EXHIBIT 99(B)(2)
WAIVER AND RELEASE
OF NON-EMPLOYEE SHAREHOLDERS
This WAIVER AND RELEASE ("Agreement") is made and entered into as of this
day of April, 2001, by and between Chequemate International Inc., a Utah
corporation (together with all Subsidiaries of Chequemate International Inc.,
"the Company"), Another World Inc., a corporation organized under the laws of
the Republic of Korea ("AWK"), the shareholders of the Company listed on the
signature pages hereto (collectively, the "VisionComm Shareholders") (the
Company, AWK, and the VisionComm Shareholders are collectively referred to as
the "Parties").
WITNESSETH
WHEREAS, the Company believes it is highly desirable and in the best
interests of the Company to receive an injection of cash and viable assets from
certain shareholders of AWK (the "Purchasers");
WHEREAS, the Parties desire that Purchaser acquire a majority equity
interest in the Company pursuant to that certain Master Agreement between the
Company and AWK dated March 15, 2001 ("Master Agreement");
WHEREAS, the Company and the VisionComm Shareholders desire to cooperate
fully with AWK in all aspects of the Acquisition, including, but not limited to,
negotiations, due diligence and the obtaining of necessary approvals, and AWK
desires to cooperate fully with the Company in all aspects of the Acquisition,
including, but not limited to, negotiations, due diligence and the obtaining of
necessary approvals;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements herein contained, the adequacy and sufficiency is
hereby acknowledged and in order to induce AWK to enter into the Master
Agreement and to implement the transactions contemplated therein, the Parties
hereby agree as follows:
REPRESENTATIONS AND WARRANTIES
1.1 Each Party represents and warrants that as of the date of this
Agreement:
1.1.1 ORGANIZATION. If a business entity, it is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its organization.
1.1.2 POWER AND AUTHORITY. It has all requisite power and authority to
enter into this Agreement and to perform its obligations under this
Agreement and to consummate the transactions contemplated hereby or thereby.
The execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate action or otherwise on the part of
each Party. This Agreement has been duly executed and delivered by each
party and constitutes, and upon execution thereof by all parties thereto,
the legal, valid and binding obligations of each Party, enforceable against
each Party in accordance with their respective terms. The execution and
delivery by each Party of this Agreement do not, and the consummation of the
transactions contemplated hereby or thereby will not, violate any provisions
of the certificate of incorporation or by-laws of any corporate Party or
violate any provision of or result in the acceleration of any obligation or
the creation of any Lien under, any Permit, agreement, indenture,
instrument, lease, order, arbitration award, judgment or decree to which any
Party is a party or by which a Party or any of its assets or properties is
bound. This Agreement has been duly approved by the board of directors of
each corporate with all necessary consents and authority to enter into this
Agreement being granted by the board of directors. No further approval is
needed from any given board of directors for each corporate Party to enter
and implement this Agreement.
1.1.2 NO CONFLICTS. The execution and delivery by it of this
Agreement, the performance by it of its obligations hereunder, and the
consummation by it of the transactions contemplated
hereby do not and will not (i) conflict with or result in a violation or
breach of any of the terms, conditions or provisions of its certificate or
articles of incorporation, bylaws or other constituent documents,
(ii) conflict with or result in a violation or breach of any term or
provision of any law or order applicable to it or any of its assets and
properties; or (iii) conflict with or result in a violation or breach of any
material contract or agreement to which it is a party or by which any of its
assets and properties is bound or affected where such conflict, violation or
breach in the case of clause (iii) would be reasonably likely to have a
material adverse effect on its ability to perform its obligations hereunder.
2. COVENANTS
The covenants undertaken in this Section 2 are conditioned upon the
successful completion of the First Closing under the Master Agreement.
2.1 ISSUANCE OF STOCK. The Company shall issue ("Issuance") an
additional number of shares of Common Stock such that total the number of
shares of Common Stock held by the VisionComm Shareholders in aggregate
after the Issuance is Twelve Million Eight Hundred Thousand (12,800,000).
Prior to Issuance, each VisionComm Shareholder will execute respectively the
Subscription Agreements attached in substantial form hereto Exhibit A. The
Issuance shall be allocation among the VisionComm Shareholders as follows:
NUMBER OF SHARES TOTAL NUMBER OF SHARES
NAME OF SHAREHOLDERS PRIOR TO ISSUANCE AFTER ISSUANCE
-------------------- ----------------- ----------------------
Xxxxxxx X. Xxxxxxx....................... 797,632 4,083,876
Xxxxxxx Growth & Income Trust I.......... 371,823 1,903,743
Xxxx Xxxxxxxx............................ 44,577 228,234
Xxxxxxx X. Xxxxxx........................ 24,850 127,232
Xxxx X. Xxxxxxx.......................... 17,831 91,295
Xxx Xxxxxx............................... 11,038 56,514
DST Asset Management Company............. 3,715 19,021
2.2 NEW MEMBERS ELECTED TO BOARD OF DIRECTORS. The Parties shall have
taken all necessary steps under the Utah Revised Business Corporation Act,
the rules of the American Stock Exchange and the rules and regulations
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") to elect AWK's nominees to the board of directors of the
Company. The Company agrees to accept the resignations from no fewer than
that number of directors on the Company's incumbent board of directors that
will give the AWK's nominees to the board a majority on the Company's Board
of Directors.
2.3 VOTE FOR REMOVAL. In the event that the Company's directors
decline to resign, the VisionComm Stockholders shall vote their shares of
Common Stock and sign all such shareholder consents as are necessary to
replace the incumbent directors with AWK's nominees.
2.4 [RESERVED]
2.5 SURRENDER NOTES AND WARRANTS. Within five (5) business days of the
date of this Agreement, the VisionComm Shareholders will surrender to the
Company for cancellation all of the promissory notes and warrants issued to
them on or around December 2000.
2.6 MODIFICATION OF REGISTRATION RIGHTS. Each VisionComm Shareholder
hereby modifies his registration rights under that certain Amended Stock
Purchase and Sale Agreement between the Company and VisionComm dated
December 19, 2000. Section 8 is hereby rescinded and replaced in its
entirety by the following and now reads:
"A. INCIDENTAL REGISTRATION. If the Purchaser at any time, proposes
to file on its behalf or on behalf of any of its shareholders, a
registration statement under the Act on any form
(other than a registration statement on Form S-4 or S-8 or any successor
form unless such forms are being used in lieu of or as the functional
equivalent of, registration rights) for any class that is the same or
similar to the Stock, it will give written notice setting forth the terms
of the proposed offering and such other information as the Sellers may
reasonably request to all Sellers at least thirty (30) days before the
initial filing with the Securities and Exchange Commission of such
registration statement, and offer to include in such filing such Stock,
and the stock issued upon exercise of the Warrants (the "Warrant Stock"),
as any Seller may request. Each Seller desiring to have Stock and Warrant
Stock registered will advise the Purchaser in writing within thirty (30)
days after the date of receipt of such notice from the Purchaser, setting
forth the amount of such Stock and Warrant Stock for which registration
is requested. The Purchaser will thereupon include in such filing the
amount of stock for which registration is so requested, and will use its
best efforts to effect registration under the Act. The rights granted
under this paragraph shall not take effect before six months after and
will expire twelve months after the date of "Second Closing" as that term
is defined in that certain Master Agreement between the Purchaser and
Another World, Inc., a corporation established under the laws of the
Republic of Korea dated March , 2001.
B. FORM S-3 REGISTRATION. In addition to the registration rights
provided in Section 8(A) above, if at any time the Purchaser is eligible
to use Form S-3 consistent with Rule 415 of the Act (or any successor
form for registration of secondary sales of Stock), any Seller may
request in writing that the Purchaser register its shares and the Warrant
Stock held by such Seller, on such form. Upon receipt of such request,
the Purchaser will promptly notify all Sellers in writing of the receipt
of such request and each such Seller may elect (by written notice sent to
the Purchaser within thirty (30) days of receipt of the Purchaser's
notice) to have its or his/her Stock and Warrant Stock included in such
registration. Thereupon, the Purchaser will, as soon as practicable, use
its best efforts to effect the registration on Form S-3 of all Stock and
Warrant Stock that the Purchaser has so been requested to register by the
Sellers for sale. The Purchaser will use its best efforts to qualify and
maintain its qualification for eligibility to use Form S-3 for such
purposes. The rights granted under this paragraph shall not take effect
before six months after and will expire twelve months after the date of
"Second Closing" as that term is defined in that certain Master Agreement
between the Purchaser and Another World, Inc., a corporation established
under the laws of the Republic of Korea dated March , 2001."
2.7 WAIVER AND RELEASE. Except for the claims listed on Schedule 2.7
attached hereto, each of the VisionComm Shareholders, on behalf of himself,
his transferees, successors and assigns, and any trustees, heirs,
beneficiaries, executors and administrators (each, a "Releasor"), hereby
releases, forever discharges and waives any rights against AWK and the
Purchasers, the Company, any present and future directors and officers of
either, any present or future shareholders of AWK or the Purchasers, and
counsel to the Company, AWK and the Purchasers, and in each case, such
person's or entity's respective successors and assigns (in each case, other
than the respective VisionComm Shareholder and any officers and directors of
the Company who resign and/or are removed or voted out of office in
accordance with the Master Agreement) (the released parties being
hereinafter collectively referred to as the "Released Parties"), from all
actions, causes of action, suits, debts, sums of money, accounts, bills,
covenants, contracts, controversies, agreements, promises, trespasses,
damages, judgments, extents, executions, claims, and demands whatsoever, in
law or equity (collectively, "Claims") that Releasor ever had, now have or
hereafter can, shall or may have against the Released Parties, for, upon, by
reason of, arising out of or otherwise relating to the conduct of the
business of the Company or the Purchasers or the transactions described or
referred to herein, from the beginning of the world to the date of this
General Release. Releasor hereby represents (and acknowledges the reliance
of the Released Parties hereon) that Releasor has not heretofore assigned or
transferred, or purported to assign or transfer, to any person, firm,
corporation or entity whatsoever, any of the Claims herein released and
discharged.
2.8 REVERSE SPLIT OF SHARES OF COMMON STOCK. If so requested in
writing at least 20 days prior to the First Closing as that term is defined
in the Master Agreement, the Company shall use its best efforts to cause a
reverse stock split to reduce the outstanding number of shares of the
Company. If the vote or written consent of the VisionComm Shareholders is
required or requested in writing by AWK in connection with the Reverse Stock
Split, each of the VisionComm Shareholders agrees to promptly provide such
vote and/or written consent, in addition to the delivery of the proxy
described in the Master Agreement. The VisionComm Shareholders shall do all
such things and execute and deliver all such documents and instruments,
including without limitation the proxy specified in Section o, as are
necessary or (in the sole discretion of AWK for the behalf of the
Purchasers) desirable to give effect to the provisions of this Section 2.8.
2.9 DELIVERIES BY VISIONCOMM SHAREHOLDERS. Within five (5) business
days hereof, each VisionComm Shareholder shall deliver to AWK an irrevocable
proxy in the form of Schedule 2.9 attached hereto and made a part hereof.
3. MISCELLANEOUS
3.1 CONFIDENTIAL INFORMATION. Except to the extent required by any
provision hereof or by applicable law or required in connection with any tax
or securities filing, or otherwise approved by the other party in advance,
for a period of five (5) years from the First Closing Date, all of the
current officers and directors of the Company shall retain in strict
confidence, and shall not use for the benefit of itself or others, any
confidential and proprietary information relating solely to the Business of
either the Company of VisionComm, customer lists, pricing policies,
marketing plans or strategies, and product development techniques or plans;
provided, however, that the restrictions of this Section shall not apply to
information which is or becomes public knowledge or otherwise generally
known in the trade through no fault of the Company, or shall be subject to
an order of a court of competent jurisdiction.
3.2 PUBLICITY. The parties shall confer with each other prior to
making any public announcement or release concerning this Agreement, the
Master Agreement or the transactions contemplated hereby and thereby and
shall promptly cooperate with each other to the extent practicable in
issuing any such announcements or releases.
3.3 NO BREAK UP LIABILITY. The Parties understand and acknowledge that
by signing this letter they are entering into good faith negotiations to
consider whether they wish to pursue the Acquisition. At any point prior to
signing the Master Agreement and other related documents, either Party may
terminate all discussions and negotiations without any liability whatsoever
to the other Party.
3.4 NOTICES. Any notice, certificate, consent, determination or other
communication required or permitted to be given or made under this Agreement
shall be in writing and shall be effectively given and made if:
(i) delivered personally, (ii) sent by prepaid courier service or mail to an
address provided to the sender by the receiving party, or (iii) sent by fax
or other similar means of electronic communication with the proof of
receipt.
(a) If to the Company or each VisionComm Shareholder addressed as
follows:
000 Xxxxx Xxxx Xxxx.
Xx. Xxxxxxx, Xxxxxxxx 00000
Attn: CEO or President
with a copy to:
00000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: CEO or President
(b) If to AWK or the Purchasers, addressed as follows:
T.B.I. Center Myong Ji University, San 38-2
Nam-Dong, Yongin
Kyunggi-Do KOREA
Telecopier: 00-00-000-0000
Attn: CEO or President
with a copy to:
Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Any such communications so given or made shall be deemed to have been given or
made and to have been received on the day of delivery, or on the day of faxing
or sending by other means of recorded electronic communication (confirmation of
delivery or transmission required), provided that such day in either event is a
business day in the State of New York and the communication is so delivered,
faxed or sent before 4:30 p.m. on such day. Otherwise, such communication shall
be deemed to have been given and made and to have been received on the next
following business day. Any such communication sent by mail shall be deemed to
have been given and made and to have been received on the fifth business day
following the mailing thereof, provided however that no such communication shall
be mailed during any actual or apprehended disruption of postal services. Any
such communication given or made in any other manner shall be deemed to have
been given or made and to have been received only upon actual receipt.
3.5 EXPENSES. Except as otherwise expressly provided in this Agreement
or in the Operative Agreements, each party will pay its own costs and
expenses.
3.6 WAIVERS. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its
right at a later time to enforce the same. No waiver by a party of any
condition or of any breach of any term, covenant, representation or warranty
contained in this Agreement shall be effective unless in writing, and no
waiver in any one or more instances shall be deemed to be a further or
continuing waiver of any such condition or breach in other instances or a
waiver of any other condition or breach of any other term, covenant,
representation or warranty.
3.7 COUNTERPARTS. This Agreement and any or all of the Transaction
Documents may be executed simultaneously in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
3.8 HEADINGS. The headings preceding the text of Articles and Sections
of this Agreement and the Schedules thereto are for convenience of reference
only and shall not be deemed part of this Agreement.
3.9 APPLICABLE LAW; ARBITRATION.
(a) This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York, United States of
America, without regard to its conflict of laws principles.
(b) Any dispute, controversy or claim arising out of or relating to
this Agreement, or the breach, termination or invalidity thereof, shall
be finally resolved by arbitration in accordance with the Arbitration
Rules of the United Nations Commission on International Trade Law
(UNCITRAL) as at present in force. The arbitration shall take place in
New York, New York and shall be conducted in the English language. The
arbitration shall be conducted by three (3) arbitrators, one to be
appointed by the Company, one to be appointed by AWK and a
third by the two arbitrators so selected. The "appointing authority" for
purposes of the UNCITRAL Rules shall be the American Arbitration
Association.
(c) To the extent permitted by law, the award of the arbitrators may
include, without limitation, one or more of the following: a monetary
award, a declaration of rights, an order of specific performance, an
injunction, reformation of the contract. The decision of the arbitrators
shall be final and binding upon the parties hereto, and judgment on the
award may be entered in any court of competent jurisdiction.
(a) Each party shall have the right to institute judicial proceedings
for interim measures of protection (including without limitation
injunction, attachment or sequestration of property, temporary
restraining order, preliminary injunctions and other equitable relief)
before or during the pendency of any arbitration proceeding hereunder, if
such remedy is required to prevent irreparable harm or injury to a party.
Each party (without hereby limiting its susceptibility to suit in any
court) expressly submits itself and consents to the non-exclusive
jurisdiction of the courts of the State of New York, and the United
States federal courts located in the borough of Manhattan, New York City,
New York, with respect to any such judicial proceeding.
(b) The cash expenses of the arbitration (including without
limitation reasonable fees and expenses of counsel, experts and
consultants) shall be borne by the party against whom the decision of the
arbitrators is rendered; provided that in the event a party prevails only
partially, such party shall be entitled to get reimbursed for such costs
and expenses in the proportion that the dollar amount successfully
claimed by the prevailing party bears to the aggregate dollar amount
claimed.
3.10 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that no assignment or other transfer shall be made
without the prior written approval of each of the parties hereto.
3.11 NO THIRD PARTY BENEFICIARIES. Except as otherwise provided
herein, this Agreement is solely for the benefit of the parties hereto and
their respective Affiliates and no provision of this Agreement shall be
deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
3.12 SEVERABILITY. If any provision of this Agreement is deemed to be
invalid, illegal or unenforceable by an arbitrator, a court of competent
jurisdiction or other governmental authority, the remainder of this
Agreement shall remain in full force and effect or shall be reasonably
construed to carry out the intent of the parties as expressed herein. This
Agreement shall be construed according to its fair meaning, with the
language used herein deemed to be the language chosen by the parties to
express their mutual intent, and no presumption or rule of strict
construction shall be applied against any party hereto.
3.13 PREAMBLE AND RECITALS. The Parties acknowledge the accuracy and
correctness of the preamble and recitals hereto and such preamble and
recitals are hereby incorporated by reference as if set forth herein at
length.
3.14 CAPITALIZED TERMS. Any capitalized terms not defined herein shall
have the meaning given them in the Master Agreement.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK
SIGNATURE PAGE TO FOLLOW
IN WITNESS WHEREOF, the Company, AWK and the VisionComm Shareholders have
executed and delivered this Agreement as of the date first above written.
ANOTHER WORLD, INC. CHEQUEMATE INTERNATIONAL INC.
By: By:
------------------------------------- -------------------------------------
Name: Name:
VISIONCOMM SHAREHOLDERS
-------------------------------------------- --------------------------------------------
NAME: XXXXXXX X. XXXXXXX NAME: XXX XXXXXX
XXXXXXX GROWTH & INCOME TRUST I DST ASSET MANAGEMENT COMPANY
By: By:
------------------------------------- -------------------------------------
Its: Its:
-------------------------------------------- --------------------------------------------
NAME: XXXX XXXXXXXX NAME: XXXX X. XXXXXXX
