FORM 10-KSB
                                 Amendment No.2
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON D.C., 20549



(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

    For the fiscal year ended December 31, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                         Commission File Number 0-28452

                            MILLENNIUM SOFTWARE, INC.
                      Formerly Legal protection Services, Inc.
               (Exact name of registrant as specified in its charter)

            Nevada                                            93-1206546
---------------------------------                        --------------------
  (State or other jurisdiction                              (IRS Employer
of  Incorporation or organization)                        Identification No.)


2950 E. Flamingo Road, Suite G, Las Vegas, Nevada               89121
-------------------------------------------------            -----------
(address of principal executive offices)                     (Zip code)

                   Issuer's telephone number: (702) 369-9614

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class                       Name of exchanges on which registered
      (None)                                               (None)

Securities  registered  pursuant to Section  12(g) of the Exchange  Act:  Common
     Stock, par value $.004 per share.

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
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. [X] Yes [ ] No


Check if there is no  disclosure of  delinquent  filers  pursuant to Item 405 of
Regulation SB is not contained herein, and will not 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. [X]


<PAGE>

                                      PART I

ITEM 1.   DESCRIPTION OF BUSINESS

GENERAL


     Millennium Software, Inc. (the Company) is engaged in the development of an
Internet business to sell financial software products worldwide.  To date it has
secured  exclusive  worldwide rights to copy,  duplicate,  sell,  distribute and
sub-license software products known as CheckMy Banking 2000, CheckMy Loans 2000,
and CheckMy  Mortgage 2000 together with  Learning  Guides (the  Software).  The
Software  was in testing  and  proving  trials at  December  31st,  1999 and not
available for customer use. The intention is to make the Software  available for
sale in the March-April 2000 period.


     To date the Company has received no sales income since incorporation as ICS
(9612), Inc. in February 1996. The name of the Company was changed to Millennium
Software, Inc. in July 1997.


     The Company entered into an Electronic  Distribution Agreement with Digital
River, Inc., (Digital River') Eden Prairie, Minnesota on March 8th, 1999 whereby
Digital  River will  provide  order  processing  and credit  card  authorization
services  for the Company to enable  delivery of the  Software to  customers  by
electronic  download,  and in physical  CD-ROM form.  The agreement with Digital
River is for a period of two years,  renewable by mutual consent.  Digital River
is an independent  third party company whose shares are traded on NASDAQ (Symbol
DRIV).   The   Internet   site  for   Digital   River,   Inc.   is   located  at
http://www.digitalriver.com.

     It  is  intended   that  the  Web  Sites  will  provide   information   and
specifications  of the  Software,  copies of  Software  reports  and screens and
on-line ordering facilities. The Company has selected Digital River, Inc. as the
third party provider of electronic order processing, secure credit authorization
and  deliverer  of the  Software.  It is intended  that on-line  ordering  links
situated within the Web Sites will provide Internet connections to an electronic
order  processing web site created for the Company by Digital  River.  End Users
wishing to purchase the Software  will be able to enter their  purchase  choices
and delivery address,  pay by credit card and select either to have the Software
delivered  electronically  direct to their  computer or in CD-ROM  form  through
postal mail or courier services organized by Digital River. On confirmed receipt
of each valid order, Digital River will advise the Company on a next working day
basis of the  customer  name and  address,  product(s)  ordered and order value.
Digital River will also provide a secure on-line management reporting system for
the Company that will track the details of all orders placed and the  accounting
records for payments due to the Company and Digital  River.  Digital  River will
receive and hold  payments from  customers,  deduct 20% as a service fee, and is
obligated under the terms of the Electronic Software  Distribution  Agreement to
pay  the  balances  due to the  Company  within  30 days  after  the end of each
calendar  monthly  period.  Digital  River  will be solely  responsible  for the
payment of all credit card  transaction  fees and the  preparation and filing of
any  sales or use tax  returns,  and the  payments  of any and all  sales or use
taxes, together with any and all related interest and penalties. Payments due to
the Company from sales of Software  less the  processing  fee of 20% deducted by
Digital  River will be subject to  adjustment by Digital River based on Software
Product returns and refunds paid to End Users.


At  December  31st,  1999 the Web Sites  were  under  construction  and were not
available for customers to use.


                                      -2-
<PAGE>


At December  31st,  1999 the Company had not  delivered  any software to Digital
River  and no  services  had been  provided  by  Digital  River on behalf of the
Company.


     The Company  entered into a Software  Licensing  Agreement  (the  Licensing
Agreement) with Abacus Systems,  Ltd.,  (Abacus) on December 8th, 1999,  whereby
the Company has obtained exclusive worldwide rights to publish, copy, distribute
Software  products and to sub-license  reproduction and  distribution  rights of
Software  products  in return for future  aggregate  royalty  payments of 15% of
sales of Software.  Abacus Systems,  Ltd is a company  controlled and managed by
the President of the Company.  At December 31st, 1999 the Software  products are
not ready for release to the  market.  Further  testing  and proving  trials are
required before they can be released for sale.


SOFTWARE PRODUCTS

     The  Company  holds  the  exclusive  worldwide  marketing  rights  to three
financial software products,  known as CheckMy Banking 2000, CheckMy Loans 2000,
and CheckMy  Mortgage 2000  developed by Abacus  Systems Ltd. All three products
are designed for personal and small business users.  The Software is intended to
run on Windows 95 or 98 computer systems.

     CheckMy  Banking 2000  provides a software  import  feature for Quicken QIF
files. Quicken (Copyright:  Intuit, Inc., Mountain View) is the leading software
product for the easy and efficient  organization  of personal and small business
financial  records.  There are believed to be several  million  users of Quicken
worldwide.  CheckMy Banking 2000  calculates bank charges,  interest and cleared
and net balances.


     CheckMy  Loans 2000  provides a new powerful  personal and  corporate  loan
management system. The software updates monthly loan balances,  interest due and
paid amounts and provides loan reports. It contains 25 software  calculators for
various what-if  possibilities,  such as calculating  interest savings with loan
consolidation,  savings  arising  from early  loan  repayments,  higher  monthly
repayments.  The software  checks lenders loan interest and loan terms and finds
true values.

     CheckMy Mortgage 2000 is a smart mortgage  calculator that contains several
advanced new mortgage comparison and forecasts of property values features.  The
software  calculates  mortgage  amortization  schedules,  refinance balances and
total mortgage  interest costs.  The software  provides compare  mortgages,  and
refinances sections which calculate alternative financial results from different
mortgages.  The  software is aimed at  personal  users who wish to keep watch on
their mortgage finances.  Country settings screen will allow users to select US,
Canadian, or UK mortgage calculations routines.


     The Software will provide  calculation  processes which will allow personal
and  business  users to check and  verify  interest  charges,  loan  repayments,
mortgage repayments, bank charges, deposit clearing delays and also to calculate
ways to save  money by more  efficient  arrangement  of  personal  or  corporate
finances.


                                      -3-
<PAGE>


     The Software will be delivered to customers either electronically  directly
into their  computers  via  electronic  download or by physical  delivery  via a
CD-ROM.

METHODS OF DISTRIBUTION

     The Company intends to use the Internet to market the Software products and
related User Guides.


     The   Company   has  two  Web   Sites   under   construction   located   at
http://www.mlnsoft.com  and  http://www.checkmy200.uk.com  (The Web Sites).  The
www.mlnsoft.com  site is designed to addresses  the US and Canadian  markets for
the Software, the www.checkmy2000.uk.com  site is designed to site the UK market
for the Software.

     It  is  intended   that  the  Web  Sites  will  provide   information   and
specifications  of the  Software,  copies of  Software  reports  and screens and
on-line ordering facilities. The Company has selected Digital River, Inc. as the
third party provider of electronic order processing, secure credit authorization
and  deliverer  of the  Software.  It is intended  that on-line  ordering  links
situated within the Web Sites will provide Internet connections to an electronic
order  processing web site created for the Company by Digital  River.  End Users
wishing to purchase the Software  will be able to enter their  purchase  choices
and delivery address,  pay by credit card and select either to have the Software
delivered  electronically  direct to their  computer or in CD-ROM  form  through
postal mail or courier services organized by Digital River. On confirmed receipt
of each valid order, Digital River will advise the Company on a next working day
basis of the  customer  name and  address,  product(s)  ordered and order value.
Digital River will also provide a secure on-line management reporting system for
the Company that will track the details of all orders placed and the  accounting
records for payments due to the Company and Digital  River.  Digital  River will
receive and hold  payments from  customers,  deduct 20% as a service fee, and is
obligated under the terms of the Electronic Software  Distribution  Agreement to
pay  the  balances  due to the  Company  within  30 days  after  the end of each
calendar  monthly  period.  Digital  River  will be solely  responsible  for the
payment of all credit card  transaction  fees and the  preparation and filing of
any  sales or use tax  returns,  and the  payments  of any and all  sales or use
taxes, together with any and all related interest and penalties. Payments due to
the Company from sales of Software  less the  processing  fee of 20% deducted by
Digital  River will be subject to  adjustment by Digital River based on Software
Product returns and refunds paid to End Users.


At  December  31st,  1999 the Web Sites  were  under  construction  and were not
available for customers to use.

         The Company  incurred  costs of $2,343 for the  development  of its Web
Sites to December 31st, 1999.

     The Company  intends to promote its Web Sites through  inclusion in leading
search engines, through advertising in web site directories, through independent
editorial review of the Software  products and through Internet linkages leading
visitors to the Company's Web Sites.  Some listings may be obtained through paid
advertising.


                                      -4-
<PAGE>


     The Company also  intends to promote its Web Sites  through  expanding  its
network  of third  party  Internet  sites  that lead  visitors  directly  to the
Company's Web Sites.  The Company intends to introduce a commission  based sales
incentive for Internet  marketing  affiliates  (Affiliates) which will provide a
30% sales  commission on net sales income earned from buyers that originate from
third party  Affiliates.  Sales commissions due to Affiliates will be payable by
the Company within 30 days after the end of each monthly reporting period.

COMPETITION

      CheckMy  2000  products  intend to  compete  in the  worldwide  market for
personal,  and small business  financial  software products that run on personal
Windows 95 and 98 computers.  This market is extremely competitive and there are
many successful and well-established products within this market. There exists a
plethora of companies  developing and selling financial software,  many of which
have  well-established  operations and substantially greater financial resources
than the Company.  The Software is unproven and completely  new. The Company has
insufficient  management  resources and personnel to compete  effectively in the
market for financial software.  There is a risk that the Software may not appeal
to personal and business  users.  There is a risk of failure of the Web Sites to
perform properly.

     Major competitors in the market for financial  software include Intuit, Inc
(Mountain View, CA), Microsoft Corporation (Redmond,  WA) and Sage Computing Ltd
(UK).

SUPPLIERS

     The Company intends to copy,  market,  distribute and sub license  Software
and User Guides  developed and supplied by Abacus  Systems Ltd.  Abacus  Systems
Ltd, is a private Bermuda company  controlled by Anthony Bigwood,  the President
of the Company.  Abacus has 22 other  shareholders,  none of whom are related to
the President in any way. The Company has  insufficient  financial  resources or
skilled personnel to undertake software development on its own. It has therefore
reached an agreement with Abacus  whereby  Abacus has developed  Software at its
own cost and the Company has acquired the  exclusive  worldwide  rights to copy,
reproduce,  distribute the Software and sub-license  rights to reproduction  and
distribution  of the Software in return for payments to Abacus of 10%  royalties
of net revenue  income  received by the Company  from sale of Software  and User
Guides,  and a 5% royalty  fee for the  provision  of  technical  support to the
Company.

The  provisions  for  termination  of the Software  Licensing  Agreement  are as
follows:

1.   Abacus may terminate the License,  at its sole  discretion,  if Royalty and
     Fee payments due to Abacus,  or any part  thereof,  become 120 days or more
     overdue.
2.   Abacus may terminate  the License,  at its sole  discretion,  if management
     control of Millennium changes from the current arrangements.
3.   Millennium may terminate this License,  at its sole  discretion,  by giving
     120 days written notice to Abacus.
4.   The License will be terminated immediately upon written notice by Abacus if
     the confidentiality provisions are breached by Millennium.

                                      -5-
<PAGE>
   The  confidentiality  provisions within the Licensing  Agreement are that the
Company agrees to keep confidential all proprietary knowledge acquired about the
Products,  promises not to divulge any such  knowledge to any third party unless
prior written consent of Abacus and its representatives is provided.  Failure to
abide by these confidentiality rules will cause an immediate cancellation of the
License.

    The  Company  does not intend to engage in software  development  activities
except for the support and  maintenance  of its Web Sites.  It may contract with
Abacus Systems Ltd for the design and development of future additional  software
products to be provided at Abacus expense.

SEASONALITY

     The Company's  proposed  business may be affected by a seasonal trend, with
stronger  sales in the run up to  Christmas  period and weaker  sales during the
summer months.

EMPLOYEES

     The Company has no full-time employees at this time, however, the President
and  Secretary  of the Company  work for and on behalf of the Company  part-time
without paid remuneration at present.


ITEM 2.   DESCRIPTION OF PROPERTY

     The Company does not own or lease any real property at this time but is
using, without charge, office facilities of its President located at 2277 Lawson
Avenue, West Vancouver, BC, Canada. The telephone number is 604-926-5236.

    The Company has registered the web domain name www.CheckMy2000.uk.com.

ITEM 3.    LEGAL PROCEDINGS

         None.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         There  have been no matters  submitted  to a vote of  security  holders
during 1999.

                                     PART II


ITEM 5.    MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's stock trades on the OTC bulletin board with the stock symbol MLNS.


PRICE RANGE OF COMMON STOCK

Date               Volume               High/Ask          Low/Bid      Close
---------       -----------          -------------     ------------   ------
12/05/97          10,200                   .60              .25         .25
03/05/98           7,000                   .60              .25         .27
07/31/98          14,500                   .40              .20         .40
09/30/98           1,000                   .30              .30         .30
12/31/98           2,000                   .30              .03         .05
03/31/99           3,800                   .75              .365        .75
06/30/99             800                   .875             .50         .50
09/30/99           3,674                   .9375            .365        .365
12/31/99           1,200                   .9375            .9375       .9375

                                      -6-
<PAGE>

These  quotations  are  over-the-counter  quotations  and  reflect  inter-dealer
prices,  without  retail  mark-up,  markdown or commission and may not represent
actual transactions.

     In August of 1997 the  Company  approved a private  placement  of shares to
Asia  Pacific  Mining  (Bermuda)  Ltd.,  which  is  controlled  by  the  Company
President.  (Note:  Asia  Pacific  Mining  (Bermuda)  changed its name to Abacus
Systems  Ltd.,  in 1999).  1,180,500  shares  at $.05 each were  issued to raise
$59,250.

     The Company issued 3,000,000  shares,  in September 1999, to the President,
Dr. A. M.  Bigwood  (2,000,000  shares) and Abacus  Systems Ltd  (1,000,000),  a
company  controlled by the  President,  at $0.01 per share as  compensation  for
$30,000  owed  by  the  Company  to  the  President,  previously  provided  as a
shareholder  loan.  The Company  reduced the amount owed to the  President  by a
corresponding $30,000.

     The  Company  authorized  the issue of 50,000  shares,  in lieu of monetary
compensation,  to General  Audit  Systems,  Inc.,  a Company  controlled  by the
President,  for payment by General Audit Systems, Inc., on behalf of the Company
to the Company  auditor,  of $500 cash in September  1999 for audit  expenses of
Millennium Software, Inc. These shares were issued in October 1999.


     The Company  issued 7,500  shares,  in December  1999,  in lieu of monetary
compensation  to Abacus Systems Ltd, a company  controlled by the President,  at
$0.01 per share as compensation for $75.00 owed by the Company to the President,
previously  provided as a shareholder  loan. The Company reduced the amount owed
to the President by a corresponding $75.

     1,000 shares were issued to Ms. D Stoute  during July 1999 for provision of
web site software development services amounting to $10.00.

     5,000 shares were issued by Private  Placement to other parties during 1999
for $50 cash.  2,500  shares were  issued to Peter and Susan  Cassidy of London,
Ontario,  Canada.  The other 2,500  shares were  issued to Mr.  Steven  Buist of
Hamilton, Ontario, Canada.

     All of the above  mentioned  shares were  offered  pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933.

                                      -7-
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS

     The Company is in a  development  stage and has earned no income  since the
date of  incorporation  in  February  1996.  Since 1997 the  Company's  business
objectives  are to  market  and  distribute  Windows  95/98  financial  software
products through the Internet.

SELECTED FINANCIAL DATA
                                         (In Dollars, except per share data)
                                     -------------------------------------------
                                     Dec 31, 1999   Dec 31, 1998   Dec 31, 1997
                                     -------------------------------------------

Net sales                                ----         -----            ----

Operating Income (loss)                (59,187)      (6,245)         (95,614)
Net Income (loss)
Earnings (loss) per share
                   - Basic              (0.011)      (0.003)           (0.10)
                   - Diluted            (0.011)      (0.003)           (0.10)
Total assets                             6,867        9,854           15,089
Debt*                                      0            0                0
Shareholder loan                        64,338        38,773          37,763
Shareholders equity (deficit)          (57,471)     (28,919)         (22,767)

* Excluding shareholder loans

     The Company  received $56,140 in working capital finance from the President
and companies  owned by the President  during 1999 by provision of interest free
loans.  $30,575 of the loan finance has been exchanged for 3,O57,  500 shares of
Company stock in lieu of cash repayment at December 31st, 1999. The total amount
of  working  capital  loan  finance  provided  by the  President  and  companies
controlled by the President since the date of  incorporation in 1996 to December
31st, 1999 has amounted to $94,913.


                                      -8-
<PAGE>


     The  Company has  inadequate  financial  resources  with which to enter the
market for personal financial software.  Its cash balances at 31st December 1999
amounted  to $2,183.  The  potential  marketing  expenses  required to enter the
market for personal and business  software  substantially  exceeds the Companies
current cash  resources.  The Company does not anticipate any cash  requirements
for purchase of significant  equipment over the next twelve months.  The Company
has no definite plans to raise additional capital during the next twelve months.
The  Company  is  currently  solely  reliant  on the  President  of the  Company
continuing  to provide  interest free loan finance to maintain the Company=s day
to  day  operations.   The  annual  operating   expenses  before  marketing  and
advertising costs amount to between $15,000 and $25,000 per annum. The President
has paid for expenses for  development  of the Company's Web Sites  amounting to
$2,343.  The  Company has no known  liabilities  except for  repayment  of loans
provided by the President.  These loans have been provided on an as needed basis
to the Company on an interest free basis, no specific repayment term,  repayable
on demand.  The Company currently has insufficient cash resources to repay these
loans.  During the next twelve months any shortfall in cash  requirements may be
provided  through  interest free loans provided to the Company by the President,
however  this  is  not  guaranteed.  If  the  President  is  unable  to  provide
loan-bridging  finance,  the  Company  may have to  discontinue  its  operations
entirely.


PLAN OF OPERATION

     The business  objective of the Company during the period from incorporation
until July 1997 was to acquire a small growth  company in the network  marketing
legal services provision sector.


     The search for a suitable  company  continued  for 15 months,  during which
period  discussions were held with several firms.  The Company's  investigations
failed to find a suitable  acquisition  candidate  and the search in the network
legal services area was discontinued in July 1997.


      In 1998,  the  Company  requested  the  President  to  develop a  business
strategy to enter the fast growing Internet  business  sector.  Several business
models of Internet  companies  were examined and it was concluded  that Internet
marketing software products was potentially promising opportunity. The Company's
current business objectives are to market and distribute Windows 95/98 financial
software products through the Internet.


     The Company entered into an Electronic  Distribution Agreement with Digital
River, Inc,  (Digital River) Eden Prairie,  Minnesota on March 8th, 1999 whereby
Digital River will provide order  processing  services for the Company to enable
delivery of the Software to customers by electronic download, and facilities for
warehousing and delivery of Software in physical  CD-ROM form.  Digital River is
an independent  company whose shares are traded on NASDAQ  (Symbol:  DRIV).  The
Internet address of Digital River is http://www.digitalriver.com.  Digital River
has not commenced  providing  software  delivery  services for the Company as of
December 31st, 1999.


     The Company is capable of  delivering  the  Software to End Users in CD-ROM
form  without  services  provided by Digital  River,  but is not able to deliver
Software by electronic download without the facilities provided by Digital River
or a similar  supplier.  Suppliers,  such as  Cybersource  Corporation,  Preview
Systems,  and ShopNow.com are able to provide  alternative sources of electronic
delivery of the Software.  The  agreement  with Digital River is for a period of
two years from March 8th, 1999, renewable by mutual consent.

                                      -9-
<PAGE>




     The  Company's  Web Sites are  intended to link  directly to Digital  River
computer  servers.  Software  will be delivered to End Users by Digital River by
electronic download or in physical CD-ROM form.


     The terms of the  Electronic  Distribution  Agreement  with  Digital  River
provide  that  Digital  River will  collect  sales  revenues  from the  Software
delivered by them in accounts controlled by them and they will deduct 20% of net
sales revenues obtained from End User customers  processed by Digital River as a
Margin  Payment  for their  facilities  provided on behalf of the  Company.  The
Margin  Payment to the Company  shall be subject to  adjustment by Digital River
based on  Software  returns  and  refunds  paid to End  Users.  The terms of the
agreement  are that  Digital  River will notify the Company  within  thirty days
after  the end of each  calendar  month  about  payments  processed  during  the
previous  calendar  month  and will pay any net  balances  owing to the  Company
within the said thirty days.

     Digital  River had not received  copies of the  Software at December  31st,
1999.


     Clause  16,  Term and  Termination  of the  agreement  with  Digital  River
contains the following provisions:

     This  Agreement  will  continue  in effect  for two (2) years from the date
hereof (March 8th,  1999).  This  Agreement  will be  automatically  renewed for
successive  additional  one (1) year  terms  (each,  a  Renewable  Term)  unless
terminated  by either  party upon ninety (90) days  written  notice prior to the
expiration of the Initial Term or any Renewable Term.

     The Agreement may be terminated by a party immediately by written notice to
the other party upon the occurrence of any of the following  events:  (i) If the
other party ceases to do business,  or otherwise  substantially  terminates  its
business  operations;  (ii) If the other party shall fail to promptly  secure or
renew any license registration, permit authorization or approval for the conduct
of its  business  in the manner  contemplated  by the  agreement  or if any such
license, registration, permit, authorization or approval is revoked or suspended
and not reinstated  within thirty (30) days; (iii) If the other party materially
breaches  any  provision  of the  agreement  and fails to fully cure such breach
within thirty (30) days of written notice  describing the breach; or (iv) If the
other party becomes  insolvent or seeks  protection  under any bankruptcy  laws,
creditors arrangements, composition or comparable proceedings, or if any respect
whatsoever affect a party's  obligations to make payments top the other party in
connection  with  the  distribution  of  Products  that  occurred  prior  to the
termination of the agreementpt



                                      -10-
<PAGE>


     The Company entered into a Software Licensing Agreement with Abacus Systems
Ltd.,  on  December  8th,  1999,  whereby the  Company  has  obtained  exclusive
worldwide  rights  to  publish,   copy  distribute  the  Software,   sub-license
reproduction  and  distribution  rights to the  Software  developed by Abacus in
return for future royalty  payments.  Abacus expects to deliver  Software to the
Company  under the terms of the licensing  agreement in March 2000.  The Company
has agreed to pay Abacus 10% of royalties  based on net revenues  received  from
the sale of Software  licensed by Abacus to the Company plus a 5% royalty  based
on net  revenues  received  from the sale of Software  licensed by Abacus to the
Company for technical support.

     Abacus Systems Ltd is a company  controlled and managed by the President of
the Company.


     The  Company has  inadequate  financial  resources  with which to enter the
market for personal financial software.  Its cash balances at 31st December 1999
amounted  to $2,154.  The  potential  marketing  expenses  required to enter the
market for personal and business  software  substantially  exceeds the Companies
current cash  resources.  The Company does not anticipate any cash  requirements
for purchase of significant  equipment over the next twelve months.  The Company
has no definite plans to raise additional capital during the next twelve months.
The  Company  is  currently  solely  reliant  on the  President  of the  Company
continuing  to provide  interest free loan finance to maintain the Company's day
to  day  operations.   The  annual  operating   expenses  before  marketing  and
advertising costs amount to between $15,000 and $25,000 per annum. The President
has provided  $2,343 for  development and maintenance of the Company's Web Sites
to  December  31st,  1999.  The  Company  has no known  liabilities  except  for
repayment of loans provided by the President.  These loans have been provided on
an as needed  basis to the  Company  on an  interest  free  basis,  no  specific
repayment term,  repayable in cash or by issuance of company stock.  The Company
currently has insufficient cash resources to repay these loans.  During the next
twelve  months  any  shortfall  in cash  requirements  may be  provided  through
interest free loans  provided to the Company by the  President,  however this is
not guaranteed. If the President is unable to provide loan-bridging finance, the
Company may have to discontinue its operations entirely.

     Sales of Software had not commenced at December 31st,  1999 and the Company
had received no income since incorporation.

     There are  substantial  uncertainties  and risks involved with the business
plans of the Company,  and added substantial  uncertainties and risk whether the
Company's  cash  resources  will be sufficient to meet the demands placed on the
Company.  There is substantial  uncertainty  whether the Company will be able to
generate  sufficient  revenues to maintain its  operations  over the next twelve
months without additional capital raised or additional  interest free loans from
the president.


     The Company has no history of marketing software products.

     The Company has no history of using a third party such as Digital  River to
deliver software  electronically  and there may be substantial risks involved in
delivering   products  by  electronic  download  to  End  Users.  There  may  be
substantial  risks involved in the ability of Digital River to pay amounts owing
to  the  Company  under  the  terms  of  the  Electronic  Software  Distribution
Agreement.  Digital River  possessed  cash resources in excess of $50 million at
December  31st,  1999 which may,  or may not,  be  sufficient  to  continue  its
operations for the remaining period of the agreement.


                                      -11-
<PAGE>



     If Digital River is unable to raise additional working capital, the Company
may be at risk from a withdrawal  of services by Digital River that would impact
the Company's  abilities to deliver to deliver  products  electronically.  Other
companies such as Cybersource  Corporation,  Preview Systems,  ShopNow.Com,  Inc
provide  similar  services  to  Digital  River.  The  Company is able to deliver
product in CD-ROM form and process  payments  without the  facilities of Digital
River being available.

     There are substantial  risks involved in marketing new software products if
the software  contains  unknown  software  errors  (Errors)  that cause  program
failures  when in the hands of End  Users.  The  Software  may  contain  several
unknown  Errors  that  may  cause  product  to be  returned  and  sales  revenue
reimbursed  to the End  User.  There  is a risk of  substantial  returns  if the
Software contains such Errors.

     There are  substantial  risks  involved  in  bringing  the new Web Sites to
market and in the Company's ability to attract visitors to the Web Sites.  There
are several  hundreds of  millions of web sites in  existence,  and many of them
compete  strongly in securing  prime Search Engine  placements and in the amount
spent on  marketing  expenditures  to attract  visitors.  The  Company  does not
possess sufficient financial resources to compete effectively in this market.


     There are  substantial  risks  involved in relying on  Affiliates  to bring
buyers to our Web Sites.  Affiliates can remove the Company's  banner from their
websites  at any time  without  notice.  Such  action  would  cause sales of the
Software through Affiliates to cease from such sites.

     There is no expected  significant  change in the number of employees during
the year 2000.

Y2K ISSUES

     The Company may experience  problems internally or externally when computer
clocks  moved  forward  in to the year  2000.  There is  inadequate  information
available  to  determine  the extent to which Y2K  problems  may impact upon the
Company,  its  bankers,  suppliers  and  other  parties.  No Y2K  problems  were
experienced to December 31st, 1999.



ITEM 7.Financial Statements

   A.           Summary of significant accounting policies.

     In compliance with SOP 98-5 all organizational costs were fully expensed in
the December 31st, 1998 financial accounts.

     In  compliance  with  para  12  of  SFAS  7 the  nature  of  the  Companies
development activities during the accounting periods have been as follows:

     December 31st,  1997. The Company was engaged in negotiations  with several
third  party arms length  companies  in Canada and  Singapore  in pursuit of its
search for possible  acquisition and merger.  No suitable  acquisition was found
and  the  Company  terminated  these  negotiations.   The  Company  was  in  its
development phase and did not earn any revenues during the period.

     December 31st,  1998. The Company was engaged in laying plans to develop an
Internet based business.  It was not engaged in any other commercial  activities
during the current period. The Company was in a developmental  phase and did not
earn any revenues during the period.

     December  31st,  1999.  The Company was engaged in  developing  an Internet
based business and commenced development of a web site. The Company entered into
an Electronic Software Distribution  Agreement with Digital River, Inc. in March
1999.  The  Company  entered  into a software  licensing  agreement  with Abacus
Systems  Ltd, a company  controlled  by the  President.  The  Company was in its
development phase and did not earn any revenues during the period.

     The Company's accounting policy in regards to exchanging stock for services
rendered is to expense the cost and issue stock in lieu of cash payment.

     The  Company's  accounting  policy  in  regards  to  exchanging  stock  for
shareholder  loans  advanced  to the  Company is to issue  stock in lieu of cash
repayment and reduce the shareholder loans by the value of stock issued.

     The useful life of computer equipment is depreciated over five (5) years.

     The Web Sites software development costs paid by the President and expensed
by the Company to December 31st, 1999 amounted to $2,343.


     No compensation expense has been recognized in the financial statements for
1999 for the issue of incentive stock options to the President.

                                      -12-
<PAGE>



MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1999, AND
DECEMBER 31, 1998

                                TABLE OF CONTENTS
                                                              Page Number
INDEPENDENT ACCOUNTANT'S REPORT                                    F-1

FINANCIAL STATEMENT
          Balance Sheets                                           F-2

          Statements of Operations and Deficit
           Accumulated During the Development Stage                F-3

          Statement of Changes in Stockholders' Equity.            F-4

          Statement of Cash Flows                                  F-5

          Notes to the Financial Statements                      F-6-9
<PAGE>

INDEPENDENT ACCOUNTANT'S REPORT

To the Board of Directors and Stockholders
of Millennium Software, Inc.
Las Vegas, Nevada

  I have audited the accompanying balance sheets of Millennium Software, Inc. (a
development  stage  company) as of December 31, 1999, and December 31, 1998, and
the related  statements of operations,  cash flows, and changes in stockholders'
equity for the period from  February 20, 1996,  (date of  inception) to December
31, 1999. These statements are the responsibility of Millennium Software,  Inc's
management.  My  responsibility  is to express  an  opinion  on these  financial
statements based on my audit.

  I conducted an audit in accordance with generally accepted auditing standards.
Those standards  require that I plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing  the  accounting  principle  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

  In my opinion,  the accompanying  financial  statements present fairly, in all
material  aspects,  the financial  position of Millennium  Software,  Inc. as of
December 31, 1999, and December 31, 1998,  and the results of  operations,  cash
flows, and changes in stockholders'  equity for the years then ended, as well as
the  cumulative  period from  February 20, 1996, in  conformity  with  generally
accepted accounting principles.



/s/David Coffey

David Coffey, C.P.A.
Las Vegas, Nevada
June 14, 2000
                                      F-1
<PAGE>

MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
                                                          December 31
                                                 -------------------------------
                                                     1999              1998
                                                 ------------      -------------
ASSETS
Cash                                            $       2,154      $       2,884

Computers less accumulated depreciation
of $6,567 and $4,310, respectively                      4,713              6,970
                                                      -------            -------
   Total Assets                                 $       6,867      $       9,854
                                                      =======            =======
LIABILITIES & STOCKHOLDERS' EQUITY

Loans from stockholders                         $      64,338             38,773
                                                      -------            -------
   Total Liabilities                                   64,338             38,773

Stockholders'  Equity Common stock,
   authorized 25,000,000 shares at $.004 par
   value, issued and outstanding 5,098,500
   shares and 2,035,000 shares, respectively,
   after giving effect to a 4 to 1 reverse split
   Effective July 30, 1997                             20,394              8,140
   Additional paid-in capital
   Deficit accumulated during the
   Development stage                                 (197,833)
(138,646)                                             -------           --------
     Total Stockholders' Equity                       (57,471)          (28,919)

Total Liabilities and Stockholders' Equity      $       6,867      $       9,854
                                                =============      =============

The accompanying notes are an integral part of these financial statements.

                                        F-2
<PAGE>

MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
(With Cumulative Figures From Inception)

                               Twelve months ended December 31,  From Inception,
                               --------------------------------  Feb.20, 1996 to
                                     1999             1998        Dec.31, 1999
                                --------------   --------------  ---------------
Income                          $            0   $            0   $           0

Expenses
   Advertising                               0                0           7,286
   Amortization of
       organizational costs                  0              633           1,000
   Auto expenses                             0                0           2,416
   Computer expenses                        10                0           3,985
   Consulting                                0                0           1,000
   Depreciation                          2,257            2,256           6,567
   Research and development              2,343                0           2,343
   Internet expenses                       801                0          12,801
   Legal and professional fees          21,180            2,804          63,669
   Office expenses                         446              552           4,802
   Telephone                             1,991                0           4,800
   Travel, meals, and lodgings          30,159                0          87,164
                                --------------   --------------   --------------
Total expenses                          59,187            6,245         197,833

Net loss                               (59,187)          (6,245)  $    (197,833)
                                                                  ==============
Retained earnings,
       beginning of period            (138,646)        (132,401)
                                --------------   --------------
Deficit accumulated during
the development stage           $     (197,833)        (138,646)
                                ==============   ==============
Earnings  (loss)  per  share,
       after  giving  effect
       to a 4 to 1 reverse split
       effective July 30, 1997:

Net loss, assuming no dilution  $        (0.02)  $         0.00   $       (0.10)
                                ==============   ==============   ==============
Net loss, assuming full dilution$        (0.02)            0.00   $       (0.10)
                                ==============   ==============   ==============
Weighted average shares,
no dilution                          3,055,625        2,035,000       2,024,881
                                ==============   ==============   ==============
Weighted average shares,
fully diluted                        3,105,625        2,035,000       2,041,548
                                ==============   ==============   =============


The accompanying notes are an integral part of these financial statements.

                                         F-3
<PAGE>

MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM FEBRUARY 20, 1996, (Date
of Inception) TO December 31, 1999


                                        Common Stock      Additional
                                   ---------------------   Paid-In
                                     Shares      Amount    Capital       Total
                                   ---------   ---------  ----------   ---------
Balance February 20, 1996            ----      $  ----    $   ----     $  ----
Issuance of common stock for
services, March, 1996               1,000,000      1,000           0      1,000
Issuance of common stock for
cash, March, 1996                   1,000,000      1,000           0      1,000
May, 1996                           1,418,000      1,418      69,482     70,900
Less offering costs                         0          0     (22,198)   (22,198)
Less net loss                               0          0           0    (36,787)
                                   ----------  ---------  ----------   ---------
Balance, December 31, 1996          3,418,000      3,418      47,284     13,915
Reverse stock split 4 to 1
on July 30, 1997                   (2,563,500)         0           0          0
Issuance of common stock
for cash, August, 1997              1,180,500      3,418      54,303     59,025
Less net loss                               0          0           0    (95,614)
                                   ----------  ---------  ----------   ---------
Balance, December 31, 1997          2,035,000      8,140     101,587    (22,674)
Less net loss                               0          0           0     (5,198)
                                   ----------  ---------  ----------   ---------
Balance, September 30, 1998         2,035,000      8,140     101,587    (27,872)
Less net loss                               0          0           0     (1,047)
                                   ----------  ---------  ----------   ---------
Balance, December 31, 1998          2,035,000      8,140     101,587    (28,919)
Issuance of common stock
for cash, June, 1999                    5,000         20          30         50
Issuance of common stock to
offset debt, September, 1999        3,050,000     12,200      18,300     30,500
Issuance of common stock for
services, June 1999                     1,000          4           6         10
Issuance of common stock to
offset debt, December, 1999             7,500         30          45         75
Less net loss                               0          0           0    (59,187)
                                   ----------  ---------  ----------   ---------
Balance, December 31, 1999          5,098,500  $  20,394  $  119,968   $(57,471)
                                   ==========  =========  ==========   =========

The accompanying notes are an integral part of these financial statements.

                                       F-4
<PAGE>

MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(With Cumulative Figures From Inception)

                                    Twelve months ended Dec. 31,  From Inception
                                    ---------------------------   Feb.20,1996 to
                                         1999          1998         Dec.31,1999
                                       --------      --------     --------------

CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net Loss                              $  (59,187)   $   (6,244)    $   (197,833)
Non-cash items included in net loss:
   Issue of stock for services                10             0             1,010
   Amort. of organizational costs              0           633                 0
   Depreciation                            2,257         2,256             6,567
Adjustments to reconcile net loss
   to cash used by operating activity:
   Loans from stockholders                56,140         1,010            94,913
   Stock issued to repay loans
   From stockholders                     (30,575)            0         (30,575)
                                      ----------    ----------     -------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES                     (31,355)       (2,345)        (125,918)

CASH FLOWS USED BY
INVESTING ACTIVITIES
   Computers                                   0             0           11,280
                                      ----------    ----------     -------------
NET CASH USED BY INVESTING ACTIVITIES          0             0           11,280

CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES
   Issue of stock to offset
   loans from stockholders                30,575             0           30,575
   Sale of common stock                       50             0            7,190
   Paid-in capital                             0             0          123,785
   Less offering costs                         0             0          (22,198)
                                      ----------    ----------     -------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES                      30,625             0          139,352
                                      ----------    ----------     ------------
NET INCREASE IN CASH                        (730)       (2,345)    $      2,154
                                                                   =============
CASH AT BEGINNING OF PERIOD                2,884         5,229
                                      ----------    ----------     -------------
CASH AT END OF PERIOD                 $    2,154    $    2,884
                                      ==========    ==========     =============

The accompanying notes are an integral part of these financial statements.

                                        F-5
<PAGE>

MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999, AND DECEMBER 31, 1998

NOTE A   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The Company was  incorporated  on February 20, 1996,  under the laws of the
State of Nevada as Legal Protection Services, Inc. The business purpose was then
to sell prepaid legal services.  On July 10, 1997, the  shareholders  approved a
change  of name to  Millennium  Software,  Inc.  The  Company  is  still  in the
development stage and has not generated any revenue from operations. The Company
is  engaged in the  development  of an  Internet-based  business  and  commenced
development of a web site. The Company  entered into an Electronic  Distribution
Agreement with Digital River, Inc. in March of 1999.

     The  Company  adopted,  effective  December,  1998,  SOP 98-5 issued by the
American Institute of Certified Public Accountants.  SOP 98-5 specifies that all
organizational  costs be expensed as  incurred.  Consequently,  the  unamortized
organizational cost balance was recognized as a December, 1998, expense.


     The Company will adopt future accounting policies and procedures based upon
the nature of transactions.

NOTE B   COMPUTER EQUIPMENT

     Computer  equipment is carried at cost.  Expenditures  for  maintenance and
repairs are charged against operations. Renewals and betterments that materially
extend  the  life  of the  asset  are  capitalized.  Expenditures  for  software
development,  maintenance,  and  support of the  Internet  web site are  charged
against operations as incurred.

     Depreciation  of the equipment is provided using the  straight-line  method
over the  estimated  useful  lives fro both federal  income taxes and  financial
reporting. Computer equipment is depreciated over five years.

NOTE C   LOANS FROM STOCKHOLDERS

     The  Company's   President,   or  companies  controlled  by  the  Company's
President, have extended loans to the Company at no interest, payable on demand,
for working  capital  purposes.  As of December 31, 1999, the Company had issued
3,057,500  shares of common stock, at $.01 per share, in repayment of $30,575 of
its loans from  stockholders.  The balance due after the  issuance of shares was
$64,338 as of December 31, 1999.

                                         F-6
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999, AND DECEMBER 31, 1998
(continued)

NOTE D   EARNINGS (LOSS PER SHARE)

         Basic  EPS is  determined  using net  income  divided  by the  weighted
average  shares  outstanding  during the  period.  Diluted  EPS is  computed  by
dividing net income by the weighted  average shares  outstanding,  assuming that
stock options, convertible bonds, or similar instruments have been exercised.

NOTE E   STOCK ISSUANCE

     In June of 1999,  the Company  issued  5,000  shares of its common stock at
$.01 per  share,  for a total of $50  cash.  Also in June of 1999,  the  Company
issued 1,000 shares of its common stock at $.01 per share for a total of $10, in
exchange for services.  The policy of the Company is that,  when it issues stock
for  services,  the assigned  value of the stock is expensed in the Statement of
Operations.

     In September of 1999,  the Company  issued  3,000,000  shares of its common
stock and  approved the issue of another  50,000  shares,  at $.01 per share,  a
total of $30,500, in repayment of loans from stockholders.  In December of 1999,
the Company  issued 7,500 shares of common stock,  at $.01 per share for a total
of $75, in repayment of loans from stockholders.

NOTE F   REVERSE STOCK SPLIT

     On July 10, 1997, the  stockholders  approved a 4 for 1 reverse stock split
to be effective July 30, 1997.

NOTE G   CONTRACTS AND COMMITMENTS

     The Company entered into an Electronic Software Distribution Agreement with
Digital River, Inc., Eden Prairie, Minnesota, in March of 1999. The agreement is
for a period of 24 months,  expiring  March 7, 2001,  renewable  for  successive
one-year  terms  unless  terminated  by  either  party.  Under  the terms of the
agreement Digital River provides

                                         F-7
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999, AND DECEMBER 31, 1998
(continued)

NOTE G   CONTRACTS AND COMMITMENTS (continued)

     Computer facilities to deliver software purchased through the Company's web
site,  electronically by downloading or by delivery of physical CD versions. The
Company's  web site links  directly to the Digital  River order  processing  web
site.  The Company has not yet  delivered  any  software to Digital  River.  The
agreement  provides  for  company  indemnification  of  Digital  River  (and its
successors)  against  any and all  liabilities,  losses,  damages  and  expenses
associated  with or  incurred as a result of any  claims,  action or  proceeding
instituted  against  Digital River as a result of acts or failures to act on the
part of the  Company.  No known  current or future  liabilities  exist under the
terms  of the  agreement  with  Digital  River  at the  date of  this  financial
statement. Digital River is not a related third party as defined by SFAS 57.

     The  Company  entered  into a  Software  Licensing  Agreement  with  Abacus
Systems,  Ltd., on December 8, 1999,  whereby the Company has obtained worldwide
rights  to  publish,   copy   distribute,   and  sub-license   reproduction  and
distribution  rights to  software  products  developed  by Abacus in return  for
future royalty payments.  Abacus Systems,  Ltd., is a private company controlled
by the  President  of the  Company.  The Company has agreed to pay a 10% royalty
based on net  revenues  from the sale of  software  licensed  to  Abacus  to the
Company  plus a 5%  royalty  based  on net  revenues  received  from the sale of
software licensed by Abacus to the Company for technical support.

NOTE H   RELATED PARTY TRANSACTIONS

     In  September  of 1999 the Company  issued  3,000,000  shares of its common
stock and approved the issuance of another 50,000 shares,  at $.01 per share, as
a  reduction  of  $30,500  payable  to  the  Company's  President  or  companies
controlled by the Company's  President.  In December of 1999 the Company  issued
another  7,500  shares of its common  stock at $.01 per share for a similar debt
reduction of $75.

     The Company's President has paid $2,343 for expenses for the development of
web sites on behalf of the  Company.  This  amount is included in the loans from
stockholders balance of $64,338 as of December 31, 1999.

                                       F-8
<PAGE>

MILLENNIUM SOFTWARE, INC.
( A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999, AND DECEMBER 31, 1998
(continued)

NOTE H   RELATED PARTY TRANSACTIONS (continued)

     The  Company  entered  into a  Software  Licensing  Agreement  with  Abacus
Systems,  Ltd., on December 8, 1999,  whereby the Company has obtained worldwide
rights  to  publish,   copy   distribute,   and  sub-license   reproduction  and
distribution  rights to  software  products  developed  by Abacus in return  for
future royalty payments.  Abacus Systems,  Ltd., is a private company controlled
by the  President  of the  Company.  The Company has agreed to pay a 10% royalty
based on net  revenues  from the sale of  software  licensed  to  Abacus  to the
Company  plus a 5%  royalty  based  on net  revenues  received  from the sale of
software licensed by Abacus to the Company for technical support.  No sales have
been made and no royalty payments were due as of December 31, 1999.

NOTE I   STOCK OPTION

     On November  22,  1999,  the Company  issued an option to its  President to
acquire  300,000  shares of its common  stock at a price of $.01 per share,  for
$3,000  cash.  The terms of the Option are  payment in cash  within a three year
period ending November 21, 2002,  after which date any outstanding  options will
be canceled.  The options can be converted  into common shares upon full payment
in  cash.  Any  number  of  options  can be  converted  at any time  during  the
three-year period. Any and all options which remain unconverted to common shares
after November 21, 2002, and the attached right to convert to common shares will
be canceled.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

     The  Company's  financial  accounts have been audited by D. Coffey CPA from
     1996 to December  31st,1999.  There have been no disputes or  disagreements
     with the auditor.

                                      F-9
<PAGE>

                                    PART III

ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS:

     The following table sets forth certain  information with respect to each of
     the  Directors,  Executive  Officers of the  Company,  their ages,  and all
     positions with the company.


Name                       Age                         Position
--------------------------------------------------------------------------------

Anthony M. Bigwood           60                        President and Director
Address
Address

Elizabeth J. Bigwood         58              Secretary/Treasurer and Director

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

     Anthony Michael Bigwood B.Sc.,  PhD., MBA (Sloan).  President and Director.
Age 60, British  citizen.  Dr. Bigwood was educated in Britain where he attended
the University of Bristol  studying natural  sciences.  He continued his studies
after his degree to earn a Ph.D.  He was  recruited  by Unilever  as  management
trainee and held several management  positions in Unilevers'  chemical division.
He joined the mining  finance  group Rio Tinto Zinc  Corporation  as a financial
management  consultant and was appointed Director of RTZ Consultants Ltd. within
three years of joining the firm.  Dr.  Bigwood was selected as "executive of the
year" by RTZ and  selected to join the Sloan MBA Program at the London  Business
School for one year where he studied banking,  finance and management  sciences.
On  rejoining  RTZ he became  managing  director of RTZ Computer  Services,  RTZ
Software and Rio Tinto Management Services  (Toronto).  He left RTZ to start his
own computer company which he ran successfully.  He sold his shareholdings after
6 years.  Thereafter Dr. Bigwood has continued to provide  financial  consulting
advisory  services and has lead several  negotiations with major banks to secure
financing for corporate  acquisitions.  Dr.  Bigwood  controls  several  private
companies  including  Abacus  Corporation,  Ltd.,  (Isle of Man,  UK) and Abacus
Systems  Ltd  (Bermuda)  and  in  addition  is  President  of the  following  US
companies:  Asia & Pacific Mining  Ventures,  Inc., Mid West Oil & Gas, Inc. and
General Audit Systems, Inc.

     Elizabeth J. Bigwood MCSP, Company Secretary and director,  age 58, British
citizen.   Mrs.  Bigwood  was  educated  in  Britain  where  she  trained  as  a
physiotherapy  nurse.  She has  worked  in  orthopedic  hospitals  and  children
intensive care hospitals where she  specialized in treating  spinal  deformities
and was  responsible  for running a special needs clinic for several years.  She
has  organizational  and  record  keeping  skills  to which she  applies  to the
maintenance of company records.

     Our  executive  officers  have served since  February of 1996. A director's
term of office is ten (10) years,  renewable by mutual consent. The next renewal
date is February 1st, 2006.

FAMILY RELATIONSHIPS

     Anthony M.  Bigwood,  President  and  Director,  and  Elizabeth J. Bigwood,
Secretary/Treasurer and director, are husband and wife.


ITEM 10. EXECUTIVE COMPENSATION

     Any  compensation  received by officers or directors of the Company will be
determined from time to time by the Board of Directors. The company is currently
developing  a new  Internet  business  venture and has not paid any  salaries or
executive  compensation.  The executive  officers and directors will not receive
compensation until operations commence.

                                      -13-
<PAGE>

     Stock Options - The Company granted 300,000 incentive options (the Options)
on common  shares to the  President  at an  exercise  price of $.01 per share on
November 22, 1999.  The terms of the Options are payment in cash within a 3 year
period ending November 21st, 2002, after which date any outstanding Options will
be cancelled.  The options can be converted into common shares upon full payment
in cash. No part payments are allowed. Any number of options may be converted at
any time  within  the  three  year  period.  Any and all  options  which  remain
unconverted to common shares after November 21st, 2002 and the attached right to
convert to common shares will be cancelled.

     The audited value of shareholders equity based on the financial  statements
prepared by the Company's  auditors was -0.01  (negative) per share on September
30, 1999.

OPTIONS/SAR GRANTS IN LAST FISCAL YEAR

-------------------------------------------------------------------------------
                 Number of Securities       % of total
               Underlying Options/SARs    Options/SARs     Execise/Base   Exp.
     Name              Granted           Granted in 1999   Price($/sh)   Date
    -------     ----------------------   ---------------   -----------  --------

Anthony Bigwood        300,000                100%          $.01/sh     10/21/02


Market price of common stock at the date of the grant was $0.365.

None of these options have been exercised within the last fiscal year End.


ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


     In August of 1997 the  Company  approved a private  placement  of shares to
Asia  Pacific  Mining  (Bermuda)  Ltd.,  which  is  controlled  by  the  Company
President.  (Note:  Asia  Pacific  Mining  (Bermuda)  changed its name to Abacus
Systems  Ltd.,  in 1999).  1,180,500  shares  at $.05 each were  issued to raise
$59,250.

     The Company issued 3,000,000  shares,  in September 1999, to the President,
Dr. A. M.  Bigwood  (2,000,000  shares) and Abacus  Systems Ltd  (1,000,000),  a
company  controlled by the  President,  at $0.01 per share as  compensation  for
$30,000  owed  by  the  Company  to  the  President,  previously  provided  as a
shareholder  loan.  The Company  reduced the amount owed to the  President  by a
corresponding $30,000.

     The  Company  authorized  the issue of 50,000  shares,  in lieu of monetary
compensation,  to General  Audit  Systems,  Inc.,  a Company  controlled  by the
President, for payment by General Audit Systems, Inc., on behalf of the Company,
of $500 in  September  1999 for  expenses.  These  shares were issued in October
1999.

                                      -14-

<PAGE>


         The Company approved the issued 7,500 shares, in December 1999, in lieu
of monetary  repayment of debt, to Abacus Systems Ltd., a company  controlled by
the President, for payment on behalf of the Company, of $75.00 for expenses paid
on behalf  of the  Company.  The 7,500  shares  of the  Company  so issued  were
transferred  in  December  1999 to married  children of the  President,  Richard
Bigwood (2,500 shares),  Catherine Coelho (2,500 shares),  and 2,500 shares were
transferred to Mr. James Bigwood, son of the President and Mrs. EJ Bigwood.


     All of the above  mentioned  shares were  offered  pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933.

     The following table sets forth, as of December 31st,  1999, the outstanding
shares of common stock of the company  owned of record or  beneficially  by each
person who owned of  record,  or was known by the  Company to own  beneficially,
more than 5% of the Company's  Common  Stock,  and the name and share holding of
each officer and director and all officers and directors as a group.

                                      -15-
<PAGE>

Title of
Class           Name & Address          Amount & Nature           % of class
              of beneficial owner       of beneficial owner
-------------------------------------------------------------------------------

Common        Abacus Systems Ltd           1,668,000                 30.90
              44 Church Street
              Hamilton
              Bermuda



Common        Abacus Corporation Ltd (1)   1,994,750                 36.95
              Kissack Court
              Ramsey
              Isle of Man
              United Kingdom


Common        A.M. Bigwood (1)             4,344,750 (2) (4)         80.48
              2277 Lawson Avenue
              West Vancouver
              BC V7V 2E3 Canada

Common        E.J. Bigwood (1)             4,344,750 (3)             80.48
              2277 Lawson Avenue
              West Vancouver
              BC V7V 2E3 Canada

Common        Officers and Directors       4,344,750                  80.48
              Combined


(1) Abacus  Corporation  Ltd, is owned  directly by Mr.  Bigwood  (50%) and Mrs.
Bigwood (50%). at December 31, 1999, Abacus Corporation Ltd owned 326,750 shares
directly  plus  1,668,000  shares  owned  beneficially  arising from its 96.825%
ownership  of Abacus  Systems Ltd.  Abacus  Systems Ltd owned  1,668,000  shares
directly.  Mr & Mrs Bigwood are the indirect owners of the 1,668,000 shares held
by Abacus Systems Ltd through their controlling  interest in Abacus  Corporation
Ltd.

(2) The President currently has options to purchase 300,000 shares at $.01 which
are exercisable until November 21, 2002, and these options are included in share
totals in the table above.

(3) Mr.  Bigwood's  spouse,  E J Bigwood,  is the beneficial  owner of 4,344,750
shares of common stock,  from her ownership of Abacus  Corporation  Ltd (326,750
shares held  directly),  indirect  ownership  of Abacus  Systems Ltd  (1,668,000
shares held  directly),  ownership of General Audit  Systems Ltd (50,000  shares
held directly) and beneficial  interest in 2,000,000 shares held directly by Mr.
Bigwood and 300,000 share options owned by Mr. Bigwood.

(4) Mrs.  Bigwood's  spouse,  A M Bigwood,  is the beneficial owner of 4,344,750
shares of common stock, from 2,000,000 shares held directly, ownership of Abacus
Corporation  Ltd (326,750 shares held  directly),  indirect  ownership of Abacus
Systems Ltd (1,668,000 shares held directly), ownership of General Audit Systems
Ltd (50,000 shares held  directly) and options to buy another  300,000 shares by
November 21, 2002.

Abacus  Systems  Ltd  transferred  7,500  shares of the  Company to the  married
children of Mr. & Mrs.  Bigwood (5,000 shares) in December 1999 and 2,500 shares
to James Bigwood, son of Mr. & Mrs. Bigwood also in December 1999.

The fully  diluted  number of shares  issued at December  31,  1999  amounted to
5,098,500.  This  total  excluded  300,000  options  issued  to  the  President.
5,098,500  shares plus 300,000 options  (5,398,500  shares in total) are used as
the basis of calculations of % of Class in the table.


The Company's  transfer  agent at December 31st,  1999 is Interwest  Transfer of
Salt Lake City, Utah. Interwest Transfer confirms that as of 12/31/99, there are
approximately 82 shareholders of record.

CHANGES IN CONTROL

     There are currently no arrangements that will result in a change in control
of the Company.
                                      -16-
<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Each of the  officers  and  directors  of the  Company are engaged in other
businesses,  either  individually or through  partnerships  and  corporations in
which  they have an  interest,  hold an office or serve on boards of  directors.
Certain conflicts of interest may arise between the Company and its officers and
directors.  The  primary  conflict  of  interest  is the amount of time that the
officers  are able to devote to the Company as opposed to their  other  business
ventures.  As the Company begins to procure revenues,  more time will be devoted
to the Company.  Another possible conflict of interest could arise from the fact
that the Company President, Anthony Bigwood, also controls Abacus Systems, Ltd.,
which is the sole supplier of the software products that the Company markets.  A
contract  exists  (attached  hereto  as  exhibit  No.  10) which  specifies  the
relationship and various responsibilities of each party in this matter.

     The Company will attempt to resolve any such conflicts of interest in favor
of the Company.  The officers and directors of the company are accountable to it
and its  shareholders  as  fiduciaries,  which  requires  that such officers and
directors exercise good faith and integrity in handling the Company's affairs. A
Shareholder may be able to institute legal action on behalf of the Company or on
behalf of itself  and all  other  similarly  situated  shareholders  to  recover
damages  or for other  relief in cases of the  resolution  of  conflicts  in any
manner prejudicial to the Company.

     Abacus  Systems Ltd, is a private  Bermuda  company  controlled  by Anthony
Bigwood, the President of the Company. Abacus has 22 other shareholders, none of
whom are related to the  President  in any way.  The  Company  has  insufficient
financial  resources or skilled personnel to undertake  software  development on
its own.  The Company has  acquired  the  exclusive  rights to copy,  reproduce,
distribute and  sub-license  rights to reproduce and distribute  CheckMy Banking
2000,  CheckMy  Loans 2000 and CheckMy  Mortgage  2000 together with User Guides
(the  Software) in return for payments to Abacus of 10% royalties of net revenue
income  received by the Company from sale of the Software,  and a 5% royalty fee
for the provision of technical support to the Company.

     The provisions for termination of the Software  Licensing  Agreement are as
follows:

1.   Abacus may terminate the License,  at its sole  discretion,  if Royalty and
     Fee payments due to Abacus,  or any part  thereof,  become 120 days or more
     overdue.
2.   Abacus may terminate  the License,  at its sole  discretion,  if management
     control of Millennium changes from the current arrangements.
3.   Millennium may terminate this License,  at its sole  discretion,  by giving
     120 days written notice to Abacus.
4.   The License will be terminated immediately upon written notice by Abacus if
     the confidentiality provisions are breached by Millennium.

   The  confidentiality  provisions within the Licensing  Agreement are that the
Company agrees to keep confidential all proprietary knowledge acquired about the
Products,  promises not to divulge any such  knowledge to any third party unless
prior written consent of Abacus and its representatives is provided.  Failure to
abide by these confidentiality rules will cause an immediate cancellation of the
License.

                                      -17-
<PAGE>
     The terms of the Software License agreement with Abacus are that Abacus has
developed  the Software at its own expense and has granted an exclusive  license
to the Software to the Company and provides  technical and customer  support for
the Company in exchange  for future  royalties  payments of 15% in  aggregate of
revenues obtained by the Company from sales of the Software.

    The Company is satisfied that the terms of the License  Agreement  including
the  royalty  payments  owed to Abacus,  are on no less  favorable  terms to the
Company than terms that could be obtained  from  unrelated  third  parties under
similar license and royalty agreements.

     The Company  does not intend to engage in software  development  activities
except for the support and  maintenance of its Web Sites.  The Company  incurred
costs of $2,343 on development of its Web Sites to December  31st,  1999,  which
was paid on behalf of the Company by the President.

     The Company may contract with Abacus  Systems Ltd for the future design and
development of additional software products to be provided at Abacus expense.

     In August of 1997 the  Company  approved a private  placement  of shares to
Asia  Pacific  Mining  (Bermuda)  Ltd.,  which  is  controlled  by  the  Company
President.  (Note:  Asia  Pacific  Mining  (Bermuda)  changed its name to Abacus
Systems  Ltd,  in 1999).  1,180,500  shares  at $.05  each were  issued to raise
$59,250.

     The Company issued 3,000,000  shares,  in September 1999, to the President,
Dr. A. M.  Bigwood  (2,000,000  shares) and Abacus  Systems Ltd  (1,000,000),  a
company  controlled by the  President,  at $0.01 per share as  compensation  for
$30,000  owed  by  the  Company  to  the  President,  previously  provided  as a
shareholder  loan.  The Company  reduced the amount owed to the  President  by a
corresponding $30,000.


                                      -18-
<PAGE>


     The  Company  authorized  the issue of 50,000  shares,  in lieu of monetary
compensation,  to General  Audit  Systems,  Inc.,  a Company  controlled  by the
President,  for payment by General Audit Systems, Inc., on behalf of the Company
to the Company  auditor,  of $500 cash in September  1999 for audit  expenses of
Millennium Software, Inc. These shares were issued in October 1999.

     The Company issued 7,500 shares, in December 1999, to Abacus Systems Ltd, a
company  controlled by the  President,  at $0.01 per share as  compensation  for
$75.00  owed  by  the  Company  to  the  President,  previously  provided  as  a
shareholder  loan.  The Company  reduced the amount owed to the  President  by a
corresponding $75. Abacus Systems Ltd transferred 7,500 shares of the Company to
the married  children of Mr. & Mrs.  Bigwood (5,000 shares) in December 1999 and
2,500 shares to James Bigwood, son of Mr. & Mrs. Bigwood also in December 1999.

     The Company  granted  300,000  incentive  options  (the  Options) on common
shares to the  President at an exercise  price of $.01 per share on November 22,
1999. The terms of the Options are payment in cash within a 3-year period ending
November 21st, 2002, after which date any outstanding Options will be cancelled.
The value of shareholders  equity based on the financial  statements prepared by
the Company's auditors was -0.01 (negative) per share on September 30, 1999.


     The Company has  received  $94,913  interest  free loan finance for working
capital since  incorporation in 1996 to December 31, 1999 from the President and
companies owned by the President. $30,575 of the loan finance had been exchanged
for 3,057,500 shares of Company stock to December 31, 1999.


The Company owes Mr. Bigwood a balance of $64,338 at December 31, 1999.

The loans provided by Mr. Bigwood have been as follows:

Dates                           Loans       Shares    Reduction     Loan balance
                              Advanced      Issued     in debt       0wing to
                            By Mr. Bigwood                          Mr. Bigwood
                                (1)          (2)
-------------------------------------------------------------------------------

02/96 -    12/31/97        $  37,763                                   $ 37,763
01/01/98 - 09/30/98        $   1,010                                   $ 38,773
10/01/98 - 12/31/98             Nil                                    $ 38,773
01/01/99 - 03/31/99        $  27,996                                   $ 66,769
04/01/99 - 06/30/99        $   4,607                                   $ 71,376
07/01/99 - 09/30/99        $  13,537        3,050,000   $ 30,500       $ 54,413
10/01/99 - 12/31/99        $  10,000            7,500   $     75       $ 64,338
-------------------------------------------------------------------------------
                  Totals   $  94,913        3,057,500   $ 30,575       $ 64,338

(1)  Loans  advanced  by AM  Bigwood  and  companies  controlled  by  him to the
     Company.

(2)  Shares listed in the table have been issued to Mr. Bigwood and to private
     companies controlled by him.


     The per share value of shares issued for services, repayment of shareholder
loans,  cash,  and incentive  stock options during the period January - December
1999 was  determined  firstly  by  reference  to  whether  the  volume  of stock
transactions  during  the  immediately  prior  three  month  period  on the  OTC
represented  1% or greater of the total  number of shares  issued,  to establish
fair market value. In the director's opinion,  trading volume of less than 1% of
shares  issued  does  not  constitute  a  proper  market  for  the  purposes  of
establishing fair market value. During each quarterly period during January 1st,
1999 -  December  31st,  1999 the  volume  of shares  traded  on the OTC  market
amounted  to 0.187%,  0.04%,  0.181%  and  0.024% of the total  number of shares
issued,  all of which fell below the threshold of 1% of shares  issued.  The per
share value of shares issued for services,  repayment of shareholder loans, cash
and  incentive   stock  options  was  then  determined  by  reference  to  total
stockholders'  equity value reported in the current period  financial  statement
divided by the number of shares  issued,  or $0.01 per share,  whichever  is the
greater value at the date of issuance of shares.


                                      -19-
<PAGE>

DIVIDENDS

     To date,  the Company has not paid any dividends on its common  stock.  The
payment of  dividends  by the  Company,  if any in the future,  rests within the
discretion of its Board of Directors  and will depend among other  things,  upon
the Company's earning, its capital requirements and its financial condition,  as
well as other relevant factors.



Description of Securities

     The authorized  capital stock of the Company consists of 25,000,000  Shares
of Common Stock.  The holders of Common Stock

(i) have  equal  ratable  rights  to  dividends  from  funds  legally  available
therefore, when, as and if declared by the Board of Directors of the Company;
(ii) are entitled to share ratably in all of the assets of the Company available
for distribution or winding up of affairs of the Company;
(iii) do not have preemptive  subscription or conversion rights and there are no
redemption or sinking fund applicable thereto; and
(iv) are entitled to one non  cumulative  vote per share,  on all matters  which
shareholders may vote on at all meetings of shareholders. At this time there are
approximately 5,398,500 shares outstanding, including 300,000 Options granted to
the President.


NONCUMULATIVE VOTING

     Holders of Shares of Common  Stock of the  Company  do not have  cumulative
voting rights which means that the holders of more than 50% of such  outstanding
Shares, voting for the election of directors,  can elect all of the directors to
be elected,  if they so choose, and, in such event, the holders of the remaining
Shares will not be able to elect any of the Company's directors.

                                      -20-
<PAGE>

PENNY STOCK REGULATION


     The  Securities  Exchange  Commission  (the  SEC) has  adopted  rules  that
regulate  broker dealer  practices in  connection  with  transactions  in 'penny
stocks.  Penny stocks generally are equity  securities with a price of less than
$5.00 (other than securities registered on certain national securities exchanges
or  quoted  on the  NASDAQ  system,  provided  that  current  price  and  volume
information  with respect to  transactions in such securities is provided by the
exchange  system.)  The penny stock rules  require a  broker-dealer,  prior to a
transaction in a penny stock not otherwise  exempt from the rules,  to deliver a
standardized  risk  disclosure  document  prepared  by  the  SEC  that  provides
information  about  penny  stocks and the nature and level of risks in the penny
stock  market.  The  broker-dealer  also must provide the customer  with bid and
offer quotations for the penny stock, the compensation of the  broker-dealer and
its salesperson in the transaction,  and monthly account  statements showing the
market value of each penny stock held in the  customer's  account.  In addition,
the penny stock rules require that prior to a  transaction  in a penny stock not
otherwise exempt from such rules, the broker-dealer  must make a special written
determination  that a penny stock is a suitable  investment for the purchase and
receive the purchaser's  written agreement to the transaction.  These disclosure
requirements  may have the effect of reducing  the level of trading  activity in
any secondary  market for a stock that becomes subject to the penny stock rules.
The Company's common stock is subject to the penny stock rules, and accordingly,
investors in this  Offering may find it  difficult to sell their  shares,  if at
all.

ITEM 13. EXHIBITS

13.1 CONTRACTS

13.1.1   Electronic Software Distribution Agreement


     This  agreement is made and entered into on March 8th,  1999 by and between
Digital  River,  Inc.,  its  successors  or assigns,  9625 West 76th Street Eden
Prairie,  Minnesota  55344 ("DR") and the  Millennium  Software,  Inc registered
office  at  2950  East  Flamingo  Road,  Suite  G,  Las  Vegas,  Nevada  89121 a
corporation,  hereafter referred to as Vendor, with its principal office at 2277
Lawson Avenue, West Vancouver BC V7V 2E3 Canada.

                                      -21-

<PAGE>


BACKGROUND

a.   Vendor  is the  Owner  of all  rights  (or has a  license  to  sell) to the
     Software as defined hereunder.
b.   Vendor  desires  to  enter  into an  Agreement  with  the DR to allow DR to
     distribute the Software.
c.   DR desires to obtain the right to distribute the Software.;

NOW THEREFORE, the parties hereby agree as follows:

1.DEFINITIONS

a.   Software:  the executable object code for the Vendor's software  identified
     on Exhibit A, including all subsequent  versions thereof provided to the DR
     pursuant to this Agreement.
b.   Documentation:  all computer readable and/or printed instructions,  manuals
     and other  materials  normally  provided from time to time by Vendor to End
     Users for use of the Software, and all subsequent versions thereof provided
     to DR pursuant to this Agreement.
c.   End-User License Agreement (EULA):  the computer readable license agreement
     provided  by Vendor that  governs the use of the Product by End Users,  and
     which is to be included with each copy of the Product sold by DR hereunder.
d.   DR Materials:  computer readable  materials provided by DR for inclusion in
     an electronic  package  containing the Software,  Documentation,  and EULA,
     which materials have been approved by Vendor.
e.   Product: a copy of the Software,  Documentation, EULA and DR Materials , if
     any, packaged in computer readable form together for electronic delivery on
     www.digitalriver.com  (or equivalent)  and/or in tangible packaged form for
     delivery in accordance with this Agreement, as identified on Exhibit A.
f.   End User:  person(s)  or  organization(s)  that  acquire a Product  for use
     rather than resale or distribution.
g.   Vendor Trademarks: the trademarks,  trade names and logos used by Vendor in
     connection with the product.
h.   Territory:  all countries in the world except (i) countries to which export
     or  re-export  of any  Product,  of the direct  products  of any Product is
     prohibited by the United States law without first  obtaining the permission
     of the United States Office of Export Administration or its successors, and
     (ii) countries that may be hereafter  explicitly  excluded  pursuant to the
     terms of this Agreement.
i.   Dealer: person(s) or organization(s) that resell the Products.
j.   Site: the Vendor's World Wide Web Site
k.   Host Sales: sales of the Products originating from the Site.
l.   Channel Sales:  sales of the Product  originating  from a source other that
     the Site.

Electronic Software Distribution Agreement

m.   Transaction:  the  processing at one time of a payment made by an End User,
     which processing of payment may include more than one (1) Product.

                                      -22-
<PAGE>

2. LICENSE

a.   Vendor hereby grants DR, within the Territory, a license and right to:
     1.   Reproduce and distribute the Product in computer  readable form to the
          End Users and/or Dealers;
     2.   Package the Product in a computer  readable form reasonably  specified
          by Vendor.
     3.   Utilize the Vendor  Trademarks in connection  with the  replication of
          the Product,  packaging and  distribution of the Product,  in a manner
          reasonably specified by Vendor; and
     4.   Distribute  in  tangible  form the  Product  to the End  Users  and/or
          Dealers.
b.   DR  acknowledges  that the Software and  Documentation  are the property of
     Vendor or its licensors  and that DR has no rights in the foregoing  except
     for encryption software supplied by DR, if any, and those expressly granted
     by this Agreement.
c.   Under no circumstances  shall the provisions of this Agreement be deemed to
     require DR to engage in any activities in connection with the  distribution
     of the Products that could, in the reasonable discretion of DR, result in a
     financial  loss  to  DR  or  result  in  an  unacceptably  small  level  of
     profitability for DR.

3. VENDOR'S GENERAL OBLIGATIONS

a.   Vendor shall deliver the current  version of the Product to DR  immediately
     following execution of this Agreement. Vendor will provide DR with:
          (i)  copies of the Software on master diskettes,
          (ii) Product   specification   information  in  a  single  file,  self
               extracting  archive  format,  or in  another  mutually  agreeable
               computer readable form that can be reproduced by DR,
          (iii)Documentation in a computer  readable form mutually  agreeable to
               the parties that can be  reproduced by DR, and (iv) all the items
               and materials specified in the Requirements  Checklist on Exhibit
               B.
b.    Vendor shall provide DR with  computer  readable  copies  and/or  tangible
      packaged Products  containing all new releases,  updates,  or revisions of
      the Software and  Documentation  within a reasonable  time after each such
      release is made  generally  available by Vendor.  Vendor will notify DR of
      its plans for each new release,  update,  or revision of the Product to DR
      in sufficient  quantities on or before the date it is offered to any other
      distributor.
c.   For Products are listed on Exhibit A as Host Sales,  Vendor shall provide a
     hypertext  link to  www.digitalriver.com  (Or  equivalent) on the Site (the
     Link) where  Product may be purchased by End-User from DR. Vendor agrees to
     prominently  display the Link and use readable  efforts to promote the Link
     on  Site.  Vendor  agrees  that no  other  hypertext  link  for sale of the
     Products will be placed on the Site or elsewhere  without the prior written
     consent of DR.
d.   If  Vendor  makes  any   modifications,   updates,   or  enhancements  (the
     Improvements)  to the  Product,  Vendor  will  offer the  Improvements  for
     distribution by DR on terms  substantially  equivalent to those provided in
     this  Agreement.  In the event that Vendor  develops  or  acquires  any new
     products,  Vendor  agrees  to  give  DR the  right  of  first  refusal  for
     distribution of these products on the Site and as provided for in this

Electronic Software Distribution Agreement

    Agreement with respect to the Products.

e.   Vendor shall furnish an EULA in computer readable form to DR which is to be
     included  with each copy of the  Products  sold by DR  hereunder.  Vendor's
     linking  of  the  Site  to   www.digitalriver.com   (or  equivalent)  shall
     constitute approval of the EULA DR is delivering as part of the Product.

                                      -23-
<PAGE>


f.   Vendor shall provide all support and be fully  responsible for all warranty
     obligations relating to the Product.  Such support and warranty shall be in
     accordance with Vendor's  then-current  published  software support policy,
     or, in the absence of such a policy in a reasonable manner.
g.   Vendor shall provide DR, without charge,  such  technological  information,
     current maintenance documentation, and telephone assistance as is necessary
     to  enable  DR  to  effectively  reproduce,   electronically  package,  and
     distribute the Products as provided for in this Agreement.

4. WARRANTIES

a.   Vendor represents and warrants that it has the right and authority to enter
     into  this  Agreement  and to  grant  DR the  rights  to the  Software  and
     Documentation granted in this Agreement.
b.   Vendor represents and warrants to DR that the Vendor has all rights, title,
     and interest in the software and Documentation or has obtained the right to
     grant to DR the license set forth in this  Agreement.  As of the  execution
     date of this Agreement,  Vendor represents and warrants that to the best of
     Vendor's knowledge the Product does not infringe upon or misappropriate the
     proprietary rights of any other person or organization.
c.   DR  represents  and warrants  that it has the right and  authority to enter
     into this Agreement.
d.   DR represents  and warrants that it will use its best efforts to accurately
     replicate the Product.
e.   DR represents  and warrants that except for  encryption  software,  if any,
     supplied by DR, the products will not be altered by DR.

5. INITIALIZATION FEE

     Vendor  agrees to pay DR the  Initialization  Fee  specified  on Exhibit A.
Vendor agrees to allow DR to offset the unpaid Initialization Fee against any or
all other amounts owing to Vendor by DR under this Agreement.  Product available
from  Vendor  will be  installed  on  DR's  server  upon  fulfillment  of  other
obligations  pursuant to this Agreement.  The Initialization Fee includes normal
price changes and version updates.  All programming and other changes made after
initial site setup excluding normal price changes,  product addition and version
updates  will be charged to Vendor at One  Hundred  Dollars  ($100.00)  per hour
(Site  Maintenance).  Vendor agrees to pay the billed Site  Maintenance  charges
within  thirty  (30)  days  from the date of  billing.  In the  event  that Site
Maintenance is not paid for within thirty (30) days of billing, Vendor agrees to
allow DR to offset the unpaid Site  Maintenance  against any or all other amount
owing to Vendor by DR under this Agreement.

6. PROCESSING AND PAYMENTS

     Sales  activities  shall  be  processed,  and  payments  shall  be  made in
accordance with the provisions specified on Exhibit C.

7. ORDERS BY MEANS OTHER THAN FROM SITE

     The Vendor  shall be charged  (written)($  . ) for each order taken for the
Products  by means  including,  but not  limited  to,  orders  taken  Electronic
Software Distribution  Agreement by telephone,  email, facsimile transmission or
by means  other  than from the Site,  which  amount  shall,  as  applicable,  be
invoiced  to the  Vendor  by DR, or  deducted  from  payments  made by DR to the
Vendor.

8. RECORDS

     DR and Vendor agree to maintain  adequate books and records relating to the
distribution  of the  Products  to end  Users  and  Dealers,  including  without
limitation,  books,  records, and tax returns relating to returns,  refunds, and
sales and use taxes.  Such books and records shall be available at the principal
office of each party for  inspection  by the other  party or its  representative
during normal business hours, for the purpose of determining the accuracy of the
payments required to be made pursuant to the provisions of this Agreement.  Each
party  shall  have the right to  conduct  such an audit  upon  twenty  (20) days
advance  written notice not more than twice each year. In the event that such an
audit  discloses an  underpayment  which is greater than five percent (5%), then
the  party  responsible  for the  underpayment  shall pay the  underpayment  and
reasonable  costs of such audit,  otherwise the party requesting the audit shall
pay the costs of such audit.

                                      -24-
<PAGE>

9. DELIVERY OF PRODUCTS

     As specified in Exhibit A, DR and/or Vendor shall be responsible for making
digital and/or tangible delivery of the Products as follows:

a.   The following  provisions  shall apply to any Products  listed on Exhibit A
     for which digital delivery is to be made by DR:

     1.   Within  twenty-four  (24) hours after  receipt of an order from an End
          User, DR shall make digital delivery of the Products  available to the
          End User.

b.   The following provisions will apply to any Products listed on Exhibit A for
     which tangible delivery is to be made by DR:

     1.   The Vendor  shall  provide DR with an  inventory of the Products to be
          held on consignment and used by DR to fulfill orders for the Products.
          DR shall be  responsible  for the  delivery of the Products to the End
          Users at the locations designed by the End User.
     2.   The  Products  shall be  delivered  to DR  prepackaged  and  ready for
          shipment  and  delivery  to the End User.  The Vendor  shall be solely
          responsible for the shipment of the Products to DR and shall be solely
          responsible  for all  costs  and  expenses  associated  with  any such
          shipments.  The Vendor shall bear the entire risk of loss or damage to
          the Products during shipments to or from DR.
     3.   Within fifteen (15) days after the date of this Agreement,  the Vendor
          shall provide DR with such consigned quantities of the Products as may
          be mutually agreed upon in writing by DR and the Vendor. On a periodic
          basis,  DR shall  provide an  inventory  detail to Vendor  showing the
          current  inventory  of  the  Products,  Periodically,  DR  will  issue
          consignment  purchase orders for the estimated needs of the Product to
          be tangibly  delivered.  The Vendor  shall be  responsible  for making
          prompt delivery of the Products to DR.
     4.   All  Shipments  of  Product to DR will be  clearly  labeled  with DR's
          purchase  order  number on the  outside of the box.  If DR is tracking
          serial  numbers  for the  Products,  Vendor  will  provide  with  each
          shipment of the Product a complete  list of the serial  numbers of the
          Product enclosed in the box.
     5.   DR shall have no  liability  of any kind  whatsoever  as a result of a
          delay in the  delivery of the  Products by Vendor,  or the delivery of
          Products to DR in  non-conforming  condition,  Upon the termination of
          this  Agreement,  at the Vendor's  sole cost and  expense,  the unsold
          inventory of the Products shall be returned to the Vendor.
c.   The following  provisions  shall apply to any Products  listed on exhibit A
     for which digital or tangible delivery is to be made by Vendor:
     1.   The Vendor  shall  maintain an inventory of the Products to be used by
          Vendor to fulfill orders for tangible delivery of products.
                                      -25-
<PAGE>

     2.   On a daily basis,  by electronic  and/or  facsimile  transmission,  DR
          shall notify  Vendor about the number of orders for the Products  made
          the previous  day ( the Order  Notification).  The Order  Notification
          shall  contain  the  names  and  delivery  addresses  (including,   as
          applicable,  electronic  delivery  addresses)  of the End  Users;  the
          names, serial numbers, and quantity of the Products sold to particular
          End Users;  and the manner of the delivery to such End Users  (whether
          digital or tangible delivery).
     3.   Vendor shall be responsible  for making digital or tangible  delivery,
          as applicable, of all Products to the End Users and Dealers identified
          in the Order  Notifications,  and shall be responsible for all risk of
          loss of, or damage to the Products during digital or tangible delivery
          to  the  End  Users.   Vendor   shall,   as  specified  in  the  Order
          Notification,  make digital  delivery or tangible  shipment to the End
          User of all the Products within  twenty-four  (24) hours after receipt
          of the Order Notifications.
     4.   Vendor shall develop,  establish,  and maintain such delivery  systems
          and  procedures as may, in the  discretion of DR, be necessary  ensure
          that the  Products are promptly  and  correctly  delivered,  and which
          enable  DR and  Vendor  to  immediately  determine  the  status of the
          Products  during  delivery.  On a daily basis,  by  electronic  and/or
          facsimile  transmission,  Vendor  shall  provide  a report to DR which
          provides   information  about  the  digital  deliveries  and  tangible
          shipments  of  the  Products  made  the  previous  day  (the  Shipment
          Reports).  The Shipment  Reports shall contain the names, and delivery
          addresses (including, as applicable, electronic delivery addresses) of
          the End Users or  Dealers  to whom the  Products  have been  digitally
          delivered or tangibly  shipped;  the form of delivery (whether digital
          or tangible  delivery);  the name,  address,  and telephone  number of
          carriers (in case of tangible shipment); confirmation numbers; package
          tracking information;  and any other information that may from time to
          time be requested by the Company.

10. MARKETING PAYMENTS

     If  Exhibit  D has been  initialed  by the  parties  and  attached  to this
Agreement,  Vendor,  and  DR  agree  to the  marketing  payments  and  marketing
activities provided for on Exhibit D.

11. CUSTOMER SERVICE

     DR's policy is to provide End User's with a thirty (30) day right to return
Products  for a refund of the purchase  price paid by the End User,  Returns and
refunds  may be  made  in the  discretion  of DR.  This  policy  is  subject  to
modification  from  time to time in the  discretion  of DR.  To the  extent  the
Vendor's  return  policies are  consistent  with those of DR then in effect,  DR
shall  cooperate  and assist  the  Vendor and End Users with  respect to Product
Returns.

                                      -26-

<PAGE>

12. CONFIDENTIALITY

a.   Each party agrees that all binary code,  inventions,  algorithms,  know-how
     ideas,  and all other  business,  technical  and financial  information  it
     obtains from the other party  constitutes the confidential  property of the
     disclosing party (confidential Information).  Except as expressly permitted
     in this Agreement,  the receiving party will hold in confidence and not use
     or disclose  any  Confidential  Information  and shall  similarly  bind its
     employee and agents.  The receiving party shall not be obligated under this
     Section with respect to information the receiving party can document that:
     1.   Is or has become  readily  available to the public through no fault of
          the receiving party or its employees or agents; or
     2.   Is received  without  restriction  from another person or organization
          lawfully in possession of such  information and lawfully  empowered to
          disclose such information;
     3.   Was  rightfully  in the  possession  of the  receiving  party  without
          restriction prior to its disclosure by the disclosing party; or
     4.   Is independently  developed by the receiving party or its employees or
          agents  without  access  to  the  other  disclosing   party's  similar
          Confidential Information.
     Each party's  obligation  with respect to  Confidential  Information  shall
continue  for the  shorter of three (3) years from date of  termination  of this
Agreement or until one of the above enumerated  conditions  becomes  applicable.
Each party  acknowledges that its breach pf this Section would cause irreparable
injury  to the  other  for  which  monetary  damages  are not  adequate  remedy.
Accordingly,  a party will be entitled to injunctive  relief and other equitable
remedies in the event of a breach of the terms of this  Agreement.  b. DR agrees
no to:
          (i)  disassemble,   decompile,   or  otherwise  reverse  engineer  the
               Software,   or  otherwise  attempt  to  learn  the  source  code,
               structure, algorithms or ideas underlying the Software; or
          (ii) take any action  contrary  to EULA  except as allowed  under this
               Agreement.

13. VENDOR TRADEMARKS

a.   DR acknowledges that the Vendor Trademarks are trademarks owned or licensed
     solely and  exclusively by Vendor,  DR agrees to use the Vendor  Trademarks
     only in the form and manner and with  appropriate  legends as prescribed by
     Vendor. All use of Vendor Trademarks shall inure to the benefit of Vendor.
b.   DR shall not remove,  alter,  cover,  or obfuscate any copyright  notice or
     other proprietary rights notice placed in or on the Products by Vendor.

14. INDEMNIFICATION

a.   Vendor shall defend,  indemnify, and hold DR and its successors and assigns
     harmless from and against any and all liabilities,  losses, damages, costs,
     and  expenses  (including  without  limitation,  reasonable  legal fees and
     expenses)  associated with or incurred as a result of any claim, action, or
     proceeding  instituted  against DR and its successors and assigned  arising
     out of or relating  to the acts or failure to act of the Vendor,  or any of
     its affiliated companies,  agents, employees or other related parties under
     this  Agreement   including,   without  limitation,   action,   claims,  or
     proceedings related to:
          (i)  Vendor's performance of its obligations under this Agreement,
          (ii) the breach by Vendor of any pf the terms of this Agreement or any
               of the representation and warranties contained herein;

                                      -27-
<PAGE>

      Electronic Software Distribution Agreement

          (iii)the  actual or alleged  infringement  of any  proprietary  rights
               arising out of DR's duplication, sale, distribution, or other use
               of the Product pursuant to this Agreement; or
          (iv) in the event the Vendor is obligated to sales or use tax payments
               pursuant  to the  provisions  of  Exhibit  C, any  obligation  or
               liability  of DR and its  successors  and assigns to make use tax
               payments in any state indicated in Exhibit C or otherwise.
b.   DR shall  indemnify  and hold Vendor  harmless from and against any and all
     liabilities,  losses,  damages,  costs, and expenses (including  reasonable
     legal fees and  expenses)  associated  with or  incurred as a result of any
     claim action, or proceeding  instituted  against Vendor resulting from DR's
     improper or unauthorized replication,  packaging, marketing,  distribution,
     or installation of the Product,  or the breach by DR of any of the terms of
     this  Agreement  or any of the  representations  and  warranties  contained
     herein.
c.   If either Vendor or DR receives notice or knowledge of a claim as described
     above,  it will  promptly  notify the other  party in writing  and give the
     other party all  necessary  information  and  assistance  and the exclusive
     authority to evaluate, defend, and settle such claim.

15.  LIMITATION OF LIABILITY The total liability of DR (including its employees,
agents,  and  Dealers)  for all claims,  whether in  contract,  tort  (including
negligence and product liability) or otherwise,  arising out of, connected with,
or resulting  from the  distribution  of the Products or the  provisions of this
Agreement shall not exceed the net amount realized by DR hereunder.  IN NO EVENT
SHALL DR BE LIABLE FOR ANY LOSS OF DATA, LOST PROFITS, OR INDIRECT,  INCIDENTAL,
CONSEQUENTIAL, SPECIAL, OR EXEMPLARY DAMAGES, EVEN IF DR HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE
OF ANY LIMITED REMEDY PROVIDED HEREIN.

16. TERM AND TERMINATION

a.   This  Agreement  will  continue  un effect  for two (2) years from the date
     hereof (Initial  Term).  This Agreement will be  automatically  renewed for
     successive  additional  one (1) year terms  (each,  a Renewal  Term) unless
     terminated  by either party upon ninety (90) days  written  notice prior to
     the expiration of the Initial Term and Renewal Term.
b.   This  Agreement may be terminated by a party  immediately by written notice
     to the other party upon the occurrence of any of the following events:  (i)
     If the  other  party  ceases to do  business,  or  otherwise  substantially
     terminates its business  operations;  (ii) If the other party shall fail to
     promptly secure or renew any license registration, permit, authorization or
     approval for the conduct of its business in the manner contemplated by this
     Agreement or if any such license,  registration,  permit,  authorization or
     approval is revoked or  suspended  and not  reinstated  within  thirty (30)
     days;  (iii) If the other party  materially  breaches any provision of this
     Agreement  and fails to fully cure such breach  within  thirty (30) days of
     written notice  describing  the breach;  or (iv) If the other party becomes
     insolvent  or  seeks  protection  under  any  bankruptcy  laws,  creditor's
     arrangement,   composition  or  comparable  proceeding,   or  if  any  such
     proceeding is instituted  against the other and not dismissed within ninety
     (90) days.
c.   Upon  termination  of this  Agreement for any reason,  DR will  immediately
     cease distribution of the Product.  The termination of this Agreement shall
     not in any respect  whatsoever affect a party's obligation to make payments
     to the other party in  connection  with the  distribution  of Products that
     occurred prior to the termination of this Agreement.
d.   Termination  by either  party  will not  affect  the rights of any End User
     under the terms of the EULA.


                                      -28-
<PAGE>


17. GENERAL PROVISIONS

a.   This  Agreement  many not be assigned by Vendor or transferred by operation
     of law to any other  person or  organization  without the  express  written
     approval of DR. DR shall be entitled to assign this  Agreement in the event
     of a merger, acquisition,  joint venture, or a sale of substantially all of
     its assets or business, or any similar transaction.
b.   All notices and demands  hereunder  shall be in writing and shall be served
     by  personal  delivery,   nationally-recognized   express  courier,  or  by
     certified  mail at the  address  of the  receiving  party set forth in this
     Agreement (or at such different  address as may be designated by such party
     by written  notice to the other  party).  All notices and demands  shall be
     deemed given upon the earlier of receipt, two (2) days after deposit with a
     nationally-recognized  express  courier;  or five (5) days after deposit in
     the mail.
c.   This  Agreement  shall be governed by and construed in accordance  with the
     substantive laws of the state of Minnesota.
d.   Each  party is acting  as an  independent  contractor  and not as an agent,
     partner, or joint venturer with the other party for any purpose.  Except as
     provided in the Agreement,  neither party shall have the right,  power,  or
     authority to act or to create any obligation, express or implied, on behalf
     of the other.
e.   The  indemnification  and  confidentiality  obligations  set  forth  in the
     Agreement  and any  other  provision  which by its  sense  and  context  is
     appropriate,  shall  survive the  termination  of this  Agreement by either
     party for any reason.
f.   The titles and  headings of the various  sections  and  paragraphs  in this
     Agreement  are intended  solely for  convenience  of reference  and are not
     intended for any other purpose whatsoever,  or to explain,  modify or place
     any construction upon ir in any of the provisions of this Agreement.
g.   All exhibits to this  Agreement  are  incorporated  herein by reference and
     made part of this Agreement.
h.   No provisions in either party's purchase  orders,  or in any other business
     forms  employed by either party will  supersede the terms and conditions of
     this  Agreement,  and no  supplement,  modification,  or  amendment  of the
     Agreement shall be binding, unless executed in writing by a duty authorized
     representative of each party to this Agreement.
i.   DR shall  not be in breach  of the  Agreement  in the event it is unable to
     perform  its  obligations  under  this  Agreement  as a result  of  natural
     disaster,   was,  emergency  conditions,   labor  strike,  the  failure  or
     substantial failure of the Internet,  or other reasons or conditions beyond
     its reasonable control.
j.   The parties  have read this  Agreement  and agree to bound by its terms and
     further agree that it constitutes the complete and entire  agreement of the
     parties and supersedes all previous  communications,  oral or written,  and
     all other  communications  between them  relating to the license and to the
     subject thereof. No representation or statements of any kind made by either
     party,  which are not  expressly  stated  herein,  shall be binding on such
     party.

 Electronic Software Distribution Agreement

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth above.

DR:                                                             Vendor:

Digital River, Inc.                         Millennium Software, Inc.



Signature:                            Signature: /s/ Anthony Bigwood
          ----------------------                 ---------------------

Name & Title:                          Name & Title: A.M. Bigwood, Pres. and CEO
             -------------------                     ---------------------------


Date: 3/24/99                             Date: March 8th 1999
     --------------------------

                                      -29-
<PAGE>




 Electronic Software Distribution Agreement

                            EXHIBIT A Defined Terms

   As used in this  Agreement,  the  following  terms  shall  have the  meanings
ascribed to them below,  and shall have  application  to the Products and DR and
the Vendor, as applicable, as indicated in the following table:

The term  Advertised  Price  shall mean the price at which the  product  will be
initially sold for Host Sales.

The term  Discount  Percentage  shall mean the  percent by which the  Advertised
Price is reduced.

The  term  Margin  Payment  shall  mean  the  Dollar  amount  of the  Discounted
Percentage, which, as applicable, shall be retained by or paid by DR.

The term  Percentage  Cost shall mean an amount  equal to the  Advertised  Price
minus the Margin  Payment,  and which  shall be payable by DR to Vendor for each
copy of a Product sold to an End User in a Host Sale.

The term Fee shall mean the amount  indicated,  which shall be payable to DR for
each Transaction.

The  term  Responsible  for  Delivery  shall  mean  the  party  responsible  for
delivering the Products to End Users.

The term  Method of  Delivery  shall mean the manner in which the  Products  are
delivered to End Users, either digitally or tangibly.

The term Distribution Cost shall mean the amount indicated,  which is the amount
DR shall pay Vendor for each  Product sold in a Channel Sale and which shall not
in any event be an amount  more than the amount  for which the Vendor  sells the
same Product to any other person or organization.

Electronic Software Distribution Agreement (continued)

                                      -30-
<PAGE>

EXHIBIT A (continued)
Product Information



Please fill out the following template for each Product.

Product name (50 characters maximum):        CHECKMYLOANS2000

Vendor Name (up to 36 characters):           MILLENNIUM SOFTWARE, INC

If product is for tangible delivery by
  DR, shipping weight:                       NOT GREATER THAN 75 GRAMS WEIGHT

Product Categories (up to 3)                 PERSONAL SOFTWARE

Does this Product include electronic
  documentation? (Y/N)                       ON LINE FILES WILL BE RESIDENT ON
                                             OUR WEB SITE
Does this Product include online help?
  (Y/N)                                      YES

What is the platform for this Product?       Win95/98 & NT

What is the vendor part number of this
 product?                                     CL #1

Will DR distribute serial numbers? (Y/N)      NO

Does this Product have an export ban? (Y/N)   NO

If yes, to which countries is export
  Restricted or banned?                       N/A

                                      -31-
<PAGE>

Electronic Software Distribution Agreement (continued)

EXHIBIT C
Processing and Payments

     For each copy of a product sold and  delivered to an End User,  DR shall be
responsible  for  the  following  processing  of  payments  made  by  End  Users
(including  amounts for sales or use taxes).  Amounts  collected  by DR shall be
deposited in an account  established,  owned,  and maintained by DR. DR shall be
solely  responsible for the payment of any and all credit card transaction fees.
DR shall be solely  responsible  for the  preparation and filing of any sales or
use tax returns,  and the  payments of any and all sales or use taxes,  together
with any and all related interest and penalties.

     Within thirty (30) days after the end of each calendar month, by electronic
and/or facsimile transmission, DR shall contain the names and delivery addresses
of the End  Users,  and names,  Vendor  Product  numbers,  and  quantity  pf the
Products sold to particular End Users.  Within thirty (30) days after the end of
each calendar month, DR shall, as indicated,  in Exhibit A, pay Percentage Costs
and  Distribution  Costs to the Vendor based on the number of Products for which
DR processed  payment  during the  immediately  preceding  calendar  month.  Any
payment  or part of a payment  hereunder,  which is not paid when due shall bear
interest at the rate of 1.5% per month from its due date until paid.

     DR acknowledges  that it shall bear the risk  associated with  unauthorized
returns of Vendor  products and credit card  charge-backs in connection with the
distribution of the Vendors products as contemplated by this Agreement. Under no
circumstances  shall DR be obligated to pay any Percentage Costs or Distribution
Costs in  connection  with any  activities  that are deemed to be  fraudulent or
criminal. DR shall use its best efforts to screen for, detect,  prevent and take
such other  actions,  as it deems  reasonably  necessary  to prevent  fraudulent
activity.  The existence of fraud,  or the possibility of the existence of fraud
shall  be  determined  in the sole  discretion  of DR,  and DR may,  at it deems
appropriate under the circumstances.  During the pendency of any such payment to
the Vendor of the Percentage Costs and  Distribution  Costs associated with such
inquiries and  investigations.  The payment of percentage Costs and Distribution
Costs shall be subject to adjustment by DR based on Product  returns and refunds
paid to End Users.

                                      -32-