Advanced Media Group-High-American Helix 1989 to 1991 Documents for Anti-Trust Litigation May 1,...

8/17/2019 Advanced Media Group-High-American Helix 1989 to 1991 Documents for Anti-Trust Litigation May 1, 2016

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PROJECT DESCRIPTION STATUS FOLLOW UP N

Mansco, Inc.

Develop Images Pre-Qualify

Question 2/10/1990

Called 03/07/90 Jim Dering/

In Contactational Assoc Of Watch

& Clock

ollector Pat Tomes/ PaulWills Develop Multimedia ApplciationPre-Qualify Question 1/5/1990

Bid $ 47,500 2/21/1990

Informal Budget Approval02/25/90

enera ounc ee ng

July Contact 04/05/90

Test Image 05/31/90Storyboard

arsons & Brinkerhoff

ngineers Develop Technical Application

Project 4th on Priority 6-8

Weeks

Send ROM Information

4/25/1990

ao Matlock Marcia Earle

Pre-Qualifying Quest

1/27/1990

Meeting 03/28/90 General

Discussions

Call 05/31/90 Contact

Tao /Status

ord New Holland Replication Bid 2/8/1990 Commitment to DATAWAREobert Shively Carmen

artin Bid W/Steve Swan ? Keep in Touch

Mobil Oil, Inc. Lynn

yland

Legal Documentation Bid

$47,500 1/13/1990

Verbal Approval 03/08/90/S.

Robertson June or July Start

Date

Contacted 06/01/90 Left

Message

eneric Software, Inc.

Develop Software and

Technical Docs CONTACT

ark Wiley? Pre-Qualify Question 2/5/1990

ndiana Bell CONTACTef Bruce Kline

ongressional Info

ystems CD-DIAGNOSTICS

Sent Version 1.2 CONTACT& Technical Specs

Microsoft, Inc

CD-DIAGNOSTICS License

Agreement CONTACTEvaluate 02/28/90 Tech Docs

03/08/90

ell Atlantic Develop Directory Sample Date by Cost Meeting for

en Clark PAPER GLUT 3/20/1990 Prototype & Present

Inv

$1,00

Storyboard 04/12/90 CD-R

Info for Demo Send "CD-ROM TECH"

Will v

Qty3/20/1990 3/26/1990 5/3/1

S. Dale High Anti-Trust Litigation Page 1 of 441


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andy Electronics, Inc Develop 2000 Images Submit Data ? Contact D. Williams

CDD

Phil

Technical Document M. Grubbs "get data 05/02,03,05/90 No Ans. Debo

ike Grubbs from D. Williams" Calle

ave Williams Meeting 03/15/90 4/29/1990 Letter to Dave Willims

Left M

05/3

hil Debord/Cdd Action Plan 03/22/90 CDD rev1-4 5/8/1990 StoryPBS

xxon Research And

roduction Multimedia Application Action Plan 03/22/90 D. Benfer "having

to D.

06/0ompany Technical Application trouble w/securityave Benfer Sample Data ?? clearance for data"

Meeting 03/15/90 D. Benfer "will deliver 5/2/1990soon" 04/09/90

ompaq, Inc CD-DIAGNOSTICS Revised CDD 1.2License Agreement With Tech Docs

en Shufflebeam 3,000-6,000 users 3/7/1990 KEEP IN TOUCHletter 03/29/90

psoa CD-DIAGNOSTICSLicense 8,000 Users

Send CDD Rev 1.232939

eda, Inc. Air Force Tech Docs 05/31/90 "Moving SlowWriting Specs for Bid"

ave Tuemler Called 03/26/90Call back 04/26/90 Will Call when he has

any news---influence

bis, Inc Network Solutions Send Questionairsother Docs

ibrary Of Congress Refferal Relationship 4/20/1990m Young Meeting 04/12/90 Call for Visitationrew Lewis Demo Retrieval Send Follow Up Wayne Called on

System to Comittee Package 03/22/90 04/25/90 -- Data ???3/14/1990

Called on 04/04/90 Sent for RFP'Sfor Replication Bid 05/18/90 -- 05/28/90

ommodore Business

Machines, Inc Replicate on 01/15/90 Meeting Developer Applicationike Kawahara 3/14/1990 In 05/22/90ail Wittenberg

Action Plan 04/19/90 Developer PackageOut 05/31/90



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mp, Inc Replicate on 03/09/90 PO #30246784 @100d Beauregard $3,000 Run 05/04/90 - 05/11/90

Reorder 100 03/22/90 $3000 / $7250$200 PO # N/A @2500

Run 06/11/90 - 06/15/90

. S. Postal Service aul Jackson Telephone Tag

CONTACT

rthur Anderson Replicate 2 IBM Discs Bid World Bank ProjectTapes 03/27/90 32952

t&T / Data Dev. 200,000 Imagesteve Swan

Waiting For TapesFrom Steve Swan

ancroft And Whintney 965,000 PAGES OF Steve visit 04/10/90di / Steve Swan CA Legal Statutes

Wayne prepare DemoSpecs on 03/31/90 Never Finished

ational Institute Of

tandards Replication Bid Due Referrals given 04/25/90 05/09/90 Award Contract

nd Technology 3/30/1990ohn Garfolio Test Tapes on 04/16/90 Verify "excellent rec." $20,000 Replication

To Distics 04/18/90 "ok" on 05/03/90 Order As Needed

merican Bankers

ssociation Complience Manuals Meeting At Helix Meet At ABAucy Griffen & Regulations 5/29/1990 06/15/90 @11:00

GOOD MeetingSchedule at ABA

a Blue Shield Develop KIOSK System Present Storyboard Logistics 05/08/90For Companies on 04/30/90

m Cartmell Present Cost on Draft Story 05/30/90rank Ryan DVI, BENEFITS, ETC 5/4/1990 'DISASTER"

$4,700 Accepted Dave jeff/06/04/90

merican Bond Buyers Convert Bond Meet 05/26/90lavek Rotkiewicz Offering Prospectus GOOD mtg. \Pentagon

to CD-ROM Sample Scan60,000 issues / 120 pp. $1,000 Proto/Story ??

EARST Publications Cataloque To CD-ROM Bid Due Out 06/05/90

"Good Things" @ Us Product KIOSK Systems For



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Systems Retail Merchants

nternall Rotory Club

eadMike Rogers

asa Replication Bid Goddard Due 06/18/90pace Flightenter 3 Masters @1,600 To 27,000



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January 22, 1991

Mayor Janice StorkLancaster Court HouseLancaster, PA 17603

Dear Janice:

I am asking you to please advuse your constituents to leave me alone. I have never doneanything to anyone, let alone anything criminal. I am tired of being in fear for my life, allbecause I have been victim to a "herd of white collar crooks".

I have finally after three years reached my threshold of pain, suffering and humiliation, all whilebuilding successful businesses for others to terrorize.

You may be familiar with the circumstances surrounding my childhood, Jack was my familiesattorney, my childhood was difficult enough.

I have always conducted my personal and business affairs with honesty and integrety, and mostimportantly I have always and will always lend a helping hand to those in need.

I have done nothing to deserve what this town has done to me, especially the circumstances of1987.

I am only human, and I am tired of leaving in fear.

And remember, as far as ISC is concerned, I was merely protecting my investment as ashareholder.

Regretfully,

Stan J. Caterbone, Director

S. Dale High Anti-Trust Litigation Page 5 of 441 Sunday, May 1, 2016


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January 22, 1991

Governor Robert CaseyCapitol BuildingHarrisburg, PA

Dear Bobby:

CLEAN UP YOUR DIRTY HOUSE, BEFORE I DO IT FOR YOU! AND IT WILL COST YOU DEARLY!!!

I'm tired of being in fear for my life!

Regrets,

Stan J. Caterbone, DirectorEnclosureTape Track 1 - 09/29/87 \Howard Eissler, Pennsylvania Securities Commision

Recorded with permission

Track 2 - 11/??/87\Detctive Bodan, Pennsylvania Attorney General's OfficeRecorded in self defense



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ADVANCED MEDIA GROUP RECAPITALIZATION PLAN KEY OBJECTIVES/GOALS

To build a profitable company geared toward the design and implementation ofproducts and services for the high end delivery of information.

The following objectives must also be achieved:Attract outside equity dollars for thecapitalization of the company.Return to American Helix, approximately 300K of the 600K usedto initially fund the Advanced Media Group. American Helix maintains an equity interest in thenew company.Eliminate future financial liability to American Helix.Resolve the LASERTEXissue.

OVERVIEW: It has become more and more apparent, that the need for a Full ServiceMultimedia Publishing Company is needed now more than ever, and that this need willcontinue to grow as delivery systems become more widely distributed. (More concreteevidence of this will be included in the business plan.) The major reason this need exists isthe extreme high cost in technical personnel and equipment to carry such a group within anorganization. The only alternative has been to network with other companies.

Networking can create other problems, especially for a company that possesses veryfew of the necessary skills in house. Problems like losing control of the client, higher costsdue to the combined profit margins of the different companies, and the potential lose of thosecapabilities. An alternative to this, is to establish a Consortium of talent to draw from for thecompletion of projects, where the Consortium has an on going interest in the evolution of thecompany. Many relationships have already been established that can be strengthenedthrough a more formalized arrangement. Other relationships need to be established that willgive the group additional capabilities in target areas.

MARKETING: We need to capitalize on American Helix existing image of a creativeforward thinking company by focusing on project development work that requires a higherlevel of creative design and implementation. At the same time grow that image through the

efforts of the consortium to establish an aura of unparalleled excellence in the industry. One ofmy largest hurdles to overcome, has been the reluctance of potential clients to do businesswith a young company, that has no track record in completing CD©ROM projects. This hurdleis only starting to be minimized by the relationships with companies and individuals that areproducing demos geared specifically towards our clients needs or particular project, for nocash up front. By drawing these companies in closer to us in a more structured relationshipwe will be able to use their past successes to eliminate the fear a potential client has in doingbusiness with us. We need to put together a portfolio of products that were produced by thegroup. This portfolio should consist of a number of different delivery mediums, ie. CD-ROM,Video, Laservideo Disc, Print, Exhibits, DVI, etc. Part of that portfolio should consist of a highimpact capabilities presentation on video by the existing consortium of talent to introduce theconcep. We need not limit ourselves solely to the CD©ROM markets. The demo, by focusingnot only on the technology and the achievements of the existing members of the consortium,

will open up brand new markets at a fraction of what it would cost to bring all of the necessaryexpertise in house.

Projects that utilize Laservideo Disc Technology, DVI, Television, Radio, Videos,Exhibits, as well as Print advertising. As CD©ROM moves more into the multimedia arena, allof these areas of expertise will be necessary. By building a consortium of talent to draw fromfor CD©ROM, we are also able to produce product for people in any one of these specificareas. We already have the portfolio started with the Yellowman Video and some CD©ROMapplication demos as well as some of the CDªROM discs that we produced. As we bring people



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into the group, the portfolio will grow rapidly by including the groups past successes. Aportfolio of this magnitude should be unparalleled in any industry and should eliminate anyfears a potential client may have in dealing with a young company. Armed with a portfolio likethis, sales people would be easy to attract that would work for a straight commission or drawagainst commission. Sales people could be recruited from each of the target markets tocapitalize on their knowledge of each of their respective industries. They would now be

entering a company to make a sale with more capabilities than they could have ever imaginedand at the same time broaden their potential customer base. By having the sales people workon commission, the cost of sales will be much easier to control and would reduce the financialexposure to the company.

Some specific target markets interested in the high end delivery of information are:

• Large and small corporations for interactive training programs as well asmanipulating large amounts of data

• Museums for exhibits Advertising agencies to produce product for their clients• Government agencies for contracts to manipulate large amounts of data as well

as interactive training programs• Retrieval Software companies that do not have multimedia capabilities• Companies that exhibit at trade shows need Exhibits.

Interactive Exhibits are more dynamic, especially in industries not associated with CD©ROM ormultimedia. Publishers of Educational Materials are looking to publish products in a moreinteractive way. Studies are being done that show children learn faster and retain more whenthey interact with the delivery medium. This list does not focus on any one particularindustry. The delivery of information reaches across almost every industry. Just aboutanything that involves a transfer of information can be enhanced and become more effectiveby using a multiple of mediums, and by having the target audience participate in the process.This one sentence is the primary reason for the incredible excitement surrounding thisindustry. The cost effectiveness of CD©ROM is secondary. The cost effectiveness ofCD©ROM is responsible for most of the growth rate, but the blending of mediums is what is

responsible for the excitement. This is important to understand because it is not necessary tolimit your markets. The process to produce an interactive training program is virtuallyidentical to produce an interactive exhibit, educational program or an advertising kiosk. Theyall involve the transfer of information. The clients are out there. They are around everycorner and under every stone you turn over. The only way to close a sale in this business is todemonstrate your capabilities.

The key word there is demonstrate. We are working in an area that is very new andvery expensive. When you are trying to close a sale for a printing job, everyone assumes youknow how to print. The criteria for getting the job is different for multimedia, interactiveprograms. When a company is considering spending possibly hundreds of thousands of dollarson a production, they need to feel comfortable with the producers expertise. These fears aremuch easier to deal with by demonstrating the skills of the Consortium.

We also need to gain exposure by presenting the technology, (NOT THE CONCEPT) atindustry and/or non-industry functions, utilizing the technology in presentations that areconsistent with the goals of the group. Typically technology presentations are either boring orthey are dealing with a technology that cannot be utilized at this time. We need to focus onthe technology that can be utilized, but demonstrate the additional creativity brought by thegroup that does not come simply by purchasing technology.



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ORGANIZATION: THE COMPANY Chief Financial Officer The Chief Financial Officerwould be Jim Tritch. Jim's responsibilities would be to establish the financial reportingprocedures that the company would operate under as well certain operational procedures.With Jim's background and expertise, the investor will feel comfortable that the financialaspects of the company are under prudent management.

President: The president of the company would be Scott Robertson. Scott'sresponsibilities would be to follow the reporting and operational procedures outlined by Jim aswell as to establish the consortium and the relationships of the participating members. Allarrangements with the members would be subject to the approval of Jim Tritch. In addition tomyself, I would need one other salaried person (25K©30K) that would be responsible for thedaily accounting functions of the company. All sales people would be straight commission. Asthe company grows there may be a need for a sales manager but it would be my preferencethat this person would work on a commission override structure. (A more detailed definition ofresponsibilities would be included in the business plan.)

BOARD OF DIRECTORS: The Board of Directors would have five seats, to be comprisedof Jim Tritch as chairman, Scott Robertson, two seats for the investor and one seat torepresent the consortium, which would be established through a vote by the members of theconsortium.

THE CONSORTIUM: Below are a few of the companies and/or individuals, along withtheir respective areas of expertise that could be brought to the group. Although most of thesepeople A are working with us in one capacity or another, before a more formalizedarrangement could be made, a much more extensive background check would be necessary.

Esscomp: Skip Langley & Wayne Landis Esscomp is a company that writes softwareand has a full text search engine with retrieval time and size capabilities that are far aboveindustry standards. Esscomp's capabilities are geared towards the indexing and retrieval oflarge amounts of data which is important to large corporations and government organizations.

Dering Musser de Nooijer: Dering Musser de Nooijer is a design company recentlyformed by Jeff Dering, Jerry Musser, and de A Nooijer that can show capabilities increative design and interactive exhibits. The people involved in this organization are largelyresponsible for the image that American Helix currently has in the market as a progressive,forward thinking company. This image is probably one of the more valuable assets theAdvanced Media Group possess at this time. Jeff Dering has just recently left NationalGeographic where he was responsible for the creation and construction of Explorers Hall, aninteractive exhibit in Washington, DC. Through his activities at National Geographic, Jeff hasbeen exposed to and worked with a number of different individuals and companies that couldbe very valuable additions to the Advanced Media Group. This company is also responsible forthe creation of the Yellowman Video which was produced for us as well as the printedbrochures and literature we distribute. Many of the materials produced for us, by thisorganization, have won national and international awards.

Sandra Morris: Sandra Morris, currently with Intel, has indicated she will be leavingIntel in the near future. Sandra has been approached by a number of companies to produceDVI products for them. She has a background in education and more recently has been thefocal point for much of Intels effort in recruiting DVI developers for what Intel and many otherpeople believe will become the standard in full motion video for computers. Sandra hasmaintained a very high profile in the industry. She regularly speaks at many of the industryshows, and has a very good reputation.



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An executive committee needs to be established which would be made up of membersof the respective groups as well as from the company. This committee would be responsiblefor reviewing and advising on potential jobs, establishing a project manager for each job,reviewing the progress on each job as well as monitoring costs for work performed by themembers to protect against overcharging for work performed.

This committee would also have a hand in the direction of marketing and advertisingdollars budgeted for the group.

Ä Until a full business plan is written and a proforma produced, I can't say exactly whatthe start up expense would be. I would estimate that $1,500,000 would need to be raised.This should accomplish the goal of returning $300,000 to American Helix and still leaveadequate operating capital. The structure of the company would be very lean and mean. Mostof the expenses would be controllable through a commission structure. The goal on projectswould be to achieve between a 5% to 20% margin depending on the size of the project. Theconsortium should have an equity interest (to be determined) in the company. Their equitycould be established a number of different ways. The simplest, would be for them to purchasestock. This is also harder to achieve. Another alternative would be to have a percentage oftheir earnings go towards the purchase of stock. This is a more viable alternative that shouldbe explored in more detail. Another alternative could be that the groups stock would vestover a period of time. Each of these alternatives carry with them advantages anddisadvantages for both the members of the group and the company. Probably the bestalternative will be a hybrid of the three options just mentioned.

Regardless of how we decide to achieve equity ownership for the members, it is veryimportant that this be a part of the plan. Obviously we would want the members to place theneeds of the group over the needs of the individual. This, for the most part goes againsthuman nature. Having an equity interest in the company will help promote the concept of"the needs of the many out weighing the needs of the one". There are a number of otherfactors that can help to promote this concept. One of those would be to target companies orindividuals for the group that do not have a long history of working for themselves and are

interested in the sense of security that working with a group provides. We are fortunate thatthe existing target members meet that criteria. A possible breakdown of equity could be asfollows:

• Raise 1.5 million paying 300K back to American Helix Investor (1.5 Million 70%AH 300K 20% Consortium 10% It would probably be a good idea tostructure some type of option for the Consortium to increase equity ownership.

• LASERTEX ISSUEÄ Ä We have a relationship with Network Technology. It is nota good relationship, but never the less it exists. We need to figure out how toget the most out of it. There are two possible primary paths this relationshipcould go. Either Tom will work with us to complete LASERTEX or we will figureout the most beneficial way to terminate the relationship. Either way it is

imperative that we deal with Tom from a position of strength and that weexercise much more control over the future path of the relationship. We areable to do this now that we have officially put Tom on notice and are exercisingour rights under the contract. We have sufficient documentation to substantiateour allegations and proof that we held up our end of the contract. Even though Ipersonally feel betrayed by the confidence and trust I placed in Tom, I doubtthat he manipulated this situation simply to scam over $275,000 from us. Ibelieve this is more situation where Tom got in over his head and his ego ismaking some very bad decisions for him with very little regard how it affects



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other people other businesses or even the long term effect on his own business.We also can not assume that this entire arrangement was not a scam. As wetry to fix the situation, all possibilities must be considered and carefullyweighted. I think a trip to Washington to meet with Tom, so a betterassessment of the situation can be made, would be the most prudent action atthis time. Without good lines of communication, the problem can not be

resolved, and could only get worse.

• TIME LINE Upon the approval to go ahead, it would take one week to complete afull written business plan. To attract the equity investment for the company itwould be advantageous to have a few or all of the members commitment to thegroup. This would enable us to demonstrate the full capabilities to the potentialinvestor. I would estimate that this could be completed in another two weeks(possibly less). The time needed to complete the funding of the company is alittle more difficult to estimate. Utilizing the presentation skills that we wouldpossess as well as the past performance of the members, coupled with theexisting excitement surrounding the industry, I believe I could have thiscompany funded in record time.



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January 10, 1991

Lt. MadenspacherMANHIEM TOWNSHIP POLICE DEPARTMENT

1825 Municipal DriveLancaster, PA 17601

Dear Lt. Madenspacher:

As per our conversation of January 9, 1991, I welcome you to visit with me onThursday, the 17th, at 3:00pm, at our facility.

Assuming your interests in "digital technologies" are sincere, I have enclosed

some information that will give you some insight into my work, and thetechnologies at large.

I will assume that our conversations contain a peaceful format, and that I willdiscuss any issues that you so desire, with only one exception. I will not be atliberty to discuss any pending or forthcoming legal action on my behalf.

Our agenda will include a tour of our facility to demonstrate to you how wemanufacture both CD-Audio and CD-ROM discs. I will also be prepared todemonstrate some of the capabilities of "digital technologies" and some of theapplications currently in use today.

Maybe someday, the Manhiem Township Police Department, will be one of myclients!

As we both know, anything is possible.

If the above meeting date is in conflict with your schedule, please call.

I look forward to our meeting.

Honestly,




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LASERTEX...

FULL MULTIMEDIA ELECTRONIC PUBLISHING AND DELIVERY SYSTEM

*Provides Affordable In-house Optical Publishing

*Enables development of Customized Interactive Information Applications by combining Data,Text, Images, Graphics, Audio and Full Motion Video Information Assets

*Develops Interactive Training and Education Applications

*Provides for Separation of Information from Authoring and Retrieval Software

*Utilizes Open Electronic Publishing Architecture (OEPA)



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THE COMPONENTS

Both expert and novice can easily use the four components of the LASERTEX publishingsystem.

Application Design: Enables you to design the specifications for information types, user

interactions, program and device interfaces, screen design, security protection, andcompression requirements.

Information Preparation: Enables you to prepare your text, data, graphics, images, audio,and video in standard formats.

Information Organization: Enables you to create information structures such as indexes,scripts, and networks to add value to your information.

Application Production: Enables you to produce the customized runtime version of theLASERTEX information product.

PUBLISHING SYSTEM FUNCTIONALITY AND CAPABILITIES

The LASERTEX publishing system distinguishes itself above other CD-ROM authoring andretrieval systems

*Low price, low royalties, and free replication enabling you to produce products whichcan sell at a reasonable price

*Complete publishing capability with over 60 automated software modules accessiblethrough one common interface

*Your information remains separate from the application software and informationstructures

*LASERTEX can accept source information in many different formats including wordprocessing, popular databases and spreadsheet, paint and draw programs,common graphics, and analog audio formats

*Converts source information into industry standards like SGML (text), dBase and Lotusspreadsheet (data), GKS (graphics), PCX and TIFF (images), and ADPCM (audio)

*Includes software for text and data entry, creation of graphics and images, audiodigitization, and development of audio-visual edit decision lists



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*Enables you to design with multiple interaction modes such as search (boolean full textand fielded search), browse (structured indexes), linear presentation (slideshow), branching presentation (interactive education and expert system), andprovides hyper link capabilities to enhance all of these modes

*Permits a you to optimize an application for one particular hardware delivery platform

or to create parallel versions for different hardware configurations

*Includes a storyboard prototype and a fully capable functional prototype for testing,refining, and demonstrating an application

*Enables you to customize context sensitive help, on-line documentation, forms, foreignlanguage requirements, and print and display fonts.

*Adds an assortment of program and device interfaces to your application includingprint, information download, notepad, bookmark, telephone, modem, and FAX

*Enables you to make your own software and third party applications accessible fromLASERTEX using the information from the CD-ROM

*Capable of producing integrated multi-volume applications

*Contains Project tracking, management tools and preliminary design guides andchecklists



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DELIVERY SOFTWARE USER FUNCTIONALITY AND CAPABILITIES

The LASERTEX multimedia publishing system integrates text and data with images, graphicsand audio information.

Text: ASCII, SGML, and text frames

Data: Spreadsheet and data base files

Images: TIFF, PCX, and other raster formats

Graphics: GKS, IGES, and other vector formats

Audio: CD-Audio, CD-ROM XA, and other audio formats

Video: Interactive video format standards will be supported

Plus special user defined formats for all information classes

DELIVERY SOFTWARE USER INTERACTIONS

LASERTEX does not force you into a specific style of access or, restrict you to a single view.One set of information assets can be published with multiple modes of interaction bases for theend user's preference.

SEARCH: This includes boolean full text search on text documents and text fields indatabases or associated with graphic, image, audio, or video files. It alsoincludes boolean search on fielded information in SGML documents anddatabases. Features include boolean operators AND, OR, NOT; proximitysearch; range search (date, time, money, numeric fields); wildcard; truncation;thesaurus; start and stop word lists; concordance browse.

BROWSE: A powerful browse capability enables end users to access all types of informationwith hierarchical and multidimensional indexes. It offers the capability to crossreference and access information from multiple viewpoints best suited to theirknowledge level.

PRESENTATION: Presents all types of information in a variety of ways including a simpleslide show format; a connected, branching learning system environment; and arule based expert system mode.

HYPER LINK: Enables an end user to traverse directed and undirected links among all sixclasses of information which form a richly interconnected knowledge network.



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*To make LASERTEX information applications more powerful, integrated device interfaces areprovided including laserdisc (videodisc), telephone, FAX, modem, and laserprinter.

*To support extended end user information access, a variety of program interfaces areprovided including context sensitive help, on-line documentation, notepad,

bookmark, path, and information download.

*To support an even wider use of information applications, LASERTEX provides directaccess to end user or 3rd party applications software. This enables end users touse the information on the CD-ROM in other software programs.

*LASERTEX provides seamless magnetic update of the CD-ROM information andpermits use of multiple drive CD-ROM applications.

*Password access, information decryption, security levels, and information auditcontrols assure that any requirements for application and information securitycan be satisfied.

*Self configuring delivery software which can run on an IBM AT compatible with 640KRAM, a magnetic hard disk, EGA-CGA-VGA monitor, MS-DOS 3.X, a CD-ROMdrive, and a keyboard. LASERTEX is also able to take advantage of moresophisticated hardware platforms up to a 386 base machine with extendedmemory, a mouse, multiple CD-ROM drives, decompression hardware, and veryhigh resolution monitors.



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SUPPORT INFRASTRUCTURE

The support infrastructure is a group of people, and a set of systems and resources designed tohelp you create quality, cost effective successful CD-ROM applications.

*Extensive hands-on training in every element of the business and technology of optical

publishing.

*A customer hotline for resolution of questions and problems.

*Free Replication of CD-ROM discs.

*Total royalties never exceed $13 per Disc.

*A complete set of user manual and system reference documentation.

*A set of operations and procedures manuals.

*An on-line technical support bulletin board for the latest technical information, tips,

and problem resolution support.

*Retail dealer and distribution network to provide market channels for your products.

*Full service information preparation and conversion available from LASERTEX servicecenters; scanning, digitizing, SGML tagging, converting, compressing, andencrypting information, avoiding the high cost of specialized equipment andpersonnel costs.



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AMERICAN HELIX ADVANCED MEDIA GROUP provides products and services to support allfacets of the Digital Technology and Optical Publishing environment. Centering around it'sstate of the art 3rd generation CD-ROM replication facility, The Advanced Media Group is proudto offer the following:

CD-ROM PRODUCT DEVELOPMENT SERVICES

CD-ROM REPLICATION SERVICES

LASERTEX ELECTRONIC OPTICAL PUBLISHING SYSTEMS

ADVANCED TECHNOLOGY WORKSHOPS IN OPTICAL PUBLISHING

ADVANCED MEDIA RESEARCH AND DEVELOPMENT PROJECTS

CD-ROM/WORM TECHNOLOGIESEXHIBIT TECHNOLOGIESINTERACTIVE VIDEO TECHNOLOGIESTECHNOLOGY TRANSFER PROJECTS

LASERTEX is a registrerd trademark of Network Technology, Inc.,7401 F Fullerton Road, Springfield, Virginia 22153-3122. American Technology Corporation isthe exclusive authorized distributor of LASERTEX Electronic Optical Publishing Systems.



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February 19, 1991

S P StephtonJUSTATP.O. Box 14373Kenwyn, 7790Capetown South Africa

Dear Mr. Stephton:

My sincere apology for not delivering your requested information.Your request was apparently lost in our paper shuffle. We regretany incontinence that this may have caused you.

In appreciation for your patience, please find the enclosed"DRAFT" copy for your evaluation. This copy is fully functional.

I would ask a written evaluation at your earliest convenience. Ihave also enclosed our capabilities and services for yourreference.

I look forward to hearing from you.

Again, my apologies for not responding earlier.

Sincerely,


cc:JUSTAT01

ENCLOSURES



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FACSIMILE TRANSMISSION

FROM: STAN CATERBONE of AMERICAN HELIXFAX NUMBER: (717) 392-7897 TELE: (717) 392-7840

TO: JULIAN OLSON COMPANY: KAwareFAX NUMBER: (415) 964-2027 DATE: 08/20/90PAGEES: 01

Dear Julian:

I appreciate your support and efforts to engage in a mutually profitable and enjoyablerelationship. I will certainly do everything in my power to facilitate the above.

In specific regards to our previous agreement, we have yet to recieve the software package.My engineers are anxiously awaiting its arrival. If it has not shipped, I would like to offer my

FEDERAL EXPRESS ACCOUNT NUMBER : 1297-5100-2 and ask that you ship it priorityovernight.

If it has already been shipped, please advise.

THANKS AGAIN FOR YOUR SUPPORT.

Regards,

Stan J. CaterboneDirector, Advanced Media Group, Ltd.,



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DATE: May 29, 1991

MEMO: PA Blue Shield Meeting of May 29th

PARTICIPANTS: Frank Ryan, Jim Cartmell, Vic McBride, Stan Caterbone, Bill DeAngelos

AGENDA: Review Storyboard for PA Blue Sheild (PABS) Input Prior to Contract Delivery

The circumstances leading up to this meeting should be known in order to understandthe conversations during the meeting. On May 4th, American (AH) Helix was commessioned toproduce a "Storyboard Illustration of the multimedia interactive CD-ROM" for (PABS). Dering& Musser (DM) were to provide input to the graphical design of the storyboard. Attached to thecontract was a preliminary flow chart of how the linear script of the information would bedisplayed.

Stan Caterbone immediately suggested that a meeting with (PABS) to collaborate onthe linear script and any technology issues be set as soon as possible. Stan also suggestedthat (DM) and programmer Vic McBride meet to determine the logistics of working the designelements with the computer programming. Both meetings were scheduled for May 8th.

On the mourning of May the 8th, Stan and Jim met at (PABS). The outcome of thatmeeting was a revised linear script, and dicisions on technology elements regarding thesystem, of which were to be illustrated in the storyboard (see notes of meeting as per JimCartmell).

At 4 o'clock of May the 8th, (DM) met with (AH), Vic McBride and Wayne Landis. Stanpresented the revised linear script to all parties. Vic McBride demonstrated the technologyused to create our storyboards, along with its capabilities. Jere voiced his concern that thistechnology was not capable of producing the same fonts and colors of his Macintosh system.Stan elaboarted on the issues that (AH) does not presently support optical publishing projectsfor the Macintosh platform. There are several reasons for this dicision:

1. The Mac platform represents only 7% of the PC users

2. The number of Mac users with CD-ROM drives is even less

3. The technologies today do not support the capability of producing Macprojects (CD-ROM) and simply converting them to DOS (IBM Compatible)platforms.

4. The Mac platform does not currently support Touch Screen technology.

MEETING (Continued)

Several alternatives were suggested to accomodate the project:

1. Jere accompany Vic during production provied design input.

2. Jere produce Mac screens and Vic duplicate within his capabilities.

3. Jere produce hard copy illustrations of screens, and Vic duplicate.

It was Jere's decision not to provide any design elements to the storyboard because ofthe "Mac" issue. It must be noted that (AH) was trying to be accomodating as possible to this



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issue. However (DM) made a decision to have (AH) develop the storyboard in its entirety. Asfar as (AH) was concerned, and with its knowledge of the technology, the Mac issue was not anissue now, and never has been.

On May the 11th, Stan faxed a revised flow chart and description of the storyboard toJim asking for "any changes that need to be made". There was no response by (PABS) to this

communication.

On or about May 21st Stan called Jere to determine if any date had been set for thepresentation. Jere had no knowledge and referred that question to Jeff. During thatconversation Jere mentioned that he had discussed with Frank that he was not participating inthe design of the storyboard because of (AH)'s "lack of capabilities".

On May 24th Stan, Wayne, and Vic met to review the current storyboard. Severalmodifications were made. Vic had several questions of which Stan wished to direct to (PABS).Stan also suggest a review meeting with (PABS) be scheduled prior to delivery in order toenable (AH) to provide (PABS) with a storyboard that will accomodate thier needs whenpresenting the project for approval. Vic talked with Jim on May 25th, and a meeting wasscheduled for May 29th.



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RECORDED TRANSCRIPT WITH

THE PENNSYLVANIA SECURITIESAND EXCHANGE COMMISSION

"JAMES GUERIN AND ISC OPERATIONS"

SEPTEMBER 8, 1987

November 17, 1990

Subject: Quotes from a recorded transcript between Stanley J. Caterbone and HowardEisler, Agent of the Pennsylvania State Securities and Exchange Commission.This transcript was recorded with the approval of all present parties.

Date ofConference: September 8, 1987

Place ofConference: 2323 New Danville PikeConestoga, PA 17512

Relationship toJames Guerin:ISC Shareholder Debtor to Parent Federal Savings and Loan

The following transcriptsd represent a few of the converstions recorded during the meeting.

Stan Caterbone - " Chem Con is the big local minority-held corporation that was doing a lot ofDefense contracts-it was associated with ISC. They went under lastspring, beginning of the summer, and there was a lot of criminalallegations made, none of them substantiated. And I was connectedwith that. They sent a board member in to see me a week before thishappened. Why. I don't know."

Stan Caterbone - "Jim Christian owned it - now I hear rumors that I was tied to ISC and I amclose to several people in that organization. Why they sent someone into California to see me, I don't know. They won,t answer me."

Stan Caterbone - "they wanted me to talk to a guy from D.C., New York, a guy from theCaribbean. I don't know what the hell is going on."

Howard Eisler - "the supposition was - I don't know how true it was a front for ISC."

Stan Caterbone - "It was, I'll tell you why. Because when Chem Con was started, back totheir inception, you look at ISC's books. They didn't have any money.Well, the first thing Chem Con did was they went and got all that freemoney from the government and you look where that money went. I



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bet I know where it went."

Stan Caterbone"this guy named Geurin, James Geurin. And I know that they were sellingcontracts back. He runs ISC and he also has his fingers pretty deeplyinto Chem Con. He's the one who started Chem Con, Guerin is the onewho started it."

Howard Eisler - " Wasn't there some allegations about a tie to Wedteck?" (Defence Contractorof New York)

Stan Caterbone - "You bet. They were tied, you'd better believe they were tied with Wedtech.The same guys in Wedtech were involved with ISC and Chem Con."

Stan Caterbone -"ISC is sold over the London Exchange. (I bought my shares from GibArmstrong) I owned a thousand shares."

Stan Caterbone -" I sold it when things started to hit the ____________."

Stan Caterbone -"Now they just did a multimillion dollar merger with a company in London.

They probably think this is going to cover their tracks."

Stan Caterbone -"What they did was, they fronted all that money and started the contracts,went bankrupt, and now the government is stuck for $18,000,000."

Stan Caterbone -"I know right now in this town's viewpoint, I stole money, I am insane, and Iam a lunatic. I tell you I will not condemn Jim Christian until he tells tomy face what happened."

Stan Caterbone -"I was framed and set up.........."

Stan Caterbone -"I don"t know maybe Jim Christian doesn't have the money. Maybe Guerinhas it or somebody else"



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November 20, 1990

List: Murray Horton, District JusticeDetective Larry Mathias, MTPDChuck Smith, Lancaster Aviation

Mike Wolfe, Loan Officer, Commonwealth BankJoe Roda, Attorney At LawGib Armstrong, SenetorPeggy Steniman, LNPRobert Kauffman, Formerly of FMG, Ltd.,Michael Hartlett, Formerly of FMG, Ltd.,Craig Russel, Attorney at Law

YOU HAVE LOCKED ME UP AND PUT ME IN JAIL & CALLED ME A CRIMINAL

YOU HAVE TAKEN EVERYTHING I OWN

YOU HAVE RUINED MY PERFECT CREDIT RATING

YOU HAVE CALLED ME INSANE BECAUSE OF MY INTERESTS IN A "DIGITAL MOVIE"

YOU HAVE AIDED IN THE COVERUP OF JAMES GUERIN & ISC

YOU HAVE TAKEN AWAY MY BUSINESS INTERESTS

YOU HAVE RUINED MY REPUTATION

"WHAT GOES AROUND MUST COME AROUND"



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August 9, 1990

David C. HostetterExecutive Vice PresidentFulton BankOne Penn Square

Lancaster, PA 17602

Dear Mr. Hostetter:

I have become very disappointed in your ability to correct aproblem that your bank has made regarding my personalbanking account #0118-74848. In fact, your actions have notonly caused me great concern for my investments that I haveentrusted in your institution, but I am now being humiliated andintimidated by your lack of concern. This incident has nowcaused me to question whether you have simply stolen myassets. The amount of money in question is some $5,000. I,msure not one of your larger accounts, however I'll fight like hell

for $5,000.

You must be aware of the implications of this incident withregards to the past performance of both commercial and, savingsand loan institutions. The public has already grown insecure andhas lost a great deal of confidence in the banking community atlarge. And maybe this is an example of how mismanagementand abuse can cause some of the same public insecurities as theactual failures themselves.

The following will depict a chronological accounting of the abovementioned incident:

On July 31, 1990 at 2:18pm (see MAC receipt) I was deniedwithdraw privileges from my checking and Fulton Fund accountsat the Greenfield center. After another unsuccessful attempt, Idecided to inquire inside to a teller. I could not understand theproblem, knowing that I should have at least $5,000 in theaccounts.

The teller began an inquire on my accounts in the computersystem. After 15 minuets, she informed me that my checkingaccount had a 0 balance. I informed her that I also had a FultonFund account with sweep, and maybe there was a problem withthat fund. Again after 15 minuets she came back with the same

answer. The manager began to become annoyed with myproblem and my concern over the situation. I asked to see someaccounting, and she said she could provide an account activityreport.

As she began scrolling transactions over the screen, I beganpeering over the counter trying to review the account. I hadnoticed a check for $6,250.00. I asked her if that was in fact acheck for that amount. She said "yes, number 470, made out inJune". I quite excitedly stated that I had never made out a



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check for six thousand dollars in June. SHE LOOKED AT ME,QUITE IRRITATED, AND SAID, "WE'LL SIR, YOU MOSTCERTAINLY DID".August 9, 1990, David C. Hostetter

Now, I was emotionally shook, I had just lost $5,000 or

$6,0000, and I had no idea how. I would certainly rememberany check written for $6,000. The manager had no right to evenquestion my ability to recollect such an incident. Instead ofreceiving support, and help in dealing with my problem, Ireceived harassment. Does the word CUSTOMER SUPPORTmean anything to your organization?.

The only advice that was given by your staff was "to go homeand check your statement". Now I must question whether youprovide any training or education to your employees.

Well, I proceeded back to my business meeting. I was quiteupset and disturbed the rest of the day, trying to determine how

someone could have stolen one of my checks without myknowledge. This was my only logical explanation, of which themanager suggested that the only way to recover the funds wasto prosecute. That was even more encouraging.

That evening I rushed home and proceeded to review mystatements for check #470. The statement showed a debit for$6,250. Corresponding to the computer inquiry of that day.

However, the canceled check #470 was for "TWELVE HUNDREDAND FIFTY DOLLARS". I will admit that the $1,250.00 could looklike a six (SEE COPY). But isn't that why we write the amountout in longhand?? At this point I was just elated to haverecovered my lost $5,000, (for approximately 37 days).

The next day I had made copies of the check at my office, andproceeded to the Greenfield branch at noon, on August 1st. Itook the original check and copies of my statement. Before Ireached the counter, the teller asked "if I had found myproblem?" I said "no, I found your problem". I went on todisplay the check, and also give my dissatisfaction with theattitude by the Manager that I had forgotten about a $6,000check, and that the customer service was really customerintimidation. Never once did anyone mention or suggest thatthere could be an error in the accounts, and that maybe because

I had never remembered writing a check out for $6,000, thatmaybe I never did.

The teller was polite and understanding, she proceeded with mycheck to the Manager's office, and returned notifying me that shewould need to take possession of the actual check forverification.



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August 9, 1990, David C. Hostetter

She informed me that the account would be brought current thatday, August 1, 1990. I asked her how I could withdraw cash,being I still had no means of getting cash. She asked me towrite a check out made payable for cash (see check #486). Shehanded me $50.00 in cash.

Excluding the lost interest and any cancelled check fees, - Ithought I was made almost whole.

TODAY IS AUGUST 9,1990

I HAVE A CURRENT BALANCE OF $ 129.61-

I STILL RECEIVE CANCELLED CHECK NOTICES

I CONTINUE TO HAVE CREDITORS NOT BEING PAID

I CONTINUE TO HAVE MY CREDIT ADVERSELY AFFECTED BYYOUR ACTIONS AND NEGLECT

YOUR INSTITUTION REFUSES TO RETURN MY ASSETS

I CONTINUE TO EXPERIENCE STRESS AND INTIMIDATION FROMYOUR LACK OF CONCERN FOR ME - YOUR CUSTOMER

NOW, YOU HAVE A PROBLEM.

Regards,

Stan J. Caterbone"Just" a Customer

ENCLOSURES

cc:



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Date: April 17, 1989

To: Scott Robertson, American Helix Technology Corporation

From: Tom Vreeland, Network Technology Corporation

Subject: LASERTEX License Program - Outline

I have attached an outline of my current thinking on the Franchise program. I think I'vecovered just about everything we have discussed.

I will send you the draft of our proposed Business Agreement in the morning.

NETWORK TECHNOLOGY CORPORATIONLASERTEX FRANCHISE PROGRAM

OVERVIEW

This outline is provided to describe the business goals, structure, organization, andscope of the LASERTEX franchise program. It should provide the basis for the agreementsbetween American Helix Technology Corporation and Network Technology Corporation,serve as the guidelines for the Franchise Agreements, Offering Statements, and filings,and provide the basic information for use in the "Business Opportunities in OpticalPublishing" courses. It contains the following elements:

Business Objectives

LASERTEX Franchise Concepts

Franchise License Structure

Franchise License Fees

Franchise License Royalties

Franchise Examples

Franchisee Qualifications

Franchise Training Programs

LASERTEX Distribution System



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LASERTEX Hardware Sales

Other Collateral Activities

Franchisor owned sites

LASERTEX BUSINESS OBJECTIVES

Network Technology Corporation has a number of important business objectives in marketingthe LASERTEX business license concept:

1) Fundamentally changing the CDROM industry to facilitate its rapid growth

2) Providing a framework of standards which will foster the growth described above.

3) Receiving revenues from the Licensing of LASERTEX and Electronic Publishing ArtsWorkstation products.

4) Receiving royalties on every disc produced using LASERTEX and ElectronicPublishing Arts Workstation products.

5) Receiving a percentage of hardwware sales to LASERTEX Licensees.

6) Receiving a percentage of the Marketing and Distribution revenues on productsproduced by licensees.

LASERTEX LICENSE DETAILS

The license under which the LASERTEX Universal Information Retrieval system andElectronic Publishing Arts Workstation tools will be provided will include many details designedto create a certain amount of uniformity in LASERTEX products. These details will includethings like:

1) Requirement for use of LASERTEX logo on discs, packaging, documentation andpromotional literature.

2) Licensees agree not to mark-up or discount LASERTEX standard royalty fees

3) Licensees agree not to develop competitive retrieval or tool software.



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4) Licensees agree to basic terms, turnaround times, and data transfer formats

for use in LASERTEX projects.

5) Licensees agree to use standard ISBN on all their discs.6) Licensees agree to pay LASERTEX replicator/distributor the LASERTEX royalties

at time of disc delivery.

7) Licensees agree to replicate at least a minimum quantity of discs if they wishto use LASERTEX distribution channels.

8) Licensees agree to participate in required training and to meet minimum standardsof quality assurance

LASERTEX FRANCHISE PROGRAM

CONCEPT:

The concept of franchising electronic publishing capabilities is new to the world ofadvanced information technology and computing services. Franchises in the world ofcomputer retailing are well established. The LASERTEX Franchise Program iscontemplated as a comprehensive, integrated support system which provides potentialfranchisees with tools, capabilities, training, and an infrastructure to enable them to makemoney in the optical publishing business. The Franchise program is designed to includefour major elements:

Developers and Publishers - LASERTEX Franchises

Service and Info Preprarers - LASERTEX Service Centers

Distribution and Retail Sales - LASERTEX Retail Licenses

Franchise Sales and Marketing - LASERTEX Sales Reps

In addition there are a number of collateral revenue generation opportunities associated withthe Franchise. These include sales of hardware, supplies, discvertising, etc.



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The LASERTEX Electronic Publishing Tools will be marketed under a hierarchical franchisearrangement. Franchisees will pay a one time franchise/license fee and an annualmaintenance fee of 10-15 percent of the maintenance fee. In return they will receive tools,training, documentation, standards, checklists, standards, replication, packaging, and coopadvertising incentives. They will subscribe to a set of royalty and premastering priceguidelines and will agree to master all LASERTEX discs at a licensed LASERTEX facility.Licensed replication facilities will provide consistent pricing and services to LASERTEXfranchisees. Hardware configurations to support the tools will be available from thedistributor. Master franchisees will have to have a specific minimum hardwareconfiguration. All licenses from Master/Replicator down are site licenses for one location

only.

FRANCHISE LICENSE STRUCTURE:

American Helix Distributor License

Can develop LASERTEX productsHires Distributor Sales Representatives

Sells Master and Replicator Licenses worldwideSells Service Center Licenses worldwideSells Dealer/Retail Licenses worldwideSells Publisher Licenses worldwideSells Developer Licenses worldwide

Distributor Sales Representative

Master-Replicator License

Can develop LASERTEX productsHires Master Sales RepresentativesSells Service Center Licenses

Sells Dealer/Retail LicensesSells Publisher LicensesSells Developer Licenses

Master Sales Representative



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Publisher License

Can develop LASERTEX productsSells Service Center LicensesSells Dealer/Retail LicensesSells Developer LicenseStandalone Publisher License

Can develop LASERTEX products

Standalone Developer License

Can develop LASERTEX products

Service Center License

Provides specialized data prep, scanning, digitizing services to LASERTEXlicensees

LASERTEX Dealer/Retail License

Sells LASERTEX products and products distributed through the LASERTEX network

LASERTEX Franchise ProgramLICENSE FEES:

American Helix Distributor License $ 275,000Distributor's Representative ?

Master-Replicator License $ 100,000

Replicator's Representative ?

Master License $ 50,000

Master Representative ?

Publisher License $ 35,000



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Service Center License $ 10,000-

25,000

Standalone Developers License $ 10,000-35,000

LASERTEX Retail License $ 5,000-15,000

LASERTEX Franchise ProgramFRANCHISE LICENSE SALES COMMISSIONS:

American Helix Distributor License 50%

Distributor's Representative ~ 20%

Master-Replicator License 30%

Master-Replicator's Representative ~ 15%

Publisher License 20%

Publisher's Representative ~ 10%

LASERTEX Franchise ProgramFRANCHISE LICENSE ROYALTIES:

LASERTEX ROYALTIES: Disc royalties are paid to the LASERTEX Replicator for every discmastered. This royalty covers the use of LASERTEX delivery software and/or data prep usingEPAW tools.



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The replicator pays the distributor and Network Technology their share of disc royalties.Royalties are allocated as follows:

Network Technology $ 4.00Distributor 2.00Master 1.50Publisher .50---------------------------------------Paid by developer/customer $ 8.00

American Helix Distributor License

Disc royalty $4 to NTC for each LASERTEX disc produced

Master-Replicator License

Disc royalty $6 to Distributor

Publisher License

Disc royalty $7.50 to Master Replicator

Standalone Publisher License

Disc royalty $7.50 to Master Replicator

Standalone Developer License

Disc royalty $8.00

Service Center License

Royalty 4% of gross data prep revenues

LASERTEX Dealer/Retail License

Percentage of sales revenue

-----------------QUANTITY DISCOUNTS ON ROYALTIES

During any annual period for serial disc publications, or for any one time project the following



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royalty discounts shall apply:

50,000-100,000 $6.00 prorated100,000-500,000 $5.00 proratedmore than 500,000- $4.00 prorated

LASERTEX Franchise ProgramOTHER PUBLISHING FEES:

The following fees may be part of the project costs for a LASERTEX project. These feesare in addition to the LASERTEX royalty.

FEES TO SECURE DATA RIGHTS: These fees are the responsibility of the publisher ordeveloper. LASERTEX licensees will understand that they will imdemnify thereplicator/distributor/franchisor against all claims of intellectual property rights in connectionwith their products.

DATA PREPARATION AND CONVERSION CHARGES: Developers and Publishers will beresponsible for all data handling, preparation and conversion charges. LASERTEX ServiceCenters and Master Sites may be able to provide these services.

ELECTRONIC PUBLISHING FEES: Since the use of the LASERTEX Universal DeliverySoftware is provided as part of the Licenses the additional costs for publishing include:

Indexing ServicesVideo and Data Compression ServicesEncryption ServicesPre-Mastering and MasteringProviding Proof discs

The replicator will quote prices and schedules for these services for LASERTEX licensees.



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LASERTEX Franchise ProgramFRANCHISE EXAMPLES

LASERTEX ROYALTIES: Disc royalties are paid to the LASERTEX Replicator for every discmastered. This royalty covers the use of LASERTEX delivery software and/or data prep usingEPAW tools.

The replicator pays the distributor and Network Technology their share of disc royalties.Royalties are allocated as follows:

Network Technology $ 3.00American Helix 3.00Master 1.50Publisher .50---------------------------------------Paid by developer/customer $ 8.00

EXAMPLE: Distributor A sells the following:

4 Master Licenses @ $ 100,000 each $ 200,000 Each Master License sells 5Publisher Lic. 100,000 Each Publisher sells 2 Developer Licenses 80,000----------------------------------------------------------- Sales commission to Distributor A

380,000

There are now 64 locations developing LASERTEX products. Let's say each site produces 4products with 200 discs each per year.

256 products @ 200 discs ea = 51,200 discs

Distributor makes $ 102,400 in royalties plus $380,000 in commissions. This doesn'tcount mastering, indexing, hardware and other revenues.

Furthermore the prime distributor will offer a marketing and retail distribution channel forthe products the franchisees develop through the licensed network of LASERTEX dealersand through direct contracts with major computer chains. The prime distributor will also

provide group buying power for drives and other hardware to reduce costs for holders ofLASERTEX licenses. Network Technology will receive a share of the collateral revenuesderived from the product distribution and hardware sales operations.



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QUALIFICATION FOR LASERTEX LICENSES

An important element in the success of the LASERTEX Licensing Program will be thequalifications which those granted licenses will initially have to meet, and the ongoingstandards of performance they will have to sustain. A part of the sales and marketingapproach will have to describe these qualifications and standards and the needs for them.We should set up a set of procedures that will allow us to determine when a licensee fallsbelow a minimum set of performance standards so that we can provide training and

other remedial support. If performance levels do not improve a license can be terminated ornot renewed.Typical qualifications might include:

MASTER-REPLICATOR LICENSEES

Hardware System RequirementsFacility RequirementsStaff RequirementsAdministrative Requirements

PUBLISHER LICENSEES

Hardware System RequirementsStaff Requirements (Training)

DEVELOPER LICENSEES

Hardware System RequirementsStaff Requirements (Training)

DEALER/RETAIL LICENSEES

Hardware System Requirements (Kiosk)Maintenance of Inventory

Staff Requirements (Training)

DISTRIBUTOR and MASTER SALES REPS

Staff Requirements - Qualifications/TrainingDemonstration Hardware Requirements



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LASERTEX SERVICE CENTER LICENSE

Hardware System RequirementsStaff Requirements (Training)Quality Assurance Review

LASERTEX FRANCHISE PROGRAMLASERTEX DISTRIBUTION SYSTEM

Here are some random thoughts on setting up distribution channels.:

TOP DOWN CHANNELS - Meet with reps of major computer store chains There are only ahandful of them. Set up CD ROM retailing concept

THE OFFICE WORKS CHAIN - Set it up as a model of the procedures, training, support, etc.Then apply the model to larger chains.

BOTTOM UP CHANNELS - By letting Publishers and Developers set up dealer licenses wecan reach the grass roots independent specialty retailers.

-----------------------------------------------------------------

It is also desirable to use the marketing channels set up in this way to market other peoplesexisting products. As the LASERTEX publishers get going their products should be morecompetitive and they should get more of the retail market share.

We can't wait till there is a critical mass of LASERTEX discs to go with the whole distributionand retailing concept. We also need to develop a LASERTEX presence in the market quicklyeven if we have to do it by publishing products ourselves.

BASIC LASERTEX PRODUCT: We need to define a simple set of consistent criteria for abasic LASERTEX product aimed at the retail market. It should be:

Distributed in a shrink wrapped Jewel case or other simplepackaging concept



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Contain well designed cover and spine printing

Contain full documentation on the Disc - it can be printedif needed

If supplemental printed information is required it canbe provided on a small insert in the package. Specs,copy,and layout will be done by Publisher and printed byReplicator

-------------

Another major distribution possibility is to work with the existing mega-softwaredistributors. They now distribute exclusively software products. Work a deal with them topublish their catalogs on CD-ROM (with pictures, fact sheets, samples, demos, and all) andsell them kiosks for their dealer locations and give them a deal to distribute our CD-ROMs.

DISC DISTRIBUTION SERVICES TO PUBLISHERS AND DEVELOPERS

The distributor (American Helix) will provide the following services to developers andpublishers:

o Publish a print and CDROM catalog of available CDROMtitles

o Handle direct sales and order fulfillment (800 number)

o Distribute catalog - direct mail, etc

o Set up retail marketing channels

o Stock product inventory

o Provide accounting, reports, and payments

o Assist publisher with pricing decisions

o Co-op advertising program

In return, the developer or publisher will:



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o Pay distributor 50% of the retail price

o agree not to sell discs for less than some minimum priceor not to sell at all

o agree to LASERTEX packaging and documentation spec

* o agree to master a specific minimum quantity

* Quantity to be determined based on marketing channels available. Initially 1000.

This permits dealers to stock copies of discs for immediate sales. Other discs could bestocked at a central site for quick shipment to dealers.

Dealers would pay distributor 10% of retail price to stock a disc and would have a requirementto stock and sell a minimum number of discs.

NOTE: Wistful thinking. After a year or two, and success of the concept, with expectedgrowth of the industry, we may be ready for franchising a chain of LASERTEX storeswith desktop publishing, desktop video, CD-ROM multimedia titles, CD-ROM informationtitles, CD-ROM Entertainment titles - CD-I or DVI consumer equipment (whichever makesit) - Reference Disc and Entertainment Disc Rentals [and marketing of Disc Rentals through

Video Rental Chains]. We can also provide at that time CD information distributionservices through Cable TV, etc.

DISTRIBUTOR DISCOUNT STRUCTURE

AMERICAN HELIXDEVELOPER DISTRIBUTOR DEALERS RETAIL CUSTOMER

=================================================================

| | | Retail Sale50% | 20%* | 0 - 30% | 70%-100% of List

| | |----------------------------------------------------------------



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| | | Sale through50% | 10%* | ? | third party

| | | distributor----------------------------------------------------------------

| | | Mail order50% | 40%* | 0% | catalog &

| | | direct sales----------------------------------------------------------------

* 5% to Network Technology

LASERTEX FRANCHISE PROGRAMHARDWARE SALES STRATEGIES

American Helix should set up hardware marketing channels. Licensees will not berequired to buy general computer hardware through us but there will be some specializedhardware they will have to buy from us. By doing so they will get a discount and be assuredthat the hardware will work with the LASERTEX and EPAW software.

This will provide opportunities for working closely with the Office Works. It will also make itimperative that we talk with drive manufacturers.

*********

We should prepare a hardware catalog containing:

CD-ROM delivery systemsCD-ROM server systemsCD-ROM portable systemsCD-ROM drivesCD-I machinesDVI machines (whenever)



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Workstation Components and SystemsScannersImage CaptureAudio HardwareVideo HardwareMeridian, TOPIX, and Ref Tech hardwareYamaha HardwareWorm HardwareWORM MediaMagnetic Media (Tapes, cartridges, disks)Caddys

Documentation and Tutorialsetc.

The catalog should be on CD-ROM as well as in print. It should contain easy orderingprocedures.

Network Technology will receive 5% of hardware sales.

LASERTEX FRANCHISE PROGRAMOTHER COLLATERAL REVENUE GENERATING ACTIVITIES

It is contemplated that other revenue generating activities may be created to utilize theLASERTEX distribution network or LASERTEX licensee base. These activities mayinclude discvertising, free disc distribution activities, disc catalog distribution and sales, etc.

A structure should be provided which will allow both American Helix and NetworkTechnology to benefit from these activities.

LASERTEX FRANCHISE PROGRAMFRANCHISOR OWNED SITES

There should be no restriction on Franchisor (Network Technology) owned, or Distributor(American Helix) owned LASERTEX sites. The distributor owned sites would be available to

American Helix at 50% of the license fee and would pay $4.00 royalties. Franchisor ownedsites would not pay license fees to the Distributor and would pay $6.00 royalties to thereplicator against which a credit of $4.00 would be applied, resulting in a net payment of$2.00 per disc from Network Technology to American Helix.



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Date:June 18, 1990From:Stan CaterboneTo:Dave Shirk, David Dering

Subject:Government Bids for CD-ROM Premastering, Mastering, &Replication

Summary: In order to receive the considerations necessary towin any of the many government projects utilizing CD-ROM, it isnecessary to prepare a very detailed, methodical, and concise bidproposal. These proposals are intended to define all processes,

procedures, and most importantly quality assurance controls. A"Statement of Work" from the NASA Solicitation RFP5-76373/206is attached for your reference.

There are 5 (five) primary processes that must bedescribed in a technical proposal that will demonstrate an overallunderstanding of the requirements necessary to deliver a CD-ROM. According to the "technical approach", and in accordancewith all technical specifications cited, the following processes mustbe defined:

1. Premastering/DMI-Stan Caterbone

2. Mastering/DMI-Stan Caterbone

3. Replication/David Dering

4. Quality Assurance/Dave Shirk-Beth Eller-DavidDering

5. File Validation/DMI-Stan Caterbone

(Continued)

Government Bids, June 18, 1990

Plan of Action: The importance of the lack of this informationhas already cost us the opportunity to bid on a $60,000 pluscontract with NASA. There are other government bids that I ampreparing that must be delivered next week. We only have to



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prepare this information one time, and then only the pricing/costproposals will need to be added for future government contracts.This information will also help me to market CD-ROM Replicationservices in the commercial market as well.

In order to complete this task as efficiently as possible,and with information that will insure our success in governmentbids, I have prepared an "INFORMATION QUESTIONNAIRE" foreach individual according to the primary process.

Due Date: Each person is asked to complete the required

questionnaire and deliver it by Friday, June 22, 1990.

I will be available for consultation, and will review theinformation on Thursday.

I thank you for your cooperation regarding this matter.

(Continued)

Government Bids, June 18, 1990

PREMASTERING -

1.Accepted Media2.Hardware Configuration/Specifications3.Software (Name, Version)4. Validation Process (Files vs. CD-ROM Image)

MASTERING -

1.Media Used2.Equipment Used3. Quality Control Procedures



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4. Shipping Procedures

REPLICATION -

1.Injection Molding Process & Procedures2.Metalizing Process

QUALITY CONTROL PROCEDURES

1. Process to Verify Stamper2.CD-CATS Analysis, (Parameters that are analyzed)

3.CD-ANALYZER, (Parameters that are analyzed afterinjection molding)4. Manual Inspection process of Printing, and flaws.

CD-ROM vs. ORIGINAL DATA FILES

1. Process to validate file transfer to CD-ROM image fileformat.



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FACSIMILE TRANSMISSION

FROM: STAN CATERBONE of AMERICAN HELIXFAX NUMBER: (717) 392-7897 TELE: (717) 392-7840

TO: GISELE V. COMPANY: DMI, INC. FAX NUMBER: (714)630-1025DATE: 08/20/90PAGEES: 01

Dear Gisele:

PLEASE SHIP THE TAPES FOR AMP, INC. FEDERAL EXPRESS PRIORITY DELIVERY.

THEY WILL BE HERE IN THE MOURNING FOR A MEETING.

THANKS FOR YOUR HELP!!!!!

Regards,

Stan J. CaterboneDirector, Advanced Media Group, Ltd.,



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EVALUATION PROGRAM

PROGRAM INTRODUCTION: The LASERTEX EVALUATION PROGRAM is intended to offerdevelopers and publishers the opportunity to take advantage of using the LASERTEXELECTRONIC PUBLISHING SYSTEM and its supportive infrastructure at a fraction of its cost.The program will allow the use of the complete system for one commercial application.Included in addition to the LASERTEX Software is the following:

1. LASERTEX operations training workshop (5-10 days)

for 2 persons.

2. Product planning, design, and project managementSupport.

3. Customer service and technical support

4. Marketing support for commercial products through theLASERTEX distribution network.

5. Optional information preparation and conversion.

6. Support for the procurement of delivery system hardware and

CD-ROM drives.

7. Recieve support in the selection and training of publishingpersonel.

8. Receive artwork and packaging design support for thecommercial products.

9. Opportunity to showcase products at the 1990Microsoft conference and the LASERTEX ExhibitionCenter in Springfield, Virginia.

Selection of the Evaluation Program candidates will be limited to a select few.

Candidates will be chosen on the merits of the application which will be developed utilizing theLASERTEX system.sssssssssssss



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was developed to accomplish the insurmountable task of delivering a product that ischaracteristic of the needs of the market that it will serve. Unlike other products that areintroduced to the marketplace, LASERTEX will offer potential qualified prospects the opportunityto utilize the complete LASERTEX system in exchange for their feedback and evaluation. Thisfeedback and evaluation will play a major role in the final development, before LASERTEX isintroduced to the optical publishing marketplace.

This evaluation program will provide extraordinary benefits for both American Helix andfor the participants. By conducting market research that is both effective and useful to theconsumers, American Helix is able to save itself and most importantly its prospects precioustime in the development and delivery of its long awaited LASERTEX ELECTRONIC PUBLISHINGSOFTWARE.

Qualifications will be limited to a select few that will serve to represent a meaningfulsampling of the marketplace, including, private business, industry, government, education,media, and special projects (exhibit technologies). This will give American Helix the neededcommunications and feedback to as many working environments as possible. A representativenumber of individuals will also be asked to serve on the LASERTEX Development Council. ThisCouncil will have direct input into the final stage of development with regards to product

functionality and capabilities.



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LASERTEX EVALUATION PROGRAM QUALIFICATIONS

PAST EXPERIENCE: Organizations must have completed at least ???? CD-ROM applicationsprior to being admitted into the LASERTEX Evaluation Program. Other media type applicationswill be considered in lieu of CD-ROM. Organizations must prove a longterm commitment tooptical publishing and CD-ROM. Selections will be based on the applicants ability todemonstrate prior success from previous applications with regards to quality, functionality andcapabilities.

PROJECT DIRECTOR: Organizations must have available at least one and preferably twoexperienced personnel to attend the 5-10 day training workshop. Organizations must commit

a project director that will oversee and administer the CD-ROM project that will be performedfor the LASERTEX Evaluation Program. The project director will act as the liaison betweenAmerican Helix and the selected organization.

PENDING PROJECT: Qualified organizations must have a pending CD-ROM project that isready to be processed and will be completed with finished discs by MICROSOFT '90 (lateFebruary or early March). All applications must be available to be part of the LASERTEXAPPLICATIONS DEMONSTRATION DISC ----- to be displayed at MICROSOFT '90.

MINIMUM FUNCTIONALITY STANDARDS: American Helix will determine minimumfunctionality standards that projects must display in order to qualify for the LASERTEXEvaluation Program. The functionality of the projects must be of such standards as to test theperformance of some or all LASERTEX capabilities. Projects can qualify with simple data

retrieval projects if they utilize creativity and excellence with regards to the user interfaces ofthe applications.



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PROGRAM PROCEDURES

Applicants will submit completed applications to American Helix Technology Corporationno later than November 1, 1989. American Helix review applications on or before November25th. Applicants will be notified of approval status of applications.

Upon acceptance, American Helix will schedule and confirm the PROJECT STETEGYMEETING. The purpose of this meeting is to explore the and coordinate the specific projectthat will be developed using the LASERTEX ELECTRONIC PUBLISHING SYSTEM. This meetingwill define system configurations, specifications, design, and project development schedules.

The following outline will be followed:

SYSTEM HARDWARE SPECIFICATIONS: All system hardware specifications neededto perform the Adhering capabilities and hardware requirements needed by the endusers for the retrieval software will be outlined. This will include any additionalrequirements for special user interfaces including audio, full motion video, graphics,etc.

PROJECT DESIGN SPECIFICATIONS: The project design specifications will be outlinedaccording to the specific application and functionality of the project beingdeveloped. This will include the user interfaces to be utilized along with specificfunctionality specifications. The project storyboard will also be outlined.

DEMONSTRATION DISC: Requirements and specifications will be outlined to deliver afunctional demonstration disc of the application under development. The appropriate timeschedule and delivery process will be outlined.

INFORMATION ASSET REQUIREMENTS: The information a

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