Exhibit 10.1
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STRATA
SECURED INTEREST PURCHASE AGREEMENT
TABLE OF CONTENTS
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Page
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1. CONSIDERATION FOR PURCHASE............................................2
2. TRANSFER OF ASSETS ...................................................2
2.1 E&S Assignment......................................2
2.2 Xxxxxxx Assignment..................................2
2.3 J&S Assignment......................................3
2.4 SAMA Assignment.....................................3
3. THE CLOSING ..........................................................3
3.1 Obligations of C-3D at the Closing .................3
3.2 Obligations of E&S at the Closing ..................4
3.3 Obligations of Xxxxxxx at the Closing ..............5
3.4 Obligations of J&S at the Closing ..................5
3.5 Obligations of SAMA at the Closing .................6
3.6 Conditions to Closing...............................6
4. DEFINITIONS...........................................................7
5. REPRESENTATIONS AND WARRANTIES
OF C-3D....................................7
5.1 Organization, Good Standing
and Qualification .........................8
5.2 Capital Structure ..................................8
5.3 Authority Relative to This Agreement................8
5.4 Valid Issuance of Stock.............................8
5.5 Governmental Consents...............................8
5.6 Non-Contravention...................................8
5.7 Litigation..........................................8
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5.8 Compliance with Law and Charter Documents...........8
5.9 Absence of Certain Changes .........................8
6. REPRESENTATIONS AND WARRANTIES
OF E&S......................................................10
6.1 Organization and Qualification ....................11
6.2 Authority Relative to this Agreement...............11
6.3 Title to E&S Assets Assigned Pursuant to
the Agreement.............................11
6.4 Balance Owing on Loan..............................11
7. REPRESENTATIONS AND WARRANTIES OF
XXXXXXX.....................................................11
7.1 Authority Relative to this Agreement...............11
7.2 Title to Xxxxxxx Assets Assigned Pursuant to
the Agreement.............................11
7.3 Balance Owing on Loan..............................12
8. REPRESENTATIONS AND WARRANTIES OF J&S................................12
8.1 Organization and Qualification ....................12
8.2 Authority Relative to this Agreement...............12
8.3 Title to J&S Assets Assigned Pursuant to
the Agreement.............................12
8.4 Balance Owing on Loan..............................12
9. REPRESENTATIONS AND WARRANTIES OF SAMA...............................12
9.1 Organization and Qualification ....................12
9.2 Authority Relative to this Agreement...............13
9.3 Title to SAMA Assets Assigned Pursuant to
the Agreement.............................13
9.4 Balance Owing on Loan..............................13
10. SECURED PARTIES' OBLIGATIONS AFTER CLOSING ..........................14
10.1 Preservation of Goodwill ..........................14
10.2 Use of Name........................................15
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10.3 Secured Parties' Indemnities.......................15
10.4 Nonsolicitation of Employees........................?
11. FORM OF AGREEMENT ...................................................16
11.1 Headings...........................................16
11.2 Entire Agreement; Modification; Waiver.............16
11.3 Counterparts.......................................16
12. PARTIES..............................................................16
12.1 Parties in Interest................................16
12.2 Assignment.........................................16
13. REMEDIES ............................................................16
14. NATURE AND SURVIVAL OF REPRESENTATION AND
WARRANTIES .................................................17
15. NOTICES .............................................................17
16. GOVERNING LAW .......................................................18
17. MISCELLANEOUS .......................................................18
17.1 References ........................................18
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TABLE OF SCHEDULES
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SCHEDULE A
Secured Party Interests and UCC-1 Filing Dates
SCHEDULE B
E&S Loan Documents
SCHEDULE C
Xxxxxxx Loan Documents
SCHEDULE D
J&S Loan Documents
SCHEDULE E
SAMA Loan Documents
SCHEDULE F
License Agreement
SCHEDULE G-1 and G-2
Investment Intent Letters
SCHEDULE H-1 and H-2
Release Documents
SCHEDULE I
Representations and Warranties Document
SCHEDULE J
Conditional Release Agreement
SCHEDULE K
Xxxx of Sale
SCHEDULE L
Acknowledgment of Liability
SCHEDULE M
Products
SCHEDULE N
Trademarks and Copyrights
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SECURED INTEREST PURCHASE AGREEMENT
This Agreement is entered into this 31st day of March, 1999, by and
between Chequemate International, Inc., dba C-3D Digital, Inc. ("C-3D"); Xxxxx
and Xxxxxxxxxx Computer Corporation ("E&S"); XxXxxxx Xxxxxxxxxx Xxxxxxx
("Xxxxxxx"); J and S Farms, Ltd. ("J&S"); and SAMA Ltd. ("SAMA") formerly known
as SJA Limited. E&S, Xxxxxxx, J&S and SAMA are collectively referred to herein
as the "Secured Parties" and individually as a "Secured Party."
RECITALS
A. The Secured Parties hold security interests in tangible assets, accounts
receivable, intellectual property and other assets of Strata, Inc.("Strata"), a
Utah corporation having its principal place of business in St. Xxxxxx, Utah. The
secured interests secure the payment of promissory notes in amounts equal to or
greater than those set forth on Schedule A attached hereto. Schedule A also
provides the filing date for the UCC-1 financing statement filings of the
Secured Parties.
B. E&S has made loans (the "E&S Loans") pursuant to promissory notes (the "E&S
Promissory Notes") to Strata pursuant to the documents described on Schedule B
and included as part of Schedule B (the "E&S Loan Documents"). Schedule B also
includes a copy of the Certification of Recordation of the filing of the
security interests of E&S with the United States Copyright Office and the United
States Patent and Trademark Office.
X. Xxxxxxx has made a loan (the "Xxxxxxx Loan") pursuant to a promissory note
(the "Xxxxxxx Promissory Note") to Strata pursuant to the documents described on
Schedule C and included as part of Schedule C (the "Xxxxxxx Loan Documents").
D. J&S has made loans (the "J&S Loans") pursuant to a promissory note (the "J&S
Promissory Note") to Strata pursuant to the documents described on Schedule D
and included as part of Schedule D (the "J&S Loan Documents").
E. SAMA has made loans (the "SAMA Loans") pursuant to a promissory note (the
"SAMA Promissory Note") to Strata pursuant to the documents described on
Schedule E and included as part of Schedule E (the "SAMA Loan Documents").
F. C-3D desires to purchase the secured interests and an assignment of the loans
of the Secured Parties pursuant to the terms of this Agreement.
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The parties agree as follows:
1. CONSIDERATION FOR PURCHASE. Subject to the terms and the
conditions set forth in this Agreement, C-3D agrees to issue and deliver to the
Secured Parties, at the Closing described in paragraph 5 hereof, shares of the
restricted common stock of C-3D as follows (the "Shares"):
a. To E&S, 200,000 shares of common stock;
b. To Xxxxxxx,16,493 shares of common stock;
c. To J&S, 85,560 shares of common stock; and
d. To SAMA, 31,280 shares of common stock.
2. TRANSFER OF ASSETS.
2.1 E&S Assignment. In exchange for 200,000 of the Shares, E&S hereby
sells, assigns, transfers and conveys to C-3D, where is, as is, without
representation or warranty as to value or collectability, and without recourse,
all of the right, title and interest of E&S under the E&S Loan Documents,
including the E&S Promissory Notes; and C-3D accepts such sale, assignment,
transfer and conveyance, after having an adequate opportunity to investigate the
same with the assistance of its counsel and to satisfy itself about the
adequacy, enforceability and collectability of the E&S Loan Documents and the
E&S Promissory Notes. At the Closing, E&S shall deliver to C-3D the original E&S
Loan Documents, properly endorsed, "without recourse," together with such UCC-3
Assignments and other assignment documents to be filed in the United States
Copyright Office and in the United States Patent and Trademark office as shall
be prepared by C-3D's counsel. Notwithstanding such assignment, C-3D
acknowledges that E&S shall continue to have a liquidated claim against Strata,
Xxx Xxxxxxxxxx, Xxxxxx Xxxxxxxxxx, Xxxx Xxxxxxxxxx and Xxxxxx Xxxxxxxxxx in the
amount of $1,000,000.
2.2 Xxxxxxx Assignment. In exchange for the common stock described in
paragraph 1(b) of this Agreement, Xxxxxxx hereby sells, assigns, transfers and
conveys to C-3D all of the right, title and interest of Xxxxxxx under the
Xxxxxxx Loan Documents, including the Xxxxxxx Promissory Note; and C-3D accepts
such sale, assignment, transfer and conveyance. At the Closing, Xxxxxxx shall
deliver to C-3D the original Xxxxxxx Loan Documents, properly endorsed, together
with appropriate UCC-3 assignments of all financing statements.
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2.3 J&S Assignment. In exchange for the common stock described in
paragraph 1(c) of this Agreement, J&S hereby sells, assigns, transfers and
conveys to C-3D all of the right, title and interest of J&S under the J&S Loan
Documents, including the J&S Promissory Note; and C-3D accepts such sale,
assignment, transfer and conveyance. At the Closing, J&S shall deliver to C-3D
the original J&S Loan Documents, properly endorsed, together with appropriate
UCC-3 assignments of all financing statements.
2.4 SAMA Assignment. In exchange for the common stock described in
paragraph 1(d) of this Agreement, SAMA hereby sells, assigns, transfers and
conveys to C-3D all of the right, title and interest of SAMA under the SAMA Loan
Documents, including the SAMA Promissory Note; and C-3D accepts such sale,
assignment, transfer and conveyance. At the Closing, SAMA shall deliver to C-3D
the original SAMA Loan Documents, properly endorsed, together with appropriate
UCC-3 assignments of all financing statements.
3. THE CLOSING. The Closing of the purchase, sale and assignment of
the interests of the Secured Parties as described in paragraph 2 above (the
"Closing") shall take place at the offices of Jensen, Duffin, Xxxxxx, Xxxx and
Xxxxxxx, which are located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000; Salt Lake City,
Utah, at 10:00 A.M. local time on Wednesday, April 7, 1999, 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, any of the parties may extend the Closing Date for a
period or periods not exceeding an aggregate of five business days by giving
written notice to the other parties.
3.1 Obligations of C-3D at the Closing. At the Closing, C-3D shall
deliver or cause to be delivered to the Secured Parties:
(a) A C-3D stock certificate in the name of Xxxxx &
Xxxxxxxxxx Computer Corporation for 200,000 shares of
restricted common stock; a C-3D stock certificate in the
name of XxXxxxx Xxxxxxxxxx Xxxxxxx for 16,493 shares of
restricted common stock; a C-3D stock certificate in the
name of J & S Farms, Ltd. for 85,560 shares of
restricted common stock; and a C-3D stock certificate in
the name of SAMA, Ltd. for 31,280 shares of restricted
common stock.
(b) The License, in the form attached hereto as Schedule F,
executed by C-3D and granting to E&S a fully paid,
perpetual restricted license to all
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computer source code, software documentation, build
scripts, test cases and regression tests, which are
included as part of a Strata technology as further
defined and set forth in such License.
(c) The Xxxx of Sale in Lieu of Foreclosure, in the form
attached hereto as Schedule K, executed by Xxx
Xxxxxxxxxx, Xxxxxx Xxxxxxxxxx, Xxxx Xxxxxxxxxx and
Xxxxxx Xxxxxxxxxx.
(d) The Mutual Release, in the form attached hereto as
Schedule H-2, executed by E&S, XxXxxxx Xxxxxxxxxx
Xxxxxxx, J&S Farms Limited and SJA Limited.
(e) The Release, in the form attached hereto as Schedule
H-1, executed by Xxx Xxxxxxxxxx, Xxxxxx Xxxxxxxxxx, Xxxx
Xxxxxxxxxx, Xxxxxx Xxxxxxxxxx and Strata, Inc.
(f) The Acknowledgment of Liability, in the form attached
hereto as Schedule L, executed by Xxx Xxxxxxxxxx, Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxx Xxxxxxxxxx and
Strata, Inc.
3.2 Obligations of E&S at the Closing. At the Closing, E&S shall
deliver or cause to be delivered to C-3D:
(a) Original E&S Loan Documents, "where is, as is," without
representation or warranty as to value or
collectability, and without recourse.
(b) Appropriate UCC-3 Assignments of all E&S financing
statements, as prepared by, and in a form satisfactory
to, C-3D's counsel.
(c) Appropriate Assignment documents of the secured interest
in copyrights and trademarks recorded at the U.S.
Copyright Office and U.S. Patent and Trademark office,
prepared by, and in a form satisfactory to, C- 3D's
counsel.
(d) An investment letter signed by authorized officers of
E&S in the form of the document attached to this
agreement as Exhibit "G-1."
(e) The executed conditional release document of E&S in the
form of Schedule J attached hereto.
(f) The Mutual Release executed by E&S, in the form attached
hereto as Schedule H-2.
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(g) The License, in the form attached hereto as Schedule F,
executed by E&S.
3.3 Obligations of Xxxxxxx at the Closing. At the Closing, Xxxxxxx
shall deliver or cause to be delivered to C-3D:
(a) The original Xxxxxxx Loan Documents.
(b) Appropriate UCC-3 assignments of all Xxxxxxx financing
statements.
(c) An investment intent letter signed Xxxxxxx in the form
of the document attached to this Agreement as Schedule
G-2.
(d) The executed Mutual Release Document in the form of
Schedule H-2.
(e) The executed release by Xxxxxxx of all guarantors of the
Xxxxxxx Promissory Note.
(f) The executed representation and warranty document signed
by Xxx Xxxxxxxxxx and Xxxx Xxxxxxxxxx in the form of
Schedule I.
(g) The executed Proprietary Information Agreements of Xxx
Xxxxxxxxxx and Xxxx Xxxxxxxxxx in form and content
acceptable to C-3D.
3.4 Obligations of J&S at the Closing. At the Closing, J&S shall
deliver or cause to be delivered to C-3D:
(a) The original J&S Loan Documents.
(b) Appropriate UCC-3 assignments of all J&S financing
statements.
(c) An investment intent letter signed by the authorized
officers, partners or members of J&S in the form of the
document attached to this Agreement as Schedule G-2.
(d) The executed Mutual Release Documentation the form of
Schedule H-2.
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(e) The executed release by J&S of all guarantors of the J&S
Promissory Note.
3.5 Obligations of SAMA at the Closing. At the Closing, SAMA shall
deliver or cause to be delivered to C-3D:
(a) The original SAMA Loan Documents.
(b) Appropriate UCC-3 assignments of all SAMA financing
statements.
(c) An investment intent letter signed by the authorized
officers, partners or members of SAMA in the form of the
document attached to this agreement as Schedule G-2.
(d) The executed Mutual Release Documentation the form of
Schedule H-2.
(e) The executed release by SAMA of all guarantors of the
SAMA Promissory Note.
3.6 Conditions to Closing. Notwithstanding the other provisions of
this Agreement, C-3D may delay the Closing for as many as fifteen (15) days, or
will not be required to close the transaction (and will be released from all
obligations hereunder), if:
(a) C-3D has been unable to enter into license or royalty
agreements with each of (i) Altura, (ii) TGS-Yonowat,
and (iii) Viewpoint Datalabs, pursuant to terms
satisfactory to C-3D, in its sole discretion; or
(b) Any of the obligations of the Secured Parties, as
provided in paragraph 3 of this Agreement have not been
satisfied.
(c) C-3D is not reasonably satisfied with the terms of
Schedule F and I.
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4. DEFINITIONS
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For purposes of this entire Agreement, the following terms shall have
the meanings indicated.
"Strata Products" shall mean any and all products in any and all stages
of development, (a) which incorporate the intellectual property owned prior to
January 20, 1999 by Strata, Inc., a Utah corporation with its principal place of
business in St. Xxxxxx, Utah, or (b) which are owned or developed by C-3 after
the date of this Agreement. Without limiting the generality of the foregoing
sentence, the phrase "Strata Products" includes all products sold by Strata,
Inc. prior to the date of this Agreement, including those products described in
Schedule "M" attached to this Agreement and incorporated by this reference, and
those products related to the trademarks and copyrights referred to in Schedule
"N" attached to this Agreement and incorporated by this reference.
"Strata 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 Strata Products.
"Strata Business Information" means any and all of the business
information, financial information, customer lists, supplier lists, marketing
strategies and plans, and other information of Strata, Inc. (but excluding
Strata Technology) and which are known to Strata, Inc. as of January 20, 1999.
"Strata Proprietary Information" shall mean any and all Strata
Technology and Strata Business Information that is not generally known to the
public or to others.
"Strata 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 Strata Products,
Strata Technology and/or the Strata Proprietary Information.
5. REPRESENTATIONS AND WARRANTIES OF C-3D. C-3D hereby represents and
warrants to the Secured Parties that the following facts and circumstances are,
and (except as otherwise indicated by reference to a specific date), at all
times up to the Closing Date will be, true and correct. Each warranty set forth
in this paragraph 6 shall survive the Closing.
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5.1 Organization, Good Standing and Qualification. C-3D is a
corporation duly organized, validly existing, and in good standing under the
laws of Utah, has all necessary corporate powers to own its properties and to
carry on its business as now owned and operated by it. C-3D is duly qualified
and in good standing and authorized to do business in each jurisdiction in which
the failure to so qualify would have a Material Adverse Effect on C-3D. As used
in this Agreement, Material Adverse Effect means a material adverse effect on,
or a material adverse change in, or a group of such of effects on or changes in,
the business, operations, financial condition, results of operation, prospects,
assets or liabilities of C-3D, taken as a whole.
5.2 Capital Structure. The authorized number of shares of C-3D is
500,000,000, all of one class, of which 20,580,659 shares are issued and
outstanding, or subscribed for as of February 4, 1999.
5.3 Authority Relative to this Agreement. C-3D 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 C-3D. This
Agreement has been duly and validly executed and delivered by C-3D and
constitutes a valid and binding agreement of C-3D, enforceable against C-3D in
accordance with its terms.
5.4 Valid Issuance of Stock.
5.4.1 Valid Issuance. The Shares, when issued, sold
and delivered in accordance with the terms of this Agreement,
will be duly and validly issued, fully paid and nonassessable.
5.4.2 Compliance with Securities Laws. The Shares
(assuming no change in applicable law and no unlawful
distribution of the Shares by the Secured Parties) will be
issued to the Secured Parties in compliance with applicable
exemptions from (i) the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and (ii) the registration and qualification
requirements of all applicable securities laws of the states
of the United States.
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5.5 Governmental Consents. No consent, approval, order or
authorization of, or registration qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company or any of its subsidiaries is required in connection with the
consummation of the transactions contemplated by this Agreement, except for the
filing of such qualifications or filings under the Securities Act and the
regulations thereunder and all applicable state securities laws as may be
required in connection with the transactions contemplated by this Agreement. All
such qualifications and filings will, in the case of qualifications, be
effective on the Closing Date and will, in the case of filings, be made within
the time prescribed by law.
5.6 Non-Contravention. The execution, delivery and performance of this
Agreement by the Company, and the consummation by the Company of the
transactions contemplated hereby and thereby, do not and will not: (i)
contravene or conflict with the Company's Articles of Incorporation, as amended
as of the Closing Date (the "Articles") or the Company's bylaws, as amended as
of the Closing Date (the "Bylaws"); (ii) constitute a violation of any provision
of any federal, state, local or foreign law binding upon or applicable to the
Company or any of its subsidiaries; or (iii) constitute a default or require any
consent under, give rise to any right of termination, cancellation or
acceleration of, or to a loss of any benefit to which the Company or any of its
subsidiaries is entitled under, or result in the creation or imposition of any
lien, claim or encumbrance on any assets of the Company or any such subsidiary
under, any contract to which the Company or such subsidiary is a party or any
permit, license or similar right relating to the Company or such subsidiary or
by which the Company or such subsidiary may be bound or affected in such a
manner as, together with all other such matters, would have a Material Adverse
Effect on the Company.
5.7 Litigation. Except as described in the LITIGATION section of the
March 26, 1999 Private Placement Memorandum of the Company, there is no action,
suit, proceeding, claim, arbitration or investigation (each, an "Action")
pending or, to the Company's best knowledge, threatened: (i) against the Company
or any of its subsidiaries, or any of their respective activities, properties or
assets, or any officer, director or employee of the Company or any of its
subsidiaries in connection with such officer's, director's or employee's
relationship with, or actions taken on behalf of, the Company or such
subsidiary, that is reasonably likely to have a Material Adverse Effect on the
Company; or (ii) that seeks to prevent, enjoin, alter or delay any of the
transactions contemplated by this Agreement. Except for the Ignite Settlement
Order, none of the Company and its subsidiaries is a party to or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality. No Action by the Company or any of its
subsidiaries is currently pending, nor does the Company or any of its
subsidiaries intend to initiate any Action, that is reasonably likely to have a
Material Adverse Effect on the Company.
5.8 Compliance with Law and Charter Documents. The Company is not in
violation or default of any provision of its Articles or Bylaws. Each of the
Company and its subsidiaries has complied and is in compliance with all
applicable statutes, laws, regulations
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and executive orders of the United States of America and all states, foreign
countries and other governmental authorities having jurisdiction over the
Company's or any of its subsidiaries' business or properties, except for any
violations that would not, either individually or in the aggregate, have a
Material Adverse Effect on the Company.
5.9 Absence of Certain Changes Since Balance Sheet Date. Since
December 31,1998, the business and operations of the Company and each of its
subsidiaries have been conducted in the ordinary course consistent with past
practice, and there has not been:
5.9.1 any declaration, setting aside or payment of any
dividend or other distribution of the assets of the Company with
respect to any shares of its capital stock or any repurchase,
redemption or other acquisition by the Company or any of its
subsidiaries of any outstanding shares of the Company's capital stock;
5.9.2 any damage, destruction or loss, whether or not covered
by insurance, except for such occurrences that have not resulted, and
are not expected to result, in a Material Adverse Effect on the
Company;
5.9.3 any waiver by the Company or any of its subsidiaries of
a valuable right or of a material debt owed to it, except for such
waivers that have not resulted, and are not expected to result,
individually or in the aggregate, in a Material Adverse Effect on the
Company;
5.9.4 any material change or amendment to, or any waiver of
any material rights under a material contract or other arrangement by
which the Company or any of its subsidiaries, or any of their
respective assets or properties, is bound or subject, except for
changes, amendments or waivers that are expressly provided for or
disclosed in this Agreement or that have not resulted, and are not
expected to result, individually or in the aggregate, in a Material
Adverse Effect on the Company;
5.9.5 any change by the Company or any of its subsidiaries in
its accounting principles, methods or practices or in the manner in
which it keeps its accounting books and records, except any such change
required by a change in generally accepted accounting principles; or
5.9.6 any other event or condition of any character, except
for such events and conditions that have not resulted, and are not
expected to result, individually or in the aggregate, in a Material
Adverse Effect on the Company.
6. REPRESENTATIONS AND WARRANTIES OF E&S. E&S represents and warrants
to C-3D as follows:
Page 17 of 26
6.1 Organization and Qualification. E&S is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Utah. E&S is duly qualified and in good standing and authorized to do business
in the state of Utah.
6.2 Authority Relative to this Agreement. E&S has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by E&S and constitutes a valid and binding
agreement of E&S, enforceable against E&S in accordance with its terms.
6.3 Title to E&S Assets Assigned Pursuant to the Agreement. E&S has
good and marketable title to the E&S Promissory Notes and no interest in the E&S
Promissory Notes or the interest securing the E&S Promissory Notes has been sold
or assigned to any other person or entity. The Promissory Notes and secured
interests of E&S are free and clear of mortgages, liens, pledges, charges,
encumbrances, equities, claims, covenants, conditions or restrictions. E&S has
no knowledge of any defect in its security interest represented by the E&S Loan
Documents or the perfection of such security interests, except for the identity
of the xxxx in Canada and France.
6.4 Balance Owing on Loans. The dollar amount of the E&S Loans, as of
February 1, 1999, is at least the amount as set forth in the fifth column of
Schedule A; and the balance owing as of the Closing shall not be less than this
amount.
7. REPRESENTATIONS AND WARRANTIES OF XXXXXXX. Xxxxxxx represents and
warrants to C-3D as follows:
7.1 Authority Relative to this Agreement. This Agreement has been duly
and validly executed and delivered by Xxxxxxx and constitutes a valid and
binding agreement of Xxxxxxx, enforceable against Xxxxxxx in accordance with its
terms.
7.2 Title to Xxxxxxx Assets Assigned Pursuant to the Agreement.
Xxxxxxx has good and marketable title to the Xxxxxxx Promissory Note and no
interest in the Xxxxxxx Promissory Note or the interest securing the Xxxxxxx
Promissory Note has been sold or assigned to any other person or entity. The
Xxxxxxx Promissory Note and secured interest of Xxxxxxx are free and clear of
mortgages, liens, pledges, charges, encumbrances, equities, claims, covenants,
conditions or restrictions. Xxxxxxx has no knowledge of any defect in her
security interest represented by the Xxxxxxx Loan Documents or the perfection of
such security interest.
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7.3 Balance Owing on Loan. The dollar amount of the Xxxxxxx Loan, as
set forth in the fifth column of Schedule A, is correct as of February 1, 1999;
and the balance owing as of the Closing shall not be less than this amount.
8. REPRESENTATIONS AND WARRANTIES OF J&S. J&S represents and warrants
to C-3D as follows:
8.1 Organization and Qualification. J&S is a limited partnership duly
organized, validly existing and in good standing under the laws of the state of
Utah. J&S is duly qualified and in good standing and authorized to do business
in the state of Utah.
8.2 Authority Relative to this Agreement. J&S has all requisite 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 authorized partners of J&S. This Agreement has been
duly and validly executed and delivered by J&S and constitutes a valid and
binding agreement of J&S, enforceable against J&S in accordance with its terms.
8.3 Title to J&S Assets Assigned Pursuant to the Agreement. J&S has
good and marketable title to the J&S Promissory Note and no interest in the J&S
Promissory Note or the interest securing the J&S Promissory Note has been sold
or assigned to any other person or entity. The Promissory Note and secured
interest of J&S are free and clear of mortgages, liens, pledges, charges,
encumbrances, equities, claims, covenants, conditions or restrictions. J&S has
no knowledge of any defect in its security interest represented by the J&S Loans
Documents or the perfection of such security interest.
8.4 Balance Owing on Loan. The dollar amount of the J&S Loan, as set
forth in the fifth column of Schedule A, is correct as of February 1, 1999; and
the balance owing as of the Closing shall not be less than this amount.
9. REPRESENTATIONS AND WARRANTIES OF SAMA. SAMA represents and
warrants to C-3D as follows:
9.1 Organization and Qualification. SAMA is a limited partnership duly
organized, validly existing and in good standing under the laws of the state of
Utah. SAMA is duly qualified and in good standing and authorized to do business
in the state of Utah.
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9.2 Authority Relative to this Agreement. SAMA has all requisite 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 authorized partners of SAMA. This Agreement has been
duly and validly executed and delivered by SAMA and constitutes a valid and
binding agreement of SAMA, enforceable against SAMA in accordance with its
terms.
9.3 Title to SAMA Assets Assigned Pursuant to the Agreement. SAMA has
good and marketable title to the SAMA Promissory Note and no interest in the
SAMA Promissory Note or the interest securing the SAMA Promissory Note has been
sold or assigned to any other person or entity. The Promissory Note and secured
interest of SAMA are free and clear of mortgages, liens, pledges, charges,
encumbrances, equities, claims, covenants, conditions or restrictions. SAMA has
no knowledge of any defect in its security interest represented by the SAMA
Loans Documents or the perfection of such security interest.
9.4 Balance Owing on Loan. The dollar amount of the SAMA Loan, as set
forth in the fifth column of Schedule A, is correct as of February 1, 1999; and
the balance owing as of the Closing shall not be less than this amount.
Page 20 of 26
10. OBLIGATIONS OF CERTAIN SECURED PARTIES AFTER THE CLOSING.
----------------------------------------------------------
10.1 Preservation of Goodwill. Following the Closing, Xxxxxxx, J&S and
SAMA will restrict their activities so that C-3D's reasonable expectations with
respect to the goodwill, business reputation, employee relations and prospects
connected with the acquisition of the secured interests and of the Strata
Intellectual Property pursuant to the foreclosure of such interests will not be
materially impaired. In furtherance, but not in limitation of, this general
obligation, Xxxxxxx, J&S and SAMAagree that, for a period of the longer of (a)
three (3) years following the Closing Date; or (b) as long as C-3D or its
assigns or successors in interest carry on a business using the Strata
Intellectual Property in the countries or areas specified:
(a) Xxxxxxx, J&S and SAMA will not compete with C-3D or
engage in any activity (except as provided in paragraph
5 hereof), which is substantially the same as or
represents an outgrowth of any business or activity
conducted by Strata, Inc. during the past two years, if
such business or activity extends to the United States
and/or any other country in which Strata, Inc. has
heretofore engaged in business or otherwise established
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 Strata, Inc.; or (ii)
entering into or attempting to enter into any business
or substantially similar business to or competing in any
way with the business previously conducted by Strata,
Inc., 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
previously conducted by Strata, Inc.; or (iv)
participating in any such competing entity or enterprise
as an owner, partner, limited partner, joint venturer,
creditor or stockholder.
The parties intend that the covenant contained in the
preceding portion of this paragraph 11.1(a) shall be
construed as a series of separate covenants, one for
Page 21 of 26
each state of the United States, Provinces of Canada, or
any countries of the world. Each separate covenant shall
be deemed identical in terms to the covenant contained
in this paragraph 11.1(a). If, in any judicial
proceeding, a court shall refuse to enforce any of the
separate covenants deemed included in this paragraph,
then this unenforceable covenant shall be deemed
eliminated from these provisions for the purpose of
those proceedings to the extent necessary to permit the
remaining separate covenants to be enforced.
(b) Except as provided in paragraph 5 of this Agreement,
Xxxxxxx, J&S and SAMA will not disclose to any person or
use for their own benefit any Strata Intellectual
Property pricing or similar matters possessed by them
relating to the Strata Intellectual Property or the
business previously conducted by Strata, Inc., unless
they first clearly demonstrate to C-3D that such matters
are at, the time of the proposed disclosure or use, of
common knowledge within the trade.
10.2 Use of Name. Xxxxxxx, J&S and SAMA agree that after the Closing
Date they shall not use or employ in any manner directly or indirectly the name
"Strata," or any variation thereof.
10.3 Certain Secured Parties' Indemnities. Each of Xxxxxxx, J&S and
SAMA (an "Indemnifying Party") shall indemnify, defend and hold harmless C-3D,
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 C-3D, or its officers, directors, or agents shall incur or
suffer, which arise, result from or relate to any breach of, or failure by such
Indemnifying Party to perform, any of its own representations, warranties,
covenants or agreements in this Agreement or in any schedule, certificate,
exhibit or other instrument furnished or to be furnished by an Indemnifying
Party under this Agreement. Notwithstanding any other provision of this
Agreement, an Indemnifying Party shall not be liable to C-3D, or its officers,
directors, or agents on any warranty, representation or covenant made by the
Indemnifying Party in this Agreement, regarding any single claim, loss, expense,
obligation or other liability that does not exceed $5,000; provided, however,
that when the aggregate amount of all such claims, losses, expenses, obligations
and liabilities of a Indemnifying Party not exceeding $5,000 each reaches
$10,000, the Indemnifying Party shall thereafter be liable in full for all such
breaches and indemnities and regarding all those claims, losses, expenses,
obligations, and liabilities.
Page 22 of 26
11. FORM OF AGREEMENT.
------------------
11.1 Headings. The subject headings of the paragraphs of this Agreement
are included for purposes of convenience only, and shall not affect the
construction or interpretation of any of its provisions.
11.2 Entire Agreement; Modification; Waiver. This Agreement and the
Schedules furnished under this Agreement constitute 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 the party to be charged. 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.
11.3 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.
12. PARTIES.
--------
12.1 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
heirs, 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.
12.2 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.
13. REMEDIES. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
Page 23 of 26
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.
14. NATURE AND SURVIVAL OF REPRESENTATIONS 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.
15. 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:
C-3D: C-3D Digital, Inc.
Attn: J. Xxxxxxx Xxxx
00 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
with copy to: Xxxxx X. Xxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Secured Parties: Xxxxx and Xxxxxxxxxx Computer Corporation
000 Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
with copy to: Xxxxx X. Xxxx
000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
XxXxxxx Xxxxxxx
000 Xxxxx 000 Xxxx
Xx. Xxxxxx, Xxxx 00000
Page 24 of 26
with copy to:
J&S Farms, Ltd.
000 Xxxxx 000 Xxxx
Xx. Xxxxxx, Xxxx 00000
with copy to:
SAMA Ltd.
000 Xxxxx Xxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxx 00000
with copy to:
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
16. GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed by, the laws of the State of Utah.
17. MISCELLANEOUS.
--------------
17.1 References. Unless otherwise specified, references to paragraphs
are to paragraphs in this Agreement.
Page 25 of 26
IN WITNESS WHEREOF, the parties to this Agreement have duly
executed it as of the day and year first above written.
Chequemate International, Inc., dba C-3D Digital, Inc.
By /s/ Xxxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx, Chairman
Xxxxx and Xxxxxxxxxx Computer Corporation
By /s/ Xxxx XxXxxxx
----------------------------------------
Its Vice President
----------------------------------------
J and S Farms, Ltd.
By /s/
----------------------------------------
Its General Partner
----------------------------------------
SAMA Limited
By /s/
----------------------------------------
Its General Partner
----------------------------------------
/s/ XxXxxxx Xxxxxxxxxx Xxxxxxx
-----------------------------------------
XxXxxxx Xxxxxxxxxx Xxxxxxx, individually
Page 26 of 26
