Oee•\\ e !/O ts_p BYSLI_¢C.CC_ fa_a_E _ W_$t_ 5WOt'GCOM ORf._, 1-_0-333.3_t33 000 : Dennis Ciccone ." _.., ".: y.._.... . • .. :0•Confidential Business Opportunity e•Presented to: e• Dennis Ciccone • Managing Director • Lycos Ventures e• July 11, 2000 e• Please Contact: e• Merritt L. Friedman • 682 Marrett Road • Lexington, MA 02420 Voice: 617.886.0452 • Fax: 501.423.5929 • e-maih mfriedman@swocc.com e All information contained herein is the proprietary and confidentiai properly of skrnbb.com Inc. (D.B.A swocc.com). It is being submitted to you solely in connection with your consideration of doing business with swocc.com. This document may not be reproduced in whole or part without the written consent of swocc.com's managemenL This information has been prepared by the management of swocc.com and reflects the subjective views and opinions of the management team. 00000ee _occ us our onl,ne :: __p_pi ng indepe_en_/• Table ofContents Page _ OO Executive Summary 1-4 Market Segments e9) Teens 1-2 Intemational 2 e• Other 2 eeswocc.com Account Funding Process 4-5 e Exchange Merchants Overview 5-6 e swocc.com e-Shopping Overview 6 eO Affiliate Merchant Overview 7 e Utilization of Universal Shopping Cart 7 Application eO Security and Fraud Related Issues 8 Competitive Advantages 9 e Appendices e Company Profile • Management Team and Board of Advisors eeAll Corporate Logos are the Property of their Respective Companies. eeeeeeee 0 "swocc.com is a revolutionary technology enabled service and infrastructure 0 company that can provide networks and portals with a value-added e-commerce solutJon that serves as a "bricks and clicks" digital bridge by allowing cash to be instantaneously funded to on-line purchasing accounts for those without access 9) to credit and debit cards or those who do not wish to use a credit card for e-9) commerce transactions." Executive Summary e swocc.com is a revolutionarytechnologyenabled serviceand infrastructurecompany that can provide networks and portals with a value-added e-commerce solution. _) swocc.com'spatent-pendingElectronic Prepaid Purchasing Unit Account Funding _) Network (EPUNETTM) servesas a fundingand paymentenginefor all e-commerceand e-mediaaspects of an existingnetworkor portal. Integrationof the swocc.comEPUNET 9) enablesportalsand networksto make e-commercecash transactionspossibleforthose without access to credit cards or debit cards. The following businessopportunity focusesonthe teen market,howeverswocc.comhas identifiedseveralmarketsegments • that, once EPUNET is integrated,willincrease the network'srevenueopportunities,as 9) EPUNET serves as a funding and payment engine for those without other viable _) altematives. 9) swocc.comalso recognizesthat EPUNETcan be deployed exclusivelyon a swocc.com brandedportal. 9) Teen Market Segment e Teens lack of access to payment methodscombinedwiththeirdemographicandcultural trends makes them a potentiallyvery profitablemarket segmentfor existingnetworks 0 Today's teens are lookingfor purchasingindependenceand wouldprefer e-commerce modelsthat mirrortheirtraditionalbrickand mortar mallvisits. A quotefrom the Spring 2000 Teenage Research Unlimited (TRU) Teenage Marketing & Lifestyle Study 9) validatesthe swocc.comconceptby statingthat: Q "Teens interest in easing transactions over the Intemet is worth 9) exploring. Most teens now have to get permission to use parents' credit cards in order to make purchases online. Teens also voice 9) concems about the security of using credit cards over the Net. A secure and independent payment method for goods bought online would be welcomed by many teens." e Integration of swocc.com's patent-pendingElectronic Prepaid Purchasing Unit Account Funding Network (EPUNET_ intothe Lycosportalwillopen the floodgates _) to teen onlinespendingat Lycosby providingan easy and effective closed-loop methodologyforteensto fundonlineaccountsand shop independentlywithoutthe use of credit,charge,debit, stored-valueor pre-paidcards. Hence the acronymswocc-_) "Shopping With Out Credit Cards." e Teens comprise a demographic group that is 31.5 million members strong, have considerable spending power and are considered the most wired generation ever. _) Teens representenormouspotentialfor online spending,yet very few have access to O ProprietaryandConfidential 1 ..-.P._ eeeee9) the method of payment most widely accepted by online merchants-a credit card. Please see the Teenage Research Unlimited (TRU) Teenage Marketing & Lifestyle Spring 2000 Study Excerpts in the Market Research Reports, which serves to validate the swocc.comconcept. e Of the total $153 billion spent by teens in 1999, lack of effective online payment methodologiesled onlineteen spendingto amountto only$250 million,only .16% of totalteen spending. An analysisof teen spendingrevealedthat 67% of the$153 billion in purchases could have been transacted online. Experts predict that total teen spendingwill reach $166 billion by the end of 2000, resultingin an online potential opportunityof $111.0 billion,swocc.comwillgreatlyincreasethe abilityof teenstoshop online and, rather than compete against current funding methodologies,is wellpositiionedt aid portalsin extending thismarketto itsfull potential. 9) International Market Segments The EPUNET has worldwideapplicationwherever a POS terminalcan be locatedand accessto the Intemet is available. A swocccan be denominatedinany currencyor tied to the US Dollar. e In SouthAmerica, the infrastructurerequiredto embracethe Internetis being builtat a rapidpace. Abundantfears relatedto fraudand creditcardsecurityhave limitedSouth Americansuse of creditcards, therebyindicatingsignificantopportunityfor deployment of EPUNET. 9) European e-commerce is beginning to show signs of mirrodng the rapid growth experienced in the United States. The familiadty that Europeans have with pre-paid cards,whichgained acceptancemore rapidlyand morewidespreadthan they did inthe UnitedStates, suggestsEuropeanswouldeasilyembracethe EPUNET concept. e The swocc.comEPUNET is idealfor facilitatinge-commercein Japan. As demographic, legislative,and technicaltrends have contributedto a recent boom in Japanese ecommmerce cultural issues have prevented Japanese consumers from taking full advantageof the e-commercemedium. Currentmodels,wherebyJapaneseconsumers have merchandise delivered to retail locations, such as 7-11, would perfectly complementthe swocc.commodel. Fears of credit card fraud and settlementissues abound, and the average Japanese consumercharges less than $2000 per year on credit cards. The swocc.comprocess would mitigate these fears and providethe Japanese consumerwithabundante-commerceopportunities. Other Market Segments e EPUNET can be utilizedby adultswho eitherdo not have a creditcard or who do not feel secure inthe use of creditcardsfor paymentfor E-commercetransactions. Jupiter Communicationsreported in August of 1999 that consumersidentifysecudtyof credit card informationas their primaryconcernin conductinge-commerce. A recent Louis Harrissurvey confirmedthat more than six millionpeople have been victimsof online creditcard fraud to date and thatfraudulenttransactionsconstituteupto 10% of a Web merchant'stotal sales. e0 ProprietaryandConfidential 2 '+;_,' eee0000swocc.com Overview _) As depicted in Figure 1, swocc.com'sinnovativefundingmethodologyutilizesPoint-of-9) Saleterminalslocatedat ExchangeMerchantlocations,suchas musicandvideostores. The brandede-pass is nota stored-valuecardandthe teen doesnotneedto purchasea 9) new card each time they wouldliketo fund theiraccount,but ratherthe e-Pass serves 9) as an online accountidentifierwhich serves to fund the teen's accountat the point-of-9) funding. O Figure1. swocc.comAccountFundingProcess swoccsinsta_meously fundedto teen's _) account,swocc.com'sEPUNETservesas the digitalbridgebetweenthe ExchangeMerchantandtile Q . ;li:.. ::,,,,,,,,IClt • :4t,., "r,.'7 °-Merchants ]!32'IiPIC___ _) _ (f.e.vidoo Existing TeenAccount Affiliate _) e.PassTM stores,musicstores, Point-of-Sale InstantlyUpdated Merchants pharmaciesetc.) Terminal Online. Hewlett-Packardand VeriFone, our technologypartners in creatingour e-commerce enablingtechnology,have workedwith us inorderto configureboththe frontand backeen systemrequirements.Hewlett-PackardConsulting,throughtheir E-Service Solution Engineering Group, has validated the architecture and confirmed that it can be 9) integratedwith minimaltechnologicalrisk. EPUNET, based on VedFone's Integrated PaymentSolutionserves as the digitalbridgebetweenthe ExchangeMerchantand the 9) teen's swocc.comaccount. The flexibilityof EPUNET is suchthat it can be integrated 9) intoexistingterminalsor deployedintonewterminals.The swocc.comEPUNET enables teensto fundonlineaccountsindependently and easily. 9) integrationof the swocc.comEPUNET providesan extremelycapital-efficientprocess for a networkor portalpartner,therebyincreasingits attractivenessfroman investment perspective. As accountsare pre-funded,moneyisreceivedpriorto purchaseindicating a negativeoperatingcycleandthe network or portalwillreceive interestonthe float for _) the lengthof timepriorto a purchasebeingmade. e Integration of the swocc.comEPUNET intoa portal or networkwillallow the networkto 9) provide a service and generate additionalrevenue from its merchant partners and 9) providersof streamingand downloadableBroadbandand e-mediaservices,in that the 9) swocc.comEPUNETwill serve as the paymenttechnologythat can extendtheir market to the teen population.The swocc.comEPUNET will create greater demand for the Company'sonlineservices as the networkcan nowdeliver a viable paymentoptionfor _) the lucrativeteen marketto itsonlinemerchantpartners. Qe _I ProprietaryandConfidential 3 Q.__, QOOeeO swocc.com,the EPUNET and the unique Exchange Merchant distributionstrategy, 9) representthe mosteffective,accessible,secureand desirablemethodforteensto shop online, swocc.comis well-positionedto becomethe premierfundingmechanismforthe newmillennium. e swocc.com Account Funding Process 9) The swocc.com patent-pending Electronic Prepaid Purchasing Unit Account Funding Network (EPUNET_ willsubstantiallyincreasethe rate of spendingbyteens online,by providingteenswithfundingindependenceandallowingthemto use swocc(s) to make online purchasesand payfor Broadbandand e-mediaservices. A swoccis a _) dollar denominated ElectronicPrepaid PurchasingUnit (EPU)TM, whereby $1.00 = 1 swocc, and is created instantlyand electronicallyfor teens at Point-Of-Saleterminals, located at Selected Exchange Merchant's (EM) retail locationsthat cater to the teen market. e Once a teen has becomea registeredmemberof Lycos,a Lycos-brandede-PassTM (an 9) embossedplasticmembershipcard)willbe mailedto the teen. e Powered_by: & e9) The e-Pass has an encryptedmagneticstripeonthe back,which,when swipedthrough the Point-of-Sale(POS) terminal,instantlyfunds the teen's onlinepurchasingaccount withswoccsat the momentthe teen makesa cashexchangeat the ExchangeMerchant O location. The e-Pass is not a stored value card, but ratherserves ONLY as an online account identifierthat when swipedthroughthe POS terminal immediatelyfunds the 9) teen's ownOnlinePre-paidPurchasingAccount(OPPA)TM undertheirsolecontrolat the _) Lycossite. The teen is then able to use theirswoccsto purchasemerchandiseonline _) from Lycos' rosterof teen-orientedAffiliateMerchants(AM) or payfor the downloadof Broadbandand e-mediaservices. Figure1. swocc,comFundingProcess-ShoppingfromAffiliateMerchants swoccsim,_ant_neousiyfundedto teen's account,swocc.com'sEFiJNETservesasthe digita! bridgebetwc.e_theExch_ge Merchant_mdthe teen'saccount. e li_ _' "'_ ....._ . e Merchants . ,,_ (i.e.video •-/:,-_r .............. stores,music stores, Existing TeenAccount Affiii=te e'Pass_ pharmacies, Point-of..Sa!e InstantlyUpdated Merchants etc.) Termina! Online. e Proprietaryand Confidential 4 _;_;_.. eee0e00O Figure2. swocc.comFundingProcess-Downloadinge-media swoccsinstantaneouslyfunded to teen'saccount. ,. , ]mMG v_==____ Exchange _ '_ • "1_ m MerchantsmmBdl_ _/_ L_ (i.e.musicand ' __Ei videostores) '/f Movie,game, _ Existing software,book,etc Point-of.Sale downloadedto PCor Termina! TVand paidfor from Teen'saccount The above figuresdemonstratesthat, in contrastto parent-fundedcreditcard accounts or storedvalue cards,the swocc.comEPUNET processprovidesteenswithquick,easy, secureand independentfundingand purchasingpower. e The unique EPUNET electronicdelivery and funding system will also facilitate the purchase of swoccs by non-members,purchases of swoccs as gifts, or funding by memberswho have not yet receivedtheirswocce-Pass. @Exchange Merchants (EM) Overview The use of existingP0S terminalsat Selected ExchangeMerchant(EM) retaillocations _) willenable the establishmentof a uniqueand proprietaryelectronicfundingnetworkfor ElectronicPre-paidUnitsto the teen market. EPUNET servesas a modularframework that forms the digital bridgebetween the Exchange Merchantlocationand the teen's _) online account. A terminaladapter componentprogramroutesthe transactionto the switchingcomponentand servesto identifya networkor portalmember, swocc.com's patent-pendingEPUNET can be easily implementedinto the Exchange Merchant's existingPoint-of-Saleterminals.Thisfeatureeliminatesany inventoryhostingas wellas avoids the costs associatedwith the deploymentof additionalequipment,employee 9) trainingand anyconcernsan ExchangeMerchantmighthave regardingcounterspace. In identifying potential Exchange Merchants, swocc.com evaluated four criteria: geographic reach, teen relevance, desire to increaseteen foot traffic and desire to increase =bdckand click"brand presence among teens, swocc.comwill enter into agreements with Exchange Merchantsin variouscategories, includingentertainment retailers,fastfood chains,specialtyfoodchainsand pharmaciesto establishgeographic reach of its proprietarynetwork, swocc.comhas identified100 nationaland regional _) retail chains that are suitable as EMs, representing over 170,000 potential POS locations, swocc.comintendsto limitP0S deploymentin order to ensure exclusivity, and is currentlyin negotiationsto reach Exchange Merchantagreementswith several well-knownnationalretailers. Q@Proprietaryand Confidential 5 _ OOQOOO When an agreementis reachedwith Lycos,swocc.comenvisionsBames& Noble,one of Lycos' premiere affiliate merchant partners, as a perfect Exchange Merchant Location. swocc.combelieves that the EPUNET offers a compelling propositionfor potential ExchangeMerchantsincluding: • The potential to build foot traffic and loyalty from the lucrative teen market. Competitivebenchmarkinghas ledto expectationsof approximatelysix millionusers by our fifth year of operations. Assuming teens fund their accounts in $20 increments,and spend$330 througha networkportal,16 extravisitsto an Exchange Merchantretaillocationare requiredbyeach teen. The end-resultisa potential100 millionteen visitsto swocc.comExchangeMerchantretaillocations. • the EPUNET process can be implementedinto existing terminals at the retail locationsof the ExchangeMerchant, andtherebyeliminatesany concernsregarding counterspace at the point-of-saleandtrainingof employees, O • the potentialto increaserevenuesand market share, • the potential to increase brand presence in the physical and virtual worlds as significantmarketingand advertisingopportunitiesexists between swocc.comand ExchangeMerchants.In the physicalworld,co-brandingopportunitiesexistonthee-Pass and in media advertising.In the virtualworld,the potentialexistsfor Exchange Merchantsto become an exclusiveon-lineAffiliate Merchantwithintheir category and • the potentialintegrationof ExchangeMerchants'andthe networksloyaltyprograms. OOswocc.com e-Shopping Overview O As Lycosalreadyutilizesthe AffiliateMerchantmodel,memberswillnavigateto the mall, where links are provided to the Affiliate Merchants.Once a teen selects an item to purchase from an Affiliate Merchant's Web site, the Affiliate Merchant or Universal ShoppingCart (USC) providerwill requestthe paymentinformationfromswocc.comin the same manner that they would request informationon a credit/chargecard sale (Private Label Credit). swocc.com supplies the Affiliate Merchant with the generic swocc.comcredit/debit/charge/ACHaccount which to charge either the purchase of merchandiseor e-mediadownloads, swocc.comsuppliesthe AffiliateMerchantwiththe shippingaddressandother informationthat is requiredto completethe orderandassure properdelivery. The teen memberdoesnot provideany buyerprofileinformationto the AffiliateMerchant. Once the transactionis complete,the funds are deductedfrom the teen's Online Prepaid PurchasingAccountand the member'sonline account balance immediatelyreflectsthe new balance. OOOOO ProprietaryandConfidential 6 _:; ", •000ee9) Affiliate Merchant (AM) Overview e EPUNET providesteensthe purchasingpowerto independentlyand securelycomplete 9) purchasingtransactionsfrom an AffiliateMerchant'ssite. 0 Integration of the swocc.com EPUNET offers several benefits for Lycos' Affiliate Merchants(AM) including: l • Members representa no-costmethodto increaseeyeballsto theAM site. • Opportunityto provideteenswiththe abilityto spendtheirownmoneyat theAMsite. 0 • Opportunityto provideteenswith a securemethodforshoppingonthe AM site. • Opportunityto buildbrandin the virtualwoddthroughplacementinthe mall andthe potentialto sponsorcontenttopush purchases. • Creationof a flawlessshoppingexperienceservesto increaselook-to-buyratio. 0 Integrationof the swocc.comEPUNET alsouniquelyrespondsto the needsof potential Affiliate Merchantsin the games, video, and movie download and streamingarenas. The swocc.comprocessprovidesa methodologyfor teens, the largestconsumers of entertainment,to participatein the rapidlyemergingcategoryof BroadbandInteractive _1_ Services ande-Media. Utilization of Universal Shopping Cart (USC) Application e swocc.com is seeking to implement a cost-effective USC application with a portal/networkpartner to enhance the shoppingexperience of the teen members, whereby a user can place merchandisefrom more than one Affiliate Merchantinto a shoppingcart yet the user is only requiredto checkoutonce. In additionto streamlined checkout,implementinga universalshoppingcart has manybenef'_sincluding: • surfingandshoppingacrossall AffiliateMerchants, • automaticIoginand registrationatAffiliateMerchantsduringthe buyingprocess, • onlineshoppingrecordsacrossallAffiliateMerchants, • abilityfor swocc.commembersto buildwish liststhat can be accessedbyfamilyand friendssothat merchandisecan be purchasedonthe swocc.commember'sbehalf, • a comparisonshoppingengine, • and reverse merchandiseauctions where Affiliate Merchants can bid competitive pricesto convert latentdemandlisted inuser'scartsto completedpurchases. e swocc.com currently has an agreement with RedCart.com of San Francisco to implement theirUSC technologywithinthe swocc.comsite. A networkor portalpartner can leverage the USC with its existingAffiliate Merchantsas utilizationof the USC servesto increasethe conversionrate of browsersto buyers. e0eee _I ProprietaryandConfidential 7 ,-i , eeeee9) Security and Fraud Related Issues e We will strictly protect the personaland accountinformationof all members.Individual O memberinformationwillnot be disclosedor soldunderany circumstances,swocc.com will work to attain the TRUSTe trustmarkas it pertainsto swocc.com'sprivate policy concerningmembers. _) Memberaccountswillbe monitoredto detectabusiveor potentialfraudulentuse. swocc.com is working closely with VeriFone to identify and eliminate any potential O loopholesthat may allowforthe swocc.comprocessto be usedin a fraudulentmanner. 9) The swocc.commethodologyprovidesthe addedbenefitthat memberscan onlyspend what they have funded,and therebyavoidthe risksassociatedwiththe abusiveuse of D credit. O Competitive Advantages 9) swocc.com'suniquepatent-pendingprocessis significantlydifferentthan otherfunding 9) and payment mechanismsavailable to teens, swocc.com is the only funding and O paymentenginethat allowsteensto shopina way that mirrorstheirtraditionalbrickand mortar experience. Integrationof the swocc.comEPUNETwill allowLycosto compete on the teen appeal and geographicreach of its distributionstrategythat requiresno 9) creditcards or parentalinvolvementto open onlineaccounts,fund onlineaccountsand shoponline. Consequently,EPUNETcreates the followingcompetitiveadvantagesover 9) otherteen e-commercefacilitators: O9) • Customer retention costs associated with On-line Affiliate Merchant malls have typicallybeen extremely high as shopperslearn to bypass the On-line mall and proceed directlyto the AffiliateMerchantsites.The swocc.comEPUNET is closed 9) loop and preventsthe teen from bypassingthe Lycossite as swoccscan only be utilizedthroughthesesites. The onlinefundingmethodsof swocc.com'scompetitors 9) causesthem to losetheirexclusiverelationshipwithcustomersoncea purchasehas • been made, as the online merchantnow has direct influenceand marketingpower 9) over the online shopper. In contrast, integrationof swocc.comEPUNET enables Lycos to capture both the teen and the affiliatefee revenues associatedwith the 9) teens' purchases,as well as retainsmarketinginfluenceover the teen, as swoccs _) can onlybe usedonthe swocc.comsite; 9) • Memberscanopen andfundonlineaccountswithoutthe useof credit,charge,debit or storedvalue cards; 9) • Members'onlinepurchasingaccountsare instantaneouslyfunded; O • Members have immediate use of funds in their online purchasingaccounts; • Fundingprocesseliminatesthe incidenceof creditcard fraud.A recent LouisHarris surveyconfirmedthat morethan six millionpeoplehave beenvictimsof onlinecredit card fraud to date and that fraudulenttransactionsconstituteup to 10% of a Web 9) merchant'stotal sales. Fraudulentuse of credit cards has caused e-commerce ee _)O ProprietaryandConfidential 8 __._._. ', eeeee 9) vendorsto experiencechargebackratesbetween15% and 30%, as comparedto 1% • by brick-and-mortarbusinesses; _) • Teens can openand fundonlineaccountswithoutparentalinvolvement; O • Geographic reach and teen relevance of selected Exchange Merchants ensures convenience and accessibility in funding accounts; and e • The extremelylowpercentageof holdersof debitcardsand checkingaccountsespeciiallyi the 12-15 (2% have debitcardsand 6% have checkingaccounts)and 16-17 (7% have debitcards and 15% have checkingaccounts)age brackets indicatesthe difficultiesthat competitorsthat seek to tie accountsto teen's personal 9) accountswillhave inestablishingcriticalmass. Diminishingthe threatof competitors that seek to tie onlineaccountto a parent'saccountis thisdirect quotefromthe study:"Teens interest in easing transactions over the Intemet is worth exploring Most teens now have to get permission to use parents' credit cards in order to make purchases online. Teens also voice concerns about the security of using credit cards 9) over the Net. A secure and independent payment method for goods bought online 9) would be welcomed by many teens." e9) swocc.com, the EPUNET and the unique Exchange Merchant distributionstrategy, representthe mosteffective, accessible,secureand desirablemethodforteensto shop online. As the competitive advantages describe, the swocc.comEPUNET is well positionedto becomethe premierfundingmechanismand paymentengine forthe new millennium. eee0eeee0eeee0eeee _ ProprietaryandConfidential 9 _' eee0000• Company Profile e skrubb.com inc. (d.b.a.swocc.com)is a Delawarecorporation(The Company), • incorporatedSeptember2, 1999 and is registeredtodo businessin Massachusetts. O Board of Directors LuisAndresPerez -Chairman JamesZucco,Jr. Merritt LaurelFriedman Trisha Perez Kennealy JohnWilliamVancura 0 Officers LuisAndresPerez President& CEO StephenM. Andress Secretary JohnWilliamVancura ActingCFO JohnAkins Vice President& CTO Merritt LaurelFriedman Directorof Marketing KeithCampionMaddock Directorof InternetEnterprise Development Q Derek Dowd Directorof ExchangeMerchant Relations QOOOQOQQOQQOOQOOQOOO Proprietary andConfidential (,,..._._,_, eeeeee0 Management Team and Board of Directors • Luis Andres Perez, Co-Founder,Chairman,CEO and Presidentof the Company. Mr. Perez is a CertifiedPublicAccountant.He earned hisBBAfromPace Universityand his MBAfromthe HarvardBusinessSchool. He started his publicaccountingcareer with Price Waterhouse Coopers. He was a cofounderof an accountingand consulting practice,whichwas soldto ArthurAndersen& Co. and where he becamea principal. He has been involvedin the operationsof construction,distributionand manufacturing enterprises,which were co-founded,developedor acquiredby himand subsequently sold. His currentbusinessinterestsare primarilyfocusedon the e-commerceaspects of the Intemet. e James Zucco Jr., Memberof the Boardof Directorsof the Company. Mr. Zucco is CEO of Spike Technologies,a pioneer in broadbandwireless access. Spike'stechnologyenables such digitalservices as voiceover IP, highspeed Internet access, high-speed data transmission,video streaming, video on demand, data warehousingandremoteWAN/I_ANmanagement.Mr. Zucco is drivingSpike'sstrategic direction, business development,and daily operations. Mr. Zucco also serves as Chairman of the Board of LockStar Inc., a venture-backed company focused on integratedsecuritysolutionsfor the eBusinessmarket. e Mr. Zuccojoined Spike fromventure capitalfirm, KleinerPerkins Caufieldand Byers, where he was CEO in Residence.Priorto joiningKleinerPerkins,Mr. Zuccoservedas Chairman,PresidentandCEO of ShivaCorporation,wherehe restoredthe companyto • profitabilityand negotiateda successfulmergerwith IntelCorporation. e Prior to joining Shiva, Mr. Zucco was a key executive in the AT&T divestiturethat created LucentTechnologies.As vice presidentand general manager,he led Lucent's most profitableproductbusiness,North AmericaNetworkSystems.He also served as the first president and successfullylaunched Lucent's CommunicationsSoftware businessunit. During his tenure at AT&T, Mr. Zucco was vice presidentand general Q manager of Advanced Network Applications at AT&T Business Communications Services. He launchedthe first set of commercialInternetbusinessesat AT&T for e-Q commerce,web hostingand Internetaccess services and streamlinedthe company's customerservices. 0 Mr. Zucco also serves as Chairmanof the Board of LockStar Inc., a venture-backed e companyfocusedon integratedsecuritysolutionsforthe eBusinessmarket. e John Akine, Vice PresidentandChief TechnologyOfficer. Mr.Akinspreviouslyserved as the ManagingConsultantof Pre-SalesTechnicalSupport at 2Roam, Inc., a supplier of wireless handhelddevices for access to the Intemet. Before joining2Roam, Mr. Akinswas at VeriFone International,a divisionof Hewlett-Packardandwas responsible for pre-salescommunicationand systemdesign of three-tierclient server transaction ee ProprietaryandConfidential _ .._,_' 0e0000• processingsystemssuch as IPS, Omnihost,vPOS, vGate in the physicaland virtual space. Prior to VeriFone, Mr. Akins was responsiblefor Developmentof a POS protocolfor use with Data-Over-Voiceand Integrated-Services-Digital-Network(ISDN) equipmentat Applied Digital Design Inc. The protocolhas been adoptedby Bellcore and isnowavailablenationally.In addition,Mr. Akinsthirtyyears of experienceincludes seniorpositionsat Ricoh,InformationSolutionsInc.ArtelonicsCorporationand Sandia NationalLaboratories. swocc.comwillbe able to leverageJohn'sextensiveexperience and knowledgeof IPS and POS systems. O Stephen M. Andress, Secretary of the Company. Mr. Andress graduated from Georgetown UniversitySchool of Foreign Services, earned an MA in International Relationsfrom the Universityof Arkansasand a JD from the Universityof California (Berkeley) School of Law. He is a Senior Partner in the firm of Nutter,McClennen& Fish. His practiceinvolvescorporatemergersandacquisitions,finance,joint ventures, technology licensingand distributionand export controls. His varied list of clients includes General Electric, United Technologies Corporation, and AirNet Communications. O John William Vancura, Member of the Board of Directors and Acting CFO. Mr. Vancurais a Certified PublicAccountant.Heearned hisBSBAfromBryantCollegeand hisMBAfromF.W. Olin GraduateSchoolof Businessat BabsonCollege. He beganhis career withArthurAndersen& Co. and has heldvarioushigh levelfinancialpositionsin multi-state telecommunicationsand restaurant companies. He has extensive experiencewith SEC compliance,Federal and multi-statetaxation,401K compliance, Federal Communicationsand State Public Utility Commissiontelecommunications registrationand compliance. He is currentlyVice Presidentof Finance and CFO of ServiSense.com. He hasexperienceinworkingwith start-upsanddevelopingoperating controlsand procedures. Mr. Vancurais Mr. Perez'son-in-law. Trisha Perez Kennealy, Member of the Board of Directors of the Company. Ms. Kennealyearned herAB in GovernmentfromHarvard Universityand her MBAfromthe Harvard BusinessSchool. She is currentlya Vice Presidentspecializingin IPOs of communicationsinfrastructurecompaniesat RobertsonStephens. Ms. Kennealyis the daughterof Mr. Perez. O Merritt Laurel Friedman, Co-Founder, Member of the Board of Directors and Director of Marketing. Ms. Friedmanearned her BAin InternationalAffairsand Economics(Cum Laude) from Lafayette College and her MBA from F.W. Olin Graduate School of • Businessat BabsonCollege(Cum Laude). Ms. Friedmanhas priorexperienceworking with the teen marketas a coordinatorand marketerof travel programsfor junior high and high school students.Her post-MBA experience includesdeveloping marketing strategiesand new products for the Global MarketingGroup at State Street Global Advisors, a division of State Street Bank. Ms. Friedman will be responsiblefor marketingto the teen marketsegmentandfor managementof the Web site content. OOOPropdetan/andConfidential _.,_.._,,. OO00000Keith Campion Maddock, Co-Founder and Director of Internet Enterprise • Development. Mr. Maddock earned his BS in Economicsfrom San Diego State. • University. He spent five years at Charles Schwaband Fidelity Investmentsin sales • capacityto highnetworthclients. In May 1998, he receivedhisMBAfromthe F.W. Olin • Graduate Schoolof Businessat BabsonCollege. His postMBA experiencebefore Co-Founding swocc.comincluded Equity Research at ABN AMRO and research and • marketingat UAM InvestmentManagement. Mr. Maddockis responsiblefor allaspects • of our relationshipwiththe AffiliateMerchantsand businessdevelopment. OO Derek Dowd, Co-Founder and Director of Exchange Merchant Relationships. He earned his BAin Historyat the Universityof California,Berkeleyand hisMBAfromthe F.W. Olin Graduate Schoolof Businessat BabsonCollege. He hasworkedin several • industriesincludingpropertymanagementand foreign exchange. Most recently he worked for an educational division of the Washington Post Company, where he managededucationalcentersfor childrenaged 4-14. Mr. Dowdwill be responsiblefor • the commercialand operatingaspects of the EPUNET as they relate to the Exchange • Merchant. O John R. Wilder, Director of TechnologyManagement. Mr. Wilder is a graduate of Bryant College where he earned a BBAin ComputerInformationSystems. He was • previouslyemployedby Open Market,wherehe was responsiblefor the implementation • of comprehensiveQualityAssuranceprogramsforthe developmentandmaintenanceof hiscompany'sleading Internetsoftwareproduct. The QA programencompassedthe processof productassurance,configurationmanagement,and processimprovementof products runningon Windows NT and Solaris UNIX platformsusing Java, XML and • Object Design, Inc. object-orienteddatabase technology. Mr. Wilder will be primarily responsiblefor managementof the ApplicationServiceProviderrelationshipas well as QualityAssuranceSystemsandControls. OQOOOOOQQQQOQO ProprietaryandConfidential , =__:_:_,, QQ0000Board of Advisors 9) Todd L. Davis, Presidentandfounderof NobelEmectronic Transfer,LLC. Nobel ElectronicTransfer, LLC is a switch for and processorof electronicfinancial transactions.Nobel currentlyprocessescredit card settlementfor 25,000 merchants. Currently,sixtybanksrelyon Nobel'scard issuing/processingfacilities.Nobeladdeda completeinternationalswitching/authorization capabilityto itsproductmixin early 1999. Nobel's suite of products provides its clients with a truly integrated e-commerce paymentplatformincludingXML based ElectronicFundsTransferfacilities. O Mr. Davis worked out of the Middle East and Europefor over twenty years leading companiesand institutionsthroughthe transitionfrom traditionalfamilyrun operations to modern internationalcorporations. Mr. Davis worked with dozens of companies, agenciesand institutions,includingUniversityof Tehran, University of Kuwait,Najeeb AI-Mutawa & Sons, InternationalContractors Group, The Public Authority for Civil Informationin Kuwait, The National Bank of Kuwait. His work included: corporate marketing strategy planning and implementation;systems design and development; policies, methods, standards and procedures development and implementation; systemsand accountingaudit controlsdesignand lobbyingfor improvedinternational trade regulations. Q Since returningto the US, Davisworkedwiththe Bushadministrationandcongresson mattersdealing with the Middle East, helpedfound ElectronicExchangeand Transfer Corporation, consulted on two new bank start-ups, and founded Nobel Electronic • Transfer, LLC. Mr. Davis is very active in civic affairs especially those related to inter-cityeconomicdevelopment,youthand internationalrelations. O George Naddaff, retail operations advisorto the Company. Mr. Naddaff currently servesas Chairmanand directorof BusinessExpansionCapitalCorporation(=BECC"), which he founded in 1986. BECC invests in developing enterprises capable of expansionthrough replicationof a successfulprototypeoperation. Mr. Naddaff also Q serves as Vice Chairmanof Mortgage.com,whichwent publicon August11, 1999 and raised approximately$57 milliondollars. Mr. Naddaffwas a Founder,Chairmanand • CEO of BostonChicken. In additionto formulatingoverallstrategicdirection,he was in chargeof BostonChicken'sfranchiseexpansionprogram. O Mr. Naddaffsoldhiscompanyto a groupof Blockbusterexecutivesin 1992,whotook it publicin 1993. Other companiesthat Mr. NaddafffoundedincludeInternationalFoods, Mulberry Learning Centers, Living and Learning Schools, which was later sold to KinderCare and VR Businessa businessbrokerage franchisewhich sold over 350 franchisesthroughoutthe United States,Canadaand Puerto Rico. Ronald E. Cahill, intellectualpropertyadvisorto the Company. Mr. Cahill graduated from Cornell University with a BS in Mechanical Engineering and a Masters of OO Propdetaryand Confidential _.. _-_ • QQ0000• Engineering. He receivedhisJD fromthe Universityof Pennsylvania.He is a partnerin the firm of Nutter, McClennen & Fish where his practice includes patent and trade secret litigationin federal courts, patent prosecutionand the related counseling. His practice coversa broad rangeof technologiesincludingmicroprocessorsand software processandinventions. Michael John Kennealy, financialadvisorto the Company. Mr. Kennealyearned his BA in Governmentfrom DartmouthCollegeand his MBA fromthe Harvard Business School. He is a partner in a leading Boston venture capital firm specializing in telecommunicationscompanies. Mr. Kennealyis marriedto Trisha Perez Kennealy,a memberof the Boardof Directors,andis Mr. Perez' son-in-law. O Joseph Dikdan, direct marketingadvisorto the Company. Mr. Dikdanisthe founderof and principalin a consultingfirm which advises clients on direct marketingand the Intemet. He wasformallya vice presidentof Metromail,Inc.a leadingproviderof direct mailservicesto Fortune500 companies. O Phyllis Jackson, ACH and cash managementadvisorto the Company. Ms. Jackson isVice PresidentCash ManagementGlobalServices Divisionof Fleet Bank.She serves O as an advisor to swocc.com on matters related to the coordination of EPUNET andthe O ACH system. OOOOOOOOOOOOOOOOOOOO Proprietary and Confidential 0000000Market Research Report Excerpts • Teenage Research Unlimited (TRU)'s Teenage Marketing & Lifestyle Spring 2000 • Study Excerpts • Teenage ResearchUnlimitedis the nation'sforemostmarketresearcherspecializingin • the youthmarketand boaststhe mostsubscribed-tostudyon teens. BasedontheTRU • study,it certainlyappearsthat,once launched,the swocc.commodelhas all the • elementsin placeto capturethe teen'smind-shareand wallet-shareand becomethe categorykillerinfacilitatingteen e-commerce. Banking Products 9) Question: Which of the following are true for you? (Check all that apply) Total Male Female 12-15 16-17 18-19 e I have a _>'_.," 31% credit card (in my name) 10% 9% 12% ;_:i,!. "_" OO I want a credit card ";'""" _....." "'""_' ......" ....'' >-..' z,,. ['_./..,'2,:3 Q I have access parents ..... to ' card ...... '_ " <"" ...." " % " f,-_._-'_.,_:.; :. _,." .../"..k::. ,.-, z,...... • .. _,-,, 0I I have a • debit card 11% 10% 12% ,_'-'_:_ ::% 33% O• I have a 66% 66% 66% 64% 65% 71% savings account e I have a 21% 19% 23% _::_ <"-"" <,,,,, ._,_: 57% checking account e Source:TeenageResearchUnlimited TRU reports that bankingproductsof all kindsremainsfairlyflat fromlastyear, • indicatingthat the there is no upwardtrends inteensuse or accessto creditcards, • checkingaccounts,debitcards, etc... eeo Proprietary andConfidential 00eeeee O Weekly Spending e• Question: Approximately how much of your own money and other people's • money did you spend in the last seven days (i.e. shopping, entertainment, etc..) • Which of the following are true for you? (Check all that apply) e9) Total Male Female 12-15 16-17 18-19 Own Money $58 $60 $55 $29 $65 $105 OeParent's Money $31 $27 $36 $33 $36 $24 eeTotal $89 $87 $91 $62 $101 $129 Source:Teenage ResearchUnlimited O Supportingswocc.com'scontentionthat teensneed an independentmethodfor conductingon-linecommerceisTRU's statementthatteen spendingof theirown moneycontinuesits steadyyear-after-yearupwardtrend. Teen spendingof family • money,however,isflat fromone year ago. OOOQQeeeeeeeeeOee ProprietaryandConfidential • @' 00