EXHIBIT 4.8
UNITED BUSINESS SERVICES
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") dated this 31ST day of March,
2000 between CHEQUEMATE INTERNATIONAL, INC., a Utah corporation ("Buyer") doing
business as C-3D Digital, with its principal offices located at 000 Xxxxxxxxxx
Xxxx., Xxxxx 000, Xxxxxx xxx Xxx, XX 00000 ("Buyer"), and United Business
Services, Inc., a Nevada corporation, with its principal offices located at 0000
X. Xxxx Xxxxxx Xxxx Xxxx, Xxxxxxx 00000 ("Seller");
WITNESSETH:
WHEREAS, Buyer desires to purchase from Seller and Seller desires to
sell to Buyer, on the terms and subject to the conditions of this Agreement,
certain assets belonging to Seller;
THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties agree
as follows:
ARTICLE 1. TRANSFER OF ASSETS
Subject to the terms and conditions set forth in this Agreement, Seller
agrees to sell, convey, transfer, assign and deliver to Buyer, and Buyer
agrees to purchase from Seller at the Closing described in Article 3 hereof,
all of the assets of Seller relating to Video-On-Call Terminal and
Video-On-Call Credit-Card-Swipe and related services, of every character and
description, whether tangible, intangible, real, personal or mixed, and
wherever located but excluding any assets specifically excluded in the
following Sections of this Article 1, all of which are sometimes collectively
referred to in this Agreement as the "Assets," including, but without
limitation to, the following:
1.1 EQUIPMENT: All the equipment (including essential replacement parts)
and other tangible personal property of every kind and description wherever
they may be located that are owned or leased by Seller, and are utilized in
connection with Seller's operations, a current list of which is attached
hereto as Schedule 1.2 (hereinafter referred to collectively as the
"Equipment"). At the Closing, Seller shall deliver to Buyer the equipment as
set forth in Schedule 1.2, or appropriate documents transferring the
ownership of the Equipment, free of any claim or encumbrance. Good and
marketable title to all such equipment shall be transferred on delivery, free
and clear of any encumbrances.
1.2 INTANGIBLES: All software, including all versions of source code,
trade names, trademarks, service marks, copyrights, patents, patent rights,
trade secrets, technical know-how, goodwill and other intangibles including
any tort claims or insurance proceeds arising out of any damage or
destruction of any of the Assets between the date of this Agreement and the
Closing Date (as hereinafter defined).
1.3 BOOKS AND RECORDS: All papers and records in Seller's care, custody or
control relating to any or all of the above-described Assets and the operation
thereof, including, but not limited to, all blueprints, schematics custom design
boards, with all production drawings needed to make more custom boards and
specifications, personnel and labor relations records, environmental control
records, sales records, accounting and financial records, maintenance and
production records; and
1.4 OTHER ASSETS: All product rights in the equipment and all improvements
thereon. All prepaid expenses relating to any of the Assets and the operation of
Seller's business sold pursuant to this Agreement.
(a) Training in the use of the VOC software and technical support. (In
Atlanta GA facility)
(b) Provide and pay the salary for one field technician for the period of
one-year starting January 1, 2000 to travel and work on hotel repair and
installations.
(c) Provide and pay the salary for one service support technician in the
Atlanta GA facility from January 1, 2000 to April 30, 2000 to provide technical
support and to assemble VOC systems. At Buyer's option, Buyer may retain the
technician's services for an additional six (6) month period with the rate of
pay to be negotiated with the technician.
(d) Atlanta Georgia support facility costs are to be covered by seller from
January 1, 2000 to April 30, 2000; this is to include rent, utilities, and
phone. Buyer may exercise an additional six (6) month extension of the use of
this facility, at Buyer's expense, at the rate of $15,000.00 payable in six
equal monthly installments of $2,500.00.
(e) The Seller will provide the use of its Salem, Oregon warehouse facility
for a period of one year from January 1, 2000 to December 31, 2000. Buyer may
exercise an additional twelve (12) month extension of the use of this facility,
at Buyer's expense, at the rate of $18,000.00 payable in twelve equal monthly
installments of $1,500.00.
(f) Buyer will pay all expenses incurred by technicians as approved by
their supervisor.
ARTICLE 2. PURCHASE PRICE
2.1 PAYMENT OF PURCHASE PRICE: In consideration for the transfer and
assignment by Seller of the Assets, and in consideration of the representations,
warranties and covenants of the Seller set forth herein, Buyer on the conditions
set forth herein and subject to the provisions in Article 9 states that:
(a) Buyer shall pay to Seller the Purchase price of $1,000,000.00.
(b) Buyer will deliver to seller $60,000.00 on the date of signing.
(c) Payment will be made in full at the time of closing (April 14, 2000).
Payment will be by certified check or in the form of Chequemate International,
Inc. unrestricted common stock. Shares of stock shall be valued at the average
of the end of day closing price over the previous five (5) days of trading, but
in no event shall the per share price be below $6.00. The number of shares to be
issued shall be equal to the balance due at closing.
(d) If closing is not completed within sixty (60) days after signing,
closing can be extended for one hundred twenty (120) days by payment of interest
on the balance at a rate of ten percent (10%) annually with monthly payments due
on the first day of the month or the next business day following the first. The
total extensions shall not exceed one hundred and eighty (180) days after
signing.
ARTICLE 3. THE CLOSING
The closing of the purchase and sale of the Assets by Seller to Buyer (the
"Closing") shall take place at the offices of Hotel Movie Network, which are
located at 0000 X. XxXxxxx Xxxxx 0 Xxxxxxx, XX 00000 at 10:00 A.M. local time,
on April 14, 2000, or at such other place and/or time as the parties may agree
in writing (the "Closing Date"). In the event that the conditions specified in
this Agreement have not been fulfilled by such date, Buyer may extend the
Closing Date (See 2.1 d).
Buyer shall perform as part of its due diligence, such inspection of
Sellers equipment, Software and all other items as Buyer reasonably deems
necessary, and shall complete such inspections on or before the Closing Date set
forth above.
3.1 SELLER'S OBLIGATIONS AT THE CLOSING: At the Closing, Sellers shall
deliver or cause to be delivered to Buyer instruments of conveyance, assignment
and transfer of all of the Assets of Seller to be transferred hereunder, in form
and substance satisfactory to Buyer's counsel.
Simultaneously with the consummation of the transfer, Seller, through its
officers, agents, and employees, shall put Buyer into full possession and
enjoyment of all the Assets to be conveyed and transferred by this Agreement.
Seller, at any time before or after the closing Date, shall execute,
acknowledge, and deliver any further assignments, conveyances and other
assurances, documents and instruments of transfer, reasonably requested by Buyer
and shall take any other action consistent with the terms of this Agreement that
may reasonably be requested by Buyer for the purpose of assigning, transferring,
granting, conveying and confirming to Buyer, or reducing to possession, any or
all property and assets to be conveyed and transferred by this Agreement. If
requested by Buyer, Seller further agrees to prosecute or otherwise enforce in
its own name for the benefit of Buyer any claims, rights, or benefits that are
transferred to Buyer by this Agreement and that require prosecution or
enforcement in the Seller's name. Any prosecution or enforcement of claims,
rights, or benefits under this Section shall be solely at
Buyer's expense, unless Seller makes the prosecution or enforcement necessary
by Seller's breach of this Agreement.
3.2 BUYER'S OBLIGATIONS AT CLOSING: Subject to the provisions of Article 9,
at the Closing, Buyer shall deliver to Seller the following instruments and
documents against delivery of the items specified in Section 3.1:
(a) Stock Certificates issued in the name of Seller, for the balance due at
closing, of Buyers common stock. (See Section 2.1); and
(b) the certificate of the President or Secretary of the Buyer confirming
that proper minutes and resolutions of the Buyer's Board of Directors have been
secured prior to the Closing whereby the purchase of the Assets has been
approved.
(c) Purchase may be made in whole or in part in the form of cash or
certified funds.
ARTICLE 4. ASSUMPTION OF LIABILITIES
Buyer is not assuming any debt, liability or obligation of Seller, whether
known or unknown, fixed or contingent except as herein specifically otherwise
provided. Seller agrees to indemnify Buyer against, and hold Buyer harmless
from, all debts, claims, liabilities and obligations of Seller not expressly
assumed by Buyer hereunder, and to pay any and all attorneys fees and legal
costs incurred by Buyer, its successors and assigns in connection therewith.
ARTICLE 5. EXCISE AND PROPERTY TAXES
Seller shall pay all sales, use and transfer taxes arising out of the
transfer of the Assets and shall pay its portion, prorated as of the Closing
Date, of state and local personal property taxes of the business. Buyer shall
not be responsible for any business, occupation, withholding or similar tax, or
for any taxes of any kind related to any period before the Closing Date.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that the following facts and
circumstances are, and except as contemplated hereby, at all times up to the
Closing Date will be, true and correct, and hereby acknowledges that such facts
and circumstances constitute the basis upon which Buyer is induced to enter into
and perform this Agreement. Each warranty set forth in this Article 6 shall
survive the Closing and any investigation made by or on behalf of Buyer.
6.1 ORGANIZATION. GOOD STANDING AND QUALIFICATION: Seller is a corporation
duly
organized, validly existing, and in good standing under the laws of the State
of Nevada, has all necessary powers to own its properties and to carry on its
business as now owned and operated by it, and is duly qualified to transact
interstate business and is in good standing in all jurisdictions in which the
nature of its business or of its properties makes such qualification
necessary.
6.2 TAX RETURNS AND AUDITS: Within the times and in the manner prescribed
by law, Seller has filed all domestic and foreign, federal, state and local tax
returns required by law and has paid all taxes, assessments and penalties due
and payable. There are no present disputes as to taxes of any nature payable by
Seller.
6.3 INVENTORIES: None of the Assets has been pledged as collateral or is
held by the Seller on consignment from others.
6.4 OTHER TANGIBLE PERSONAL PROPERTY: The Equipment described in Section
1.2 and SCHEDULE 1.2 of this Agreement constitutes all the items of tangible
personal property owned by, in the possession of, or used by Seller in
connection with the business sold pursuant to this Agreement. The Equipment
listed in SCHEDULE 1.2 constitutes all tangible personal property necessary for
the conduct by Seller of the business as now conducted.
The equipment inventory listed in SCHEDULE 1.2 is new equipment, or is
used equipment in good condition and repair; and is sufficient in kind and
quality for the installation of fully operational pay-per-view services.
6.5 TITLE TO ASSETS: Seller has good and marketable title to all of the
Assets and interests in Assets, whether personal, tangible, and intangible,
which constitute all the Assets and interests in assets that are used in the
business of Seller to be sold pursuant to this Agreement. All the Assets are
free and clear of mortgages, liens, pledges, charges, encumbrances, equities,
claims, easements, rights of way, covenants, conditions, or restrictions, EXCEPT
(i) the lien of current taxes not yet due and payable; and (ii) possible minor
matters that, in the aggregate, are not substantial in amount and do not
materially detract from or interfere with the present or intended use of any of
the Assets, nor materially impair business operations. All tangible personal
property of Seller is in good operating condition and repair, ordinary wear and
tear excepted. Except as set forth on the appropriate SCHEDULE listing such
Assets, neither any officer, nor any director or employee of Seller, nor any
spouse, child or other relative of any of these persons, owns, or has any
interest, directly or indirectly, in any of the personal property owned by or
leased to Seller or any copyrights, patents, trademarks, trade names or trade
secrets licensed by Seller for use in the business to be sold pursuant to this
Agreement. Seller does not occupy any real property in violation of any law,
regulation or decree.
6.6 CUSTOMERS AND SALES: SCHEDULE 1.1 to this Agreement is a correct and
current list of all customers of Seller for the business to be sold pursuant to
this Agreement. Seller has no
information and is not aware of any facts indicating that any of these
customers intend to cease doing business with Seller or materially alter the
amount of the business that they are presently doing with Seller.
6.7 OTHER CONTRACTS: The Assets are not bound by any distributor's or
manufacturer's representative or agency agreement, any agreement not entered
into in the ordinary course of business, any indenture, mortgage, deed of trust,
lease or any agreement that is unusual in nature, duration or amount. Seller is
not a party to, nor is Seller or the Assets bound by, any agreement that is
materially adverse to the business, property, or financial condition of Seller.
6.8 COMPLIANCE WITH LAWS: Seller has complied with, and is not in violation
of, applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable environmental, health, building,
zoning or other law, ordinance or regulation) affecting the Assets or the
operation of its business to be sold pursuant to this Agreement.
6.9 LITIGATION: There is no suit, action, arbitration or legal,
administrative or other proceeding, or governmental investigation pending, or to
the best knowledge of Seller, threatened, against or affecting Seller, or any of
its business, assets or financial condition. Seller is not in default with
respect to any order, writ, injunction or decree of any federal, state, local or
foreign court, department, agency or instrumentality. Seller is not presently
engaged in any legal action to recover moneys due to it or damages sustained by
it.
6.10 ASSETS SUFFICIENT FOR CONDUCT OF BUSINESS: The Assets constitute all
of the assets required for Buyer to conduct the business of Seller as it is
presently conducted.
6.11 AGREEMENT WILL NOT CAUSE BREACH OR VIOLATION: Neither the entry into
this Agreement nor the consummation of the transactions contemplated hereby will
result in or constitute any of the following: (i) a breach of any term or
provision of this Agreement; (ii) a default or an event that, with notice or
lapse of time, or both, would be a default, breach or violation of the Articles
of Incorporation or Bylaws of Seller or any lease, license, promissory note,
conditional sales contract, commitment, indenture, mortgage, deed of trust or
other agreement, instrument or arrangement to which Seller is a party or by
which Seller or the Assets are bound; (iii) an event that would permit any party
to terminate any agreement or to accelerate the maturity of any indebtedness or
other obligation of Seller; (iv) the creation or imposition of any lien, charge
or encumbrance on any of the Assets; or (v) the violation of any law,
regulation, ordinance, judgment, order or decree applicable to or affecting
Seller or the Assets.
6.12 AUTHORITY AND CONSENTS: Seller has the right, power, legal capacity
and authority to enter into, and perform its obligations under this Agreement,
and no approvals or consents of any persons or entity other than Seller are
necessary in connection with it. The execution and delivery of this Agreement by
Seller have been duly authorized by all necessary corporate action
of Seller (including any necessary action by Seller's security holders), and
this Agreement constitutes a legal, valid and binding obligation of Seller
enforceable in accordance with its terms.
6.13 DOCUMENTS DELIVERED: Each copy or original of any agreement, contract
or other instrument which is identified in any exhibit delivered by Seller or
their counsel to Buyer (or its counsel or representatives), whether before or
after the execution hereof, is in fact what it is purported to be by the Seller
and has not been amended, canceled or otherwise modified.
6.14 FULL DISCLOSURE: None of the representations and warranties made by
Seller or made in any letter, certificate or memorandum furnished or to be
furnished by Seller, or on their behalf, contains or will contain any untrue
statement of a material fact, or omits any material fact the omission of which
would make the statements made misleading. There is no fact known to Seller
which materially adversely affects, or in the future may (so far as Seller can
now reasonably foresee) materially adversely affect the condition, Assets,
liabilities, business operations or prospects of Seller that has not been set
forth herein or heretofore communicated to Buyer in writing pursuant hereto.
6.15 BULK SALES PROVISIONS: The parties shall cooperate in making such
filings and publishing such notices as may be necessary under the bulk sales
laws of Oregon and Georgia.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Seller as follows:
7.1 ORGANIZATION AND QUALIFICATION: Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah. All
subsidiaries of Buyer are legal entities that are duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of incorporation. Buyer has all requisite power and authority to own or operate
its properties and conduct its business as it is now being conducted. Buyer is
duly qualified and in good standing as a foreign corporation or entity
authorized to do business in each of the jurisdictions in which the character of
the properties owned or held under lease by it or the nature of the business
transacted by it makes such qualification necessary.
7.2 AUTHORITY RELATIVE TO THIS AGREEMENT: Buyer has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of Buyer, and no other corporate
proceedings on the part of Buyer are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by Buyer and, assuming this Agreement constitutes
a valid and binding obligation of the Seller, this Agreement
constitutes a valid and binding agreement of Buyer, enforceable against Buyer
in accordance with its terms.
7.3 SEC REPORTS: Since January 1, 1998, to the best of its knowledge Buyer
has filed all required forms, reports and documents ("Buyer SEC Reports") with
the Securities and Exchange Commission (the "SEC") required to be filed by it
pursuant to the federal securities laws and the SEC rules and regulations
thereunder, all of which have complied in all material respects with all
applicable requirements of the Securities Act of 1933 (the "Securities Act") and
the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and
interpretive releases promulgated thereunder. None of such Buyer SEC Reports,
including without limitation any financial statements, notes, or schedules
included therein, at the time filed, contained any untrue statement of a
material fact, or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Each of the consolidated balance sheets in or incorporated by reference
into the Buyer SEC Reports fairly presents or will fairly present the financial
position of the entity or entities to which it relates as of its date, and each
of the related consolidated statements of operations and retained earnings and
cash flows or equivalent statements in the Buyer SEC Reports (including any
related notes and schedules) fairly presents or will fairly present the results
of operations, retained earnings and cash flows, as the case may be, of the
entity or entities to which it relates for the period set forth therein (subject
in the case of unaudited interim statements, to normal yearend audit
adjustments) in each case in accordance with generally-accepted accounting
principles applicable to the particular entity consistently applied throughout
the periods involved, except as may be noted therein; and independent certified
public accountants for Buyer have rendered or will render an unqualified opinion
with respect to each audited financial statement included in the Buyer SEC
Reports. The consolidated financial statements included in the Buyer SEC Reports
are hereinafter sometimes collectively referred to as the "Buyer Financial
Statements."
7.4 CONSENTS AND APPROVALS: NO VIOLATION: Neither the execution and
delivery of this Agreement by Buyer nor the consummation of the transactions
contemplated hereby nor compliance by Buyer with any of the provisions hereof
will conflict with or result in any breach of any provision of the Articles of
Incorporation or by-laws of Buyer or any Subsidiary, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority, except pursuant to the Securities Act and the Exchange
Act, such filings and approvals as may be required under the "blue sky",
takeover or securities laws of various states, or result in a default (with or
without due notice or lapse of time or both) (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, contract, license, agreement
or other instrument or obligation to which Buyer is a party or by which Buyer,
any of its Subsidiaries or
any of their respective assets may be bound, result in the creation or
imposition of any lien, charge or other encumbrance on the assets of Buyer or
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Buyer or any of its respective assets.
7.5 LITIGATION ETC.: Except as disclosed in the Buyer SEC Reports and in
SCHEDULE 7.5, there is no action, claim, or proceeding pending or, to the
knowledge of Buyer, threatened, to which Buyer is or would be a party before any
court or Governmental Authority acting in an adjudicative capacity or any
arbitrator or arbitration tribunal with respect to which there is a reasonable
likelihood of a determination having, or which, insofar as reasonably can be
foreseen in the future would have, a material adverse effect on Buyer and since
December 31, 1997, there have been no claims made or actions or proceedings
brought against any officer or director of Buyer arising out of or pertaining to
any action or omission within the scope of his employment or position with
Buyer, which claim, action or proceeding would involve a material adverse effect
on Buyer taken as a whole. All material litigation and other material
administrative, judicial or quasi-judicial proceedings to which Buyer is a party
or to which it has been threatened to be made a party are described in the Buyer
SEC Reports and in SCHEDULE 7.5.
7.6 COMPLIANCE WITH LAW AND PERMITS: Buyer has owned and operated its
properties and assets in substantial compliance with the provisions and
requirements of all laws, orders, regulations, rules and ordinances issued or
promulgated by all Governmental Authorities having jurisdiction with respect
thereto. All necessary governmental certificates, consents, permits, licenses or
other authorizations with regard to the ownership or operation by Buyer of its
properties and assets have been obtained and no violation exists in respect of
such licenses, permits or authorizations. None of the documents and materials
filed with or furnished to any Governmental Authority with respect to the
properties, assets or businesses of Buyer contains any untrue statement of a
material fact or fails to state a material fact necessary to make the statements
therein not misleading.
7.7 BUYER COMMON STOCK: The shares to be issued by Buyer pursuant to this
Agreement have been duly authorized and, when issued in accordance with the
terms of the this Agreement, will be validly authorized and issued and fully
paid and nonassessable, and no shareholder of Buyer will have any preemptive
rights or dissenter's rights with respect thereto.
ARTICLE 8. SELLER'S OBLIGATIONS BEFORE CLOSING.
Seller covenants that, except as otherwise agreed in writing by Buyer, from
the date of this Agreement until the Closing:
8.1 BUYER'S ACCESS TO PREMISES AND INFORMATION: Buyer and its counsel,
accountants and other representatives shall be entitled to have full access
during normal business hours to all Seller's properties, books, accounts,
records, agreements and documents of or relating to the Assets. Seller shall
furnish or cause to be furnished to Buyer and its representatives all data and
information concerning the business, finances and properties of Seller that
may reasonably be requested.
8.2 CONDUCT OF BUSINESS IN NORMAL COURSE: Seller shall carry on its
business and activities diligently and in substantially the same manner as it
previously has been carried on, and shall not make or institute any unusual or
novel methods of purchase, sale, lease, management, accounting or operation that
will vary materially from the methods used by Seller as of the date of this
Agreement.
8.3 PRESERVATION OF BUSINESS RELATIONSHIPS: Seller shall use its best
efforts, without making any commitments on behalf of Buyer, to preserve its
business organization intact, to keep available to Seller its present employees,
and to preserve its present relationships with suppliers, customers and others
having business relationships with it.
8.4 MAINTENANCE OF INSURANCE: Seller shall continue to carry its existing
insurance, subject to variations in amounts required by the ordinary operations
of its business. At the request of Buyer and at Buyer's sole expense, the amount
of insurance against fire and other casualties which, at the date of this
Agreement, Seller carries on any of the Assets or in respect of its operations
shall be increased by such amount or amounts as Buyer shall specify. Seller
shall cause Buyer to be named as an additional insured on each existing
insurance policy carried by Seller. In all events, the risk of loss remains upon
Seller prior to Closing, and becomes Buyer's risk only after Closing.
8.5 NEW TRANSACTIONS: Seller shall not do, or agree to do without the prior
written consent of the Buyer, any of the following acts:
(a) enter into any contract, commitment or transaction not in the usual and
ordinary course of its business; or
(b) enter into any contract, commitment or transaction in the usual and
ordinary course of business involving an amount exceeding $1,000.00
individually, or $10,000.00 in the aggregate; or
(c) make any capital expenditures in excess of $5,000.00 for any single
item or $10,000.00 in the aggregate, or enter into any leases of capital
equipment or property under which the annual lease charge is in excess of
$5,000.00; or
(d) sell or dispose of any capital assets with a net book value in excess
of $1,000.00 individually, or $10,000.00 in the aggregate.
8.7 EXISTING AGREEMENTS: Seller shall not modify, amend, cancel or
terminate any of
its existing contracts or agreements, or agree to do any of those acts,
without the prior written consent of Buyer.
8.8 CONSENT OF OTHERS: As soon as reasonably practical after the execution
and delivery of this Agreement, and in any event on or before the Closing Date,
Seller shall obtain the written consent of the persons described in SCHEDULE 8.8
to this Agreement and will furnish to Buyer executed copies of these consents.
8.9 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING: Seller shall use its
best efforts to assure that all representations and warranties of Seller set
forth in this Agreement and in any written statements delivered to Buyer by
Seller under this Agreement will also be true and correct as of the Closing Date
as if made on that date and that all conditions precedent to Closing shall have
been met.
8.10 SALES AND USE TAX ON PRIOR SALES: Seller agrees to furnish to Buyer a
clearance certificate from the appropriate agencies and any related certificates
that Buyer may reasonably request as evidence that all sales and use and other
tax liabilities of Seller (other than income tax liabilities) accruing before
the Closing Date have been fully satisfied or provided for.
8.11 STATUTORY FILINGS: Seller shall cooperate fully with Buyer in
preparing and filing all information and documents deemed necessary or desirable
by Buyer under any statutes or governmental rules or regulations pertaining to
the transactions contemplated by this Agreement.
ARTICLE 9. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligations of Buyer to purchase the Assets under this Agreement are
subject to the satisfaction, at or before the Closing, of all the conditions set
out below in this Article 9. Buyer may waive any or all of these conditions in
accordance with Section 15.2 hereof, provided however, that no such waiver of a
condition shall constitute a waiver by Buyer of any of its other rights or
remedies, at law or in equity, if Seller shall be in default of any of its
representations, warranties or covenants under this Agreement.
9.1 ACCURACY OF SELLERS REPRESENTATIONS AND WARRANTIES: All representations
and warranties by Seller in this Agreement or in any written statement that
shall be delivered to Buyer by Seller under this Agreement shall be true on and
as of the Closing Date as though made at that time.
9.2 ABSENCE OF LIENS: At or prior to the Closing, Buyer shall have received
UCC search reports dated as of a date not more than five days before the Closing
Date issued by the Secretaries of each State where assets are located,
indicating that there are no filings under the Uniform Commercial Code on file
with such Secretary of State which name Seller or any other name used by the
Seller as debtor, other than the liens otherwise disclosed in the Schedules
hereto.
9.3 SELLER PERFORMANCE: Seller shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by Seller on or before the Closing
Date.
9.4 CERTIFICATION BY SELLER: Buyer shall have received a certificate, dated
the Closing Date, signed and verified by Seller's president or vice president
and its treasurer or assistant treasurer, certifying, in such detail as Buyer
and its counsel may reasonably request, that the conditions specified in
Sections 9.1 and 9.3 have been fulfilled.
9.5 ABSENCE OF LITIGATION: No action, suit or proceeding before any court
or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
9.6 CORPORATE APPROVAL: The execution and delivery of this Agreement by
Seller, and the performance of its covenants and obligations under it, shall
have been duly authorized by all necessary corporate action, and Buyer shall
have received copies of all resolutions pertaining to that authorization,
certified by the secretary of Seller.
9.7 CORPORATION TAX CLEARANCE: Buyer shall have received a Certificate of
Good Standing for Seller as of a date not more than 3 days before the Closing
Date and a Letter of Account Status for Seller as of a date not more than 3 days
before the Closing Date certifying that all sales taxes or other taxes of the
Seller have been paid. Such documents are to be issued by the states where
business has been done.
9.8 CERTIFICATE REGARDING EMPLOYMENT TAX OBLIGATIONS: Buyer shall have
received a Certificate of the President and Secretary of the Seller stating
that, as of the Closing Date, no contributions, interest, or penalties are
unpaid by Seller with regard to any payroll taxes, or unemployment or workers'
compensation contributions for periods prior to most recent filing deadlines.
9.9 CONSENTS: All necessary agreements and consents of any parties to the
consummation of the transaction contemplated by this Agreement, or otherwise
pertaining to the matters covered by it, shall have been obtained by Seller and
delivered to Buyer.
9.10 APPROVAL OF DOCUMENTATION: The form and substance of all certificates,
instruments and other documents delivered to Buyer under this Agreement shall be
satisfactory in all reasonable respects to Buyer and its counsel.
9.11 CONDITION OF ASSETS: The Assets shall not have been materially or
adversely
affected in any way as a result of any fire, accident, storm, or other
casualty or labor or civil disturbance or act of God or the public enemy.
9.12 VALUATION OF ASSETS: Buyer shall have accepted the valuation of the
Assets, as set forth on the schedules attached hereto (as adjusted as of the
Closing Date).
9.13 COMPLETION OF DUE DILIGENCE: All due diligence reasonably required by
the Buyer has been completed, and the results of such due diligence are
satisfactory to the Buyer in its sole discretion and judgment with regard to all
aspects of the transaction, including but not limited to matters relating to the
Assets.
9.14 COMPLIANCE WITH BULK SALES LAWS: The parties have complied with all
applicable Bulk Sales Laws or similar provisions.
ARTICLE 10. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligations of Seller to sell and transfer the Assets under this
Agreement are subject to the satisfaction, at or before the Closing, of all the
following conditions:
10.1 ACCURACY OF BUYER'S REPRESENTATIONS AND WARRANTIES: All
representations and warranties by Buyer contained in this Agreement or in any
written statement delivered by Buyer under this Agreement shall be true on and
as of the Closing as though such representations and warranties were made on and
as of that date.
10.2 BUYER'S PERFORMANCE: Buyer shall have performed and complied with all
covenants and agreements, and satisfied all conditions that it is required by
this Agreement to perform, comply with, or satisfy, before or at the Closing.
10.3 BUYER'S CORPORATE APPROVAL: Buyer shall have received corporate
authorization and approval for the execution and delivery of this Agreement and
all corporate action necessary or proper to fulfill the obligations of Buyer to
be performed under this Agreement on or before the Closing Date.
ARTICLE 11. EMPLOYEE PLANS
Seller represents that the Seller has no Employee Plan in effect or to
which the Seller is subject. For purposes of this Agreement, the term "Employee
Plan" includes all pension, retirement, disability, medical, dental or other
health insurance plans, life insurance or other death benefit plans, profit
sharing, deferred compensation, stock option, bonus or other incentive plans,
vacation benefit plans, severance plans, or other employee benefit plans or
arrangements
including, without limitation, any pension plan as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974 ("ERISA") and any welfare
plan as defined in Section 3(1) of ERISA, whether or not funded, covering any
employee or to which Seller is a party or bound or makes or has made any
contribution or by which Seller may have any liability to any employee
(including any such plan formerly maintained by or in connection with which
Seller may have any liability to any employee, and any such plan which is a
multi employer plan as defined in Section 3(37) (A) of ERISA.
ARTICLE 12. SELLER'S OBLIGATIONS AFTER THE CLOSING
12.1 PRESERVATION OF GOODWILL: Following the Closing, Seller will restrict
its activities so that Buyer's reasonable expectations with respect to the
goodwill, business reputation, employee relations and prospects connected with
the Assets will not be materially impaired. Additionally, Seller will not
disclose to any person or use for its own benefit any price lists, pricing data,
customer lists, or similar matters possessed by it relating to the Assets or the
business transferred to Buyer unless it first clearly demonstrates to Buyer that
such matters are, at the time of the proposed disclosure or use, of common
knowledge within the trade.
12.2 SELLER INDEMNITIES: Seller shall indemnify, defend and hold harmless
Buyer and its officers, directors, and agents against and in respect of any and
all claims, demands, losses, costs, expenses, obligations, liabilities, damages,
recoveries and deficiencies, including interest, penalties and reasonable
attorneys fees, that Buyer, or its officers, directors, or agents shall incur or
suffer, which arise, result from or relate to any breach of, or failure by
Seller to perform, any of its representations, warranties, covenants or
agreements in this Agreement or in any schedule, certificate, exhibit or other
instrument furnished or to be furnished by Seller under this Agreement.
Notwithstanding any other provision of this Agreement, Seller shall not be
liable to Buyer, or its officers, directors, or agents on any warranty,
representation or covenant made by Seller in this Agreement, regarding any
single claim, loss, expense, obligation or other liability that does not exceed
$10,000; provided, however, that when the aggregate amount of all such claims,
losses, expenses, obligations and liabilities not exceeding $10,000 each reaches
$10,000, Seller shall thereafter be liable in full for all such breaches and
indemnities, and regarding all those claims, losses, expenses, obligations, and
liabilities.
12.3 ACCESS TO RECORDS: From and after the Closing, Seller shall allow
Buyer, and its counsel, accountants and other representatives, such access to
records which after the Closing are in the custody or control of Seller as Buyer
reasonably requires in order to comply with its obligations under the law or
under contracts assumed by Buyer pursuant to this Agreement.
ARTICLE 13. COSTS
Each of the parties shall pay all costs and expenses incurred or to be
incurred by it in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.
ARTICLE 14. SECURITIES ASPECTS OF AGREEMENT
14.1 All parties to this Agreement mutually understand, agree and covenant
that any referenced sale or other disposition of any security under this
Agreement shall be controlled and governed by this section. Specifically should
there arise any conflict of application or interpretation under this section and
any other provision or section of this Agreement; this section shall be given
primary definition and control. The term "securities" for the purposes of this
Agreement shall mean and include all shares of Chequemate, and any warrants to
acquire those shares as well as any other instrument or obligation customary or
commonly described as a security. Each of the following terms and conditions of
the issuance and distribution of the securities shall be fully applicable unless
otherwise specifically waived or treated in the following paragraphs.
14.2 Each security issued pursuant to the terms of this Agreement shall be
a "restricted" security unless otherwise specifically referenced as being issued
pursuant to a registration or offering.
14.3 Seller understands and agrees that a restricted security for the
purposes of this Agreement is one, which is issued without meeting registration
requirements under both federal and state law within the United States. Each
party to this Agreement further agrees and acknowledges that the nature of
restricted security is that it is not freely tradable. That is, the holder of
such security cannot immediately market or further distribute such security in
the open market, or through private transactions without the express written
consent of the issuer, primarily Chequemate under the terms of this Agreement.
14.4 Seller fully acknowledges and understands that the resale of a
restricted security will normally require substantial holding periods unless
subsequently subject to an intervening registration under applicable federal and
state securities laws. Seller acquiring restricted stock under this Agreement
further acknowledges and agrees that the principal, though not exclusive, means
by which restricted securities are resold under United States law and conforming
state laws and regulations is Securities and Exchange Commission ("SEC") Rule
144, which essentially requires a holding period of one year before the stock
can be resold or any interest therein further sold or assigned. In general
terms, Rule 144 would require that there be current public information about the
Company before the provisions of the Rule could be relied upon for subsequent
resale, that the aforementioned holding period had been met, that the sales
occurred through independent arms-length and unsolicited brokerage transactions,
that certain volume limitations on the number of shares sold in each three month
period be observed, and that a
report of sales will be filed with the SEC. Seller understands that the
foregoing constitutes only a general description of Rule 144 and that such
person is or has the means to become familiar with all of the specific
provisions and terms of Rule 144 through his independent legal advisors.
Seller further acknowledges and agrees that while Rule 144 is not exclusive,
that it is anticipated and intended that it would be the primary means by
which securities acquired under this Agreement could be resold absent the
specific registration provisions of this Agreement.
14.5 Any entity acquiring securities pursuant to this Agreement with the
intent to divide such securities among its principal shareholders as part of the
acquisition process, will be responsible for obtaining the knowledgeable consent
and agreement of such actual shareholder to the terms of this Agreement,
specifically referencing this paragraph.
14.6 Seller fully understands and agrees that should such person be
deemed to be in a "control" position as to Chequemate incident to the
completion of this Agreement, that such person must comply with the volume
limitations of Rule 144 to complete sales of his or her securities acquired,
except for securities which have been otherwise registered pursuant to this
Agreement. A control person has been defined by the SEC, and by most state
securities regulatory agencies, as a person who has the capacity to exercise
control over the issuing company. While no precise mathematical formulation
of a control person is applicable to all situations, the following are
generally presumed to be control people:
(i) a person holding 10% or more of the shares of the issuing company;
(ii) any principal officer or any director of the issuing company.
14.7 Seller represents that it is acquiring the Shares for its own account,
for investment and not with a view to the distribution or resale thereof. The
Seller further represents that its financial and other circumstances are such
that it has adequate means of providing for its current and anticipated future
needs without having to sell or otherwise dispose of the Shares, and that the
Seller is able to bear the economic risks of this investment and consequently is
able to hold the Shares for an indefinite period of time and to sustain the loss
of its entire investment in the Shares, in the event such a loss should occur.
14.8 Seller acknowledges and represents that, due to its knowledge and
experience in financial and business matters, its investment experience
generally and its experience with investments similar to the Shares in
particular, Seller, either alone or together with its advisors, if any, is able
to understand and merits of, and the risks involved in, its proposed investment
in the Shares. Seller, either alone or together with its advisors, if any, has
the capacity to protect its own interests in connection with this transaction.
14.9 Seller acknowledges that Buyer has furnished or made available to
Seller all
financial and other data relating to Buyer, required by Seller to enable it
to make an informed decision concerning its approval of this transaction and
its resulting acquisition of the Shares. In particular, Seller acknowledges
that it has received and reviewed the financial statements of Buyer for the
past two years and complete copies of all of the Buyer's SEC Reports for such
period. Seller acknowledges that it has been informed that Buyer has not
previously conducted business except as disclosed in the Buyer's SEC Reports.
Seller represents and acknowledges that it and its principals have been
engaged in the business of providing pay-per-view and cable services in the
hotel/lodging industry, which is intended area of business for which the
Assets are being acquired by the Buyer. In this regard, Seller has been
acquainted with the Chief Executive Officer of Buyer. Seller further
represents and acknowledges that it has had full opportunity to obtain
additional information from Buyer to verify the accuracy of the information
supplied by it and to evaluate the merits of its investment decision,
including, without limitation, full opportunity to ask questions of and
receive satisfactory answers and other information from Buyer, its officers,
directors and other persons acting on its behalf, and all such questions have
been answered, and such other information supplied, to Seller's full
satisfaction. Seller is aware of, and has thoroughly evaluated, to its own
satisfaction, the high degree of risk associated with investing in Buyer,
including but not limited to, the specific risks associated with Buyer's
business and the risks associated with the ownership of common stock.
14.10 Seller hereby represents and warrants to Buyer that Seller is an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D.
Seller further represents and warrants that it is a corporation, and that each
of the equity owners of Seller are "accredited investors" by reason of the fact
that each of the equity owners meets one or both of the following criteria:
(i) The owner is a natural person whose individual net worth, or joint net
worth with owner's spouse, at the time of this agreement, exceeds $1,000,000; or
(ii) The owner is a natural person who had an individual income in excess
of $200,000 in each of the two most recent years, or joint income with owner's
spouse in excess of $300,000 in each of those years, and has a reasonable
expectation of reaching the same income level in the current year.
14.11 Seller hereby agrees (of behalf of itself and subsequent transferees
of the Securities) that the Securities shall not be sold, transferred, pledged
or hypothecated unless, in the opinion of counsel satisfactory to Buyer, such
registration is not required, and that each certificate evidencing any of the
Securities shall bear a legend in substantially the following form:
"The securities represented by this certificate have not been
registered under the
United States Securities Act of 1933 or under the securities
laws of any state, and such securities may not be sold or
offered for sale, transferred, pledged or hypothecated unless
in the opinion of counsel satisfactory to the Company such
registration is not required."
In addition, Seller hereby agrees that, if Buyer maintains its own share
records, a notation consistent with such legend may be made in such share
transfer records restricting any such sale, transfer, pledge or hypothecation or
such other notation appropriate to ensure compliance with federal and state
securities laws, or, if such share transfer records are maintained by a
registrar, Buyer may issue to such registrar stop transfer instructions or other
instructions appropriate to ensure compliance with federal and state securities
laws. The foregoing restrictions and related legend provisions shall remain in
effect until, in the opinion of counsel satisfactory to Buyer, they are no
longer required.
Seller further agrees that it will defer the receipt of the Securities
until such time as the Additional Listing Application related to the Securities
is approved by AMEX. Buyer agrees to promptly file the Additional Listing
Application and pursue its approval with reasonable diligence.
14.12 Registration Rights (piggyback clause).
If the Company proposes to register any of its stock or other securities
under the Securities Act of 1933 (the "Act") in connection with the public
offering of such securities solely for cash (other than a registration relating
solely to the sale of securities to participants in a Company stock plan, or a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Shares) the Company shall, subject to the provisions of
this paragraph, use its reasonable efforts to cause to be registered under the
Act all of the Shares that Seller has acquired under this Agreement. In
connection with any registrations in which the Shares have the right to be
included pursuant to this paragraph, and which involve an underwriting of
securities being issued by the Company, the Company shall not be required to
include any of the Shares in such underwriting unless Seller accepts the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the opinion of
the underwriters, jeopardize the success of the offering by the Company. It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to this paragraph that Seller shall furnish to the Company such
information regarding Seller, the Shares held by Seller, and the intended method
of disposition of such Shares as shall be required to effect the registration of
its Shares.
ARTICLE 15. FORM OF AGREEMENT
15.1 HEADINGS: The subject headings of the Articles and Sections of this
Agreement are included for purposes of convenience only, and shall not affect
the construction or interpretation of any of its provisions.
15.2 ENTIRE AGREEMENT, MODIFICATION: WAIVER: This Agreement constitutes the
entire agreement between the parties pertaining to the subject matter contained
in it and supersedes all prior and contemporaneous agreements, representations,
and understandings of the parties. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by all the parties.
No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
15.3 COUNTERPARTS: This Agreement may be executed simultaneously in one or
more counterparts, each of, which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
ARTICLE 16. PARTIES
16.1 PARTIES IN INTEREST: Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provisions give any third persons any right of
subrogation or action over against any party to this Agreement.
16.2 ASSIGNMENT: This Agreement shall be binding on and shall inure to the
benefit of the parties to it and their respective heirs, legal representatives,
successors and assigns. This Agreement shall not be assignable without the
written consent of the Seller, which consent shall not be unreasonably withheld
or delayed.
ARTICLE 17. REMEDIES
17.1 RECOVERY OF LITIGATION COSTS: If any legal action or any arbitration
or other proceeding so brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
any of the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it or they may be entitled.
17.2 CONDITIONS PERMITTING TERMINATION: Subject to the provisions of
Article 2 relating to the postponement of the Closing Date, either party may on
or prior to the Closing Date terminate this Agreement by written notice to the
other, without liability to the other, if any bona fide action or proceeding
shall be pending against either party on the Closing Date that could result in
an unfavorable judgment, decree or order that would prevent or make unlawful the
carrying out of this Agreement.
17.3 DEFAULTS PERMITTING TERMINATION: If either Buyer or Seller materially
defaults in the due and timely performance of any of its warranties, covenants,
or agreements under this Agreement, the non-defaulting party or parties may on
the Closing Date give notice of termination of this Agreement, in the manner
provided in Article 19. The notice shall specify with particularity the default
or defaults on which the notice is based. The termination shall be effective
five days after the Closing Date, unless the specified default or defaults have
been cured on or before this effective date for termination.
ARTICLE 18. SURVIVAL OF REPRESENTIONS AND WARRANTIES
All representations, warranties, covenants and agreements of the parties
contained in this Agreement, or in any instrument, certificate, opinion or other
writing provided for in it, shall survive the Closing.
ARTICLE 19. NOTICES
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom notice is to be given,
or on the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
Seller:
X.X. XxXxxxxxx
United Business Services, Inc.
0000 X. Xxxx Xxxxxx Xxxx #0-000
Xxxx, XX 00000
Buyer:
C-3D Digital c/o Xxxx Xxxxxx
000 Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx xxx Xxx, XX 00000
with copy to:
Xxxx X.X. XxXxxxx
Hotel Movie Network
000 X. XxXxxxx Xxxxx 0
Xxxxxxx, XX 00000
Any party may change its address for purposes of this Article by giving the
other parties written notice of the new address in the manner set forth above.
ARTICLE 20. GOVERNING LAW
This Agreement shall be construed in accordance with, and governed by,
the laws of the State of Arizona.
ARTICLE 21. FURTHER ASSURANCES
The parties agree to execute any and all further documents reasonably
necessary to give full effect to the intentions of the parties as set forth
herein.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
as of the day and year first above written.
BUYER
CHEQUEMATE INTERNATIONAL, INC.,
a Utah corporation
By /s/ J. Xxxxxxx Xxxx
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Its: CEO
SELLER
UNITED BUSINESS SERVICES, INC.
a Nevada corporation
By /s/ XX XxXxxxxxx
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Its: President