Form 10-KSB Telemetrix Inc.

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LFu+gz34iEAPc84SiuHA33VbyE8/RfYbN01whmaR0AZjQ417kY/PiMXUm7FSylHu bVj6kKdMb65sykJ8rwLEHg== 0001182063-04-000109.txt : 20040609 0001182063-04-000109.hdr.sgml : 20040609 20040609085322 ACCESSION NUMBER: 0001182063-04-000109 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040609 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEMETRIX INC CENTRAL INDEX KEY: 0000742814 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 593453156 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14724 FILM NUMBER: 04854895 BUSINESS ADDRESS: STREET 1: 1225 SAGE ST CITY: GERING STATE: NE ZIP: 69341 BUSINESS PHONE: 3033837610 MAIL ADDRESS: STREET 1: 1225 SAGE ST CITY: GERING STATE: NE ZIP: 69341 FORMER COMPANY: FORMER CONFORMED NAME: ARNOX CORP DATE OF NAME CHANGE: 19960612 10KSB 1 telem10ksb123103.htm Form 10-KSB Telemetrix Inc.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED December 31, 2003
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __ TO __

COMMISSION FILE NUMBER 000-14724

TELEMETRIX INC.
(Name of small business issuer in its charter)

DELAWARE 470830931
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

1225 SAGE STREET, GERING, NEBRASKA 69341
(Address of principal executive offices) (Zip Code)

(308) 436-4090
(Registrant's telephone number, including area code)

Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock, Par
Value $0.001

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year. $381,967

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) $1,446,383.70 as determined by the closing price of
$0.24 on May 3, 2004.

Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 18,476,186 shares of common stock
outstanding as of April 30, 2004.

DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus for
identification purposes (e.g., annual report to security holders for fiscal year
ended December 24, 1990).

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

TELEMETRIX INC.

INDEX

Part I.
Item 1. Description of Business .......................................4
Item 2. Description of Property ......................................12
Item 3. Legal Proceedings ............................................13
Item 4. Submission of Matters to a Vote of Security Holders ..........13

Part II.
Item 5. Market for Common Equity and Related Stockholder Matters .....13
Item 6. Management's Discussion and Analysis or Plan of Operation.....15
Item 7. Financial Statements .........................................21
Item 8. Changes in and Disagreements with Accountants and
Financial Disclosure .........................................41
Item 8A. Controls and Procedures ......................................41

Part III.
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act ...41
Item 10. Executive Compensation .......................................43
Item 11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters ...................46
Item 12. Certain Relationships and Related Transactions ...............49
Item 13. Exhibits and Reports on Form 8-K .............................49
Item 14. Principal Accountant Fees and Services .......................50

This Annual Report includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. This Act provides a "safe
harbor" for forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify these
statements as forward looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results. All statements other than statements of historical fact,
including statements regarding industry prospects and future results of
operations or financial position, made in this Annual Report are
forward-looking. We use words such as "anticipates," "believes," "expects,"
"future" and "intends" and similar expressions to identify forward-looking
statements. Forward-looking statements reflect management's current
expectations, plans or projections and are inherently uncertain. Our actual
results may differ significantly from management's expectations, plans or
projections. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. We undertake
no obligation to publicly release any revisions to these forward-looking
statements that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. Readers are urged,
however, to review the factors set forth in reports that we file from time to
time with the Securities and Exchange Commission.

-3-

PART I

ITEM 1. DESCRIPTION OF BUSINESS

ORGANIZATIONAL HISTORY
We were formed through a series of corporate combinations, as follows:
o On January 2, 1999, Telemetrix Resource Group, Inc., a Colorado Corporation
("TRG, Inc."), acquired Telemetrix Resource Group Limited (TRG Ltd.), a
Nova Scotia corporation from Hartford Holdings Ltd., TRG Ltd.'s sole
shareholder, in accordance with a share exchange and plan of
reorganization;
o On March 22, 1999, Arnox Corporation (an inactive public corporation), TRG
Inc. and Tracy Corporation II d/b/a Western Total Communication ("WTC")
executed a Plan of Reorganization, which contemplated a share exchange and
reorganization transaction, which is referred to hereafter as "the
combination";
o On April 5, 1999, the first phase of the combination occurred, whereby
Arnox acquired 100% of the issued and outstanding common shares of TRG Inc.
in exchange for 6,127,200 shares of Arnox's common stock;
o Thereafter, Arnox's historical financial statements become those of TRG
Ltd., as TRG Ltd.'s operations were the ongoing operations of the combined
companies;
o On September 22, 1999, the final phase of the combination closed, whereby,
we acquired 100% of the issued and outstanding common shares of WTC in
exchange for 5,372,800 shares of Arnox's common stock;
o Through these combinations, the stockholders of WTC and TRG, Inc. acquired
a total of 11,500,000 shares of Arnox common stock (approximately 90%) and
therefore acquired control of Arnox;
o After the Combination, the companies changed their names to reflect their
complementary businesses, as follows: (a) Arnox became Telemetrix, Inc.;
(b) TRG Ltd. Became Telemetrix Solutions, Inc.; and (c) WTC became
Telemetrix Technologies; and
o Tracy Corporation II, a Nebraska corporation, became our wholly owned
subsidiary.

As of December 31, 2003, we have 18,476,186 shares of our common stock
outstanding. As of April 30, 2004, we have 18,476,186 shares of our common stock
outstanding.

BUSINESS

OVERVIEW

We offer the following services:
o Wireless paging services;
o Wireless Personal Communications Services
o Wireless network access and specific rate plans for data only
customers. This provides nationwide wireless network roaming access.
The service provided is generally used for telemetry and telematic
systems, which involves the use of remote devices for data collection
and analysis; and
o Hardware, software, and communications software and technology and
related services that we provide for other wireless carriers.

Wireless Paging Service
We own and operate a wireless paging service. Wireless paging is a service that
has been in use for over 30 years. This is the service that was originally known
for its use by doctors and emergency personnel who were on call; this was before
the common availability of wireless mobile phones. Paging equipment consists of
a small device that is usually attached to one's belt or carried in a person's
pocket, and which makes a beeping notification sound when a message is received.
In recent times, because of the widespread use of wireless mobile phones, pagers
are being used by fewer people, but pagers continue to be used in more
specialized situations, and present a lower priced alternative to a wireless
mobile phone. Overall, paging service revenue is decreasing on paging systems
nationwide, as it is with the paging network that we operate. Our paging network
provides coverage of portions of western Nebraska, southeastern Wyoming and
northeastern Colorado.

-4-

Wireless Mobile Telephone Service
We also own and operate a wireless PCS mobile telephone service. There are two
major types of mobile telephone technology in use in the United States, Global
System for Mobility (GSM) and Code Division Multiple Address (CDMA). Examples of
wireless companies that use the GSM technology are AWS (ATT Wireless), Cingular
and T-Mobile. Examples of wireless companies that use the CDMA technology are
Sprint and Verizon. We currently use only GSM technology.

Our wireless mobile telephone service provides coverage in western Nebraska and
eastern Wyoming only. We have future plans of expanding the network service area
to include a portion of Interstate Highway 80 which is in the southern part of
our licensed area. We provide network service for customers of ATT Wireless,
T-Mobil and Cingular, when they are in our coverage area. The income from
providing this service is known as "roaming revenue".

Nationwide network data access
There are a number of companies designing and manufacturing devices to collect
data and then report events or exceptions via various wireless technologies,
which has become known in the industry as Machine to Machine communications,
otherwise known as M2M communications. We were in the business of designing and
marketing such devices. During the third quarter of 2002, we determined there
would be an increasing amount of market competition from hardware companies that
had significant capital and expertise and these companies were better positioned
and funded to capitalize on such business opportunities. We also determined
these companies would share a common problem which is the ability to get an
affordable nationwide wireless data plan which would be necessary for them to be
able to use their devices. Our market opportunity for providing affordable
wireless nationwide data only service is greater that our market for application
specific telemetry related hardware and software, primarily because of the lack
of distribution channels for telemetry hardware. We began using our knowledge of
the GSM wireless networks to create service plans for customers that needed
service for their hardware and reporting devices. This gave us the capability of
entering endless vertical telemetry and data markets without investing capital
in specific research and development to produce specific hardware, software and
firmware solutions for those markets.

We currently provide nationwide GSM network access on a wholesale basis for
hardware that communicates using Short Message Service (SMS). We activate
Subscriber Identity Module (SIM) cards for telemetry and telematic applications,
without including charges for monthly voice service fees. As a licensed GSM PCS
operator, we deliver nationwide GSM service through our inter-network roaming
agreements. We provide short message services throughout the United States
through our agreements with AWS, T-Mobile, Cingular and other wireless GSM
carriers. We issue SIM cards and provide nationwide service through our roaming
agreements to send and receive messages from our SIM cards virtually anywhere in
the United States. This kind of service is necessary for M2M hardware operate.

SMS service is simply a digital network service that allows digital phone users
to send and receive text messages on their digital phones. Each message may be a
maximum of 160 characters long. Telemetry and telematic customers use this
message protocol to wirelessly communicate with their hardware devices.

Our immediate objective is to increase the amount of message traffic and network
roaming traffic through our network infrastructure for delivery on networks
operated by our roaming partners. Our next objective is to integrate General
Packet Radio Service, otherwise known as GPRS, into our data offering. GPRS is a
high speed data service which can be used for Internet access.

-5-

Hardware, software and network operator service solutions
We created a brand name of CentreGate(TM) to differentiate between the data
services and the services we offer and provide other wireless companies. Through
CentreGate, we are able to provide mobile switching services and other essential
wireless solutions for our customers, which are other wireless carriers. Many
smaller wireless carriers do not wish to invest the money necessary or can not
afford to purchase the network equipment required to operate a small wireless
network. The expertise and talent necessary to operate a small network is
difficult to acquire. Through CentreGate, smaller wireless operators are able to
arrange all the services necessary to operate their local transmitters and
handle voice and data without having to install expensive and complicated
equipment. CentreGate has a unique method of connecting the central office
equipment located in Gering, Nebraska with the equipment operated by a wireless
carrier anywhere in North America and using the equipment to operate the local
carrier's network just as if their equipment were owned and operated locally by
themselves. This saves the smaller local carrier a tremendous amount of time and
expense in getting their wireless network operational and also provides a means
of making the network profitable more quickly. By sharing our Mobile Switching
Center, using CentreGate sources for financial settlement and billing, and
having CentreGate manage roaming agreements with other wireless carriers, the
local CentreGate network customer can concentrate on marketing and revenue
opportunities within their network coverage and not have to spend time finding
qualified and competent personnel to work on the technical network operational
issues.

OUR BILLING PRACTICES
We charge our customers for services based on the following 3 billing levels:
o Monthly pager service fees;
o Per message for short message services; and
o Professional services, which include billing and network services we
provide to small telecom operators.

DIVISIONS
We operate the following divisions:
o Telemetry and Pager Services - Our Telemetry and Pager Services
Division provide short messaging services and pager services directly
to end users;
o CentreGate Division - Our CentreGate Division provides professional
services, which include billing and network services that we provide
to small telecom operators; and
o Reseller Division - We have agreements with agents and resellers that
purchase our telemetry and data services at wholesale and then resell
them at their retail rates.

GEOGRAPHIC MARKETS
Our primary geographic markets are the United States, Canada, and Mexico.

DISTRIBUTION AND MARKETING METHODS
o CentreGate Division - Our CentreGate Division markets its services
directly to the customer by: (a) direct contact with principals of
wireless service providers; (b) exhibits at trade shows; and (c)
website and direct mail to wireless service providers;
o Resellers/Agents - We have agreements with resellers and agents that
purchase our data and messaging services from our net price sheets and
then resell the services at their retail prices to the public; and
o Company Officers - Our Chief Executive Officer and Chief Operating
Officer market our telemetry services by directly working with
prospective customers, vendors and application service providers and
placing qualified prospective customers as appropriate on a trial
service through our network.

FUTURE BUSINESS PLANS
Our future business plans during 2004, will include the following:
o CentreGate Division - Implementing and marketing CentreGate's billing
and switching services by working with wireless carriers we have
identified that have a demonstrated need for our services. Marketing
will be directed by a professional with a history of wireless business
experience. Implementation of the CentreGate services will be
accomplished through our employees and outside contractors; and
o Expanding Reseller Program - We will attempt to expand out telemetry
services related business by adding resellers that market such
services.

-6-

COST OF COMPLIANCE WITH ENVIRONMENTAL LAWS
We have no costs associated with environmental regulations related compliance
and we do not anticipate any future costs associated with such compliance.

INTELLECTUAL PROPERTY RIGHTS
On January 11, 2000, the United States Patent and Trademark Office issued us
Patent # 6,014,089 which covers claims for an apparatus and method for
transmitting data to and from a data collection device using the short message
service functionality of the control channel of a personal communications
system.

On November 29, 2000, the United States Patent and Trademark Office issued us
Patent # 6,150,955 which covers claims relating e to the use of our Telemetrix
T3000 e-Telemetry Data System TM for monitoring certain digital packets
associated with a digital communications system control channel, identifying of
certain packets and replacing of certain non-information bearing packets with
packets that contain useful data and information. These patents have duration of
17 years from the date of issue and, as such, expire in 2017.

On November 17, 2003, we applied to the United States Patent and Trademark
Office for the trademark name "CentreGate". This application is still pending.

TOWERS
As more fully detailed under Item 2, Description of Properties, we own or rent
to others certain tower sites in Wyoming and Nebraska and also rent tower sites
for our use in Wyoming, Nebraska and Colorado. Twelve of these towers are used
to support simple antennas which send radio signals to small radio receivers or
pagers, which then create an alert sound and either broadcast a voice message or
show a telephone number to be used for either a voice message notification or to
show the number to be used to return a call by the person carrying the pager.
Each paging transmitter has a coverage area of approximately 25 miles from each
tower site. The pagers are also used by groups of people that may need to be
notified emergencies, such as volunteer firemen and ambulance attendants. Six of
these tower sites are used to transmit and receive two way communications
primarily between mobile telephone users and the Public Switched Telephone
Network.

LICENSES
Our wholly owned subsidiary, Tracy Corporation II, holds the following Federal
Communications Commission radio frequency licenses:
o 1 Personal Communications Systems or PCS license, referred to by the
Federal Communications Commission as a Basic Trading Area 411 license,
license number KNLF 407 for Scottsbluff, Nebraska. This license
entitles us to operate a Personal Communications wireless network in
this area. The network is used to provide local mobile telephone
service and also mobile telephone service for persons from other PCS
mobile telephone companies that are "roaming in that area. Our
business agreements with other PCS networks allow our customers to
"roam" reciprocally on those networks for voice service out of our
coverage area.
o 18 Paging and Mobile Telephone licenses serving 18 locations in
Western Nebraska, Eastern Wyoming, and Northeastern, Colorado which
give us the exclusive right to use a one radio frequency to
communicate with the paging devices of our customers for paging
service. The licenses are not shared which gives our paging customers
a higher level of interference free voice and digital paging service.

-7-

EMPLOYEES
We have 6 full time direct or contract employees in our Gering, Nebraska office,
as follows:
o Chief Executive Officer;
o Infrastructure Hardware Technician;
o Central Office Switch Technician;
o 2 Billing and Accounting Personnel that are contracted from Tracy
Broadcasting Corporation; and
o Building and Tower Maintenance person that is contracted from Tracy
Broadcasting Corporation.

We have 4 full time direct or contract employees in our Atlanta, Georgia office,
as follows:
o Chief Operating Officer
o Vice President of Sales
o Management Accountant
o Engineering Services that are obtained from one engineer on a contract
basis

We have no employees that are members of labor unions. We use the services of
independent contractors and consultants.

COMPETITION
Competitive Business Conditions and Our Place in the Market
The markets for all of our services are increasingly competitive. Our
competitors have substantially longer operating histories, greater name
recognition, larger customer bases and greater financial and technical resources
than us. Because we are financially and operationally smaller than our
competitors, we will encounter difficulties in capturing market share. Our
competitors are able to conduct extensive marketing campaigns and may be able to
create more attractive pricing of services within their target markets than us.
In addition, we do not have an established brand name or reputation while our
competitors have significantly greater brand recognition, customer base,
operating history, and financial and other resources.

Some of our biggest competitors in the telemetry services market are:
o Kore Wireless;
o Aeris; and
o Qualcomm

Some of our biggest competitors in the local pager market are:
o Pagemart;
o Skytel; and
o Action Communications

Some of our biggest competitors in our CentreGate billing systems market are:
o Boston Communications Group, Inc.;
o Amdocs; and
o Verisign

Our Plan to Compete
We plan to compete in the following ways:
o Attempt to provide a superior level of customer care and service to
developers of new and innovative technologies utilizing digital
wireless communications systems;
o Utilize attractive pricing plans that are not easily duplicated by
larger wireless carriers;
o Using our application service provider model of providing advanced
telecommunications services for small wireless carriers; and
o Attempt to secure marketing agreements with primary vendors and
service providers that bring new, innovative and advanced services to
market.

-8-

GOVERNMENTAL REGULATION
Wireless telecommunications services are subject to significant regulation. We
could become subject to additional regulatory requirements as our services grow.
We are subject to regulations under the Communications Act of 1934 and the
Telecommunications Act of 1996. The Federal Communications Commission regulates
the facilities and services we use to provide, originate, or terminate
interstate or international communications. Our PCS and other wireless services
require radio frequency licenses from the Federal Communications Commission or a
contractual arrangement with a licensee. We have a PCS license, which was
obtained in the C Block License Auction. We also have paging facility licenses,
which are used in the operation of the existing paging system. We maintain
Federal Communication Commission licenses on all of the communication
facilities. The PCS licenses were issued on a 10-year basis with an expectation
of renewal at the end of that term. The paging licenses are granted on a 10-year
basis also with a reasonable expectation of renewal.

MATERIAL AGREEMENTS

Memorandum of Understanding with interWave Communications, Inc.
We have a April 12, 2004 Memorandum of Understanding with interWave
Communications, a Delaware corporation located in Mountain View, California,
which is a developer and manufacturer of GSM and CDMA infrastructure equipment.
The Memorandum of Understanding reflects the desire to create and enter into a
co-marketing agreement between us and interWave Communications for the purpose
of enabling GSM and CDMA cellular network marketing and sales to small and/or
roaming-only partners located primarily in North America. The agreement provides
that both companies will collaborate on marketing the combined benefits of their
equipment, software and services and will undertake joint marketing initiatives
in order to develop new business opportunities together through new and existing
distributors, channels and other business relationships. The Memorandum of
Understanding is to remain in force for 4 months from April 9, 2004 unless it is
terminated earlier if the parties finalize a definitive agreement or provide
notice of termination.

Reseller Agreement with Topp, Inc.
We have a March 31, 2004, reseller agreement with Topp, Inc. in which Topp, Inc.
acts as our reseller and makes purchases from us allowing Topp, Inc. to market
and sell access to and usage of our PCS service. The agreement provides that
Topp, Inc. may appoint or employ agents, sub-agents or other appointees in the
furtherance of the product marketing or delivery of services provided to end
users. The agreement further provides that we grant Topp, Inc., as a reseller, a
non-exclusive revocable license to buy short message service from us and access
to our PCS system as necessary to market services to end users and other
resellers within North America. Topp, Inc., as a reseller, may according to our
procedures, procure SIM cards directly from any SIM card vendor or provider
approved for use by us on our network and network facilities. The SIM card
identification will be assigned by us and neither the reseller, Topp, Inc. nor
any end user or other reseller shall acquire any proprietary interest in any
specific number assigned for its use.

Customer Master Agreement with Cerillion Technologies Limited
We have an April 13, 2004 agreement with Cerillion Technologies in which
Cerillion will provide us Cerillion's software, third party products and
software support services for resale by us and for the exclusive purpose of
supply of billing services to other wireless carriers, related entities and our
customers. This agreement does not permit us to assign or subcontract any rights
or obligations under the agreement or appoint any agent to perform such
obligations, except as otherwise permitted by the agreement. The agreement may
be terminated by written notice if either party fails to observe or perform any
material term or condition of the agreement and if such breach continues for 30
days. We are not permitted to use, reproduce, sublicense or otherwise deal in
the software or the source code of the software or reverse engineer, decompile
or disassemble the software. We are required to use Cerillion's trademarks and
trade names.

-9-

Master Purchase & License Agreement with Telos Technology
We have a October 22, 2003 Master Purchase and License Agreement with Telos
Technology in which we agree to purchase from Telos Technology a GSM Mobile
Switching Center (MSC).

Stock Purchase Agreement with Tracy Broadcasting Corporation
We have a May 26, 2003 Stock Purchase Agreement with Tracy Broadcasting
Corporation, which is solely owned by our Chief Executive Officer, Michael
Tracy. In this agreement, Tracy Broadcasting, which is identified as the
"purchaser" agrees to purchase 10,042,500 shares of our restricted common stock
for a total purchase price of $401,700.

Tower Gate Finance Limited Agreement
We have an October 1, 2003 agreement with Tower Gate Finance Limited which
provides that:
o Tower Gate, its management and associates will invest $30,000 in our
common stock at a share price of $0.04 per shares, the total of which
is 750,000 shares. There is a provision for this stock amount to be
divided by 200 and taken as 3,740 Series D Preferred Shares;
o Tower Gate, its management and associates will invest up to a further
$150,000 in our stock at $0.04 per share, being 3,750,000 shares.
There is a provision for this stock amount to be divided by 200 and
taken as 8,750 to 18,750 Series D Preferred shares;
o As soon as practicable and before the planned $2,000,000 equity raise,
we have agreed that we will: (a) finalize our balance sheet; (b) reach
a satisfactory agreement with the holders of $1,200,000 convertible
debentures, satisfaction being defined as: (a) removal of the risk of
the debenture holders delaying the $2,000,000 investment round and (c)
based on the scenarios offered, achieving the best mix of reduction in
cash paid or equity given as settlement and achieving the longest
extension of the date of any repayments which may be due.

We and Tower Gate will work together in the $2 million fund raising round to
prepare necessary documentation and Tower Gate will project manage the round to
the close. We will purchase the switch and associated software and hardware via
a lease purchase arrangement. In the event a guarantee in addition to the
guarantee by us is required for the lease/purchase of a switch, Tower Gate will
provide the leasing entity such guarantee. If we are unable to maintain the
lease payments on a current basis, Tower Gate may declare us in breach of
agreement. All key shareholders, including Tower Gate, Michael Glaser, Michael
Tracy, Larry Becker and William Becker agree to a lock out of 12 months until
August 30, 2004. The following shareholders may sell a total of 2,250,000 shares
of our stock which are not subject to a lockout: (a) Michael Glaser - 500,000
shares; (b) Michael Tracy - 1,000,000 shares; (c) William Becker - 500,000
shares; and (d) Larry Becker - 250,000 shares. The parties agree to the
following timetable of actions to be completed before the $2,000,000 funding
round and at the time of the $2,000,000 funding round: (a) agreement of a
management contract with Geoff Girdler; (b) gaining Federal Communications
Commission approval on a change of control of the corporation.

Exchange Agreement between us and Hartford Holdings
We have an exchange and conversion agreement with Hartford Holdings which
provides for the following:
o Hartford Holdings will surrender certificates to us representing
3,962,004 shares of our common stock;
o In exchange for the surrender of the above certificates, we shall
exchange without further cost 594,301 shares of our common stock and
16,838.5 Shares our preferred stock;
o Hartford has the option, upon written notice to us, to have us
register the 594,301 shares of our common stock on a registration
statement.

-10-

Exchange Agreement between us and Ionian Investments, Ltd.
We have a May 30, 2003 Exchange and Conversion Agreement with Ionian
Investments, Ltd. which provides for the following:
o Hartford Holdings will surrender certificates to us representing
2,000,000 shares of our common stock;
o In exchange for the surrender of the above certificates, we shall
exchange without further cost 112,500 shares of our common stock and
3,187.5 Shares of our preferred stock;
o Hartford has the option, upon written notice to us, to have us
register the 112,500 shares of our common stock on a registration
statement.

Exchange Agreement between us and Michael Tracy.
We have a May 26, 2003 Exchange and Conversion Agreement with our Chief
Executive Officer, Michael Tracy, which provides for the following:
o Michael Tracy will surrender all certificates representing shares of
our common stock which we have issued to Michael L. Tracy, his heirs,
successors or assigns which correspond or were issued in connection or
association with the schedule of notes as reflected in Exhibit 1 to
the exchange agreement, as well as shares issued on the date or
reorganization as consideration and shares issued for salary to us
representing 4,317,775 shares of our common stock;
o In exchange for the surrender of the above certificates, Michael Tracy
has the right to exchange without further cost all notes and shares of
common stock issued as consideration for any of the notes listed in
Exhibit 1, as well as shares issued as in lieu of salary for 3,584,151
shares of common stock and 101,551 shares of preferred stock;
o Michael Tracy has the right, upon written notice to us, to exercise
certain registration rights specified in the exchange agreement.

Exchange Agreement between us and WYSE Investments. Ltd.
We have a May 26, 2003 Exchange and Conversion Agreement with WYSE Investments,
Ltd. which provides for the following:
o WYSE Investments will surrender certificates to us representing
2,000,000 shares of our common stock;
o In exchange for the surrender of the above certificates, we shall
exchange 500,000 shares of our common stock for 75,000 shares of
common stock and 2,125 shares of our preferred stock;
o WYSE Investments has the right, upon written notice to us, to exercise
certain registration rights specified in the exchange agreement.

Exchange Agreement between us and Ardara Investments, Ltd.
We have a May 30, 2003 Exchange and Conversion Agreement with Ardara
Investments, Ltd. which provides for the following:
o Adara Investments will surrender certificates to us representing
2,000,000 shares of our common stock;
o In exchange for the surrender of the above certificates, we shall
exchange 750,000 shares of our common stock for 112,500 shares of
common stock and 3,187 shares of our preferred stock;
o Adara Investments has the right, upon written notice to us, to
exercise certain registration rights specified in the agreement.

Exchange Agreement between us and Becker Capital Investments, Ltd.
We have a May 26, 2003 Exchange and Conversion Agreement with Becker Capital
Investments, Ltd. which provides for the following:
o Becker Capital Investments will surrender all certificates to us
representing all shares of common stock which have been issued by us
to Becker Capital Management, Larry Becker, his heirs, successors or
assigns;
o In exchange for the surrender of the above certificates, we shall
exchange all notes and shares of common stock issued as consideration
for any of the notes listed in Exhibit 1 of the Exchange Agreement for
632,002 shares of our common stock and 17,906 shares of our preferred
stock;
o Becker Capital Investments has the right, upon written notice to us,
to exercise certain registration rights specified in the agreement.

-11-

Exchange Agreement between us and Michael L. Glaser.
We have a May 26, 2003 Exchange and Conversion Agreement with Michael L. Glaser
which provides for the following:
o Michael L. Glaser will surrender all certificates to us representing
all shares of common stock which have been issued by us to Michael L.
Glaser, his heirs, successors or assigns which correspond or were
issued in connection with the schedule of notes attached in Exhibit 1
to the agreement;
o In exchange for the surrender of the above certificates, we shall
exchange all notes and shares of common stock issued as consideration
for any of the notes listed in Exhibit 1 of the Exchange Agreement for
886,380 shares of our common stock and 25,441 shares of our preferred
stock;
o Michael L. Glaser has the right, upon written notice, to exercise
certain registration rights specified in the agreement.

Consulting Agreement with Bear Paw Software, Inc.
We have a January 2004 verbal consulting agreement with Bear Paw Software to
provide on a monthly basis senior level oversight of network operations and
infrastructure implementation. We pay Bear Paw Software $10,000 per month for
those services. This agreement is cancelable at any time by either party to the
agreement.

Office Lease Agreements
Our office lease agreements are summarized below under Item 2, Description of
Properties.

ITEM 2. DESCRIPTION OF PROPERTIES
Our wholly owned subsidiary, Tracy Corporation II, leases 5,168 square feet of
office space and space for the location of our switching center at our executive
offices, 1225 Sage Street in Gering, Nebraska from our Chief Executive Officer,
Michael Tracy, for a monthly lease payment of $2,500. This space is adequate for
our needs. This lease expires on October 31, 2007.

We have an Office Services Agreement with the Center for Premier Suites and
Business Services, Inc. for approximately 400 square feet of office space, with
access to a common conference room, reception area and office services, and at
our Georgia office located at 300 Village Green Circle, Suite 201 Smyrna, GA
30080. This agreement is effective as of November 10, 2003 and terminates on
May 31, 2004. The monthly payment is $1895. This space is adequate for our
needs. We intend to renew this lease.

We own tower sites in the following locations:
o Guernsey, Wyoming
o Wheatland, Wyoming
o Torrington, Wyoming
o Henry, Nebraska
o Gering, Nebraska
o Bushnell, Nebraska
o Kimball, Nebraska
o Dix, Nebraska
o Sidney, Nebraska
o Oshkosh, Nebraska
o Minatare, Nebraska
o Ogallala, Nebraska
o Alliance, Nebraska

We rent tower space or tower sites in the following locations:
o Douglas, Wyoming
o Mitchell, Nebraska
o Scottsbluff, Nebraska
o Chadron, Nebraska
o Sterling, Colorado

The leases and rental agreements pertaining to these tower sites are generally a
five year term. Rental charges are based on a monthly rate calculated by the
number of feet of tower space between the antenna location on the tower and the
ground multiplied by a per foot rate, plus a monthly charge for equipment space
within the building at the base of the tower site used to house equipment.

-12-

ITEM 3. LEGAL PROCEEDINGS
From approximately November 2001 to approximately February 2003, we were
involved with litigation involving Plexus Corporation, one of our vendors, which
related to a dispute regarding the services provided by Plexus Corporation and
the amount claimed by Plexus that we owed for such services (American
Arbitration Case No. 57 117 00155 01 Telemetrix, Inc. and Telemetrix
Technologies (Tracy Corporation II) v. Plexus Corporation, Plexus Technology
Group and Plexus Electronic Corporation. During February 2003, we settled this
litigation by which we and Plexus mutually released each other from any and all
claims against the other party and we are not required to make any payment to
Plexus.

During March 2002, a complaint was filed against us in James M. Doyle v.
Telemetrix, Inc. (District Court of Scotts Bluff County, Nebraska; Case No.
CI-02-157H) claiming that we failed to pay certain wages due to James Doyle. On
May 31, 2002 a default judgment was entered against us in the amount of $56,134.
On June 19, 2002, an amended default judgment was entered against us for an
additional $14,033, for a total judgment of $70,167. On or about December 12,
2002, we filed a Motion to Vacate Judgment. We are attempting to settle this
litigation.

Apart from this matter, we are subject to dispute and litigation in the ordinary
course of our business. None of these matters, in the opinion of our management,
is material or likely to result in a material effect on us based upon
information available at this time.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the year ended
December 31, 2003.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Below is the market information pertaining to the range of the high and low bid
information of our common stock for each quarter since our common stock has been
quoted on the OTC Bulletin Board or the National Quotation Bureau's Pink Sheets.
From April 2003 to present, our common stock has been quoted under the symbol
TLXT on the National Quotation Bureau's Pink Sheets. From April 1999 to April
2003, our common stock was quoted on the OTC Bulletin Board. The quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.

2003 Low High
----------------------------------------------
Fourth Quarter .06 .50
Third Quarter .06 .14
Second Quarter .08 .16
First Quarter .06 .14

2002 Low High
----------------------------------------------
Fourth Quarter .08 .17
Third Quarter .15 .34
Second Quarter .23 .75
First Quarter .12 .35

The source of the above information is table.finance.yahoo.com.

There is a limited trading market for our common stock. There is no assurance
that a regular trading market for our common stock will develop, or if developed
will be sustained. A shareholder in all likelihood, therefore, will not be able
to resell their securities should he or she desire to do so when eligible for
public resale. Furthermore, it is unlikely that a lending institution will
accept our securities as pledged collateral for loans unless a regular trading
market develops.

-13-

Reports and Other Information to Shareholders
We are subject to the informational requirements of the Securities Exchange Act
of 1934. Accordingly, we file annual, quarterly and other reports and
information with the Securities and Exchange Commission. You may read and copy
these reports and other information we file at the Securities and Exchange
Commission's public reference rooms in Washington, D.C. Our filings are also
available to the public from commercial document retrieval services and the
Internet world wide website maintained by the Securities and Exchange Commission
at www.sec.gov.

Holders
As of April 30, 2004, we had 249 holders of record of our common stock. We have
one class of stock outstanding. We have no shares of our preferred stock
outstanding. As of April 30, 2004, there were 7,055,631 shares of our stock held
by non-affiliates and 11,420,754 shares of our stock held by affiliates.

Options
We have 450,000 options outstanding to purchase 450,000 shares of our common
stock.

Warrants
We have 631,250 warrants outstanding, which if exercised are convertible into
631,250 shares of our common stock.

Penny Stock Considerations.
Our shares are "penny stocks" as that term is generally defined in the
Securities Exchange Act of 1934 as equity securities with a price of less than
$5.00. Our shares are subject to rules that impose sales practice and disclosure
requirements on broker-dealers who engage in certain transactions involving a
penny stock.

Under the penny stock regulations, a broker-dealer selling a penny stock to
anyone other than an established customer or "accredited investor" must make a
special suitability determination regarding the purchaser and must receive the
purchaser's written consent to the transaction prior to the sale, unless the
broker-dealer is otherwise exempt. Generally, an individual with a net worth in
excess of $1,000,000 or annual income exceeding $200,000 individually or
$300,000 together with his or her spouse is considered an accredited investor.
In addition, under the penny stock regulations the broker-dealer is required to:
o Deliver, prior to any transaction involving a penny stock, a
disclosure schedule prepared by the Securities and Exchange Commission
relating to the penny stock market, unless the broker-dealer or the
transaction is otherwise exempt;
o Disclose commissions payable to the broker-dealer and its registered
representatives and current bid and offer quotations for the
securities;
o Send monthly statements disclosing recent price information pertaining
to the penny stock held in a customer's account, the account's value
and information regarding the limited market in penny stocks; and
o Make a special written determination that the penny stock is a
suitable investment for the purchaser and receive the purchaser's
written agreement to the transaction, prior to conducting any penny
stock transaction in the customer's account.

Because of these regulations, broker-dealers may encounter difficulties in their
attempt to sell shares of our stock, which may affect the ability of
shareholders or other holders to sell their shares in the secondary market and
have the effect of reducing the level of trading activity in the secondary
market. These additional sales practice and disclosure requirements could impede
the sale of our securities if our securities become publicly traded. In
addition, the liquidity for our securities may be adversely affected, with a
corresponding decrease in the price of our securities. Our shares are subject to
such penny stock rules and our shareholders will, in all likelihood, find it
difficult to sell their securities.

-14-

Dividends.
We have not declared any cash dividends on our stock since our inception and do
not anticipate paying such dividends in the foreseeable future. We plan to
retain any future earnings for use in our business. Any decisions as to future
payment of dividends will depend on our earnings and financial position and such
other factors as the Board of Directors deems relevant.

Securities Authorized for Issuance under Equity Compensation Plans.
Not applicable.

Recent Sales of Unregistered Securities.
On or about September 10, 2001, we filed a Form S-8 Registration Statement under
the Securities Act of 1933 registering 375,000 shares of our common stock to be
issued to Scott Parliament in accordance with an August 20, 2001 consulting
agreement we had with Mr. Parliament. On September 21, 2001, we issued 375,000
shares of our common stock to Mr. Parliament, who was referred to us by Sarah R.
Speno of 1st SB Partners Ltd. We received and acted in reasonable reliance upon
legal advice and guidance from our legal counsel at the time regarding the
issuance to Mr. Parliament ; however, we have been recently advised that certain
investor relations related services that were to be provided by Mr. Parliament
are prohibited under Regulation S-8. As such, the issuance of the 375,000 shares
of our common stock to Mr. Parliament may have violated the registration
provisions of the federal securities laws, specifically Section 5 of the
Securities Act of 1933.

Use of Proceeds from Registered Securities.
Not applicable

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OR OPERATION.
The following discussion should be read in conjunction with our financial
statements and related notes appearing elsewhere in this Form 10-KSB and our
Annual Report on Form 10-KSB for our fiscal year ended December 31, 2002. The
terms "the Company," "we," "our" or "us" refer to Telemetrix Inc. This
discussion contains forward-looking statements based on our current
expectations, assumptions, and estimates. The words or phrases "believe,"
"expect," "may," "anticipates" or similar expressions are intended to identify
"forward-looking statements." Actual results could differ materially from those
projected in the forward-looking statements as a result of a number of risks and
uncertainties pertaining to our business, including: (a) our limited operating
history and our history of losses make it difficult for you to evaluate our
current and future business and our future financial results; (b) if we are
unable to obtain additional financing, we will be unable to proceed with our
operating plan; (c) even if we obtain additional debt or equity financing, the
value of our common stock will be diluted; (d) we have negative cash flow from
operations and an accumulated deficit that raises substantial doubt about our
ability to continue as a going concern; (d) we are subject to substantial debt
obligations of approximately $5 million, which may negatively affect our ability
to grow; (e) whether we will keep pace with the rapid development of technology
in the wireless communications services area; (f) whether our existing
technology will become obsolete or too expensive to upgrade; (g) the wireless
communications services area generally experiences a high rate of "churn"
representing the rate of lost customers, and there is no assurance that we will
not experience churn due to competitive forces and price competition; (h) should
our business be subject to increasing government regulation, we will be subject
to increasing costs; and (i) we are dependent upon third party providers,
including roaming partners and wireless network companies through which we
obtain our interconnections throughout North America and also international
markets; should we lose the services of these third party providers, our
operations may negatively affected, including interruptions in our service.

Statements are made as of the filing of this Form 10-QSB with the Securities and
Exchange Commission and should not be relied upon as of any subsequent date.
Unless otherwise required by applicable law, we do not undertake, and we
specifically disclaim any obligation, to update any forward-looking statements
to reflect occurrences, developments, unanticipated events or circumstances
after the date of such statement.

-15-

Overview
Up until August 2002, our revenues were primarily generated from one way
wireless communication (paging services) related income. Beginning in September
2002, we ceased research and development on telemetry related hardware products;
instead, we began focusing on providing Global Systems for Mobile communications
(GSM) network access for telemetry devices from third party providers. We began
providing access to the nationwide GSM network through our network and roaming
agreements for short message service customers that use data and short message
service to communicate with and control their telemetry and telematic hardware
devices. At that time, we began conducting business in telemetry services, which
consisted of Short Message Services (SMS), including actual text messages
transmitted to and from wireless modems, the sale of and service for subscriber
identity module (SIM) cards, a cost per short message (SM), and an activation
fee for subscriber/customers.

Capital Expenditures and Requirements
During 2003, we committed to one significant capital expenditure of
approximately $500,000 for a Mobile Switching Center (MSC). If we obtain
adequate funding, we expect to make the following significant capital
expenditures during 2004: (a) $300,000 for additional switching equipment; (b)
$150,000 for a short message service center; and (c) $75,000 for infrastructure
hardware and software to support our billing system.

Critical Accounting Policies and Estimates
The preparation of our financial statements requires us to make estimates and
assumptions that affect the reported amounts. The estimates and assumptions are
evaluated on an on-going basis and are based on historical experience and on
various other factors that are believed to be reasonable. Estimates and
assumptions include, but are not limited to, fixed asset lives, intangible
assets, income taxes, and contingencies. We base our estimates on historical
experience and on various other assumptions we believe to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions. We believe the following critical
accounting policies affect our more significant judgments and estimates used in
the preparation of the financial statements. Our accounting for revenue
recognition and stock compensation, which requires us to estimate the value of
the shares issued, and the value of intangible assets requires us to continually
assess whether such assets are impaired. Our critical accounting policies are
outlined in our audited financial statements contained in our Form 10-KSB for
the year ended December 31, 2002.

During our Fiscal Year 2003 period, our revenues were derived from the
following:
o $251,149 from our telemetry related services;
o $119,166 from our pager related services; and
o $11,652 from tower rental.

Our revenues are dependent upon the following factors:
o Our ability to secure additional agreements for customers using our
network for nationwide network access for short message service and
data;
o Our CentreGate Division's ability to sell their service offerings and
implement the hardware and software for network operations and billing
services;
o Our ability to hire and maintain contract engineers that will be able
to install and maintain and support the equipment and software
necessary for both our division services as well as the CentreGate
Division;
o Demand for our services;
o Individual economic conditions in our markets; and
o Our ability to market our services.

-16-

Years ended December 31, 2003 and 2002

Consolidated Statement of Operations

Revenues. Revenues for the year ended December 31, 2003 increased 107.96% to
$381,967 from $183,670 for the same period in 2002. The increase in our Revenues
is primarily attributable to having telemetry related message revenues of
$251,149 for the year ended December 31, 2003 compared to $14,784 for the
comparable 2002 period, representing an increase of $236,365 or 1598% in
telemetry related revenue. In contrast, our pager related revenues decreased by
$39,255 or 24.78% from $119,166 during the year ended December 31, 2003 compared
to $158,421 for the comparable 2002 period. We believe that during the year 2004
pager related revenues will continue to decline since the overall North American
pager market has experienced a consistent decline in revenues over the past
years due to the increasing usage of wireless technology. We will attempt to
expand our revenues by marketing our network data access and generating
associated revenues and through our CentreGate Division's carrier and wireless
operator services.

Cost of Revenues. Cost of revenues currently consist primarily of pager
equipment, equipment repairs, software, additional phone circuits, and base
station infrastructure operating equipment. Cost of revenues increased $44,553
or 139.89% to $76,400 for the year ended December 31, 2003, from $31,847 for the
comparable 2002 period, representing 20% and 15.96% of the total revenues for
the year ended December 31, 2003 and December 31, 2002, respectively. The
increase in the cost of revenues as a percentage of revenues is attributable to
the increased proportion of our revenues that are derived from telemetry related
message services, which accounted for approximately 65.75% of our Revenues in
the year ended December 31, 2003 and only 7.04% in the year ended December 31,
2002.

Should telemetry related revenues grow faster than our other business segments,
our Cost of Revenues as a percentage of Revenues will continue to increase, but
not on a direct relationship. If competition driven market conditions force us
to lower the prices that we charge our customers, our cost of revenues as a
percentage of revenues will increase.

Operating Losses. Operating losses for the year ended December 31, 2003
decreased by 13.68% or $440,025 to ($2,777,431) from ($3,217,456) for the
comparable 2002 period. The decrease in operating losses was primarily due to
the following decreases on our expenses: (a) a $514,079 decrease in our selling,
general and administrative expenses, or a 41.48% decrease, from $725,149 for the
twelve months ending December 31, 2003 to $1,239,228 for the comparable 2002
period; and (b) a 100% decrease in our research and development expense from
$119,510 for the twelve months ending December 31, 2002 to $0 for the comparable
2003 period. The decrease in expenses was partially offset by a $331,424 or
14.05% increase in our non-cash stock compensation from $2,026,425 during fiscal
year 2002 to $2,357,849 during fiscal year 2003.

Non-Cash Stock Compensation Expense. Non-Cash Stock based Compensation had a
$331,424 or 14.05% increase in our non-cash stock compensation from $2,026,425
during fiscal year 2002 to $2,357,849 during fiscal year 2003. This increase is
attributable principally to shares to be issued as consideration for related
party notes.

Research and Development Expenses. Research and development expenses were $0 and
$119,510 for the year ended December 31, 2003 and 2002, respectively, which
represents 0% and 59.89% of revenues for the years ended December 31, 2003 and
2002, respectively. The 2002 research and development expenses consist of
engineering services and the development and purchase of software, hardware and
firmware for our telemetry based hardware. The decrease in our research and
development expenses is attributable to termination of all hardware and software
research and development project because of changing market conditions, in which
competitive telemetry based hardware became increasingly available in the
marketplace. As a result, the project was no longer viable from a competitive
cost perspective.

-17-

Selling, General and Administrative Expenses. Selling, General and
Administrative expenses decreased by $514,079 to $725,149 for the year ended
December 31, 2003 from $1,239,228 for the year ended December 31, 2002. As a
percentage of revenues, Selling, General and Administrative expenses decreased
to 189.85% for the year ended December 31, 2003 from 621.00% for the year ended
December 31, 2002. The decrease in our Selling, General and Administrative
Expenses is mainly attributable to reducing our operations and staffing and
reducing travel related expenses, including travel and attendance at
conventions.

Interest Expense. Interest expense decreased by $210,199 or 37.78% to $346,176
for the year ended December 31, 2003 from $556,375 for the year ended December
31, 2002.

Impairment of Assets. Impairment of Assets decreased by $5,578,407 or 98.19% to
$103,000 for the year ended December 31, 2002 from $5,681,407 for the comparable
2002 period. This decrease is due our recording of impairment losses in 2002
related to goodwill, patents and construction in progress and impairment losses
related to the obsolescence of equipment in 2003.

Net Loss. Net Loss for the year ended December 31, 2003 decreased by $6,503,552
or 68.78% to ($2,951,932) as compared to ($9,455,484) for the year ended
December 31, 2002.

Net Loss Per Share. The net loss per share of common stock for the year ended
December 31, 2003 was ($0.16) for the weighted average shares (fully diluted)
outstanding of 18,475,176 Shares and ($0.51) for the year ended December 31,
2002 for the same number of shares.

Balance Sheet

Current Assets. Current assets amounted to $105,292 as of December 31, 2003 as
compared to $50,277 as of December 31, 2002. This $55,065 or 109.52% increase in
our current assets is mainly attributable to an increase in cash.

Property and Equipment. Property and Equipment amounted to $5,106 as of December
30, 2003 as compared to $473,516 as of December 31, 2002. This $468,410 or
98.92% decrease in our Property and Equipment is attributable principally to
depreciation of $31,447, the write off of software of $103,000 due to impairment
and the write off of certain equipment related to the settlement of certain
litigation of $288,193.

Current Liabilities. As of December 31, 2003, current liabilities decreased to
$4,995,342 as compared with $8,726,611 as of December 31, 2002. This $3,731,269
decrease or 42.76% in our current liabilities results mainly from the conversion
of debt by three main noteholders and investors from debt to a subscription for
our common stock.

Liquidity and Capital Resources December 31 2003.

Cash as of December 31, 2003 amounted to $34,811 as compared with $0 for the
year ended December 31, 2002, an increase of $37,811 or 100%. This increase was
generated by deposits received by us in the month of December 2003, proceeds
from investor loans in November and December 2003, less disbursements for
operations and deposits on certain equipment.

Net cash used in operating activities for the twelve months ended December 31,
2003 was ($577,977). This results principally from the loss from operations and
decrease in accounts payable offset by impairment losses and stock
subscriptions.

-18-

We plan to change the method of financing our operations from incurring debt to
be used against future conversion to equity to funding for the current
commitments for capital expenditures mainly from equity sources and company
operations. We do not have material commitments for capital expenditures for the
current year 2004. We will also continue to finance our operations from loans
from major shareholders and fundraising activities. We do not believe our future
cash flow from operations together with our current cash will be sufficient to
finance our activities through the year 2004; therefore, we plan to raise money
through a public or private placement to fund the implementation of an expanding
operational plan.

For the year ended December 31, 2003 and 2002, we incurred net losses of
$2,951,932 and $9,455,238. In addition, we had a working capital deficit of
$4,890,050 and stockholders' deficit of $4,917.986 at December 31, 2003. Our
ability to continue as a going concern is contingent upon our ability to attain
profitable operations and secure financing.

We cannot continue to satisfy our current cash requirements for a period of
twelve (12) months through our existing capital. We anticipate total estimated
operating expenditures of approximately $840,000 (or $70,000 per month) over the
next twelve (12) months, in the following areas:
o Salaries and labor = $185,000
o Network operating costs = $300,000
o Network infrastructure = $85,000
o General and Administrative (exclusive of salaries) = $270,000

Our current cash of $76,682 as of March 31, 2004 will satisfy our cash
requirements for only approximately one month.

Accordingly, we will be unable to fund our expenses through our existing assets
or cash unless we obtain adequate financing through traditional bank financing
or a debt or equity offering; however, because we have limited revenues and a
poor financial condition, we may be unsuccessful in obtaining such financing or
the amount of the financing may be minimal and therefore inadequate to implement
our business plans. In the event that we do not receive financing or our
financing is inadequate, we may have to liquidate our business and undertake any
or all of the following actions:
o Significantly reduce, eliminate or curtail our business to reduce
operating costs;
o Sell, assign or otherwise dispose of our assets, if any, to raise cash
or to settle claims by creditors;
o Pay our liabilities in order of priority, if we have available cash to
pay such liabilities;
o If any cash remains after we satisfy amounts due to our creditors,
distribute any remaining cash to our shareholders in an amount equal
to the net market value of our net assets;
o File a Certificate of Dissolution with the State of Delaware to
dissolve our corporation and close our business;
o Make the appropriate filings with the Securities and Exchange
Commission so that we will no longer be required to file periodic and
other required reports with the Securities and Exchange Commission,
if, in fact, we are a reporting company at that time.

Based upon our current assets, however, we will not have the ability to
distribute any cash to our shareholders.

If we are unable to satisfy our obligations and we qualify for protection under
the U.S. Bankruptcy Code, we may voluntarily file for reorganization under
Chapter 11 or liquidation under Chapter 7. Our creditors may also file a Chapter
7 or Chapter 11 bankruptcy action against us. If our creditors or we file for
Chapter 7 or Chapter 11 bankruptcy, our creditors will take priority over our
shareholders. If we fail to file for bankruptcy under Chapter 7 or Chapter 11
and we have creditors; such creditors may institute proceedings against us
seeking forfeiture of our assets, if any.

-19-

We do not know and cannot determine which, if any, of these actions we will be
forced to take. If any of these foregoing events occur, owners of our shares
could lose their entire investment.

At December 31, 2003 we had a working capital deficit of $4,890,050.

Cash used by operating activities was ($577,977) for the twelve months ended
December 31, 2003. Net cash used by investing activities was ($106,250). Net
cash provided by financing activities was $719,038 which consisted principally
of advances from affiliates of $568,640 and proceeds from convertible debt of
$350,000 less repayments of affiliate loans of $100,000 and long term debt of
$99,602.

To date, we have funded our activities principally from loans from related
parties.

Contractual Obligations And Commercial Commitments
We have no contractual obligations, including lease obligations, apart from
agreements in the normal course of our business.

Recent Pronouncements
In December 2002, the Financial Accounting Standards Board ("FASB") issued
Statement No. 148 ("SFAS No. 148"), "Accounting for Stock-Based Compensation,
Transition and Disclosure." SFAS No. 148 provides alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. SFAS No. 148 also requires that
disclosures of the pro forma effect of using the fair value method of accounting
for stock-based employee compensation be displayed more prominently and in a
tabular format. Additionally, SFAS No. 148 requires disclosure of the pro forma
effect in interim financial statements. The transition and annual disclosure
requirements of SFAS No. 148 are effective for fiscal years ended after December
15, 2002. The interim disclosure requirements are effective for interim periods
ending after December 15, 2002. The disclosure provision of SFAS No. 148 has
been adopted by the Company with appropriate disclosure included in the
financial statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
No. 149 is effective for contracts entered into or modified after September 30,
2003, except as specified and for hedging relationships designated after June
30, 2003.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS 150
requires that certain financial instruments, which under previous guidance were
accounted for as equity, must now be accounted for as liabilities. The financial
instruments affected include mandatory redeemable stock, certain financial
instruments that require or may require the issuer to buy back some of its
shares in exchange for cash or other assets and certain obligations that can be
settled with shares of stock. SFAS 150 is effective for all financial
instruments entered into or modified after May 31, 2003. Otherwise it will
become effective at the beginning of the first interim period beginning after
June 15, 2003.

The Company believes that the ongoing application of these Statements will not
have a material adverse effect on the Company's financial position, results of
operations, or cash flows.

-20-

ITEM 7. FINANCIAL STATEMENTS

TELEMETRIX, INC.

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2003

C O N T E N T S

Reports of Independent Auditors ................................22

Financial Statements:

Balance Sheet ..................................................23

Statements of Operations .......................................24

Statement of Stockholders' (Deficit) ...........................25

Statements of Cash Flows .......................................26

Notes to Financial Statements ................................27-30

-21-

REPORT OF INDEPENDENT AUDITORS

Stockholders and Board of Directors
Telemetrix, Inc.

We have audited the accompanying consolidated balance sheet of Telemetrix, Inc.
as of December 31, 2003, and the related consolidated statements of operations,
stockholders' (deficit) and cash flows for the years ended December 31, 2003 and
2002. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Telemetrix, Inc. as of December
31, 2003, and results of its operations and its cash flows for the years ended
December 31, 2003 and 2002, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered a loss from operations and has
working capital and stockholders' deficits. These factors raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to this matter are also discussed in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

/s/Stark Winter Schenkein & Co., LLP

Stark Winter Schenkein & Co., LLP

Denver, Colorado
April 12, 2004

-22-

Telemetrix, Inc.
Consolidated Balance Sheet
December 31, 2003

Assets

Current assets:
Cash $ 34,811
Accounts receivable 58,232
Other current assets 12,248
-----------
Total current assets 105,292
-----------
Property and equipment, net 5,106
-----------
Other assets:
Deposit on Equipment purchase 101,000
Licenses 258,423
-----------
359,423
-----------
$ 469,820
===========

Liabilities and stockholders' (deficit)

Current liabilities:
Accounts payable $ 1,576,130
Accrued expenses 515,107
Accounts payable and accrued expenses - affiliates 523,945
Convertible debentures 1,200,000
Notes payable - affiliates 392,313
Current portion of long-term debt 337,849
Convertible debt 350,000
Customer deposit 100,000
-----------
Total current liabilities 4,995,344
-----------
Long-term debt 392,463
-----------
Stockholders' (deficit):
Preferred stock, $.001 par value,
5,000,000 shares authorized
no shares issued or outstanding -
Preferred stock, Series D, $.001 par value,
Convertible, liquidation preference $30 per share,
250,000 shares authorized none issued or outstanding -
Common stock, $.001 par value,
25,000,000 shares authorized,
18,476,186 shares issued and outstanding 18,477
Paid in capital 51,147,136
Subscribed common shares 5,722,244
Accumulated (deficit) (61,901,647)
Deferred compensation (95,951)
-----------
(5,109,741)
Other comprehensive income:
Currency translation adjustment 191,754
-----------
(4,917,987)
-----------
$ 469,820
===========

See the accompanying notes to the consolidated financial statements.

-23-

Telemetrix, Inc.
Consolidated Statements of Operations
Years Ended December 31, 2003 and 2002

2003 2002
------------ ------------
Revenue:
Pager and telemetry $ 370,315 $ 173,205
Other 11,652 26,349
------------ ------------
381,967 199,554
------------ ------------
Cost of revenue:
Pager and telemetry 76,400 31,847
------------ ------------
Gross margin 305,567 167,707
------------ ------------
Operating expenses:
Research and development - 119,510
Non-cash stock compensation 2,357,849 2,026,425
Selling, general and administrative expenses 725,149 1,239,228
------------ ------------
3,082,998 3,385,163
------------ ------------
(Loss) from operations (2,777,431) (3,217,456)
------------ ------------
Other (income) expense:
Other income (5,455) -
Impairment of assets 103,000 5,681,407
Gain from extinguishment of debt (269,220) -
Interest expense 346,176 556,375
------------ ------------
174,502 6,237,782
------------ ------------
Net (loss) before comprehensive income (2,951,933) (9,455,238)

Comprehensive (loss) - (246)
------------ ------------
Net (loss) $ (2,951,933) $ (9,455,484)
============ ============
Per share information - basic and fully diluted:
Weighted average shares outstanding 18,476,176 18,476,176
============ ============
Net (loss) per share $ (0.16) $ (0.51)
============ ============

See the accompanying notes to the consolidated financial statements.

-24-

Telemetrix, Inc.
Consolidated Statement of Stockholders' (Deficit)
Years Ended December 31, 2003 and 2002

Additional Subscribed Currency
Common Stock Paid in Common Deferred Translation Accumulated
Shares Amount Capital Shares Compensation Adjustment (Deficit) Total
---------- ------- ----------- ---------- ------------ ----------- ------------ -----------
Balance at
December 31, 2001 18,476,186 $18,477 $46,808,483 $1,757,000 $ (171,000) $ 192,000 $(49,494,476) $ (889,516)

Deferred compensation
expensed - - - - 171,000 - - 171,000
Subscribed common shares
for services - - - 288,000 - - - 288,000
Subscribed common shares
for loan incentives - - - 1,738,425 (283,625) - - 1,454,800
Currency translation
adjustment - - - - - (246) - (246)
Net (loss) for the year - - - - - - (9,455,238) (9,455,238)
Balance at
December 31, 2002 18,476,186 18,477 46,808,483 3,783,425 (283,625) 191,754 (58,949,714) (8,431,200)
========== ======= =========== ========== ========== =========== ============ ===========

Deferred compensation
expensed - - - - 283,625 - - 283,625
Subscribed common shares
forgiven - - 3,233,978 (3,233,978) - - - -
Subscribed common shares
for loan incentives - - - 458,500 (95,951) - - 362,549
Discount on common shares - - 1,104,675 - - - - 1,104,675
Common shares subscribed
for services - - - 607,000 - - - 607,000
Subscribed common shares
for loan conversions
and interest - - - 4,107,297 - - - 4,107,297
Net (loss) for the year - - - - - - (2,951,933) (2,951,933)
Balance at
December 31, 2003 18,476,186 $18,477 $51,147,136 $5,722,244 $ (95,951) $ 191,754 $(61,901,647) $(4,917,987)
========== ======= =========== ========== ========== =========== ============ ===========

See the accompanying notes to the consolidated financial statements.

-25-

Telemetrix, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31, 2003 and 2002

2003 2002
----------- -----------
Cash flows from operating activities:

Net (loss) $(2,951,932) $(9,455,238)
Adjustments to reconcile net (loss)
to net cash (used in) operating
activities:
Depreciation and amortization 174,753 196,212
Impairment of goodwill and other assets 103,000 5,681,407
Gain on the extinguishment of debt (269,220) -
Common stock subscriptions for services
and other non-cash items
net of amount of deferred compensation 2,357,849 1,913,800
Increase (decrease) in accounts
receivable (7,378) 10,053
(Decrease) in other current assets (74) (12,060)
Increase (decrease) in accounts payable (280,107) 219,874
Increase (decrease) in accrued expenses 51,244 (106,137)
Increase in customer deposits 100,000 -
Increase in accounts payable and
accrued expenses - affiliates 143,888 844,925
----------- -----------
Total of adjustments 2,373,955 8,748,074
----------- -----------
Net cash (used in) operating activities (577,977) (707,164)
----------- -----------

Cash flows from investing activities:
Deposits on equipment (101,000) -
Purchase of property and equipment (5,250) (96,867)
----------- -----------
Net cash (used in) investing activities (106,250) (96,867)
----------- -----------

Cash flows from financing activities:
Advances from affiliates 568,640 549,351
Repayment of affiliate advances (100,000) -
Proceeds from convertible debt 350,000 -
Bank overdraft - 244,162
Payments on long-term debt and notes (99,602) (2,236)
----------- -----------
Net cash provided by financing activities 719,038 791,277
----------- -----------
Effect of foreign currency translation
on cash - (246)

Net increase (decrease) in cash 34,811 (13,000)

Beginning - cash balance - 13,000
----------- -----------
Ending - cash balance $ 34,811 $ -
=========== ===========

Supplemental cash flow information:
Cash paid for income taxes $ - $ -
=========== ===========
Cash paid for interest $ 37,834 $ 83,942
=========== ===========

Non cash investing and financing activities:
Conversion of related party notes
and interest to stock subscriptions $ 4,107,297 $ -
=========== ===========
Forgiveness of related party stock
subscriptions $ 3,233,978 $ -
=========== ===========

See the accompanying notes to the consolidated financial statements.

-26-

Telemetrix, Inc.
Notes to Consolidated Financial Statements
December 31, 2003

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Telemetrix Inc. (the "Company") was formed through a series of corporate
combinations. On January 2, 1999, Telemetrix Resource Group Inc., a Colorado
Corporation ("TRG, Inc."), acquired Telemetrix Resource Group Limited (TRG
Ltd.), a Nova Scotia corporation from Hartford Holdings Ltd., TRG Ltd.`s sole
shareholder, pursuant to a share exchange and plan of reorganization. On March
22, 1999, Arnox Corporation (an inactive public corporation), TRG Inc. and Tracy
Corporation II d/b/a Western Total Communication ("WTC") executed a Plan of
Reorganization, which contemplated a share exchange and reorganization
transaction (the "Combination"). On April 5, 1999, the first phase of the
combination occurred, whereby Arnox acquired 100% of the issued and outstanding
common shares of TRG Inc. in exchange for 6,127,200 shares of Arnox's common
stock. Arnox's historical financial statements become those of TRG Ltd., as TRG
Ltd.`s operations were the ongoing operations of the combined companies. All of
the transactions comprising the Combination, with the exception of WTC, have
been accounted for as reverse acquisitions and no goodwill has been recorded. On
September 22, 1999, the final phase of the combination closed, whereby, the
Company acquired 100% of the issued and outstanding common shares of WTC in
exchange for 5,372,800 shares of Arnox's common stock. Through these
combinations, the stockholders of WTC and TRG, Inc. acquired a total of
11,500,000 shares of Arnox common stock (approximately 90%) and therefore
acquired control of Arnox. After the Combination, the companies changed their
names to reflect their complementary businesses:

Arnox became Telemetrix, Inc.
TRG Ltd. Became Telemetrix Solutions, Inc.
WTC became Telemetrix Technologies, Inc.

The Company offers wireless paging service, personal communications services
("PCS") service, PCS nationwide network access and services and technology to
telecommunications carriers and other businesses.

Network access involves providing a source and means for telemetry and telematic
companies and customers to use the nation wide PCS networks of major carriers
for the transmission of data and messages which are necessary in the conduct of
their business. Telemetrix provides the service as a "data only" offering
through the roaming agreements which it has with other PCS carriers and
operators in North America, including Mexico and Canada.

PCS carriers use the Company's technology to provide network services for their
wireless customers. Telemetrix has the ability to use its infrastructure
equipment located in Gering, Nebraska to provide switching and billing services
for smaller carriers that would otherwise be unable to have access to these
services.

Consolidation

The financial statements include the accounts of the Company and its wholly
owned subsidiaries. All significant intercompany accounts and transactions have
been eliminated in consolidation.

-27-

Reclassifications

Certain items presented in the previous year's financial statements have been
reclassified to conform to current year presentation.

Revenue Recognition

The Company recognizes paging and telemetry revenue, which consists of fees
charged to subscribers, when services are provided. Revenue from the sale of
paging equipment is recognized upon delivery to the customer.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are stated at estimated net realizable value. Accounts
receivable are comprised of balances due from customers net of estimated
allowances for uncollectible accounts. In determining collectibility, historical
trends are evaluated and specific customer issues are reviewed to arrive at
appropriate allowances.

Property and Equipment

Property and equipment is recorded at cost. Depreciation of assets is computed
using the straight-line method over the following estimated useful lives.

Buildings and improvements 5 - 31.5 years
Office equipment 7 years
Computer equipment and software 5 - 7 years
Communication equipment 5 - 7 years
Vehicles 5 years
T-3000 equipment 5 years

Licenses

Licenses are capitalized and amortized over their estimated useful lives of 10
years and are stated net of amortization. Amortization charged to operations was
$92,285 during 2003 and 2002.

Licenses consists of the following at December 31, 2003:

Licenses $ 922,856
Less: accumulated amortization 664,433
---------
$ 258,423
=========

Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of December 31, 2003. The
respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments include cash,
accounts receivable, accounts payable, notes payable and convertible debentures.
Fair values were assumed to approximate carrying values for these financial
instruments because they are short term in nature and their carrying amounts
approximate fair values. The carrying value of the Company's long-term debt
approximated its fair value based on the current market conditions for similar
debt instruments.

-28-

Long Lived Assets

The carrying value of long-lived assets is reviewed on a regular basis for the
existence of facts and circumstances that suggest impairment. The Company will
measures the amount of any impairment based on the amount that the carrying
value of the impaired assets exceed the undiscounted cash flows expected to
result from the use and eventual disposal of the impaired assets. During 2003
and 2002 the Company recorded impairment losses as discussed in Note 4.

Net Income (Loss) Per Common Share

The Company calculates net income (loss) per share as required by Statement of
Financial Accounting Standards ("SFAS") 128, "Earnings per Share." Basic
earnings (loss) per share is calculated by dividing net income (loss) by the
weighted average number of common shares outstanding for the period. Diluted
earnings (loss) per share is calculated by dividing net income (loss) by the
weighted average number of common shares and dilutive common stock equivalents
outstanding. During periods in which the Company incurs losses common stock
equivalents, if any, are not considered, as their effect would be anti-dilutive.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Research and Development

Research and development costs are expensed as incurred and were $0 and $119,510
during 2003 and 2002.

Advertising Costs

Advertising costs are charged to expense as incurred. Advertising costs included
in selling, general and administrative expenses were $1,441 and $20,372 during
2003 and 2002.

Software Development Costs

Direct costs incurred in the development of software are capitalized once the
preliminary project stage is complete, management has committed to funding the
project and completion, and use of the software for its intended purpose are
probable. The Company ceases capitalization of development costs once the
software has been substantially completed and is ready for its intended use.
Software development costs are amortized over their estimated useful lives of 3
years. Costs associated with upgrades and enhancements that result in additional
functionality are capitalized.

Segment Information

The Company follows SFAS 131, "Disclosures about Segments of an Enterprise and
Related Information". Certain information is disclosed, per SFAS 131, based on
the way management organizes financial information for making operating
decisions and assessing performance. The Company currently operates in a single
segment and will evaluate additional segment disclosure requirements as it
expands its operations.

-29-

Income Taxes

The Company follows SFAS 109 "Accounting for Income Taxes" for recording the
provision for income taxes. Deferred tax assets and liabilities are computed
based upon the difference between the financial statement and income tax basis
of assets and liabilities using the enacted marginal tax rate applicable when
the related asset or liability is expected to be realized or settled. Deferred
income tax expenses or benefits are based on the changes in the asset or
liability each period. If available evidence suggests that it is more likely
than not that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the deferred tax assets to
the amount that is more likely than not to be realized. Future changes in such
valuation allowance are included in the provision for deferred income taxes in
the period of change.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees for services
based on the fair value of the equity instruments issued and accounts for equity
instruments issued to other than employees based on the fair value of the
consideration received or the fair value of the equity instruments, whichever is
more reliably measurable.

The Company accounts for stock based compensation in accordance with SFAS 123,
"Accounting for Stock-Based Compensation." The provisions of SFAS 123 allow
companies to either expense the estimated fair value of stock options or to
continue to follow the intrinsic value method set forth in APB Opinion 25,
"Accounting for Stock Issued to Employees" ("APB 25") but disclose the pro forma
effects on net income (loss) had the fair value of the options been expensed.
The Company has elected to continue to apply APB 25 in accounting for its stock
option incentive plans.

Foreign Currency Translation

The functional currency of one of the Company's subsidiaries is the applicable
local currency. The translation from the applicable foreign currency to U.S.
dollars is performed for balance sheet accounts using current exchange rates in
effect at the balance sheet date and for revenue and expense accounts using a
weighted average exchange rate during the period. The gains and losses, net of
applicable deferred income taxes, resulting from translation are included in
stockholders' (deficit).

The Company's subsidiary located in Toronto, Canada ceased operations and
activities as of March 31, 2002.

Recent Pronouncements

In May 2003, the FASB issued Financial Accounting Standard No. 150, "Accounting
for Certain Financial Instruments with Characteristics of Both Liabilities and
Equity" (SFAS 150). SFAS 150 establishes standards for how a company classifies
and measures certain financial instruments with characteristics of both
liabilities and equity. It requires that a company classify a financial
instrument that is within the scope as a liability (or an asset in some
circumstances). SFAS 150 is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. The Company does not expect
the adoption of SFAS 150 to have an impact on its financial position or
operating results.

-30-

In April 2003, the FASB issued Statement of Financial Accounting Standard No.
149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities" (SFAS 149). SFAS 149 amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under FASB Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS 149 is generally effective for
contracts entered into or modified after June 30, 2003 or hedging relationships
designated after June 30, 2003. The Company does not expect the adoption of SFAS
149 to have an impact on its financial position or operating results.

In January 2003, the FASB issued FASB Interpretation ("FIN") No. 46,
Consolidation of Variable Interest Entities, which requires variable interest
entities (commonly referred to as SPEs) to be consolidated by the primary
beneficiary of the entity if certain criteria are met. FIN No. 46 is effective
immediately for all new variable interest entities created or acquired after
January 31, 2003. The adoption of this statement does not impact the Company's
historical or present financial statements, as the Company has not created or
acquired any variable interest entities, nor does it expect to in the future.

In December 2002, the Financial Accounting Standards Board ("FASB") issued SFAS
148 "Accounting for Stock-Based Compensation--Transition and Disclosure--an
amendment of SFAS 123." SFAS 148 provides alternative methods of transition for
a voluntary change to the fair value based method of accounting for stock-based
employee compensation from the intrinsic value-based method of accounting
prescribed by APB 25. As allowed by SFAS 123, the Company has elected to
continue to apply the intrinsic value-based method of accounting, and has
adopted the disclosure requirements of SFAS 123. The Company currently does not
anticipate adopting the provisions of SFAS 148.

In July 2002, the FASB issued SFAS 146, "Accounting for Costs Associated with
Exit or Disposal Activities." SFAS 146 provides new guidance on the recognition
of costs associated with exit or disposal activities. The standard requires
companies to recognize costs associated with exit or disposal activities when
they are incurred rather than at the date of commitment to an exit or disposal
plan. SFAS 146 supercedes previous accounting guidance provided by the EITF
Issue No. 94-3 "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." EITF Issue No. 94-3 required recognition of costs at the date
of commitment to an exit or disposal plan. SFAS 146 is to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.
Early application is permitted. The adoption of SFAS 146 by the Company has not
had a material impact on the Company's financial position, results of
operations, or cash flows.

In April 2002, the FASB issued SFAS 145, "Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
Among other things, this statement rescinds FASB Statement No. 4, "Reporting
Gains and Losses from Extinguishment of Debt" which required all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an extraordinary item, net of related income tax effect. As a result, the
criteria in APB Opinion No. 30, "Reporting the Results of Operations --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," will now be used to
classify those gains and losses. The provisions of SFAS 145 related to the
classification of debt extinguishment are effective for years beginning after
May 15, 2002. The adoption of SFAS 145 by the Company has not had a material
impact on the Company's financial position, results of operations, or cash
flows.

-31-

NOTE 2. BASIS OF REPORTING

The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.

The Company has experienced a significant loss from operations as a result of
its investment necessary to achieve its operating plan, which is long-range in
nature. For the years ended December 31, 2003 and 2002, the Company incurred net
losses of $2,951,932 and $9,455,238 and has a working capital deficit of
$4,890,052 and a stockholders' deficit of $4,917,986 at December 31, 2003.

The Company's ability to continue as a going concern is contingent upon its
ability to attain profitable operations and secure financing. In addition, the
Company's ability to continue as a going concern must be considered in light of
the problems, expenses and complications frequently encountered by entrance into
established markets and the competitive environment in which the Company
operates.

The Company is pursuing equity and debt financing for its operations and is
seeking to expand its operations. Failure to secure such financing may result in
the Company depleting its available funds and not being able pay its
obligations.

The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment at December 31, 2003 consisted of the following:

Land $ 13,301
Buildings 16,803
Vehicles 32,147
Furniture and office equipment 53,734
Computer equipment and software 146,025
Equipment 707,002
----------
969,012
Accumulated depreciation and amortization (963,906)
----------
$ 5,106
==========

Depreciation and amortization expense for the years ended December 31, 2003 and
2002 was $82,468 and $100,195.

NOTE 4. IMPAIRMENT LOSSES

During the years ended December 31, 2003 and 2002 the Company determined that
certain long-lived assets were impaired. The Company charged the amount by which
fair value, determined by comparing the estimated future cash flows of such
assets to their carrying value of $103,000 and $5,681,407, exceeded their
carrying value. The following impairment losses were charged to operations
during 2003 and 2002.

Goodwill $ - $4,529,359
Patent - 37,147
Equipment 103,000 -
Construction in progress - 1,114,901
---------- ----------
$ 103,000 $5,681,407
========== ==========

-32-

NOTE 5. NOTES PAYABLE - RELATED PARTIES

The Company has outstanding notes payable to affiliates in the principal amount
of $392,313 at December 31, 2003. These notes are due on demand and bear
interest at 10% per annum. During the years ended December 31, 2003 and 2002,
the affiliates advanced additional funds of $568,640 and $549,341 respectively
and the Company made repayments of the advances of $100,000 and $0 respectively.
The Company has accrued interest aggregating $108,762 at December 31, 2003 and
recorded interest expense of $236,342 and $364,021 during the years ended
December 31, 2003 and 2002. In addition to the stated interest rates the Company
has agreed to issue an aggregate of 16,650,301 shares of common stock as
additional consideration for the loans. These shares have been valued at
$3,951,927, which represents the fair market value of the shares on the dates of
the loans. During 2003 and 2002 $458,500 and $1,738,425 has been charged to
operations related to these issuances and through December 31, 2003 $95,951 has
been recorded as deferred compensation and represents the unearned portion of
the shares. To date none of the shares have been issued. During May 2003 in
conjunction with the conversion of the notes and accrued interest discussed
below the note holders forgave the issuance of an aggregate of 10,594,539 shares
of common stock with an aggregate value of $3,233,978. During May 2003, the
Company, through corporate resolution, agreed to convert existing corporate
indebtedness of major shareholders and investors in the company into equity
through an approved corporate exchange of non-issued common shares for notes and
accrued interest aggregating $4,107,297. The conversion of debt to equity by
those participating note holders will include the issuance of preferred and
common shares of the Company. The Corporation's Amended Articles of
Incorporation ("Articles") authorizes the Corporation to issue up to 5,000,000
Preferred Shares, with a par value of $.001 ("Preferred Shares") in one or more
series at such price and in such number as authorized by the Board of Directors.
The Articles also authorize the Board to prescribe the number, voting powers,
designations, preferences, limitations, restrictions and relative rights of each
series of Preferred Shares. Accordingly, the Board of Directors designated
250,000 Preferred Shares as Series D Preferred Shares (see Note 9).

NOTE 6. NOTES PAYABLE

Convertible debentures - interest at 6.25% per annum, conversion
feature allows the holder to use the debenture as payment for
a like value of securities should the Company complete a
stock offering of $6,000,000 at January 1, 2001. Such an
offering was not completed. The debentures are currently
in default $1,200,000

Note payable - Federal Communications Commission (C Block)
interest at 7% per annum. Interest payments only of $13,543 due
on a quarterly basis through September 2002. Quarterly interest
and principal payments of $55,875 beginning December 2002
until maturity at September 2006, secured by FCC license 688,484

Note payable - Federal Communications Commission (F Block)
interest at 7% per annum. Interest payments only of $1,163 due
on a quarterly basis through April 1999. Quarterly interest
and principal payments of $2,975 beginning July 2001
until maturity at April 2007, secured by FCC license 41,828
----------
1,930,312
Less: current portion 1,537,849
----------
$ 392,463
==========

Maturity of long term debt is as follows:

2004 $ 1,537,849
2005 211,078
2006 173,022
2007 8,363
-------------
$ 1,930,312
=============

-33-

NOTE 7. CONVERTIBLE DEBENTURES

During October 2003 the Company entered into a funding agreement with a third
party whereby the Company would be able to borrow up to $2,000,000 in the form
of convertible notes. As of December 31, 2003 the Company was advanced an
aggregate of $350,000 pursuant to these demand notes. The notes do not bear
interest unless in default in which case interest accrued at the rate of 12% per
annum. The notes may be converted into the Company's common shares at $.04 per
share and the difference between the conversion price and the fair market value
of the shares at the time of conversion, if conversion occurs, will be charged
to interest expense. The Company is subject to certain representations and
requirements contained in the loan agreement and is not in compliance with
certain of those representations and requirements. As of the date of the
financial statements the Company has not been notified of any default on the
funding agreement.

NOTE 8. INCOME TAXES

The Company accounts for income taxes under SFAS 109, which requires use of the
liability method. SFAS 109 provides that deferred tax assets and liabilities are
recorded based on the differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes,
referred to as temporary differences. Deferred tax assets and liabilities at the
end of each period are determined using the currently enacted tax rates applied
to taxable income in the periods in which the deferred tax assets and
liabilities are expected to be settled or realized.

The provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate to income before provision for income taxes.
The sources and tax effects of the differences are as follows:

Income tax provision at
the federal statutory rate 34 %
Effect of operating losses (34)%
-----
-

As of December 31, 2003, the Company has a net operating loss carryforward of
approximately $46,000,000. This loss will be available to offset future taxable
income. If not used, this carryforward will expire through 2023 subject to
certain limitations resulting from a change in control. The deferred tax asset
of approximately $15,000,000 relating to the operating loss carryforward has
been fully reserved at December 31, 2003.

NOTE 9. STOCKHOLDERS' (DEFICIT)

Preferred Stock

1. Rank. Series D Preferred Shares ("Series D Shares") are senior to the
Company's common shares ("Common Shares"), in priority for receiving
distributions and for payment upon liquidation of the Company.

2. Preference. Each Series D Share has a liquidation preference of $30.00
plus all accrued but unpaid distributions (the "Preference").

3. Conversion Rate. Upon a Conversion Event (seess.8) the affected Series D
Shares shall convert into Common Shares at the Conversion Rate. The 'Conversion
Rate' shall initially be two hundred (200) Common Share into one Series D Share
but will automatically adjust:
3.1. in the same manner as the Common Shares were adjusted in stock splits,
share consolidations, stock dividends, recapitalizations, and similar changes to
the Company's capitalization ("Recapitalization"). For example, if each Common
Share was split into two recapitalized Common Shares then the Conversion Rate
would become one Series D Share into four hundred recapitalized Common Shares);

-34-

3.2. so that the percentage of the total Common Shares and securities
convertible into Common Shares (collectively, "Share Equivalents") represented
by the Series D Shares owned by each Series D Holder (the "Series D Percentage")
does not change despite any issuance of Share Equivalents (excluding securities
issued pursuant to an employee stock option plan) at a per-Share Equivalent
price below the Preference.
Upon the occurrence of each adjustment of the Conversion Rate, the Company,
at its expense, shall promptly compute such Conversion Rate adjustment and
furnish each Series D Holder with a certificate stating the new Conversion Rate
and explaining the facts underlying the Conversion Rate adjustment. The term
'Common Equivalent Basis' means equally with the Common Shares as though the
Series D Shares were converted into Common Shares at the then-applicable
Conversion Rate.

4. Distributions. Each Series D Preferred Shareholder (a "Series D Holder")
shall participate in distributions on a Common Equivalent Basis.

5. Liquidation Preference. If the Company is liquidated, Series D Holders
shall receive their entire Preference (i.e., $30.00 per Series D Share plus all
accrued but unpaid distributions) before any distribution or payment is made on
any junior capital stock (including the Common Shares). After receiving this
Preference, Series D Holders will then participate in distribution of the
Company's assets on a Common Equivalent Basis.

6. Voting Rights. Series D Shares shall vote as a separate voting group on
the following matters:
6.1. issuance of any Company capital stock senior to the Series D Shares in
priority for receiving distributions, for payment of any liquidation preference
and in redemption rights;
6.2. alteration of the Preferences of the Series D Shares, including
amendments to the Articles or Bylaws;
6.3. liquidation, Recapitalization or similar corporate reorganization;
6.4. loans, borrowings, debt, guarantees or similar obligations ("Debt") by
Company except when Company's aggregate Debt is below $3,000,000;
6.5. transaction or associated transactions:
6.5.1. involving a merger, consolidation or similar transaction;
6.5.2. issuing or transferring more than 50% of the Company's voting
stock;
6.5.3. selling all or substantially all Company assets; when the
resulting deemed value of the Common Shares would be less than $15.00 per
Common Share;
6.6. conversion of all Series D Shares into Common Shares pursuant to
Section 8.4;
6.7. transactions identified in Sections 7.4.2 & 7.4.6 after the aggregate
Share Equivalents issued in such transactions exceeds $1 million; and
6.8. when the Act requires voting as a separate voting group.
Each Series D Holder has the right to notice of all meetings of the Company's
shareholders, to attend such meetings and to vote on a Common Equivalent Basis
on all matters presented for vote by the Common Shares except for those
specified in this Section.

7. Preemptive Rights. If the Company sells any Share Equivalents then each
Series D Holder may prevent a reduction in its Series D Percentage after such
sale ("Preemptive Right") by purchasing a sufficient portion of such Share
Equivalents.
7.1. Company will notify each Series D Holder about the proposed sale of
Share Equivalents, the terms, the proposed sale date and the amount the Series D
Holder must pay to prevent reduction in its Series D Percentage ("Preemption
Price").
7.2. To exercise its Preemptive Right, a Series D Holder must provide the
Preemption Price to Company within 30 days after the notice of the proposed
sale; otherwise a Series D Holder waives its Preemptive Right for that
particular sale.

-35-

7.3. Company will permit those Series D Holders exercising their Preemptive
Right to exercise the Preemptive Right of those Series D Holders that do not
exercise their Preemptive Right; such exercise shall be pro rata to the relative
Series D Percentages of the exercising Series D Holders and payment must occur
at least 10 days before the proposed date for the sale of the Share Equivalents.
7.4. This Section does not apply to issuance's or sales of Share
Equivalents:
7.4.1. pursuant to employee stock or option grants;
7.4.2. to strategic corporate partners;
7.4.3. for equipment financing;
7.4.4. to acquire another business;
7.4.5. in an underwritten public offering; or
7.4.6. in a transaction when the Company does not receive cash
proceeds from such issuance or sale; but Series D Holder approval is
required pursuant to Section 6.8 after the aggregate Share Equivalents
issued in transactions identified in Sections 7.4.2 & 7.4.6 exceeds $1
million.
7.5. Company must notify the Series D Holders of any transaction listed in
Section 6.4 or 6.5 (a "Combination") and permit the Series D Holders
collectively to purchase the Company (either by acquiring all Company capital
stock or purchasing all or substantially all Company assets) at the deemed
per-Common Share value proposed in the Combination. If any Series D Holder does
not desire to purchase its pro rata portion of Company capital stock or assets,
then remaining Series D Holders may purchase that portion).
The Preemptive Rights shall apply again to a proposed sale of Share Equivalents
if Company does not complete that proposed sale or Combination within 150 days
after the initial notice given by Company.

8. Conversion Events. Upon any of the following events ("Conversion
Events"):
8.1. A Series D Holder requests conversion of any Series D Shares;
8.2. Company completes an underwritten public offering of the Common Shares
for gross proceeds of at least $5 million and the total Share Equivalents would
have a deemed value of at least $10 million using the public offering price per
Common Share; or
8.3. a majority of the Series D Holders vote (pursuant to Section 6.7) to
convert all Series D Shares; then the affected Series D Shares will convert into
Common Shares pursuant to Section 3.

9. Redemption. The Company may redeem the Series D Shares, in whole or in
part, at the same time (a "Redemption Event").
9.1. Company elects to redeem only a portion of the Series D Preferred
Shares.
9.2. Company will notify each Series D Holder about the Redemption Event,
the redemption terms and the Redemption Date (at least 30 days after the
Redemption Event).
9.3. Prior to the Redemption Date, a Series D Holder may convert any Series
D Shares into Common Shares pursuant to Section 8.
9.4. If Company redeems less than all Series D Shares outstanding on the
Redemption Date then Company shall redeem such Series D Shares on a pro rata
basis.
On the Redemption Date, the Company will pay the Preference for each redeemed
Series D Share in immediately available funds to the associated Series D Holder.

10. Limited Issuance. After conversion or redemption of any Series D Share,
such Series D Share shall not be available for re-issuance.

Exchange Agreement with Hartford Holdings
The Company has an exchange and conversion agreement with Hartford Holdings
which provides for the following:
o Hartford Holdings will surrender certificates representing 3,962,004
shares common stock;
o In exchange for the surrender of the above certificates, the Company
shall exchange without further cost 594,301 shares of common stock and
16,838.5 Shares preferred stock;
o Hartford has the option, upon written notice to register the 594,301
shares of common stock.

-36-

Exchange Agreement between with Ionian Investments, Ltd.
The Company has an Exchange and Conversion Agreement with Ionian Investments,
Ltd. which provides for the following:
o Hartford Holdings will surrender certificates representing 2,000,000
shares of common stock;
o In exchange for the surrender of the above certificates, the Company
shall exchange without further cost 112,500 shares of common stock and
3,187.5 Shares of preferred stock;
o Hartford has the option, upon written notice to register the 112,500
shares of common stock.

Exchange Agreement with Michael Tracy.
The Company has an Exchange and Conversion Agreement with its Chief Executive
Officer, Michael Tracy, which provides for the following:
o Michael Tracy will surrender all certificates representing 4,317,775
shares of common stock;
o In exchange for the surrender of the above certificates, Michael Tracy
has the right to exchange without further cost all notes and shares of
common stock issued as consideration for any notes as well as shares
issued as in lieu of salary for 3,584,151 shares of common stock and
101,551 shares of preferred stock;
o Michael Tracy has the right, upon written notice, to exercise certain
registration rights specified in the exchange agreement.

Exchange Agreement with WYSE Investments. Ltd.
The Exchange and Conversion Agreement with WYSE Investments, Ltd. Which provides
for the following:
o WYSE Investments will surrender certificates representing 2,000,000
shares of common stock;
o In exchange for the surrender of the above certificates, the Company
will exchange 500,000 shares of common stock for 75,000 shares of
common stock and 2,125 shares of preferred stock;
o WYSE Investments has the right, upon written notice to exercise
certain registration rights specified in the exchange agreement.

Exchange Agreement with Ardara Investments, Ltd.
The Company has an Exchange and Conversion Agreement with Ardara Investments,
Ltd. which provides for the following:
o Adara Investments will surrender certificates representing 2,000,000
shares of common stock;
o In exchange for the surrender of the above certificates, the Company
will exchange 750,000 shares of common stock for 112,500 shares of
common stock and 3,187 shares of preferred stock;
o Adara Investments has the right, upon written notice to exercise
certain registration rights specified in the agreement.

Exchange Agreement with Becker Capital Investments, Ltd.
The Company has an Exchange and Conversion Agreement with Becker Capital
Investments, Ltd. which provides for the following:
o Becker Capital Investments will surrender all certificates
representing all shares of common stock which have been issued to
Becker Capital Management, Larry Becker, his heirs, successors or
assigns;
o In exchange for the surrender of the above certificates, the Company
will exchange all notes and shares of common stock issued as
consideration for any notes for 632,002 shares of our common stock and
17,906 shares of our preferred stock;
o Becker Capital Investments has the right, upon written notice to
exercise certain registration rights specified in the agreement.

Exchange Agreement with Michael L. Glaser.
The Company has an Exchange and Conversion Agreement with Michael L. Glaser
which provides for the following:
o Michael L. Glaser will surrender all certificates representing all
shares of common stock which have been issued by us to him
o In exchange for the surrender of the above certificates, the Company
will exchange all notes and shares of common stock issued as
consideration for any notes for 886,380 shares of common stock and
25,441 shares of preferred stock;
o Michael L. Glaser has the right, upon written notice, to exercise
certain registration rights specified in the agreement.

-37-

Common Stock

During the year ended December 31, 2002 the Company recorded stock subscriptions
for an aggregate of $1,738,425 for 11,589,500 shares of common stock related to
incentive compensation on the notes described in Note 5 and $288,000 for
1,587,833 shares of common shares related to officers salary as discussed in
Note 10.

During the year ended December 31, 2003 the Company recorded stock subscriptions
for an aggregate of $458,500 for 5,585,635 shares of common stock related to
incentive compensation on the notes described in Note 5 and $300,000 for
2,729,942 shares of common shares related to officers salary as discussed in
Note 10.

During May 2003 the Company agreed to issue 10,042,500 shares of common stock to
an officer for the conversion of notes aggregating $401,700. The difference
between the fair market value of the shares and the conversion price aggregating
$1,104,675 has been charged to operations during the year.

During the year ended December 31, 2003 the Company agreed to issue an aggregate
of 600,000 shares of common stock for services valued at their fair market value
of $36,000, and 2,161,704 shares of common stock for prior years salary due to
an officer valued at their fair market value of $271,000. These amounts have
been charged to operations during the year.

A summary of subscribed common shares follows:

Officers salary 6,479,479 $ 859,000
Loan incentive shares 6,055,762 719,947
Services 600,000 36,000
Conversion of related
Party debt 34,746,941 4,107,297
---------- ----------
47,882,182 $5,722,244
========== ==========

Stock-based Compensation

The Company has a stock option plan, which covers certain key management
personnel. Options to purchase common shares may be granted at a price not less
than fair market value on the date of the grant. Options may not be exercised
prior to one year or after five years from the date of the grant. No options
were granted during 2003 or 2002.

A summary of stock option and warrant activity is as follows:

Weighted
Number average
of exercise
shares price
Balance at
December 31, 2001 1,381,250 $3.79
Granted -
Exercised/Forfeited (300,000) $3.79
-----------
Balance at
December 31, 2002 1,081,250 $3.79
Granted -
Exercised/Forfeited -
-----------
Balance at
December 31, 2003 1,081,250 $3.79
===========

Exercisable at December 31, 2003 1,081,250

Weighted average remaining contractual life - 2.43 years
Weighted average fair value - $.40

-38-

NOTE 10. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its office from an officer of the Company at a rate of $2,500
per month pursuant to a lease expiring in October 2007. Future minimum lease
payments are as follows:

2004: $30,000 2005: $30,000 2006: $30,000 2007: $25,000

Rent expense for the years ended December 31, 2003 and 2002 including the above
lease was $52,462 and $51,455.

Employment Contracts

The Company has entered into an employment contract expiring on December 31,
2003 with its president. The agreement call for annual salary payments of
$300,000 plus bonuses based on certain performance objectives. During 2003 and
2002 this officer received $0 and $12,000 in cash payments and the balance was
paid with a common stock subscription for 2,729,242 and 1,587,833 shares
respectively valued at their fair market value of $300,000 and $288,000.

Litigation

The Company was involved in litigation with Plexus Corp., a vendor, related to
good and services provided by Plexus. At December 31, 2002, the Company had
recorded a liability of $557,413 to Plexus, which was included in accounts
payable. The Company disputed the amount and the fact that Plexus provided the
goods and services required by the Company. During February 2003 the Company
settled litigation with Plexus whereby the Company and Plexus mutually released
each other from any and all claims against the other party. Pursuant to the
terms of the settlement agreement the Company is not required to make any
payment to Plexus. The amount of the recorded liability of $557,413 less the
carrying value of the equipment was recognized as a gain from the settlement of
a liability during 2003 aggregating $269,220.

The Company is also involved in various legal actions arising in the normal
course of business management believes that such matters will not have a
material effect upon the financial position of the Company.

-39-

Funding Agreement

The Company entered into an agreement with a third party, which provides that:
o The third party, its management and associates will invest $30,000 in
common stock at a share price of $0.04 per shares, the total of which
is 750,000 shares; There is a provision for this stock amount to be
divided by 200 and taken as 3,750 Series D Preferred Shares;
o The third party, its management and associates will invest up to a
further $150,000 in stock at $0.04 per share, being 3,750,000 shares.
There is a provision for this stock amount to be divided by 200 and
taken as 18,750 Series D Preferred shares;
o As soon as practicable and before a planned $2,000,000 equity raise,
the Company has agreed to: (a) finalize its balance sheet; (b) reach a
satisfactory agreement with the holders of $1,200,000 in convertible
debentures, satisfaction being defined as: (a) removal of the risk of
the debenture holders delaying the $2,000,000 investment round and (c)
based on the scenarios offered, achieving the best mix of reduction in
cash paid or equity given as settlement and achieving the longest
extension of the date of any repayments which may be due.

The Company will work together with the third party in the proposed $2 million
fund raising round to prepare necessary documentation and the third party will
project manage the round to the close. There is no assurance that any funding
pursuant to this agreement will be completed.

Equipment Purchase Agreement

During November 2003 the Company entered into an agreement to purchase network
switching equipment for an aggregate of $676,800. The Company made a down
payment on the equipment in the amount of $101,000, which is included in other
assets at December 31, 2003.

Other

The Company has agreed to issue certain common shares to various related
parties. As of December 31, 2003 the Company does not have sufficient authorized
shares to affect these issuances.

On or about September 10, 2001, the company filed a Form S-8 Registration
Statement under the Securities Act of 1933 registering 375,000 shares of common
stock to be issued in accordance with a consulting agreement. On September 21,
2001, the Company issued the 375,000 shares of common stock. The Company
received and acted in reasonable reliance upon legal advice and guidance from
legal counsel at the time regarding the issuance, however, it has been recently
advised that certain investor relations related services that were to be
provided are prohibited under Regulation S-8. As such, the issuance of the
375,000 shares of common stock may have violated the registration provisions of
the federal securities laws, specifically Section 5 of the Securities Act of
1933.

NOTE 11. SUBSEQUENT EVENTS

Through April 1, 2004 the Company borrowed an additional $670,000 pursuant to
the convertible notes described in Note 7.

-40-

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE.
Not applicable

ITEM 8A. CONTROLS AND PROCEDURES.
As of December 31, 2003, an evaluation was performed under the supervision and
with the participation of our management, including our Chief Executive Officer
and Principal Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based on that evaluation,
our management, including our Chief Executive Officer and Principal Financial
Officer, concluded that our disclosure controls and procedures were effective as
of December 31, 2003.

There has not been any change in our internal control over financial reporting
during the quarter ended December 31, 2003 that has materially affected or is
reasonably likely to materially affect, our internal control over financial
reporting.

PART III.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.
Directors and Executive Officers Our Directors may appoint new directors and
elect officers at regular meetings with proper notification. Our shareholders
elect our Directors at each annual general meeting. Directors hold office until
their successors have been elected and qualified or until death, resignation or
removal. Our Officers are appointed by our Board of Directors. Our directors and
executive officers are as follows:

- ---------------------------------------------------------------------------------
Name Age Position Term of Office
- ---------------------------------------------------------------------------------
Patrick J. Kealy 62 Chairman of the Board* Until resignation or removal
- ---------------------------------------------------------------------------------
Michael Tracy 58 President/Chief Executive Until resignation or removal
Officer/Acting Chief
Financial Officer/Chief
Accounting Officer/
Director
- ---------------------------------------------------------------------------------
William W. Becker 74 Director/Former Chairman Until resignation or removal
of the Board**
- ---------------------------------------------------------------------------------
John T. Connor, Jr. 63 Secretary Until resignation or removal
- ---------------------------------------------------------------------------------
Michael L. Glaser 64 Former Secretary and Until resignation or removal
Director***
- ---------------------------------------------------------------------------------
* Mr. Kealy has been our Chairman of the Board since April 15, 2004
** Mr. Becker resigned as our Chairman of the Board on April 15, 2004. He
previously served as our Chairman of the Board from March 30, 1999 until
April 15, 2004.
*** Mr. Glaser resigned as our Secretary and Director on April 15, 2004. He
served as our Secretary and Director from April, 1999 to April 15, 2004.

-41-

Patrick J. Kealy has been our Chairman of the Board since April 15, 2004. From
July 2002 to present, Mr. Kealy has been the Chairman of Swissfone
International, Ltd., an international long distance service provider located in
Washington, D.C. From January 1998 to November 2002, Mr. Kealy was the
President of Harris, Hoover and Lewis International, an investment advisor firm
located in New York, New York. From 1965 to 1995, Mr. Kealy was employed in
various management positions by various securities brokerage firms, including
from 1984 to 1990 with Morgan Stanley in New York, New York. Mr. Kealy
graduated from Notre Dame University in 1965 with a BBA Degree in Finance.

Michael Tracy has been a Director since April, 1999, and has been our President
and CEO since December, 1999. From 1982 through the current date, Mr. Tracy has
been President of Tracy Corporation II dba Western Total Communications and also
dba Telemetrix Technologies a wireless paging and mobile telephone
communications company located in Gering, NE.

William Becker has been our Director since April 15, 2004. From April, 1999to
April 15, 2004, Mr. Becker was our Chairman of the Board. From March 1996 to
June 1999 and then from September 1999 to present, Mr. Becker was the Chairman
of the Board of: (a) the Becker Group of Companies, a investment and venture
capital firm, based in Grand Cayman, Bahamas; and (b) TeleHub Communications, a
research and development located in Gurnee, Illinois. Mr. Becker is a Director
of the Board of Directors of the following companies: ncube Corporation; AirCell
Communications; Transdigital Communications Corporation; and TeleHub
Communications Corporation.

John T. Connor, Jr. has been our Secretary since April 15, 2004. Since October
1998, Mr. Connor has been the founder and portfolio manager of Third Millenium
Russia Fund, a Securities and Exchange Commission mutual fund. Since November
2002, Mr. Connor has been a Director of Swissfone, an international long
distance provider located in Washington. D.C. Since July 2003, Mr. Connor has
been a Director of Teton Petroleum, an exploration and production oil firm doing
business in the Russian Federation and which is located in Denver, Colorado. Mr.
Connor graduated from Williams College in 1963 with a Bachelor of Arts Degree
and from Harvard Law School in 1967 with a Juris Doctor Degree.

FORMER SECRETARY AND DIRECTOR
Michael L. Glaser was our Secretary and Director from April 1999 until April 15,
2004. Mr. Glaser has been an attorney with the law firm of Shughart Thomson &
Kilroy, P.C. since January 2003. From January 1996 through December 2002, Mr.
Glaser was a director and shareholder of the law firm of Lottner Rubin Fishman
Brown & Saul, P.C. located in Denver, Colorado. Mr. Glaser received a BA Degree
from the George Washington University in 1961 and a Juris Doctor Degree from the
George Washington University School of Law in 1965.

SIGNIFICANT EMPLOYEES
None

FAMILY RELATIONSHIPS
There are no other family relationships among our officers, directors,
promoters, or persons nominated for such positions.

LEGAL PROCEEDINGS
William Becker, a Director and our former Chairman of the Board, was the
Chairman of TeleHub Communications Corporation from March 1996 through June 1999
and then from September 1999 to the present. On October 27, 1999, a TeleHub
subsidiary petitioned for reorganization under the U.S. Bankruptcy Code. At that
time, that subsidiary owed its parent corporation, TeleHub Communications
Corporation approximately $606,000 for billing and consulting services. Given
the status of this bankruptcy case, TeleHub Communications Corporation has
reserved for the entire amount owed and does not expect to receive any payment.

Apart from the above matter, no officer, director, or persons nominated for such
positions, promoter or significant employee has been involved in legal
proceedings that would be material to an evaluation of our management.

-42-

Our directors, executive officers and control persons have not been involved in
any of the following events during the past five years:

1. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;

2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);

3. being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or

4. being found by a court of competent jurisdiction (in a civil action),the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.

COMMITTEES OF THE BOARD OF DIRECTORS
We presently do not have an audit committee, compensation committee, nominating
committee, an executive committee of our board of directors, stock plan
committee or any other committees. However, our board of directors is
considering establishing various such committees during the current fiscal year.
Currently, our Board of Directors makes the decisions regarding compensation,
our audit, the appointment of auditors, and the inclusion of financial
statements in our periodic reports.

AUDIT COMMITTEE FINANCIAL EXPERT
We have no financial expert. We believe the cost related to retaining a
financial expert at this time is prohibitive.

CODE OF ETHICS
We have not yet adopted a corporate code of ethics. Our board of directors is
considering establishing, over the next year, a code of ethics to deter
wrongdoing and promote honest and ethical conduct; provide full, fair, accurate,
timely and understandable disclosure in public reports; comply with applicable
laws; ensure prompt internal reporting of code violations; and provide
accountability for adherence to the code.

ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth summary information concerning the compensation
received for services rendered to it during the current year and the years ended
December 31, 2001 and 2002, and 2003 respectively. Michael J. Tracy is our only
executive officer who received aggregate compensation during our last fiscal
year which exceeded, or would exceed on an annualized basis, $100,000.

-43-

- ---------------------------------------------------------------------------------------------------------
Summary Compensation Chart
- ---------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
- ---------------- ----- --------------------------------- ----------------------------------- ------------
Name & Restricted L/Tip All Other
Position Year Salary ($) Bonus ($) Other ($) Stock Awards Options($) Payouts($) Compensation
- ---------------- ----- --------------------------------- ----------------------------------- ------------
Michael J. Tracy 2004 $120,000 0 0 0 0 0 0
Chief Executive
Officer
2003 $300,000* 0 0 0 0 0 0

2002 $300,000 0 0 0 0 0 0

Geoffrey
Girdler 2004 $150,000** 0 0 0 0 0 0
Chief
Operating
Officer
- ---------------------------------------------------------------------------------------------------------
* During 2003, our Chief Executive Officer, agreed to accept a total of
2,729,942 shares of our common stock in lieu of his $300,000 salary. These
shares were valued at prices ranging from $0.06 to $0.36. To date, none of the
2,729,942 shares have been issued to Mr. Tracy.
** Mr. Girdler became our Chief Operating Officer in October 2003, but was only
compensated for two weeks of December 2003 in the amount of $7,500.

-44-

- --------------------------------------------------------------------------------
Options/SAR Grants 2003
- --------------------------------------------------------------------------------
% of Total
Number of Options
Name and Securities Granted To
Principle Underlying Employees Exercise Expiration
Position Options in 2003(1) Price Date
- --------------------------------------------------------------------------------
Michael Tracy 0 0 Not Applicable Not Applicable
President, Chief
Executive Officer,
Acting Chief Financial
Officer, Chief
Accounting Officer,
Director
- --------------------------------------------------------------------------------
William W. Becker 0 0 Not Applicable Not Applicable
Director,
Former Chairman
Of the Board
- --------------------------------------------------------------------------------
Michael L. Glaser 0 0 Not Applicable Not Applicable
Former Secretary and
Director
- --------------------------------------------------------------------------------
TOTAL 100.00%
- --------------------------------------------------------------------------------
(1) There were no Options/SAR Grants in 2003, the last completed fiscal year.

-45-

- ----------------------------------------------------------------------------------------------
Aggregate Option/SAR Exercises in 2003 and Fiscal Year End Option/SAR Values
- ----------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options/SARs at
Shares Value FY-End (#) FY-End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
- ----------------------------------------------------------------------------------------------
Michael Tracy Not Not Not
President, Chief Applicable Applicable 150,000/0 Applicable(1)/0
Executive Officer,
Acting Chief Financial
Officer, Chief
Accounting Officer,
Director
- ----------------------------------------------------------------------------------------------
William W. Becker Not Not Not
Director, Applicable Applicable 150,000/0 Applicable(1)/0
Former Chairman
Of the Board
- ----------------------------------------------------------------------------------------------
Michael L. Glaser Not Not Not
Former Secretary and Applicable Applicable 150,000/0 Applicable(1)/0
Director
- ----------------------------------------------------------------------------------------------
(1) There were no in-the-money exercisable options or SARs at the end of the
fiscal year.

BOARD COMPENSATION
Other than provide above our directors do not receive any compensation for their
services as directors, although some directors are reimbursed for reasonable
expenses incurred in attending board or committee meetings.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The following tables set forth the ownership as of April 30, 2004: (a) by each
person known by us to be the beneficial owner of more than five percent (5%) of
our outstanding common stock; and (b) by each of our directors, by all executive
officers and our directors as a group.

To the best of our knowledge, all persons named have sole voting and investment
power with respect to such shares, except as otherwise noted. There are not any
pending or anticipated arrangements that may cause a change in our control.

-46-

- ---------------------------------------------------------------------------------
Security Ownership of Beneficial Owners:
- ---------------------------------------------------------------------------------
Title of Class Name & Address Amount Nature Percent
- -------------- ------------------------- ------------ --------------- -------
Common Michael J. Tracy 4,885,504 Direct 26.44
Chief Executive Officer
721 East 38th Street
Scottsbluff, Nebraska
69361

Common William W. Becker 6,535,250* Direct/Indirect 35.37
Director/Former
Chairman of the Board
Park Lane
West Bay Road
Georgetown, Grand Cayman
Islands
British West Indies

Common Michael L. Glaser 1,029,033** Direct 5.57
Former/Secretary/Director
2324 S. Jackson
Denver, Colorado
80210

- -------------- ------------------------- ------------ --------------- -------
Total 12,449,787 67.38
========== =======
- ---------------------------------------------------------------------------------
* William W. Becker's beneficial ownership of 6,099,504 shares of our common
stock is composed of: (a) 87,500 shares that he individually owns; (b) 50,000
shares that are owned by his wife, Christine Becker; (c) 2,000,000 shares held
in the name of the following entities located at c/o The Harbour Trust Co. Ltd.
One Capital Place, P.O. Box 1787, Cayman Islands, British West Indies, in which
William W. Becker has voting power over such shares: (i) 750,000 shares owned by
Adara Investments, Ltd. a trust that is maintained for the benefit of one of
William Becker's (son/grandson); (ii) 500,000 shares owned by Wyse Investments,
Ltd., a trust that is maintained for the benefit of one of William Becker's
(son/grandson); (iii) 750,000 shares owned by Ionian Investments, Ltd., a trust
that is maintained for the benefit of one of William Becker's (son/grandson).
** Michael L. Glaser's ownership of 1,029,033 shares of our common stock is
composed of: (a) 816,533 shares owned by Michael L. Glaser individually; (b)
12,500 shares owned jointly by Michael L. Glaser and his wife, Catherine M.
Glaser; and (c) 200,000 shares in the name of Michael L. Glaser IRA Rollover.

-47-

- ----------------------------------------------------------------------------------------
Security Ownership of Management:
- ----------------------------------------------------------------------------------------
Title of Class Name & Address Amount Nature Percent
- -------------- ------------------------- ---------- --------------- --------------
Common Michael J. Tracy 4,885,504 Direct 26.44
Chief Executive Officer
1225 Sage
Gering, Nebraska 69341

Common William W. Becker 6,534,250* Direct/Indirect 35.37
Director/Former
Chairman of the Board
Park Lane
West Bay Road
Georgetown, Grand Cayman
Islands
British West Indies

Common Patrick J. Kealy 0 Not Applicable Not Applicable
Chairman of the Board
53 E. 74th Street
Apartment 4R
New York, New York 10021

Common John T. Connor, Jr. 0 Not Applicable Not Applicable
2300 Old Scenic Highway
Lake Wales, Florida 33859

Common Michael L. Glaser 1,029,033** Direct 5.57
Former/Secretary/Director
1050 17th Street
Suite 2300
Denver, Colorado 80202
- -------------- ------------------------- ---------- --------------- --------------
Total 12,449,787 67.38
========== =======
- ----------------------------------------------------------------------------------------
*William W. Becker's beneficial ownership of 6,534,250 shares of our common
stock is composed of: (a) 3,962,004 shares owned by Hartford Holdings, Ltd.
which is owned and controlled by William Becker; (b) 87,500 shares that William
Becker individually owns; (c) 484,746 shares of our common stock owned by Becker
Capital Management, which is solely owned and controlled by William Becker; and
(d) 2,000,000 shares held in the name of the following entities located at c/o
The Harbour Trust Co. Ltd. One Capital Place, P.O. Box 1787, Cayman Islands,
British West Indies, in which William W. Becker has voting power over such
shares: (i) 750,000 shares owned by Adara Investments, Ltd. a trust that is
maintained for the benefit of one of William Becker's (son/grandson); (ii)
500,000 shares owned by Wyse Investments, Ltd., a trust that is maintained for
the benefit of one of William Becker's (son/grandson); (iii) 750,000 shares
owned by Ionian Investments, Ltd., a trust that is maintained for the benefit of
one of William Becker's (son/grandson).
**Michael L. Glaser's ownership of 1,029,033 shares of our common stock is
composed of: (a) 816,533 shares owned by Michael L. Glaser individually; (b)
12,500 shares owned jointly by Michael L. Glaser and his wife, Catherine M.
Glaser; and (c) 200,000 shares in the name of Michael L. Glaser IRA Rollover.

-48-

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Our wholly owned subsidiary, Tracy Corporation II, leases 5,168 square feet of
office space at our executive offices, 1225 Sage Street in Gering, Nebraska from
our Chief Executive Officer, Michael Tracy, for a monthly lease payment of
$2,500. Michael Tracy owns the building where our offices are located.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits

Exhibit
Number Description
- ------- -----------------
10.1 Software OEM Agreement with Ericsson Messaging Systems Inc. (1)
10.2 Resellers Agreement with Ericsson Messaging Systems Inc. (1)
10.3 TRACCS Software Purchase Agreement (2)
10.4 Employment Agreement for Michael Tracy (2)
10.5 Employment Agreement for Joseph Schon (2)
10.6 Memorandum of Understanding with interWave Communications, Inc.
10.7 Customer Master Agreement with Cerillion Technologies Limited
10.8 Stock Purchase Agreement with Tracy Broadcasting Corporation
10.9 Tower Gate Finance Limited Agreement
10.10 Exchange Agreement between us and Hartford Holdings
10.11 Exchange Agreement between us and Ionian Investments, Ltd.
10.12 Exchange Agreement between us and Michael Tracy
10.13 Exchange Agreement between us and WYSE Investments. Ltd.
10.14 Exchange Agreement between us and Ardara Investments, Ltd.
10.15 Exchange Agreement between us and Becker Capital Investments, Ltd.
10.16 Exchange Agreement between us and Michael L. Glaser
10.17 Office Lease Agreement between Michael J. Tracy and Tracy Corporation II
10.18 Office Services Agreement between us and The Centre for Premier Suites
and Business Services, Inc.
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
- -----------------
(1) Previously filed and incorporated by reference to Company's Current Report
on SEC Form 10-Q as filed August 14, 2000.
(2) Previously filed and incorporated by reference to Company's Current Report
on SEC Form 10-Q as filed November 14, 2000.

We hereby incorporate the following additional documents by reference: (a) our
annual report on Form 10-KSB for the year ended December 31, 2002 which was
filed on December 2, 2003; and (b) our quarterly reports on Form 10-QSB for the
quarters ended: March 31, 2003 which was filed on March 16, 2003, June 30, 2003
which was filed on March 16, 2003, and September 30, 2003 which was filed on
March 17, 2003.

(b) Reports on Form 8-K
Not Applicable

-49-

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
The aggregate fees billed for the fiscal year ended December 31, 2003 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our Form 10-KSB or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for these fiscal
periods were estimated as follows: we paid our accountant, Stark Winter
Schenkein & Co., LLP, $30,000.

The aggregate fees billed for the fiscal year ended December 31, 2002 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our Form 10-KSB or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for these fiscal
periods were estimated as $20,000 that we paid to our accountant, Stark Winter
Schenkein & Co., LLP.

Audit-Related Fees
None.

Tax Fees
None.

All Other Fees
None.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Telemetrix Inc.

By /s/Michael J. Tracy June 7, 2004
Michael J. Tracy
President, Chief Executive Officer
and Chief Financial Officer
(Principal Executive and Accounting Officer)

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/ Michael J. Tracy June 7, 2004
Michael J. Tracy, Director, President,
Chief Executive Officer and Chief
Financial Officer (Principal Executive
and Accounting Officer)

By /s/ Patrick J. Kealy June 7, 2004
Patrick J. Kealy, Director

By /s/ William W. Becker June 7, 2004
William W. Becker, Director

-50-

EX-10.6 2 telemetrixex106.htm Exhibit 10.6 Memorandum of Understanding with interWave Communications, Inc.

Exhibit 10.6 Memorandum of Understanding with interWave Communications, Inc.


                           MEMORANDUM OF UNDERSTANDING

This Memorandum of Understanding ("MOU") is made and entered into by and between
interWAVE Communications, Inc. a company organized under the laws of the State
of Delaware, U.S.A., its principal place of business at 2495 Leghorn Street,
Mountain View, CA 94043 (hereafter referred to as "IWAV"); and, Telemetrix,
Inc., a corporation organized under the laws of the State of Delaware and having
its principal place of business at 1225 Sage Street, Gering, Nebraska 69341
(hereafter referred to as "Telemetrix"), together the Parties.

WHEREAS, IWAV is a developer and manufacturer of GSM and CDMA infrastructure
equipment; and

WHEREAS Telemetrix is a licensed and authorized mobile operator providing GSM
switching services and other services to mobile operators; and

WHEREAS, the Parties desire to create and enter into a Co-Marketing Agreement
for the purposes of enabling GSM and CDMA cellular network sales to small and
roaming-only operators in North America and the Caribbean

NOW, THEREFORE, the Parties hereby recite their present intentions and
understandings:

1.   Co-Marketing Obligations

     a)   The respective offerings of the companies address various technology
          requirements for the provision of wireless communications in the
          mobile operator environment. Pursuant to the terms of an agreement,
          both companies will collaborate on marketing the combined benefits of
          their equipment, software and services.

     b)   The companies will undertake joint marketing initiatives in order to
          develop new business opportunities together through new and existing
          distributors, channels and other business relationships. This will
          include, but may not be limited to, joint participation at trade
          shows, direct mail, speaking engagements, and the submittal of
          proposals to prospective customers.

2.   The Parties agree to enter into good faith negotiations to establish a
     definitive agreement establishing the rights, responsibilities and
     obligations of the Parties on or before June 30, 2004.

3.   Each Party will use reasonable efforts to promote the objectives of this
     MOU for as long as the MOU is in effect and ensure the availability of
     management and technical personnel to assist the other in  meeting the
     objectives of this MOU.

4.   Nothing in this Agreement is intended, or shall be construed, to require
     either Party to accept any terms and conditions in any proposal made by the
     other Party, except by written consent.

5.   This MOU shall remain in force from the effective date for four months
     thereafter unless it is terminated earlier in accordance with the following
     provisions.

     a)   the Parties finalize a definitive Agreement

     b)   without cause or excuse by either Party by delivering a notice of such
          termination to the other Party.  The termination of this MOU shall be
          deemed effective on the fifth (5th) day following the other Party's
          receipt of such termination notice.

The termination of this Agreement shall not abrogate the obligations of the
parties with respect to the protection of proprietary or confidential
information, as set forth in the mutual non-disclosure agreement dated XXXX.


6.   This Agreement is not intended by the parties to constitute or create a
     joint venture, partnership, or formal business organization of any kind,
     and the rights and obligations of the parties shall only be those expressly
     set forth herein. Neither party shall have authority to bind the other
     except to the extent authorized herein.

7.   Each party will bear all of its own costs, risks and liabilities it arising
     out of its obligations and efforts under this MOU during the period prior
     to establishment of a definitive Agreement. which are defined as the
     periods up to an award of a contract for the Program by the Government.


This MOU shall be deemed effective as of April 9, 2004 and shall expire on four
months thereafter unless terminated earlier in accordance with the Paragraph
hereof entitled TERMINATION.


IN WITNESS WHEREOF, the undersigned have executed this Memorandum of
Understanding as of the above date.


Telemetrix, Inc.                              interWAVE Communications, Inc.



Michael Tracy                                                 William T. Carlin
Chief Executive Officer                              Chief Operating Officer

EX-10.7 3 telemetrixex107.htm Exhibit 10.7 Customer Master Agreement with Cerillion Technologies Limited

Exhibit 10.7 Customer Master Agreement with Cerillion Technologies Limited

CERILLION TECHNOLOGIES LIMITED
15 Adeline Place
London
WC1B 3AJ

Customer Master Agreement Terms and Conditions (the "Master Agreement")

Agreement Number    270.01

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


THIS AGREEMENT is made on the 20th day of December 2003 (the "Commencement
Date") between Cerillion Technologies Limited whose principal business office is
shown above ("CERILLION") and Telemetrix Inc, with offices at 300 Village Green
Circle, Suite 201, Smyrna, GA 30080 United States of America ("TELEMETRIX").

CERILLION and TELEMETRIX hereby agree as follows:

This agreement shall include those schedules listed below which are designated
by TELEMETRIX initials, and future schedules referencing the above stated
agreement number (the "Schedules"). All future orders from TELEMETRIX to
CERILLION shall be governed by the terms and conditions referenced herein and
shall become effective upon acceptance by an authorised CERILLION employee.

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

Schedules                                            TELEMETRIX's Initials
   Schedule 1:   CERILLION Implementation
                 Services Agreement                  ____NOT USED_________
   Schedule 2:   CERILLION Customer Support and
                 Maintenance Agreement               _____________________
   Schedule 3:   CERILLION Third Party
                 Licence(s)                          _____________________
   Schedule 4:   CERILLION Escrow Agreement
                                                     _____________________
   Schedule 5:   CERILLION Price List
                                                     _____________________
   Schedule 6:   CERILLION Customer
                 Registration Form                   _____________________
   Schedule 7:   CERILLION Initial Services and
                 Roaming                             _____________________
   Schedule 8:   CERILLION Telemetry Device
                 Extension                           _____________________





1.   Appointment and Term

1.1  CERILLION hereby agrees to supply TELEMETRIX for resale by way of ASP /
     bureau services with the Base Products (the "Software"), the Third Party
     Products, and the Software Support Services and with the Documentation for
     the exclusive purpose of the supply of billing services to one or more
     organisations listed in Schedule 6 ("Customer").

1.2  TELEMETRIX shall register new Customers with CERILLION in accordance with
     the Customer Registration Process defined in clause 16.1.3 TELEMETRIX shall
     not be entitled to assign or subcontract any of its rights or obligations
     under this Agreement or appoint any agent to perform such obligations
     except as expressly allowed under this Agreement.

1.3  This Agreement together with the Schedules shall commence on the
     Commencement Date and shall continue until terminated by either party in
     accordance with Sub-Clause 1.4 below:

1.4  Either party may serve on the other written notice of termination of this
     Agreement to take place with immediate effect if the other:

     (a)  fails to observe or perform any material term or condition of this
          Agreement and such breach (if capable of remedy) continues for thirty
          (30) days after receipt of a written notice from the terminating party
          specifying the breach and requiring the same to be remedied; and/or

     (b)  disposes of the whole or a substantial part of its undertaking,
          property or assets, or stops payment of its debts, and/or is made
          insolvent or admits insolvency or files a winding up petition under
          the Insolvency Act 1986 or has a winding up petition filed against
          such other party.

1.5  Termination shall be without prejudice to any rights existing or accrued of
     the parties at the date of such termination.

1.6  All clauses in this Agreement stated (expressly or implied) to survive
     termination shall survive termination.

1.7  TELEMETRIX shall upon request from CERILLION and otherwise immediately upon
     termination of this Agreement deliver to CERILLION all CERILLION Property,
     confidential information, correspondence, other documents, specifications,
     papers and property (of whatever  kind) belonging to CERILLION or given to
     TELEMETRIX by CERILLION or to the Customer by CERILLION or TELEMETRIX
     during the terms of this Agreement.

2.   Licence

2.1  In consideration of TELEMETRIX's full payment of the Fees in accordance
     with clause 3 below, CERILLION hereby grants to TELEMETRIX and TELEMETRIX
     agrees to accept on the terms and conditions of this Agreement a
     non-exclusive and non-transferable licence to process customer and billing
     data for, and to give access to the Customer using:

     (a)  the Software for the Customer's internal use at the site(s) specified
          in the Order Form ("Site(s)"); and

     (b)  the Documentation.

2.2  In consideration of TELEMETRIX's full payment of the Fees in accordance
     with clause 3 below, CERILLION hereby grants to TELEMETRIX and TELEMETRIX
     agrees to accept on the terms and conditions of this Agreement a
     non-exclusive and non-transferable licence to use the Software and the
     Documentation for the purposes of configuration, integration, test and
     support of the Software at the Site for the benefit exclusively of the
     Customer.

2.3  Not withstanding the above Clauses 2.1 and 2.2, TELEMETRIX may request an
     extension of the number of Sites referred to in the licence granted under
     Clause 2.1(a), by completing the Site(s) section of an additional Order
     Form and then delivering it to CERILLION (the "Request").

2.4  Any Request  delivered to CERILLION in  accordance  with Clause 2.3 of this
     Agreement will be subject to approval of CERILLION. If accepted, CERILLION
     will notify TELEMETRIX of its decision and thereafter CERILLION shall
     include the additional Site(s) specified in the Request.

2.4  CERILLION hereby undertakes that such approval shall be decided not later
     than seven (7) days of receipt of the Request.

3.   Payment

3.1  TELEMETRIX agrees to pay to CERILLION the Fees as specified on the Order
     Form.

3.2  If TELEMETRIX fails to pay any sum due under this Agreement, without
     prejudice to the provisions contained in sub-clause 3.7 of the Master
     Agreement or to any other remedy, CERILLION may, after giving TELEMETRIX
     fourteen  days' written notice of its intention so to do, cease all work in
     progress in respect of the Supply or any part thereof until the payment be
     made; in which case the Implementation Fees shall be increased by the
     amount of the costs and expenses (calculated in accordance with Sub-Clause
     11.1 (a) of the Implementation Agreement) of CERILLION occasioned by such
     cessation and the subsequent resumption of work and TELEMETRIX shall grant
     a reasonable extension for the performance of the Implementation Agreement.

3.3  Additional Licence Fees are based on the number of Customer Subscriptions
     and shall be paid by TELEMETRIX at the rates set out in the Order Form on a
     one off basis, if over a one (1) month period, the average number of
     Subscriptions exceeds the thresholds set out in the Order Form. Where any
     Additional Licence Fee is payable CERILLION shall invoice TELEMETRIX
     separately and payment of the Additional Licence Fee shall be due and
     payable in accordance with clause 3.6 below.

3.4  All sums due pursuant to this Agreement shall be exclusive of local taxes,
     duties, levies or other deductions or withholdings for which TELEMETRIX
     shall be liable in accordance with the law.

3.5  TELEMETRIX agrees, and shall procure that the Customer agrees to make and
     keep sufficient records to enable CERILLION to verify all payments due to
     it under this Agreement, and to provide access by CERILLION to such records
     upon receiving written request by CERILLION.

3.6  All payments due under this Agreement shall be payable in US Dollars in
     cleared funds into a bank account nominated by CERILLION within 30 days of
     the date of CERILLION's relevant invoices.

3.7  No counterclaim or set-off by TELEMETRIX may be deducted from any payment
     due to CERILLION on any account whatsoever without the express prior
     written consent of CERILLION.

4.   TELEMETRIX's obligations

4.1  TELEMETRIX warrants that it:

     (a)  shall not use, reproduce, sub-licence, or otherwise deal in the
          Software or the source code of the Software, the Documentation or any
          copies thereof except as expressly permitted by this Agreement;

     (b)  shall use CERILLION's trademarks and trade names relating to the
          Software and/or the Documentation only in the registered or agreed
          style in connection with use of the Software or the Documentation
          pursuant to its obligations under this Agreement and not alter,
          obscure,remove, interfere with or add to any of the trademarks, trade
          names, markings or notices affixed to or contained in the Software or
          the Documentation;

     (c)  shall not reverse engineer, de-compile or disassemble the Software or
          any portion thereof, nor otherwise attempt to create or derive the
          Source Code; and

     (d)  shall provide CERILLION staff, agents and  sub-contractors with full,
          free and safe access to its premises and its Customer's premises, and
          shall provide such office  accommodation and facilities without charge
          which CERILLION may reasonably require in order to fulfil its
          obligations under this Agreement.

     (e)  shall sublicense the Software and Documentation on terms no less
          stringent than this Agreement, including for the avoidance of doubt
          terms exactly parallel to this Clause 4.1.

4.2  For the avoidance of doubt, the Customer and TELEMETRIX shall be able to,
     without further reference to CERILLION:

     (a)  make a copy (in  whole or in part) of the Software as is absolutely
          necessary for the purpose of back-up or archiving

     (b)  make a copy of the Software for the purposes of establishing an
          offline environment to be used for test and training purposes provided
          that such copy of the Software shall not be used for any operational
          purpose provided that the original and all copies of the Software
          shall remain the property of CERILLION and all such copies include
          CERILLION's copyright notice and/or trademarks.

4.3  TELEMETRIX agrees to make available to CERILLION an authorised
     representative who shall:

     (a)  be authorised to make binding decisions for TELEMETRIX with regard to
          this Agreement, including any changes and/or additions to the
          Schedules or other variation hereto; and

     (b)  review all documents that are provided by CERILLION for review
          hereunder so that corrections or changes may be made by CERILLION; and

     (c)  provide CERILLION with all relevant information concerning
          TELEMETRIX's operations and activities which may be required by
          CERILLION hereunder.

4.4  Where participation by, or access by CERILLION to, TELEMETRIX's and the
     Customer's own staff is necessary in relation to this Agreement, TELEMETRIX
     agrees that such staff shall be available at the times agreed by the
     parties. In reaching such agreement, TELEMETRIX shall endeavour to meet any
     reasonable timetable proposed by CERILLION. Furthermore, where such staff
     participate in providing the Supply, TELEMETRIX shall ensure that such
     staff possess the appropriate skills and experience for the tasks assigned
     to them.

5.   CERILLION Warranty

5.1  CERILLION warrants that on delivery the Software shall conform in all
     material respects with the corresponding Function Catalogue and Controlling
     Specification.

5.2  Both parties acknowledge that:

     (a)  it is possible for software to corrupt not only the Software but other
          software used on the same system including the operating system
          software;

     (b)  such corruption of software may remain dormant and will not
          necessarily be found during a period of writing or testing.

5.3  CERILLION warrants that it has used all reasonable endeavours during the
     writing of the Software to ensure that no viruses, trojan horses, worms,
     software bombs or similar items ("Viruses") are coded or introduced to the
     Software.

5.4  CERILLION shall supply without charge any corrections, rectifications or
     modifications required in order for the Software to comply with the
     warranties of this clause 5 provided that such defects in the Software are
     brought to the attention of CERILLION in writing together with all
     information necessary to prove the defect within a period of three calendar
     months of delivery of the Software. CERILLION shall within fourteen (14)
     days to determine the defect(s) and if found defective, to replace/rectify
     within seven (7) days of such discovery/establishment at CERILLION'S own
     expense. For the avoidance of doubt, this clause does not entitle
     TELEMETRIX to any of the services of the Software Support Services.

6.   Intellectual Property Rights

6.1  Title to the Software, New Releases, Documentation, all other specification
     documents, manuals, drawings and other media and materials for the Software
     or relating to any New Releases, modifications, Enhancements or
     replacements thereof supplied by CERILLION under this Agreement (the
     "CERILLION Property"), are and shall remain the property of CERILLION or
     its licensors. In addition, applications developed under the Software
     Support Services are and shall remain the property of CERILLION unless
     otherwise agreed in writing.

6.2  Any modification, improvement, addition, invention or upgrade deriving from
     or relating to the CERILLION Property developed and/or suggested by
     TELEMETRIX or the Customer will be promptly disclosed and delivered by
     TELEMETRIX to CERILLION. TELEMETRIX assigns by way of future assignment all
     Intellectual Property Rights arising in any work or material produced by
     TELEMETRIX as a result of CERILLION carrying out its obligations under this
     Agreement, and TELEMETRIX shall execute all documents and co-operate fully
     with all procedures required to give full effect to such assignments.
     Further, TELEMETRIX will procure that the Customer assigns by way of future
     assignment all Intellectual Property Rights arising in any work or material
     produced by the Customer as a result of CERILLION carrying out its
     obligations under this Agreement, and the Customer shall execute all
     documents and co-operate fully with all procedures required to give full
     effect to such assignments.

6.3  TELEMETRIX shall notify CERILLION immediately if it becomes aware of any
     unauthorised use of any of the CERILLION Property and will assist CERILLION
     in taking all steps to defend such rights.

7.   Escrow

     Following TELEMETRIX's written request, the parties shall enter into an
     escrow agreement in respect of the source code of the Software and
     associated documentation in the form of the agreement attached at Schedule
     4 and agree to comply with all terms of the said agreement. All charges
     involved will be paid by TELEMETRIX. For the avoidance of doubt, any
     materials released under the provisions of the aforementioned escrow
     agreement may only be used in accordance with this Agreement and for the
     purposes described herein.

8.   Indemnity

8.1  Subject to clause 10 below, CERILLION agrees to indemnify and save harmless
     at its own expense TELEMETRIX from and against any claims that the
     CERILLION Property infringes the Intellectual Property Rights of any third
     party in the United Kingdom but excluding patent applications which could
     not reasonably have come to the attention of CERILLION at the time of
     delivery of the relevant CERILLION Property.

8.2  TELEMETRIX undertakes that CERILLION shall be given notice of any claim
     described in 8.1 above that is made against TELEMETRIX and CERILLION shall
     have the sole right to defend and settle such claims at its own discretion
     in order to settle or oppose any such claims.

8.3  In the event that any such infringement occurs or may occur CERILLION at
     its discretion may:

     (a)  procure for the  Customer the right to continue using the infringing
          part of the CERILLION Property; or

     (b)  modify or amend the infringing part of the CERILLION Property so that
          the same becomes non-infringing; or

     (c)  replace the infringing part of the CERILLION Property by other
          software of similar capability.

8.4  The cost of all work carried out by CERILLION pursuant to clause 8.3 above
     shall be met by the party responsible for the infringement.

The foregoing sub-clauses state the entire liability and the exclusive
remedy of each of the parties with respect to the infringement or alleged
infringement by use of the CERILLION Property of any patent, trade or
     service mark or copyright or other intellectual property right.

9.   Confidentiality

9.1  All information, data, drawings, specification, documentation, software
     listings, source or object code which either party has created or which it
     may from time to time create in supporting or enhancing the Software or
     Documentation (other than the ideas and principles underlying the same)
     (the "Confidential Information") is confidential to the creating party.
     Each party agrees that it shall use the Confidential Information of the
     other party solely in accordance  with the provisions of this Agreement and
     that each party shall not at any time during or after completion, expiry or
     termination of this Agreement disclose such Confidential Information
     whether directly or indirectly to any third party without the prior written
     consent of the other party.

9.2  TELEMETRIX further agrees that it shall not itself or through any
     subsidiary, agent or third party modify, vary, enhance, copy, sell, lease,
     licence, sub-license or otherwise deal with the Software or any part or
     parts or variations, modifications, copies New Releases, versions or
     enhancements thereof.

9.3  The foregoing provisions shall not prevent the disclosure or use by either
     party of any information which is or hereafter, through no fault of that
     party, becomes public knowledge or to the extent permitted by law.

9.4  Notwithstanding the other provisions of this clause 9, CERILLION shall have
     the right to refer publicly in its website, brochures, proposals,
     presentations and other advertising materials to the existence of this
     agreement and the general nature of the products and services carried out
     for TELEMETRIX such information to be forwarded to TELEMETRIX for approval.

9.5  For the avoidance of doubt, TELEMETRIX shall impose terms of
     confidentiality on the Customer no less stringent than this clause 9.

10.  Limitation of Liability

10.1 Save as expressly provided in this Agreement there are no other conditions,
     non-fraudulent warranties or representations (express or implied) with
     respect to the Software and any warranty or representation implied by law
     are expressly excluded to the maximum extent permitted by law. TELEMETRIX
     expressly affirms that it is not relying on any non-fraudulent warranty,
     condition or representation not contained in this agreement.

10.2 Except as provided for explicitly in clause 1.4, either party's sole
     remedies in respect of any breach of the terms of this Agreement shall be
     limited to damages.

10.3 Nothing in this Agreement shall purport to exclude or limit either party's
     liability for death or personal injury to the extent arising from the
     negligence of that party or its employees, agents or sub-contractors. For
     the avoidance of doubt the whole of this clause 10 shall be subject to this
     clause 10.3.

10.4 Subject to sub-clause 10.3, the parties will not be liable to each other
     for the following loss or damage however caused and even if foreseeable by
     that party:

     (a)  losses which may be caused by defective products from other
          manufacturers; or

     (b)  any indirect, consequential, incidental or special damages or any
          direct or indirect loss of profits, revenue, goodwill, loss of data or
          anticipated savings whether sustained by TELEMETRIX or any other party
          even if advised of the possibility of such loss or damages.

10.5 Each party shall maintain appropriate and adequate insurance to cover its
     liabilities under this Agreement, however, subject to sub-clause 10.3
     Cerillion's entire liability in respect of all defaults shall be limited to
     the lesser of the total amount payable under the Agreement and
     (pound)1,000,000.

11.  Force Majeure

     Neither Party shall be liable to the other Party nor be held in breach of
     this Agreement if prevented hindered or delayed in the performance or
     observance of each party's obligations hereunder resulting from acts beyond
     each party's control including but not limited to acts of God, acts or
     regulations of any governmental or supra-national authority or any third
     party supplier, war or national emergency, accident, fire, riot, strikes,
     lock-outs, industrial disputes, epidemics, third party hardware, software
     or other equipment, communication line failure or failure and fluctuation
     of power supply.

12.  Non-solicitation

12.1 During and for a period of twelve (12) months after the termination of this
     Agreement, neither Party shall solicit the services of nor employ any
     employee of the other Party.

12.2 Each party agrees that if it employs or engages any person contrary to
     Sub-Clause 8.2 above the party in default shall be liable to pay to the
     other party an amount equal to such person's salary per annum at the time
     of leaving the employment of the other party.

13.  Encryption Export Statement

     TELEMETRIX acknowledges that export or use of the Software may be subject
     to compliance with laws, rules and regulations of bodies having
     jurisdiction over such operations and agrees to comply with the same. If
     the export or use of the Software or products containing the Software is so
     controlled CERILLION shall have no responsibility to obtain any such
     approval required by any applicable laws, rules or regulations.

14.  Notices

14.1 Any notice, which expression includes any other communication whatsoever
     which is made in accordance with this Agreement, should reference the
     appropriate CERILLION contract number and shall, without prejudice of
     giving it, be sufficiently given if it is sent by registered or recorded
     delivery first class post to the other party to the address stated on the
     signature page of this Agreement or to such other address as the respective
     party may advise by notice in writing from time to time.

          The addressees shall be:

          For CERILLION                               For TELEMETRIX

          The Commercial Manager                      The Chief Executive

14.2 Notices shall be deemed to have been properly given after three Working
     days in the case of notices posted from the United Kingdom to a destination
     therein and eight Working days in the case of all other notices posted from
     the United Kingdom to a destination therein and eight Working days in the
     case of all other notices posted internationally.

15.  General

15.1 The parties agree that this Agreement contains the entire agreement of the
     parties and supersede all prior agreements, understandings or arrangements
     between them and further each party acknowledges:

     (a)  that it has not entered into this Agreement or agreed the Schedules on
          the basis of and does not rely and has not relied upon any statement
          or representation (whether negligently made or innocently made) or
          warranty or other provision (whether oral, written, express or
          implied) except those expressly repeated or referred to in this
          Agreement and/or the Schedules; and

     (b)  the only remedy or remedies available in respect of any
          misrepresentation or untrue statement made to it shall be a claim for
          breach of this Agreement and/or the Schedules, and each party further
          acknowledges that this clause shall not apply to any statement,
          representation or warranty made fraudulently or to any provision of
          this Agreement and/or the Schedules which was induced by fraud so that
          nothing in this Agreement or the Schedules shall affect the remedies
          available to the parties in respect of such fraudulent matters.

15.2 In the event that any provision of this Agreement is adjudged to be
     constructed so it is deemed to be in breach of any applicable law such that
     that provision is unenforceable then the parties shall re-negotiate in good
     faith such offending provision and any related provisions.

15.3 In the event that TELEMETRIX issues purchase orders which refer to products
     and/or services listed on the Order Form or any extension of such products
     and services, such purchase orders shall be regarded as for the
     administrative convenience of TELEMETRIX only, and any terms and conditions
     attached to such purchase orders shall not form part of this Agreement nor
     be regarded as superseding this Agreement.

15.4 Unless expressly provided in this Agreement, no express term of this
     Agreement or any term implied under it is enforceable pursuant to the
     Contracts (Rights of Third Parties) Act 1999 by any person who is not a
     party to it.

15.5 All rights and remedies of the parties hereto are separate and cumulative.
     The waiver or failure of either party to exercise in any respect any right
     or remedy provided herein shall not be deemed a waiver of any further right
     or remedy hereunder.

15.6 The headings of the terms and conditions herein contained are inserted for
     convenience of reference only and are not intended to be part of or to
     affect the meaning or interpretation of any of the terms and conditions of
     this Agreement.

15.7 This Agreement shall be subject to, governed by, and construed in
     accordance with the laws of England and Wales and the parties hereby submit
     to the exclusive jurisdiction of the English Courts.

16.  Customer Registration Process

16.1 TELEMETRIX will carry out its own marketing sales efforts at its own cost
     to lead to the identification and sale of billing services to potential
     customers.

16.2 Upon identification of a potential customer ("Prospect"), TELEMETRIX will
     provisionally register such customer with CERILLION by providing the
     information required in the Customer Registration Form in Schedule 6.

16.3 The Parties will agree any implementation services required by TELEMETRIX
     to be provided by CERILLION specific to the Prospect at this time and
     document (directly or by reference) such agreement on the Customer
     Registration Form. Fees and terms for such supply shall be separately
     agreed.

16.4 In the event that additional support services are required to be provided
     by Cerillion specific to the Prospect, these shall also be agreed at this
     time and document (directly or by reference) such agreement on the Customer
     Registration Form. Fees and terms for such supply shall be separately
     agreed.

16.5 In the event that any complementary software is to be provided, such
     software shall be invoiced by Cerillion upon supply, and such invoice must
     be paid by TELEMETRIX within 30 days.

16.6 Registration will be effective on payment of the first Recurrent Fee as
     defined in the agreed and completed Customer Registration Form.

16.7 Support Services will be provided to TELEMETRIX in accordance with Schedule
     2 for the benefit of its Customers. In the event that after 12 months of
     operation of this Agreement, the total number of subscribers for all
     Customers does not exceed ten thousand, CERILLION reserves the right either
     to terminate support, or to charge an additional low-usage support fee.

16.8 If at any time a CERILLION invoice for a Recurrent Fee or other fee for a
     specific Customer is overdue by more than 30 days, registration of that
     Customer shall be deemed to be terminated.

17.  Definitions

     In this Agreement, save for where expressly provided otherwise by the
     Schedules themselves, the following words and expressions shall have the
     following meanings:

     "Additional Licence Fees"       means the fees payable by TELEMETRIX in the
                                     event that the number of Subscriptions
                                     reaches the thresholds described in the
                                     Order Form;

     "Additional Software"           means the changes or additions to the Base
                                     Products defined within the Controlling
                                     Specification and listed in the Statement
                                     of Supply in Schedule1.;

     "Agreement"                     means these terms and conditions, the
                                     contents of the Schedules and Appendices
                                     appended hereto as amended from time to
                                     time and any written and authorised
                                     amendments hereto;

     "Base Product"                  means a software product of CERILLION, as
                                     described by its corresponding "Function
                                     Catalogue", listed in the Order Form
                                     attached to this Agreement at Schedule 5;

     "Documentation"                 means in respect of a Base Product, the
                                     documents entitled "Function Catalogue"
                                     "User Guide" and "Operations Manual" which
                                     correspond to such Base Product, and in the
                                     respect of Additional Software, any
                                     documents relating to such Additional
                                     Software specified in the Schedule 1
                                     "Statement of Supply";

     "Enhancement"                   means a new or improved feature of the
                                     Software which may be specified in the
                                     product road map;

     "Fees"                          means the Licence Fees, Implementation
                                     Fees, Software Support Fees, Additional
                                     Licence Fees, Third Party Licence Fees,
                                     specified on the Order Form and all other
                                     fees that may be agreed between the parties
                                     in writing from time to time;

     " Implementation Fee"           means the fee set out in the Order Form
                                     payable to CERILLION for the delivery of
                                     Software, Documentation and Implementation
                                     Services pursuant to Schedule 1 ;

     " Implementation Services"      means the ancillary items or ancillary
                                     services specified in the Schedule 1
                                     "Statement of Supply" to be supplied by
                                     CERILLION in accordance with the terms of
                                     that Schedule;

     "Intellectual Property "        means including but not limited to, all
                                     past and future copyright, related rights,
                                     patents, utility models, trade marks, trade
                                     names, service marks, design rights,
                                     database rights, semi-conductor topography
                                     rights, rights in unfair competition,
                                     rights in undisclosed or confidential
                                     information (such as know-how, trade
                                     secrets and inventions (whether patentable
                                     or not)), and other similar intellectual
                                     property rights (whether registered or not)
                                     and applications for such rights as may
                                     exist anywhere in the world;

     "Intellectual Property Rights"  means all title and proprietary rights in
                                     the Intellectual Property;

     "Licence Fee"                   means the fee payable to CERILLION for the
                                     use of the Software and set out in the
                                     Order Form;

     "Order Form"                    means the Order Form for the Software and
                                     Software Support Services at Schedule 5 to
                                     this Agreement;

     "New Release(s)"                means a new formal version of the Software
                                     or improved, updated or upgraded version of
                                     the Software, which may include both bug
                                     fixes and Enhancements;

     "Software Support Fee(s)"       means the fees payable by TELEMETRIX to
                                     CERILLION for the Software Support Services
                                     as set out in the Order Form;

     "Software Support Services"     means the services to be supplied by
                                     CERILLION to TELEMETRIX and which are set
                                     out in the Appendix to Schedule 2 to this
                                     Agreement;

     "Subscription"                  means a communication service provided by
                                     the Customer and subscribed to by an end
                                     user for which usage events can be
                                     individually measured or recorded and for
                                     which there is usually a unique dialling
                                     number or IP address, e.g. a single public
                                     telephone exchange line or a single GSM
                                     mobile subscription;

     "Third Party Products"          means the hardware and software products
                                     together with their associated
                                     documentation manufactured by a third party
                                     but to be provided by CERILLION under this
                                     Agreement to the extent listed on the Order
                                     Form;

     Third Party Product Fees        Means the fees payable by TELEMETRIX to
                                     CERILLION for the Third Party Products as
                                     set out in the Order Form;

     "VAT"                           means Value Added Tax;

     "Working Day(s)"                means the period 0900 to 1700 Greenwich
                                     Mean Time or British Summer Time, Monday to
                                     Friday.  Working Days shall not include
                                     English public holidays nor CERILLION
                                     holidays (reasonable prior notice of which
                                     will be given to TELEMETRIX by CERILLION).



         CERILLION                          /s/TELEMETRIX INC.
                                            --------------------------
                                                  (TELEMETRIX)

By:       /s/Louis T. Hall                   By: Michael J. Tracy
         --------------------------         --------------------------
            (type or print name)              (type or print name)

         /s/illegible                       /s/Michael J. Tracy
         --------------------------         --------------------------
                 (signature)                       (signature)

Title:   Managing Director            Title: President
         --------------------------         --------------------------

Date:    7/4/2004                     Date: April 13, 2004
         --------------------------         --------------------------


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





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

CONTRACT AMENDMENT

Agreement Number   270.01                Amendment Number   01

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



Whereas        Cerillion Technologies Ltd and Telemetrix Inc. ("the Parties")
               have concluded a Customer Master Agreement dated 20th December
               2003 ("the Agreement")

And Whereas    both Parties are desirous of amending that Agreement


It is hereby agreed that the terms of the Agreement shall be varied as follows:

1. Amendments to front sheet only of Master Agreement, as defined in attachment.

2. Addition of Schedule 7, as defined in attachment.

3. Addition of Schedule 8, as defined in attachment


  --------------- --------------------------- ---------------- -----------------
  CERILLION                                   TELEMETRIX
  Signature                                   Signature /s/Michael J. Tracy
  Printed Name:                               Printed Name: Michael J. Tracy
  Title:                                      Title: Pres.
  Date:                                       Date: April 13, 2004
  Fax. No.:                                   Fax. No.: 308-436-5165
  --------------- --------------------------- ---------------- -----------------
- --------------------------------------------------------------------------------



- --------------------------------------------------------------------------------
Master Agreement: 270.01         Version: 1.0


CERILLION TECHNOLOGIES LTD
15 Adeline Place
London
WC1 3AJ




Schedule 7: CERILLION Initial Services and Roaming


Agreement Number                          270.01
                                 --------------------------

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



By initialling here and in the appropriate space on the face of the Agreement to
indicate the intention to have this Price List apply, the Customer agrees to the
following terms and conditions which are incorporated in and made a part of the
Master Agreement.



Customers Initials _________________ Date: _________________

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


1    Initial Services
1.1  CERILLION shall provide services to set up and configure the Software prior
     to its use by TELEMETRIX to support its first customer. These services
     ("Initial Services") shall be limited to the following:

     ------------------ --------------------------------------------------------
     Customizations:    Mediator Collector for Telos MSC
     ------------------ --------------------------------------------------------
                        Mediator Collector for Ericsson SMSC
     ------------------ --------------------------------------------------------
                        Mediator Collector for ETSI GPRS GSN
     ------------------ --------------------------------------------------------
                        Mediator File Splitting based upon operator
     ------------------ --------------------------------------------------------
                        Provisioning notification via email
     ------------------ --------------------------------------------------------
     Configuration:     Assist TELEMETRIX to set-up Cerillion configuration
     ------------------ --------------------------------------------------------
     Installation       Provide hardware and 3rd party license specifications
     ------------------ --------------------------------------------------------
                        Assist with the set-up of hardware to support Cerillion
     ------------------ --------------------------------------------------------
                        Assist with the install of Cerillion and 3rd party
                        licenses
     ------------------ --------------------------------------------------------
     Integration        Perform software integration testing of customizations
                        defined above
     ------------------ --------------------------------------------------------
                        Assist TELEMETRIX with system integration testing
     ------------------ --------------------------------------------------------
     Post Live Support  Provide 3rd line support in accordance with Schedule 2
     ------------------ --------------------------------------------------------

- --------------------------------------------------------------------------------
1.2  The Parties recognise that no form of acceptance testing or `end user'
     operations and user training shall be carried out as part of these Initial
     Services.

1.3  The Initial Services shall be provided without charge to TELEMETRIX by
     CERILLION.

1.4  In consideration for the supply of the Initial Services, TELEMETRIX shall
     exclusively use the CERILLION Software for the supply of billing services
     to its customers for a period of three years from the Commencement Date,
     excepting that, in the event that TELEMETRIX has undertaken to offer
     billing services to customers using CDMA technology, and CERILLION cannot
     supply an upgrade to the Software to provide a billing solution for such
     technology within 60 days of the written notification of a firm requirement
     to do so, TELEMETRIX may utilise  another  solution for CDMA billing until
     the CERILLION upgrade is available.

2    Roaming

2.1  In consideration of the use of the CERILLION Software for the billing of
     roaming revenue, TELEMETRIX will remit seven and one half percent (7.5%) of
     the gross income claimed from other operators to CERILLION on a monthly
     basis, subject to a minimum monthly payment of one thousand dollars (USD
     1,000), payable from the first month in which a TAP file is submitted to a
     TAP clearing house by TELEMETRIX. The definition of Recurrent Fee is
     extended accordingly.

3    Further Development

3.1  CERILLION will undertake to develop the following interfaces and to supply
     these without charge, when the monthly income received by CERILLION from
     TELEMETRIX exceeds twenty thousand dollars (USD 20,000):

     -------------------------------------------
     o     Automatic provisioning for Telos MSC
     -------------------------------------------
     o     Automatic provisioning for Voicemail
     -------------------------------------------


4    Take-on of new operators

4.1  For each new operator for which billing services will be provided  by
     TELEMETRIX under this Agreement, a fee is payable on registration ("Initial
     Fee").  The Initial Fee is set to USD 10,000, and will be invoiced by
     Cerillion on acceptance by Cerillion of the registration of a new Customer,
     as described in Schedule 6. An additional Initial Fee will be charged on
     re-registration, if the Customer has been de-registered at some point in
     the past.

4.2  Any additional services for a new Custonmer will be dealt with as described
     in Schedule 6.

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



- --------------------------------------------------------------------------------
Master Agreement: 270.01                                   Version: 1.0



CERILLION TECHNOLOGIES LTD
15 Adeline Place
London
WC1 3AJ




Schedule 7: CERILLION Telemetry Device Extension


Agreement Number       270.01
                  -----------------

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



By initialling here and in the appropriate space on the face of the Agreement to
indicate the intention to have this Price List apply, the Customer agrees to the
following terms and conditions which are incorporated in and made a part of the
Master Agreement.



Customers Initials _________________    Date: _________________

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



1    Telemetry Devices

1.1  A "Telemetry Device" is a remote sensor and/or data logger that returns the
     data collected to a central point by transmitting it as calls across a
     mobile network.

1.2  In consideration for the fees detailed in clause 1.3 below and the
     undertakings in clause 1.5 below, CERILLION hereby extends the licence
     granted for the use of the Software in the Master Agreement for the billing
     of mobile calls made by Telemetry Devices.

1.3  For each Telemetry Device registered to transmit calls or actually making
     calls that will be billed by the CERILLION Software, TELEMETRIX will remit
     the sum of thirty-five cents (USD 0.35) per month to CERILLION. The
     definition of Recurrent Fee shall be extended accordingly.

1.4  The "Exclusive Date" is defined as the date three calendar months from the
     date of execution of this Schedule.

1.5  Where TELEMETRIX has the requirement to bill for calls made by Telemetry
     Devices, TELEMETRIX shall exclusively use the CERILLION Software for this
     purpose , such restriction to apply for a period of three years from the
     Exclusive Date, excepting that, in the event that CERILLION cannot supply
     an upgrade to the Software to provide a billing solution for such
     technology within 60 days of the date of execution of this Schedule,
     TELEMETRIX may utilise another solution until the CERILLION upgrade is
     available.

1.6  For the avoidance of doubt, no extension of the Initial Services is
     provided by this Schedule.
- --------------------------------------------------------------------------------

EX-10.8 4 telemetrixex108.htm Exhibit 10.8 Stock Purchase Agreement with Tracy Broadcasting Corporation

Exhibit 10.8 Stock Purchase Agreement with Tracy Broadcasting Corporation


                            STOCK PURCHASE AGREEMENT


     THIS AGREEMENT is made and entered into this 26th day of May, 2003, by and
between Telemetrix Inc., (hereinafter referred to as "Seller") and Tracy
Broadcasting Corporation, (hereinafter referred to as "Purchaser");

W I T N E S S E T H:

     WHEREAS, the Seller is authorized to issue up to 25,000,000 shares of
common stock of Telemetrix Inc., (hereinafter referred to as the "Corporation"),
a Delaware corporation, which Corporation has issued capital stock of 18,296,672
shares of $.001 par value common stock, and

     WHEREAS, the Purchaser desires to purchase 10,042,500 shares of said stock
and the Seller desires to sell said stock, upon the terms and subject to the
conditions hereinafter set forth;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and in order to consummate the purchase and the
sale of the Corporation's Stock aforementioned, it is hereby agreed as follows:

     1. PURCHASE AND SALE:

     Subject to the terms and conditions hereinafter set forth, at the closing
of the transaction contemplated hereby, the Seller shall sell, and immediately
have issued for delivery to Purchaser certificate(s) representing such stock,
and the Purchaser shall purchase from the Seller the Corporation's Stock in
consideration of the purchase price set forth in this Agreement. The
certificates representing the Corporation's Stock shall have all the necessary
documentary transfer tax stamps affixed thereto at the expense of the Seller.

     The closing of the transactions contemplated by this Agreement (the
"Closing"), shall be held at Gering, Nebraska on May 15, 2003, at 1225 Sage
Street, or such other place, date and time as the parties hereto may otherwise
agree.

     At closing, the Seller shall deliver to Purchaser, documentation from
Hartford Holdings, Ardara, Wyse & Ionian Investments, Michael J. Tracy, Michael
L. Glaser, and Becker Capital Management representing and attesting the
conversion of all debt held by those entities into equity in Seller and furthre
representing the voluntary reduction in the number of shares of common stock of
the seller held by each in exchange for shares of a preferred stock issue of
Seller.

     2. AMOUNT AND PAYMENT OF PURCHASE PRICE.

     The total consideration and method of payment thereof are fully set out in
Exhibit "A" attached hereto and made a part hereof.

     3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby warrants and
represents:

     (a) Organization and Standing.

         Corporation is a corporation duly organized, validly existing and in
good standing



- --------------------------------------------------------------------------------
                                     Page 1                           05/25/03





under the laws of the State of Delaware and has the corporate power and
authority to carry on its business as it is now being conducted.

     (b) Restrictions on Stock.

     i. The stock is "restricted" as defined in SEC Rule 144 and any
certificates issued to Purchaser may bear a restrictive legend concerning these
restrictions.

     ii. Seller is the lawful owner of the Stock, free and clear of all security
interests, liens, encumbrances, equities and other charges.

     iii. There are no existing warrants, options, stock purchase agreements,
redemption agreements, restrictions of any nature, calls or rights to subscribe
of any character relating to the stock, nor are there any securities convertible
into such stock.

     4. REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.

     Seller and Purchaser hereby represent and warrant that there has been no
act or omission by Seller, Purchaser or the Corporation which would give rise to
any valid claim against any of the parties hereto for a brokerage commission,
finder's feel or other like payment in connection with the transactions
contemplated hereby.

     5. GENERAL PROVISIONS

     (a) Entire Agreement.

     This Agreement (including the exhibits hereto and any written amendments
hereof executed by the parties) constitutes the entire Agreement and supersedes
all prior agreements and understandings, oral and written, between the parties
hereto with respect to the subject matter hereof.

     (b) Sections and Other Headings.

     The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

     (c) Governing Law.

     This agreement, and all transactions contemplated hereby, shall be
governed by, construed and enforced in accordance with the laws of the State of
Nebraska. The parties herein waive trial by jury and agree to submit to the
personal jurisdiction and venue of a court of subject matter jurisdiction
located in Scotts Bluff County, State of Nebraska. In the event that litigation
results from or arises out of this Agreement or the performance thereof, the
parties agree to reimburse the prevailing party's reasonable attorney's fees,
court costs, and all other expenses, whether or not taxable by the court as
costs, in addition to any other relief to which the prevailing party may be
entitled.

     (d) Signatures

     This Agreement may be executed in counterparts, with each such duly
executed counterpart having the same validity, force and effect as the original.


- --------------------------------------------------------------------------------
                                     Page 2                           O5/25/03




     (e) Facsimile Copies

     A facsimile copy of this document and any signatures shall be considered
for all purposes and intent as legal and binding originals.



     IN WITNESS WHEREOF, this Agreement has been executed by each of the
individual parties hereto on the date first above written.





     Signed, sealed and delivered in the presence of:


Telemetrix Inc.                               Telemetrix Inc.

/s/William W. Becker                          /s/Michael L. Glaser
William W. Becker                             Michael L. Glaser
Chairman of the Board of Directors            Secretary



Tracy Broadcasting Corporation

/s/Michael J. Tracy
Michael J. Tracy, President










- --------------------------------------------------------------------------------
                                     Page 3                            05/25/03







                                  EXHIBIT "A"



AMOUNT AND PAYMENT OF PURCHASE PRICE

     (a) Consideration.

     As total consideration for the purchase and sale of the Corporation's
Stock, pursuant to this Agreement, the Purchaser shall pay to the Seller the sum
of Four Hundred One Thousand Seven Hundred Dollars ($401,700), such total
consideration to be referred to in this Agreement as the "Purchase Price".

     (b) Payment.

     The Purchase Price shall be paid as follows:

     i. The sum of Four Hundred One Thousand Seven Hundred Dollars ($401,700) to
be delivered to Seller upon the execution of this Agreement.


















- --------------------------------------------------------------------------------
                                     Page 4                           O5/25/03

EX-10.9 5 telemetrixex109.htm Exhibit 10.9 Tower Gate Finance Limited Agreement

Exhibit 10.9 Tower Gate Finance Limited Agreement

TOWERGATE

AGREEMENT

BETWEEN

Tower Gate Finance Limited ("Tower Gate");

and Telemetrix Inc (the "Company" or "Telemetrix").

1. INVESTMENT

1.1. Upon signing of this Agreement, by signing the attached letter, Tower Gate,
its management or its associates will invest USD $30,000 in Telemetrix
stock at a share price of $0.04 per share. This being the average share
price of the last investment in the Company, and the lowest subscription
made to-date in the Company. These 750,000 shares will be divided by 200
and taken as 3,750 Series D Preference Shares.

1.2. By a series of agreed payments, Tower Gate, its management or its
associates will invest up to a further USD $150,000 in Telemetrix stock,
again at $0.04 per share, being 3,750,000 Ordinary shares, taken as 8,750
to 18,750 Series D Preferred shares. It is anticipated that this amount
will be sufficient to fund the working capital of the Company until the
additional $2M investment round is completed.

1.3. These amounts invested as detailed in Sections 1.1 and 1.2 will be used by
the Company to make the payments listed in Appendix A hereto.

1.4. As soon as practicable hereafter and before the $2M raise as referred to
below, the Company will - by a series of steps:

o Finalise the Company's balance sheet as referred to in the spreadsheet
listed in Appendix 81 hereto by effecting amongst others the changes
as defined in Appendix 82.

o Reach a satisfactory agreement with the holders of the $1,200,000
convertible debentures Satisfaction being defined as (a) removal of
the risk of the debenture holders delaying the $2M investment round
and (b) based on the scenarios offered, achieving the best mix of a

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

reduction in the cash paid or equity given in-lieu as settlement and
the longest extension of the date of any repayments.

1.5. The Company will as soon as practicable issue the stock referred to above
upon receipt of subscription monies and will enter the subscribers in the
Company's records and do all filings and obtain all due consents.

1.6. Stock issued will be subject to the same restrictions as any/all other 144
stock and will carry the same notations as all other Series D stock.

2. SERVICES OFFERED

2.1. Tower Gate and Telemetrix Inc will work together in the $2 million fund
raising round to prepare necessary documentation and Tower Gate will
project manage the round to the close.

2.2. Tower Gate will supply Chris Fitzsimmons as a Non-Executive Director.

3. LEASE PURCHASE

3.1. Telemetrix will seek to purchase the switch and associated software and
hardware as defined in the agreed business plan in the form attached hereto
as Attachment 1 (the "Business Plan") via a lease purchase scheme. Tower
Gate will help facilitate this process.

3.2. In the event a guarantee in addition to the guarantee of Telemetrix Inc. is
required for the lease/purchase of a switch, Tower Gate will provide the
leasing entity such guarantee subject to a form of agreement acceptable to
the leasing entity and Tower Gate and Telemetrix.

3.3. In the Event Telemetrix is unable to maintain the lease payments on a
current basis, Tower Gate may declare Telemetrix in breach of agreement and
upon Tower Gate's written notice of breach, Telemetrix has a period of 15
days to remedy the breach. If Telemetrix does not remedy the specific
matter causing the breach, Tower Gate may declare Telemetrix in breach and
either make lease the payments in the place of Telemetrix or take any other
action provided in the leasing agreement, including taking possession of
the switch.

3.4. In the event of a breach as set forth in 3.3, any amount advanced by Tower
Gate either as a payment or in settlement of the lease agreement in

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

total, Tower Gate may at its option convert lease advances as well as any
sums owing into shares of Telemetrix. In such event, the conversion rate
will amount to average trading price of Telemetrix stock over the prior 28
day trading period, less twenty percent (20%).

4. SETTLEMENT

4.1. The guarantee as above will be valued for the purposes of this clause at
the cash amounts paid by Tower Gate under it. This shall be added to all
amounts that Tower Gate, its management or associates or its investors
invest, combined with other amounts raised by the Company ("New Money") .

4.2. For every $10,000 of New Money the Company will issue to Tower Gate 100,000
shares of Common Stock in Telemetrix.

4.3. The Company will issue such shares to Tower Gate (or as it shall direct)
and enter the names of the subscribers in the Company books and make all
necessary filings and obtain all necessary consents. The Company will
increase its authorised shares to 200M to facilitate this.

4.4. An Option Pool of 10M shares of Common Stock in Telemetrix will be created.
Individual employees of Tower Gate will be allowed to participate in this
pool alongside Telemetrix employees

5. CAPITAL STRUCTURE

5.1. The current capital structure of the company is as shown in Appendix Cl.

5.2. Following the approval of the FCC, the capital structure of the company
incorporating the issuance of the Series D preferred shares could be as in
Appendix C2 which is included for illustrative purposes only.

5.3. The anticipated capital structure of the Company for a $2M investment, as
well as other amounts invested by Tower Gate (and related parties) as
referred to herein is shown in the attached spreadsheet appended as
Appendix D. Again this recognises that FCC approval has not yet been
granted for the Series D preferred and that these amounts are liable to
change as interest accumulates.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

5.4. It is recognised that the company has a number of alternative approaches to
create the final capital structure as illustrated by Appendix D. The final
route will be agreed between the two parties soon after the signing of this
agreement.

5.5. All existing shareholders, future shareholders and investors will become
holders of Ordinary shares.

5.6. For providing management services, Tower Gate will receive $125,000 per
annum excluding expenses from 1st September 2003.

6. OTHER TERMS

6.1. All key shareholders including Tower Gate, Michael Glaser, Michael Tracy
Larry Becker and William Becker hereby agree a lock out of 12 months until
30th August 2004, and such shareholders will sign this Agreement in order
to confirm this, as well as agreeing to all the other terms hereof.

6.2. The following shareholders may sell a total of 2,250,000 shares of company
stock as delineated below pursuant to Rule 144 and these shares are not
subject to the lockout

o Michael Glaser: 500,000 shares

o Michael Tracy: 1,000,000 shares

o William Becker: 500,000 shares

o Larry Becker: 250,000 shares

6.3. The parties will work to ensure that all the shares of the Company owned by
parties referred to herein will be listed on the market.

6.4. Telemetrix will be obligated to work with Tower Gate for the raising of the
anticipated $2M and the strategy as outlined in the Business Plan.

6.5. Telemetrix will ensure all future filings with the SEC are made on time and
to the required standard, as well as obtain all consents to complete all
the actions referred to herein and in the Business Plan.

6.6. Any FCC and/or SEC approvals have been confirmed and are completed. The
current exceptions to this are recognised as being:

o The 10K for the financial year ending 31st December 2002, which is
completed but not yet filed

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

o The two 10Qs for the quarters ending 31st March 2003 and 30th June
2003 neither of which have been completed or filed

6.7. If necessary, documents will be filed with the FCC outlining any foreign
ownership.

6.8. Geoff Girdler will be employed on a management contract until such time as
approval can be gained from the FCC to employ him as an officer of the
company.

6.9. English law shall apply to this Agreement and the parties submit to the
non-exclusive jurisdiction of the English courts.

6.10.Nothing in this Agreement shall infer any partnership between any of the
parties, from a legal point of view.

6.11.Both parties can vary or waive any of the terms hereof if situations
change, and such changes must be in writing and signed by both parties.

7. TIMINGS

7.1. Following signing of this term sheet the parties shall together agree a
timetable of actions to be completed before the $2M funding round and at
the time of the $2M funding round. These shall include but not be limited
to:

o Agreement of a management contract with Geoff Girdler

o Gaining FCC approval for the appointment of Geoff Girdler as an
Officer of the company.

o Gaining approval for changes relating to the creation of the Series D
preferred shares.

o Reaching agreement with the Debenture holders.

o Completion of the company's audited balance sheet.

o Filing of the completed 10K.

o Completion and filing of the two 10Qs.

o Increasing the authorised share capital of the company to 200M shares.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

8. REPRESENTATIONS AND WARRANTIES

8.1. It is recognized that Tower Gate will need representations and warranties
both for itself and the subscribers of stock under or pursuant to this
Agreement (in order to raise money), and accordingly the Company hereby
represents and warrants to Tower Gate (for itself and for the subscribers)
that:

o The various actions referred to in the Business Plan and in particular
in relation to the company's balance sheet shall be effected

o The Business Plan is accurate as to all facts and all opinions stated
therein are reasonably held by the Company.

o The Company has paid all necessary state, federal and employee related
taxes.

o The current balance sheet of the company is as set out in Appendix B.

o Appendix Cl sets out details of all shares, warrants and options
issued as at the date of signing.

o Appendix E contains a list of all liabilities and amounts of the
Company as known at the time of signing this agreement.

o Appendix F contains Any actual or possible litigation against the
Company is as specified in the attached representations.

8.2. Tower Gate represents it has had an opportunity to do all appropriate and
necessary due diligence to enter into this agreement and has had the
opportunity to complete the work prior to offering this letter

9. SIGNATURES

9.1. For the purpose of this document, scanned signatures shall have the same
meaning and effect as actual signatures.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

Signed and dated:

/s/Chris Fitzsimmons 6th October 2003
- ------------------------------- ---------------
Chris Fitzsimmons Dated
Director
Tower Gate Finance Ltd

/s/William W. Becker 10/1/03
- ------------------------------- ---------------
William W. Becker Dated
Chairman, Director Telemetrix Inc.

/s/Michael J. Tracy October 1, 2003
- ------------------------------- ---------------
Michael J. Tracy Dated
President, Director Telemetrix Inc.

/s/Michael L. Glaser 10/01/03
- ------------------------------- ---------------
Michael L. Glaser Dated
Secretary, Director Telemetrix Inc.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

Signed and dated by major shareholders on behalf of themselves or as legal
representatives of the entities listed in Attachment 3, according to Section 6.1

/s/William W. Becker 10/01/03
- ------------------------------- ---------------
William W. Becker Dated

/s/Michael J. Tracy October 1, 2003
- ------------------------------- ---------------
Michael J. Tracy Dated

/s/Michael L. Glaser 10/1/03
- ------------------------------- ---------------
Michael L. Glaser Dated

/s/Larry Becker 10/01/03
- ------------------------------- ---------------
Larry Becker Dated

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

REPRESENTATION

I, Michael J. Tracy, President of Telemetrix Inc. offer the following
representations on behalf of the company:

1. Litigation. Dovle v. Telemetrix. Judgement was entered by default in the
amount of $70,167.52. Management claims that service of summons was not
made. The court file reflects that the Delaware Registered Agent was
served. An action to vacate the judgement is pending. While management
desires to vigorously pursue the motion, it is the opinion of counsel the
motion will be denied and the judgement will stand. Concurrently,
Telemetrix has initiated action against the Registered Agent for failure to
notify or forward the notice of summons.

2. The Company has paid and/or is current on all necessary state, federal and
employee related taxes.

3. The balance sheet and associated financial information is not the result of
an outside audit, however is based on the financial information found in
the books and records of the corporation. The audit for Telemetrix will be
completed as soon as funds are available to re-engage the auditing firm.
Once the audit is completed, all necessary filings will be brought current
with the SEC. There is another outstanding matter with the SEC, and that
involves an inquiry of the FCC with respect to some of the accounting
procedures used by the former auditors. The current auditing firm is aware
of the questions that remain open and will finalise a response to the SEC
during the completion of the audit.

4. The existing capital structure as stated in Appendix C1 accurately
represents the structure as of the date of the completion of the 10K for
2001. There have been no changes since that date. The structure does not
represent or include the changes in shareholdings which are held in
abeyance at this time. However the future shareholdings are current through
this date. There are some matters of the corporation with respect to the
issuance of shares to Tracy for unpaid salary and expenses and to

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

Girdler for the execution of a financial guarantee on behalf of the company.

/s/Michael J. Tracy
Michael J. Tracy, President

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

LIST OF APPENDICES

Appendix A Proposed Key Items of Expenditure

Appendix B1 Telemetrix Inc Balance Sheet for 10K dated 31st December 2003

Appendix B2 Changes to be effected to the Telemetrix Inc Balance Sheet

Appendix B3 Pro forma balance as at 31st August 2003

Appendix C1 Telemetrix Inc current Capital Structure

Appendix C2 Telemetrix Inc illustrative Capital Structure following
approval by FCC to create the Series D preferred shares

Appendix D Telemetrix Inc future intended Capital Structure

Appendix E Existing Liabilities

Appendix F Details of actual or possible litigation

LIST OF ATTACHMENTS

Attachment 1 Business Plan

Attachment 2 Company Certificates

Attachment 3 Copies of agreements to debt for equity swap.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

APPENDIX A: PROPOSED KEY ITEMS OF EXPENDITURE

These are intended to be:

Organisation Amount
---------------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION $59,295
STARK*W1NTER*SCHENKEIN & CO., LLP $15,955
LIEBEN, WHITTED, HOUGHTON, SLOWIACZEK, & CAV $15,000
HALL, ESTILL, HARDWlCK, GABLE, GOLDEN & NELSO $10,000
TRACY BROADCASTING CORPORATION $10,000
TSI TELECOMMUNICATION SERVICES $5,100
SHERIDAN ROSS $5,000
VAN STEENBERG LAW FIRM $5,000
BROOKS, PANSING BROOKS, PC, LLO $4,000
REGIONAL WEST MEDICAL CENTER $3,500
JOE SCHON $2,500
STAPLES $2,153
CHALOUPKA, HOL YOKE, HOFMEISTER, SNYDER & CHA $2,000
ELAN CC (JOE SCHON) $2,000
ELAN CC (MARQUERITE MCKEE) $2,000
ELAN CC (MIKE TRACY) $2,000
ELAN CC (PAUL ZOLMAN) $2,000
ELAN CC (RICHARD GREEN) $2,000
COMPUTERSHARE $1,827
ELAN CC (ROBERT HINZE) $1,527
SCOTTS BLUFF COUNTY TREASURER $1,473
SPRINT (PCS) $1,353
SPRINT DATA SERVICES $1,152
CITY OF GERING $1,001
ELAN CC (GREG CARRIER) $1,000
J.G. ELLIOTT COMPANY $992
MIKE TRACY $967
ELAN CC (LINDA LULF 1029) $923
SPRINT - 436-6400 $884
VALLEY BANK AND TRUST CO $872
COMMSOURCE INC. $750
ELAN CC (CONNIE BLOME) $728
CHEYENNE COUNTY $720
THE DEPOSITORY TRUST COMPANY $675
KAAQ-FM/KQSK-FM $470
D & H ELECTRONICS SUPPLY, INC $443
NEBRASKA DEPT OF REVENUE - SALES TAX $433
KEITH COUNTY IMPLEMENT $400
SPRINT - 635-3185 - KC,MO $367

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE
APPENDIX A: (contd)

Organisation Amount
---------------------------------------------------------------------------

BARTEL'S ACE HARDWARE $330
GOSHEN COUNTY UNIFIED SCHOOL DIST. $307
SPRINT - 436-7101 - KC,MO $291
NEBR. PUBLIC PO\!-JER DIST. $283
PANHANDLE COOPERATIVE ASSN $251
HAMPTON INN & SUITES $206
NEBRASKA TRANSPORT CO, INC. $205
TOO WAY RADIO SERVICE, INC $180
VILLAGE OF MORRILL $180
CITY OF TORRINGTON $160
IONEX 1197505 $103
CITY OF MITCHELL $100
JOHNSON-CASHWAY LUMBER COMPANY $97
BANNER COUNTY TREASURER $74
NORTHERN EXPOSURE COMPUTER CENTER $71
HIGH WEST ENERGY 922403 $62
SPRINT - 632-5989 - KC,MO $50
SPRINT - 235-2275 - KC,MO $44
QWEST $41
SPRINT - 532-3020 - KC,MO $40
WHEATLAND RURAL ELECTRIC ASSOCIATION $37
SCOTTSBLUFF FORD LLC $26
RADIO SHACK $25
WHEAT BELT PUBLIC POWER DISTRICT $24
HIGH WEST ENERGY 922402 $24
CITY OF ALLIANCE $20
CITY OF SIDNEY $19
SPRINT - 635-4200 - KC,MO $11
KIMBALL COUNTY TREASURER $10
---------------------------------------------------------------------------
TOTAL $171,731
---------------------------------------------------------------------------

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

APPENDIX B1: TELEMETRIX INC BALANCE SHEET FROM 10-K

The balance sheet as taken from 10-K 31st December 2002 is:

BALANCE SHEET CONSOLIDATION
- --------------------------------------------------------------------------------
Current assets $38,103
Accounts receivable $12,174
-----------
$50,277
-----------
Property and equipment, NBV $473,516
Other assets
Licences $350,708
Receivable from affiliates $12,751
-----------
$363,459
-----------
$887,252
===========

Liabilities and stockholders defecit
Bank Overdraft $244,162
Accounts payable $2,169,486
Accrued expenses $463,863
A/c payable & accrued expenses - affiliates $895,676
Convertible debenture $1,200,000
Notes payable affiliate $3,515,351
Current portion of long term debt $238,073
---------
Total current liabilities $8,726,611
-----------
Long term debt $591,841
-----------
Stockholders deficit
Common stock $18,477
Paid in capi1a1 $46,808,483
Subscribed common shares $3,783,425
Accurnulated (defecit) -$58,949,714
Deferred compensation -$283,625
-----------
-$8,622,954
Other comprehensive income
Currency translation income $191,754
-----------
$887,252
===========

This balance sheet is not yet audited and will be replaced by an audited balance
sheet as soon as possible.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

APPENDIX B2: CHANGES TO BE EFFECTED TO BALANCE SHEET

The following changes will be effected before or at the time of the $2M raise:

ACCOUNTS PAYABLE
As at the 30th August 2003, the Accounts Payable in total was $1,985,424 versus
$2,169,486 as shown in Appendix B1. Of this amount it is the company's belief
that:

o $362,381.83 represents creditors that are yet to be paid.

o $1,464,838.17 represents creditors whose claims are either held to not
be valid, have agreed to abandon their claim or have lapsed.

On completion of the latest audited accounts it is the company's belief that the
auditors will recognise and incorporate the above changes.

ACCRUED EXPENSES
The accrued expenses figure of $463,863 represents interest that was expensed
and is due to holders of the loan notes. This amount will be converted into
equity under the same terms as the aforementioned loan note conversion.

The effect of this will be to remove the Accrued expenses figure.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES - AFFILIATES
The majority of this figure represents inter company transactions due between
companies or associates controlled by the Becker Group of Companies ("BGC"). It
is the company's belief that a substantial proportion of the $895,676 will be
written off following re-engagement with the auditors.

CONVERSION OF LOAN NOTES TO EQUITY
Of the $3,515,351 "Notes payable - affiliates" shown in Appendix B1, the holders
of these loan notes being Michael Tracy, Michael Glaser, William Becker, Larry
Becker have agreed to convert the outstanding principal and accrued interest to
equity as part of the proposed Series D preferred round (it being recognised
that

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

this round may be superseded by the increase in the authorised share capital to
200M shares).

As of the 18th September 2003 the total value of the Notes payable was
$3,576,980.32 following the format of Appendix Bl.

These changes have been agreed and these agreements are shown in Attachment 3.

The result of these changes will be:

o Removal of the Notes payable figure from the balance sheet. As of 18th
September this amount would be $3,536,980.32.

o Repayment of $30,000 to Tracy Broadcasting Corporation (such repayment
taking place at the time of the $2M raise).

o Repayment of $10,000 to Larry Becker (such repayment taking place at
the time of the $2M raise).

CURRENT PORTION OF LONG TERM DEBT
The amount of $238,073 will be converted on the same terms as detailed earlier
for the loan notes.

The net result will be the reduction of the figure to $0.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

APPENDIX B3: PRO FORMA BALANCE SHEET AS AT 31st AUGUST 2003

As taken from Telemetrix's MIS:

PRO FORMA BALANCE SHEET As at 31st August 2003

Current assets
Accounts receivable $70,669
Other current assets $3,983 $74,652

Property and equipment, NBV $133,591
Construction in progress $1,114,901
Patents, net $34,659
T -3000 capitalised $288,193 $1,571,344

Other assets
Deposits $2,923
Licences $289,185
Receivable from affiliates $12,751 $304,859
----------
$1,950,855
==========
Liabilities and stockholders defecit
Accounts payable $1,985,424
Accrued expenses $223,939
A/c payable & accrued expenses - affiliates $397,274
Convertible deben1ure $1,200,000
Notes payable affiliate $7,563,704
Current portion of long term debt $238,073 $11,608,414

Long term debt $507,336

Stockholders deficit
Common stock $18,477
Paid in capita1 $46,808,483
Subscribed common shares $3,783,425
Accumulated (defecit) -$60,491,655
Deferred compensation -$283,625 -$10,164,895
----------
$1,950,855
==========

Those figures shown highlighted in green do not reflect the changes outlined in
Appendix B2.

The most significant difference is in the notes payable figure that incorporate
various transactions between BGC and Telemetrix Inc, which are due to be written
off in the ensuing audit.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

APPENDIX C1: CURRENT CAPITAL STRUCTURE

As of the date of signing, the current capital structure of the company is:

COMMON STOCK

COMMON STOCK Number Shareholdings
- ---------------------------------------------- ----------- -------------
Directors Hartford Holdings 3,962,004 21.4%
and Adara Investments 750,000 4.1%
Significant Wise Investments 500,000 2.7%
Investors Ionaian Investments 750,000 4.1%
Vintage Investments Ltd 1,725,000 9.3%
William W Becker 137,500 0.7%
Larry Becker (over 5%
beneficial ownership) 946,833 5.1%
Michael J Tracy 4,885,504 26.4%
Michael L Glaser 1,432,554 7.8%
Joe Schon 50,000 0.3%
Subtotal 15,139,395 81.9%
----------------------- ----------- -------------

Public & Non-Private 3,336,791 18.1%

- ---------------------------------------------- ----------- -------------
TOTAL - issued and outstanding stock 18,476,186 100.0%
- ---------------------------------------------- ----------- -------------

Source: 10K (draft) 3151 December 2002

WARRANTS and OPTIONS

Instrument Name Amount Strike price Expires
- -----------------------------------------------------------------------
Warrants 664,376 31/12/2003
- -----------------------------------------------------------------------
TOTAL 664,376
- -----------------------------------------------------------------------

Options Joe Schon 300,000 4.69 12/09/2003

William Becker 50,000 4.75 30/04/2010
100,000 0.68 30/04/2011

Michael Tracy 50,000 4.75 30/04/2010
100,000 0.68 30/04/2011

Michael Glaser 50,000 4.75 30/04/2010
100,000 0.68 30/04/2011
- -----------------------------------------------------------------------
TOTAL 750,000
- -----------------------------------------------------------------------

Source: 10K (draft) 31 5t December 2002

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

APPENDIX C2: ANTICIPATED CAPITAL STRUCTURE FOLLOWING FCC APPROVAL

Were the sums outstanding as at the 18th August 2003, to be converted into the
Series D preferred shares then the capital structure on a fully diluted basis
would be:

- ------------------------- ---------- ----------- -------------------
Ordinary Preferred
Capital Structure Shares shares TOTAL %
- ------------------------- ---------- ----------- ---------- ------

Hartford Holdings 594,301 16,839 611,139 2.7%
Ardara, Wyse & Ionian
Investments 300,000 8,500 308,500 1.4%
William Becker 137,500 0 137,500 0.6%
Michael J. Tracy 3,584,151 101,551 3,685,702 16.4%
Michael L. Glaser 886,380 25,114 911,494 4.1%
Larry Becker 632,002 17,907 649,909 2.9%
Vintage Investments 1,725,000 0 1,725,000 7.7%
TBC Stock Ownership 10,042,500 0 10,042,500 44.7%
- ------------------------- ---------- ----------- ---------- ------
Directors and significant
investors 17,901,834 169,910 18,071,744 80.5%

Public/Float 2,867,088 0 2,867,088 12.8%

Rest Cert Shares - Misc.
Ownership 1,513,095 0 1,513,095 6.7%
- ------------------------- ---------- ----------- -------------------
TOTAL 22,282,017 169,910 22,451,927 100.0%
- ------------------------- ---------- ----------- -------------------

As FCC approval has not yet been sought or given, the outstanding debts will
continue to increase as interest is paid on them leading to an increase in the
amount of preferred stock to be issued.

At the same time, the increase of the company's authorised shares to 200M may
negate the requirement to create the Series D preferred.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

APPENDIX D
Existing shareholder Existing Existing New S'holding
Ordinaries Preferred Ordinaries
-----------------------------------------------------------------------------------------------------

ILLUSTRATIVE Directors Hartford Holdings (a) 594,301 16,839 3,962,004 3.2%
FUTURE & Ardara, Wyse & Ionian Investments 300,000 8,500 2,000,000 1.6%
CAPITAL Large William Becker, Chairman of the
STRUCTURE s/holders Board of Directors (b) 137,500 0 137,500 0.1%
Michael J. Tracy, Chief
Executive Officer 3,584,151 101,551 23,894,343 19.3%
Michael L. Glaser, Secretary
and Director 886,380 25,114 5,909,202 4.8%
Larry Becker (does not include
$30K note outstanding) 632,002 17,907 4,213,345 3.4%
Vintage Investments 1,725,000 0 1,725,000 1.4%
TBC Stock Ownership 10,042,500 0 10,042,500 8.1%
This is based -------------------------------------------------------------------------------
on Appendix C2 Subtotal 17,901,834 169,910 51,883,894 41.9%
and so should
be accepted to Public Pubic Float & Rest Ownership 2,867,088 0 15,781,842 12.8%
be an Restricted Certificated Shares
illustration - Misc. Ownership 1,513,095 0 8,328,808 6.7%
of potential -------------------------------------------------------------------------------
holdings.
Subtotal 4,380,183 0 24,110,650 19.5%

Noteholders Debenture holders - equity kicker 0 0 2,000,000 1.6%
Any such Pre-round investment 0 18,750 3,750,000 3.0%
transaction Investors 0 0 10,000,000 8.1%
will be subject far blue 0 0 20,000,000 16.2%
to Board and Option Pool 0 0 10,000,000 8.1%
FCC approval Michael Tracy
salaries and
incentives 0 10,000 2,000,000 1.6%
-----------------------------------------------------------------------------------------------------
TOTAL 22,282,017 198,660 123,744,544 100.0%
-----------------------------------------------------------------------------------------------------

Authorised 200,000,000
Issued shares 123,744,544
Authorised not issued 76,255,456

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

APPENDIX E: OUTSTANDING LIABILITIES

As taken from the pro-forma accounts dated 31st August 2003. A total list of the
company's liabilities are:

LIABILITIES
- -----------

Liabilities
Current Liabilities

Accounts Payable
Accounts Payable $1,985,423.72
-------------
Total Accounts Payable $1,985,423.72

Credit Cards
TBC - Elan Visa $582.64
TBC VISA $357.95
Valley Bank - $819.36
-------------
Total Credit Cards $1,759.95

Other Current Liabilities
Accrued Interest Tracy C Cards
Accr Int Advanta -$486.56
Accr Int Am Express Blue -$75.00
Accr Int Aria Provo -$151.74
Accr Int Capital One Plat MC -$1,016.83
Accr Int Capital One Visa -$224.10
Accr Int Citibank Plat MC 7495 -$636.14
Accr Int Juniper -$527.19
Accrlnt MBNA Platinum MC -$1,311.00
Accr Int Nextcard Visa -$398.70
Accr Int US Bank Visa -$541.92
Accr Int Wachovia Visa -$327.93
-------------
Total Accrued Interest Tracy C Cards -$5,697.11

Accrued Salaries $55,750.00
Interco - Solutions $397,273.58
Interco - Telemetrix, Inc.
Intercompany-INC FNB -$181.83
Interco - Telemetrix, Inc. - Other $7,118,047.25
-------------
Total Interco - Telemetrix, Inc. $7,117,865.42

Page 1

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

LIABILITIES contd.
- ------------------

Nebraska City Sales Tax $66.00
Nebraska State Sales Tax $2,602.52
Nebraska Universal Service Fund $20,558.63
Note Payable - Michael Tracy $1,416,965.16
Note Payable - TBC $198,873.71
Notes Payable - Larry Becker $30,000.00
Notes Payable - Valley Bank $3,020.68
Notes Payable Tracy. C Cards
MT Advanta 0002 $10,287.44
MT American Express Blue $7,707.45
MT Aria Providian 1370 $4,293.03
MT Capital One Plat MC 1512 $20,911.11
MT Capital One Visa 9297 $4,123.49
MT Citibank Platinum MC 7495 $19,717.08
MT Juniper 1377 $17,783.10
MT MBNA Platinum 2786 $21,964.02
MT Nextcard Visa 6515 $13,922.58
MT US BankVisa $15,891.49
MT Wachovia Visa 4265 $7,264.21
Total Notes Payable Tracy. C Cards $143,865.00

Payroll Liabilities $3,312.81

Sales Tax Payable -$432.66
Valley Bank. LOC - OEM -$723.76
Wyoming Sales Tax -$142.58
-------------
Total Other Current Liabilities $9,383,157.40
-------------

Total Current Liabilities $11,370,341.07

Long Term Liabilities
Customer Deposits Held $4,385.00
FCC Payable. C Block $694,097.50
FCC Payable. F Block $46,926.80
-------------
Total Long Term Liabilities $745,409.30
-------------

Total Liabilities $12,115,750.37
-------------

Page 1

Note that like the pro-forma summary accounts, these figures do not incorporate
any of the changes that will take effect following the audit by the new
accountants.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

APPENDIX F: ACTUAL AND OUTSTANDING LITIGATION

Chaloupka, Holyoke, Hofmeister, Snyder & Chaloupka
A Professional Corpornlion, L.L.O.
Attorneys at Law
1714 Second Avenue
Robert P. Chaloupka Post Office Box 2424 ALLIANCE OFFICE
Thomas T.Holyoke Scottsbluff, Nebraska 69363.2424 416 West 3rd Street
Paul E. Hofmeister Alliance, Nebraska 69301
Andrew W. Snyder Telephone: (308) 635-5000 Telephone: (308) 762-5484
Maren Lynn Chaloupka Facsimile: (308) 635-8000
E-mail: tth@chhhsclaw.net

May 28, 2003

Stark Winter Schenkein & Co., L.L.P.
7535 East Hampden Avenue, Suite 109
Denver, Colorado 80231

Re: Telemetrix Inc.

Dear Ladies and Gentlemen:

As requested by the referenced corporation, we are furnishing you with the
following information:

PENDING LITIGATION

Doyle v. Telemetrix: Judgement was entered by default in the amount of
$70,167.52. Management claims that service of summons was not made. The court
file reflects that the Delaware registered agent was served. We have filed a
motion to vacate the judgement which is pending. While management desires to
vigorously pursue the motion, it more likely than not that the motion will be
denied and thus the judgement will stand.

THREATENED LITIGATION

The company is in a dispute with a Canadian firm called Echo Consultants, Ltd.,
with which there is an agreement to complete certain software development work.
Echo takes the position that their work was accepted by Telemetrix. Telemetrix
believes that the software does not work. The parties attempted to resolve the
matter and $25,000 was placed in escrow which Telemetrix claims. The procedural
questions are complex because of Canadian law, an applicable arbitration
provision and the refusal of Echo to negotiate. We believe that the probable
cost to recover the money makes the claim marginal and may open Telemetrix to
additional claims against it by Echo in an undeterminable amount.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

Stark Winter Schenkein & Co., LLP
May 28, 2003
Page 2

UNASSERTED CLAIMS AND ASSESSMENTS

We are unaware of any unasserted possible claims or assessments against this
corporation. The corporation's understanding with respect to Statement of
Financial Account Standards No.5 is correct.

It should be noted that we are not general counsel to this corporation and are
not familiar with its business and operations. We are not securities lawyers and
are not familiar with the requirements for publicly owned companies. We are
asked periodically to undertake specific matters on behalf of this corporation.

As of December 31, 2OO2, the amount due us, including unbilled amounts, was
$1,690.62.

Very truly yours,

Thomas T. Holyoke

TTH:cmm

cc: Telemetrix, Inc.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

ATTACHMENT 1: BUSINESS PLAN

The following business plan is a true and fair representation of the future
strategy of Telemetrix Inc. based on the company receiving a further investment
of $2M (two million US dollars).

The plan was created through meetings and discussions between Geoff Girdler,
Michael Tracy and other members of the prospective management group. The
forecasts are based on current and expected future wireless telephony markets
and business trends, and on the knowledge of Messrs. Girdler and Tracy in those
areas.

Signed and dated:

/s/ Michael J. Tracy
Michael J. Tracy, President 24th Sept 2003
Michael Tracy Dated

Director
Telemetrix Inc

/s/ Geoff Girdler 24th Sept 2003
Geoff Girdler Dated

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

ATTACHMENT 2: COMPANY CERTIFICATES

AGENTS AND CORPORATIONS, INC.
PROFESSIONAL CORPORATION SERVICES SINCE 1974

DAVID N. WILLIAMS, ESQUIRE PHONE (302) 575-0877
PRESIDENT (800) 759-2248
FAX (302) 575-1642
SUITE 600, ONE COMMERCE CENTER E-MAIL ADDRESS:
1201 ORANGE STREET www.incnow.com
P.O. BOX 511
WILMINGTON, DE 19899-0511

July 16, 2003

Mr. Michael Tracy
P O Box 17
1225 Sage Street
Gering, NE 96341

RE: Telemetrix Inc.

Dear Mr. Tracy:

Enclosed for your records is the date-stamped copy of the Certificate of Renewal
and Revival which was filed and became effective on July 15, 2003 with the
Office of the Secretary of State of Delaware.

You should retain this document with the corporation records.

Thank you for the opportunity to be of service.

Yours truly,

/s/ Sandy Zimmerman
Sandy Zimmerman

DELAWARE IS THE FIRST STATE FOR INCORPORATION

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

ATTACHMENT 2: Contd

COVER SHEET

INCORPORATION SECTION
GENERAL INFORMATION
STATE OF DELAWARE 303/739-2073
INCORPORATION SECTION DEPARTMENT OF STATE NAME RESERVATION
P.O. BOX 390 Harriet Smith Windsor, Secretary 303/759-5800
FRANCHISE TAX SECTION DIVISION OF CORPORATIONS 800/420-5042
P.O. BOX 740 JOHN G. TOWNSEND BUILDING FRANCHISE TAX SECTION
UNIFORM COMMERCIAL CODE DUKE OF YORK STREET 303/739-4228
P.O. BOX 763 DOVER, DELAWARE 19903 UNIFORM COMMERCIAL CODE
DOVER, DELAWARE 19903 303/739-4278

********************************************************************************
SRV#: 030462084 Agent: 9030670 File #: 2019301 Package#: 000279631
Priority: 6 Mail Code F

User: SDOCDJM

Comments:

Attn:

Agent: AGENTS AND CORPORATIONS, INC.
1201 ORANGE STREET, SUITE 600
ONE COMMERCE CENTER
WILMINGTON, DE 19801

Items Included: Item Type Copies
Image 001
********************************************************************************

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

ATTACHMENT 2: Contd

State of Delaware
Secretary of State
Division of Corporations
Delivered 11:05 AM 07/15/2003
FILED 11:04 AM 07-15-2003
SRV 030462084 - 2019301 FILE

STATE OF DELAWARE
CERTIFICATE FOR RENEWAL AND REVIVAL
OF
Telemetrix Inc.

Telemetrix Inc., a corporation organized under the laws of Delaware, the charter
of which was forfeited for failure to obtain a registered agent, now desires to
procure a restoration, renewal and revival of its charter, and hereby certifies
as follows:

1. The name of the corporation if Telemetrix Inc.
2. Its registered office in the State of Delaware if located at 1201 Orange
Street, Suite 600, City of Wilmington, New Castle County, Delaware 19801
the name and address of its registered agent is Agents and Corporations,
Inc., 1201 Orange Street, Suite 600, City of Wilmington, New Castle County,
Delaware 19801.
3. The date of filing of the original Certificate of Incorporation in Delaware
was October 17, 1983.
4. The date when restoration, renewal, and revival of the charter of this
company is to commence is the October 23, 2002, at which time its charter
became inoperative and forfeited for failure to obtain a registered agent
and this certificate for renewal and revival is filed by authority of the
duly elected directors of the corporation in accordance with the laws of
the State of Delaware.

IN TESTIMONY WHEREOF, and in compliance with the provisions of Section 312 of
the General Corporation Law of the State of Delaware, as amended, providing for
the renewal, extension and restoration of charters, the last and acting
authorized officer hereunto set his/her hand to this certificate the 14th day of
July, 2003.

Telemetrix Inc.
By: /s/Michael J. Tracy
Authorized Officer

Michael J. Tracy, Pres.
Print Name and Title

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

ATTACHMENT 3: AGREEMENT TO DEBT TO EQUITY SWAP

EXCHANGE AND CONVERSION AGREEMENT
BETWEEN
TELEMETRIX INC.
AND
ARDARA INVESTMENTS, LTD

THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 30th day of May, 2003 by and among
TELEMETRIX INC., a Delaware corporation with offices at 1225 Sage Street,
Gering, Nebraska 69341 ("Company"), and Ardara Investments Ltd.,
Harbour Trust Co. Ltd, One Capital Place, P.O. Box 1787 GT, Grand
Cayman, Cayman Islands, B.W.I., ("ARDARARDARA").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, ARDARA holds stock in the Company;

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the Common Stock held by ARDARA for new issue preferred
capital stock of the Company; and

WHEREAS, the Company and ARDARA mutually desire to set forth their agreements
and understandings with respect to such exchange of common capital stock for new
issue preferred capital stock of the Company of the Company and to provide for
certain rights of ARDARA in connection therewith;

NOW, THEREFORE, for and in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained and the mutual benefits
derived therefrom, the parties hereto do covenant and agree as follows:

1. Capital Structure of the Company. The Company is a Delaware corporation
authorized by its Certificate of Incorporation, to issue 25,000,000 shares
of Common Stock ("Common Stock"), par value $.001 per share, of which
18,486,176 are outstanding and 5,000,000 shares of Preferred Stock, par
value of $.001 per share, of which 0 shares are outstanding.

2. Exchange of Common Stock capital stock for new issue preferred shares of
stock. As of the date of this agreement, ARDARA shall surrender to the
principal office of the Company (or such other office or agency of the
Company as the Company may designate by notice in writing to the holder or
holders of the Common Stock of the Company) certificates representing
2,000,000 shares of Common Stock which have been issued by the Company to
ARDARA, successors or assigns, and shall exchange without further cost
750,000 shares of Common Stock for 112,500 shares of Common Stock and
3187.5 shares of Preferred Stock. This agreement does not contemplate the
surrender of any shares of stock which are held by ARDARA and which were
not a part of any transactions between ARDARA and the Company, and which
shares are held by ARDARA as either restricted or unrestricted shares of
Common Stock.

3. Authorization of Issuance of Preferred Stock. This exchange calls for the
issuance of Preferred Stock. The Company shall promptly take such steps as
may be necessary or appropriate under the laws of Delaware and the federal
securities laws to permit the issuance of the Preferred Stock. If the
authorization and issuance of such Preferred Stock requires an amendment to
the Company's Certificate of Incorporation and the adoption by the
stockholders of such amendment, the Company shall immediately initiate the
necessary and required documents and corporate meetings. The Preferred
Stock shall be non-voting stock.

4. Option of ARDARA for Registration or Exchange of Stock. At any time, and
subject to the terms set forth in paragraph 5 of this document, ARDARA
shall have the right by providing written notice to the Company to have the
Company register in accordance with Paragraph 6 hereof all or any part of
the Common Stock owned by ARDARA. if any, held by ARDARA on a registration
statement in compliance with the Securities Act of 1933 in order to permit
the sale or distribution of such stock.

5. Registration of Stock. If the Company shall receive from ARDARA a written
request that the Company register Common Stock under a registration
statement in compliance with the Securities Act of 1933 as provided in
paragraph 6 hereof, in order to permit the sale or distribution of such
stock, the Company, as soon as practicable after giving written notice to
ARDARA (which notice shall be given by the Company within ten (10) days
after receipt of the written request for registration from ARDARA) that it
has elected to file a registration statement for the Common Stock held by
ARDARA pursuant to this paragraph, will use its best efforts to effect such
registration and qualify the Common Stock in such jurisdictions as may be
requested by ARDARA. Any such registration of shares requested by ARDARA
may include shares of Common Stock owned by other shareholders of the
Company. 100,000 (One Hundred Thousand) shares in the aggregate is the
minimum number of shares that may be included in any registration. Each
selling shareholder shall bear a pro rata portion of all costs and expenses
paid to third parties (other than those paid to any affiliate or subsidiary
of the Company or any shareholder thereof) for registration and filing
fees, printing expenses, fees and disbursements of counsel, and any
accounting fees incident to or required by the registration or
qualification. Underwriting discounts and commissions shall be the pro rata
expense of each selling shareholder. The Company shall keep effective and
maintain any such registration statement for such period and to the extent
as ARDARA may deem necessary for the purpose of selling or disposing of the
shares, and from time to time during such period shall amend or supplement
the prospectus used in connection therewith to the extent necessary in
order to comply with the applicable law. The Company shall be required to
comply with the above registration provisions only once, except that if
ARDARA receives a Warrant which it is not entitled to exercise until after
the registration statement has become effective, then ARDARA shall be
entitled to a second registration to cover Common Stock acquired by it upon
exercise of the Warrant an any other shares of Common Stock then still
owned by ARDARA.

Should the Company at any time seek to register all or any part of its
Common Stock under a registration statement in compliance with the
Securities Act of 1933, without having been requested to do so by ARDARA,
in accordance with this paragraph, ARDARA may (in addition to its
registration rights set forth above) add any or all of such shares of the
Company as it may own to any such registration. The Company shall bear all
costs and expenses for registration and filing fees, printing expenses,
fees and disbursements of all counsel and any accounting fees, including
expenses of any special audit, incident to or required by any registration
not requested by ARDARA. Underwriting discounts and commissions shall be
the pro rata expense of such selling shareholder.

6. Indemnification. Prior to the effective date of any registration statement
relating to any of the shares of Common Stock owned by ARDARA, the Company
and ARDARA shall enter into an agreement providing for reciprocal
indemnification against any losses, claims, damages or liabilities to which
the Company or ARDARA (or controlling persons thereof) may become subject
under the Securities Act of 1933, as amended, or otherwise, in the form of
reciprocal indemnification provisions which customarily appear in
underwriting agreements used by reputable investment bankers.

7. Acquisition for investment. ARDARA hereby agrees that the shares of Common
Stock are being acquired for its own account and not with a view to the
distribution or resale thereof and the same shall not be sold or
transferred in the absence of an effective registration statement under the
Securities Act of 1933 unless an exemption therefrom is available.

8. Agreements Relating to Rule 144. If and so long as the Company has
securities registered pursuant to the Securities Act of 1933, the Company
will (a) file reports in compliance with the Securities Exchange Act of
1934, and (b) at its expense, forthwith upon the request of ARDARA, deliver
to ARDARA a certificate, signed by the Company's principal financial
officer, stating (i) Company's name, address and telephone number
(including area code), (ii) the Company's Securities and Exchange
identification number, (iii) the Company's Securities and Exchange
Commission file number, (iv) the number of shares of stock (and other
securities) outstanding as shown by the most recent report or statement
published by the Company and (v) whether the Company has filed the reports
required to be filed under the Securities Exchange Act of 1934 for a period
of at least ninety (90) days prior to the date of such certificate and in
addition has filed the most recent annual report required to be filed
thereunder. If at any time, subsequent to the exchange of ARDARA's notes
for Common Stock, the Company is not required to file reports in compliance
with either Section 13 or Section 15(d) of the Securities Exchange Act of
1934, the Company, at its expense will, forthwith upon the written request
of ARDARA, make available adequate current public information with respect
to the Company within the meaning of paragraph (c)(2) of Rule 144 of the
General Rules and Regulations promulgated under the Securities Act of 1933.

9. Transfer of Common Stock by ARDARA. It is expected that ARDARA shall and
ARDARA shall at any time be permitted without any approval, consent or
action of the Company to, sell, transfer or assign all or any part of the
Common Stock or other voting or non-voting equity securities of the Company
then owned by ARDARA to other individuals, corporations or other entities;
provided, however, in the event of a sale, transfer or assignment by ARDARA
of any of its shares of Common Stock, ARDARA shall, in the absence of an
effective registration statement under the Securities Act of 1933 covering
such shares, provide the Company with an opinion of counsel, satisfactory
in form and substance to the Company and its counsel, to the effect that
such sale, transfer or assignment will not require that such securities be
registered under the Securities Act of 1933. Any such assignee, in
proportion to its ownership of the Common Stock or other voting or
non-voting equity securities, shall be entitled to exercise or acquire all
of the rights or interests which may be exercised or acquired by ARDARA
pursuant to the terms of this Agreement; provided, however, that the right
to request mandatory registration under paragraph 5 shall be exercisable
only by the then owners of a majority interest of the Common Stock
previously held by ARDARA.

10. Notices and Addresses. All notices or other communications in connection
herewith shall be in writing and shall be mailed by first class or air
mail, postage prepaid to the following addresses and to the attention of
the party in question:

Harbour Trust Co., Ltd.
One Capital Place
P.O. Box 1787 GT
Grand Cayman
Cayman Islands, B.W.I.

Attn: Alan Milgate

Or at such other addresses as may have been furnished to the other parties
in writing.

11. No additional Classes of Common Stock. The Company shall not create any
additional classes of common capital stock.

12. Termination of Agreement. This Agreement shall terminate only upon the
exercise by ARDARA of all of its rights for registration or exchange of
stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
consent of the Company and ARDARA.

13. Amendments. This agreement may be amended only by written amendment signed
by ARDARA and the Company.

14. Complete Agreement. This Agreement contains all of the Agreements and
understandings between the parties here-to relative to the transaction
contemplated herein.

15. Choice of Law. This agreement and all matters pertaining thereto shall be
construed under the laws of the State of Nebraska.

16. Signatures. This Agreement may be executed in counterparts, with each such
duly executed counterpart having the same validity, force and effect as the
original.

17. Facsimile. A facsimile copy of this document and any signatures shall be
considered for all purposes and intent as legal and binding originals.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.

Ardara Investments, Ltd. Telemetrix Inc.

/s/ illegible /s/Michael J. Tracy
- ---------------------------- ----------------------------
By:For and on behalf of Bluejay Investments, Ltd. Michael J. Tracy, President
and Cardinal Investments Limited, Directors

Telemetrix Inc.

/s/Michael L. Glaser
- ----------------------------
Michael L. Glaser, Secretary

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

EXCHANGE AND CONVERSION AGREEMENT
BETWEEN
TELEMETRIX INC.
AND
BECKER CAPITAL MANAGEMENT

THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 26 day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("the Company"), and BECKER CAPITAL MANAGEMENT, 7102 LaVista Place, Suite
100, Longmont, CO ("BCM").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, the Company and BCM have entered into certain loan agreements
("notes"), a schedule of which is identified as Exhibit 1 and is attached to and
made a part of this agreement; and

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the notes held by BCM for shares of the common and preferred
capital stock of the Company; and

WHEREAS, the Company and BCM mutually desire to set forth their agreements and
understandings with respect to such exchange of notes for shares of the common
capital stock of the Company and to provide for certain rights of BCM in
connection therewith;

2. Exchange of notes for Common Stock. As of the date of this agreement, BCM
shall surrender to the principal office of the Company (or such other
office or agency of the Company as the Company may designate by notice in
writing to the holder or holders of the Common Stock of the Company) all
certificates representing all shares of Common Stock which have been issued
by the Company to Becker Capital Management, Larry Becker, his heirs,
successors or assigns which correspond or were issued in connection or
association with the schedule of notes attached hereto as Exhibit 1, and
shall exchange without further cost all notes and shares of Common Stock
issued as consideration for any of the notes listed in Exhibit 1, for
632,002 shares of Common Stock of the Company and 17,906.7 shares of
Preferred Stock. This agreement does not contemplate the surrender of any
shares of stock which are held by BCM and which were not a part of any
transactions between BCM and the Company, and which shares are held by BCM
as either restricted or unrestricted shares of Common Stock.

4. Option of BCM for Registration or Exchange of Stock. At any time, and
subject to the terms set forth in paragraph 5 of this document, BCM shall
have the right by providing written notice to the Company to have the
Company register in accordance with Paragraph 6 hereof all or any part of
the Common Stock owned by BCM. if any, held by BCM on a registration
statement in compliance with the Securities Act of 1933 in order to permit
the sale or distribution of such stock.

5. Registration of Stock. If the Company shall receive from BCM a written
request that the Company register Common Stock under a registration
statement in compliance with the Securities Act of 1933 as provided in
paragraph 6 hereof, in order to permit the sale or distribution of such
stock, the Company, as soon as practicable after giving written notice to
BCM (which notice shall be given by the Company within ten (10) days after
receipt of the written request for registration from BCM) that it has
elected to file a registration statement for the Common Stock held by BCM
pursuant to this paragraph, will use its best efforts to effect such
registration and qualify the Common Stock in such jurisdictions as may be
requested by BCM. Any such registration of shares requested by BCM may
include shares of Common Stock owned by other shareholders of the Company.
100,000 (One Hundred Thousand) shares in the aggregate is the minimum
number of shares that may be included in any registration. Each selling
shareholder shall bear a pro rata portion of all costs and expenses paid to
third parties (other than those paid to any affiliate or subsidiary of the
Company or any shareholder thereof) for registration and filing fees,
printing expenses, fees and disbursements of counsel, and any accounting
fees incident to or required by the registration or qualification.
Underwriting discounts and commissions shall be the pro rata expense of
each selling shareholder. The Company shall keep effective and maintain any
such registration statement for such period and to the extent as BCM may
deem necessary for the purpose of selling or disposing of the shares, and
from time to time during such period shall amend or supplement the
prospectus used in connection therewith to the extent necessary in order to
comply with the applicable law. The Company shall be required to comply
with the above registration provisions only once, except that if BCM
receives a Warrant which it is not entitled to exercise until after the
registration statement has become effective, then BCM shall be entitled to
a second registration to cover Common Stock acquired by it upon exercise of
the Warrant an any other shares of Common Stock then still owned by BCM.

Should the Company at any time seek to register all or any part of its
Common Stock under a registration statement in compliance with the
Securities Act of 1933, without having been requested to do so by BCM, in
accordance with this paragraph, BCM may (in addition to its registration
rights set forth above) add any or all of such shares of the Company as it
may own to any such registration. The Company shall bear all costs and
expenses for registration and filing fees, printing expenses, fees and
disbursements of all counsel and any accounting fees, including expenses of
any special audit, incident to or required by any registration not
requested by BCM. Underwriting discounts and commissions shall be the pro
rata expense of such selling shareholder.

6. Indemnification. Prior to the effective date of any registration statement
relating to any of the shares of Common Stock owned by BCM, the Company and
BCM shall enter into an agreement providing for reciprocal indemnification
against any losses, claims, damages or liabilities to which the Company or
BCM (or controlling persons thereof) may become subject under the
Securities Act of 1933, as amended, or otherwise, in the form of reciprocal
indemnification provisions which customarily appear in underwriting
agreements used by reputable investment bankers.

7. Acquisition for investment. BCM hereby agrees that the shares of Common
Stock are being acquired for its own account and not with a view to the
distribution or resale thereof and the same shall not be sold or
transferred in the absence of an effective registration statement under the
Securities Act of 1933 unless an exemption therefrom is available.

8. Agreements Relating to Rule 144. If and so long as the Company has
securities registered pursuant to the Securities Act of 1933, the Company
will (a) file reports in compliance with the Securities Exchange Act of
1934, and (b) at its expense, forthwith upon the request of BCM, deliver to
BCM a certificate, signed by the Company's principal financial officer,
stating (i) Company's name, address and telephone number (including area
code), (ii) the Company's Securities and Exchange identification number,
(iii) the Company's Securities and Exchange Commission file number, (iv)
the number of shares of stock (and other securities) outstanding as shown
by the most recent report or statement published by the Company and (v)
whether the Company has filed the reports required to be filed under the
Securities Exchange Act of 1934 for a period of at least ninety (90) days
prior to the date of such certificate and in addition has filed the most
recent annual report required to be filed thereunder. If at any time,
subsequent to the exchange of BCM's notes for Common Stock, the Company is
not required to file reports in compliance with either Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, the Company, at its
expense will, forthwith upon the written request of BCM, make available
adequate current public information with respect to the Company within the
meaning of paragraph (c)(2) of Rule 144 of the General Rules and
Regulations promulgated under the Securities Act of 1933.

9. Transfer of Common Stock by BCM. It is expected that BCM shall and BCM
shall at any time be permitted without any approval, consent or action of
the Company to, sell, transfer or assign all or any part of the Common
Stock or other voting or non-voting equity securities of the Company then
owned by BCM to other individuals, corporations or other entities;
provided, however, in the event of a sale, transfer or assignment by BCM of
any of its shares of Common Stock, BCM shall, in the absence of an
effective registration statement under the Securities Act of 1933 covering
such shares, provide the Company with an opinion of counsel, satisfactory
in form and substance to the Company and its counsel, to the effect that
such sale, transfer or assignment will not require that such securities be
registered under the Securities Act of 1933. Any such assignee, in
proportion to its ownership of the Common Stock or other voting or
non-voting equity securities, shall be entitled to exercise or acquire all
of the rights or interests which may be exercised or acquired by BCM
pursuant to the terms of this Agreement; provided, however, that the right
to request mandatory registration under paragraph 5 shall be exercisable
only by the then owners of a majority interest of the Common Stock
previously held by BCM.

Larry Becker
Becker Capital Management
7102 LaVista Place
Suite 100
Longmont, CO
80503

Or at such other addresses as may have been furnished to the other parties
in writing.

11. No additional Classes of Common Stock. The Company shall not create any
additional classes of common capital stock.

12. Termination of Agreement. This Agreement shall terminate only upon the
exercise by BCM of all of its rights for registration or exchange of stock
as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
consent of the Company and BCM.

13. Amendments. This agreement may be amended only by written amendment signed
by BCM and the Company.

14. Complete Agreement. This Agreement contains all of the Agreements and
understandings between the parties here-to relative to the transaction
contemplated herein.

15. Choice of Law. This agreement and all matters pertaining thereto shall be
construed under he laws of the State of Nebraska.

16. Signatures. This Agreement may be executed in counterparts, with each such
duly executed counterpart having the same validity, force and effect as the
original.

17. Facsimile. A facsimile copy of this document and any signatures shall be
considered for all purposes and intent as legal and binding originals.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.

Becker Capital Management Telemetrix Inc.

/s/Larry Becker /s/Michael J. Tracy
- ---------------------------- -----------------------------
Larry Becker Michael J. Tracy, President

Telemetrix Inc. Telemetrix Inc.

/s/Michael L. Glaser /s/William L. Becker
- ----------------------------- ----------------------------
Michael L. Glaser William L. Becker, Chairman
Secretary Board of Directors

EXHIBIT 1

Total 03/31/2003
Date of Interest Accrued Share price
Note # Loan Rate Principal Int. Total at $0.15
- --------------------------------------------------------------------------------------------------
30-01 (31) 04/06/2001 Becker Capital Mgmt 10.00% 75,000.00 15,750.00 90,750.00 605,000
30-02 (32) 04/30/2000 Becker Capital Mgmt 10.00% 50,000.00 10,500.00 60,500.00 403,333
30-03 (33) 05/30/2001 Becker Capital Mgmt 10.00% 30,000.00 6,300.00 36,300.00 242,000
30-04 (34) 06/14/2001 Becker Capital Mgmt 10.00% 80,000.00 16,800.00 96,800.00 645,333
30-05 07/02/2001 Becker Capital Mgmt 10.00% 25,000.00 5,250.00 30,250.00 201,667
30-06 07/31/2001 Becker Capital Mgmt 10.00% 64,000.00 13,440.00 77,440.00 516,267
30-07 08/21/2001 Becker Capital Mgmt 10.00% 25,000.00 5,250.00 30,250.00 201,667
30-08 10/26/2001 Becker Capital Mgmt 10.00% 20,105.64 4,222.18 24,327.82 162,185
067 01/30/2002 Becker Capital Mgmt 10.00% 50,000.00 10,500.00 60,500.00 403,333
071 07/12/2002 Becker Capital Mgmt 10.00% 24,963.59 1,816.79 26,780.38 178,536
072 07/30/2002 Becker Capital Mgmt 10.00% 25,000.00 1,694.44 26,694.44 177,963
073 08/06/2002 Becker Capital Mgmt 10.00% 8,000.00 526.67 8,526.67 56,844
074 08/21/2002 Becker Capital Mgmt 10.00% 35,000.00 2,158.33 37,158.33 247,722
075 09/04/2002 Becker Capital Mgmt 10.00% 16,000.00 924.44 16,924.44 112,830
11/07/2002 Becker Capital Mgmt 10.00% 3,500.00 140.00 3,640.00 24,267
12/06/2002 Becker Capital Mgmt 10.00% 5,000.00 159.72 5,159.72 34,398

Totals 95,432.59 632,001.82 4,213,345

*Total Shares 4,213,345

*This number is after adjustment to the conversion value of the notes,
reflecting an interest rate of 10% on all notes, interest computed on an
annually compounded basis through March 31, 2003.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

EXCHANGE AND CONVERSION AGREEMENT
BETWEEN
TELEMETRIX INC.
AND
MICHAEL L. GLASER

THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 26 day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("the Company"), and MICHAEL L. GLASER an individual residing at 2324
South Jackson Street, Denver, CO 80210 ("Glaser").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, the Company and Glaser have entered into certain loan agreements
("notes"), a schedule of which is identified as Exhibit 1 and is attached to and
made a part of this agreement; and

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the notes held by Glaser for shares of the common and
preferred capital stock of the Company; and

WHEREAS, the Company and Glaser mutually desire to set forth their agreements
and understandings with respect to such exchange of notes for shares of the
common capital stock of the Company and to provide for certain rights of Glaser
in connection therewith;

2. Exchange of notes for Common Stock. As of the date of this agreement,
Glaser shall surrender to the principal office of the Company (or such
other office or agency of the Company as the Company may designate by
notice in writing to the holder or holders of the Common Stock of the
Company) all certificates representing all shares of Common Stock which
have been issued by the Company to Michael L. Glaser, his heirs, successors
or assigns which correspond or were issued in connection or association
with the schedule of notes attached hereto as Exhibit 1, and shall exchange
without further cost all notes and shares of Common Stock issued as
consideration for any of the notes listed in Exhibit 1, as well as shares
issued on the date of reorganization as consideration and shares issued for
services for 886,380 shares of Common Stock of the Company and 25,114.1
shares of Preferred Stock. This agreement does not contemplate the
surrender of any shares of stock which are held by Glaser and which were
not a part of any transactions between Glaser and the Company, and which
shares are held by Glaser as either restricted or unrestricted shares of
Common Stock.

4. Option of Glaser for Registration or Exchange of Stock. At any time, and
subject to the terms set forth in paragraph 5 of this document, Glaser
shall have the right by providing written notice to the Company to have the
Company register in accordance with Paragraph 6 hereof all or any part of
the Common Stock owned by Glaser. if any, held by Glaser on a registration
statement in compliance with the Securities Act of 1933 in order to permit
the sale or distribution of such stock.

5. Registration of Stock. If the Company shall receive from Glaser a written
request that the Company register Common Stock under a registration
statement in compliance with the Securities Act of 1933 as provided in
paragraph 6 hereof, in order to permit the sale or distribution of such
stock, the Company, as soon as practicable after giving written notice to
Glaser (which notice shall be given by the Company within ten (10) days
after receipt of the written request for registration from Glaser) that it
has elected to file a registration statement for the Common Stock held by
Glaser pursuant to this paragraph, will use its best efforts to effect such
registration and qualify the Common Stock in such jurisdictions as may be
requested by Glaser. Any such registration of shares requested by Glaser
may include shares of Common Stock owned by other shareholders of the
Company. 100,000 (One Hundred Thousand) shares in the aggregate is the
minimum number of shares that may be included in any registration. Each
selling shareholder shall bear a pro rata portion of all costs and expenses
paid to third parties (other than those paid to any affiliate or subsidiary
of the Company or any shareholder thereof) for registration and filing
fees, printing expenses, fees and disbursements of counsel, and any
accounting fees incident to or required by the registration or
qualification. Underwriting discounts and commissions shall be the pro rata
expense of each selling shareholder. The Company shall keep effective and
maintain any such registration statement for such period and to the extent
as Glaser may deem necessary for the purpose of selling or disposing of the
shares, and from time to time during such period shall amend or supplement
the prospectus used in connection therewith to the extent necessary in
order to comply with the applicable law. The Company shall be required to
comply with the above registration provisions only once, except that if
Glaser receives a Warrant which it is not entitled to exercise until after
the registration statement has become effective, then Glaser shall be
entitled to a second registration to cover Common Stock acquired by it upon
exercise of the Warrant an any other shares of Common Stock then still
owned by Glaser.

Should the Company at any time seek to register all or any part of its
Common Stock under a registration statement in compliance with the
Securities Act of 1933, without having been requested to do so by Glaser,
in accordance with this paragraph, Glaser may (in addition to its
registration rights set forth above) add any or all of such shares of the
Company as it may own to any such registration. The Company shall bear all
costs and expenses for registration and filing fees, printing expenses,
fees and disbursements of all counsel and any accounting fees, including
expenses of any special audit, incident to or required by any registration
not requested by Glaser. Underwriting discounts and commissions shall be
the pro rata expense of such selling shareholder.

6. Indemnification. Prior to the effective date of any registration statement
relating to any of the shares of Common Stock owned by Glaser, the Company
and Glaser shall enter into an agreement providing for reciprocal
indemnification against any losses, claims, damages or liabilities to which
the Company or Glaser (or controlling persons thereof) may become subject
under the Securities Act of 1933, as amended, or otherwise, in the form of
reciprocal indemnification provisions which customarily appear in
underwriting agreements used by reputable investment bankers.

7. Acquisition for investment. Glaser hereby agrees that the shares of Common
Stock are being acquired for its own account and not with a view to the
distribution or resale thereof and the same shall not be sold or
transferred in the absence of an effective registration statement under the
Securities Act of 1933 unless an exemption therefrom is available.

8. Agreements Relating to Rule 144. If and so long as the Company has
securities registered pursuant to the Securities Act of 1933, the Company
will (a) file reports in compliance with the Securities Exchange Act of
1934, and (b) at its expense, forthwith upon the request of Glaser, deliver
to Glaser a certificate, signed by the Company's principal financial
officer, stating (i) Company's name, address and telephone number
(including area code), (ii) the Company's Securities and Exchange
identification number, (iii) the Company's Securities and Exchange
Commission file number, (iv) the number of shares of stock (and other
securities) outstanding as shown by the most recent report or statement
published by the Company and (v) whether the Company has filed the reports
required to be filed under the Securities Exchange Act of 1934 for a period
of at least ninety (90) days prior to the date of such certificate and in
addition has filed the most recent annual report required to be filed
thereunder. If at any time, subsequent to the exchange of Glaser's notes
for Common Stock, the Company is not required to file reports in compliance
with either Section 13 or Section 15(d) of the Securities Exchange Act of
1934, the Company, at its expense will, forthwith upon the written request
of Glaser, make available adequate current public information with respect
to the Company within the meaning of paragraph (c)(2) of Rule 144 of the
General Rules and Regulations promulgated under the Securities Act of 1933.

9. Transfer of Common Stock by Glaser. It is expected that Glaser shall and
Glaser shall at any time be permitted without any approval, consent or
action of the Company to, sell, transfer or assign all or any part of the
Common Stock or other voting or non-voting equity securities of the Company
then owned by Glaser to other individuals, corporations or other entities;
provided, however, in the event of a sale, transfer or assignment by Glaser
of any of its shares of Common Stock, Glaser shall, in the absence of an
effective registration statement under the Securities Act of 1933 covering
such shares, provide the Company with an opinion of counsel, satisfactory
in form and substance to the Company and its counsel, to the effect that
such sale, transfer or assignment will not require that such securities be
registered under the Securities Act of 1933. Any such assignee, in
proportion to its ownership of the Common Stock or other voting or
non-voting equity securities, shall be entitled to exercise or acquire all
of the rights or interests which may be exercised or acquired by Glaser
pursuant to the terms of this Agreement; provided, however, that the right
to request mandatory registration under paragraph 5 shall be exercisable
only by the then owners of a majority interest of the Common Stock
previously held by Glaser.

Michael L. Glaser
2324 South Jackson
Denver, CO
80210

Or at such other addresses as may have been furnished to the other parties
in writing.

11. No additional Classes of Common Stock. The Company shall not create any
additional classes of common capital stock.

12. Termination of Agreement. This Agreement shall terminate only upon the
exercise by Glaser of all of its rights for registration or exchange of
stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
consent of the Company and Glaser.

13. Amendments. This agreement may be amended only by written amendment signed
by Glaser and the Company.

14. Complete Agreement. This Agreement contains all of the Agreements and
understandings between the parties here-to relative to the transaction
contemplated herein.

15. Choice of Law. This agreement and all matters pertaining thereto shall be
construed under the laws of the State of Nebraska.

16. Signatures. This Agreement may be executed in counterparts, with each such
duly executed counterpart having the same validity, force and effect as the
original.

17. Facsimile. A facsimile copy of this document and any signatures shall be
considered for all purposes and intent as legal and binding originals.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.

Telemetrix Inc.

/s/Michael L. Glaser /s/Michael J. Tracy
- ---------------------------- -----------------------------
Michael L. Glaser Michael J. Tracy, President

Telemetrix Inc.

/s/William L. Becker
- ----------------------------
William L. Becker, Chairman
Board of Directors

Exhibit 1

Total 03/31/2003
Date of Interest Accrued Share price
Note # Loan Rate Principal Int. Total at $0.15
- --------------------------------------------------------------------------------------------------
057 08/01/2001 Michael Glaser IRA 10.00% 55,500.00 11,655.00 67,155.00 447,700
Rollover
064 12/15/2001 Michael Glaser IRA 10.00% 343,488.87 72,132.66 415,621.53 2,770,810
Rollover
066 12/31/2001 Michael Glaser IRA 10.00% 165,375.00 34,728.75 200,103.75 1,334,025
Rollover
069 02/22/2002 Michael Glaser 10.00% 100,000.00 21,000.00 121,000.00 806,667
139,516.41 803,880.28 5,359,202
Shares At Org. 550,000
Total Shares* 5,909,202

*This number is after adjustment to the conversion value of the notes,
reflecting an interest rate of 10% on all notes, interest computed on an
annually compounded basis through March 31, 2003.

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

EXCHANGE AGREEMENT
BETWEEN
TELEMETRIX INC.
AND
HARTFORD HOLDINGS

THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 26 day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("Company"), and HARTFORD HOLDINGS, a Cayman corp with offices at P.O. Box
143, Grand Cayman, BWI ("Hartford").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, HARTFORD holds stock in the Company;

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the Common Stock held by HARTFORD for new issue preferred
capital stock of the Company; and

WHEREAS, the Company and HARTFORD mutually desire to set forth their agreements
and understandings with respect to such exchange of common capital stock for new
issue preferred capital stock of the Company of the Company and to provide for
certain rights of HARTFORD in connection therewith;

2. Exchange of Common Stock capital stock for new issue preferred shares of
stock. As of the date of this agreement, HARTFORD shall surrender to the
principal office of the Company (or such other office or agency of the
Company as the Company may designate by notice in writing to the holder or
holders of the Common Stock of the Company) certificates representing
3,962,004 shares of Common Stock which have been issued by the Company to
HARTFORD, successors or assigns, and shall exchange without further cost
3,962,004 shares of Common Stock for 594,301 shares of Common Stock and
16,838.5 shares of Preferred Stock. This agreement does not contemplate the
surrender of any shares of stock which are held by HARTFORD and which were
not a part of any transactions between HARTFORD and the Company, and which
shares are held by HARTFORD as either restricted or unrestricted shares of
Common Stock.

4. Option of HARTFORD for Registration or Exchange of Stock. At any time, and
subject to the terms set forth in paragraph 5 of this document, HARTFORD
shall have the right by providing written notice to the Company to have the
Company register in accordance with Paragraph 6 hereof all or any part of
the Common Stock owned by HARTFORD. if any, held by HARTFORD on a
registration statement in compliance with the Securities Act of 1933 in
order to permit the sale or distribution of such stock.

5. Registration of Stock. If the Company shall receive from HARTFORD a written
request that the Company register Common Stock under a registration
statement in compliance with the Securities Act of 1933 as provided in
paragraph 6 hereof, in order to permit the sale or distribution of such
stock, the Company, as soon as practicable after giving written notice to
HARTFORD (which notice shall be given by the Company within ten (10) days
after receipt of the written request for registration from HARTFORD) that
it has elected to file a registration statement for the Common Stock held
by HARTFORD pursuant to this paragraph, will use its best efforts to effect
such registration and qualify the Common Stock in such jurisdictions as may
be requested by HARTFORD. Any such registration of shares requested by
HARTFORD may include shares of Common Stock owned by other shareholders of
the Company. 100,000 (One Hundred Thousand) shares in the aggregate is the
minimum number of shares that may be included in any registration. Each
selling shareholder shall bear a pro rata portion of all costs and expenses
paid to third parties (other than those paid to any affiliate or subsidiary
of the Company or any shareholder thereof) for registration and filing
fees, printing expenses, fees and disbursements of counsel, and any
accounting fees incident to or required by the registration or
qualification. Underwriting discounts and commissions shall be the pro rata
expense of each selling shareholder. The Company shall keep effective and
maintain any such registration statement for such period and to the extent
as HARTFORD may deem necessary for the purpose of selling or disposing of
the shares, and from time to time during such period shall amend or
supplement the prospectus used in connection therewith to the extent
necessary in order to comply with the applicable law. The Company shall be
required to comply with the above registration provisions only once, except
that if HARTFORD receives a Warrant which it is not entitled to exercise
until after the registration statement has become effective, then HARTFORD
shall be entitled to a second registration to cover Common Stock acquired
by it upon exercise of the Warrant an any other shares of Common Stock then
still owned by HARTFORD.

Should the Company at any time seek to register all or any part of its
Common Stock under a registration statement in compliance with the
Securities Act of 1933, without having been requested to do so by HARTFORD,
in accordance with this paragraph, HARTFORD may (in addition to its
registration rights set forth above) add any or all of such shares of the
Company as it may own to any such registration. The Company shall bear all
costs and expenses for registration and filing fees, printing expenses,
fees and disbursements of all counsel and any accounting fees, including
expenses of any special audit, incident to or required by any registration
not requested by HARTFORD. Underwriting discounts and commissions shall be
the pro rata expense of such selling shareholder.

6. Indemnification. Prior to the effective date of any registration statement
relating to any of the shares of Common Stock owned by HARTFORD, the
Company and HARTFORD shall enter into an agreement providing for reciprocal
indemnification against any losses, claims, damages or liabilities to which
the Company or HARTFORD (or controlling persons thereof) may become subject
under the Securities Act of 1933, as amended, or otherwise, in the form of
reciprocal indemnification provisions which customarily appear in
underwriting agreements used by reputable investment bankers.

7. Acquisition for investment. HARTFORD hereby agrees that the shares of
Common Stock are being acquired for its own account and not with a view to
the distribution or resale thereof and the same shall not be sold or
transferred in the absence of an effective registration statement under the
Securities Act of 1933 unless an exemption therefrom is available.

8. Agreements Relating to Rule 144. If and so long as the Company has
securities registered pursuant to the Securities Act of 1933, the Company
will (a) file reports in compliance with the Securities Exchange Act of
1934, and (b) at its expense, forthwith upon the request of HARTFORD,
deliver to HARTFORD a certificate, signed by the Company's principal
financial officer, stating (i) Company's name, address and telephone number
(including area code), (ii) the Company's Securities and Exchange
identification number, (iii) the Company's Securities and Exchange
Commission file number, (iv) the number of shares of stock (and other
securities) outstanding as shown by the most recent report or statement
published by the Company and (v) whether the Company has filed the reports
required to be filed under the Securities Exchange Act of 1934 for a period
of at least ninety (90) days prior to the date of such certificate and in
addition has filed the most recent annual report required to be filed
thereunder. If at any time, subsequent to the exchange of HARTFORD's notes
for Common Stock, the Company is not required to file reports in compliance
with either Section 13 or Section 15(d) of the Securities Exchange Act of
1934, the Company, at its expense will, forthwith upon the written request
of HARTFORD, make available adequate current public information with
respect to the Company within the meaning of paragraph (c)(2) of Rule 144
of the General Rules and Regulations promulgated under the Securities Act
of 1933.

9. Transfer of Common Stock by HARTFORD. It is expected that HARTFORD shall
and HARTFORD shall at any time be permitted without any approval, consent
or action of the Company to, sell, transfer or assign all or any part of
the Common Stock or other voting or non-voting equity securities of the
Company then owned by HARTFORD to other individuals, corporations or other
entities; provided, however, in the event of a sale, transfer or assignment
by HARTFORD of any of its shares of Common Stock, HARTFORD shall, in the
absence of an effective registration statement under the Securities Act of
1933 covering such shares, provide the Company with an opinion of counsel,
satisfactory in form and substance to the Company and its counsel, to the
effect that such sale, transfer or assignment will not require that such
securities be registered under the Securities Act of 1933. Any such
assignee, in proportion to its ownership of the Common Stock or other
voting or non-voting equity securities, shall be entitled to exercise or
acquire all of the rights or interests which may be exercised or acquired
by HARTFORD pursuant to the terms of this Agreement; provided, however,
that the right to request mandatory registration under paragraph 5 shall be
exercisable only by the then owners of a majority interest of the Common
Stock previously held by HARTFORD.

Hartford Holdings
c/o William L. Becker
Park Lane
West Bay Road
Georgetown, Grand Cayman Islands,
British West Indies

Or at such other addresses as may have been furnished to the other parties
in writing.

11. No additional Classes of Common Stock. The Company shall not create any
additional classes of common capital stock.

12. Termination of Agreement. This Agreement shall terminate only upon the
exercise by HARTFORD of all of its rights for registration or exchange of
stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
consent of the Company and HARTFORD.

13. Amendments. This agreement may be amended only by written amendment signed
by HARTFORD and the Company.

14. Complete Agreement. This Agreement contains all of the Agreements and
understandings between the parties here-to relative to the transaction
contemplated herein.

15. Choice of Law. This agreement and all matters pertaining thereto shall be
construed under he laws of the State of Nebraska.

16. Signatures. This Agreement may be executed in counterparts, with each such
duly executed counterpart having the same validity, force and effect as the
original.

17. Facsimile. A facsimile copy of this document and any signatures shall be
considered for all purposes and intent as legal and binding originals.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.

HARTFORD HOLDINGS Telemetrix Inc.

/s/ illegible /s/Michael J. Tracy
- ---------------------------- -----------------------------
By: Michael J. Tracy, President

Telemetrix Inc.

/s/Michael L. Glaser
- ----------------------------
Michael L. Glaser, Secretary

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

EXCHANGE AGREEMENT
BETWEEN
TELEMETRIX INC.
AND
IONIAN INVESTMENTS, LTD

THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 30th day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("Company"), and IONIAN Investments Ltd. ___________Harbour Trust Co.
Ltd, One Capital Place, P.O. Box 1787 GT, Grand Cayman, Cayman Islands, B.W.I.,
("IONIAN").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, IONIAN holds stock in the Company;

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the Common Stock held by IONIAN for new issue preferred
capital stock of the Company; and

WHEREAS, the Company and IONIAN mutually desire to set forth their agreements
and understandings with respect to such exchange of common capital stock for new
issue preferred capital stock of the Company of the Company and to provide for
certain rights of IONIAN in connection therewith;

2. Exchange of Common Stock capital stock for new issue preferred shares of
stock. As of the date of this agreement, IONIAN shall surrender to the
principal office of the Company (or such other office or agency of the
Company as the Company may designate by notice in writing to the holder or
holders of the Common Stock of the Company) certificates representing
2,000,000 shares of Common Stock which have been issued by the Company to
IONIAN, successors or assigns, and shall exchange without further cost
750,000 shares of Common Stock for 112,500 shares of Common Stock and
3,187.5 shares of Preferred Stock. This agreement does not contemplate the
surrender of any shares of stock which are held by IONIAN and which were
not a part of any transactions between IONIAN and the Company, and which
shares are held by IONIAN as either restricted or unrestricted shares of
Common Stock.

4. Option of IONIAN for Registration or Exchange of Stock. At any time, and
subject to the terms set forth in paragraph 5 of this document, IONIAN
shall have the right by providing written notice to the Company to have the
Company register in accordance with Paragraph 6 hereof all or any part of
the Common Stock owned by IONIAN. if any, held by IONIAN on a registration
statement in compliance with the Securities Act of 1933 in order to permit
the sale or distribution of such stock.

5. Registration of Stock. If the Company shall receive from IONIAN a written
request that the Company register Common Stock under a registration
statement in compliance with the Securities Act of 1933 as provided in
paragraph 6 hereof, in order to permit the sale or distribution of such
stock, the Company, as soon as practicable after giving written notice to
IONIAN (which notice shall be given by the Company within ten (10) days
after receipt of the written request for registration from IONIAN) that it
has elected to file a registration statement for the Common Stock held by
IONIAN pursuant to this paragraph, will use its best efforts to effect such
registration and qualify the Common Stock in such jurisdictions as may be
requested by IONIAN. Any such registration of shares requested by IONIAN
may include shares of Common Stock owned by other shareholders of the
Company. 100,000 (One Hundred Thousand) shares in the aggregate is the
minimum number of shares that may be included in any registration. Each
selling shareholder shall bear a pro rata portion of all costs and expenses
paid to third parties (other than those paid to any affiliate or subsidiary
of the Company or any shareholder thereof) for registration and filing
fees, printing expenses, fees and disbursements of counsel, and any
accounting fees incident to or required by the registration or
qualification. Underwriting discounts and commissions shall be the pro rata
expense of each selling shareholder. The Company shall keep effective and
maintain any such registration statement for such period and to the extent
as IONIAN may deem necessary for the purpose of selling or disposing of the
shares, and from time to time during such period shall amend or supplement
the prospectus used in connection therewith to the extent necessary in
order to comply with the applicable law. The Company shall be required to
comply with the above registration provisions only once, except that if
IONIAN receives a Warrant which it is not entitled to exercise until after
the registration statement has become effective, then IONIAN shall be
entitled to a second registration to cover Common Stock acquired by it upon
exercise of the Warrant an any other shares of Common Stock then still
owned by IONIAN.

Should the Company at any time seek to register all or any part of its
Common Stock under a registration statement in compliance with the
Securities Act of 1933, without having been requested to do so by IONIAN,
in accordance with this paragraph, IONIAN may (in addition to its
registration rights set forth above) add any or all of such shares of the
Company as it may own to any such registration. The Company shall bear all
costs and expenses for registration and filing fees, printing expenses,
fees and disbursements of all counsel and any accounting fees, including
expenses of any special audit, incident to or required by any registration
not requested by IONIAN. Underwriting discounts and commissions shall be
the pro rata expense of such selling shareholder.

6. Indemnification. Prior to the effective date of any registration statement
relating to any of the shares of Common Stock owned by IONIAN, the Company
and IONIAN shall enter into an agreement providing for reciprocal
indemnification against any losses, claims, damages or liabilities to which
the Company or IONIAN (or controlling persons thereof) may become subject
under the Securities Act of 1933, as amended, or otherwise, in the form of
reciprocal indemnification provisions which customarily appear in
underwriting agreements used by reputable investment bankers.

7. Acquisition for investment. IONIAN hereby agrees that the shares of Common
Stock are being acquired for its own account and not with a view to the
distribution or resale thereof and the same shall not be sold or
transferred in the absence of an effective registration statement under the
Securities Act of 1933 unless an exemption therefrom is available.

8. Agreements Relating to Rule 144. If and so long as the Company has
securities registered pursuant to the Securities Act of 1933, the Company
will (a) file reports in compliance with the Securities Exchange Act of
1934, and (b) at its expense, forthwith upon the request of IONIAN, deliver
to IONIAN a certificate, signed by the Company's principal financial
officer, stating (i) Company's name, address and telephone number
(including area code), (ii) the Company's Securities and Exchange
identification number, (iii) the Company's Securities and Exchange
Commission file number, (iv) the number of shares of stock (and other
securities) outstanding as shown by the most recent report or statement
published by the Company and (v) whether the Company has filed the reports
required to be filed under the Securities Exchange Act of 1934 for a period
of at least ninety (90) days prior to the date of such certificate and in
addition has filed the most recent annual report required to be filed
thereunder. If at any time, subsequent to the exchange of IONIAN's notes
for Common Stock, the Company is not required to file reports in compliance
with either Section 13 or Section 15(d) of the Securities Exchange Act of
1934, the Company, at its expense will, forthwith upon the written request
of IONIAN, make available adequate current public information with respect
to the Company within the meaning of paragraph (c)(2) of Rule 144 of the
General Rules and Regulations promulgated under the Securities Act of 1933.

9. Transfer of Common Stock by IONIAN. It is expected that IONIAN shall and
IONIAN shall at any time be permitted without any approval, consent or
action of the Company to, sell, transfer or assign all or any part of the
Common Stock or other voting or non-voting equity securities of the Company
then owned by IONIAN to other individuals, corporations or other entities;
provided, however, in the event of a sale, transfer or assignment by IONIAN
of any of its shares of Common Stock, IONIAN shall, in the absence of an
effective registration statement under the Securities Act of 1933 covering
such shares, provide the Company with an opinion of counsel, satisfactory
in form and substance to the Company and its counsel, to the effect that
such sale, transfer or assignment will not require that such securities be
registered under the Securities Act of 1933. Any such assignee, in
proportion to its ownership of the Common Stock or other voting or
non-voting equity securities, shall be entitled to exercise or acquire all
of the rights or interests which may be exercised or acquired by IONIAN
pursuant to the terms of this Agreement; provided, however, that the right
to request mandatory registration under paragraph 5 shall be exercisable
only by the then owners of a majority interest of the Common Stock
previously held by IONIAN.

IONIAN
Harbour Trust Co., Ltd.
One Capital Place
P.O. Box 1787 GT
Grand Cayman
Cayman Islands, B.W.I.

Attn: Alan Milgate

Or at such other addresses as may have been furnished to the other parties
in writing.

11. No additional Classes of Common Stock. The Company shall not create any
additional classes of common capital stock.

12. Termination of Agreement. This Agreement shall terminate only upon the
exercise by IONIAN of all of its rights for registration or exchange of
stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
consent of the Company and IONIAN.

13. Amendments. This agreement may be amended only by written amendment signed
by IONIAN and the Company.

14. Complete Agreement. This Agreement contains all of the Agreements and
understandings between the parties here-to relative to the transaction
contemplated herein.

15. Choice of Law. This agreement and all matters pertaining thereto shall be
construed under he laws of the State of Nebraska.

16. Signatures. This Agreement may be executed in counterparts, with each such
duly executed counterpart having the same validity, force and effect as the
original.

17. Facsimile. A facsimile copy of this document and any signatures shall be
considered for all purposes and intent as legal and binding originals.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.

IONIAN Investments, Ltd. Telemetrix Inc.

/s/illegible /s/Michael J. Tracy
- ---------------------------- -----------------------------
By: For and on behalf of Bluejay Michael J. Tracy, President
Investments Ltd. and Cardinal
Investments Limited, Directors

Telemetrix Inc.

/s/Michael L. Glaser
- ----------------------------
Michael L. Glaser, Secretary

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

TOWERGATE

EXCHANGE AND CONVERSION AGREEMENT
BETWEEN
TELEMETRIX INC.
AND
MICHAEL J. TRACY

THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 26 day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("the Company"), and MICHAEL J. TRACY, an individual residing at 731 East
38th Street, Scottsbluff, NE 69361 ("Tracy").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, the Company and Tracy have entered into certain loan agreements
("notes"), a schedule of which is identified as Exhibit 1 and is attached to and
made a part of this agreement; and

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the notes held by Tracy for shares of the common and preferred
capital stock of the Company; and

WHEREAS, the Company and Tracy mutually desire to set forth their agreements and
understandings with respect to such exchange of notes for shares of the common
capital stock of the Company and to provide for certain rights of Tracy in
connection therewith;

2. Exchange of notes for Common Stock. As of the date of this agreement, Tracy
shall surrender to the principal office of the Company (or such other
office or agency of the Company as the Company may designate by notice in
writing to the holder or holders of the Common Stock of the Company) all
certificates representing all shares of Common Stock which have been issued
by the Company to Michael L. Tracy, his heirs, successors or assigns which
correspond or were issued in connection or association with the schedule of
notes attached hereto as Exhibit 1, as well as shares issued on the date of
reorganization as consideration and shares issued for salary and shall have
the right to exchange without further cost all notes and shares of Common
Stock issued as consideration for any of the notes listed in Exhibit 1, as
well as shares issued as in lieu of salary for 3,584,151 shares of Common
Stock of the Company and 101,551 shares of Preferred Stock. This agreement
does not contemplate the surrender of any shares of stock which are held by
Tracy and which were not a part of any transactions between Tracy and the
Company, and which shares are held by Tracy as either restricted or
unrestricted shares of Common Stock.

4. Option of Tracy for Registration or Exchange of Stock. At any time, and
subject to the terms set forth in paragraph 5 of this document, Tracy
shall have the right by providing written notice to the Company to have the
Company register in accordance with Paragraph 6 hereof all or any part of
the Common Stock owned by Tracy. if any, held by Tracy on a registration
statement in compliance with the Securities Act of 1933 in order to permit
the sale or distribution of such stock.

5. Registration of Stock. If the Company shall receive from Tracy a written
request that the Company register Common Stock under a registration
statement in compliance with the Securities Act of 1933 as provided in
paragraph 6 hereof, in order to permit the sale or distribution of such
stock, the Company, as soon as practicable after giving written notice to
Tracy (which notice shall be given by the Company within ten (10) days
after receipt of the written request for registration from Tracy) that it
has elected to file a registration statement for the Common Stock held by
Tracy pursuant to this paragraph, will use its best efforts to effect such
registration and qualify the Common Stock in such jurisdictions as may be
requested by Tracy. Any such registration of shares requested by Tracy may
include shares of Common Stock owned by other shareholders of the Company,.
100,000 (One Hundred Thousand) shares in the aggregate is the minimum
number of shares that may be included in any registration. Each selling
shareholder shall bear a pro rata portion of all costs and expenses paid to
third parties (other than those paid to any affiliate or subsidiary of the
Company or any shareholder thereof) for registration and filing fees,
printing expenses, fees and disbursements of counsel, and any accounting
fees incident to or required by the registration or qualification.
Underwriting discounts and commissions shall be the pro rata expense of
each selling shareholder. The Company shall keep effective and maintain any
such registration statement for such period and to the extent as Tracy may
deem necessary for the purpose of selling or disposing of the shares, and
from time to time during such period shall amend or supplement the
prospectus used in connection therewith to the extent necessary in order to
comply with the applicable law. The Company shall be required to comply
with the above registration provisions only once, except that if Tracy
receives a Warrant which it is not entitled to exercise until after the
registration statement has become effective, then Tracy shall be entitled
to a second registration to cover Common Stock acquired by it upon exercise
of the Warrant an any other shares of Common Stock then still owned by
Tracy.

Should the Company at any time seek to register all or any part of its
Common Stock under a registration statement in compliance with the
Securities Act of 1933, without having been requested to do so by Tracy, in
accordance with this paragraph, Tracy may (in addition to its registration
rights set forth above) add any or all of such shares of the Company as it
may own to any such registration. The Company shall bear all costs and
expenses for registration and filing fees, printing expenses, fees and
disbursements of all counsel and any accounting fees, including expenses of
any special audit, incident to or required by any registration not
requested by Tracy. Underwriting discounts and commissions shall be the pro
rata expense of such selling shareholder.

6. Indemnification. Prior to the effective date of any registration statement
relating to any of the shares of Common Stock owned by Tracy, the Company
and Tracy shall enter into an agreement providing for reciprocal
indemnification against any losses, claims, damages or liabilities to which
the Company or Tracy (or controlling persons thereof) may become subject
under the Securities Act of 1933, as amended, or otherwise, in the form of
reciprocal indemnification provisions which customarily appear in
underwriting agreements used by reputable investment bankers.

7. Acquisition for investment. Tracy hereby agrees that the shares of Common
Stock are being acquired for its own account and not with a view to the
distribution or resale thereof and the same shall not be sold or
transferred in the absence of an effective registration statement under the
Securities Act of 1933 unless an exemption therefrom is available.

8. Agreements Relating to Rule 144. If and so long as the Company has
securities registered pursuant to the Securities Act of 1933, the Company
will (a) file reports in compliance with the Securities Exchange Act of
1934, and (b) at its expense, forthwith upon the request of Tracy, deliver
to Tracy a certificate, signed by the Company's principal financial
officer, stating (i) Company's name, address and telephone number
(including area code), (ii) the Company's Securities and Exchange
identification number, (iii) the Company's Securities and Exchange
Commission file number, (iv) the number of shares of stock (and other
securities) outstanding as shown by the most recent report or statement
published by the Company and (v) whether the Company has filed the reports
required to be filed under the Securities Exchange Act of 1934 for a period
of at least ninety (90) days prior to the date of such certificate and in
addition has filed the most recent annual report required to be filed
thereunder. If at any time, subsequent to the exchange of Tracy's notes for
Common Stock, the Company is not required to file reports in compliance
with either Section 13 or Section 15(d) of the Securities Exchange Act of
1934, the Company, at its expense will, forthwith upon the written request
of Tracy, make available adequate current public information with respect
to the Company within the meaning of paragraph (c)(2) of Rule 144 of the
General Rules and Regulations promulgated under the Securities Act of 1933.

9. Transfer of Common Stock by Tracy. It is expected that Tracy shall and
Tracy shall at any time be permitted without any approval, consent or
action of the Company to, sell, transfer or assign all or any part of the
Common Stock or other voting or non-voting equity securities of the Company
then owned by Tracy to other individuals, corporations or other entities;
provided, however, in the event of a sale, transfer or assignment by Tracy
of any of its shares of Common Stock, Tracy shall, in the absence of an
effective registration statement under the Securities Act of 1933 covering
such shares, provide the Company with an opinion of counsel, satisfactory
in form and substance to the Company and its counsel, to the effect that
such sale, transfer or assignment will not require that such securities be
registered under the Securities Act of 1933. Any such assignee, in
proportion to its ownership of the Common Stock or other voting or
non-voting equity securities, shall be entitled to exercise or acquire all
of the rights or interests which may be exercised or acquired by Tracy
pursuant to the terms of this Agreement; provided, however, that the right
to request mandatory registration under paragraph 5 shall be exercisable
only by the then owners of a majority interest of the Common Stock
previously held by Tracy.

Michael J. Tracy
731 East 38th Street
Scottsbluff, NE
69361

Or at such other addresses as may have been furnished to the other parties
in writing.

11. No additional Classes of Common Stock. The Company shall not create any
additional classes of common capital stock.

12. Termination of Agreement. This Agreement shall terminate only upon the
exercise by Tracy of all of its rights for registration or exchange of
stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
consent of the Company and Tracy.

13. Amendments. This agreement may be amended only by written amendment signed
by Tracy and the Company.

14. Complete Agreement. This Agreement contains all of the Agreements and
understandings between the parties here-to relative to the transaction
contemplated herein.

15. Choice of Law. This agreement and all matters pertaining thereto shall be
construed under he laws of the State of Nebraska.

16. Signatures. This Agreement may be executed in counterparts, with each such
duly executed counterpart having the same validity, force and effect as the
original.

17. Facsimile. A facsimile copy of this document and any signatures shall be
considered for all purposes and intent as legal and binding originals.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.

Telemetrix Inc.

/s/Michael J. Tracy /s/Michael L. Glaser
- ---------------------------- ----------------------------
Michael J. Tracy Michael L. Glaser, Secretary

Telemetrix Inc.

/s/William L. Becker
- ----------------------------
William L. Becker, Chairman
Board of Directors

far blue soon to be a trading name of Tower Gate Finance Limited
Registered in England Number 03924137
Regulated by the FSA

EX-10.10 6 telemetrixex1010.htm Exhibit 10.10 Exchange Agreement between us and Hartford Holdings

Exhibit 10.10 Exchange Agreement between us and Hartford Holdings



                               EXCHANGE AGREEMENT
                                    BETWEEN
                                TELEMETRIX INC.
                                      AND
                               HARTFORD HOLDINGS



THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 26 day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("Company"), and HARTFORD HOLDINGS, a Cayman corp with offices at P.O. Box
143, Grand Cayman, BWI ("Hartford").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, HARTFORD holds stock in the Company;

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the Common Stock held by HARTFORD for new issue preferred
capital stock of the Company; and

WHEREAS, the Company and HARTFORD mutually desire to set forth their agreements
and understandings with respect to such exchange of common capital stock for new
issue preferred capital stock of the Company of the Company and to provide for
certain rights of HARTFORD in connection therewith;

NOW, THEREFORE, for and in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained and the mutual benefits
derived therefrom, the parties hereto do covenant and agree as follows:

1.   Capital Structure of the Company. The Company is a Delaware corporation
     authorized by its Certificate of Incorporation, to issue 25,000,000 shares
     of Common Stock ("Common Stock"), par value $.001 per share, of which
     18,486,176 are outstanding and 5,000,000 shares of Preferred Stock, par
     value of $.001 per share, of which 0 shares are outstanding.

2.   Exchange of Common Stock capital stock for new issue preferred shares of
     stock. As of the date of this agreement, HARTFORD shall surrender to the
     principal office of the Company (or such other office or agency of the
     Company as the Company may designate by notice in writing to the holder or
     holders of the Common Stock of the Company) certificates representing
     3,962,004 shares of Common Stock which have been issued by the Company to
     HARTFORD, successors or assigns, and shall exchange without further cost
     3,962,004 shares of Common Stock for 594,301 shares of Common Stock and
     16,838.5 shares of Preferred Stock. This agreement does not contemplate the
     surrender of any shares of stock which are held by HARTFORD and which were
     not a part of any transactions between HARTFORD and the Company, and which
     shares are held by HARTFORD as either restricted or unrestricted  shares of
     Common Stock.

3.   Authorization of Issuance of Preferred Stock. This exchange calls for the
     issuance of Preferred Stock. The Company shall promptly take such steps as
     may be necessary or appropriate under the laws of Delaware and the federal
     securities laws to permit the issuance of the Preferred Stock. If the
     authorization and issuance of such Preferred Stock requires an amendment to
     the Company's Certificate of Incorporation and the adoption by the
     stockholders of such amendment, the Company shall immediately initiate the
     necessary and required documents and corporate meetings. The Preferred
     Stock shall be non-voting stock.

4.   Option of HARTFORD for Registration or Exchange of Stock. At any time, and
     subject to the terms set forth in paragraph 5 of this document, HARTFORD
     shall have the right by providing written notice to the Company to have the
     Company register in accordance with Paragraph 6 hereof all or any part of
     the Common Stock owned by HARTFORD. if any, held by HARTFORD on a
     registration statement in compliance with the Securities Act of 1933 in
     order to permit the sale or distribution of such stock.

5.   Registration of Stock. If the Company shall receive from HARTFORD a written
     request that the Company register Common Stock under a registration
     statement in compliance with the Securities Act of 1933 as provided in
     paragraph 6 hereof, in order to permit the sale or distribution of such
     stock, the Company, as soon as practicable after giving written notice to
     HARTFORD (which notice shall be given by the Company within ten (10) days
     after receipt of the written request for registration from HARTFORD) that
     it has elected to file a registration statement for the Common Stock held
     by HARTFORD pursuant to this paragraph, will use its best efforts to effect
     such registration and qualify the Common Stock in such jurisdictions as may
     be requested by HARTFORD. Any such registration of shares requested by
     HARTFORD may include shares of Common Stock owned by other shareholders of
     the Company. 100,000 (One Hundred Thousand) shares in the aggregate is the
     minimum number of shares that may be included in any registration. Each
     selling shareholder shall bear a pro rata portion of all costs and expenses
     paid to third parties (other than those paid to any affiliate or subsidiary
     of the Company or any shareholder thereof) for registration and filing
     fees, printing expenses, fees and disbursements of counsel, and any
     accounting fees incident to or required by the registration or
     qualification. Underwriting discounts and commissions shall be the pro rata
     expense of each selling shareholder. The Company shall keep effective and
     maintain any such registration statement for such period and to the extent
     as HARTFORD may deem necessary for the purpose of selling or disposing of
     the shares, and from time to time during such period shall amend or
     supplement the prospectus used in connection therewith to the extent
     necessary in order to comply with the applicable law. The Company shall be
     required to comply with the above registration provisions only once, except
     that if HARTFORD receives a Warrant which it is not entitled to exercise
     until after the registration statement has become effective, then HARTFORD
     shall be entitled to a second registration to cover Common Stock acquired
     by it upon exercise of the Warrant an any other shares of Common Stock then
     still owned by HARTFORD.

     Should the Company at any time seek to register all or any part of its
     Common Stock under a registration statement in compliance with the
     Securities Act of 1933, without having been requested to do so by HARTFORD,
     in accordance with this paragraph, HARTFORD may (in addition to its
     registration rights set forth above) add any or all of such shares of the
     Company as it may own to any such registration. The Company shall bear all
     costs and expenses for registration and filing fees, printing expenses,
     fees and disbursements of all counsel and any accounting fees, including
     expenses of any special audit, incident to or required by any registration
     not requested by HARTFORD. Underwriting discounts and commissions shall be
     the pro rata expense of such selling shareholder.

6.   Indemnification. Prior to the effective date of any registration statement
     relating to any of the shares of Common Stock owned by HARTFORD, the
     Company and HARTFORD shall enter into an agreement providing for reciprocal
     indemnification against any losses, claims, damages or liabilities to which
     the Company or HARTFORD (or controlling persons thereof) may become subject
     under the Securities Act of 1933, as amended, or otherwise, in the form of
     reciprocal indemnification provisions which customarily appear in
     underwriting agreements used by reputable investment bankers.

7.   Acquisition for investment. HARTFORD hereby agrees that the shares of
     Common Stock are being acquired for its own account and not with a view to
     the distribution or resale thereof and the same shall not be sold or
     transferred in the absence of an effective registration statement under the
     Securities Act of 1933 unless an exemption therefrom is available.

8.   Agreements Relating to Rule 144. If and so long as the Company has
     securities registered pursuant to the Securities Act of 1933, the Company
     will (a) file reports in compliance with the Securities Exchange Act of
     1934, and (b) at its expense, forthwith upon the request of HARTFORD,
     deliver to HARTFORD a certificate, signed by the Company's principal
     financial officer, stating (i) Company's name, address and telephone number
     (including  area code), (ii) the Company's Securities and Exchange
     identification number, (iii) the Company's Securities and Exchange
     Commission file number, (iv) the number of shares of stock (and other
     securities) outstanding as shown by the most recent report or statement
     published  by the Company and (v) whether the Company has filed the reports
     required to be filed under the Securities Exchange Act of 1934 for a period
     of at least ninety (90) days prior to the date of such certificate and in
     addition has filed the most recent annual report required to be filed
     thereunder. If at any time, subsequent to the exchange of HARTFORD's notes
     for Common Stock, the Company is not required to file reports in compliance
     with either Section 13 or Section 15(d) of the Securities Exchange Act of
     1934, the Company, at its expense will, forthwith upon the written request
     of HARTFORD, make available adequate current public information  with
     respect to the Company within the meaning of paragraph (c)(2) of Rule 144
     of the General Rules and Regulations promulgated  under the Securities Act
     of 1933.

9.   Transfer of Common Stock by HARTFORD. It is expected that HARTFORD shall
     and HARTFORD shall at any time be permitted without any approval, consent
     or action of the Company to, sell, transfer or assign all or any part of
     the Common Stock or other voting or non-voting equity securities of the
     Company then owned by HARTFORD to other individuals, corporations or other
     entities; provided, however, in the event of a sale, transfer or assignment
     by HARTFORD of any of its shares of Common Stock, HARTFORD shall, in the
     absence of an effective registration statement under the Securities Act of
     1933 covering such shares, provide the Company with an opinion of counsel,
     satisfactory in form and substance to the Company and its counsel, to the
     effect that such sale, transfer or assignment will not require that such
     securities be registered under the Securities Act of 1933. Any such
     assignee, in proportion to its ownership of the Common Stock or other
     voting or non-voting equity securities, shall be entitled to exercise or
     acquire all of the rights or interests which may be exercised or acquired
     by HARTFORD pursuant to the terms of this Agreement; provided, however,
     that the right to request mandatory registration under paragraph 5 shall be
     exercisable only by the then owners of a majority interest of the Common
     Stock previously held by HARTFORD.

10.  Notices and Addresses. All notices or other communications in connection
     herewith shall be in writing and shall be mailed by first class or air
     mail, postage prepaid to the following addresses and to the attention of
     the party in question:

     Hartford Holdings
     c/o William L. Becker
     Park Lane
     West Bay Road
     Georgetown, Grand Cayman Islands,
     British West Indies

     Or at such other addresses as may have been furnished to the other parties
     in writing.

11.  No additional Classes of Common Stock. The Company shall not create any
     additional classes of common capital stock.

12.  Termination of Agreement. This Agreement shall terminate only upon the
     exercise by HARTFORD of all of its rights for registration or exchange of
     stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
     consent of the Company and HARTFORD.

13.  Amendments. This agreement may be amended only by written amendment signed
     by HARTFORD and the Company.

14.  Complete Agreement. This Agreement contains all of the Agreements and
     understandings between the parties here-to relative to the transaction
     contemplated herein.

15.  Choice of Law. This agreement and all matters pertaining thereto shall be
     construed under he laws of the State of Nebraska.

16.  Signatures. This Agreement may be executed in counterparts, with each such
     duly executed counterpart having the same validity, force and effect as the
     original.

17.  Facsimile. A facsimile copy of this document and any signatures shall be
     considered for all purposes and intent as legal and binding originals.


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.



HARTFORD HOLDINGS                                 Telemetrix Inc.

/s/ illegible                                     /s/Michael J. Tracy
- ----------------------------                      -----------------------------
By:                                               Michael J. Tracy, President


Telemetrix Inc.

/s/Michael L. Glaser
- ----------------------------
Michael L. Glaser, Secretary

EX-10.11 7 telemetrixex1011.htm Exhibit 10.11 Exchange Agreement between us and Ionian Investments, Ltd.

Exhibit 10.11 Exchange Agreement between us and Ionian Investments, Ltd.


                               EXCHANGE AGREEMENT
                                     BETWEEN
                                 TELEMETRIX INC.
                                       AND
                             IONIAN INVESTMENTS, LTD


THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 30th day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("Company"), and IONIAN Investments Ltd. ___________Harbour Trust Co.
Ltd, One Capital Place, P.O. Box 1787 GT, Grand Cayman, Cayman Islands, B.W.I.,
("IONIAN").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, IONIAN holds stock in the Company;

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the Common Stock held by IONIAN for new issue preferred
capital stock of the Company; and

WHEREAS, the Company and IONIAN mutually desire to set forth their agreements
and understandings with respect to such exchange of common capital stock for new
issue preferred capital stock of the Company of the Company and to provide for
certain rights of IONIAN in connection therewith;

NOW, THEREFORE, for and in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained and the mutual benefits
derived therefrom, the parties hereto do covenant and agree as follows:

1.   Capital Structure of the Company. The Company is a Delaware  corporation
     authorized by its Certificate of Incorporation, to issue 25,000,000 shares
     of Common Stock ("Common  Stock"), par value $.001 per share, of which
     18,486,176 are outstanding and 5,000,000 shares of Preferred Stock, par
     value of $.001 per share, of which 0 shares are outstanding.

2.   Exchange of Common Stock capital stock for new issue preferred shares of
     stock. As of the date of this agreement, IONIAN shall surrender to the
     principal office of the  Company (or such other office or agency of the
     Company as the Company may designate by notice in writing to the holder or
     holders of the Common Stock of the Company) certificates representing
     2,000,000 shares of Common Stock which have been issued by the Company to
     IONIAN, successors or assigns, and shall exchange without further cost
     750,000 shares of Common Stock for 112,500 shares of Common Stock and
     3,187.5 shares of Preferred Stock. This agreement does not contemplate the
     surrender of any shares of stock which are held by IONIAN and which were
     not a part of any transactions between IONIAN and the Company, and which
     shares are held by IONIAN as either restricted or unrestricted shares of
     Common Stock.

3.   Authorization of Issuance of Preferred Stock. This exchange calls for the
     issuance of Preferred Stock. The Company shall promptly take such steps as
     may be necessary or appropriate under the laws of Delaware and the federal
     securities laws to permit the issuance of the Preferred Stock. If the
     authorization and issuance of such Preferred Stock requires an amendment to
     the Company's Certificate of Incorporation and the adoption by the
     stockholders of such amendment, the Company shall immediately initiate the
     necessary and required documents and corporate meetings. The Preferred
     Stock shall be non-voting stock.

4.   Option of IONIAN for Registration or Exchange of Stock. At any time, and
     subject to the terms set forth in paragraph 5 of this document, IONIAN
     shall have the right by providing written notice to the Company to have the
     Company register in accordance with Paragraph 6 hereof all or any part of
     the Common Stock owned by IONIAN. if any, held by IONIAN on a registration
     statement in compliance with the Securities Act of 1933 in order to permit
     the sale or distribution of such stock.

5.   Registration of Stock. If the Company shall receive from IONIAN a written
     request that the Company register Common Stock under a registration
     statement in compliance with the Securities Act of 1933 as provided in
     paragraph 6 hereof, in order to permit the sale or distribution of such
     stock, the Company, as soon as practicable after giving written notice to
     IONIAN (which notice shall be given by the Company within ten (10) days
     after receipt of the written request for registration from IONIAN) that it
     has elected to file a registration statement for the Common Stock held by
     IONIAN pursuant to this paragraph, will use its best efforts to effect such
     registration and qualify the Common Stock in such jurisdictions as may be
     requested by IONIAN. Any such registration of shares requested by IONIAN
     may include shares of Common Stock owned by other shareholders of the
     Company. 100,000 (One Hundred Thousand) shares in the aggregate is the
     minimum number of shares that may be included in any registration. Each
     selling shareholder shall bear a pro rata portion of all costs and expenses
     paid to third parties (other than those paid to any affiliate or subsidiary
     of the Company or any shareholder thereof) for registration and filing
     fees, printing expenses, fees and disbursements of counsel, and any
     accounting fees incident to or required by the registration or
     qualification. Underwriting discounts and commissions shall be the pro rata
     expense of each selling shareholder. The Company shall keep effective and
     maintain any such registration statement for such period and to the extent
     as IONIAN may deem necessary for the purpose of selling or disposing of the
     shares, and from time to time during such period shall amend or supplement
     the prospectus used in connection therewith to the extent necessary in
     order to comply with the applicable law. The Company shall be required to
     comply with the above registration provisions only once, except that if
     IONIAN receives a Warrant which it is not entitled to exercise until after
     the registration statement has become effective, then IONIAN shall be
     entitled to a second registration to cover Common Stock acquired by it upon
     exercise of the Warrant an any other shares of Common Stock then still
     owned by IONIAN.

     Should the Company at any time seek to register all or any part of its
     Common Stock under a registration  statement in compliance with the
     Securities Act of 1933, without having been requested to do so by IONIAN,
     in accordance with this paragraph, IONIAN may (in addition to its
     registration rights set forth above) add any or all of such shares of the
     Company as it may own to any such registration. The Company shall bear all
     costs and expenses for registration and filing fees, printing expenses,
     fees and disbursements of all counsel and any accounting fees, including
     expenses of any special audit, incident to or required by any registration
     not requested by IONIAN. Underwriting discounts and commissions shall be
     the pro rata expense of such selling shareholder.

6.   Indemnification. Prior to the effective date of any registration statement
     relating to any of the shares of Common Stock owned by IONIAN, the Company
     and IONIAN shall enter into an agreement providing for reciprocal
     indemnification against any losses, claims, damages or liabilities to which
     the Company or IONIAN (or controlling persons thereof) may become subject
     under the Securities Act of 1933, as amended, or otherwise, in the form of
     reciprocal indemnification provisions which customarily appear in
     underwriting agreements used by reputable investment bankers.

7.   Acquisition for investment. IONIAN hereby agrees that the shares of Common
     Stock are being acquired for its own account and not with a view to the
     distribution or resale thereof and the same shall not be sold or
     transferred in the absence of an effective registration statement under the
     Securities Act of 1933 unless an exemption therefrom is available.

8.   Agreements Relating to Rule 144. If and so long as the Company has
     securities registered pursuant to the Securities Act of 1933, the Company
     will (a) file reports in compliance  with the  Securities Exchange Act of
     1934, and (b) at its expense, forthwith upon the request of IONIAN, deliver
     to IONIAN a certificate, signed by the Company's principal financial
     officer, stating (i) Company's name, address and telephone number
     (including area code), (ii) the Company's Securities and Exchange
     identification number, (iii) the Company's Securities and Exchange
     Commission file number, (iv) the number of shares of stock (and other
     securities) outstanding as shown by the most recent report or statement
     published by the Company and (v) whether the Company has filed the reports
     required to be filed under the Securities Exchange Act of 1934 for a period
     of at least ninety (90) days prior to the date of such certificate and in
     addition  has filed the most recent annual report required to be filed
     thereunder. If at any time, subsequent to the exchange of IONIAN's notes
     for Common Stock, the Company is not required to file reports in compliance
     with either Section 13 or Section 15(d) of the Securities Exchange Act of
     1934, the Company, at its expense will, forthwith upon the written request
     of IONIAN, make available adequate current public information with respect
     to the Company within the meaning of paragraph (c)(2) of Rule 144 of the
     General Rules and Regulations promulgated under the Securities Act of 1933.

9.   Transfer of Common Stock by IONIAN. It is expected that IONIAN shall and
     IONIAN shall at any time be permitted  without any approval, consent or
     action of the Company to, sell, transfer or assign all or any part of the
     Common Stock or other voting or non-voting equity securities of the Company
     then owned by IONIAN to other individuals, corporations or other entities;
     provided, however, in the event of a sale, transfer or assignment by IONIAN
     of any of its shares of Common Stock, IONIAN shall, in the absence of an
     effective registration statement under the Securities Act of 1933 covering
     such shares, provide the Company with an opinion of counsel, satisfactory
     in form and substance to the Company and its counsel, to the effect that
     such sale, transfer or assignment will not require that such securities be
     registered under the Securities  Act of 1933. Any such assignee, in
     proportion to its ownership of the Common Stock or other  voting or
     non-voting equity securities, shall be entitled to exercise or acquire all
     of the rights or interests which may be exercised or acquired by IONIAN
     pursuant to the terms of this Agreement; provided, however, that the right
     to request mandatory registration under paragraph 5 shall be exercisable
     only by the then owners of a majority interest of the Common Stock
     previously held by IONIAN.

10.  Notices and Addresses. All notices or other communications in connection
     herewith shall be in writing and shall be mailed by first class or air
     mail, postage prepaid to the following addresses and to the attention of
     the party in question:

     IONIAN
     Harbour Trust Co., Ltd.
     One Capital Place
     P.O. Box 1787 GT
     Grand Cayman
     Cayman Islands, B.W.I.

     Attn:  Alan Milgate

     Or at such other addresses as may have been furnished to the other parties
     in writing.

11.  No additional Classes of Common  Stock. The Company shall not create any
     additional classes of common capital stock.

12.  Termination of Agreement. This Agreement shall terminate only upon the
     exercise  by IONIAN of all of its rights for registration or exchange of
     stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
     consent of the Company and IONIAN.

13.  Amendments. This agreement may be amended only by written amendment signed
     by IONIAN and the Company.

14.  Complete Agreement. This Agreement contains all of the Agreements and
     understandings between the parties here-to relative to the transaction
     contemplated herein.

15.  Choice of Law. This agreement and all matters pertaining thereto shall be
     construed under he laws of the State of Nebraska.


16.  Signatures. This Agreement may be executed in counterparts, with each such
     duly executed counterpart having the same validity, force and effect as the
     original.

17.  Facsimile. A facsimile copy of this document and any signatures shall be
     considered for all purposes and intent as legal and binding originals.


IN WITNESS WHEREOF,  the parties hereto have duly executed this Agreement on the
date first above written.



IONIAN Investments, Ltd.                        Telemetrix Inc.

/s/illegible                                    /s/Michael J. Tracy
- ----------------------------                    -----------------------------
By: For and on behalf of Bluejay                Michael J. Tracy, President
Investments Ltd. and Cardinal
Investments Limited, Directors


Telemetrix Inc.

/s/Michael L. Glaser
- ----------------------------
Michael L. Glaser, Secretary

EX-10.12 8 telemetrixex1012.htm Exhibit 10.12 Exchange Agreement between us and Michael Tracy

Exhibit 10.12 Exchange Agreement between us and Michael Tracy


                        EXCHANGE AND CONVERSION AGREEMENT
                                     BETWEEN
                                 TELEMETRIX INC.
                                       AND
                                MICHAEL J. TRACY


THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 26 day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("the Company"), and MICHAEL J. TRACY, an individual residing at 731 East
38th Street, Scottsbluff, NE 69361 ("Tracy").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, the Company and Tracy have entered into certain loan agreements
("notes"), a schedule of which is identified as Exhibit 1 and is attached to and
made a part of this agreement; and

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the notes held by Tracy for shares of the common and preferred
capital stock of the Company; and

WHEREAS, the Company and Tracy mutually desire to set forth their agreements and
understandings with respect to such exchange of notes for shares of the common
capital stock of the Company and to provide for certain rights of Tracy in
connection therewith;

NOW, THEREFORE, for and in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained and the mutual benefits
derived therefrom, the parties hereto do covenant and agree as follows:

1.   Capital Structure of the Company. The Company is a Delaware corporation
     authorized by its Certificate of Incorporation, to issue 25,000,000 shares
     of Common Stock ("Common  Stock"), par value $.001 per share, of which
     18,486,176 are outstanding and 5,000,000 shares of Preferred Stock, par
     value of $.001 per share, of which 0 shares are outstanding.

2.   Exchange of notes for Common Stock. As of the date of this agreement, Tracy
     shall surrender to the principal office of the Company (or such other
     office or agency of the Company as the Company may designate by notice in
     writing to the holder or holders of the Common Stock of the Company) all
     certificates representing all shares of Common Stock which have been issued
     by the Company to Michael L. Tracy, his heirs, successors or assigns which
     correspond or were issued in connection or association with the schedule of
     notes attached hereto as Exhibit 1, as well as shares issued on the date of
     reorganization as consideration and shares issued for salary and shall have
     the right to exchange without further cost all notes and shares of Common
     Stock issued as consideration for any of the notes listed in Exhibit 1, as
     well as shares issued as in lieu of salary for 3,584,151 shares of Common
     Stock of the Company and 101,551 shares of Preferred Stock. This agreement
     does not contemplate the surrender of any shares of stock which are held by
     Tracy and which were not a part of any transactions between Tracy and the
     Company, and which shares are held by Tracy as either restricted or
     unrestricted shares of Common Stock.

3.   Authorization of Issuance of Preferred Stock. This exchange calls for the
     issuance of Preferred Stock. The Company shall promptly take such steps as
     may be necessary or appropriate under the laws of Delaware and the federal
     securities laws to permit the issuance of the Preferred Stock. If the
     authorization and issuance of such Preferred Stock requires an amendment to
     the Company's Certificate of Incorporation and the adoption by the
     stockholders of such amendment, the Company shall immediately initiate the
     necessary and required documents and corporate meetings. The Preferred
     Stock shall be non-voting stock.

4.   Option of Tracy for Registration or Exchange of Stock. At any time, and
     subject to the terms set forth in paragraph 5 of this document, Tracy
     shall have the right by providing written notice to the Company to have the
     Company register in accordance with Paragraph 6 hereof all or any part of
     the Common Stock owned by Tracy. if any, held by Tracy on a registration
     statement in compliance with the Securities Act of 1933 in order to permit
     the sale or distribution of such stock.

5.   Registration of Stock. If the Company shall receive from Tracy a written
     request that the Company register Common Stock under a registration
     statement in compliance with the Securities Act of 1933 as provided in
     paragraph 6 hereof, in order to permit the sale or distribution of such
     stock, the Company, as soon as practicable after giving written notice to
     Tracy (which notice shall be given by the Company within ten (10) days
     after receipt of the written request for registration from Tracy) that it
     has elected to file a registration statement for the Common Stock held by
     Tracy pursuant to this paragraph, will use its best efforts to effect such
     registration and qualify the Common Stock in such jurisdictions as may be
     requested by Tracy. Any such registration of shares requested by Tracy may
     include shares of Common Stock owned by other shareholders of the Company,.
     100,000 (One Hundred Thousand) shares in the aggregate is the minimum
     number of shares that may be included in any registration. Each selling
     shareholder shall bear a pro rata portion of all costs and expenses paid to
     third parties (other than those paid to any affiliate or subsidiary of the
     Company or any shareholder thereof) for registration and filing fees,
     printing expenses, fees and disbursements of counsel, and any accounting
     fees incident to or required by the registration or qualification.
     Underwriting discounts and commissions shall be the pro rata expense of
     each selling shareholder. The Company shall keep effective and maintain any
     such registration statement for such period and to the extent as Tracy may
     deem necessary for the purpose of selling or disposing of the shares, and
     from time to time during such period shall amend or supplement the
     prospectus used in connection therewith to the extent necessary in order to
     comply with the applicable law. The Company shall be required to comply
     with the above registration provisions only once, except that if Tracy
     receives a Warrant which it is not entitled to exercise until after the
     registration statement has become effective, then Tracy shall be entitled
     to a second registration to cover Common Stock acquired by it upon exercise
     of the Warrant an any other shares of Common Stock then still owned by
     Tracy.

     Should the Company at any time seek to register all or any part of its
     Common Stock under a registration statement in compliance with the
     Securities Act of 1933, without having been requested to do so by Tracy, in
     accordance with this paragraph, Tracy may (in addition to its registration
     rights set forth above) add any or all of such shares of the Company as it
     may own to any such registration. The Company shall bear all costs and
     expenses for registration and filing fees, printing expenses, fees and
     disbursements of all counsel and any accounting fees, including expenses of
     any special audit, incident to or required by any registration not
     requested by Tracy. Underwriting discounts and commissions shall be the pro
     rata expense of such selling shareholder.

6.   Indemnification. Prior to the effective date of any registration statement
     relating to any of the shares of Common Stock owned by Tracy, the Company
     and Tracy shall enter into an agreement providing for reciprocal
     indemnification against any losses, claims, damages or liabilities to which
     the Company or Tracy (or controlling persons thereof) may become subject
     under the Securities Act of 1933, as amended, or otherwise, in the form of
     reciprocal indemnification provisions which customarily appear in
     underwriting agreements used by reputable investment bankers.

7.   Acquisition for investment. Tracy hereby agrees that the shares of Common
     Stock are being acquired for its own account and not with a view to the
     distribution or resale thereof and the same shall not be sold or
     transferred in the absence of an effective registration statement under the
     Securities Act of 1933 unless an exemption therefrom is available.

8.   Agreements Relating to Rule 144. If and so long as the Company has
     securities registered pursuant to the Securities Act of 1933, the Company
     will (a) file reports in compliance with the Securities Exchange Act of
     1934, and (b) at its expense, forthwith upon the request of Tracy, deliver
     to Tracy a certificate, signed by the Company's principal financial
     officer, stating (i) Company's name, address and telephone number
     (including area code), (ii) the Company's Securities and Exchange
     identification number, (iii) the Company's Securities and Exchange
     Commission file number, (iv) the number of shares of stock (and other
     securities) outstanding as shown by the most recent report or statement
     published by the Company and (v) whether the Company has filed the reports
     required to be filed under the Securities Exchange Act of 1934 for a period
     of at least ninety (90) days prior to the date of such  certificate  and in
     addition has filed the most recent annual report required to be filed
     thereunder. If at any time, subsequent to the exchange of Tracy's notes for
     Common Stock, the Company is not required to file reports in compliance
     with either Section 13 or Section 15(d) of the Securities Exchange Act of
     1934, the Company, at its expense will, forthwith upon the written request
     of Tracy, make available adequate current public information with respect
     to the Company within the meaning of paragraph (c)(2) of Rule 144 of the
     General Rules and Regulations promulgated under the Securities Act of 1933.

9.   Transfer of Common Stock by Tracy. It is expected that Tracy shall and
     Tracy shall at any time be permitted without any approval, consent or
     action of the Company to, sell, transfer or assign all or any part of the
     Common Stock or other voting or non-voting equity securities of the Company
     then owned by Tracy to other individuals, corporations or other entities;
     provided, however, in the event of a sale, transfer or assignment by Tracy
     of any of its shares of Common Stock, Tracy shall, in the absence of an
     effective registration statement under the Securities Act of 1933 covering
     such shares, provide the Company with an opinion of counsel, satisfactory
     in form and substance to the Company and its counsel, to the effect that
     such sale, transfer or assignment will not require that such securities be
     registered under the Securities Act of 1933. Any such assignee, in
     proportion to its ownership of the Common Stock or other voting or
     non-voting equity securities, shall be entitled to exercise or acquire all
     of the rights or interests which may be exercised or acquired by Tracy
     pursuant to the terms of this Agreement; provided, however, that the right
     to request mandatory registration under paragraph 5 shall be exercisable
     only by the then owners of a majority interest of the Common Stock
     previously held by Tracy.

10.  Notices and Addresses. All notices or other communications in connection
     herewith shall be in writing and shall be mailed by first class or air
     mail, postage prepaid to the following addresses and to the attention of
     the party in question:

     Michael J. Tracy
     731 East 38th Street
     Scottsbluff, NE
     69361

     Or at such other addresses as may have been furnished to the other parties
     in writing.

11.  No additional Classes of Common Stock. The Company shall not create any
     additional classes of common capital stock.

12.  Termination of Agreement. This Agreement shall terminate only upon the
     exercise by Tracy of all of its rights for registration or exchange of
     stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
     consent of the Company and Tracy.

13.  Amendments. This agreement may be amended only by written amendment signed
     by Tracy and the Company.

14.  Complete Agreement. This Agreement contains all of the Agreements and
     understandings between the parties here-to relative to the transaction
     contemplated herein.

15.  Choice of Law. This agreement and all matters pertaining thereto shall be
     construed under he laws of the State of Nebraska.

16.  Signatures. This Agreement may be executed in counterparts, with each such
     duly executed counterpart having the same validity, force and effect as the
     original.

17.  Facsimile. A facsimile copy of this document and any signatures shall be
     considered for all purposes and intent as legal and binding originals.


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.



                                               Telemetrix Inc.

/s/Michael J. Tracy                            /s/Michael L. Glaser
- ----------------------------                   ----------------------------
Michael J. Tracy                               Michael L. Glaser, Secretary


Telemetrix Inc.

/s/William L. Becker
- ----------------------------
William L. Becker, Chairman
Board of Directors



                                                 Exhibit 1

                                                                          Simple              Share price
         Date of                     Interest                            Accrued                 at $0.15
Note #   Loan                        Rate    Maturity     Principal     Interest        Total     Renewal
- ---------------------------------------------------------------------------------------------------------
014-J    02/15/2001  Michael Tracy   14.99% On Demand      6,825.00     1,943.83     8,768.83      58,459
015-CBM  02/15/2001  Michael Tracy   19.53% On Demand     20,100.00     7,458.51    27,558.51     183,723
016-M    02/20/2001  Michael Tracy   14.99% On Demand      6,000.00     1,696.37     7,696.37      51,309
017-AEB  02/20/2001  Michael Tracy   10.00% On Demand      7,000.00     1,320.28     8,320.28      55,469
018-N    02/24/2001  Michael Tracy   23.49% On Demand      4,000.00     1,761.75     5,761.75      38,412
019-COM  02/24/2001  Michael Tracy    9.90% On Demand     19,570.00     3,632.68    23,202.68     154,685
020-M    02/26/2001  Michael Tracy   14.99% On Demand      5,000.00     1,401.15     6,401.15      42,674
021-AR   02/27/2001  Michael Tracy   21.99% On Demand      5,000.00     2,052.40     7,052.40      47,016
022-ADV  03/09/2001  Michael Tracy   15.99% On Demand      5,125.00     1,506.95     6,631.95      44,213
023-M    03/09/2001  Michael Tracy   14.99% On Demand      6,030.00     1,662.17     7,692.17      51,281
024-US   03/12/2001  Michael Tracy   22.90% On Demand     13,000.00     5,449.56    18,449.56     122,997
025-FSB  03/15/2001  Michael Tracy   11.00% On Demand     40,000.00     8,017.78    48,017.78     320,119
027-FSB  03/29/2001  Michael Tracy   11.00% On Demand     20,000.00     3,923.33    23,923.33     159,489
028-W    04/03/2001  Michael Tracy    8.00% On Demand      6,000.00       849.33     6,849.33      45,662
029-FSB  04/03/2001  Michael Tracy   11.00% On Demand     12,000.00     2,335.67    14,335.67      95,571
035-COV  04/20/2001  Michael Tracy   19.80% On Demand      4,120.00     1,404.92     5,524.92      36,833
036-FSB  04/20/2001  Michael Tracy   11.00% On Demand      4,000.00       757.78     4,757.78      31,719
037      05/16/2001  Michael Tracy   11.00% On Demand     50,000.00     9,075.00    59,075.00     393,833
039      05/16/2001  Michael Tracy   11.00% On Demand     10,000.00     1,815.00    11,815.00      78,767
040      05/16/2001  Michael Tracy   11.00% On Demand    200,000.00    36,300.00   236,300.00   1,575,333
041-FSB  05/21/2001  Michael Tracy   11.00% On Demand      4,000.00       719.89     4,719.89      31,466
042-N    05/23/2001  Michael Tracy   18.99% On Demand      3,525.55     1,091.66     4,617.21      30,781
043-ADV  06/11/2001  Michael Tracy   15.99% On Demand      4,800.00     1,210.98     6,010.98      40,073
044-COM  06/11/2001  Michael Tracy    9.90% On Demand      1,000.00       156.20     1,156.20       7,708
045-W    06/11/2001  Michael Tracy    8.00% On Demand      1,000.00       126.22     1,126.22       7,508
046      06/08/2001  Michael Tracy   11.00% 06/08/2002   110,000.00    19,191.94   129,191.94     861,280
047      06/15/2001  Michael Tracy   11.00% 06/15/2002    17,341.12     2,988.45    20,329.57     135,530
49       07/10/2001  Michael Tracy   11.00% 07/10/2002   150,000.00    24,704.17   174,704.17   1,164,694
050-W    07/10/2001  Michael Tracy   13.49% On Demand      1,500.00       302.96     1,802.96      12,020
051-N    07/10/2001  Michael Tracy   18.99% On Demand      3,100.00       881.40     3,981.40      26,543
052-COM  07/10/2001  Michael Tracy    9.90% On Demand      1,050.00       155.64     1,205.64       8,038
053-MTP  07/20/2001  Michael Tracy   11.00% On Demand     64,716.75    10,460.74    75,177.49     501,183
054-MTP  07/23/2001  Michael Tracy   11.00% On Demand      3,882.52       624.01     4,506.53      30,044
055      07/27/2001  Michael Tracy   11.00% On Demand     10,300.00     1,642.85    11,942.85      79,619
056      08/16/2001  Michael Tracy   11.00% On Demand     60,000.00     9,203.33    69,203.33     461,356
058      07/23/2001  Michael Tracy   11.00% On Demand     23,971.88     3,852.81    27,824.69     185,498
059      09/11/2001  Michael Tracy   11.00% On Demand      4,800.00       698.13     5,498.13      36,654
060      10/01/2001  Michael Tracy   11.00% On Demand     11,559.18     1,610.58    13,169.76      87,798
061-CC   10/10/2001  Michael Tracy   15.25% On Demand      4,625.00       875.76     5,500.76      36,672
062      10/24/2001  Michael Tracy   11.00% On Demand     20,105.64     2,660.09    22,765.73     151,772
062B     11/05/2001  Michael Tracy   11.00% On Demand    150,000.00    19,295.83   169,295.83   1,128,639
063      11/15/2001  Michael Tracy   15.25% On Demand     50,000.00     8,705.21     58705.21      391368
065      12/17/2001  Michael Tracy   10.00% On Demand    374,059.93    39,380.20   413,440.13   2,756,268
070      03/29/2002  Michael Tracy   11.00% On Demand    400,000.00    33,855.56   433,855.56   2,892,370
077      09/30/2002  Michael Tracy   10.00% On Demand      2,655.93        67.87     2,723.80      18,159
078      10/03/2002  Michael Tracy   10.00% On Demand     66,781.97     1,651.00    68,432.97     456,220
079      10/16/2002  Michael Tracy   10.00% On Demand      5,000.00       105.56     5,105.56      34,037
080      10/22/2002  Michael Tracy   10.00% On Demand      3,000.00        58.33     3,058.33      20,389
083      11/21/2002  Michael Tracy   10.00% On Demand      2,500.00        27.78     2,527.78      16,852

Total Shares After Conversion*         15,986,346
Organization Shares                     4,140,000
Salary Shares                           3,726,569
038 & 063 Shares                           41,428
Total                                  23,894,343


* Shares after conversion represent a change of simple interest to 10.00% on all
notes.

EX-10.13 9 telemetrixex1013.htm Exhibit 10.13 Exchange Agreement between us and WYSE Investments Ltd.

Exhibit 10.13 Exchange Agreement between us and WYSE Investments Ltd.


                               EXCHANGE AGREEMENT
                                    BETWEEN
                                TELEMETRIX INC.
                                      AND
                             WYSE INVESTMENTS, LTD


THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 26 day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("Company"), and WYSE Investments Ltd. with offices at: PO Box 143 GT
Grand Cayman Island, BWI ("WYSE").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, WYSE holds stock in the Company;

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the Common Stock held by WYSE for new issue preferred capital
stock of the Company; and

WHEREAS, the Company and WYSE mutually desire to set forth their agreements and
understandings with respect to such exchange of common capital stock for new
issue preferred capital stock of the Company of the Company and to provide for
certain rights of WYSE in connection therewith;

NOW, THEREFORE, for and in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained and the mutual benefits
derived therefrom, the parties hereto do covenant and agree as follows:

1.   Capital Structure of the Company. The Company is a Delaware corporation
     authorized by its Certificate of Incorporation, to issue 25,000,000 shares
     of Common Stock ("Common Stock"), par value $.001 per share, of which
     18,486,176 are outstanding and 5,000,000 shares of Preferred Stock, par
     value of $.001 per share, of which 0 shares are outstanding.

2.   Exchange of Common Stock capital stock for new issue preferred shares of
     stock. As of the date of this agreement, WYSE shall surrender to the
     principal office of the Company (or such other office or agency of the
     Company as the Company may  designate by notice in writing to the holder or
     holders of the  Common Stock of the Company) certificates representing
     2,000,000 shares of Common Stock which have been issued by the Company to
     WYSE, successors or assigns, and shall exchange without further cost
     500,000 shares of Common Stock for 75,000 shares of Common Stock and 2,125
     shares of Preferred Stock. This agreement does not contemplate the
     surrender of any shares of stock which are held by WYSE and which were not
     a part of any transactions between WYSE and the Company, and which shares
     are held by WYSE as either restricted or unrestricted shares of Common
     Stock.

3.   Authorization of Issuance of Preferred Stock. This exchange calls for the
     issuance of Preferred  Stock. The Company shall promptly take such steps as
     may be necessary or appropriate under the laws of Delaware and the federal
     securities laws to permit the issuance of the Preferred Stock. If the
     authorization and issuance of such Preferred Stock requires an amendment to
     the Company's Certificate of Incorporation  and the adoption by the
     stockholders of such amendment, the Company shall immediately initiate the
     necessary and required documents and corporate meetings. The Preferred
     Stock shall be non-voting stock.

4.   Option of WYSE for Registration or Exchange of Stock. At any time, and
     subject to the terms set forth in paragraph 5 of this document, WYSE shall
     have the right by providing written notice to the Company to have the
     Company register in accordance with Paragraph 6 hereof all or any part of
     the Common Stock owned by WYSE. if any, held by WYSE on a registration
     statement in compliance  with the Securities Act of 1933 in order to permit
     the sale or distribution of such stock.

5.   Registration of Stock. If the Company shall receive from WYSE a written
     request that the Company register Common Stock under a registration
     statement in compliance with the Securities Act of 1933 as provided in
     paragraph 6 hereof, in order to permit the sale or distribution of such
     stock, the Company, as soon as practicable  after giving written notice to
     WYSE (which notice shall be given by the Company within ten (10) days after
     receipt of the  written  request for registration from WYSE) that it has
     elected to file a registration statement for the Common Stock held by WYSE
     pursuant to this paragraph, will use its best efforts to effect such
     registration  and qualify the Common Stock in such jurisdictions as may be
     requested by WYSE. Any such registration of shares requested by WYSE may
     include shares of Common Stock owned by other shareholders of the Company.
     100,000 (One Hundred Thousand) shares in the aggregate is the minimum
     number of shares  that may be included in any registration. Each selling
     shareholder shall bear a pro rata portion of all costs and expenses paid to
     third parties (other than those paid to any affiliate or subsidiary of the
     Company or any  shareholder thereof) for registration and filing fees,
     printing expenses, fees and disbursements of counsel, and any accounting
     fees incident to or required by the registration or qualification.
     Underwriting discounts and commissions shall be the pro rata expense of
     each selling shareholder. The Company shall keep effective and maintain any
     such registration statement for such period and to the extent as WYSE may
     deem necessary for the purpose of selling or disposing of the shares, and
     from time to time during such period shall amend or supplement the
     prospectus used in connection therewith to the extent necessary in order to
     comply with the applicable law. The Company shall be required to comply
     with the above registration provisions only once, except that if WYSE
     receives a Warrant which it is not entitled to exercise until after the
     registration statement has become effective, then WYSE shall be entitled to
     a second registration to cover Common Stock acquired by it upon exercise of
     the Warrant an any other shares of Common Stock then still owned by WYSE.

     Should the Company at any time seek to register all or any part of its
     Common Stock under a registration statement in compliance with  the
     Securities Act of 1933, without having been requested to do so by WYSE, in
     accordance with this paragraph, WYSE may (in addition to its registration
     rights set forth above) add any or all of such shares of the Company as it
     may own to any such registration.  The Company shall bear all costs and
     expenses for registration  and filing fees, printing expenses, fees and
     disbursements of all counsel and any accounting fees, including expenses of
     any special audit, incident to or required by any registration not
     requested by WYSE. Underwriting discounts and commissions shall be the pro
     rata expense of such selling shareholder.

6.   Indemnification. Prior to the effective date of any registration statement
     relating to any of the shares of Common Stock owned by WYSE, the Company
     and WYSE shall enter into an agreement providing for reciprocal
     indemnification against any losses, claims, damages or liabilities to which
     the Company or WYSE (or  controlling  persons thereof) may become subject
     under the Securities Act of 1933, as amended, or otherwise, in the form of
     reciprocal indemnification provisions which customarily appear in
     underwriting agreements used by reputable investment bankers.

7.   Acquisition for investment. WYSE hereby agrees that the shares of Common
     Stock are being acquired for its own account and not with a view to the
     distribution or resale thereof and the same shall not be sold or
     transferred in the absence of an effective registration statement under the
     Securities Act of 1933 unless an exemption therefrom is available.

8.   Agreements Relating to Rule 144. If and so long as the Company has
     securities registered pursuant to the Securities Act of 1933, the Company
     will (a) file reports in compliance with the Securities Exchange Act of
     1934, and (b) at its expense, forthwith upon the request of WYSE, deliver
     to WYSE a certificate, signed by the Company's principal financial officer,
     stating (i) Company's name, address and telephone number (including area
     code), (ii) the Company's Securities and Exchange identification number,
     (iii) the Company's Securities and Exchange Commission file number, (iv)
     the number of shares of stock (and other securities) outstanding as shown
     by the most recent report or statement published by the Company and (v)
     whether the Company has filed the reports required to be filed under the
     Securities Exchange Act of 1934 for a period of at least ninety (90) days
     prior to the date of such certificate and in addition has filed the most
     recent annual report required to be filed thereunder. If at any time,
     subsequent to the exchange of WYSE's notes for Common Stock, the Company is
     not required to file reports in compliance with  either Section 13 or
     Section 15(d) of the Securities Exchange Act of 1934, the Company, at its
     expense will, forthwith upon the written request of WYSE, make available
     adequate current public information with respect to the Company within the
     meaning of paragraph (c)(2) of Rule 144 of the General Rules and
     Regulations promulgated under the Securities Act of 1933.

9.   Transfer of Common Stock by WYSE. It is expected  that WYSE shall and WYSE
     shall at any time be permitted  without any approval, consent or action of
     the Company to, sell, transfer or assign all or any part of the Common
     Stock or other voting or non-voting equity  securities of the Company then
     owned by WYSE to other individuals, corporations or other entities;
     provided, however, in the event of a sale, transfer or assignment by WYSE
     of any of its shares of Common Stock, WYSE shall, in the absence of an
     effective registration statement under the Securities Act of 1933 covering
     such shares, provide the Company with an opinion of counsel, satisfactory
     in form and substance to the Company and its  counsel, to the effect that
     such sale, transfer or assignment will not require that such securities be
     registered under the Securities Act of 1933. Any such assignee, in
     proportion to its ownership of the Common Stock or other voting or
     non-voting equity securities, shall be entitled to exercise or acquire all
     of the rights or interests which may be exercised or acquired by WYSE
     pursuant to the terms of this Agreement; provided, however, that the right
     to request mandatory registration under paragraph 5 shall be exercisable
     only by the then owners of a majority interest of the Common Stock
     previously held by WYSE.

10.  Notices and Addresses.  All notices or other communications in connection
     herewith shall be in writing and shall be mailed by first class or air
     mail, postage prepaid to the following addresses and to the attention of
     the party in question:

           WYSE

     Or at such other addresses as may have been furnished to the other parties
     in writing.

11.  No additional Classes of Common Stock. The Company shall not create any
     additional classes of common capital stock.

12.  Termination of Agreement. This Agreement shall terminate only upon the
     exercise by WYSE of all of its rights for registration or exchange of stock
     as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
     consent of the Company and WYSE.

13.  Amendments. This agreement may be amended only by written amendment signed
     by WYSE and the Company.

14.  Complete Agreement. This Agreement contains all of the Agreements and
     understandings between the parties here-to relative to the transaction
     contemplated herein.

15.  Choice of Law. This agreement and all matters pertaining thereto shall be
     construed under he laws of the State of Nebraska.

16.  Signatures. This Agreement may be executed in counterparts, with each such
     duly executed counterpart having the same validity, force and effect as the
     original.

17.  Facsimile.  A facsimile copy of this document and any signatures shall be
     considered for all purposes and intent as legal and binding originals.


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.



WYSE Investments, Ltd.                             Telemetrix Inc.

/s/ illegible                                      /s/Michael J. Tracy
- ----------------------------                     -----------------------------
By:                                                 Michael J. Tracy, President


Telemetrix Inc.

/s/Michael L. Glaser
- ----------------------------
Michael L. Glaser, Secretary

EX-10.14 10 telemetrixex1014.htm Exhibit 10.14 Exchange Agreement between us and Ardara Investments, Ltd.

Exhibit 10.14 Exchange Agreement between us and Ardara Investments, Ltd.


                        EXCHANGE AND CONVERSION AGREEMENT
                                     BETWEEN
                                 TELEMETRIX INC.
                                       AND
                             ARDARA INVESTMENTS, LTD


THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 30th day of May, 2003 by and among
TELEMETRIX INC., a Delaware corporation with offices at 1225 Sage Street,
Gering, Nebraska 69341 ("Company"), and Ardara Investments Ltd.,
Harbour Trust Co. Ltd, One Capital Place, P.O. Box 1787 GT, Grand
Cayman, Cayman Islands, B.W.I., ("ARDARARDARA").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, ARDARA holds stock in the Company;

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the Common Stock held by ARDARA for new issue preferred
capital stock of the Company; and

WHEREAS, the Company and ARDARA mutually desire to set forth their agreements
and understandings with respect to such exchange of common capital stock for new
issue preferred capital stock of the Company of the Company and to provide for
certain rights of ARDARA in connection therewith;

NOW, THEREFORE, for and in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained and the mutual benefits
derived therefrom, the parties hereto do covenant and agree as follows:

1.   Capital Structure of the Company. The Company is a Delaware corporation
     authorized by its Certificate of Incorporation, to issue 25,000,000 shares
     of Common Stock ("Common Stock"), par value $.001 per share, of which
     18,486,176 are outstanding and 5,000,000 shares of Preferred Stock, par
     value of $.001 per share, of which 0 shares are outstanding.

2.   Exchange of Common Stock capital stock for new issue preferred shares of
     stock. As of the date of this agreement, ARDARA shall surrender to the
     principal office of the Company (or such other office or agency of the
     Company as the Company may designate by notice in writing to the holder or
     holders of the Common Stock of the Company) certificates representing
     2,000,000 shares of Common Stock which have been issued by the Company to
     ARDARA, successors or assigns, and shall exchange without further cost
     750,000 shares of Common Stock for 112,500 shares of Common Stock and
     3187.5 shares of Preferred Stock. This agreement does not contemplate the
     surrender of any shares of stock which are held by ARDARA and which were
     not a part of any transactions between ARDARA and the Company, and which
     shares are held by ARDARA as either restricted or unrestricted shares of
     Common Stock.

3.   Authorization of Issuance of Preferred Stock. This exchange calls for the
     issuance of Preferred Stock. The Company shall promptly take such steps as
     may be necessary or appropriate under the laws of Delaware and the federal
     securities laws to permit the issuance of the Preferred Stock. If the
     authorization and issuance of such Preferred Stock requires an amendment to
     the Company's Certificate of Incorporation and the adoption by the
     stockholders of such amendment, the Company shall immediately initiate the
     necessary and required documents and corporate meetings. The Preferred
     Stock shall be non-voting stock.

4.   Option of ARDARA for Registration or Exchange of Stock. At any time, and
     subject to the terms set forth in paragraph 5 of this document, ARDARA
     shall have the right by providing written notice to the Company to have the
     Company register in accordance with Paragraph 6 hereof all or any part of
     the Common Stock owned by ARDARA. if any, held by ARDARA on a registration
     statement in compliance with the Securities Act of 1933 in order to permit
     the sale or distribution of such stock.

5.   Registration of Stock. If the Company shall receive from ARDARA a written
     request that the Company register Common Stock under a registration
     statement in compliance with the Securities Act of 1933 as provided in
     paragraph 6 hereof, in order to permit the sale or distribution of such
     stock, the Company, as soon as practicable after giving written notice to
     ARDARA (which notice shall be given by the Company within ten (10) days
     after receipt of the written request for registration from ARDARA) that it
     has elected to file a registration statement for the Common Stock held by
     ARDARA pursuant to this paragraph, will use its best efforts to effect such
     registration and qualify the Common Stock in such jurisdictions as may be
     requested by ARDARA. Any such registration of shares requested by ARDARA
     may include shares of Common Stock owned by other shareholders of the
     Company. 100,000 (One Hundred Thousand) shares in the aggregate is the
     minimum number of shares that may be included in any registration. Each
     selling shareholder shall bear a pro rata portion of all costs and expenses
     paid to third parties (other than those paid to any affiliate or subsidiary
     of the Company or any shareholder thereof) for registration and filing
     fees, printing expenses, fees and disbursements of counsel, and any
     accounting fees incident to or required by the registration or
     qualification. Underwriting discounts and commissions shall be the pro rata
     expense of each selling shareholder. The Company shall keep effective and
     maintain any such registration statement for such period and to the extent
     as ARDARA may deem necessary for the purpose of selling or disposing of the
     shares, and from time to time during such period shall amend or supplement
     the prospectus used in connection therewith to the extent necessary in
     order to comply with the applicable law. The Company shall be required to
     comply with the above registration provisions only once, except that if
     ARDARA receives a Warrant which it is not entitled to exercise until after
     the registration statement has become effective, then ARDARA shall be
     entitled to a second registration to cover Common Stock acquired by it upon
     exercise of the Warrant an any other shares of Common Stock then still
     owned by ARDARA.

     Should the Company at any time seek to register all or any part of its
     Common Stock under a registration statement in compliance with the
     Securities Act of 1933, without having been requested to do so by ARDARA,
     in accordance with this paragraph, ARDARA may (in addition to its
     registration rights set forth above) add any or all of such shares of the
     Company as it may own to any such registration. The Company shall bear all
     costs and expenses for registration and filing fees, printing expenses,
     fees and disbursements of all counsel and any accounting fees, including
     expenses of any special audit, incident to or required by any registration
     not requested by ARDARA. Underwriting discounts and commissions shall be
     the pro rata expense of such selling shareholder.

6.   Indemnification. Prior to the effective date of any registration statement
     relating to any of the shares of Common Stock owned by ARDARA, the Company
     and ARDARA shall enter into an agreement providing for reciprocal
     indemnification against any losses, claims, damages or liabilities to which
     the Company or ARDARA (or controlling persons thereof) may become subject
     under the Securities Act of 1933, as amended, or otherwise, in the form of
     reciprocal indemnification provisions which customarily appear in
     underwriting agreements used by reputable investment bankers.

7.   Acquisition for investment. ARDARA hereby agrees that the shares of Common
     Stock are being acquired for its own account and not with a view to the
     distribution or resale thereof and the same shall not be sold or
     transferred in the absence of an effective registration statement under the
     Securities Act of 1933 unless an exemption therefrom is available.

8.   Agreements Relating to Rule 144. If and so long as the Company has
     securities registered pursuant to the Securities Act of 1933, the Company
     will (a) file reports in compliance with the Securities Exchange Act of
     1934, and (b) at its expense, forthwith upon the request of ARDARA, deliver
     to ARDARA a certificate, signed by the Company's principal financial
     officer, stating (i) Company's name, address and telephone number
     (including area code), (ii) the Company's Securities and Exchange
     identification number, (iii) the Company's Securities and Exchange
     Commission file number, (iv) the number of shares of stock (and other
     securities) outstanding as shown by the most recent report or statement
     published by the Company and (v) whether the Company has filed the reports
     required to be filed under the Securities Exchange Act of 1934 for a period
     of at least ninety (90) days prior to the date of such certificate and in
     addition has filed the most recent annual report required to be filed
     thereunder. If at any time, subsequent to the exchange of ARDARA's notes
     for Common Stock, the Company is not required to file reports in compliance
     with either Section 13 or Section 15(d) of the Securities Exchange Act of
     1934, the Company, at its expense will, forthwith upon the written request
     of ARDARA, make available adequate current public information with respect
     to the Company within the meaning of paragraph (c)(2) of Rule 144 of the
     General Rules and Regulations promulgated under the Securities Act of 1933.

9.   Transfer of Common Stock by ARDARA. It is expected that ARDARA shall and
     ARDARA shall at any time be permitted without any approval, consent or
     action of the Company to, sell, transfer or assign all or any part of the
     Common Stock or other voting or non-voting equity securities of the Company
     then owned by ARDARA to other individuals, corporations or other entities;
     provided, however, in the event of a sale, transfer or assignment by ARDARA
     of any of its shares of Common Stock, ARDARA shall, in the absence of an
     effective registration statement under the Securities Act of 1933 covering
     such shares, provide the Company with an opinion of counsel, satisfactory
     in form and substance to the Company and its counsel, to the effect that
     such sale, transfer or assignment will not require that such securities be
     registered under the Securities Act of 1933. Any such assignee, in
     proportion to its ownership of the Common Stock or other voting or
     non-voting equity securities, shall be entitled to exercise or acquire all
     of the rights or interests which may be exercised or acquired by ARDARA
     pursuant to the terms of this Agreement; provided, however, that the right
     to request mandatory registration under paragraph 5 shall be exercisable
     only by the then owners of a majority interest of the Common Stock
     previously held by ARDARA.

10.  Notices and Addresses. All notices or other communications in connection
     herewith shall be in  writing and shall be mailed by first class or air
     mail, postage prepaid to the following addresses and to the attention of
     the party in question:

     Harbour Trust Co., Ltd.
     One Capital Place
     P.O. Box 1787 GT
     Grand Cayman
     Cayman Islands, B.W.I.

     Attn:  Alan Milgate

     Or at such other addresses as may have been furnished to the other parties
     in writing.

11.  No additional Classes of Common Stock. The Company shall not create any
     additional classes of common capital stock.

12.  Termination of Agreement. This Agreement shall terminate only upon the
     exercise by ARDARA of all of its rights for registration or exchange of
     stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
     consent of the Company and ARDARA.

13.  Amendments. This agreement may be amended only by written amendment signed
     by ARDARA and the Company.

14.  Complete Agreement. This Agreement contains all of the Agreements and
     understandings between the parties here-to relative to the transaction
     contemplated herein.

15.  Choice of Law. This agreement and all matters pertaining thereto shall be
     construed under the laws of the State of Nebraska.

16.  Signatures. This Agreement may be executed in counterparts, with each such
     duly executed counterpart having the same validity, force and effect as the
     original.

17.  Facsimile. A facsimile copy of this document and any signatures shall be
     considered for all purposes and intent as legal and binding originals.


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.



Ardara Investments, Ltd.                          Telemetrix Inc.

/s/ illegible                                        /s/Michael J. Tracy
- ----------------------------                         ----------------------------
By:For and on behalf of Bluejay Investments, Ltd.    Michael J. Tracy, President
and Cardinal Investments Limited, Directors



Telemetrix Inc.

/s/Michael L. Glaser
- ----------------------------
Michael L. Glaser, Secretary

EX-10.15 11 telemetrixex1015.htm Exhibit 10.15 Exchange Agreement between us and Becker Capital Investments, Ltd.

Exhibit 10.15 Exchange Agreement between us and Becker Capital Investments, Ltd.


                        EXCHANGE AND CONVERSION AGREEMENT
                                     BETWEEN
                                 TELEMETRIX INC.
                                       AND
                            BECKER CAPITAL MANAGEMENT


THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 26 day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at 1225 Sage Street, Gering, Nebraska
69341 ("the Company"), and BECKER CAPITAL MANAGEMENT, 7102 LaVista Place, Suite
100, Longmont, CO ("BCM").

WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and

WHEREAS, the Company and BCM have entered into certain loan agreements
("notes"), a schedule of which is identified as Exhibit 1 and is attached to and
made a part of this agreement; and

WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the notes held by BCM for shares of the common and preferred
capital stock of the Company; and

WHEREAS, the Company and BCM mutually desire to set forth their agreements and
understandings with respect to such exchange of notes for shares of the common
capital stock of the Company and to provide for certain rights of BCM in
connection therewith;

NOW, THEREFORE, for and in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained and the mutual benefits
derived therefrom, the parties hereto do covenant and agree as follows:

1.   Capital Structure of the Company. The Company is a Delaware corporation
     authorized by its Certificate of Incorporation, to issue 25,000,000 shares
     of Common Stock ("Common Stock"), par value $.001 per share, of which
     18,486,176 are outstanding and 5,000,000 shares of Preferred Stock, par
     value of $.001 per share, of which 0 shares are outstanding.

2.   Exchange of notes for Common Stock. As of the date of this agreement, BCM
     shall surrender to the principal office of the Company (or such other
     office or agency of the Company as the Company may designate by notice in
     writing to the holder or holders of the Common Stock of the Company) all
     certificates representing all shares of Common Stock which have been issued
     by the Company to Becker Capital Management, Larry  Becker, his heirs,
     successors or assigns which correspond or were issued in connection or
     association with the schedule of notes attached hereto as Exhibit 1, and
     shall exchange without further cost all notes and shares of Common Stock
     issued as consideration for any of the notes listed in Exhibit 1, for
     632,002 shares of Common Stock of the Company and 17,906.7 shares of
     Preferred Stock. This agreement does not contemplate the surrender of any
     shares of stock which are held by BCM and which  were not a part of any
     transactions between BCM and the Company, and which shares are held by BCM
     as either restricted or unrestricted shares of Common Stock.

3.   Authorization of Issuance of Preferred Stock. This exchange calls for the
     issuance of Preferred Stock. The Company shall promptly take such steps as
     may be necessary or appropriate under the laws of Delaware and the federal
     securities laws to permit the issuance of the Preferred Stock. If the
     authorization and issuance of such Preferred Stock requires an amendment to
     the  Company's Certificate of Incorporation and the adoption by the
     stockholders of such amendment, the Company shall immediately initiate the
     necessary and required documents and corporate meetings. The Preferred
     Stock shall be non-voting stock.

4.   Option of BCM for Registration or Exchange of Stock. At any time, and
     subject to the terms set forth in paragraph 5 of this document, BCM shall
     have the right by providing written  notice to the Company to have the
     Company register in accordance with Paragraph 6 hereof all or any part of
     the Common Stock owned by BCM. if any, held by BCM on a registration
     statement in compliance with the Securities Act of 1933 in order to permit
     the sale or distribution of such stock.

5.   Registration of Stock. If the Company shall receive from BCM a written
     request that the Company register Common Stock under a registration
     statement in compliance with the Securities Act of 1933 as provided in
     paragraph 6 hereof, in order to permit the sale or distribution of such
     stock, the Company, as soon as practicable after giving written notice to
     BCM (which notice shall be given by the Company within ten (10) days after
     receipt of the written request for registration from BCM) that it has
     elected to file a registration statement for the Common Stock held by BCM
     pursuant to this paragraph, will use its best efforts to effect such
     registration and qualify the Common Stock in such jurisdictions as may be
     requested by BCM. Any such registration of shares requested by BCM may
     include shares of Common Stock owned by other shareholders of the Company.
     100,000 (One Hundred Thousand) shares in the aggregate is the minimum
     number of shares that may be included in any registration. Each selling
     shareholder shall bear a pro rata portion of all costs and expenses paid to
     third parties (other than those paid to any affiliate or subsidiary of the
     Company or any shareholder thereof) for registration and filing fees,
     printing expenses, fees and disbursements of counsel, and any accounting
     fees incident to or required by the registration or qualification.
     Underwriting discounts and commissions shall be the pro rata expense of
     each selling shareholder. The Company shall keep effective and maintain any
     such registration statement for such period and to the extent as BCM may
     deem necessary for the purpose of selling or disposing of the shares, and
     from time to time during such period shall amend or supplement the
     prospectus used in connection therewith to the extent necessary in order to
     comply with the applicable law. The Company shall be required to comply
     with the above registration provisions only once, except that if BCM
     receives a Warrant which it is not entitled to exercise until after the
     registration statement has become effective, then BCM shall be entitled to
     a second registration to cover Common Stock acquired by it upon exercise of
     the Warrant an any other shares of Common Stock then still owned by BCM.

     Should the Company at any time seek to register all or any part of its
     Common Stock under a registration statement in compliance with the
     Securities Act of 1933, without having been requested to do so by BCM, in
     accordance with this paragraph, BCM may (in addition to its registration
     rights set forth above) add any or all of such shares of the Company as it
     may own to any such registration. The Company shall bear all costs and
     expenses for registration and filing fees, printing expenses, fees and
     disbursements of all counsel and any accounting fees, including expenses of
     any special audit, incident to or required by any registration not
     requested by BCM. Underwriting discounts and commissions shall be the pro
     rata expense of such selling shareholder.

6.   Indemnification. Prior to the effective date of any registration statement
     relating to any of the shares of Common Stock owned by BCM, the Company and
     BCM shall enter into an agreement providing for reciprocal indemnification
     against any losses, claims, damages or liabilities to which the Company or
     BCM (or controlling persons thereof) may become subject under the
     Securities Act of 1933, as amended, or otherwise, in the form of reciprocal
     indemnification provisions which customarily appear in underwriting
     agreements used by reputable investment bankers.

7.   Acquisition for investment. BCM hereby agrees that the shares of Common
     Stock are being acquired for its own account and not with a view to the
     distribution or resale thereof and the same shall not be sold or
     transferred in the absence of an effective registration statement under the
     Securities Act of 1933 unless an exemption therefrom is available.

8.   Agreements Relating to Rule 144. If and so long as the Company has
     securities registered pursuant to the Securities Act of 1933, the Company
     will (a) file reports in compliance with the Securities Exchange Act of
     1934, and (b) at its expense, forthwith upon the request of BCM, deliver to
     BCM a certificate, signed by the Company's principal financial officer,
     stating (i) Company's name, address and telephone number (including area
     code), (ii) the Company's Securities and Exchange identification number,
     (iii) the Company's Securities and Exchange Commission file number, (iv)
     the number of shares of stock (and other securities) outstanding as shown
     by the most recent report or statement published by the Company and (v)
     whether the Company has filed the reports required to be filed under the
     Securities Exchange Act of 1934 for a period of at least ninety (90) days
     prior to the date of such certificate and in addition has filed the most
     recent annual report required to be filed thereunder. If at any time,
     subsequent to the exchange of BCM's notes for Common Stock, the Company is
     not required to file reports in compliance with either Section 13 or
     Section 15(d) of the Securities Exchange Act of 1934, the Company, at its
     expense will, forthwith upon the written request of BCM, make available
     adequate current public information with respect to the Company within the
     meaning of paragraph (c)(2) of Rule 144 of the General Rules and
     Regulations promulgated under the Securities Act of 1933.

9.   Transfer of Common Stock by BCM. It is expected that BCM shall and BCM
     shall at any time be permitted without any approval, consent or action of
     the Company to, sell, transfer or assign all or any part of the Common
     Stock or other voting or non-voting equity securities of the Company then
     owned by BCM to other individuals, corporations or other entities;
     provided, however, in the event of a sale, transfer or assignment by BCM of
     any of its shares of Common Stock, BCM shall, in the absence of an
     effective registration statement under the Securities Act of 1933 covering
     such shares, provide the Company with an opinion of counsel, satisfactory
     in form and substance to the Company and its counsel, to the effect that
     such sale, transfer or assignment will not require that such securities be
     registered under the Securities Act of 1933. Any such assignee, in
     proportion to its ownership of the Common Stock or other voting or
     non-voting equity securities, shall be entitled to exercise or acquire all
     of the rights or interests which may be exercised or acquired by BCM
     pursuant to the terms of this Agreement; provided, however, that the right
     to request mandatory registration under paragraph 5 shall be exercisable
     only by the then owners of a majority interest of the Common Stock
     previously held by BCM.

10.  Notices and Addresses. All notices or other communications in connection
     herewith shall be in writing and shall be mailed by first class or air
     mail, postage prepaid to the following addresses and to the attention of
     the party in question:

     Larry Becker
     Becker Capital Management
     7102 LaVista Place
     Suite 100
     Longmont, CO
     80503

     Or at such other addresses as may have been furnished to the other parties
     in writing.

11.  No additional Classes of Common Stock. The Company shall not create any
     additional classes of common capital stock.

12.  Termination of Agreement. This Agreement shall terminate only upon the
     exercise by BCM of all of its rights for registration or exchange of stock
     as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
     consent of the Company and BCM.

13.  Amendments. This agreement may be amended only by written amendment signed
     by BCM and the Company.

14.  Complete Agreement. This Agreement contains all of the Agreements and
     understandings between the parties here-to relative to the transaction
     contemplated herein.

15.  Choice of Law. This agreement and all matters pertaining thereto shall be
     construed under he laws of the State of Nebraska.

16.  Signatures. This Agreement may be executed in counterparts, with each such
     duly executed counterpart having the same validity, force and effect as the
     original.

17.  Facsimile. A facsimile copy of this document and any signatures shall be
     considered for all purposes and intent as legal and binding originals.


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.



Becker Capital Management                         Telemetrix Inc.

/s/Larry Becker                                   /s/Michael J. Tracy
- ----------------------------                      -----------------------------
Larry Becker                                      Michael J. Tracy, President


Telemetrix Inc.                                   Telemetrix Inc.

/s/Michael L. Glaser                              /s/William L. Becker
- -----------------------------                     ----------------------------
Michael L. Glaser                                 William L. Becker, Chairman
Secretary                                                  Board of Directors






                                    EXHIBIT 1

                                                                       Total            03/31/2003
            Date of                         Interest                 Accrued           Share price
Note #      Loan                                Rate   Principal        Int.      Total   at $0.15
- --------------------------------------------------------------------------------------------------
30-01 (31)  04/06/2001  Becker Capital Mgmt   10.00%   75,000.00   15,750.00  90,750.00    605,000
30-02 (32)  04/30/2000  Becker Capital Mgmt   10.00%   50,000.00   10,500.00  60,500.00    403,333
30-03 (33)  05/30/2001  Becker Capital Mgmt   10.00%   30,000.00    6,300.00  36,300.00    242,000
30-04 (34)  06/14/2001  Becker Capital Mgmt   10.00%   80,000.00   16,800.00  96,800.00    645,333
30-05       07/02/2001  Becker Capital Mgmt   10.00%   25,000.00    5,250.00  30,250.00    201,667
30-06       07/31/2001  Becker Capital Mgmt   10.00%   64,000.00   13,440.00  77,440.00    516,267
30-07       08/21/2001  Becker Capital Mgmt   10.00%   25,000.00    5,250.00  30,250.00    201,667
30-08       10/26/2001  Becker Capital Mgmt   10.00%   20,105.64    4,222.18  24,327.82    162,185
067         01/30/2002  Becker Capital Mgmt   10.00%   50,000.00   10,500.00  60,500.00    403,333
071         07/12/2002  Becker Capital Mgmt   10.00%   24,963.59    1,816.79  26,780.38    178,536
072         07/30/2002  Becker Capital Mgmt   10.00%   25,000.00    1,694.44  26,694.44    177,963
073         08/06/2002  Becker Capital Mgmt   10.00%    8,000.00      526.67   8,526.67     56,844
074         08/21/2002  Becker Capital Mgmt   10.00%   35,000.00    2,158.33  37,158.33    247,722
075         09/04/2002  Becker Capital Mgmt   10.00%   16,000.00      924.44  16,924.44    112,830
            11/07/2002  Becker Capital Mgmt   10.00%    3,500.00      140.00   3,640.00     24,267
            12/06/2002  Becker Capital Mgmt   10.00%    5,000.00      159.72   5,159.72     34,398

                                              Totals               95,432.59 632,001.82  4,213,345

                                                                           *Total Shares 4,213,345


*This number is after adjustment to the conversion value of the notes,
reflecting an interest rate of 10% on all notes, interest computed on an
annually compounded basis through March 31, 2003.

EX-10.16 12 telemetrixex1016.htm Exhibit 10.16 Exchange Agreement between us and Michael L. Glaser

Exhibit 10.16 Exchange Agreement between us and Michael L. Glaser