or about June 26, 2002, certain of the Parties entered into a
Settlement Agreement and Mutual General Release (the "2002 Settlement
Agreement") resolving certain of the Actions, namely, those lawsuits identified
at Paragraphs A.1 through A.4 of these Recitals. The 2002 Settlement Agreement
contained a provision providing that, in the event an offer in compromise had
not been executed by December 1, 2002, the Plaintiffs could, at their sole
discretion, rescind the 2002 Settlement Agreement. The Parties dispute whether
an offer in compromise was executed by December 1, 2002; Plaintiffs later sought
to rescind the 2002 Settlement Agreement.
C. The Parties desire fully and finally to resolve and to settle any
and all differences and claims between them, and only as to them, relating to or
arising out of the Actions.
AGREEMENT
---------
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in consideration of the mutual promises,
covenants and conditions herein contained, the Parties agree as follows:
1. DISMISSALS. Upon the Court's approval of this agreement, and
contemporaneous with the execution of this Agreement, Plaintiffs shall deliver
to Defendants, c/o Jeffrey W. Griffith, Esq., Callahan & Blaine, 3 Hutton Center
Drive, Suite 900, Santa Ana, California 92707, an executed dismissal with
prejudice as to each of the Actions, which shall be filed upon full execution of
the Agreement. This Agreement shall be enforceable under California Code of
Civil Procedure Section 664.6, as set forth in Paragraph 13 below.
2. SETTLEMENT PAYMENT TO THE BENTLEYS.
a. Accesspoint shall pay to the Bentleys a settlement payment
in the total amount of $750,000 (the "Settlement Payment"), which
amount includes the principal, interest, and attorneys' fees on all
amounts owed on the Promissory Notes which are the subject of the
actions described in Paragraphs A.2 through A.4 of the Recitals, above,
as well as the amounts paid by the Bentleys to settle various lease
guaranties and credit card debts of Accesspoint. If Accesspoint pays
the Bentleys strictly in accordance with the schedule in Paragraph
2.b., below, the Bentleys shall discount the $750,000 to $500,000, such
that Accesspoint will only have to pay the Bentleys $500,000. If,
however, Accesspoint fails timely to pay any of the amounts described
in Paragraph 2.b., below, then the full amount of $750,000 shall become
immediately due and payable, less whatever amounts have already been
paid.
b. Pursuant to Paragraph 2.a., above, Accesspoint shall pay
the Bentleys in accordance with the following schedule:
Initials
--------
----- ----- ----- ----- ----- -----
B-2
(1) A lump sum payment of $250,000 which shall be made
from an assignment of the reserve deposit of
Accesspoint from Chase Merchant Services ("Chase").
Accesspoint shall assign, and hereby does assign, all
right, title and interest to that certain $250,000
reserve deposit held by Chase in connection with
Accesspoint's merchant accounts portfolio (the
"$250,000 Reserve") to the Bentleys. This lump sum
payment from the $250,000 Reserve shall be made on
the earlier of: (a) One Hundred Eighty (180) days
following a shareholders' meeting of Accesspoint
which shall occur on or before November 1, 2004 (the
"Shareholders' Meeting"), to approve any sale of
Accesspoint's merchant accounts portfolio to a
purchaser other than Chase; or (b) Thirty (30) days
following Chase's release of deposit funds from the
sale of Accesspoint's merchant accounts portfolio to
Chase or any other entity owned by or related to
Chase. In all events, Accesspoint shall use its best
efforts to expedite and to facilitate the sale of the
merchant accounts portfolio and the payment of the
$250,000 Reserve to the Bentleys. The Bentleys may,
at their sole discretion, also seek to expedite the
release of the Chase $250,000 Reserve to them.
Defendants agree to vote any shares they have, or on
which they have the rights to vote, in favor of the
sale of the merchant accounts portfolio and execute
any and all documents reasonably necessary to
effectuate the assignment of the Chase $250,000
Reserve to the Bentleys. In the event that Chase does
not approve the sale of Accesspoint's merchant
accounts portfolio and cause the release to the
Bentleys of the $250,000 Reserve within the time
periods set forth in this subsection, Accesspoint
shall pay to the Bentleys the $250,000 lump sum
payment within One Hundred Eighty (180) days of the
Shareholders' Meeting. In the event that Accesspoint
pays the $250,000 to the Bentleys and the source of
funds for such payment is not the Chase Reserve, then
the assignment of Accesspoint's interest in the
Reserve hereunder shall be null and void.
(2) The Parties acknowledge that the sale of
Accesspoint's merchant accounts portfolio must be
approved by Accesspoint's shareholders, pursuant to a
shareholders' meeting as described in Paragraph 6,
below. Barber and Ameropa will vote in favor of the
sale of Accesspoint's merchant accounts portfolio
consistent with the terms of this Agreement and will
utilize their best efforts to obtain shareholder
approval of such sale.
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B-3
(3) The sum of $250,000 made payable in increments of at
least $5,000 per month, with a final balloon payment,
on or before each due date as provided in the chart
below:
----------------------- -------------------------
DUE DATE MINIMUM PAYMENT AMOUNT
----------------------- -------------------------
August 30, 2004 $5,000
----------------------- -------------------------
September 30, 2004 $5,000
----------------------- -------------------------
October 30, 2004 $5,000
----------------------- -------------------------
November 30, 2004 $5,000
----------------------- -------------------------
December 30, 2004 $5,000
----------------------- -------------------------
January 30, 2005 $5,000
----------------------- -------------------------
February 28, 2005 $5,000
----------------------- -------------------------
March 30, 2005 $5,000
----------------------- -------------------------
April 30, 2005 $5,000
----------------------- -------------------------
May 30, 2005 $5,000
----------------------- -------------------------
June 30, 2005 $5,000
----------------------- -------------------------
July 30, 2005 $5,000
----------------------- -------------------------
August 30, 2005 $5,000
----------------------- -------------------------
September 30, 2005 $5,000
----------------------- -------------------------
October 30, 2005 $5,000
----------------------- -------------------------
November 30, 2005 $5,000
----------------------- -------------------------
December 30, 2005 $170,000
----------------------- -------------------------
TOTAL $250,000.00
----------------------- -------------------------
Accesspoint shall use its best efforts to pay more
than the $5,000 per month. To the extent that
Accesspoint voluntarily pays more than $5,000 in any
given month, or in the event that more than $5,000
per month is paid in any month by reason of
subsection (4) below, then the amount in excess of
$5,000 shall be credited towards the latest payment
due on the chart provided above.
(4) In the event Chase should resume allowing merchants
to be added to Accesspoint's merchant account
portfolio, then the monthly payments shall increase
from $5,000 to $10,000 on the 90th day following such
resumption.
(5) Each of the aforementioned payments shall be made
payable to the "Samuels, Green, Steel & Adams, LLP
Attorney Client Trust Account" and delivered to the
Bentleys, c/o Mark S. Adams, Esq., Samuels, Green,
Steel & Adams, LLP, 19800 MacArthur Blvd., Suite
1000, Irvine, California 92612, on or before the
respective due dates.
c. Accesspoint shall have five (5) calendar days after each
due date as a grace period for the Bentleys to receive each of the
scheduled payments referenced in Paragraph 2.b.(3) above, before any
action can be taken to enforce collection (the "Grace Period"). Should
Accesspoint fail timely to make any of the payments described in this
Paragraph 2 when due and after expiration of any applicable Grace
Period, the unpaid balance of the entire Settlement Payment shall
become immediately due and payable.
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B-4
3. RELEASE OF ACCESSPOINT'S MERCHANT ACCOUNTS PORTFOLIO. MBS, NIS,
Barber, the Bentleys and Djokovich agree to release any security or interest
they may have in Accesspoint's merchant accounts portfolio as recorded in any
UCC Financial Statements (UCC-1), and agree to execute any and all documents,
including any release or modification to any such UCC-1, to effectuate such
release.
4. FORGIVENESS OF DEBT AND ISSUANCE OF SHARES. Ameropa represents and
warrants that it is the holder of approximately $1.5 Million in debt owed to it
by Accesspoint arising out of that certain Secured Loan Agreement and Revolving
Line of Credit Secured Promissory Note between NIS and Accesspoint entered into
in or about December, 2001 (the "$1.5 Million Debt"). Ameropa agrees to forgive
the $1.5 Million Debt. In addition to the other consideration provided herein,
Accesspoint shall issue shares of Accesspoint stock to Barber, or his designate,
for causing the forgiveness of the $1.5 Million Debt. The shares issued shall be
in the amount such that Barber, or his designate, shall obtain 52% of the total
outstanding shares of Accesspoint stock.
5. STOCK SECURITY AGREEMENT. When the stock referenced in Paragraph 4,
above, is issued to Barber, or his designate, Defendants shall immediately
release any and all security agreements, restrictions and limitations on all
shares of the Plaintiffs' stock (including the encumbrance arising out of that
certain Secured Loan Agreement, Revolving Line of Credit Secured Promissory
Note, Irrevocable Proxies, and other related agreements, between NIS,
Accesspoint, and certain of the Parties, entered into in or about December,
2001, which agreements shall also then be cancelled), securing the $1.5 Million
Debt. Defendants shall also then immediately cause the removal of all other
trading and voting restrictions on Plaintiffs' shares at no cost to the
Plaintiffs. Defendants will expedite, at their cost, the removal of any legends
and restrictions from Plaintiffs' shares of Accesspoint stock, and shall deliver
said stock, as set out in Attachment "A" attached hereto, to the Plaintiffs, c/o
Mark S. Adams, Esq., Samuels, Green, Steel & Adams, LLP, 19800 MacArthur Blvd.,
Suite 1000, Irvine, California 92612, as soon as reasonably possible.
6. SHAREHOLDERS MEETING. The Parties agree to arrange for a
shareholders' meeting of Accesspoint, to be conducted as soon as possible, but
by no later than November 1, 2004.
7. THE 2002 SETTLEMENT AGREEMENT. The Parties agree that the 2002
Settlement Agreement is null and void, and any rights and/or obligations arising
thereunder are of no force and effect.
8. AGREEMENT TO VOTE SHARES. Plaintiffs agree to vote their shares of
Accesspoint stock in favor of (a) doubling the present number of Accesspoint's
outstanding shares of stock, (b) selling Accesspoint's merchant accounts
portfolio, and (c) electing the slate of candidates proposed by Barber to be
members of Accesspoint's Board of Directors.
9. RELEASE OF DECLARATORY RELIEF ACTION. Plaintiffs agree to waive
their claim and not object to the disposition of 4,100,000 shares of Accesspoint
stock by Barber and/or Accesspoint's Board of Directors, which were the subject
of the Declaratory Relief Action.
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B-5
10. NO RELEASE REGARDING APC LIABILITIES. Notwithstanding anything else
herein, the release set out in Paragraph 14 and the Civil Code Section 1542
waiver provided in Paragraph 15, below, do not pertain to, and the Company
agrees to indemnify and hold harmless the Bentleys and Tom Djokovich from, any
liabilities with respect to Accesspoint's debts and/or obligations, including,
but not limited to, Internal Revenue Service, lease and credit card obligations.
The Plaintiffs agree that the Company shall have no obligation to indemnify or
hold harmless the Bentleys and Tom Djokovich from prior debts, obligations,
claims and/or lawsuits, which the Plaintiffs have already paid, resolved or
otherwise settled, and from any attorneys' fees incurred prior to the effective
date of this agreement. The Plaintiffs represent and warrant that they have no
actual knowledge of any other prior debts, obligations, claims and/or lawsuits
which the Plaintiffs have already paid, resolved or otherwise settled, except as
listed below:
--------------------------------------------------------------------------------
CASE NAME CASE NO.
--------------------------------------------------------------------------------
COLONIAL PACIFIC V. ACCESSPOINT, ET AL. 02CC05697
--------------------------------------------------------------------------------
TEXTRON V. ACCESSPOINT, ET AL. 02HL05439
--------------------------------------------------------------------------------
LYON FINANCIAL V. ACCESSPOINT, ET AL. 02HL02433
--------------------------------------------------------------------------------
ADVANTA BANK CORP. V. ACCESSPOINT, ET AL. 02HL02373
--------------------------------------------------------------------------------
MOCERI LEASING V. ACCESSPOINT, ET AL. 02CC15181
--------------------------------------------------------------------------------
These prior debts, obligations, claims and/or lawsuits which the Plaintiffs have
already paid, resolved or otherwise settled shall be referred to herein as "the
Resolved Obligations." Nothing in this Agreement shall limit the Bentleys or Tom
Djokovich from seeking indemnification or pursuing the Company for payment of
any debts and/or obligations, except for the Resolved Obligations. It is
asserted by certain taxing authorities that Tom Djokovich and/or Tamara
Djokovich may be liable for taxes and penalties in the approximate amount of
$30,000 regarding Black Sun Graphics. The Parties agree that this release does
not release any claims that Tom Djokovich and/or Tamara Djokovich may have
against Accesspoint for reimbursement for any payments of taxes and/or penalties
arising from any claims by any taxing authority regarding Black Sun Graphics.
Accesspoint and the Defendants represent and warrant that they have no actual
knowledge of any outstanding or pending claims by any taxing authority for which
the Bentleys and/or Tom Djokovich may be liable relating to Accesspoint.
11. REPRESENTATION OF AUTHORITY; IMPLEMENTATION. Each Party hereto
represents and warrants that its attorneys are authorized and directed to
perform the acts necessary to accomplish this settlement. In addition, each
Party agrees to execute any and all additional documents necessary to effectuate
the terms of this Agreement. If the Parties cannot agree on the terms of any
documents or formula necessary to effectuate the terms of this Agreement, the
Parties agree to submit such a dispute for arbitration before JAMS Endispute to
arbitrate the terms of such documents or formula. The Parties agree that any
decision by the arbitrator shall be the binding language of such documents or
determination of such formula. The Parties shall bear the cost of the
arbitration equally.
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B-6
12. MOTION TO APPROVE SETTLEMENT. The Parties understand that this
Agreement may be subject to Court approval. If the Court fails to approve the
terms of this Agreement, this Agreement is void and cannot be enforced, and any
and all consideration delivered or paid to the other Party shall be returned and
each Party placed in the same position as before this Agreement was entered into
insofar as is possible, which shall be a condition of any recission. Each Party
shall seek and shall use its best efforts to obtain Court approval of the
Settlement. Should any Party fail and/or refuse to sign this Agreement, each
Party executing this Agreement shall sign a stipulation in support of any such
motion or any application for determination of good faith settlement. So long as
the Bentleys, Djokovich, Accesspoint, Barber, MBS, and Ameropa sign this
Agreement, and there is a determination of good faith settlement by the Court,
the Agreement shall be enforceable by and against those Parties signing the
Agreement as to such persons' and/or entities' obligations, rights and duties
arising out of this Agreement.
13. ENFORCEABILITY UNDER SECTION 664.6. In the event that any of the
terms of this Agreement are materially breached by either Party, the other Party
can enforce the terms of this Agreement pursuant to Code of Civil Procedure
Section 664.6 as to the defaulting party.
14. MUTUAL RELEASE. Except for the rights and obligations of the
Parties arising from this Agreement, the Parties hereby, for themselves, their
employees, agents, partners, representatives, successors and assigns, discharge
and release one another, their past and present employees, agents, executors,
administrators, trustees, heirs, attorneys, partners, insurers, representatives,
assigns, predecessors, successors and related entities, from any and all claims,
damages, actions, judgments, obligations, attorneys' fees, indemnities,
subrogations, duties, demands, controversies and liabilities of every nature at
law or in equity, liquidated, or unliquidated, known or unknown, matured or
unmatured, foreseeable or unforeseeable, which they had or have arising out of
the Actions.
15. WAIVER OF UNKNOWN CLAIMS. It is understood and agreed that the
Parties' releases set forth hereinabove extend to all claims of every kind,
nature and description whatsoever, known or unknown, suspected or unsuspected
and any and all rights under the provisions of Section 1542 of the Civil Code of
California or under any comparable statute of any other jurisdiction. The
Parties expressly acknowledge that they are familiar with and expressly waive
and relinquish every right or benefit they have or may have under the provisions
of Section 1542 of the Civil Code of California which reads as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
16. ENTIRE AGREEMENT. This Agreement contains the sole, complete and
entire agreement and understanding of the Parties concerning the matters
contained herein and may not be altered, modified, or changed in any manner
except by a writing duly executed by the Parties. No Party is relying on any
representations other than those expressly set forth herein. No conditions
precedent to the effectiveness of this Agreement exists, other than as expressly
provided for herein. There are no oral or written collateral agreements. All
prior discussions and negotiations have been and are merged, integrated into and
superseded by this Agreement.
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B-7
NOTICES. Any notice, demand, request, consent, approval or
communication that either Party desires or is required to give to the other
Party shall be addressed and served on or delivered to the other Party or
Parties, at the address and fax number set forth below. Any Party may change
his/her/its address by notifying the other Parties of their change of
address(es) in writing. Any notice served by personal delivery and/or by fax by
5:00 p.m. shall be deemed to have been received on the day received.
---------------------------------------------------------------- -----------------------------------
IF TO MERCHANT BILLING SERVICES, INC., AMEROPA LIMITED, INC., Jeffrey W. Griffith, Esq.
A NEVADA CORPORATION, WILLIAM R. BARBER, AND/OR CHRISTINE E. Callahan & Blaine
CROCKER: 3 Hutton Centre, Suite 900
Santa Ana, CA 92707
Fax: (714) 241-4445
---------------------------------------------------------------- -----------------------------------
IF TO THE COMPANY: Edward A. Hoffman, Esq.
11620 Wilshire Blvd., Suite 340
Los Angeles, CA 90025
Fax: (310) 575-6107
---------------------------------------------------------------- -----------------------------------
IF TO RONALD PENNA AND INTELLITECH WEB SOLUTIONS, INC.: Ronald Penna
4351 Alla Road #5
Marina Del Rey, CA 90292
---------------------------------------------------------------- -----------------------------------
IF TO MARCIA ALLEN: Marcia Allen
269 S. Beverly Drive, Suite 544
Beverly Hills, CA 90212
---------------------------------------------------------------- -----------------------------------
IF TO NET INTEGRATED SYSTEMS, LTD.: John R. Riihiluoma, Esq.
Appleby Spurling Hunter
P.O. Box HM1179
Hamilton HM EX Bermuda
---------------------------------------------------------------- -----------------------------------
IF TO JAMES M. BENTLEY, JAMES W. BENTLEY, AS AN INDIVIDUAL AND Mark S. Adams, Esq.
AS CO-TRUSTEE OF THE BENTLEY FAMILY TRUST C, MARY ANN BENTLEY, Samuels, Green, Steel & Adams, LLP
AS AN INDIVIDUAL AND AS CO-TRUSTEE OF THE BENTLEY FAMILY 1995 19800 MacArthur Blvd., Suite 1000
TRUST, THE BENTLEY FAMILY LIMITED PARTNERSHIP, AND ACCESS Irvine, CA 92612
HOLDINGS LIMITED PARTNERSHIP AND/OR TOM DJOKOVICH: Fax: (949) 263-0005
---------------------------------------------------------------- -----------------------------------
18. WAIVER. The delay or failure of a Party to exercise any right,
power or privilege hereunder, or failure to enforce strictly any breach or
default shall not constitute a waiver with respect thereto; and no waiver of any
such right, power, privilege, breach or default on any one occasion shall
constitute a waiver thereof on subsequent occasion unless clear and express
notice thereof in writing is provided.
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B-8
19. ATTORNEYS' FEES UPON BREACH. If any action at law or in equity or
any motion is brought to enforce this Agreement or to collect any unpaid
amounts, the prevailing or collecting Party shall be entitled to all of its
costs in bringing, prosecuting, and/or collecting on said action(s) or motion or
judgment, including its attorneys' fees.
20. APPLICABLE LAW. This Agreement shall be construed according to the
laws of the State of California in effect as of the date of execution.
21. ADVICE OF COUNSEL. The Parties represent that prior to the
execution of this Agreement they had the opportunity to seek the benefit of
independent legal counsel of their own selection regarding the substance of this
Agreement.
22. COSTS. Except as otherwise provided herein, the Parties to this
Agreement agree to bear their own costs and attorneys' fees in connection with
the Actions.
23. NO LIABILITY. This Agreement is executed by the Parties hereto for
the sole purpose of settling the matters involved in the dispute, and it is
expressly understood and agreed, as a condition hereof, that this Agreement
should not constitute nor be construed to be an admission of the truth or
correctness of any claim asserted.
24. REPRESENTATION OF AUTHORITY. Each individual executing this
Agreement on behalf of any Party expressly represents and warrants that he/she
has authority to execute and thereby bind the Party on behalf of which he/she
executes this Agreement to the terms of this Agreement and agrees to indemnify
and hold harmless each other party from any claim that such authority did not
exist.
25. HEADINGS. The headings included in this Agreement are for
convenience only and do not limit, alter, or affect the matters contained in
this Agreement or the paragraphs they encaption.
26. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which together constitute one single document.
27. TELEFACSIMILE SIGNATURES. This Agreement and any documents relating
to it may be executed and transmitted to any other party by telefacsimile, which
telefacsimile shall be deemed to be, and utilized in all respects as, an
original, wet-inked document.
28. DATE OF EXECUTION. The Parties execute this Agreement as of the
date first above set forth.
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B-9
"PLAINTIFFS"
------------------------ ------------------------
Tom Djokovich James M. Bentley
------------------------ ------------------------
James W. Bentley, as an Mary Ann Bentley, as an
individual and as Co-Trustee individual and as Co-Trustee
of The Bentley Family Trust of The Bentley Family 1995 Trust
------------------------ ------------------------
James W. Bentley, General Partner of James W. Bentley, General Partner of
The Bentley Family Limited Partnership Access Holdings Limited Partnership
"DEFENDANTS"
ACCESSPOINT CORPORATION, A NEVADA CORPORATION NET INTEGRATED SYSTEMS, LTD.
By: ________________________ By: ________________________
Name: ______________________ Name: ______________________
Its: _______________________ Its: _______________________
SIGNATURES CONTINUED ON FOLLOWING PAGE
Initials
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B-10
PROCESSING SOURCE INTELLITECH WEB SOLUTIONS, INC.
INTERNATIONAL, INC., A
CALIFORNIA CORPORATION
By: ________________________ By: ________________________
Name: ________________________ Name: Ronald Penna
Its: ________________________ Its: ________________________
MERCHANT BILLING SERVICES, INC. AMEROPA LIMITED, INC., A NEVADA
CORPORATION
By: ________________________ By: ________________________
Name: ________________________ Name: ________________________
Its: ________________________ Its: ________________________
_____________________________ _____________________________
William R. Barber Marcia Allen, In Pro Per
_____________________________ _____________________________
Christine E. Crocker Ronald J. Penna, In Pro Per
SIGNATURES CONTINUED ON FOLLOWING PAGE
Initials
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B-11
APPROVED AS TO FORM:
--------------------
SAMUELS, GREEN, STEEL & ADAMS, LLP CALLAHAN & BLAINE, APLC
By:__________________________ By:__________________________
Mark S. Adams Jeffrey W. Griffith
Attorneys for Plaintiffs Attorneys for Defendant Merchant Billing
Services, Inc., Ameropa Limited, Inc., a Nevada
corporation, William R. Barber, and Christine
E. Crocker
LAW OFFICES OF EDWARD A. HOFFMAN APPLEBY SPURLING HUNTER
By:__________________________ By:__________________________
Edward A. Hoffman John R. Riihiluoma
Attorneys for Defendants Accesspoint Counsel for Stephen E. Lowe, Official Receiver
Corporation, a Nevada corporation and and Liquidator of Defendant Net Integrated
Processing Source International, Inc., a Systems, Ltd.
California corporation
Initials
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B-12
ATTACHMENT "A"
CERTIFICATE NO.
NAME (NUMBER OF SHARES)
------------------------------------------------------- ------------------------
Access Holdings Limited Partnership #2984 (1,905,037)
26482 Valpariso
Mission Viejo, CA 92691
------------------------------------------------------- ------------------------
Bentley, James Mathews #1154 (2,000)
524 Princeton Pl. #2925 (15,384)
San Luis Obispo, CA 93405
------------------------------------------------------- ------------------------
Bentley, Cornelia Ann #2924 (15,384)
7917 Camino Gloria
San Diego, CA 92122
------------------------------------------------------- ------------------------
Bentley, Jill Melinda #2927 (15,384)
26482 Valpariso
Mission Viejo, CA 92691
------------------------------------------------------- ------------------------
Bentley, Matthew Alexander #2926 (15,384)
26482 Valpariso
Mission Viejo, CA 92691
------------------------------------------------------- ------------------------
Bentley, Christopher Mathew #1157 (20)
2858 Tolkien Lane
Portland, OR 97034
------------------------------------------------------- ------------------------
Bentley, Ted #1186 (4,750)
15801 NE 22 St.
Vancouver, WA 98684
------------------------------------------------------- ------------------------
Djokovich, Tom M. #2982 (3,605,257)
23332 Vista Carillo
Laguna Niguel, CA 92677
------------------------------------------------------- ------------------------
Djokovich, Milan #1118 (9,244)
13572 Emperor Drive
Santa Ana, CA 92705
------------------------------------------------------- ------------------------
Djokovich, Cameron Thomas #2967 (30,000)
23332 Vista Carillo
Laguna Niguel, CA 92677
------------------------------------------------------- ------------------------
Djokovich, Shane Thomas #2968 (30,000)
23332 Vista Carillo
Laguna Niguel, CA 92677
------------------------------------------------------- ------------------------
Initials
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B-13
------------------------------------------------------- ------------------------
Djokovich, Cierra Ann #2969 (30,000)
23332 Vista Carillo
Laguna Niguel, CA 92677
------------------------------------------------------- ------------------------
Djokovich, Kendra Ann #2970 (30,000)
23332 Vista Carillo
Laguna Niguel, CA 92677
------------------------------------------------------- ------------------------
Djokovich, Milan #2971 (25,000)
23332 Vista Carillo
Laguna Niguel, CA 92677
Initials
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B-14