Contract

by C-3D Digital Inc
December 23rd, 1998




                                                                    Exhibit 10.2
                                                                    ------------
Date: December 21, 1998

Chequemate International, Inc.
75 West 200 South
Suite 350
Salt Lake City, Utah 84101
Attention: Mr. Michael Heil, President

         Re:     Subscription Agreement for 8% Convertible Redeemable Debentures
                 ---------------------------------------------------------------
Dear Sirs:

Pursuant  to a  private  offering  by  Chequemate  International,  Inc.,  a Utah
corporation (the "Company"),  the undersigned (the "Subscriber")  hereby tenders
his or her  subscription  for the  Company's  units  (the  "Units"),  each  Unit
consisting  of  (i)  the   Company's  8%   Convertible   Redeemable   Debentures
(collectively, the "Debentures" and each, a "Debenture") in the principal amount
of  two  hundred  fifty   thousand   dollars   ($250,000)  and  (ii)  a  warrant
(collectively,  the "Warrants" and each, individually,  a "Warrant") to purchase
twenty-four  thousand seven hundred fifty-three (24,753) shares of the Company's
common stock, with a $0.0001 par value ("Common Stock"),  at a purchase price of
two  hundred  fifty  thousand  dollars  ($250,000)  per  Unit.  As  used in this
Agreement,  the term  "Conversion  Shares" shall mean the shares of Common Stock
issuable upon conversion of the Debentures, the term "Warrant Shares" shall mean
the shares of Common Stock  issuable  upon  exercise of the  Warrants,  the term
"Shares"  shall mean the  Warrant  Shares and the  Conversion  Shares,  and term
"Securities" shall mean the Units, the Debentures,  the Warrants and the Shares.
The maturity date and conversion  price of the Debentures and the exercise price
of the  Warrants  shall be  determined  in the  manner  provided  in the form of
Debenture  and Warrant  included in the  Disclosure  Documents,  as  hereinafter
defined.

The  Company  is  offering  the  Debentures  to a limited  number of  accredited
investors, as defined in Rule 501 of the Securities and Exchange Commission (the
"Commission")  under the  Securities  Act of 1933,  as amended (the  "Securities
Act"),  pursuant  to an  exemption  from the  registration  requirements  of the
Securities Act provided by Sections 4(2) and 4(6) of the Securities Act and Rule
506 of the Commission under the Securities Act.

In consideration  of the mutual  covenants and agreements set forth herein,  the
Company and the Subscriber hereby agree as follows:

         a.       The Subscriber hereby agrees to purchase from the Company, and
                  the Company  agrees to sell to the  Subscriber,  not less than
                  three  Units  at a  purchase  price  of  seven  hundred  fifty
                  thousand  dollars  ($750,000).  Payment of the purchase  price
                  shall be made by check  payable to the order of "Esanu  Katsky
                  Korins  &  Siger,   LLP,  as  escrow   agent  for   Chequemate
                  International,  Inc." or by wire  transfer to the Esanu Katsky
                  Korins & Siger, LLP escrow account. The purchase price for the
                  Units shall be paid in installments as hereinafter provided.

                  i.       The  purchase  price  for the Unit  shall be  payable
                           within  five  (5)  business  days of the date of this
                           Agreement.  The  date  on the  Unit is  purchased  is
                           referred to as the "Closing Date."

                  ii.      Proceeds from the sale of the Debentures will be held
                           until checks have  cleared,  after which the proceeds
                           will be disbursed.

                  iii.     There is no placement  agent in  connection  with the
                           offering of the  Debentures.  The Company has engaged
                           Coleman  Capital  Partners,  Ltd.  ("Coleman")  as  a
                           consultant in connection with this Offering, to which
                           the  Company  will pay  compensation  pursuant  to an
                           agreement between the Company and Coleman.


                                  Page 36 of 81





                  iv.               The Company shall have the right, on written
                          notice   to   the   Subscriber,   to   terminate   the
                          Subscriber's  obligation to purchase Units,  provided,
                          however,  that such  termination  shall not affect the
                          Company's  obligations  pursuant to Paragraphs 6 and 7
                          of this Agreement,  which shall continue in full force
                          and  effect,  except  that the  Company's  obligations
                          pursuant to  Paragraph  6(b) shall  terminate  at such
                          time  (prior to the date set forth  therein) as all of
                          the  Conversion  Shares  which have been issued or are
                          issuable  upon  conversion of  outstanding  Debentures
                          shall have been sold.

         b.               The Company  represents and warrants to the Subscriber
                          as follows:

                  i.                Organization and Qualification.  The Company
                          is (i) a  corporation  duly  organized and existing in
                          good standing  under the laws of the State of Utah and
                          has  the   requisite   corporate   power  to  own  its
                          properties  and to carry on its  business as now being
                          conducted and (ii) qualified to conduct  business as a
                          foreign   corporation  to  do  business  and  in  good
                          standing in every  jurisdiction in which the nature of
                          the business  conducted by it makes such qualification
                          necessary  and where the  failure so to qualify  would
                          have a  Material  Adverse  Effect.  As  used  in  this
                          Agreement,  the term "Material  Adverse  Effect" means
                          any material adverse effect on (A) the Securities; (B)
                          the ability of the Company to perform its  obligations
                          under this Agreement or under the  Securities,  or (C)
                          the  business,  operations,  properties  or  financial
                          condition  of the  Company.  The Company does not have
                          any equity  investment  or other  interest,  direct or
                          indirect,  in, nor any outstanding loans,  advances or
                          guarantees  to, any  domestic or foreign  corporation,
                          association,  partnership,  limited liability company,
                          joint venture or other  entity,  except for the equity
                          interest in the  Company's  wholly  owned  subsidiary,
                          Chequemate Technologies,  Inc. and except as reflected
                          on the  Financial  Statements  referenced in Paragraph
                          2(f) herein.

                  ii.               Authorization;  Enforcement. The Company has
                          the requisite  corporate  power and authority to enter
                          into and perform its obligations under this Agreement,
                          to issue and sell the Units pursuant to this Agreement
                          and to issue the Shares in  accordance  with the terms
                          of the  Debentures  and Warrants,  as the case may be.
                          The  execution,   delivery  and  performance  of  this
                          Agreement,  the  Debentures  and the  Warrants and the
                          consummation  by  the  Company  of  the   transactions
                          contemplated by this Agreement, the Debentures and the
                          Warrants (including without limitation the issuance of
                          the  Debentures  and  Warrants  and the  issuance  and
                          reservation for issuance of the Shares) have been duly
                          authorized by the Company's  board of directors and no
                          further consent or authorization  of the Company,  its
                          board of directors,  or its  stockholders is required.
                          This Agreement has been duly executed and delivered by
                          the  Company  and  constitutes  the valid and  binding
                          obligation  of the  Company  enforceable  against  the
                          Company in accordance with its terms.

                  iii.              Capitalization. The authorized capital stock
                          of the  Company  consists  of  500,000,000  shares  of
                          Common Stock,  of which  19,360,252  shares are issued
                          and outstanding. The document entitled "Capital Stock"
                          in the Disclosure  Documents includes a description of
                          the rights,  preferences  and privileges of holders of
                          the Common Stock and a listing of all shares of Common
                          Stock which are reserved for  issuance.  No person has
                          any preemptive rights,  rights of first refusal or any
                          other  similar  rights  of  any  stockholders  of  the
                          Company,   whether  by   statute,   pursuant   to  the
                          certificate of incorporation or by-laws of the Company
                          or   pursuant   to   any   agreement    (collectively,
                          "Preemptive  Rights")  with  respect to the issued and
                          outstanding  shares of Common Stock or with respect to
                          the Debentures, the Warrants or the Shares. Except for
                          an agreement  that expires in May 1999,  no person has
                          the  right  to  nominate  or  designate  directors  or
                          officer of the Company,  including any stockholders or
                          voting trust agreements. All of the outstanding shares
                          of Capital  Stock have been, or upon issuance will be,
                          validly  issued,  fully  paid  and  nonassessable.  No
                          shares of capital stock of the Company  (including the
                          Shares,  if and when issued) are or will be subject to

                                  Page 37 of 81





                           any Preemptive Rights.

                  iv.               Issuance of Shares.
                                    -------------------

                           (1)           The  Shares  are  duly  authorized  and
                                    reserved for issuance,  and upon  conversion
                                    of the  Debentures  or upon  exercise of the
                                    Warrants,  as the case may be, in accordance
                                    with the respective  terms thereof,  will be
                                    validly     issued,     fully    paid    and
                                    non-assessable, will be free from all taxes,
                                    liens,  claims and encumbrances and will not
                                    be   subject   to   Preemptive   Rights   of
                                    stockholders  of the  Company and or subject
                                    the holder to personal liability.

                           (2)           All of the outstanding shares of Common
                                    Stock have been duly and validly  authorized
                                    and issued, fully paid and nonassessable and
                                    were  not   issued  in   violation   of  any
                                    Preemptive   Rights,   and  were  issued  in
                                    transaction  that  were  either   registered
                                    pursuant  to the  Securities  Act or  exempt
                                    from the  registration  requirements  of the
                                    Securities Act.

                  v.                No Conflicts.  The  execution,  delivery and
                          performance  of this  Agreement  by the  Company,  the
                          performance  by the Company of its  obligations  under
                          this   Agreement   and   the   Securities,   and   the
                          consummation  by  the  Company  of  the   transactions
                          contemplated  by this  Agreement  (including,  without
                          limitation,  the  issuance of the  Securities  and the
                          Shares)  will not (i)  result  in a  violation  of the
                          Company's certificate of incorporation and by-laws, as
                          currently in effect (the  "Organizational  Documents")
                          or (ii) conflict  with, or constitute a default (or an
                          event which with notice or lapse of time or both would
                          become a default)  under, or give to others any rights
                          of    termination,    amendment,    acceleration    or
                          cancellation   of,   any   agreement,   indenture   or
                          instrument to which the Company is a party or by which
                          it is  bound,  or result  in a  violation  of any law,
                          rule,   regulation,    order,   judgment   or   decree
                          (including,  based on the  accuracy  the  Subscriber's
                          representations  and  warranties  set  forth  in  this
                          Agreement,  Federal  and  state  securities  laws  and
                          regulations) applicable to the Company or by which any
                          of  the  Company's  property  or  asset  is  bound  or
                          affected.  The  Company  is  not in  violation  of its
                          Organizational  Documents,  and the  Company is not in
                          default (and no event has occurred which,  with notice
                          or lapse of time or both,  would  put the  Company  in
                          default)  under,  nor has  there  occurred  any  event
                          giving  others  (with notice or lapse of time or both)
                          any rights of termination,  amendment, acceleration or
                          cancellation of, any Contract, as hereinafter defined,
                          to  which  the  Company  is a party  or by which it is
                          bound, except for possible defaults or rights as would
                          not, individually or in the aggregate, have a Material
                          Adverse  Effect.  The  business  of the Company is not
                          being conducted in violation of any law,  ordinance or
                          regulation of any governmental  entity. The Company is
                          not   required  to  obtain  any   consent,   approval,
                          authorization  or  order  of,  or make any  filing  or
                          registration with, any court or governmental agency or
                          any  regulatory  or self  regulatory  agency  or other
                          party (each of the  foregoing  being  referred to as a
                          "consent")  in order  for it to  execute,  deliver  or
                          perform any of its obligations under this Agreement or
                          the  Securities,  in each case in accordance  with the
                          terms hereof or thereof  other than  filings  required
                          pursuant to the Securities  Act and  applicable  state
                          securities laws and except where the failure to obtain
                          any such  consent  would not have a  Material  Adverse
                          Effect.

                  vi.                    Financial  Statements.   The  Company's
                           financial  statements  for the years  ended March 31,
                           1998 and 1997,  which have been  certified  by Jones,
                           Jensen  &  Company,   and  the  unaudited   financial
                           statements  for the period ended  September 30, 1998,
                           including,  in each  case,  a  balance  sheet and the
                           related  statements of income,  stockholders'  equity
                           and  cash  flows,  together  with the  related  notes
                           (collectively, the "Financial Statements"), have been
                           delivered to the Subscriber. The Financial Statements
                           were prepared in accordance  with all books,  records
                           and  accounts of the Company,  are true,  correct and
                           complete and have been  prepared in  accordance  with
                           
                                  Page 38 of 81




                           generally     accepted     accounting     principles,
                           consistently  applied.  Jones,  Jensen &  Company  is
                           independent  as to the Company under the rules of the
                           Commission   pursuant  to  the  Securities  Act.  The
                           Financial  Statements  present  fairly the  financial
                           position  of the  Company at the  respective  balance
                           sheet dates,  reflect all liabilities,  contingent or
                           other,  of the  Company  of the type  required  to be
                           reflected on  corporate  balance  sheets  prepared in
                           accordance   with   generally   accepted   accounting
                           principles as at such dates,  and fairly  present the
                           results  of  the  Company's  operations,  changes  in
                           stockholders'  equity and cash flows for the  periods
                           covered.  The unaudited financial  statements for the
                           period   ended   September   30,  1998   include  all
                           adjustments  (which  include  only  normal  recurring
                           adjustments)   necessary   to   present   fairly  the
                           information  for such period.  Except as set forth in
                           the March 31, 1998 Financial Statements,  the Company
                           has no material liabilities, contingent or otherwise,
                           other than (i)  liabilities  incurred in the ordinary
                           course  of  business  subsequent  to the date of such
                           Financial   Statements  and  (ii)  obligations  under
                           contracts  and  commitments  incurred in the ordinary
                           course of business and not required  under  generally
                           accepted  accounting  principles  to be  reflected in
                           such financial statements, none of which are material
                           to the Company.

                  vii.              SEC   Documents.   The   Common   Stock   is
                           registered pursuant to the Securities Exchange Act of
                           1934, as amended (the  "Exchange  Act").  The Company
                           has  delivered  to the  Subscriber  its  Form  10-KSB
                           Annual Report, as amended by a Form 10-KSB Amendment,
                           for the fiscal  year ended March 31,  1998,  its Form
                           10-QSB   Quarterly   Report  for  the  quarter  ended
                           September  30, 1998 and all other  filings  made with
                           the Commission  through the date hereof, all of which
                           are collectively  referred to as the "SEC Documents."
                           The SEC Documents,  taken as a whole,  do not contain
                           any  misstatement  of fact or omit any  statement  of
                           fact   necessary   to  make   them   not   materially
                           misleading.

                  viii.             Form S-3 Eligibility. The Company meets each
                           of the  requirements  listed in General  Instructions
                           1.A to Form  S-3,  and the  Company  is  eligible  to
                           register   the  Shares  on  a  Form  S-3,   or  other
                           appropriate registration form.

                  ix.               No Breach of Contract. Except as provided in
                           Schedule 2(i) attached hereto,  the Company is not in
                           breach or  violation  of any  contracts,  agreements,
                           leases or other  instruments  (each a "Contract")  to
                           which the  Company is a party or by which the Company
                           is bound or to which any of its  properties or assets
                           is subject,  which breach or  violation  would have a
                           Material Adverse Effect.

                  x.                Absence of Certain Changes.  Since September
                           30, 1998,  there has been no material  adverse change
                           in the business,  properties,  operations,  financial
                           condition,  or results of  operations of the Company,
                           or to  the  best  of  the  Company's  knowledge,  its
                           prospects,  except  as  disclosed  in  the  Financial
                           Statements or the SEC Documents.

                  xi.               Absence of  Litigation.  Except as disclosed
                           in  the  Financial   Statements  or  the   Disclosure
                           Documents,  there  is no  action,  suit,  proceeding,
                           inquiry  or  investigation  before  or by any  court,
                           public  board,  government  agency,   self-regulatory
                           organization  or body pending or, to the knowledge of
                           the  Company,  threatened  against or  affecting  the
                           Company  or  any  of  its  respective   directors  or
                           officers  in  their  capacities  as such  wherein  an
                           unfavorable decision,  ruling or finding would have a
                           Material Adverse Effect.

                  xii.              Intellectual Property. Except as provided in
                           Schedule 2(l), the Company owns or is licensed to use
                           all   patents,   patent   applications,   trademarks,
                           trademark  applications,  trade names, service marks,
                           copyrights,    copyright   applications,    licenses,
                           permits,  know-how (including trade secrets and other
                           unpatented   and/or   unpatentable   proprietary   or
                           confidential information,  systems or procedures) and
                           other  similar  rights  and   proprietary   knowledge
                           (collectively,   "Intangibles")   necessary  for  the
                           

                                  Page 39 of 81




                           conduct of its business as now being conducted and as
                           described  in the  Disclosure  Documents.  Except  as
                           disclosed  in  the  document  "Risk  Factors"  in the
                           Disclosure  Documents,  the Company has not  received
                           any formal or informal  notice  (including any demand
                           or request  that the Company  enter into a license or
                           other  agreement  in  order  to  avoid  any  claim of
                           infringement)  to the effect that any of its products
                           or any  Intangibles  infringe  upon  the  proprietary
                           rights of any other person.  To the best knowledge of
                           the  Company,  the Company does not infringe or is in
                           conflict  with any  right of any  other  person  with
                           respect to any Intangibles which,  individually or in
                           the  aggregate,  if  the  subject  of an  unfavorable
                           decision,  ruling or  finding,  would have a Material
                           Adverse Effect.

                  xiii.             Management.     The    document     entitled
                           "Management"  in the Disclosure  Documents sets forth
                           information concerning (i) each officer and director,
                           (ii)  compensation  information  consistent with such
                           information  required  to be  included in the Summary
                           Compensation Table pursuant to Item 402 of Regulation
                           S-B, (iii) a summary of all outstanding options and a
                           description of all outstanding  stock option or other
                           equity-based    incentive   plans,   and   (iv)   the
                           information  to be  provided  by Items 403 and 404 of
                           Regulation    S-B.   Such   document   shall   update
                           information included in the Company's Form 10-KSB for
                           the fiscal year ended March 31,1998.

                  xiv.              Foreign  Corrupt   Practices.   Neither  the
                           Company, nor any director,  officer,  agent, employee
                           or other person  acting on behalf of the Company has,
                           in the course of his actions for or on behalf of, the
                           Company,  used any  corporate  funds for any unlawful
                           contribution,  gift,  entertainment or other unlawful
                           expenses  relating to  political  activity;  made any
                           direct or indirect unlawful payment to any foreign or
                           domestic   government   official  or  employee   from
                           corporate  funds;  violated or is in violation of any
                           provision of the U.S.  Foreign Corrupt  Practices Act
                           of 1977; or made any bribe, rebate, payoff, influence
                           payment,  kickback or other  unlawful  payment to any
                           foreign or domestic government official or employee.

                  xv.               Subscriber's  Legal Fees.  The Company  will
                           pay  Subscriber,  upon  request,  two  thousand  five
                           hundred  dollars  ($2,500)  for its  legal  fees,  in
                           addition to the fees paid to Esanu,  Katsky  Korins &
                           Siger, LLP referenced herein.

                  xvi.              Disclosure.  All information  relating to or
                           concerning the Company set forth in this Agreement or
                           included in the Disclosure Documents,  as hereinafter
                           defined,  taken together,  is true and correct in all
                           material respects, and the Company has not omitted to
                           state any  material  fact  necessary in order to make
                           the  statements  made herein or therein,  in light of
                           the  circumstances  under  which they were made,  not
                           misleading.  The Subscriber shall be entitled to rely
                           upon the  Company's  representations  and  warranties
                           contained  in  this  Agreement,  notwithstanding  any
                           independent investigation made by the Subscriber.

                  xvii.             No Integrated  Offering.  Except as provided
                           in Schedule 2(q),  neither the Company nor any of its
                           affiliates,  nor any  person  acting  on its or their
                           behalf, has directly or indirectl} made any offers or
                           sales of any  securities or solicited any offerers to
                           buy  any  security  under  circumstances  that  would
                           require  registration  of  the  Units  being  offered
                           hereby under the Securities Act.

         c.                The Subscrmber understands$and agrees that, after the
                  Company's  receipt of thiw Agreement,  the Company will review
                  the  Subscriber's  eligibility  and will determmne  whether to
                  accept or reject this  subscrmption  in whole or in part.  The
                  Comtany may determine to renect this  subscviption mn whole or
                  in  part  in  its sole  end  absolute  discretion.    If  this
                  subscription is$accepted in whole, then the Company will issue
                  the  Debentures  subscribed  for to the  Subscriber.  If  this
                  subscription  is rejected  in whole,  this  Agreement  and any
                  other subscription  materials will be promptly returned to the
                  Subscriber and the Subscriber's  subscription  payment will be
                  refunded to the Subscriber  without  interest.  In that event,
                  the  Subscriber and the Company will have no further rights or
                  

                                  Page 40 of 81




                  claims against each other by virtue of this Agreement. If this
                  subscription  is  accepted in part and  rejected in part,  the
                  Company is authorized  to amend this  Agreement to reflect the
                  number of Units for which this  subscription is accepted,  and
                  the Company will issue the Debentures and Warrants  comprising
                  the Units as to which this  subscription  is  accepted  at the
                  same time as if this subscription had been accepted in whole.

         d.       The  Subscriber   hereby   represents  and  warrants  to,  and
                  covenants and agrees with, the Company as follows:

                  i.                The  Subscriber  understands  that the offer
                           and sale of the Units is being  made only by means of
                           this  Agreement.  In deciding to subscribe for Units,
                           the Subscriber  has not  considered  any  information
                           other than that  contained in this  Agreement  and in
                           the documents  listed in Exhibit A to this  Agreement
                           (the "Disclosure Documents"), a copy of each of which
                           has been provided to the  Subscriber  and reviewed by
                           the  Subscriber  to the  extent  that the  Subscriber
                           deemed  necessary or advisable.  In  particular,  the
                           Subscriber  understands  that  the  Company  has  not
                           authorized  the use of, and the  Subscriber  confirms
                           that  he or  she  is  not  relying  upon,  any  other
                           information,  written or oral,  other  than  material
                           contained  in  this   Agreement  and  the  Disclosure
                           Documents.  The Subscriber is aware that the purchase
                           of the Units  involves a high degree of risk and that
                           the  Subscriber  may sustain,  and has the  financial
                           ability  to  sustain,  the loss of his or her  entire
                           investment.   The  Subscriber  understands  that  the
                           Company  is  a  development  stage  corporation,  has
                           incurred  significant  losses and no assurance can be
                           given  that the  Company  will be  profitable  in the
                           future,  that the  failure  of the  Company  to raise
                           funds,  in addition to the proceeds  from the sale of
                           the Units,  may have a material  adverse  effect upon
                           its business and, if sufficient  additional funds are
                           not  raised,  the  Company may not be able to pay the
                           Debentures  when due,  and that there is no assurance
                           that there will be a market for the Company's  Common
                           Stock   or   other   securities.    Furthermore,   in
                           subscribing    for   the   Units,    the   Subscriber
                           acknowledges  that the Company has not made,  and the
                           Subscriber  is not  relying in any manner  upon,  any
                           projections  or forecasts of future  operations.  The
                           Subscriber  has had the  opportunity to ask questions
                           of,  and  receive   answers   from,   the   Company's
                           management regarding the Company.

                  ii.               The  Subscriber  represents  to the  Company
                           that he or she (i) is an accredited  investor  within
                           the  meaning  of Rule 501 under the  Securities  Act,
                           (ii)  understands  that in order to be  treated as an
                           accredited investor,  the Subscriber must meet one of
                           the tests  for an  accredited  investor  set forth on
                           Exhibit  B to this  Agreement,  and  (iii)  has  read
                           Exhibit B and is an accredited  investor as set forth
                           on  the  signature  page  of  this   Agreement.   The
                           Subscriber further represents that he or she has such
                           knowledge  and  experience  in financial and business
                           matters  as to enable  him or her to  understand  the
                           nature and extent of the risks involved in purchasing
                           the Units.  The  Subscriber  is fully aware that such
                           investments  can and  sometimes do result in the loss
                           of the entire  investment.  The Subscriber can afford
                           to sustain the loss of his or her entire  investment,
                           and the  Subscriber's  purchase of the Units is being
                           made from funds which the Subscriber has allocated to
                           high risk,  illiquid  investments  and such funds are
                           not  required  by the  Subscriber  to meet his or her
                           normal  expenses.  The  Subscriber has engaged his or
                           her own counsel and accountants to the extent that he
                           deems it necessary.

                  iii.              The Subscriber acknowledges that the Company
                           is  relying  on  the   Subscriber's   representations
                           contained  in  this   Agreement  in  executing   this
                           Agreement  and  issuing  the Units and its counsel is
                           relying on such  statements  and  representations  in
                           rendering its opinion  pursuant to Paragraph  5(a)(v)
                           of this  Agreement,  and  the  Subscriber  agrees  to
                           indemnify  and hold  harmless  the  Company,  and its
                           officers, directors,  controlling persons and counsel
                           from and  against  all  manner  of  loss,  liability,
                          

                                  Page 41 of 81




                           damage or expense which they or any of them may incur
                           as a result of any material  misstatement  of fact or
                           omission of a material fact by the Subscriber in this
                           Agreement.

                  iv.               The   Subscriber   is  acquiring  the  Units
                           pursuant to this  Agreement  for  investment  and not
                           with a view to the sale or distribution  thereof, for
                           his or her own  account  and not on behalf of others;
                           has not  granted  any other  person any  interest  or
                           participation  in or right or option to purchase  all
                           or any portion of the Units;  is aware that the Units
                           are restricted  securities within the meaning of Rule
                           144 of the Commission  under the Securities  Act, and
                           may not be sold or otherwise  transferred  other than
                           pursuant to an effective registration statement or an
                           exemption  from  registration;  and  understands  and
                           agrees that the Units may bear the Company's standard
                           investment  legend.  The Subscriber  understands  the
                           meaning of these restrictions.

                  v.                The   Subscriber   will  not   transfer  the
                           Securities  except in compliance  with all applicable
                           Federal and state  securities  laws and  regulations.
                           The  Subscriber   understands  and  agrees  that  the
                           Company is not obligated to recognize any transfer of
                           any   Securities   unless  it  is  satisfied  in  its
                           reasonable  discretion that there has been compliance
                           with such  securities laws and  regulations,  and, in
                           such  connection,  the Company may request an opinion
                           of  counsel  acceptable  to  the  Company  as to  the
                           availability of any exemption.

                  vi.               The  Subscriber  has  been  informed  by the
                           Company  that the  issuance of the Units  pursuant to
                           this  Agreement  will be exempt under Section 4(2) or
                           4(6) of the Securities  Act and/or  Regulation D, and
                           in particular,  Rule 506, of the Commission under the
                           Securities Act and applicable  exemption  under state
                           securities laws, and the Subscriber  understands that
                           such  exemption is dependent upon the accuracy of the
                           information    contained    in    the    Subscriber's
                           representations set forth in this Agreement.

                  vii.              The Subscriber  represents and warrants that
                           it has  engaged  no  broker  and that no  finder  was
                           involved  directly or indirectly  in connection  with
                           the   Subscriber's   purchase   of  the  Units.   The
                           Subscriber  shall  indemnify  and hold  harmless  the
                           Company   from  and   against  any  manner  of  loss,
                           liability,  damage  or  expense,  including  fees and
                           expenses of counsel,  resulting  from a breach of the
                           Subscriber's  warranty  contained  in this  Paragraph
                           4(g).

                  viii.             To the extent that the Subscriber has deemed
                           it necessary, the Subscriber has consulted his or her
                           own  legal,  accounting,  tax,  investment  and other
                           advisors.

                  ix.               If  the  Subscriber  is a  corporation,  all
                           corporate   action   necessary  for  the   execution,
                           delivery and  performance  by the Subscriber has been
                           taken and the  person  executing  this  Agreement  on
                           behalf of the Subscriber is an authorized  officer of
                           the  Subscriber.  If  the  Subscriber  is  a  limited
                           partnership or limited liability company,  the person
                           executing  this  Agreement  is a general  partner  or
                           managing member of the Subscriber.  If the Subscriber
                           is a trust,  estate or other  fiduciary,  the  person
                           executing  this  Agreement is the trustee,  executor,
                           administrator or other fiduciary.

                  (j)      Neither the Subscriber  nor its affiliates  will sell
short  or sell  against  the box any  securities  of the  Company  owned  by the
undersigned  or with respect to which the  undersigned  has the power to vote or
transfer such securities.

                  (k)      The   subscriber   shall  not   transfer  the  Units,
Debentures,  or Warrants to another holder until after the effective date of the
Registration Statement.  After the effective date of the Registration Statement,
any  such  transferee   shall  be  required  to  make  in  writing  all  of  the
representations and warranties set forth in paragraph 4(a) through 4(j) hereof.

         e.                It shall be a condition precedent to the Subscriber's


                                  Page 42 of 81





obligation  to pay for the Units that the following  conditions  shall have been
met:

                           (1)              The Company shall have  delivered to
                                    the Subscriber or his or her representative:

                                    (a)           A copy of the  certificate  of
                                            incorporation    of   the   Company,
                                            certified by the  Secretary of State
                                            of Utah as of a current date.

                                    (b)           A copy of the  by-laws  of the
                                            Company,  certified by the Secretary
                                            of the Company.

                                    (c)           Resolutions  of the  Company's
                                            board of directors  authorizing  the
                                            transactions  contemplated  by  this
                                            Agreement,    certified    by    the
                                            Secretary of the Company.

                           (2)                All     of      the      Company's
                                    representations  and warranties set forth in
                                    this Agreement  shall be true and correct in
                                    all material  respects on such date with the
                                    same effect as if such  representations  and
                                    warranties  were  made  on  such  date,  the
                                    Company  shall have complied in all material
                                    respects with all of its  obligations  to be
                                    performed  by it on or  prior  to  the  such
                                    date.

                           (3)                No Material  Adverse Change in the
                                    business  or  financial   condition  of  the
                                    Company shall have occurred or be threatened
                                    since  the  date of this  Agreement,  and no
                                    proceedings  shall be  threatened or pending
                                    before any governmental  entity or authority
                                    which is likely  to  result in a  restraint,
                                    prohibition  or the  obtaining of damages or
                                    other   relief  in   connection   with  this
                                    Agreement   or  the   consummation   of  the
                                    transactions contemplated by this Agreement.

                           (4)                The Company  shall have  delivered
                                    to the  Subscriber  the  certificate  of its
                                    chief executive and financial officers dated
                                    the Closing Date as to the matters set forth
                                    in  Paragraphs  5(a)(ii)  and  (iii) of this
                                    Agreement.  . (5) The Subscriber  shall have
                                    received  the  opinion  of  Bruce  L.  Dibb,
                                    counsel to the  Company,  dated the  Closing
                                    Date, that:

                                    (a)               The     Company    is    a
                                            corporation  organized  and existing
                                            in good  standing  under the laws of
                                            the State of Utah with the corporate
                                            power to conduct it  business as the
                                            same is presently conducted.

                                    (b)               All    corporate    action
                                            necessary    for   the    execution,
                                            delivery  and   performance  by  the
                                            Company  of  this   Agreement,   the
                                            Debentures and the Warrants has been
                                            taken,   and  this  Agreement,   the
                                            Debentures and Warrants  constitute,
                                            the valid and binding obligations of
                                            the    Company,    enforceable    in
                                            accordance  with  their   respective
                                            terms,  except as enforceability may
                                            be affected by customary  principles
                                            governing equitable relief generally
                                            and  to any  applicable  bankruptcy,
                                            moratorium, equitable subordination,
                                            insolvency,  fraudulent  conveyance,
                                            usury   or  other   laws   affecting
                                            creditors'    rights    and    their
                                            enforcement  generally,  and  except
                                            that no  opinion  is given as to the
                                            enforceability         of        any
                                            indemnification provisions.

                                    (c)               The   Shares   have   been
                                            reserved  for  issuance   and,  when
                                            issued   upon   conversion   of  the
                                            
                                  Page 43 of 81




                                            Debentures   or   exercise   of  the
                                            Warrants,  will be duly and  validly
                                            authorized  and  issued,  fully paid
                                            and   nonassessable  and  free  from
                                            Preemptive Rights.

                                    (d)               In   reliance   upon   the
                                            accuracy of the  representations and
                                            warranties    of   the    Subscriber
                                            contained  in  this   Agreement  and
                                            assuming that the Company files in a
                                            timely  manner a Form D pursuant  to
                                            Regulation   D  of  the   Commission
                                            pursuant to the Securities  Act, the
                                            sale of the Units is exempt from the
                                            registration   requirements  of  the
                                            Securities Act.

                           (6)              A Form D shall  have  been  prepared
                                  for filing with the Commission.

                           (7)              The  Company   shall  have  paid  to
                                  Coleman the compensation due to Coleman.

                           (8)    The  Company  shall have paid to Esanu  Katsky
                        Korins & Siger,  LLP, its legal fees of twelve  thousand
                        five hundred dollars ($12,500) plus disbursements.

         f.                The  Company  hereby  covenants  and agrees  with the
                           Subscriber that:

                  i.              The Company  will,  promptly,  but in no event
                        later than three (3) business  days after each  closing,
                        file  (i) the Form D with  the  Commission  and (ii) all
                        documents   and   instruments   required  by  the  state
                        securities  laws of any state in which any  purchaser of
                        Units lives.

                  ii.             During the period  commencing  on the  Closing
                        Date and ending  ninety  (90) days  after  such  Closing
                        Date, the Company will not, without the prior consent of
                        the  holders of a majority  of the  principal  amount of
                        Debentures then outstanding, issue or sell or enter into
                        any  agreement  to issue or sell any  shares  of  Common
                        Stock or any Convertible  Securities (i.e., any warrants
                        or options or ---- convertible debt or equity securities
                        or other  securities  upon the exercise or conversion of
                        which shares of Common Stock may be issued), except that
                        this  Paragraph  6(b) shall not be construed to prohibit
                        the Company from (i) issuing Common Stock or Convertible
                        Securities in connection with an acquisition or pursuant
                        to options or  warrants  which are  outstanding  on such
                        Closing  Date or (ii)  entering  into any  agreement  to
                        issue, or issuing, any convertible  securities or common
                        stock  pursuant  to an equity  line of credit  currently
                        contemplated  by the Company or (iii) issue common stock
                        with regard to a Regulation S private  placement  funded
                        in the  Company's  fiscal  third and fourth  quarters or
                        (iv) issuing  options to employees or  consultants at an
                        exercise  price not less than the fair  market  value on
                        the  date of grant  pursuant  to the  Company's  present
                        stock  option  plan and  performance  stock  plan or (v)
                        issuing   restricted   stock   grants  to  employees  or
                        consultants    pursuant   to   the   Company's   present
                        performance stock plan;  provided,  however,  that in no
                        event  shall the  number  of  options  and stock  grants
                        issued  during any such  ninety  (90) day period  exceed
                        Three Hundred Thousand  (300,000) shares.  References to
                        consultants  in this  Paragraph  6(b)  shall  mean  only
                        consultants   who  (x)  perform   functions  that  would
                        otherwise  be  performed by employees of the Company and
                        (y)  whose  services  do not  relate to the  raising  of
                        money.

                  iii.            As long as the  Subscriber  or any  transferee
                        (other than a  transferee  pursuant to the  Registration
                        Statement)  shall own any  Securities,  (i) the  Company
                        shall file all annual,  quarterly  and periodic  reports
                        with the Commission not later than the last day on which
                        such filings may be made  pursuant to the Exchange  Act,
                        and (ii) the  Company  shall  continue to be eligible to
                        use a Form S-3 or a Form SB-2 registration statement for
                        the sale of the Shares.


                                  Page 44 of 81





                  iv.             As  long  as  the  Subscriber  shall  own  any
                        Securities, the Company will provide the Subscriber with
                        a copy of each Form 10-K or Form 10-KSB  Annual  Report,
                        Form 10-Q or Form 10-QSB Quarterly Report,  each current
                        report on Form 8-K and any definitive proxy material, at
                        the times such filings are made with the  Commission and
                        will  in  addition   provide  the  Subscriber  with  all
                        materials that are mailed to  stockholders  at such time
                        as the materials are mailed to the stockholders.

                  v.              The Company  will comply with its  obligations
                        pursuant to the Debentures and the Warrants.

                  vi.             Until the  earlier of (i) July 1, 1999 or (ii)
                        such date as all of the  principal  and  interest on the
                        Debentures  shall  have been paid in full or (iii)  such
                        date as all of the Debentures shall have been converted,
                        neither the Company  nor any of its  subsidiaries  shall
                        borrow any money or incur any obligations  pursuant to a
                        certain proposed equity line of credit agreement between
                        Bristol Asset Management,  LLC (or a substitute  lender)
                        and the Company,  as the same may hereafter be modified,
                        amended or replaced. The present terms of such agreement
                        have been previously  disclosed to the Subscriber.  This
                        Paragraph  6(f) shall apply to any credit line  facility
                        entered  into by the Company  during the period  between
                        the date of this Agreement and July 1, 1999.

         g.             The Company shall (i) file or cause to be filed with the
                  Commission,  not later  than  forty-five  (45) days  after the
                  Closing  Date, a  registration  statement  (the  "Registration
                  Statement") on Form S-3 or other  applicable  form,  providing
                  for the sale by the  Subscriber  of all of the Shares and (ii)
                  use its  best  efforts  to  have  the  Registration  Statement
                  declared  effective  by the  Commission  not  later  than  one
                  hundred twenty (120) days from the Closing Date, time being of
                  the essence.  The  Registration  Statement shall register such
                  number of shares of Common Stock equal to two hundred  percent
                  (200%) of the number of shares of Common  Stock which would be
                  issuable upon  conversion of the  Debentures and upon exercise
                  of the  Warrants  in the event  such  conversion  or  exercise
                  occurred at the lowest  closing bid price of the Common  Stock
                  for the  sixty  (60)  trading  days  prior  to the date of the
                  execution of this Agreement.  The Registration Statement shall
                  cover  the  issuance  of  the  Shares  and  the  sale  by  the
                  Subscriber  or the  Subscriber's  transferee  in the manner or
                  manners  designated by the  Subscriber.  The Company agrees to
                  keep the Registration  Statement  continuously effective until
                  all of the Shares have been sold. References in this Paragraph
                  7  to  the  Subscriber  shall  include,  in  addition  to  the
                  Subscriber, any holder of the Shares or the Securities,  other
                  than pursuant to the Registration Statement. Such Shares shall
                  be registered  regardless of whether, at the effective date of
                  the  Registration  Statement,  the Debentures  shall have been
                  issued or converted or the Warrants  shall have been issued or
                  converted.  In the event the  Registration  Statement does not
                  register a sufficient number of shares to cover all the shares
                  underlying  such the Debenture and Warrant,  the Company shall
                  file an  additional  registration  statement  not  later  than
                  ninety (90) days from the date the  Registration  Statement is
                  declared  effective by the Commission  covering such number of
                  additional  shares  of  Common  Stock  as the  Subscriber  may
                  reasonably request.

                  i.              The Company shall pay all expenses incident to
                        the  Company's  performance  of or  compliance  with its
                        obligations  under this Paragraph 7, including,  without
                        limitation,  all registration,  filing,  listing,  stock
                        exchange, Nasdaq and NASD fees, all fees and expenses of
                        complying  with  state  securities  or blue sky laws all
                        word  processing,  duplicating  and  printing  expenses,
                        messenger and delivery expenses, the fees, disbursements
                        and other  charges of counsel for the Company and of its
                        independent    public    accountants,    but   excluding
                        commissions and applicable transfer taxes, if any, which
                        commissions  and  transfer  taxes  shall be borne by the
                        seller or sellers of Shares in all cases.

                  ii.             In complying with its obligations  pursuant to
                        Paragraph 7(a) of this Agreement,  the Company shall, as
                        expeditiously as possible:

                                  Page 45 of 81






                           (1)                Prepare    and   file   with   the
                                    Commission  the  Registration  Statement  to
                                    effect such  registration and thereafter use
                                    its best efforts to cause such  registration
                                    statement to become effective as promptly as
                                    possible.

                           (2)                Notify the  Subscriber at any time
                                    when  a  prospectus   relating   thereto  is
                                    required   to   be   delivered   under   the
                                    Securities Act, upon discovery that, or upon
                                    the  happening  of any  event as a result of
                                    which,   the  prospectus   included  in  the
                                    Registration  Statement,  as then in effect,
                                    includes an untrue  statement  of a material
                                    fact or  omits to state  any  material  fact
                                    required to be stated  therein or  necessary
                                    to   make   the   statements   therein   not
                                    misleading in the light of the circumstances
                                    under  which they were made,  and  promptly,
                                    but not later  than ten (10)  business  days
                                    after the  happening of such event,  prepare
                                    and file with the Commission such amendments
                                    and   supplements   to   the    Registration
                                    Statement   and  the   prospectus   used  in
                                    connection  therewith as may be necessary to
                                    keep the  Registration  Statement  effective
                                    and to  comply  with the  provisions  of the
                                    Securities  Act and the  Exchange  Act  with
                                    respect  to the  disposition  of all  Shares
                                    until  such time as all of the  Shares  have
                                    been  disposed  of in  accordance  with  the
                                    method  of  disposition  set  forth  in such
                                    registration statement.

                           (3)                Before  filing  the   Registration
                                    Statement or prospectus or any amendments or
                                    supplements  thereto,  furnish to and afford
                                    the  Subscriber  a  reasonable   opportunity
                                    (unless waived in writing by the Subscriber)
                                    to  review  copies  of  all  such  documents
                                    (including  copies  of any  documents  to be
                                    incorporated  by  reference  therein and all
                                    exhibits  thereto)  proposed to be filed (at
                                    least five (5)  business  days prior to such
                                    filing).  The  Company  shall  not  file any
                                    registration  statement or prospectus or any
                                    amendments or supplements thereto in respect
                                    to the  shares if the  holders of a majority
                                    of the Shares  included in the  Registration
                                    Statement shall reasonably object.

                           (4)                Use its best efforts to obtain the
                                    prompt  withdrawal  of any order  suspending
                                    the    effectiveness   of   a   registration
                                    statement,  and in any event  shall,  within
                                    thirty  (30)  days  of  such   cessation  of
                                    effectiveness, use its best efforts to amend
                                    the  Registration   Statement  in  a  manner
                                    reasonably expected to obtain the withdrawal
                                    of the order  suspending  the  effectiveness
                                    thereof, or file an additional  registration
                                    statement  pursuant to Rule 415 covering all
                                    of the  Shares  and use its best  efforts to
                                    cause  the  Registration   Statement  to  be
                                    declared  effective  as soon as  practicable
                                    after such filing and to remain effective as
                                    provided in this Paragraph 7.

                           (5)                In the  event of any  transfer  of
                                    Shares  or  Securities   which   requires  a
                                    supplement  or  post-effective  amendment to
                                    the  Registration  Statement or  prospectus,
                                    promptly    file    such    supplement    or
                                    post-effective  amendment  and use its  best
                                    efforts   to  have  such   filing   declared
                                    effective by the  Commission  as promptly as
                                    possible after the filing thereof.

                           (6)                Furnish  to  the  Subscriber  such
                                    number of copies  of such  drafts  and final
                                    conformed   versions  of  such  Registration
                                    Statement  and of each  such  amendment  and
                                    supplement  thereto (in each case  including
                                    all exhibits and any documents  incorporated
                                    by reference), such number of copies of such
                                    drafts and final  versions of the prospectus
                                    contained  in  such  Registration  Statement
                                    (including each  preliminary  prospectus and
                                    any  summary   prospectus)   and  any  other
                                    prospectus  filed  under  Rule 424 under the
                                    Securities   Act,  in  conformity  with  the
                                    
                                  Page 46 of 81




                                    requirements of the Securities Act, and such
                                    other   documents,   as  such   seller   may
                                    reasonably request in writing.

                           (7)                Use  its  best   efforts   (i)  to
                                    register  or qualify  all Shares  under such
                                    other  securities  or blue  sky  laws of not
                                    more than 20  states or other  jurisdictions
                                    of  the  United  States  of  America  as the
                                    Subscriber  shall   reasonably   request  in
                                    writing,  (ii) to keep such  registration or
                                    qualification  in effect for so long as such
                                    registration  statement  remains  in effect,
                                    (iii) to prevent  the  issuance of any order
                                    suspending    the    effectiveness    of   a
                                    registration   statement  or  of  any  order
                                    preventing  or  suspending   the  use  of  a
                                    prospectus or suspending  the  qualification
                                    (or exemption from  qualification) of any of
                                    the  Shares  for  sale in any  jurisdiction,
                                    and, if any such order is issued, to use its
                                    best efforts to obtain the withdrawal of any
                                    such order at the earliest  possible moment,
                                    and (iv) to take any other  action  that may
                                    be  reasonably  necessary  or  advisable  to
                                    enable  such  sellers  to   consummate   the
                                    disposition  in  such  jurisdictions  of the
                                    securities  to  be  sold  by  such  sellers,
                                    except  that the  Company  shall not for any
                                    such   purpose   be   required   to  qualify
                                    generally   to  do  business  as  a  foreign
                                    corporation in any  jurisdiction  wherein it
                                    would not but for the  requirements  of this
                                    Paragraph  7(c)(vii)  be  obligated to be so
                                    qualified,  to subject itself to taxation in
                                    such  jurisdiction  or to consent to general
                                    service of process in any such jurisdiction.

                           (8)                Use its best  efforts to cause all
                                    Shares to be registered  with or approved by
                                    such  other  federal  or state  governmental
                                    agencies or  authorities as may be necessary
                                    in the opinion of counsel to the Company and
                                    counsel  to the  Subscriber  to  enable  the
                                    seller or sellers  thereof to consummate the
                                    disposition of such Shares in the manner set
                                    forth in the Registration Statement.

                           (9)                Otherwise    comply    with    all
                                    applicable  rules  and  regulations  of  the
                                    Commission and any other governmental agency
                                    or authority  having  jurisdiction  over the
                                    offering, and make available to its security
                                    holders, as soon as reasonably  practicable,
                                    an earnings statement covering the period of
                                    at least  twelve  months,  but not more than
                                    eighteen  months,  beginning  with the first
                                    full calendar month after the effective date
                                    of  such   Registration   Statement,   which
                                    earnings   statement   shall   satisfy   the
                                    provisions   of   Section   11(a)   of   the
                                    Securities  Act  and  Rule  158  promulgated
                                    thereunder,  and  furnish to each  seller of
                                    Shares at least ten days prior to the filing
                                    thereof   a  copy   of  any   amendment   or
                                    supplement to such Registration Statement or
                                    prospectus.

                  iii.              The  Registration  Statement,  when declared
                           effective  by the  Commission  or  when  subsequently
                           amended (by an amendment which is declared  effective
                           by the  Commission)  or any  prospectus  in the  form
                           included in the  registration  statement  as declared
                           effective  by the  Commission  or  when  subsequently
                           supplemented  will not contain an untrue statement of
                           a  material  fact or omit to  state a  material  fact
                           required to be stated  therein or  necessary  to make
                           the statements therein, in light of the circumstances
                           under which they were made, not misleading.

                  iv.               The Company may  require the  Subscriber  to
                           furnish the Company such  information  regarding such
                           seller and the distribution of the securities covered
                           by the Registration Statement as the Company may from
                           time to time reasonably  request in writing and as is
                           required by applicable laws and regulations.

                  v.                The Company  hereby  agrees to indemnify and
                           hold  harmless the  Subscriber,  including  any other
                           holder of  Shares,  and their  respective  directors,
                           officers,  agents  and  advisers  (collectively,  the
                           "Agents")  and  each  person,  if any,  who  controls
                           within the  meaning  of Section 15 of the  Securities
                           

                                  Page 47 of 81




                           Act (the "Control Person") the Subscriber or any such
                           holder  against  any  losses,   claims,   damages  or
                           liabilities,   joint  or   several,   to  which   the
                           Subscriber, any such other holder of Shares, any such
                           Agent, or any such Control Person may become subject,
                           under the  Securities  Act,  the  Exchange Act or any
                           other  Federal or state law,  including  common  law,
                           insofar   as  such   losses,   claims,   damages   or
                           liabilities (or actions in respect thereof) arise out
                           of or are  based  upon (i) any  untrue  statement  or
                           alleged untrue statement of a material fact contained
                           in (A) a  registration  statement,  including (I) any
                           pre-  or  post-effective  amendments  or  supplements
                           thereof and (ll) any preliminary  prospectus or final
                           prospectus   contained   therein   or  any   pre-  or
                           post-effective  amendments  or  supplements  thereto,
                           filed for any registration under this Agreement,  (B)
                           in any Blue  Sky Law  application  or other  document
                           executed  by  the  Company   specifically   for  such
                           registration or (C) based upon information  furnished
                           by  the   Company   filed  in  any   state  or  other
                           jurisdiction  in order to  qualify  any or all of the
                           Shares  under the  securities  laws thereof (any such
                           application,  document or  information in (B) and (C)
                           above  being  hereinafter  referred to as a "Blue Sky
                           Application");  (ii) the omission or alleged omission
                           to state in such  registration  statement or Blue Sky
                           Application  a material  fact  required  to be stated
                           therein or necessary to make the  statements  therein
                           not  misleading;  or (iii) any  untrue  statement  or
                           alleged untrue statement of a material fact contained
                           in  such   registration   statement   or   Blue   Sky
                           Application  or the  omission or alleged  omission to
                           state  therein a material  fact required to be stated
                           therein or necessary to make the statements  therein,
                           in the light of the  circumstances  under  which they
                           were made,  not  misleading,  and will reimburse such
                           parties for any reasonable  attorneys'  fees or other
                           expenses  reasonably  incurred by them or any of them
                           in connection with investigating or defending against
                           any such loss,  claim,  damage,  liability or action;
                           provided,  however,  that  the  Company  will  not be
                           liable or responsible for  reimbursement  of expenses
                           in any such case to the  extent  that any such  loss,
                           claim,  damage or liability arises out of or is based
                           upon an untrue  statement or alleged untrue statement
                           or omission or alleged omission made in reliance upon
                           and in conformity with written information  furnished
                           to the  Company  by or on behalf of such  indemnified
                           party  specifically  for use with  reference to or in
                           the preparation of a registration statement, any such
                           pre-  or   post-effective   amendment  or  supplement
                           thereof, or any Blue Sky Application.  This indemnity
                           agreement is in addition to any  liability  which the
                           Company may otherwise  have. The indemnity  agreement
                           of the Company contained in this Paragraph 7(f) shall
                           remain   operative  and  in  full  force  and  effect
                           regardless of any investigation  made by or on behalf
                           of any of the Subscriber, any other holder of Shares,
                           any Agent or any Control Person and shall survive the
                           registration and sale of any Shares by the Subscriber
                           or any such holder.

                  vi.               The  Subscriber  and each  other  holder  of
                           Shares,  by  including  such  holder's  Shares in the
                           Registration   Statement,   agrees,   severally,   to
                           indemnify and hold  harmless the Company,  its Agents
                           and the Control Persons thereof to the same extent as
                           the  indemnity  from the  Company to the  Subscriber,
                           such  other  holders,  their  respective  Agents  and
                           Control  Persons but only with  respect to any untrue
                           statement or alleged untrue  statement or omission or
                           alleged   omission   made  in  reliance  upon  or  in
                           conformity with written information  relating to such
                           person by such person expressly for use in connection
                           with   any    registration    statement,    pre-   or
                           post-effective  amendment or supplement thereto or in
                           any  Blue  Sky  Application  filed  pursuant  to this
                           Agreement.  The  liability  of any Holder  under this
                           Paragraph  7(g) shall be limited to the amount of net
                           proceeds to such Holder from the Shares sold pursuant
                           to the  registration  statement  which  gives rise to
                           such liability.  This indemnity  agreement will be in
                           addition to any liability  that the Subscriber or any
                           such other holder may otherwise  have.  The indemnity
                           agreement of the  Subscriber  and such other  holders
                           contained  in  this   Paragraph   7(g)  shall  remain
                           operative and in full force and effect  regardless of
                           any investigation made by or on behalf of the Company
                           or any of its Control  Persons and shall  survive the
                           registration   and  sale  of  any   Shares   and  the
                           expiration or termination of this Agreement.

                  vii.              If any  action or claim  shall be brought or
                           

                                  Page 48 of 81




                           asserted by a party entitled to indemnification under
                           Paragraph  7(f) or 7(g)  (as the case may be) of this
                           Agreement (each an "Indemnified Party") in respect of
                           which  indemnity  may be sought from the  responsible
                           party  identified in said  Paragraph 7(f) or 7(g) (as
                           the  case  may be) (the  "Indemnifying  Party"),  the
                           Indemnified   Party   shall   promptly   notify   the
                           Indemnifying  Party in writing,  and the Indemnifying
                           Party shall assume the defense thereof, including the
                           employment   of   counsel    satisfactory   to   each
                           Indemnified  Party and the payment of all  reasonable
                           legal  and  other   expenses.   The  failure  of  any
                           Indemnified  Party to notify the  Indemnifying  Party
                           will  not  relieve  the  Indemnifying  Party  of  any
                           liability  for  indemnification  which it may have to
                           any  Indemnified  Party under this Paragraph 7 unless
                           the   Indemnifying   Party  has  been   substantially
                           prejudiced  by such failure and in no event will such
                           failure  relieve  the  Indemnifying  Party  from  any
                           liability  it  may  have  to  any  Indemnified  Party
                           otherwise   than   under  this   Paragraph   7.  Each
                           Indemnified  Party  shall  have the  right to  employ
                           separate   counsel   in  any  such   action   and  to
                           participate in the defense thereof,  but the fees and
                           expenses of such  counsel  shall be at the expense of
                           such  Indemnified  Party  unless  (i) the  employment
                           thereof  has  been  specifically  authorized  by  the
                           Indemnifying   Party   in   writing,   or  (ii)   the
                           Indemnifying  Party has failed to assume the  defense
                           and employ  counsel or (iii) the named parties to any
                           such action (including any impleaded parties) include
                           both   (A)  any   Indemnified   Party   and  (B)  the
                           Indemnifying  Party,  and, in the judgment of counsel
                           to any  Indemnified  Party,  it is advisable for such
                           Indemnified  Party  to  be  represented  by  separate
                           counsel (in which case the  Indemnifying  Party shall
                           not have the  right to  assume  the  defense  of such
                           action on behalf of such Indemnified Party; provided,
                           however,  it being  understood that the  Indemnifying
                           Party shall,  in connection  with any one such action
                           or  separate  but  substantially  similar  or related
                           actions in the same  jurisdiction  arising out of the
                           same general allegations or circumstances,  be liable
                           for the  reasonable  fees  and  expenses  of only one
                           separate  firm of  attorneys  at any  time  for  each
                           Indemnified  Party pursuant to this Agreement in each
                           jurisdiction,  and each such firm shall be designated
                           in  writing  by  such  Indemnified  Party  holding  a
                           majority  of the  Shares  being  registered  for  all
                           Indemnified  Parties).  The Indemnifying  Party shall
                           not be liable for any  settlement  of any such action
                           effected by an Indemnified  Party without the written
                           consent of the Indemnifying Party (which shall not be
                           withheld  unreasonably  in  light of all  factors  of
                           importance to such Indemnified Party), but if settled
                           with  such  written  consent,  or if there be a final
                           judgment  or  decree  for the  plaintiff  in any such
                           action by a court of competent  jurisdiction  and the
                           time to appeal  shall have expired or the last appeal
                           shall have been denied, the Indemnifying Party agrees
                           to indemnify and hold harmless each Indemnified Party
                           from and against any loss or  liability  by reason of
                           such settlement or judgment.

                  viii.             If the indemnification  provided for in this
                           Agreement   is   held  by  a   court   of   competent
                           jurisdiction  to be  unavailable  to  an  Indemnified
                           Party  with  respect to any loss,  liability,  claim,
                           damage  or  expense  referred  to  therein,  then the
                           Indemnifying  Party,  in  lieu of  indemnifying  such
                           Indemnified Party thereunder, shall contribute to the
                           amount paid or payable by such Indemnified Party as a
                           result  of such  loss,  liability,  claim,  damage or
                           expense  in  such  proportion  as is  appropriate  to
                           reflect the relative fault of the Indemnifying  Party
                           on the one hand and of the  Indemnified  Party on the
                           other  hand in  connection  with  the  statements  or
                           omissions  which  resulted  in such loss,  liability,
                           claim,  damage  or  expense  as  well  as  any  other
                           relevant equitable considerations. The relevant fault
                           of the Indemnifying  Party and the Indemnified  Party
                           shall be  determined  by  reference  to,  among other
                           things,   whether   the  untrue  or  alleged   untrue
                           statement of a material fact or the omission to state
                           a material  fact relates to  information  supplied by
                           the  Indemnifying  Party or by the Indemnified  Party
                           and the parties' relative intent,  knowledge,  access
                           to information  and opportunity to correct or prevent
                           such  statement  or  omission.   Notwithstanding  the
                           foregoing,  the  amount any  Holder is  obligated  to
                           contribute   pursuant  to  this  Agreement  shall  be
                           limited to the net  proceeds  to such Holder from the
                           Shares sold  pursuant to the  Registration  Statement
                           which  gives rise to such  obligation  to  contribute
                           (less the  aggregate  amount of any damages which the
                           Subscriber  or such other holder has  otherwise  been
                           

                                  Page 49 of 81




                           required  to pay in  respect  of  such  loss,  claim,
                           damage,  liability  or  action  or any  substantially
                           similar  loss,  claim,  damage,  liability  or action
                           arising from the sale of such Shares).  The foregoing
                           contribution  agreement  shall in no way  affect  the
                           contribution   liabilities   of  any  persons  having
                           liability  under  Section  11 of the  Securities  Act
                           other than the Company, the Subscriber and such other
                           holders.  No  contribution  shall be  requested  with
                           regard to the settlement of any matter from any party
                           who  did not  consent  to the  settlement,  provided,
                           however,  that such consent shall not be unreasonably
                           withheld  in light of all  factors of  importance  to
                           such party.  Notwithstanding  any  provisions of this
                           Paragraph  7,  no  person   guilty  of  a  fraudulent
                           misrepresentation  (within  the  meaning  of  Section
                           11(f) of the  Securities  Act) shall be  entitled  to
                           contribution  from any  person  who was not guilty of
                           such fraudulent misrepresentation.

         h.                All notices  provided for in this Agreement  shall be
                  in  writing  signed  by the  party  giving  such  notice,  and
                  delivered personally or sent by overnight courier or messenger
                  against  receipt  thereof or sent by  registered  or certified
                  mail (air mail if overseas),  return  receipt  requested or by
                  telecopier  if  receipt of  transmission  is  confirmed  or if
                  transmission   is  confirmed  by  mail  as  provided  in  this
                  Paragraph 8. Notices  shall be deemed to have been received on
                  the date of  personal  delivery  or  telecopy  or,  if sent by
                  certified or registered mail, return receipt requested,  shall
                  be deemed to be  delivered  on the fifth  (5th)  business  day
                  after  the  date  of  mailing.  Notices  shall  be sent to the
                  Company at 75 West 200 South,  Suite 350, Salt Lake City, Utah
                  84101,  Attention:  Mr. Michael Heil,  CEO,  telecopier  (801)
                  322-1165,  and to the  Subscriber  at his or her  address  and
                  telecopier  number set forth on the signature  page or to such
                  other  address  as any party  shall  designate  in the  manner
                  provided in this Paragraph 8.

         i.                This  Agreement   constitutes  the  entire  agreement
                  between the parties  relating  to the subject  matter  hereof,
                  superseding  any and all  prior  or  contemporaneous  oral and
                  prior  written  agreements,   understandings  and  letters  of
                  intent.  This Agreement may not be modified or amended nor may
                  any right be waived except by a writing which expressly refers
                  to this Agreement, states that it is a modification, amendment
                  or waiver  and is  signed by all  parties  with  respect  to a
                  modification  or  amendment  or the party  granting the waiver
                  with respect to a waiver.  No course of conduct or dealing and
                  no trade custom or usage shall modify any  provisions  of this
                  Agreement.

                  i.                This  Agreement  shall  be  governed  by and
                           construed in accordance with the laws of the State of
                           New York applicable to agreements  executed and to be
                           performed  wholly within such state,  without  regard
                           for  principles  of  conflicts  of law.  The  Company
                           hereby (i) consents to the exclusive  jurisdiction of
                           the United  States  District  Court for the  Southern
                           District of New York and  Supreme  Court of the State
                           of New York in the  County of New York in any  action
                           relating  to or arising out of this  Debenture,  (ii)
                           agrees  that any  process  in any such  action may be
                           served upon it, in  addition  to any other  method of
                           service  permitted by law, by certified or registered
                           mail,  return receipt  requested,  or by an overnight
                           courier  service which obtains  evidence of delivery,
                           with the same full force and effect as if  personally
                           served  upon him in New York City,  and (iii)  waives
                           any claim that the  jurisdiction of any such tribunal
                           is not a convenient forum for any such action and any
                           defense  of lack  of in  personam  jurisdiction  with
                           respect thereto. 

                  ii.               Any  termination of this Agreement shall not
                           affect  in  any  manner  the   parties'   obligations
                           pursuant  to  Paragraphs  6,  7,  8  and  9  of  this
                           Agreement, which shall survive such termination.

                  iii.              This  Agreement  shall be  binding  upon and
                           inure to the benefit of the parties hereto, and their
                           respective successors and permitted assigns.

                  iv.               In the  event  that  any  provision  of this
                           Agreement  becomes  or  is  declared  by a  court  of
                           competent  jurisdiction to be illegal,  unenforceable
                           or void,  this Agreement shall continue in full force
                           and effect without said provision.


                                  Page 50 of 81





                  v.                Each  party  shall,  without  payment of any
                           additional  consideration  by any other party, at any
                           time on or after  the  sale of the  Units  take  such
                           further  action and  execute  such other and  further
                           documents  and  instruments  as the  other  party may
                           request in order to provide  the other party with the
                           benefits of this Agreement.

                  vi.               All references to any gender shall be deemed
                           to include the masculine,  feminine or neuter gender,
                           the singular shall include the plural, and the plural
                           shall include the singular.

                  vii.              This  Agreement  may be  executed  in two or
                           more  counterparts,  each of which shall be deemed an
                           original but all of which together  shall  constitute
                           one and the same document.

                  viii.             The various representations, warranties, and
                           covenants set forth in this Agreement or in any other
                           writing  delivered  in  connection   therewith  shall
                           survive the issuance of the Units.

          Please  confirm  your  agreement  with the  foregoing  by signing this
          Agreement where indicated.


                                         Very truly yours,


Number of Units
Subscribed for:                                            
three
                                          --------------------------------
                                          Name of Subscriber

Total
Purchase Price:                          By:               
                                            ------------------------------
$750,000.                                     (Signature)


                                         Title, if applicable
                                                              -------------
Address:                                      
        --------------------
- ----------------------------

Telecopier Number:                
                  ----------

Social Security No. or Tax I.D. No.:                         
                                    ------------

The Subscriber is an accredited  investor  based on the following  paragraphs of
Exhibit B to this Agreement:
- -----------------------------

Accepted this      day of
December, 1998

CHEQUEMATE INTERNATIONAL,  INC.


By:                                                            
   -------------------------------
     Michael Heil, President

                                  Page 51 of 81





                                                                       Exhibit A
                              Disclosure Documents

         a.   Risk Factors

         b.   Form 10-KSB for the fiscal year ended March 31, 1998

         c.   Amended Form 10-QSB for the quarter ended September 30, 1998

         d.   Capital Stock

         e.   Management

         f.   Form of Debenture.

         g.   Form of Warrant

                  Schedule 2(i)

                  Schedule 2(l)

                  Schedule 2(q)


                                  Page 52 of 81





                                  RISK FACTORS
                                  ------------

         THE FOLLOWING REPRESENTS MANAGEMENT'S VIEW OF THE MORE SIGNIFICANT RISK
FACTORS WHICH SHOULD BE CONSIDERED BY EACH INVESTOR,  BUT DOES NOT PURPORT TO BE
A LISTING OF ALL POTENTIAL  RISK  FACTORS.  CONSEQUENTLY,  EACH INVESTOR  SHOULD
REVIEW  CAREFULLY ALL PARTS OF THE OFFERING  MEMORANDUM IN ADDITION TO REVIEWING
THE FOLLOWING:

A.       General Business Risks.
         -----------------------

         1. Development  Stage. The Company was organized as a Texas corporation
on April 21, 1989 and changed its  jurisdiction of  incorporation on January 26,
1995 by  becoming  a Utah  corporation.  Since it has not  sustained  profitable
operations  in any of its market  sectors  during the periods  reflected  in the
attached  SEC  reports,  the Company  must be  considered  a  development  stage
enterprise with limited prior operating history. Each investor should be advised
that,  historically and statistically,  development stage entities  constitute a
greater risk of loss of investment than investment in a seasoned company.

         2. Success of Product and  Services.  There is no assurance or warranty
that the contemplated  products and services will be commercially  successful or
that the  Company's  proprietary  interest in the products  can be  commercially
protected  through  copyrights,  patents or other similar types of applications.
The  Company  is  engaged  in the  development  and  marketing  of what  must be
considered as novel and experimental new products and innovations. Each investor
must consider,  as a potential risk factor,  the  possibility  that the investor
could invest in this Offering and not receive any return of investment,  or lose
his entire  investment if the product is not successfully  marketed or otherwise
not commercially successful.

         3.  Competition.  There is  substantial  competition,  both locally and
internationally,  in the electronics  industry in which the Company engages.  No
assurance  can be made,  despite  the best  efforts  of  management,  that other
companies  may not  produce  competitive  programs,  services,  or  devices at a
competitive   advantage  which  could  cause  the  Company  to  be  commercially
unprofitable.

         4. Government Regulation.  Various aspects of the industry in which the
Company has historically engaged have been subject to government regulation such
as regulation by the Federal Communications  Commission (FCC), the Federal Trade
Commission  (FTC), as well as local  governmental  agencies.  Various changes by
regulatory agencies, or in the tax treatment of the Company or its applications,
could have significant impacts upon the Company and its profitability.

         5. Year 2000  Compliance.  The  Company  is  concerned  that the entire
electronics and media industries may be substantially and adversely  impacted by
various  failures of computer  systems  and  programs to properly  adjust to, or
account  for the  change  to the year  2000  relevant  to their  computer  based
operations.  It is not  possible  to  project  the  potential  scope of  adverse
impacts,  if any, but it is believed that such adverse  impacts,  if they occur,
may be most  significant in the broadcast  industries  which could directly bear
upon the Company's future operations. The Company does not believe it internally
has any  computer  program  systems or  configurations  which are not  presently
conformed to the year 2000 (Y2-K)  standards,  but adverse  impacts could easily
result  from  various  media  companies  with whom or through  which the Company
intends to engage in business. Since this risk cannot realistically be measured,
each  prospective  investor should consider this as an unknown and  undetermined
risk factor.

B.  Particular Risk of this Offering.
    ---------------------------------

         1.  Operating   Losses.   As  you  will  note  from  the  attached  and
incorporated  consolidated financial statements for the Company, the Company, to
date,  has a net  operating  loss from limited  sales.  While start up companies
frequently have operating  losses,  each investor should consider the absence of
profits as a risk factor.

         2. Arbitrary  Offering Price. The Offering price of the Company's stock
has been arbitrarily  determined and does not purport to represent any intrinsic
value or net worth of the Company.

         3.  New  Products  and  Concepts.  The new  products  applications  and
services  attempted to be funded and marketed pursuant to this Offering does not
have an established market share.  Neither do such products or applications have
a proven market share.  As a consequence,  there can be no assurance or warranty
that the Company will be commercially  successful in its attempts to produce and
market the new products or services. Moreover, even if fully protected, there is
no absolute  assurance  that the Company  will be  successful  in its  marketing


                                  Page 53 of 81




efforts for the new products and services,  that a market demand will be created
for such new products or services,  or that it may not have inherent  defects or
problems  making it unsuitable for the purposes  intended.  All of these must be
considered as risk factors in any Offering  attempting to develop and market new
products and services.

         4.  Substantial  Dilution.  Investments  in this Offering will incur an
immediate and  substantial  dilution to the value of their shares.  In the event
the  Company  is  required  to raise  subsequent  capital  for its  products  or
operations,  it is probable  that shares  will be sold on terms  different  than
offered herein and investors may incur subsequent dilution, both as to the value
of their shares and voting control. See "Dilution" section.

         5. Termination of the Offering. There is a risk that the minimum number
of shares  offered  may not be  promptly  sold and  investors  would  have their
investment funds held in escrow without earnings until the Offering  Termination
Date. See "Terms of the Offering."

         6. Lack of  Adequate  Capitalization.  The funds  being  raised in this
Offering may not adequately fund the intended business purposes and products and
subsequent  funding  may not be  available.  The company  currently  has limited
assets or net worth. See Attached Financial statements.

         7. Continuing Services of Management.  While the CEO and other officers
intends to serve the  Company on a full-time  basis,  there is no  assurance  or
warranty  that the present  management  may not  retire,  resign,  or  otherwise
disengage at some future date resulting in the risk factors inherent in a change
of management to a start-up Company.
Further, the Company may need to acquire other full-time officers or employees.

         8.  Compensation  of  Management.  At present  management is being paid
substantial  compensation  from capital.  As a result, a significant  portion of
offering  proceeds  may be used to pay  salaries  before  there  are  sufficient
revenues to fully cover salaries and other compensation.

         9. Outstanding  Litigation.  The Company is presently in the process of
settling an outstanding  litigation claim with Ignite Advertising for a claim in
the amount of approximately $400,000.00. The Company has agreed to issue 376,600
shares to Ignite Advertising with registration rights. Each prospective investor
in the Company should understand that this settlement and the issuance of shares
pursuant  thereto will  constitute a dilution  factor to investors  and existing
shareholders  and may reduce the ability of the Company to raise future capital.
These  matter  and other  litigation  risks are more fully  discussed  under the
"Litigation Section."

         C.  Securities Risk Factors.
             ------------------------

         1. Limited Market.  Each  prospective  investor in this offering should
understand  that the Company has very limited  trading  markets and no assurance
can be given that the price of the stock may not be at risk or  effected  by the
completion  of this private  placement  offering,  or that the price will be the
same as currently quoted.  Further,  because the markets are very thinly traded,
any additional  shares issued by the Company may have  significant  impacts upon
those markets.

         2. Present SEC Review Standards.  The Company has been informed through
its counsel  that the SEC is  currently  critically  reviewing  various  private
placement offering types and subsequent  registration rights such as the present
offering.  In various popular  financial  literature the offering similar to the
present private offering with preferred  registration  rights based upon various
formulas  have  been  described  as  "toxic  convertible"  offerings.  While not
strictly prohibited by the SEC, each investor should clearly understand that the
SEC will most likely  critically  review any type of offering of this nature and
such review and  comments  may cause  unanticipated  and  unusual  delays in the
clearance of any subsequent  registration rights or any subsequent  offerings by
the Company. Moreover, this type of offering may be subject to a higher level of
administrative review and potential  administrative actions or investigations by
the Securities and Exchange Commission.

         3. Limited Transferability. Securities issued pursuant to this Offering
have  not  been  registered  and are  subject  to  very  strict  limitations  on
subsequent   transfers,   resales,  or  assignments.   These  matters  are  more
particularly    described   under    "Restricted    Nature   of   Securities   -
Transferability."  In short,  each individual  investor  should  understand that
there may not develop any public  markets  through  which  reliance upon federal
rules for resale of  restricted  securities  are often  founded.  Further,  each
investor must  understand  that there may be substantial  holding periods before
the  securities  can be resold,  even if a public  market is  developed.  In all


                                  Page 54 of 81




events,  transferability will be very limited and the shares should be purchased
only by those seeking long-term capital growth.

         4.  Lack of  Registration  Review.  Because  this  is not a  registered
offering,  no formal  guidelines  or  requirements  for  review are or have been
imposed by most jurisdictions allowing the claim of exemption, or by the federal
government through the Securities and Exchange Commission (SEC). By contrast, in
a registered offering, the Offering would most likely be thoroughly review by an
independent  agency,  such as the SEC, or a state securities  agency.  Moreover,
various states impose  requirements,  known as "Merit  Requirements"  on various
aspects of  offerings  pursuant to  registration  in that  jurisdiction  such as
limitations on dilutions.  Because this is a private  placement,  such review or
merit  requirements are usually not imposed.  Each  prospective  investor should
further consider, as a potential risk factor, the fact that all Company offering
terms were  determined  upon the sole  judgment of management of the Company and
were not formulated or arrived upon from any particular  disclosure  perspective
or merit review requirements.

         5. Potential Securities Actions. Management believes, though it can not
substantiate  empirically,  that  offerings  of this type may be more subject to
litigation by securities holders or government  administrative actions,  because
of the lack of  registration,  that would be the case in a registered  offering.
Should a securities action or administrative proceeding be instituted, either by
a governmental agency or an individual  investor,  proceeds of this Offering may
be expended to defend any such securities action,  whether or not the Company is
successful.  Any such  action  may,  as a  result,  substantially  reduce  funds
available  for  business  activities  of the Company  and lead to a  potentially
insolvency or bankruptcy of the Company.


                                  Page 55 of 81





                                  CAPITAL STOCK

         The Company has authorized  500,000,000 shares of common stock at a par
value of  $0.0001.  As of  December  1, 1998,  there are issued and  outstanding
(including  shares  subscribed  for),  19,360,252  shares.  The  Company  has no
preferred class of stock.


                                  Page 56 of 81





                                                    MANAGEMENT

Directors and Executive Officers

         The  following  table  contains  certain  information   concerning  the
nominees for the Board of Directors of the Company.

- ----------------------------------------------------------------------------------------------------------------- Name and Age First Became a Shares of Common Percentage of Principle Director Stock Beneficially Common Stock Occupation or Owned Outstanding Employment - ----------------------------------------------------------------------------------------------------------------- Blaine Harris, 60 1994 2,377,000 14% Chairman - ----------------------------------------------------------------------------------------------------------------- Harold P. Glick 56 1995 528,962 3% Partner in the real estate company of Moore Warfield & Glick - ----------------------------------------------------------------------------------------------------------------- Robert E. Warfield 58 1995 1,000,000 6% Partner in real estate company of Moore Warfield & Glick - ----------------------------------------------------------------------------------------------------------------- Chuck Coonradt 54 1996 11,754 .1% Chairman and CEO of the Game of Work, Inc. a management consulting firm - ----------------------------------------------------------------------------------------------------------------- Andre Peterson 46 1998 119,586 1% VP of Marketing and Chief Marketing Officer of Cogito Incorporated - ----------------------------------------------------------------------------------------------------------------- John Bartholomew 40 1998 68,729 .4% General Manager of The Kaizen Group - -----------------------------------------------------------------------------------------------------------------
Business Experience Blaine Harris. Chairman, Director. Mr. Harris is an alumnus of Idaho State University, where he majored in Business and Marketing. Mr. Harris has extensive experience in real estate with his primary focus being commercial and residential project development. From 1986 to 1991, he served as Chief Executive Officer and Chairman of the Board of Directors of Help-U-Sell, Inc. and was involved with Help-U-Sell as a partner of Conquest Management, a Utah partnership, which managed and owned a 49% interest in Help-U-Sell. During his administration, Help-U-Sell grew from 118 franchises to 650 plus franchises and was listed as the fastest growing real estate franchising organization in the country. In 1991, the Help-U-Sell, Mutual Benefit Life, was taken over by the New Jersey State Insurance Regulators and its subsidiaries were liquidated, including Help-U-Sell, Inc. In 1991, Mr. Harris formulated and began development of Chequemate International, Inc. Harold P. Glick. Director. Mr. Glick received his BS degree in accounting from the University of Maryland in 1965 and became a Certified Public Accountant the following year. Mr. Glick successfully built and managed a family owned retail business prior to joining Mr. Robert Warfield as a partner in the real estate Company of Moore, Warbled and Glico. Additionally, since 1988, Mr. Glico has been a regional owner of Help-U-Sell Real Estate in Virginia, Maryland, Washington D. C. and Delaware. Mr. Glico served as President of the Greater Ocean City, Maryland, Board of Realtors in 1988, is a member of the Advisory Board of Nations Bank and serves on the Maryland Governor's Economic Development Committee. Page 57 of 81 Robert Warfield. Director. Mr. Warfield has a BS Degree in Economics from Western Maryland College. He has an extensive background in real estate and regional sales management with the Weyerhauser Corporation. Mr. Warfield first became licensed in real estate in 1962, and in 1975 started Warfield Real Estate. He has been in the real estate and business development business in Ocean City, Maryland since 1971. For the past 18 years Mr. Warfield has been President of Moore, Warfield and Glick, Inc., with real estate sales over $100 million and rentals of $12 million. Additionally, since 1988, Mr. Warfield has been a regional owner of Help-U-Sell Real Estate in Virginia, Maryland, Washington D.C. and Delaware. Mr. Warfield currently serves on the Board of Directors of Atlantic General Hospital and Ocean City Golf and Yacht Club. He has also served as a director of Second National Service Corp., and Salisbury School. Chuck Coonradt. Director. Mr. Coonradt is Chairman of the Board and CEO of The Game of Work, a Utah-based corporation engaged in providing management and personnel training for its corporate clients in the fields of goal- setting and profit improvement. Clients of the firm include Quaker Oats, Wendy's, The Chicago Tribune, First Interstate bank, Dow Chemical and Pepsi-Cola. Andre Peterson. Director. Mr. Peterson is an alumnus of Brigham Young University, where he majored in Business Management. He is currently the Vice President of Marketing and Chief Marketing Officer for Cogito Incorporated, a software technology development company. He was the VP of Marketing and a Partner of The Kaizen Group, a marketing and development group for start-up software companies from 1996 to present. He served as the President of Enhanced Simulation Marketing from 1994 through 1996, marketing a newly patented motion simulator for the entertainment industry. He was the VP of Marketing for WordPerfect Corporation and Novell Corporation from 1983 to 1994. Mr. Peterson was responsible for all aspects of sales and marketing for WordPerfect, taking sales from one million in 1983, to over seven hundred million in 1994. Prior to working for WordPerfect, Mr. Peterson was a member of the White House Staff for four years. John V. Bartholomew. Director. Mr. Bartholomew has a BS degree in Computer Science from Brigham Young University. He has extensive experience in the application of technology in computers and complex systems. He has been involved in the management of technology sales and marketing for more than a decade with such companies as WordPerfect and Novell. He was the General Manager of The Kaizen Group, a consulting organization for technology companies with such customers as Microsoft, NetVision, PowerQuest, LogicalNet and Cogito, a Knowledge based software solutions provider. Executive Officers The following table outlines the executive officers of the Company. This table does not include those officers that serve as Directors.
- --------------------------------------------------------------------------------------------------------------------- Name Age Position Held Current Term of Office or Directorship and period of Service - --------------------------------------------------------------------------------------------------------------------- J. Michael Heil 44 CEO Current Term September 1998 to current. Service since September 1998 - --------------------------------------------------------------------------------------------------------------------- Ted Lassetter 60 President Current Term September 1998 to current. Service since September 1998 - --------------------------------------------------------------------------------------------------------------------- Steven B. Anderson 29 CFO Current Term September 1998 to current. Service since July 1995. - ---------------------------------------------------------------------------------------------------------------------
Business Experience J. Michael Heil. Mr. Heil has over 17 years in the satellite and television business. Mr. Heil was formerly president of Skylink America, Inc. and Satellite Cinema, successfully launching five digital video pay-per-view networks. Page 58 of 81 During his tenure he grew the business to $20 million in annual revenue and over 150,000 subscribers. He was the Director of Operations for Comsat Video Enterprises, and Chairman & CEO of Television Entertainment Network, Inc., a Canadian hotel pay-per-view company. Ted Lassetter. Mr. Lassetter has spent over 34 years with IBM working as Senior Engineer, product manager and vice president of data processing (DP) manufacturing IBM World Trade Corp. He successfully managed all of IBM's DP plants and technology plants outside of the U.S. He later became a private consultant for such companies as Toyota MFG., Mutual Benefit Life and Help-U-Sell, Inc. Steven B. Anderson. CFO/Secretary/Treasurer. Mr. Anderson has a Masters of Business Administration degree from the University of Utah. Mr. Anderson also received his BA Degree in Accounting from the University of Utah. Mr. Anderson has been with the Company since 1995 when he joined the Corporation as the Assistant Controller. Mr. Anderson first distinguished himself through his ability to provide projections and models that help with business decisions. Since then his role with the Company has continually increased. Mr. Anderson currently works on SEC reporting, financial statements, shareholder and investor relations among other corporate responsibilities. Executive Compensation The following table sets forth the current salary information for executive officers. - -------------------------------------------------------------------------------- Name and Principal Position Current Yearly Salary - -------------------------------------------------------------------------------- Blaine Harris, Chairman $120,000 - -------------------------------------------------------------------------------- J. Michael Heil, CEO $120,000 - -------------------------------------------------------------------------------- Ted Lassetter, President $120,000 - -------------------------------------------------------------------------------- Steven B. Anderson, CFO $ 55,000 - -------------------------------------------------------------------------------- The following chart shows the stock options granted to the current executive officers of the Company. - -------------------------------------------------------------------------------- Name and Principal Position Total Options Granted Total Options Vested - -------------------------------------------------------------------------------- Blaine Harris, Chairman 70,000 42,000 - -------------------------------------------------------------------------------- Steven B. Anderson, CFO 30,000 9,000 - -------------------------------------------------------------------------------- The following chart shows stock options granted to those other than executive officers. - -------------------------------------------------------------------------------- Name Total Options Granted - -------------------------------------------------------------------------------- Jerry Coleman 59,910 - -------------------------------------------------------------------------------- John Bartholomew 64,285 - -------------------------------------------------------------------------------- Bert Alvey 192,855 - -------------------------------------------------------------------------------- Carlos Bullos 200,000 - -------------------------------------------------------------------------------- Amber Davidson 64,285 - -------------------------------------------------------------------------------- Andre Peterson 58,571 - -------------------------------------------------------------------------------- Trilogy Design 16,667 - -------------------------------------------------------------------------------- Page 59 of 81 Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information as of September 30, 1998 with respect to each person who owns of record, or is known to the Company to beneficially own, more than 5% of the outstanding shares of voting common stock, and the beneficial ownership of such securities by each officer and director who owns any stock, and by all officers and directors as a group.
- ---------------------------------------------------------------------------------------------------------------- Name and Address of Beneficial Amount and Nature of Ownership Percent of currently issued and Owner of Voting Stock Subscribed Stock - ---------------------------------------------------------------------------------------------------------------- Blaine Harris 2,377,0002 14% 57 West 200 South Suite 350 Direct Ownership Salt Lake City, Utah 84101 - ---------------------------------------------------------------------------------------------------------------- Robert Warfield 1,000,000 6% 10481 Golf Course Road Direct Ownership Ocean City, MD 21842 - ---------------------------------------------------------------------------------------------------------------- Harold P. Glick 528,962 3% 10706 Piney Island Drive Direct Ownership Bishopville, MD 21842 - ---------------------------------------------------------------------------------------------------------------- Chuck Coonradt 11,754 .1% 3797 W. Blacksmith Road Direct Ownership Park City, Utah 84060 - ---------------------------------------------------------------------------------------------------------------- Andre Peterson 119,5862 1% 291 East 950 South Direct Ownership Orem, Utah 84058 - ---------------------------------------------------------------------------------------------------------------- John Bartholomew 68,7592 .4% 291 East 950 South Direct Ownership Orem, Utah 84058 - ---------------------------------------------------------------------------------------------------------------- Steven B. Anderson 9,0002 .1% 57 West 200 South Suite 350 Direct Ownership Salt Lake City, Utah 84101 - ---------------------------------------------------------------------------------------------------------------- CEDE & Co. 3,920,120 23% PO Box 222 Bowling Green Station New York, NY 10274 - ---------------------------------------------------------------------------------------------------------------- Navada Holdings Ltd. 1,000,000 6% C/0 Suite 1402 PDCP Bank Centre 8737 Paseo de Roxas Makati Metro Manila Philippines - ---------------------------------------------------------------------------------------------------------------- Officers and Directors as a group 4,115,061 24% - ----------------------------------------------------------------------------------------------------------------
- ---------------------- 2 Includes shares which these individuals have the right to acquire within sixty days pursuant to options granted through September 30, 1998 in the following amounts; Harris 42,000, Peterson 58,571, Bartholomew 64,285, Anderson 9,000 Page 60 of 81 SCHEDULE 2(i) List of Possible Breaches of Contracts and List of Legal Proceedings 1. BH PRODUCTIONS, INC., an Illinois Corp., d/b/a IGNITE ADVERTISING v. CHEQUEMATE INTERNATIONAL, proposed settlement of monthly payments in settlement of all claims. 2. NEWPAPER AGENCY CORP., v. CHEQUEMATE ELECTRONICS, INC. a Utah Corporation, formerly CHEQUEMATE THIRD DIMENSION, INC. Civil No. 980907238, Ralph Tate Attorney for Plaintiff. Total of $13,132.56 plus interest and legal fees. Payments of $2,569.11 on 09/29/98, $2,500.00 on 10/30/98, and $2,500 on 12/02/98 have been made against claim. 3. MARKO FOAM PRODUCTS, INC. v. CHEQUEMATE INTERNATIONAL, INC. Civil No. 980908766, Ralph Tate Attorney for Plaintiff. Total of $20,590.89 plus interest and legal fees. Payments of $3,000 on 09/29/98, $3,000 on 10/30/98, $2,990.97 on 12/02/98 have been made against claim. 4. GOLDEN PACIFIC ELECTRONICS, INC. v. CHEQUEMATE ELECTRONICS, INC.; Civil No. 980407246CV. Richard Frandsen Attorney for Plaintiff. Total of $9,070 plus interest and legal costs. Payments of $2,500 on 08/07/98, $2,500 on 09/29/98, $2,500 on 10/30/98, $1,570 on 12/02/98 have been made. 5. CENTRAL MEADOW PARK, L.P. v. Chequemate Tele-Services, Inc., Fred Boedeker, and Blaine Harris. A retainer was paid to Langley & Branch to represent Chequemate Tele-Services and Blaine in this lawsuit over a lease that was entered into in Texas. Gregory M. Weistein is the attorney handling the claim for Chequemate Tele-Services and Blaine. His phone number is (214) 953-7214. No action has been taken by plaintiff in 1998. Page 61 of 81 SCHEDULE 2(l) The Company is in the process of filing a trademark application for the use of the name "C-3D Digital," and presently is doing business as C-3D Digital, Inc. in the State of Utah. Page 62 of 81 SCHEDULE 2(q) The presently proposed settlement of the Ignite litigation contemplates the payment of cash on a monthly basis to settle all claims. Page 63 of 81 Exhibit B A Subscriber who meets any one of the following tests is an accredited investor: (a) The Subscriber is an individual who has a net worth, or joint net worth with the Subscriber's spouse, of at least $1,000,000. (b) The Subscriber is an individual who had individual income of more than $200,000 (or $300,000 jointly with the Subscriber's spouse) for the past two years, and the Subscriber has a reasonable expectation of having income of at least $200,000 (or $300,000 jointly with the Subscriber's spouse) for the current year. (c) The Subscriber is an officer or director of the Company. (d) The Subscriber is a bank as defined in Section 3(a)(2) of the Securities Act or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity. (e) The Subscriber is a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934. (f) The Subscriber is an insurance company as defined in Section 2(13) of the Securities Act. (g) The Subscriber is an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act. (h) The Subscriber is a small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958. (i) The Subscriber is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors. (j) The Subscriber is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. (k) The Subscriber is an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000. (l) The Subscriber is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the Commission under the Securities Act. (m) The Subscriber is an entity in which all of the equity owners are accredited investors (i.e., all of the equity owners meet one of the tests for an accredited investor). If an individual investor qualifies as an accredited investor, such individual may purchase the Units in the name of his individual retirement account ("IRA"). Page 64 of 81