-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KzQQh8JSmvJS6XON75HDxNKsHEmALaBuhh71PWX/hEq04gxZzTFBBEMvdOs8ii0Q dB5ljHIXXkXTEgnFzDDLQA== /in/edgar/work/0001116502-00-000184/0001116502-00-000184.txt : 20001012 0001116502-00-000184.hdr.sgml : 20001012 ACCESSION NUMBER: 0001116502-00-000184 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20001011 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WATCHOUT INC CENTRAL INDEX KEY: 0000736314 STANDARD INDUSTRIAL CLASSIFICATION: [6792 ] IRS NUMBER: 840959153 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-40373 FILM NUMBER: 738100 BUSINESS ADDRESS: STREET 1: 20283 STATE ROAD 7 STREET 2: SUITE #400 CITY: BOCA RATON STATE: FL ZIP: 33498 BUSINESS PHONE: 5614829420 MAIL ADDRESS: STREET 1: 1900 N W CORP BLVD STREET 2: SUITE 400 E CITY: BOCA RATON STATE: FL ZIP: 33431 FORMER COMPANY: FORMER CONFORMED NAME: WHITE CLOUD EXPLORATION INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CAVALCADE OF SPORTS NETWORK INC CENTRAL INDEX KEY: 0001100902 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 911853362 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 810 808 4TH AVENUE SW STREET 2: CALGARY ALBERTA CANADA ZIP: 10022 BUSINESS PHONE: 2127503211 MAIL ADDRESS: STREET 1: 810 808 4TH AVENUE SW STREET 2: CALGARY ALBERTA CANADA SC 13D 1 0001.txt SCHEDULE 13D SCHEDULE 13D INFORMATION REQUIREMENTS FOR FILING UPON ACQUISITION OF FIVE PERCENT OF A CLASS OF EQUITY SECURITIES SUBJECT TO THE REPORTING REQUIREMENTS OF THE 1934 ACT SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No.___ )* WATCHOUT! INC.. ------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK ------------------------------------------------------------------------------- (Title of Classes of Securities) 941106106 ------------------------------------------------------------------------------- (CUSIP Number) Jeffrey G. Klein 23123 State Road 7 Suite 350B Boca Raton, Florida 33428 (561) 470-9010 ------------------------------------------------------------------------------- (Name, Address, and Telephone Number of Person Authorized to Receive Notices and Communications) September 1, 2000 ------------------------------------------------------------------------------- (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. (1) NAME OF REPORTING PERSONS. S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Cavalcade of Sports Networks, Inc. 65-0703836 Todd Violette (control person of Cavalcade of Sports Networks, Inc. ###-##-#### - -------------------------------------------------------------------------------- (2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ X ] - -------------------------------------------------------------------------------- (3) SEC USE ONLY - -------------------------------------------------------------------------------- (4) SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- (5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] NA - -------------------------------------------------------------------------------- (6) CITIZENSHIP OR PLACE OF ORGANIZATION Cavalcade of Sports Networks, Inc. is a Nevada corporation Todd Violette is a United States citizen - ----------------------------------------------------------------------------------------------------------- (7) SOLE VOTING POWER Cavalcade of Sports Networks, Inc. 25,100,000 NUMBER OF SHARES Todd Violette is a control person of Cavalcade of Sports BENEFICIALLY OWNED BY Networks, Inc. EACH REPORTING PERSON --------------------------------------------------------------- (8) SHARED VOTING POWER There is no Shared voting power amongst the reporting persons. However, Todd Violette is a control person of Cavalcade of Sports Networks, Inc. --------------------------------------------------------------- (9) SOLE DISPOSITIVE POWER Cavalcade of Sports Networks, Inc. 25,100,000 Todd Violette is a control person of Cavalcade of Sports Networks, Inc. --------------------------------------------------------------- (10) SHARED DISPOSITIVE POWER There is no shared dispositive power amongst the reporting persons. However, Todd Violette is a control person of Cavalcade of Sports Networks, Inc. - ----------------------------------------------------------------------------------------------------------- (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Cavalcade of Sports Networks, Inc. 25,100,000 Todd Violette is a control person of Cavalcade of Sports Networks, Inc. but does not otherwise beneficially own any additional shares of issuer. - ------------------------------------------------------------------------------------------------------------ (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ------------------------------------------------------------------------------------------------------------ (13) Percent of Class Represented by Amount in Row (11) Cavalcade of Sports Networks, Inc. 50.5% Includes shares beneficially owned by Todd Violette, a control person of Cavalcade of Sports Networks, Inc. - ------------------------------------------------------------------------------------------------------------ (14) Type of Reporting Person* Cavalcade of Sports Networks, Inc. Corporation Todd Violette Individual - ------------------------------------------------------------------------------------------------------------
Item 1. Security and Issuer WATCHOUT! INC. Common Stock 20283 State Rd. 7, Suite 400 Boca Raton, FL 33428 Item 2. Identity and Background 1. (a) Cavalcade of Sports Networks, Inc. (b) 7272 Wisconsin Ave., #300 Bethesda, MD 20814 EIN: 91-1853362 (c) Application Service Provider that offers complete intranet infrastructure for small to medium sized businesses. (d) Not Applicable (e) Not Applicable (f) A Nevada corporation 2. (a) Todd Violette (b) 7272 Wisconsin Ave., #300 Bethesda, MD 20814 SS#: ###-##-#### (c) Businessman (d) NA (e) NA (f) United States Citizen ITEM 3: Source and Amount of Funds or Other Consideration
AMOUNT PURCHASE PURCHASER PURCHASED DATE COST SOURCE Cavalcade of Sports Networks, Inc 25,100,000 common shares 9/1/2000 $6,200,000 OO*
*exchange of shares of subsidiary ITEM 4. Purpose of Transaction Obtain control of the board of directors of the issuer. It is the intent of the reporting person to designate two out of three of said directors. ITEM 5. Interest in Securities of the Issuer: (a) Number and Percentage of Shares of Common Stock Beneficially owned: 25,100,000 50.5% (b) Sole Power to Vote or to Direct the Vote 25,100,000 shares of common stock. There is no shared voting power. Todd Violette is a control person of Cavalcade of Sports Networks, Inc. (c) See Item 3 above (d) Not Applicable (e) Not Applicable ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer None ITEM 7. Material to be Filed as Exhibits 10.1 Stock Exchange Agreement dated August 31, 2000 SIGNATURE After reasonable inquiry and to the best of the knowledge and belief of each of the undersigned, each of the undersigned certifies that the information set forth on this statement is true, complete and correct. September 26, 2000 ---------------------------------------- (Date) CAVALCADE OF SPORTS, NETWORKS, INC. By: /s/ Todd Violette --------------------------- Todd Violette, President EX-10.1 2 0002.txt STOCK EXCHANGE AGREEMENT STOCK EXCHANGE AGREEMENT This Stock Exchange Agreement (the "AGREEMENT") dated as of the __ day of August 2000, is by and amongst Watchout!, Inc., a Utah corporation (hereinafter referred to as "Buyer" ) and Cavalcade of Sports Networks, Inc., a, Nevada corporation, (hereinafter referred to as the "Seller" or "Shareholder") and Cormax Business Solutions, Ltd., an Alberta corporation, (hereinafter referred to as the "Company"). WHEREAS, the respective Board of Directors of Buyer and Seller deem the acquisition by Buyer of all of the issued and outstanding capital stock of the Company on the terms set forth in this Agreement to be desirable, generally to the welfare and advantage of each, and in the best interests of the shareholders of each; NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants herein contained, and for the purpose of prescribing the terms and conditions of such acquisition, the mode of carrying it into effect, and such other details and provisions as are necessary or desirable, the parties hereto hereby represent, warrant, covenant and agree as follows: ARTICLE I PLAN OF AGREEMENT 1.01 Number of Shares. Subject to the further conditions of this Agreement and the truth of the representations and warranties provided herein, the Seller agrees to transfer to Buyer at the Closing a total of 1,000 shares of common stock (the "Shares"), said Shares representing all of the issued and outstanding shares of common stock of the Company owned by the Company duly endorsed for transfer in exchange for a total of 25,100,000 in the common stock of the Buyer which is valued at $.30 per share for this agreement for a total of $7,530,000 shares of common stock. The shares of the Buyer to be issued to the Shareholders will be restricted securities as that term is defined under the Securities Act of 1933, as amended. 1 ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY The Company and the Shareholder represent and warrant to Buyer that: 2.01 Incorporation, Common Stock, Etc. Company is a corporation duly organized and existing in good standing under the laws of the Province of Alberta. Attached hereto as Exhibit 2.01 is a copy of the Company's Articles of Incorporation. Company has full corporate power and authority to carry on its business as it is now being conducted and to own and operate its assets, businesses and properties. Company has unlimited authorized no par value capital stock, of which 1,000 shares are issued and outstanding. There are and at the Closing will be no outstanding subscriptions, options, warrants, convertible securities, calls, commitments or agreements calling for or requiring issuance or transfer, sale or other disposition of any shares of capital stock of the Company or calling for or requiring the issuance of any securities or rights convertible into or exchangeable (including on a contingent basis) for shares of capital stock. All of the outstanding shares of the Company are duly authorized, validly issued, fully paid and non-assessable. There are no dividends due, to be paid or are in arrears with respect to any of the capital stock of Company. 2.02 Company Financial Statements. Attached hereto as Schedule 2.02 are the most recent financial statements for the Company dated August 30, 2000. The Company Balance Sheet and Income Statement present fairly the financial position of the Company as of the dates set forth in the financial statements. The Balance Sheet has been prepared in conformity with generally accepted accounting principles. There has been no material change in the financial condition of the Company since the date of the financial statements. All liabilities of the Company are set forth in the financial statements and there are no undisclosed liabilities of any kind or nature. 2 The Company further agrees to provide the Buyer within 60 days of closing with certified financial statements in conformity with Securities and Exchange Commission reporting requirements. If the Company is unable to provide the required certified financial statements or, the certified financial statements reflect a material change in the financial condition of the Company from that which was represented in the August 30, 2000 financial statements, then in that event the Buyer may, in its sole and absolute discretion and in addition to any remedies available at law, rescind this Agreement. 2.03 Litigation. Except as set forth on exhibit 2.03, there are no actions, suits, proceedings, or investigations pending or, to the best of its knowledge, threatened or contemplated against Company at law or in equity, before any federal, state, municipal or other governmental department, commission, board, agency or instrumentality, domestic or foreign. The Company is not subject to any outstanding judgments or operating under or subject to or in default with respect to any order, writ, injunction or decree of any court or federal, state, municipal or other governmental department, commission, board, agency or instrumentality, domestic or foreign. 2.04 Compliance with Laws. The Company has complied in all material respects with all laws, regulations, orders, domestic and foreign, and neither the present uses by Company of its properties nor the conduct of its business violate any such laws, regulations, orders or requirements, and except as set forth in Schedule 2.04 (if applicable) the Company has not received any notice of any claim or assertion that it is not so in compliance. 2.05 Indebtedness. Except as set forth in the Company Balance Sheet, Company has not executed any instruments, entered into any agreements or arrangements pursuant to which the Company has borrowed any money, incurred or guaranteed any indebtedness or established any line of credit which represents a liability of the Company as of the date thereof. 3 2.06 No Material Adverse Change. Since the Company Balance Sheet Date, there has not been any material adverse change in the condition, financial or otherwise, of the Company or in its business taken as a whole; nor has there been any material transaction entered into by the Company. The Company has not incurred any material obligations, contingent or otherwise except for legal and accounting fees and expenses in connection with the transactions contemplated by this Agreement. There has not been any damage, destruction or loss, whether or not covered by insurance adversely affecting the Company's business, property or assets; nor has the Company (a) created or incurred any indebtedness; (b) issued, sold, purchased, redeemed or granted any shares of Company Common Stock or any other securities of Company or any options, warrants or other rights to purchase any shares of Company Common Stock except as between and amongst its current shareholders; (c) amended its Certificate of Incorporation or bylaws, (d) paid any obligation or liability other than obligations or liabilities reflected in its Balance Sheet dated as of the Company Balance Sheet Date or incurred any liabilities except for legal and accounting fees and disbursements incurred in the ordinary course of business or in connection with this Agreement and the transactions contemplated hereby. 2.07 No Defaults. Neither the execution nor delivery of this Agreement nor the consummation of the contemplated transaction are events which, of themselves or with the giving of notice or passage of time or both, could constitute a violation of or conflict with or result in any breach of or default under the terms, conditions or provisions of any judgment, law or regulation or of the Company's Certificate of Incorporation or Bylaws, or of any agreement or instrument to which Company is a party or by which it is bound; or could result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever on the property or assets of Company; and no consent of any third party except as expressly contemplated herein is 4 required for the consummation of this Agreement by Company. 2.08 Corporate Action of Company. The Board of Directors of the Company has duly authorized the execution and delivery of this Agreement. Subject to the approval of the stockholders of the Company as provided herein, this Agreement constitutes a valid, legal and binding agreement of Company and is enforceable in accordance with its terms. 2.09 Liabilities. As of the Company Balance Sheet Date, the Company has incurred no other liabilities except in the ordinary course of business. 2.10 Taxes. Except as set forth on Schedule 2.10, all federal, state, and local tax returns, reports and declarations of estimated tax or estimated tax deposit forms required to be filed by Company have been duly filed; the Company has paid all taxes which have become due pursuant to such returns or pursuant to any assessment received by it, and has paid all installments of estimated taxes due; and all taxes, levies and other assessments which Company is required by law to withhold or to collect have been duly withheld and collected and have been paid over to the proper governmental authorities. Company has no knowledge of any tax deficiency which has been or might be asserted against Company which would materially and adversely affect the business or operations of Company. At Closing, the Company shall provide Buyer with copies of all tax returns, of any kind or nature, filed by Company, together with all accounting information. 2.11 Title to Property; Leases. Company has good and defensible title in fee simple to, or valid and enforceable leasehold estates in, all properties and assets, which are material to its continued operations, free and clear of all liens, encumbrances, charges or restrictions or are not materially significant or important in relation to its operations and business. All of such leases and subleases under which Company is the lessor or sublessor, lessee or sublessee of properties or assets or under which 5 Company holds properties or assets as lessee or sublessee are in full force and effect. Company is not in default in respect of any of the terms or provisions of any of such leases or subleases, and no claim has been asserted by anyone adverse to their respective rights as lessor, sublessor, lessee or sublessee under any of the leases or subleases mentioned above, or affecting or questioning their respective rights to continued possession of the leased or subleased premises or assets under any such lease or sublease; and Company either owns or leases all such properties as are necessary to its operations as now conducted. 2.12 Licenses. Except that the Company has not filed as a foreign corporation doing business in Maryland, the Company has obtained all required licenses, permits or other governmental authorization for the conduct of its business as now being conducted. 2.13 Bank Accounts. Attached hereto as schedule 2.13 is a listing of all bank accounts and account numbers which are currently held by Company. 2.14 Contracts and Commitments. Except as set forth in Exhibit 2.14, there are no contracts nor commitments of Company requiring any future payment to an officer, director, employee, agent or shareholder of Company. Also attached and marked as Exhibit 2.14 is a list of all current Company employees and the salary of each. 2.15 Representations True and Correct. This Agreement and the Schedules and Exhibits attached hereto do not contain any untrue statement of a material fact concerning Company or omits any material fact concerning Company which is necessary in order to make the statements therein not misleading. All of the representations and warranties contained herein (including all statements contained in any certificate or other instrument delivered by or on behalf of the Shareholders pursuant hereto or in connection with the transactions contemplated hereby) shall survive the Closing. 6 2.16 Retirement Plans. Company has no pension plan, profit sharing or similar employee benefit plan. 2.17 Intellectual Property Rights. Attached hereto as Exhibit 2.17 is a list of all trademarks, trade names, copyrights, patents, common law proprietary claims which are owned by the Company together with copies of any official notice from any issuing governing organization. The Company has proprietary common law property rights, or will obtain necessary consents within 14 days to the E commerce Platform Source Codes as set forth in the attached exhibits. 2.18 Contracts and Commitments. The Company has signed contracts of $1.3 million and commitments under review and consideration totaling in excess of $1 million. 2.19 Indemnification. The Company and the Shareholders jointly and individually shall indemnify and hold Buyer, its officers and directors, harmless of and in respect of: (1) Any damage or loss resulting from any loss, any liability of any kind or nature which is not set forth in the financial statements, damage, misrepresentation, breach of warranty or non-fulfillment on the part of Company under this Agreement or from any misrepresentation or omission from any certificates or other instruments furnished to Company pursuant to this Agreement. (2) All actions, suits, proceedings, demands assessments, judgments, costs and expenses incident to any of the foregoing including reasonable attorney's fees and all costs incurred by Buyer to enforce this agreement against Company. ARTICLE III REPRESENTATIONS AND WARRANTIES OF Buyer Buyer represents and warrants to the Shareholder and Company that: 3.01 Incorporation, Common Stock, Etc. Buyer is a corporation 7 duly organized and existing in good standing under the laws of the State of Utah. The Buyer has full corporate power and authority to carry on its business as it is now being conducted and to own and operate its assets, businesses and properties. The Buyer has authorized capital stock consisting of 50 million shares of Common Stock, par value $.001 per share, of which 24,583,202 will be outstanding as of August 31, 2000 shares are issued and outstanding. All of the outstanding shares of the Company are duly authorized, validly issued, fully paid and non-assessable. There are no dividends due, to be paid or are in arrears with respect to any of the capital stock of Company. 3.02 Buyer Financial Statements. Attached hereto as Schedule 3.02 are the most recent financial statements for the Buyer dated as of June 30, 2000 as filed with the Securities and Exchange Commission. The Buyer Balance Sheet and Income Statement present fairly the financial position of Buyer as of the dates set forth in the financial statements. The Balance Sheet has been prepared in conformity with generally accepted accounting principles. There has been no material change in the financial condition of the Buyer since the date of the financial statements. All liabilities of the Buyer are set forth in the financial statements and there are no undisclosed liabilities of any kind or nature. 3.03 Litigation. Except for the Bader litigation, which Buyer has provided information to Seller, there are no actions, suits, proceedings, or investigations pending or, to the best of its knowledge, threatened or contemplated against Buyer at law or in equity, before any federal, state, municipal or other governmental department, commission, board, agency or instrumentality, domestic or foreign. The Buyer is not subject to any outstanding judgments or operating under or subject to or in default with respect to any order, writ, injunction or decree of any court or federal, state, municipal or other governmental department, commission, board, 8 agency or instrumentality, domestic or foreign. 3.04 Compliance with Laws. The Buyer has complied in all material respects with all laws, regulations, orders, domestic and foreign, and neither the present uses by Buyer of its properties nor the conduct of its business violate any such laws, regulations, orders or requirements, and the Buyer has not received any notice of any claim or assertion that it is not so in compliance. 3.05 No Defaults. Neither the execution nor delivery of this Agreement nor the consummation of the contemplated transaction are events which, of themselves or with the giving of notice or passage of time or both, could constitute a violation of or conflict with or result in any breach of or default under the terms, conditions or provisions of any judgment, law or regulation or of Buyer's Certificate of Incorporation or Bylaws, or of any agreement or instrument to which Buyer is a party or by which it is bound; or could result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever on the property or assets of Buyer; and no consent of any third party except as expressly contemplated herein is required for the consummation of this Agreement by Buyer. 3.06 Corporate Action of Buyer. The Board of Directors of the Buyer has duly authorized the execution and delivery of this Agreement. This Agreement constitutes a valid, legal and binding agreement of Buyer and is enforceable in accordance with its terms. 3.07 Taxes. Except as set forth on Schedule 3.07, all federal, state, and local tax returns, reports and declarations of estimated tax or estimated tax deposit forms required to be filed by Buyer have been duly filed; Buyer has paid all taxes which have become due pursuant to such returns or pursuant to any assessment received by it, and has paid all installments of estimated taxes due; and all taxes, levies and other assessments which Buyer is required by law to withhold or to collect have been 9 duly withheld and collected and have been paid over to the proper governmental authorities. Buyer has no knowledge of any tax deficiency which has been or might be asserted against Buyer which would materially and adversely affect the business or operations of Buyer. 3.08 Title to Property; Leases. Buyer has good and defensible title in fee simple to, or valid and enforceable leasehold estates in, all properties and assets, which are material to its continued operations, free and clear of all liens, encumbrances, charges or restrictions except as set forth in the attached Schedule 3.08 or are not materially significant or important in relation to its operations and business. All of such leases and subleases under which Buyer is the lessor or sublessor, lessee or sublessee of properties or assets or under which Buyer holds properties or assets as lessee or sublessee are in full force and effect. Buyer is not in default in respect of any of the terms or provisions of any of such leases or subleases, and no claim has been asserted by anyone adverse to their respective rights as lessor, sublessor, lessee or sublessee under any of the leases or subleases mentioned above, or affecting or questioning their respective rights to continued possession of the leased or subleased premises or assets under any such lease or sublease; and Buyer either owns or leases all such properties as are necessary to its operations as now conducted. 3.09 Representations True and Correct. This Agreement and the Schedules and Exhibits attached hereto do not contain any untrue statement of a material fact concerning Buyer or omits any material fact concerning Buyer which is necessary in order to make the statements therein not misleading. All of the representations and warranties contained herein (including all statements contained in any certificate or other instrument delivered by or on behalf of the Buyer) shall survive the closing. 3.10 Indemnification. Buyer shall indemnify and hold Company, its officers and directors, harmless of and in respect of: 10 (1) Any damage or loss resulting from any loss, liability, damage, misrepresentation, breach of warranty or non-fulfillment on the part of Buyer under this agreement or from any misrepresentation or omission from any certificates or other instrument furnished to Company pursuant to this agreement. (2) All actions, suits, proceedings, demands assessments, judgments, costs and expenses incident to any of the foregoing including reasonable attorney's fees and all costs incurred by Company to enforce this agreement against Buyer. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER The Shareholder owns 100% of the issued and outstanding shares of stock of Company. The Shares are owned free and clear of any liens or encumbrances and that the Shareholder is free to transfer the Shares without the consent of any third party. ARTICLE V CONDITIONS TO THE OBLIGATIONS OF BUYER TO CLOSE The obligations of Buyer under this Agreement are, at the option of Buyer, subject to the fulfillment of the following conditions at, or prior to, the closing date: 5.01 Representations, Warranties and Covenants. All representa tions and warranties of Company contained in this Agreement and in any statement, certificate, schedule or other document delivered by Company pursuant hereto or in connection herewith shall have been true and accurate in all respects as of the date when made and as of the Closing Date. 5.02 Covenants, Etc. Company shall have substantially performed and complied with each and every covenant, agreement and condition required by this Agreement to be performed or complied with by them prior to, or at, the Closing Date. 11 5.03 Certificate. Company shall have delivered to Buyer a certificate of the President and Secretary of Company, dated the Closing Date, certifying to the fulfillment of the conditions set forth in 5.01 and 5.02. 5.04 Proceedings. No action or proceedings shall have been instituted or threatened against the Company which could materially adversely affect the business of the Company. No action or proceedings shall have been instituted or threatened against any of the parties to this Agreement or their directors or officers before any court or governmental agency to restrain, prohibit or obtain substantial damages in respect of this Agreement or the consummation of the transactions contemplated hereby. 5.05 Corporate Documents. Prior to Closing the Company shall furnish to Buyer copies of the Certificate of Incorporation of Company and each amendment thereto, if any, which shall be certified by a proper state official; one copy of the By-Laws and minutes of Company by its secretary or an assistant secretary as being currently in effect, and a certificate of good standing issued by the proper state officials of each state in which Company transacts business and is required to qualify. 5.06 Document & Production. This Agreement is expressly conditioned on Company providing all identified schedules and exhibits within 14 days of closing. ARTICLE VI CONDITIONS TO THE OBLIGATIONS OF THE SELLER The obligations of the Seller is subject to the fulfillment of the following conditions at or prior to the Closing Date: 6.01 Representations, Warranties and Covenants. All repre sentations and warranties of Buyer contained in this Agreement and in any statement, certificate, schedule or other document delivered pursuant hereto, 12 or in connection herewith, shall have been true and accurate in all respects as of the date when made and as of the Closing Date. 6.02 Covenants, Etc. Buyer shall have substantially performed and complied with each and every covenant, agreement and condition required by this Agreement to be performed or complied with by it prior to, or at, the Closing Date. 6.03 Proceedings. No action or proceedings shall have been instituted or threatened against Buyer which could materially and adversely affect the business of Buyer. No actions or proceedings shall have been instituted or threatened against any of the parties to this Agreement, or their directors or officers before any court or governmental agency to restrain, prohibit or obtain substantial damages in respect to this Agreement or the consummation of the transactions contemplated hereby. 5.06 Document & Production. This Agreement is expressly conditioned on Buyer providing all identified schedules and exhibits within 14 days of closing. ARTICLE VII CONDITIONS FOLLOWING CLOSING Pursuant to Article II of this Agreement, the Seller has represented to the Buyer that the Company will secure contracts for sales totaling $2 million within the next 180 days. ARTICLE VIII MISCELLANEOUS PROVISIONS 8.01 Abandonment of Agreement. This Agreement may be terminated and the transactions hereby contemplated abandoned at any time prior to the Closing Date, whether before or after the approval and adoption hereof by the shareholders of each Company by (a) the mutual consent of the Board of Directors of Company and Buyer or (b) the Board of Directors of the Company if any condition to its obligations provided in this Agreement has not 13 been met at the time such condition is to be met and has not been waived by it, or (c) by the Board of Directors of Buyer, if any condition to its obligations provided in this Agreement has not been met at the time such condition is to be met and has not been waived by it. 8.02 Liabilities. In the event this Agreement is terminated pursuant to Section 8.01, no party hereto shall have any liability to the other and each party shall bear their own costs incurred. 8.03 Assignments. This Agreement may not be assigned except with the written consent of the nonassigning party. Notwithstanding the foregoing, the rights of the Shareholders to receive the Shares shall be freely assignable. 8.04 Survival of Representations and Warranties. Company and Buyer agree all representations and warranties contained herein or made hereunder shall survive the Closing, except that any breach disclosed in writing to either party prior to Closing is waived by such party if it elects to close notwithstanding such breach. 8.05 Notices. All notices, demands and other communications which may or are required to be given pursuant to this Agreement shall be given or made when personally delivered or when deposited in the United States Mail, first class, postage pre-paid, addressed as follows: If to Company to: c/o Richard Greene 2455 East Sunrise Blvd. Suite 905 Sunrise, Florida 33304 or to such other address as Company may, from time to time, designate by Notice to Buyer If to Buyer to: 2865 S Eagle Road, PMB 393 Newtown, PA 18940 With a copy to: 14 FARBER AND KLEIN 23123 State Road Seven #350B Boca Raton, Florida 33428 or to such other addresses as Buyer may, from time to time, designate by notice to Company. 8.06 Closing. The closing date for the contemplated transaction shall be on or before September 1, 2000 . 8.07 Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes and cancels any and all prior agreements between the parties relating to its subject matter. The representations, warranties, covenants and conditions of the obligations of the parties hereto may not be orally amended, modified or altered, but may be amended, modified or altered in a writing signed by each of the parties, whether before or after the meeting of shareholders of Company contemplated herein. 8.08 Captions. The captions of Articles and Sections of Articles hereof are for convenience only and shall not control or affect the meaning or construction of any of the provisions of this Agreement. 8.09 Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Florida and jurisdiction for any dispute shall be in Florida. 8.10 Waivers. Any failure of either party hereto to comply with any of its obligations or agreements, or to fulfill conditions herein contained may be waived in writing by the other party. No waiver by any party of any condition or the breach of any provision, term, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise, shall be deemed to be or construed as a further or continuing waiver of any such condition or of the breach of any other provision, term, covenant, representation, or warranty of this Agreement. 8.11 Counterparts. This Agreement may be executed in several 15 counterparts and all so executed shall constitute one agreement, binding upon all of the parties hereto, notwithstanding that not all of the parties are signatory to the original or the same counterpart. 8.12 Successors. The terms covenants and conditions of the Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns. 8.13 Binding Agreement. This Agreement represents the entire agreement among the parties hereto with respect to the matters described herein and is binding upon and shall inure to the benefit of the parties hereto and their legal representatives. This Agreement may not be assigned and, except as stated herein, may not be altered or amended except in writing executed by the party to be charged. 8.14 Tax Free Exchange. It is the intent of the respective parties that this Agreement be treated as a tax free exchange under the Section 368 of the Internal Revenue Code. 8.15 Delivery of Documents. The Closing of this transaction is specifically contingent upon delivery of all documents by the respective parties. The Remainder of this Space Left Intentionally Blank. 16 This Agreement entered into the date first entered above. WATCHOUT! INC. WITNESS: - --------------------------------- --------------------------- BY: Mel Broussard Its President --------------------------- CAVALCADE OF SPORTS NETWORKS, INC. - --------------------------------- --------------------------- BY: Todd Violette Its president --------------------------- 17 -----END PRIVACY-ENHANCED MESSAGE-----