SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: May 16, 1997
CHEQUEMATE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Utah 76-0279816
(State or other jurisdiction (I.R.S. Employer
or incorporation) Identification No.)
33-38511-FW
(Commission File Number)
57 West 200 South, Suite 350
Salt Lake City, UT 84101
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (801) 322-1111
ITEM 5. Other Events.
On May 16, 1997 the registrant executed an agreement (the "ATG
Agreement") to acquire the exclusive, worldwide and perpetual license to
certain proprietary three dimensional video technology which has been
developed under the name of Realeyes 3D Video (the "Realeyes
Intellectual Property"). A copy of the ATG Agreement, excluding
confidential or proprietary definitions and schedules, is attached as an
Exhibit to this report. The Realeyes Intellectual Property is owned and
licensed by Applied Technology Group, LC, a Utah limited liability
company (hereafter "ATG"). The negotiation of the ATG transaction was
approved by the Board of Directors of the registrant on March 7, 1997.
Chequemate has formed a new wholly-owned subsidiary called
Chequemate Third Dimension, Inc., which will manufacture and market
the Realeyes product that incorporates the Realeyes Intellectual Property.
The principal place of business of the new Chequemate subsidiary is at 57
West 200 South, Suite 350, Salt Lake City, Utah 84101. Its telephone
number at this location is: (801) 322-1111.
The revolutionary Realeyes product consists of a small VCR-size
unit which digitizes a TV signal and converts it to 3-D. It can be used
with any television in combination with signals from satellite receivers,
cable feed, VCRs, laser disc players or video games. The Chequemate 3-D
system can convert any TV signal to 3-D in either the NTSC format
used in the United States, or the PAL format used abroad.
A definitive license agreement setting forth the terms and
conditions of the license is to be entered into by the June 16, 1997
closing date of the ATG transaction. The principle terms of the license
agreement and of the other agreements of this transaction are included in
the May 16th agreement. The parties have agreed to formalize by June
16th certain proprietary information agreements and complete the details
of the transaction as provided in paragraphs 12 and 13 of the ATG
Agreement. The execution of these agreements is a precondition to the
closing. No assurance can be given that all definitive agreements will be
entered into. Further, the ATG Agreement grants Chequemate a due
diligence period during which the registrant may rescind the transaction at
its election. This due diligence period expires on July 26, 1997.
Notwithstanding these contingencies, the management of Chequemate is
optimistic that all necessary documentation of the transaction will be
completed and conditions satisfied. Manufacture of a pre-production run
of units by CTD has already begun.
The ATG Agreement provides for the employment of Bert Alvey,
the principal manager of ATG, and of Amber Davidson, the design
engineer of the Realeyes product. As of the closing, the balance of the
ATG owners will enter into consulting agreements with CTD. The
assistance of the owners of ATG is deemed to be critical to the
development and the marketing of the Realeyes product. At the closing,
options for 2,000,020 shares of the registrant's common stock will be
granted to the employees and consultants under the referenced
agreements. The registrant will concurrently file a Form S-8 to register
the options and any shares of stock issued pursuant to the options. The
terms of the employment and consulting agreements also provide for
lockup provisions that preclude each of the shareholders from selling
more than twenty-five percent of their shares in any of the first four six-
month periods following the closing. These agreements further provide
for the grant of performance options. These options will vest as certain
sales levels of the Realeyes products are achieved (see the vesting
schedule set forth in paragraph 3.3.1.2 of the ATG Agreement, at page 11
of 28 hereof).
ITEM 7. Financial Statements, Pro Forma, Financial Information
and Exhibits.
(c) Exhibits
Documents Exhibit No. Page
Agreement regarding (2) 4
Chequemate Third Dimension, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed in its behalf
by the undersigned hereunto duly authorized.
DATED this 6 day of June, 1997.
CHEQUEMATE INTERNATIONAL, INC.
By /s/ Greg L. Popp
Its: Secretary/VP Operations
8kcmi2.491
<PAGE>
AGREEMENT REGARDING
CHEQUEMATE THIRD DIMENSION, INC.
THIS AGREEMENT is entered into by and between
CHEQUEMATE INTERNATIONAL, INC. ("CMI"), and ADVANCED
TECHNOLOGY GROUP, L.L.C. ("ATG").
RECITALS
WHEREAS, ATG has developed and/or acquired technology
relating to a Realeyes Product (as defined below); and
WHEREAS, ATG desires to license its intellectual property in this
technology to Chequemate Third Dimension, Inc. (referred to herein as
"CTD" or the "Corporation") which is a wholly owned subsidiary of
CMI;
WHEREAS, CTD is a new corporation formed by CMI to enter
into a License Agreement with ATG, and to manufacture and market 3D
effects product incorporating the licensed intellectual property; and
WHEREAS, CTD intends to immediately prepare its principal 3D
effects product for manufacturing, and will initiate the purchase of
inventory for such purposes prior to the execution of a number of the
definitive contracts referred to in this document, including the License
Agreement;
IT IS AGREED as follows, in consideration of the mutual promises
and conditions contained in this Agreement.
Definitions
"3D" shall mean three dimensional.
"2D" shall mean two dimensional.
"3D Effects Applications" shall mean methods, processes,
applications, apparatus and products for electronically converting 2D
video information or signals, regardless of the storage or transmission
medium, to produce a simulated 3D picture or image. Without limiting
the generality of the preceding sentence, the phrase "3D Effects
Applications" includes, but is not limited to: methods, processes,
applications, apparatus and products for providing a simulated 3D visual
environment from 2D information, data or signals; methods, processes,
applications, apparatus and products for converting an entire 2D video
image or signal to a simulated 3D format; methods, processes,
applications, apparatus and products for converting 2D video from any
standard source (e.g., NTSC, HDTV and similar or equivalent standards)
to a 3D picture or image that is displayable on any standard CRT
television or CRT projector; [confidential information deleted]. The term
"3D Effects Applications" shall not include methods, processes,
applications, apparatus or products for producing 3D images, picture or
displays from 3D video information. As used herein, the phrase "3D
video information" refers to video information, data or signals captured
through or with the use of specialized 3D multilens (e.g., stereoscopic)
cameras.
"Other Applications" shall mean applications and products other
than 3D Effects Applications.
"3D Video Industry" means businesses and persons involved in the
research, development or commercialization of applications and products
relating to 3D video images or to 3D Effects Applications.
"Realeyes Product" shall mean any and all 3D Effects Applications
of ATG, in any and all stages of development, in the possession of ATG
as of May 16, 1997.
"Realeyes Technology" shall mean any and all technology,
inventions, technical information, computer programs (including source
code and object code), scientific or technical data, know-how, research,
developments, product plans, product information, product component
information, product formulae, ideas, processes, designs, drawings, and
works of authorship which are applicable to or in the area of any of the
Realeyes Product and which are known to ATG or the Principals as of
May 16, 1997.
"Realeyes Intellectual Property" shall mean any and all patent
rights, trade secret rights, copyrights, trademarks, and other intellectual
property under any and all state, federal and foreign laws in and to the
Realeyes Product, Realeyes Technology and/or the Realeyes Proprietary
Information.
"Realeyes Business Information" means any and all of ATG's
business information, financial information, customer lists, supplier
lists, marketing strategies and plans, and other information of ATG (but
excluding Realeyes Technology) and which are known to ATG as of May
16, 1997.
<PAGE>
"Realeyes Proprietary Information" shall mean any and all
Realeyes Technology and Realeyes Business Information that is not
generally known to the public or to others in the 3D Video Industry.
"Company Proprietary Information" shall mean any and all
information, including technical information, product information,
business information, financial information, marketing strategies and
plans, customer lists, and supplier lists, that is confidential and
proprietary to the Company and that is not generally known to the public
or to others in the 3D Video Industry or to the Company's competitors.
By definition, Company Proprietary Information does not include any
Realeyes Proprietary Information.
"Third Party Proprietary Information" shall mean any information,
including technical information, product information, business
information, financial information, marketing strategies and plans,
customer lists, and supplier lists, that is confidential and proprietary
to a third party and disclosed by the third party to the Company under an
obligation of confidentiality binding on the Company. ATG and the
Principals are not a "third party" for the purposes of this definition. By
definition, Third Party Proprietary Information does not include any
Realeyes Proprietary Information or Company Proprietary Information.
"Proprietary Information" shall mean any or all Realeyes
Proprietary Information, Company Proprietary Information, and Third
Party Proprietary Information.
The "Principals" shall mean those individuals listed in Schedule
6.1 attached hereto.
"CTD Product" shall mean any and all 3D Effects Applications
made, sold or commercialized by or for CTD or its sublicensees. "CTD
Product" will also include any Realeyes Product made, sold or
commercialized by CTD or its sublicensees.
"CTD Product unit" shall mean a product which includes the
proprietary chip sets of the Realeyes Product, or such product together
with not more than one remote control unit and not more than two pair of
shutterglasses.
1. License Agreement.
ATG agrees to exclusively license to CTD all Realeyes Intellectual
Property owned or controlled by ATG or any of the Principals in
accordance with a "License Agreement" to be mutually agreed upon by
ATG and CTD. The scope of the license and the exclusivity will be
limited to 3D Effects Applications. If any of the intellectual property
within the Realeyes Intellectual Property licensed to CTD applies to 3D
Effects Applications and to Other Applications, then such intellectual
property will be exclusively licensed to CTD for 3D Effects Applications,
but reserved by ATG for Other Applications. The License Agreement
will be the definitive agreement governing such license and after its
execution shall be appended to this Agreement as Schedule 1.
1.1 The license will be worldwide and perpetual, unless
terminated for the failure of CTD meet its royalty or other obligations
under the License Agreement or for the failure of CMI to meet its
obligations under this Agreement. It is understood that although the
license is characterized as perpetual, it will cease to include licensed
Realeyes Intellectual Property as such Realeyes Intellectual Property
expires or terminates (e.g., when a patent expires at the end of its term).
1.2 The License Agreement will also provide for the
disclosure to CTD of all material Realeyes Technology and material ATG
Business Information known to ATG or the Principals. This disclosure
shall be made and facilitated through the Principals as consultants or
employees of CTD. This disclosure will also include the transfer by ATG
to CTD of ATG's prototypes, drawings, proprietary chips, and written
documentation relating to the Realeyes Product.
1.3 The definitive License Agreement shall include other
terms, provisions and details consistent with an exclusive worldwide
license and as mutually agreed to by ATG and CTD.
1.4 The license will include the right for CTD to grant
sublicenses, but CTD must ensure that the sublicensees pay the agreed
upon royalties to ATG and otherwise respect the License Agreement.
1.5 This Agreement and the License Agreement will be
subject to a proposed agreement with Carlos Bullos relating to marketing
rights in South America, which agreement shall be mutually agreeable in
form and content to CTD and Carlos Bullos.
1.6 In the event of any infringement by a third party of
any portion of the Realeyes Intellectual Property, CTD shall promptly
inform ATG of such infringement. Either party, or the parties acting
together, shall have the right to take all legitimate steps to halt such
infringement. Subject to receiving advice from experienced patent
counsel, either party may prosecute an infringement claim and may
request the other party to become a party to the proceedings and to
provide reasonable assistance, and the other party shall do so, provided
that the requesting party agree to reimburse the other party for costs and
expenses the other party may incur at the requesting party's request. If
successful, any recovery shall inure to the exclusive benefit of the party
prosecuting the claim. If both CTD and ATG elect to prosecute the
claim, CTD and ATG shall mutually cooperate and assist one another,
share equally in the costs and expenses of prosecuting the claim, and
share equally any recovery.
2. Royalty
The License Agreement shall provide for the following royalties:
2.1. CTD shall pay to ATG the sum of $400,000 within
fifteen (15) days after CTD shall have received the proceeds from the sale
of the first 10,000 units of the CTD product.
2.2 CTD shall pay to ATG, in any month where more
than 2,500 units of the CTD product are sold, 2% of the gross profits of
CTD from (a) the sales proceeds received by CTD from the sale of the
CTD Product units; (b) the sales proceeds received by CTD from the sale
of the CTD proprietary chip sets to be installed in television sets; and
(c) the royalties received from sub-licensees of the Realeyes technology.
This royalty shall be paid within 30 days of the end of each month. Gross
profit shall be the net sales price of the units, less returns, and less
cost of goods sold without any allocation of general and administrative
overhead, determined in accordance with GAAP, applied on a consistent
basis.
3. Formation, Organization and Agreements of CTD
CMI has filed Articles of Incorporation for CTD in the
form attached hereto as Schedule 3. CMI will vote its stock in CTD and
ATG and CMI will designate and elect members of the board of directors
of CTD which shall organize and conduct the business of CTD as
follows:
3.1 Subject to the provisions of paragraph 5.2, CMI
agrees to transfer and convey to CTD the following amounts of money as
capital contributions:
3.1.1. $500,000 cash upon the signing of this
Agreement;
3.1.2. $750,000 cash within thirty (30) days
following the signing of this Agreement; and
3.1.3. $1,750,000 cash within sixty (60) days
following the signing of this Agreement.
3.2 CTD will be organized as follows:
3.2.1. For a period of two years from the date
of this Agreement, the board of directors of CTD will be comprised of
five directors selected by ATG and the CMI Board of Directors. For
such two year period, ATG will be allowed to select three members of the
board and CMI will select two members of the board. For a period of
one year from the date of this Agreement, these three board members
shall be Bert Alvey, Andre Peterson and John Bartholemew. For a period
of two years from the date of this Agreement, Blaine Harris, or a
designee appointed by the board of directors of CMI, will serve as the
Chairman of the Board of Directors. For a period of two years from the
date of this Agreement, CMI agrees (a) to vote its stock in CTD to
provide that the slate of three directors proposed by ATG (the "ATG
Board Members") shall be elected as directors of CTD; and (b) not to
increase the number of directors; provided that, as directors of CTD, they
will take no action without unanimous board approval to (a) amend the
Articles of Incorporation of CTD; (b) authorize or issue any additional
stock, or options or rights in stock, of CTD; (c) license, sell or encumber
the Realeyes product technology, or any part thereof; (d) except as
provided in paragraph 3.2.1(e), incur any debts or enter into any contracts
that will obligate CTD in an aggregate amount in excess of $50,000; or
(e) incur any sales expense, or incur any debts or enter into contracts for
the purchase of inventory, in excess of those amounts set forth in the
business plans of CTD for the projected manufacturing buildup of CTD,
based upon sales forecasts unanimously approved by the board of
directors of CTD.
3.2.2. For a period of two years from the date
of this Agreement, Bert Alvey shall be appointed as President of CTD.
Other officers of CTD are to be appointed as determined by the CTD
Board of Directors. Bert Alvey shall enter into an employment contract
providing for compensation at $10,000 per month, as provided in
paragraph 4.2 of this Agreement. Amber Davidson shall enter into an
employment contract providing for compensation at $10,000 per month,
as provided in paragraph 4.2 of this Agreement.
3.3. CMI, immediately after signing this Agreement, will
begin consulting with ATG to establish a full development plan, including
business plan, quality control plan, development projections, inventory
needs and analysis, supplier contracts and agreements, lease agreements,
salary agreements, and in short, oversee the set-up and development of all
aspects of CTD for full implementation of the business plan to be
developed. However, the following elements shall be incorporated into
the development plan:
3.3.1. Consultants. CTD shall hire as
consultants and independent contractors Loran Swensen, Jonathan
Neville, John Bartholomew, Andre Peterson, Carlos Bullos, Jerry
Coleman, Boyd Fenn, Stan Fenn, Merl Prince, Randy Rigby, and Gordon
Sprague (the "Consultants"). Each Consultant shall enter into a
consulting agreement which will provide for cash compensation for a six
month period beginning May 1, 1997, and/or a Base Stock Option and
Performance Stock Option for CMI stock. The cash and stock options
shall be in the amounts as set forth in Schedule 3.3.1 attached hereto.
The cash payments shall be due and payable on the 1st of each month,
with the first payment due upon execution of this Agreement for the
month of May, 1997. During the six month period referred to herein, all
consultants receiving a cash component of compensation agrees to devote
50% of work time to the development, manufacture, and/or marketing of
the CTD products.
3.3.1.1. The Base Stock Option shall be
granted in a separate Option Agreement on the Closing Date. The Base
Stock Option shall be a non-qualified option with an exercise price of one
cent ($0.01) per share of CMI common stock. Except as provided in
paragraph 5 hereof, the Base Stock Option shall be fully vested, non-
cancelable and non-terminable for its ten year term. The option terms
shall include a "lock-up" provision that shall limit an option holder to
selling no more than twenty five percent of the number of shares subject
to the consultant's Base Stock Option in each six month period from the
date of the Closing. The lockup provision will expire after a period of
two years. The right to sell stock under the "lockup" provision shall not
be cumulative from one sixth month period to any subsequent six month
period.
3.3.1.2. The Performance Stock Option
shall be granted in a separate Option Agreement on the Closing Date.
The Performance Stock Option shall be a non-qualified option with an
exercise price of one cent ($0.01) per share of CMI common stock. Each
such option shall be exercisable in increments, as provided in the table
below, and based upon the receipt by CTD of the sales proceeds from the
sale of units of the CTD product.
No. of Units Sold Fractional Portion of Performance
Stock Option Shares Subject to
Exercise
20,000 1/6
40,000 1/6
60,000 1/6
60,000 1/6
60,000 1/6
60,000 1/6
3.3.1.3. On or before the Closing, CMI
shall have filed with the Securities and Exchange Commission a Form S-8
registration statement including all Base Stock Options and all
Performance Stock Options referred to in this Agreement. Such
registration statement shall remain effective and not be withdrawn until
the expiration, or earlier exercise, of all options granted in this
paragraph 3.
3.3.2. Lease Agreement. For the period of 1
May 1997 through 31 March, 1998, CTD will sublease office space and
warehouse space at the facility leased by MDS at 497 West 1960 South,
Sandy, Utah. CTD shall pay MDS $1,800 per month for such space,
which payment is due and payable on the first day of each month. This is
sufficient space to assemble, test and ship 10,000 units per month. CTD
also agrees to maintain four telephone lines at said office for a minimum
of six months from the date of execution of this Agreement. CTD shall
promptly pay the telephone bill for such lines.
3.3.3. Production. CTD shall immediately
continue to produce the initial 200 Realeyes Product units currently in
production, and shall further immediately proceed to produce the
additional 9,800 Realeyes Product units planned by ATG. These 10,000
units are the "Initial Units." CTD shall immediately take the following
steps to assure prompt production and shipping of the Initial Units:
3.3.3.1. Arrange shipment, delivery, and
payment terms with suppliers
3.3.3.2. Schedule production with Circuit
Technology Corporation
3.3.3.3. Arrange for final assembly and
testing, in its own facilities or by subcontracting with a third party
3.3.3.4. Arrange for packaging,
inventory, and shipping of finished units
3.3.4. Sales. CTD shall use all reasonable
diligence to sell the Initial Units by:
3.3.4.1. Continuing magazine advertising
pursuant to existing contracts
3.3.4.2. Developing a marketing plan for
dealers, video stores, catalogues, etc.
3.3.4.3. Establishing distributors overseas
with minimum purchase commitments, such as contracting with Vaun
Andrus to set up his Japanese contacts
3.3.4.4. Pursuing relationships with major
electronics companies such as Mitsui, Philips, and others.
3.3.5. The Board of Directors of CTD will
immediately begin to establish a minimal operating unit and grow as
needed from operating profits to the extent possible. Subject to CTD
board approval, CTD will utilize as many of the existing services of CMI
as is appropriate and feasible until such time that it can completely
sustain its own operating unit. The cost to CTD shall be no greater than if
CTD were to obtain the same services from any outside service. The cost
shall be carried on the books of CTD as an account payable upon demand to
CMI. CTD may also utilize as many of the existing services of ATG and
its members as is appropriate and feasible on the same basis as it may use
the CMI services.
3.3.6. For a period of two years from the date
of this Agreement, bank accounts will be set up with dual authorized
signatures, one being the chief financial officer of CMI and the other Bert
Alvey, to allow the officers to immediately start fulfilling existing
contracts and entering new contracts for the production, assembly and
shipping of the CTD Product. Initially these contracts and major
agreements will be approved by the CTD Board of Directors as well as
the established officers of CTD.
3.3.7. Subject to CTD board approval, CMI
will initially provide the services, or the limited services, of Mr. Lavar
Butler or other appropriate personnel to assist in the layout and efficient
flow of product manufacturing and assembly while permanent
arrangements are being made. The costs of such services will be
reimbursed to CMI as provided in paragraph 3.3.5 hereof.
3.3.8. Appropriate audits will be set-up and
established to comply with all SEC, IRS and tax regulations. CMI's
outside accounting firm will initially be used to provide continuity with
its SEC filings.
3.3.9. With respect to patent applications and
patents which claim any invention related to 3D Effects Applications
invented by any employee of ATG or any of the Principals on or before
May 16, 1997 the following shall apply: (a) such patent applications and
patents will be owned by ATG and will be licensed to CTD as part of the
licensed Realeyes Intellectual Property under the License Agreement, and
(b) CTD will pay for all costs and expenses of such patent applications
and patents incurred on or after May 16, 1997 (including the preparation,
filing, prosecution, maintenance and enforcement thereof, and the
attorneys' fees, patent agents' fees, and government fees incurred in
connection therewith), incurred after the date of this Agreement, and (c)
such patents and patent applications and the preparation, filing,
prosecution, maintenance and enforcement thereof, shall be controlled by
CMI and by legal counsel designated by CMI.
After May 16, 1997, CTD shall have the right to have patent
applications covering the Realeyes Technology and/or Realeyes Products
filed in those countries where CTD in its sole discretion, deems advisable
in view of its commercial operations. ATG and its Principals agree to
execute or cause to be executed all documents necessary or desirable for
the purpose of applying for and obtaining patents thereon. All such
applications will be owned by CTD. CTD shall control the prosecution of
all such patent applications, but shall provide or cause to be provided to
ATG a copy of all correspondence to and from the patent authorities
relating to such patent applications, so as to afford ATG sufficient time
to comment and advise. The costs associated with the preparation and
filing and prosecution of such patent applications by CTD or at CTD's
request, as well as the expense incurred by ATG in prosecuting and in
maintaining such application and/or patent, shall be paid by CTD; provided,
however, such expenses may be offset by CTD against royalties payable by
CTD to ATG hereunder.
After May 16, 1997, ATG may, at ATG's expense, file patent
applications directed to the Realeyes Technology in any country in which
CTD elects not to seek patent protection thereon, provided that all such
patent applications filed by ATG shall be deemed to be included within
the Realeyes Technology and licensed to CTD hereunder without
additional cost or expense. ATG shall advise CTD of the filing of each
such patent application and ATG will cause same to be prosecuted
diligently and in good faith at his own expense. CTD and its Principals
shall execute or cause to be executed all documents necessary or desirable
for the purpose of applying for and obtaining patents thereon. All such
applications filed by ATG will be owned by ATG.
4. Obligations of the ATG and its Members
4.1 ATG will secure from its Members the following
performances and agreements:
4.1.1. Each Principal will collectively and
individually sign appropriate assignments and other documents to transfer
and assign any and all of the Principal's rights, titles and interests in
and to the Realeyes Intellectual Property to ATG.
4.1.2. The Principals, will not enter into any contract
or agreement relating to the Realeyes Technology and assets, short-term
or otherwise, without authority of Board of Directors of CTD.
4.1.3. ATG and the Principals, individually and
collectively, acknowledge that the Realeyes Technology including the
technology described on Schedule 4.1.3A licensed to CTD in fulfillment
of this Agreement and the License Agreement, will be the subject of a
grant an exclusive license to CTD, and the right to use such is contingent
upon performance of all the terms of the License Agreement. From the
date of this Agreement, neither ATG nor the Principals will not compete
with CTD by engaging in any business or activity involving the sale,
marketing, or commercialization of any 3D Effects Application, if such
business or activity extends to the United States or any other country in
which CTD engages in business, currently anticipates engaging in
business, or otherwise establishes its goodwill, business reputation, or
any customer relations. For the purposes of this Agreement, the term
"compete" shall mean (i) calling on, soliciting or taking away, as a client
or customer, or attempting to call on, solicit or take away as a client or
customer any individual, partnership, corporation or association that was
a client or customer of CTD; or (ii) entering into or attempting to enter
into any business or substantially similar business to or competing in any
way with the business of CTD, either alone or with any individual,
partnership, corporation or association; or (iii) acting as an agent,
representative, consultant, officer, director, independent contractor, or
employee of an entity or enterprise which is competing with the business
of CTD; or (iv) participating in any such competing entity or enterprise as
an owner, partner, limited partner, joint venturer, creditor or
stockholder, except for publicly traded companies in which ATG is only a
passive stockholder of less than ten percent of the issued and outstanding
stock. Notwithstanding anything to the contrary, there shall be no
restriction on ATG under this Section 4 with respect to any business or
activity that does not involve the sale, marketing or commercialization of
3D Effects Applications, provided that ATG does not infringe any of the
Realeyes Intellectual Property licensed by ATG to CTD or any intellectual
property of CTD or breach any obligation of confidentiality under this
Agreement. The Principals will each execute separate proprietary
information and inventions agreements in the form of Schedule 4.1.3B.
The Principals will execute such agreements concurrently with the execution
of this Agreement.
4.2. As soon as possible after the signing of this
Agreement, Bert Alvey and Amber Davidson will enter into employment
agreements with CTD for a duration of not less than two years and with
benefits consistent with those granted to existing CMI management
personnel. At the Closing, Mr. Alvey and Mr. Davidson will each
receive from CMI (a) a Base Stock Option for 257,143 shares of CMI
common stock, subject to the same rights and restrictions as the options
described in paragraph 3.3.1.1 hereof; and (b) a Performance Stock
Option for 64,286 shares of CMI common stock, subject to the same
rights and restrictions as the options described in paragraph 3.3.1.2
hereof. At Closing, the consulting agreement between ATG and Amber
Davidson, as reflected in a letter dated February 7, 1997, shall be
terminated.
4.3. ATG presently utilizes the services of companies
which the individual owners of ATG either own or control. These
arrangements are hereby superseded by the contracts to be entered into
directly between CTD and the respective companies, which are to be
attached hereto at the Closing and incorporated into this Agreement, and
which generally provide that:
4.3.1. MDS shall provide 3-D demo tapes and
other 3D tapes for the "Video of the Month" contract. The quality and
content of the videos are subject to the majority approval of the Board of
Directors of CTD. CTD agrees to pay the price of $10 per video for the
first 50,000 videos purchased.
4.3.2. Amlabs shall provide the first 70,000
units of the first generation of two program chips owned by CTD
pursuant to pricing specified in that agreement. Amlabs agrees to enter
into a nondisclosure/non-compete agreement.
4.4 ATG and MDS may enter into agreements with
and/or engage the services of any of the Principals in connection with
products and matters outside the scope of 3D Effects Applications unless
such Principal (except for Amber Davidson) is or becomes a full time
employee of CTD.
5. Obligations and Rights of CMI
5.1. The parties acknowledge that CMI intends to raise
the capital to fund CTD in fulfillment of its obligations contained herein
by the sale of CMI stock. CMI agrees to move as rapidly as possible to
meet all NASDAQ requirements and to complete the funding in
accordance with the schedule provided in paragraph 3.1 above. If CMI
fails to meet its scheduled payments by more than 15 days, CTD will
forfeit its rights under the License Agreement after receiving written
notice of default, and the parties shall have the rights and obligations as
set forth in paragraph 14 hereof.
5.2. CMI has had full opportunity to review the
performance of the Realeyes product technology, but has not had full
access to all of ATG's files and documents. ATG will continue to use its
best efforts to cooperate with CMI and shall provide to CMI all
documents related to the Realeyes product technology, including patent
search information. CMI shall be afforded seventy (70) days from the
date of this Agreement (the "due diligence period") to complete its due
diligence, and may elect at any time during this due diligence period to
decline to make further payments required by this Agreement. In such
event, CMI shall have the right to rescind this transaction, and the
parties shall have the rights and obligations as set forth in paragraph 14
hereof.
6. Warranties
ATG represents and warrants to CMI as follows:
6.1. Organization, Existence and Good Standing. ATG is
a Limited Liability Company duly organized, validly existing and in good
standing under the laws of the State of Utah and has full power and
authority to carry on its business as now being conducted, to own or lease
and operate its properties and the assets, and to perform all of its
obligations under the agreements and instruments to which it is a party or
by which it is bound. The Articles of Organization, Minutes and
Operating Agreement of the limited liability company are true, correct
and complete and reflect all amendments thereto as of the date hereof.
There are 4,200,000 issued and outstanding membership interests in ATG
which are owned by the members of ATG in the amounts and by the
members as designated in Schedule 6.1 attached hereto.
6.2. Authority. Each of the owners of ATG have authority
and capacity to execute and deliver this Agreement and consummate the
transactions contemplated thereby. There are no proceedings relating to
ATG which would preclude this transaction. ATG's Managers and
Members have approved the grant of the License Agreement and
authorize the transactions as stated in this Agreement, and consent to and
ratify the transactions and this Agreement.
6.3. Assets. ATG has good and marketable title to all of
the Realeyes Intellectual Property to be licensed to CTD as provided in
Section 1 of this Agreement, , and to assets listed on the financial
statements and balance sheets provided to CMI by ATG; and such assets
and licensed Realeyes Intellectual Property is free and clear of all
contracts (except as provided in paragraph 1.2 hereof), mortgages, liens,
pledges, charges, security interest, encumbrances, or title retention
agreements of any kind or nature.
6.4. ATG is not in default, with or without the giving of
notice or passage of time, or both, under any material contract,
agreement, license, mortgage or other document relating to or affecting
the Realeyes Intellectual Property.
6.5. Litigation. To ATG's knowledge, other than those
matters disclosed in Schedule 6.5 hereto, there is no material litigation,
action, suit, investigation, or claim proceeding pending against ATG (or
the Assets) or its Managers or Members before any court, agency or other
governmental body which may result in any material adverse effect upon
ATG or which seeks to enjoin or prohibit or otherwise challenges the
transactions contemplated hereby, and there are no judgments, decrees or
awards in existence against ATG.
6.6. Pension or Profit-Sharing. ATG does not have any
pension, profit-sharing, stock bonus, stock purchase, retirement or other
incentive or compensation plans or arrangements in effect for benefiting
any employee, consultant, agent, officer or director of ATG, except as
disclosed in the documents produced pursuant to the terms herein.
6.7. Disclosure. Neither this Agreement nor any other
document, certificate, or written or oral statement furnished to CMI by
ATG, in connection with the transaction contemplated hereby,
intentionally contains any untrue statement of material fact. Neither this
Agreement, nor any other document, certificate or written or oral
statement furnished to CMI by ATG in connection with the transaction
contemplated hereby, intentionally omits any material fact necessary to
make the statements therein accurate.
6.8 Contracts and Accounts Payable. A complete list of
(a) all of the material contracts of ATG, written or oral; and (b) all
material accounts payable, and the amounts thereof, are set forth on
Schedule 6.8, in sufficient detail to reasonably identify the same.
6.9 Except for the warranty set forth in Section 6.10
below, ATG and the Principals make no warranty of noninfringement of
intellectual property. It is the responsibility of CMI and CTD to conduct
such patent searches and other intellectual property investigations as they
deem appropriate or needed. Except for the warranty of Section 6.10,
CMI and CTD assume the risk of intellectual property infringement.
6.10 ATG warrants that as of the date of this Agreement it
does not have actual knowledge that any Realeyes Product infringes any
patent or intellectual property of a third party and that no basis for any
such claim or proceeding exists. ATG warrants that no third party has
communicated to ATG any allegation of such infringement. ATG will,
prior to Closing, give to CMI copies of any patent search results and
other intellectual property investigations, if any, conducted by or for ATG
relating to 3D Effects Applications. To the best of ATG's knowledge and
belief, the Realeyes Intellectual Property is not being infringed upon by
any other person or entity. No event has occurred which permits, or
upon the giving of notice or the passage of time would permit, revocation
or termination of any of the Realeyes Intellectual Property. No event has
occurred, either upon the giving of notice or the passage time, which
invalidates or may invalidate any of the Realeyes Intellectual Property.
None of the Realeyes Intellectual Property is subject to any outstanding
order, decree, judgement, stipulation, or agreement restricting the scope
or use thereof.
6.11 When any warranty or representation is made as to
the "knowledge" or "actual knowledge" of ATG, the knowledge referred
to shall be that of the members of the ATG limited liability company as
such members are identified in Schedule 6.1.
7. Indemnity
7.1 ATG shall indemnify, defend, and hold harmless
CMI, CTD and their assignees, successors, employees and agents from
and against, for, and with respect to any claim, liability, obligation,
loss, damage, deficiency, assessment, judgment, cost or expense (including,
without limitation, reasonable attorney's fees and expenses, and costs and
expenses reasonably incurred in investigating, preparing, or defending
against any litigation or claim), action, suit, proceeding, or demand, of
any kind or character, arising out of, or in any manner incident, relating
or attributable to:
7.1.1. Any breach of any written
representation or warranty of ATG contained in this Agreement;
7.1.2. Any failure of ATG to perform or
observe any covenant, agreement or condition to be performed or
observed by it under this Agreement, except as otherwise provided
herein; and
7.1.3. ATG's use or possession of the
Realeyes Product or Realeyes Intellectual Property inconsistent with this
Agreement after the closing.
7.2 CMI shall indemnify, defend, and hold harmless
ATG and its assignees, successors, employees and agents from and
against, for, and with respect to any claim, liability, obligation, loss,
damage, deficiency, assessment, judgment, cost or expense (including,
without limitation, reasonable attorney's fees and expenses, and costs and
expenses reasonably incurred in investigating, preparing, or defending
against any litigation or claim), action, suit, proceeding, or demand, of
any kind or character, arising out of, or in any manner incident, relating
or attributable to:
7.2.1. Any breach of any written
representation or warranty of CMI contained in this Agreement; and
7.2.2. Any failure of CMI to perform or
observe any covenant, agreement or condition to be performed or
observed by it under this Agreement, except as otherwise provided
herein.
8. Representations and Warranties of CMI
CMI represents and warrants to ATG as follows:
8.1. Organization, Existence and Good Standing. CMI is
a corporation duly organized, validly existing and in good standing under
the laws of the State of Utah and has full corporate power and authority to
carry on its business as now being conducted. CMI is qualified to do
business as a foreign corporation in the jurisdictions set forth in
Schedule
8.1. The Articles of Incorporation, Minutes and By-Laws
of the corporation are true, correct and complete and reflect all
amendments thereto as of the date hereof.
8.2. Binding Effect. This Agreement constitutes a valid
and binding agreement of CMI.
8.3. No Brokers or Finders Fee. CMI has not incurred,
nor will CMI incur, any liability for finder's or broker's fees or similar
commissions in connection with this Agreement or the transactions
contemplated by this Agreement; and if it is determined that any such
liability incurred by CMI exists, ATG shall have no responsibility
therefore.
8.4. Authority. Each of the officers of CMI have
authority and capacity to execute and deliver this Agreement and
consummate the transaction contemplated thereby. There are no corporate
proceedings relating to CMI which would preclude this transaction.
CMI's Board of Directors has approved CTD's receipt of the License
Agreement, and consents to and ratifies the transactions and this
Agreement.
8.5. Stock Ownership. The list in Schedule 8.5 contains:
(i) all the issued and outstanding shares of CMI as of the date of Closing,
showing how many shares are restricted and how many are unrestricted;
(ii) all stock options that have been granted by CMI, showing vested,
unvested, and exercised and unexercised options; (iii) all stock that has
been paid for but not issued; (iv) all currently effective stock offerings
including but not limited to those under Regulation S; (v) all existing
plans to offer additional stock during calendar year 1997, and thereafter;
and (vi) all existing "lock-up" agreements. Except as disclosed in
Schedule 8.5, all issued and outstanding capital stock is fully paid and
non-assessable, and there are no convertible securities, options, warrants
or other agreements or commitments obligating CMI to issue any
additional shares of capital stock or other securities.
8.6. Financial Statements and SEC Filings. The financial
statements contained in CMI's SEC filings comprise a true, complete and
accurate statement as to CMI's financial condition as of the respective
dates. Except as provided in Schedule 8.6, CMI is current in its filings
with the SEC, and such filings are complete and accurate.
8.7. No Adverse Change. Since December 31, 1996, the
date of the most recent SEC filing, CMI has not issued any stock, bonds
or other corporate securities (except as disclosed in Schedule 8.5),
incurred any obligations or liability except current liabilities in the
ordinary course of business, declared or paid any dividends or made any
distributions to stockholders, purchased or redeemed any shares of capital
stock, mortgaged or pledged any of its assets, tangible or intangible, sold
or transferred any assets or canceled any debts or claims except in the
ordinary course of business, sold, assigned or licensed any patents,
trademarks, or trade names, suffered any extraordinary losses or waived
any rights, or entered into any agreement obligating it to do any of the
foregoing acts, nor does CMI have any obligation to do so. Except as
disclosed in Schedule 8.7, since December 31, 1996, there has been no
material change in the nature or condition of the business or financial
condition of CMI. There are no outstanding judgments or judicial or
administrative orders or any pending litigation involving CMI.
9. Survival of Representations, Warranties and Covenants
All representations, warranties and covenants of ATG, and CMI
herein contained shall survive after the date hereof for a period of two
years.
10. Exclusion of other Warranties
The representations and warranties specified by CMI and ATG in
this Agreement exclude and are in lieu of all other warranties, whether
express or implied.
11. Covenant not to Compete
11.1. Term. This covenant not to compete shall be
perpetual from the closing date (the "Covenant Period"), provided that
such period shall terminate immediately upon the termination of the
definitive License Agreement by reason of the material default of CTD,
or by reason of the recision by CMI, as set forth in paragraph 5 hereof.
11.2. Restriction. During the Covenant Period, ATG shall
not directly or indirectly own, manage, operate, join, control or
participate in the management, operation or control of any business which
is engaged in the production or sale of any 3D Effect Application.
11.3. Non-Piracy. ATG further agrees that during the
Covenant Period, it shall not induce or attempt to induce any client of
CMI or CTD, including any client which was a client of ATG on the date
of this Agreement, to reduce the level of 3D Effects Application business
with, or to cease or refrain from doing business with CTD or any CTD
affiliate. As used in this Agreement, the term "affiliate" shall mean any
individual, joint venture, partnership, corporation or stockholder which
controls, is controlled by, or is under common control with, or the
management and operations of which are substantially influenced by
CMI.
11.4. Remedy. ATG specifically acknowledges that a
default of this provision would cause irreparable damage and, therefore, it
agrees that, in addition to any remedies at law and equity, CMI or CTD
may obtain an injunction specifically enjoining ATG from violating this
Covenant Not to Compete.
12. ATG's Conditions Precedent
The obligations of the parties under this Agreement are subject to
the satisfaction of the following conditions. Any party may waive any or
all of these conditions in whole or in part without prior notice; provided,
however, that no such waiver of a condition shall constitute a waiver by
such party of any of its respective rights or remedies if any other party
should be in default of any of its representations, warranties, or
covenants under this Agreement.
12.1. CTD shall have entered into agreements satisfactory
to the Consultants regarding their consulting responsibilities as described
in paragraph 3.3.1.
12.2. CTD shall have entered into an employment contract
with Bert Alvey satisfactory to Bert Alvey as described in paragraph
3.2.2.
12.3. CTD shall have entered into an employment contract
with Amber Davidson satisfactory to Amber Davidson as described in
paragraph 3.2.2.
12.4. CTD shall have entered into a video production
contract with MDS satisfactory to MDS as described in paragraph 4.3.1.
12.5. CTD shall have entered into a supply contract with
Amlabs satisfactory to Amlabs as described in paragraph 4.3.2.
12.6. ATG shall have received an opinion of counsel for
CMI, dated as of the Closing Date, to the effect that: (i) CMI is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Utah and has the corporate power and authority to
execute, deliver and perform this Agreement; (ii) this Agreement has been
duly authorized by all necessary action on the part of CMI and has been
duly executed and delivered by CMI; and (iii) the consummation of the
transactions contemplated by this Agreement will not and does not violate
any provisions of the articles of incorporation or bylaws of CMI, or to
the best of such counsel's knowledge, any judgments, orders or
agreements applicable to CMI.
12.7. CMI shall have performed and complied with all the
terms, covenants and conditions of this Agreement to be performed or
complied with by them, respectively, on or before the Closing Date, and
all representations and warranties of CMI contained herein shall be true
and complete when made and as of the Closing Date.
13. CMI's Conditions Precedent.
The obligations of the parties under this Agreement are subject to
the satisfaction of the following conditions. Any party may waive any or
all of these conditions in whole or in part without prior notice; provided,
however, that no such waiver of a condition shall constitute a waiver by
such party of any of its respective rights or remedies if any other party
should be in default of any of its representations, warranties, or
covenants under this Agreement.
13.1. The Consultants shall have entered into agreements
satisfactory to CMI regarding their consulting responsibilities as
described in paragraph 3.3.1.
13.2. Bert Alvey shall have entered into an employment
contract with CTD satisfactory to CMI as described in paragraph 3.2.2.
13.3. Amber Davidson shall have entered into an
employment contract with CTD satisfactory to CMI as described in
paragraph 3.2.2.
13.4 The Members of ATG and Amlabs shall have entered
into the proprietary information agreements, or nondisclosure/non-compete
agreements satisfactory to CMI as described in paragraphs 4.1.3 and 4.3.2.
13.5 CTD shall have entered into a video production
contract with MDS satisfactory to CMI as described in paragraph 4.3.1.
13.6 CTD shall have entered into a supply contract with
Amlabs satisfactory to CMI as described in paragraph 4.3.2.
13.7. CMI shall have received an opinion of counsel for
ATG, dated as of the Closing Date, to the effect that: (i) ATG is a limited
liability company duly incorporated, validly existing and in good standing
under the laws of the State of Utah and has the power and authority to
execute, deliver and perform this Agreement; (ii) this Agreement has been
duly authorized by all necessary action on the part of ATG and has been
duly executed and delivered by ATG; and (iii) the consummation of the
transactions contemplated by this Agreement will not and does not violate
any provisions of the Articles of Organization or Operating Agreement of
ATG, or to the best of such counsel's knowledge, any judgments, orders
or agreements applicable to ATG.
13.8. ATG shall have performed and complied with all the
terms, covenants and conditions of this Agreement to be performed or
complied with by ATG, on or before the Closing Date, and all
representations and warranties of ATG contained herein shall be true and
complete when made and as of the Closing Date.
14. Disengagement Rights and Responsibilities
In the event of (a) the forfeiture by CTD of its rights under the
License Agreement for the failure of CMI to meet its scheduled capital
contribution payments as provided in paragraphs 3.1 and 5.1 hereof; (b)
the rescission of this transaction by CMI as provided in paragraph 5.2
hereof; or (c) the absence of a closing of this transaction as required by
paragraph 15.15 hereof by reason of the failure of any one or more of the
conditions precedent set forth in paragraphs 12 and 13 hereof (the
"Failure to Close"), the parties agree that the rights and responsibilities
of the parties shall be limited to the following and that neither party
shall have a claim to recover damages from the other by reason of the above
three enumerated events, except as provided in this paragraph 14.
14.1 The parties agree to (a) the automatic cancellation of
this Agreement (except for the provisions of paragraphs 14 and 15
hereof); (b) the automatic cancellation of the License Agreement, the
Proprietary Information and Inventions Agreements, the consulting and
employment agreements, the MDS and Amlabs agreements, the Base
Stock Option and Performance Stock Option agreements; and (c) the
return to CMI by ATG of the number of shares of CMI stock issued
pursuant to the stock options referred to herein as of the date of the
cancellation of the option agreements pursuant to the provisions of this
paragraph 14.1. ATG shall indemnify, defend, and hold harmless CMI,
CTD and their assignees, successors, employees and agents from and
against, for, and with respect to any claim, liability, obligation, loss,
damage, deficiency, assessment, judgment, cost or expense (including,
without limitation, reasonable attorney's fees and expenses, and costs and
expenses reasonably incurred in investigating, preparing, or defending
against any litigation or claim), action, suit, proceeding, or demand, of
any kind or character, arising out of, or in any manner incident, relating
or attributable to CTD's failure to perform under any of the described
consulting, employment, MDS, Amlabs or option agreements.
14.2 ATG agrees to repay to CMI all cash contributions
made pursuant to paragraph 3.1. hereof which have been made prior to
the cancellation of this Agreement pursuant to the provisions of paragraph
14.1. Repayment shall be made within twelve months of the
cancellation of this Agreement pursuant to the provisions of paragraph
14.1, and interest shall accrue at the prime rate on the unpaid balance
from such date. Prior to the effective date of the cancellation of the
License Agreement hereunder, ATG shall execute in favor of CMI a
security agreement and financing statement pledging a first secured
position in the assets of ATG (including existing and after-acquired
accounts receivable, inventory and Proprietary Technology), to secure the
repayment of the amount set forth herein and the transfer of the shares of
stock referred to in paragraph 14.1 hereof.
14.3 CTD shall have the right to complete the sale of all of
its finished inventory; and (b) to complete the assembly and sale of all of
its raw inventory of parts and work in process, as of the date of the
receipt of the default notice as provided in paragraph 5.1, or the
rescission notice as provided in paragraph 5.2, or as of the date of the
Failure to Close as provided herein. ATG agrees to sell to CTD, at then
established cost, any inventory and chip sets necessary to complete the
assembly of the raw inventory and work in process as described herein.
14.4 The parties agree that each will keep in confidence
and trust all proprietary information of the other party, and will not
disclose any such proprietary information without the prior written
consent of the other party.
15. Miscellaneous Provisions
15.1 Remedies and Attorneys' Fees. In the event either of
the parties default on any of the terms and conditions of this Agreement,
the non-defaulting party may exercise all remedies provided under
applicable law, but in addition, the defaulting party agrees to pay the
other party all cost incurred in enforcing this Agreement, including
reasonable attorneys' fees, in addition to all other amounts due hereunder
and damages caused by the default.
15.2. Notice and Cure. It is understood and agreed by the
parties that in the event that either party shall default on any of the
terms and conditions of this Agreement, then unless otherwise specifically
provided for in this Agreement, that party shall have fifteen (15) days to
cure said default after a notice of default is given in writing.
15.3. Enforceability. It is agreed that the rights granted
to the parties hereunder are of a special and unique kind and character and
that, if there is a breach by any party of any material provision of this
document, the other party or parties would not have any adequate remedy
at law. It is expressly agreed, therefore, that the rights of the parties
hereunder may be enforced by an action for specific performance and
other appropriate equitable relief.
15.4. Modification or Amendments. No amendment,
change or modification of this document shall be valid unless in writing
and signed by all parties hereto.
15.5. Entire Agreement. This document constitutes the
entire understanding and agreement of the parties with respect to the
subject matter of this Agreement, and any and all prior agreements,
understandings or representations are hereby terminated and canceled in
their entire and are of no further force or effect.
15.6. Applicable Law and Severability. This Agreement
shall be governed by the laws of the State of Utah. Any provision herein
held to be unenforceable by a court of competent jurisdiction shall be
deemed severable and the remaining Agreement shall continue in full
force and effect.
15.7. Successor and Assigns. All of the terms and
provisions contained herein shall inure to the benefit of and shall be
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns. However, no assignment may be
made of the rights or obligations of a party to this Agreement, without the
written consent of the other party hereto.
15.8. Further Assurances. Each of the parties hereto shall
execute and deliver any and all additional papers, documents, and other
assurances, and shall do any and all acts and things reasonably necessary
in connection with the performance of their obligations hereunder and to
carry out the intent of the parties hereto.
15.9. Announcements of this merger, and any and all other
public statements or disclosures, will be made only by authorized
personnel of ATG, CTD and/or CMI appropriately designated by the
Board of Directors of CTD or of CMI. Interviews, therefore, must be
coordinated and controlled to avoid misunderstandings or misstatements
that could confuse or inappropriately divulge insider information, and
terms will not be disclosed except where required by law.
15.10 Captions. The captions appearing at the
commencement of the sections hereof are descriptive only and for
convenience in reference. Should there by any conflict between any such
caption and the section at the head of which it appears, the section and
not such caption shall control and govern in the construction of this
document.
15.11. Exhibits. All exhibits and schedules attached
hereto and referred to herein are hereby incorporated herein as though set
forth at length.
15.12. Separate Counterparts. This document may be
executed in one or more separate counterparts, each of which, when so
executed, shall be deemed to be an original. Such counterparts may be
executed and transmitted by facsimile. Such counterparts shall, together,
constitute and be one and the same instrument.
15.13. Time of the Essence. Time is of the essence
of this Agreement.
15.14. Notices. Any and all notices, demands or
other communications required or desired to be given hereunder by any
party shall be in writing and shall be validly given or made to another
party if served either personally, if deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested, or if
mailed by a reputable overnight courier such as Federal Express. If such
notice, demand or other communication be served personally, notice shall
be conclusively deemed given on the day notice is received. If such
notice, demand or other communication be sent by overnight courier,
notice shall conclusively be deemed given on the business day next
following the deposit thereof with the courier:
TO CMI: Chequemate International Inc.
57 West 200 South, Suite 350
Salt Lake City, Utah 84101
with a copy to: Bruce L. Dibb
311 South State, Suite 380
Salt Lake City, Utah 84111
TO ATG: Advanced Technology Group L.L.C.
459 West 9160 South
Sandy, Utah 84070
with a copy to: Brent Christensen
50 South Main Street, #1600
Salt Lake City, Utah 84144
Any party may change its address for the purpose of receiving notices,
demands and other communications as herein provided by a written notice
give in the manner aforesaid to the other party or parties hereto.
15.15. Closing. Unless otherwise agreed to by ATG
and CMI, the closing or Closing Date, as referred to in this Agreement,
shall take place on the first business day more than 30 days after the
execution of this Agreement at a mutually agreeable location in Salt Lake
City.
In witness whereof, the parties have executed this Agreement at
Salt Lake City, Utah, the day and year first above written.
Advanced Technology Group, L.C.
By /s/ Bert Alvey /s/ John Bartholemew
Bert Alvey, Member of ATG John Bartholemew, Member ofATG
/s/ Andre Peterson /s/ Loran Swensen
Andre Peterson, Member of ATG Loran Swensen, Member of ATG
/s/ Jonathan Neville /s/ Jerry Coleman
Jonathan Neville, Member of ATG Jerry Coleman, Member of ATG
/s/ Amber Davidson /s/ Carlos Bullos
Amber Davidson, Member of ATG Carlos Bullos, Member of ATG
/s/ Boyd Fenn /s/ Merl Prince
Boyd Fenn, Member of ATG Merl Prince, Member of ATG
/s/ Merl Prince
Stan Fenn, Member of ATG
Chequemate International, Inc.
By /s/ Blaine Harris
Blaine Harris CEO & Chairman
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