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:
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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 & 371,823 1,903,743
Income Trust I
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
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DST Asset 3,715 19,021
Management Company
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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
