PURCHASE AGREEMENT
by, between and among
IPEX, Inc.
("Purchaser"),
B Tech Ltd.
("B Tech"),
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇"),
and
▇▇▇▇▇▇▇▇ ▇▇▇▇
("Boni")
(collectively, "Seller")
June 7, 2005
TABLE OF CONTENTS
1. PURCHASE AND SALE ASSETS 1
1.1 Purchase and Sale of Assets 1
1.2 Liabilities Not Assumed 2
1.3 Instruments of Conveyance or Assignment 2
2. PURCHASE PRICE 2
2.1 Purchase Price 2
3. CLOSING 2
3.1 Closing 2
4. TAXES AND PREPAID ITEMS 3
5. REPRESENTATIONS AND WARRANTIES OF B TECH AND ▇▇▇▇▇▇▇▇▇ 3
5.1 Organization and Corporate Power 3
5.2 Due Authorization; Effect of Transaction 3
5.3 Personal Properties 3
5.4 Material Contracts and Arrangements 3
5.5 Litigation and Compliance With Laws 4
5.6 Intellectual Property, Trademarks, Licenses, etc. 4
5.7 Adverse Restrictions 4
5.8 Material Information 5
5.9 Certain Transactions 5
5.10 No Governmental Authorizations or Approvals
Required 5
5.11 Continuing Representations 5
6. REPRESENTATIONS FOR UNITED STATES SECURITIES LAWS 5
6.1 Adherence with Applicable Securities Laws 5
6.2 Legends 6
6.3 Investment Purposes 7
6.4 Continuing Representations 8
7. REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF PURCHASER 8
7.1 Due Authorization; Effect of Transaction 8
7.2 Capitalization 8
7.3 Valid Title to Common Stock 8
7.4 Continuing Representations 9
8. CONDITIONS OF PURCHASER'S OBLIGATIONS 9
8.1 Governance 9
8.2 Employment Letter 9
8.3 Covenant Not to Compete and Confidentiality Agreement 9
8.4 Instruments of Transfer 9
8.5 Escrow Agreement 9
9. CONDITIONS OF SELLER'S OBLIGATIONS 9
9.1 Governance 9
9.2 Employment Letter 10
9.3 Covenant Not to Compete and Confidentiality Agreement 10
10. INDEMNIFICATION BY B TECH AND ▇▇▇▇▇▇▇▇▇ 10
10.1 Indemnification 10
10.2 Notice of Claim 11
10.3 Set-Off or Reimbursement 12
10.4 Payment in Shares 12
11. BROKERAGE FEE 12
12. AMENDMENTS; WAIVERS 12
13. ASSIGNMENT; SUCCESSORS AND ASSIGNS 13
14. SEVERABILITY 13
15. COUNTERPARTS 13
16. SECTION AND OTHER HEADINGS 13
17. NOTICES 13
18. GENDER 15
19. LAW TO GOVERN 15
20. COURTS 15
21. CONFIDENTIALITY 15
22. POST-CLOSING MATTERS 15
Exhibits:
Exhibit A Employment Letter
Exhibit B Covenant Not to Compete and Confidentiality Agreement
Exhibit C Escrow Agreement
Schedules:
5.1 Seller's Jurisdictions
5.4 Seller's Material Contracts
5.5 Seller's Litigation
5.6 Seller's Intellectual Property
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement"), entered into this 7th day of
June 2005, by, between and among IPEX, Inc. a corporation organized and existing
under the laws of the State of Nevada ("Purchaser"); B Tech Ltd., a corporation
organized and existing under the laws of the British Virgin Islands ("B Tech");
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"); and ▇▇▇▇▇▇▇▇ ▇▇▇▇ ("Boni") (collectively, the
"Seller").
W I T N E S S E T H T H A T:
WHEREAS, Purchaser desires to purchase and Seller desires to sell and
convey to Purchaser certain assets of Seller relating to the development of
certain intellectual property, upon the terms and subject to the conditions set
forth herein.
WHEREAS, the Purchaser shall purchase from RGBChannel SRL, a corporation
organized and existing under the laws of Italy, certain other assets relating to
the development of certain other intellectual property, pursuant to an agreement
of even date, that will close simultaneously with this Agreement.
NOW, THEREFORE, in consideration of the agreements of the parties hereto,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Purchase and Sale of Assets. At the Closing (as defined in Section 3),
Seller agrees to sell, convey, transfer, assign, and deliver to Purchaser, and
Purchaser agrees to purchase from Seller, for the purchase price hereinafter
specified in Section 2.1, the Seller's assets as set forth in Schedule 5.6 (the
"Assets"), free and clear of all liens, encumbrances and liabilities. Without
limiting the generality of the foregoing, the Assets to be acquired by Purchaser
hereunder shall include:
(a) All of Seller's rights to or under all trademarks, service
marks, certification marks, United States and foreign trademark
registrations and applications, trade names, copyrights, domain names,
United States and foreign patents and patent applications, if any,
including international priority rights associated therewith, and all
patent and other license, trade secrets, inventions, and royalties and
rights to ▇▇▇ for past infringements, relating to those items listed or
otherwise described on the Schedules hereto.
(b) Any and all right, title and interest of the Seller in and to
all intellectual property rights and proprietary expertise, including,
without limitation, proprietary information, technical and technological
data, know-how, processes, invention conception memoranda, manufacturing
and engineering data, computer programs, and trade secrets, relating to
the Assets.
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(c) Any and all files, papers, books, records, sales and advertising
materials and records, technical and user manuals, sales and purchase
correspondence, permits, licenses, certificates of any governmental body
and quotations affecting or pertaining to Seller's Assets.
1.2 Liabilities Not Assumed. Purchaser shall not assume any liabilities of
Seller.
1.3 Instruments of Conveyance or Assignment. The sale, conveyance,
transfer, assignment, and delivery of the Assets, as herein provided, shall be
effected by bills of sale, assignments, or other instruments in such reasonable
and customary form as shall be requested by Purchaser, and Seller, ▇▇▇▇▇▇▇▇▇ and
Boni shall at any time and from time to time after the Closing, upon reasonable
request, execute, acknowledge, and deliver such additional bills of sale,
assignments, or other instruments and take such other actions as may be
reasonably required to effectuate the transactions contemplated by this
Agreement.
2. PURCHASE PRICE.
2.1 Purchase Price. In consideration for the sale, conveyance, transfer,
and delivery of the Assets and upon the terms and subject to the conditions set
forth in this Agreement, Purchaser shall pay to Seller the "Purchase Price",
which shall be:
(a) An issuance of common stock, in book form, of the Purchaser
("Common Stock"), valued at six million dollars ($6,000,000), at the price
per share computed as the average of the closing bid and asked prices of
the Common Stock quoted in the Over-The-Counter Market Summary for the
five (5) trading days prior to the Closing Date. The Common Stock will be
issued as of the Valuation Date as follows: (i) to B Tech, Common Stock
valued at $5,640,000, and (ii) to Boni, Common Stock valued at $360,000;
and
(b) In the event that the intellectual property, or a part thereof,
acquired by the Purchaser from the Seller, as described in Schedule 5.6,
is sold, assigned or other wise disposed by the Purchaser within eighteen
(18) months of the Closing Date (the "Sale"), B Tech and Boni (in the same
ratio as set forth in Section 2.1(a)), shall receive as an addition to the
Purchase Price set forth in subparagraphs (a) and (b), above, twenty five
percent (25%) of the consideration received in the Sale, less six million
dollars ($6,000,000), allocated as designated by the Seller. In the event
that twenty five percent (25%) of the consideration received in the Sale
in less than six million dollars ($6,000,000), no addition to the Purchase
Price according to this paragraph 2.1(b) shall be due.
2.2 Purchase Price Adjustment. On the date ninety (90) days after the
Closing Date (the "Valuation Date"), the Purchaser shall compute the price per
share as the average of the closing bid and asked prices of the Common Stock
quoted in the Over-The-Counter Market Summary for the five (5) trading days
prior to the Valuation Date (the "Valuation Price per Share"). The number of
shares of Common Stock to be issued on the Valuation Date shall be adjusted by
dividing six million dollars ($6,000,000) by the Valuation Price per Share.
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3. CLOSING.
3.1 Closing. The closing of the sale and purchase (the "Closing") shall
take place at the offices of ▇▇▇▇▇▇▇▇▇ Law Group, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ simultaneously with the execution of
this Agreement by all the parties hereto (the "Closing Date"). At the Closing,
Seller shall deliver to Purchaser such bills of sale, endorsements, assignments,
deeds, drafts, checks, stock powers, or other instruments as shall be effective
to vest in Purchaser good and marketable title to the Assets subject to no
liens, encumbrances, or rights in any other party whatsoever.
4. TAXES AND PREPAID ITEMS.
Except as otherwise provided herein, Seller will pay all Italian sales,
use, franchise, and other taxes and charges, which may become payable in
connection with the sale of the Assets pursuant to the terms of this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF B TECH AND ▇▇▇▇▇▇▇▇▇.
B Tech and ▇▇▇▇▇▇▇▇▇ jointly and severally represent and warrant, covenant
and agree that as of the Closing Date:
5.1 Organization and Corporate Power. B Tech is a corporation duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation with full power and authority (corporate and
other) to carry on the business in which it is engaged (a true and correct list
of each such jurisdiction is set forth in Schedule 5.1) and to execute and
deliver and carry out the transactions contemplated by this Agreement.
5.2 Due Authorization; Effect of Transaction. No provisions of the
Certificate of Incorporation or By-Laws of B Tech, or of any agreement,
instrument, or understanding, or any judgment, decree, rule, or regulation, to
which B Tech is a party or by which B Tech is bound, has been or will be
violated by the execution and delivery by B Tech of this Agreement or the
performance or satisfaction of any agreement or condition herein contained upon
its part to be performed or satisfied, and all requisite corporate and other
authorizations for such execution, delivery, performance, and satisfaction have
been duly obtained. Upon execution and delivery, this Agreement will be a legal,
valid, and binding obligation of Seller, enforceable in accordance with its
terms. B Tech is not in default in the performance, observance, or fulfillment
of any of the terms or conditions of its Articles of Incorporation or By-Laws.
5.3 Personal Properties. Seller owns and has good and marketable title to
all the tangible and intangible personal property and assets, as set forth in
Schedule 5.6, free and clear of all mortgages, liens, encumbrances, equities,
claims, and obligations to other persons, of whatever kind and character Upon
the sale, assignment, transfer, and delivery of the Assets to Purchaser
hereunder, there will be vested in Purchaser good and marketable title to the
tangible and intangible personal property constituting a part thereof, free and
clear of all mortgages, liens, encumbrances, equities, claims, and obligations
to other persons, of whatever kind and character.
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5.4 Material Contracts and Arrangements. Except as set forth in Schedule
5.4, Seller is not a party to any contract or arrangement, including, without
limitation, any commitments or obligations, contingent or otherwise, relating
directly or indirectly to the Assets.
5.5 Litigation and Compliance with Laws. Seller is not a party to any
litigation or legal or other actions, suits, proceedings, or investigations, at
law or in equity or admiralty, or before any federal, state, municipal, or other
governmental department, commission, board, agency, or instrumentality, domestic
or foreign, in which Seller or any of its officers or directors, in such
capacity, is engaged, or, to the knowledge and belief of Seller and Controlling
Stockholder, with which Seller or any of its officers or directors is
threatened, except as set forth in Schedule 5.5 (subject to the provisions of
Section 11), in connection, directly or in directly, with the Assets. Seller is
and at all times since its inception has been in compliance with Italian laws
and governmental rules and regulations, and all requirements of insurance
carriers, applicable to the Assets.
5.6 Intellectual Property, Trademarks, Licenses, Etc. Schedule 5.6 sets
forth all of the intellectual property, trademarks, trade names, service marks,
patents, copyrights, registrations, or applications with respect thereto, and
licenses or rights under them owned, used, or intended to be acquired or used by
Seller, and, to the extent indicated in Schedule 5.6, they have been duly
registered in such offices as are indicated therein. Seller is the sole and
exclusive owner of the intellectual property, trademarks, trade names, service
marks, and copyrights, the holder of the full record title to the trademark
registrations and the sole owner of the inventions covered by the patents and
patent applications, all as set forth in Schedule 5.6; Seller has the sole and
exclusive right, to the extent listed in Schedule 5.6, to use such intellectual
property, trademarks, trade names, service marks, patents and copyrights, and,
except to the extent set forth on Schedule 5.6, all of them are free and clear
of any mortgages, liens, encumbrances, equities, licenses, claims, and
obligations to other persons of whatever kind and character.
5.7 Adverse Restrictions. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby are not events that of
themselves or with the giving of notice or the passage of time or both, could
constitute, on the part of Seller, 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 trust agreements of Seller, any
agreement or instrument to which Seller is a party or by which it is bound, or
result in the creation or imposition of any lien, charge, or encumbrance of any
nature whatsoever on the property or assets of Seller and no such event of
itself or with the giving of notice or the passage of time or both will result
in the acceleration of the due date of any obligation of Seller.
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5.8 Material Information. Neither this Agreement (including the Schedules
and Exhibits hereto) nor any certificate or other information or document
furnished or to be furnished by either Seller or ▇▇▇▇▇▇▇▇▇ to Purchaser contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact required to be stated herein or therein or necessary to
make the statements herein or therein not misleading.
5.9 Certain Transactions. None of the officers, directors or shareholders
of Seller is presently a party to any transaction with Seller, including,
without limitation, any contract, agreement, or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from, any officers,
directors or shareholders, any member of a family of any officers, directors or
shareholders or any corporation, partnership, trust, or other entity in which
any officers, directors or shareholders has a substantial interest or is an
officer, director, trustee, or partner.
5.10 No Governmental Authorizations or Approvals Required. No
authorization or approval of, or filing with, any governmental agency,
authority, or other body will be required in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
5.11 Continuing Representations. The representations and warranties of B
Tech and ▇▇▇▇▇▇▇▇▇ herein contained shall survive the Closing for a period of
one (1) year.
6. REPRESENTATIONS FOR UNITED STATES SECURITIES LAWS.
The B Tech, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ severally represent and warrant, covenant
and agree that as of the date hereof and as of the Closing Date:
6.1 Adherence with Applicable Securities Laws. B Tech, ▇▇▇▇▇▇▇▇▇ and Boni
understand that the Common Stock is being offered to them in reliance upon
specific exemptions from the registration requirements of United States federal
and state securities laws under Regulation D and/or Regulation S as promulgated
under the Securities Act of 1933, as amended, and that the Purchaser is relying
upon the truth and accuracy of, and the B Tech's, ▇▇▇▇▇▇▇▇▇'▇, and Boni's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of B Tech, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ set forth herein in order to
determine the availability of such exemptions and the eligibility of B Tech,
▇▇▇▇▇▇▇▇▇ and Boni to acquire the Common Stock. Accordingly, each of the B Tech,
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ hereby represents either:
(a) it is an "accredited investor" within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as
amended, and is familiar with the type of risks inherent in the
acquisition of securities such as the Common Stock and each of the
Seller's and ▇▇▇▇▇▇▇▇▇'▇ financial position is such that the Seller
and ▇▇▇▇▇▇▇▇▇ can afford to retain its Common Stock for an
indefinite period of time without realizing any direct or indirect
cash return on its investment; or
(b) it is acquiring the Common Stock in an offshore transaction and
further represents:
5
(i) B Tech, ▇▇▇▇▇▇▇▇▇ and Boni are outside the United States when
receiving and executing this Agreement;
(ii) B Tech, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ are not aware of any advertisement
of any of the Common Stock;
(iii) B Tech, ▇▇▇▇▇▇▇▇▇ and Boni have not acquired the Common Stock
as a result of, and will not itself engage in, any "directed selling
efforts" (as defined in Regulation S under the Securities Act of
1933, as amended) in the United States in respect of the Common
Stock which would include any activities undertaken for the purpose
of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of the
Common Stock; provided, however, that the Seller and ▇▇▇▇▇▇▇▇▇ may
sell or otherwise dispose of the Common Stock pursuant to
registration of the Common Stock pursuant to the Securities Act of
1933, as amended, and any applicable state and provincial securities
laws or under an exemption from such registration requirements and
as otherwise provided herein;
(iv) B Tech, ▇▇▇▇▇▇▇▇▇ and Boni agree that the Purchaser will refuse
to register any transfer of the Common Stock not made in accordance
with the provision of Regulation S, pursuant to an effective
registration statement under the Securities Act of 1933, as amended,
or pursuant to an available exemption from the registration
requirements of the Securities Act of 1933 and in accordance with
applicable state and provincial securities laws;
(v) B Tech, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ understand and agree that offers and
sales of any of the Common Stock, prior to the expiration of a
period of one year after the date of transfer of the Common Stock
(the "Distribution Compliance Period"), shall only be made in
compliance with the safe harbor provisions set forth in Regulation
S, pursuant to the registration provisions of the Securities Act of
1933, as amended, or an exemption there from, and that all offers
and sales after the Distribution Compliance Period shall be made
only in compliance with the registration provisions of the
Securities Act of 1933, as amended, or an exemption there from, and
in each case only in accordance with all applicable securities laws;
and
(vi) B Tech, ▇▇▇▇▇▇▇▇▇ and Boni understand and agree not to engage
in any hedging transactions involving the Common Stock, prior to the
end of the Distribution Compliance Period unless such transactions
are in compliance with the Securities Act of 1933, as amended.
6.2 Legends. B Tech, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ hereby acknowledge that upon the
issuance of the Common Stock, and until such time as the same is no longer
required under the applicable securities laws and regulations, the certificates
representing any of the Common Stock will bear a legend substantially in one of
the following forms:
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NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), IN RESPECT OF SUCH SHARES
IS THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933
ACT IS THEN IN FACT APPLICABLE TO SAID SHARES;
OR
THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT
U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). ACCORDINGLY, NONE OF
THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE
1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S.
PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
WITH THE 1933 ACT.
6.3 Investment Purposes. B Tech, ▇▇▇▇▇▇▇▇▇ and Boni agree that they are
acquiring the Common Stock for investment purposes and will not offer, sell or
otherwise transfer, pledge or hypothecate any of the Common Stock issued to them
(other than pursuant to an effective Registration Statement under the Securities
Act of 1933, as amended) directly or indirectly unless:
(a) the sale is to the Purchaser;
(b) the sale is made pursuant to the exemption from registration under
the Securities Act of 1933, as amended, provided by Rule 144
thereunder; or
(c) the Common Stock is sold in a transaction that does not require
registration under the Securities Act of 1933, as amended, or any
applicable United States state laws and regulations governing the
offer and sale of securities, and the vendor has furnished to
Purchaser an opinion of counsel to that effect or such other written
opinion as may be reasonably required by Purchaser.
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6.4 Continuing Representations. The representations and warranties of B
Tech, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ herein contained shall survive the
Closing for the applicable statute of limitations.
7. REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF PURCHASER.
Purchaser represents and warrants, covenants and agrees that as of the
Closing Date:
7.1 Due Authorization; Effect of Transaction. No provision of Purchaser's
Certificate of Incorporation or By-Laws, or of any agreement, instrument, or
understanding, or any judgment, decree, rule, or regulation, to which Purchaser
is a party or by which it is bound, has been, or will be violated by the
execution by Purchaser of this Agreement or the performance or satisfaction of
any agreement or condition herein contained upon its part to be performed or
satisfied, and all requisite corporate and other authorizations for such
execution, delivery, performance, and satisfaction have been duly obtained. Upon
execution and delivery, this Agreement will be a legal, valid, and binding
obligation of Purchaser, enforceable in accordance with its terms. Purchaser is
not in default in the performance, observance, or fulfillment of any of the
terms or conditions of its Certificate of Incorporation or By-Laws.
7.2 Capitalization. The authorized capital stock of the Purchaser consists
of 75,000,000 shares of common stock, having a par value of one-tenth of one
cent ($0.001) per share, of which 28,195,566 shares are issued and outstanding
("Capital Stock"). On the Valuation Date, the Common Stock will be duly and
validly issued, fully paid and non-assessable. The Capital Stock is free and
clear of any and all claims, liens, pledges, charges, encumbrances, mortgages,
security interests, options, preemptive or other rights, restrictions on
transfer, or other interests or equities or imperfections of title whatsoever.
Other than Series A Warrants to acquire 1,750,000 shares of common stock, Series
B Warrants to acquire 1,750,000 shares of common stock and warrants issued to
certain placement agents to acquire 410,000 shares of Common Stock, there are no
other equity securities of Purchaser outstanding on the date hereof and there
are no other existing warrants, preemptive or other rights, options, calls,
commitments, conversion privileges, or other agreements (all of the foregoing
being collectively called "Options") obligating Purchaser to issue any or all of
its authorized and unissued capital stock, or any security convertible into
and/or exchangeable for capital stock of the Purchaser. The Purchaser has no
capital stock of any class authorized or outstanding except as identified
herein. The Capital Stock represents one hundred percent (100%) of the issued
and outstanding capital stock of the Company. The Capital Stock and Options
issued to date by the Purchaser or any subsidiary were issued pursuant to a
valid registration statement or in transactions exempt from registration under
the federal Securities Act of 1933, as amended (the "Securities Act") and under
applicable state securities or Blue Sky laws (the "State Laws"). The Purchaser
has not or will not have violated the Securities Act or the State Laws in
connection with the issuance of any shares of capital stock or other securities
from the date of incorporation through the Closing Date.
7.3 Valid Title to Common Stock. The Purchaser will deliver to Seller,
valid and marketable title to the Common Stock on the Valuation Date, free and
clear of any claims, liens, pledges, charges, encumbrances, mortgages, security,
interests, options, preemptive or other rights, restrictions on transfer or
other interest or equities or any other imperfections of title whatsoever. The
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Purchaser represents and warrants that it has full power and lawful authority to
execute and deliver this Agreement and to consummate and perform the
transactions contemplated hereby; and that the execution and delivery of this
Agreement by it and the consummation and performance of the transactions
contemplated hereby by it are and will be the legal, valid and binding
obligation of the Purchaser, enforceable against it in accordance with their
terms.
7.4 Continuing Representations. The representations and warranties of
Purchaser herein contained shall survive the Closing for a period of one (1)
year.
8. CONDITIONS OF PURCHASER'S OBLIGATIONS.
The obligations of Purchaser hereunder are subject to the fulfillment to
the reasonable satisfaction of the Purchaser, at the Closing, of each of the
following conditions:
8.1 Governance. B Tech shall deliver to Purchaser copies, certified by the
Secretary of B Tech, of the unanimous written consent of the Board of Directors
of B Tech authorizing this Agreement and the other agreements and instruments to
be delivered pursuant thereto and the transactions contemplated hereby and
thereby.
8.2 Employment Letter. ▇▇▇▇▇▇▇▇▇ shall have executed and delivered to
Purchaser an Employment Letter, in substantially the form of Exhibit A hereto.
8.3 Covenant Not to Compete and Confidentiality Agreement. B Tech,
▇▇▇▇▇▇▇▇▇ and Boni shall have executed and delivered a Covenant Not to Compete
and Confidentiality Agreement, in substantially the form of Exhibit B hereto.
8.4 Instruments of Transfer. Seller and ▇▇▇▇▇▇▇▇▇ shall have delivered to
Purchaser bills of sale, assignments, deeds, stock powers, and other instruments
of transfer and assignment in accordance with the provisions hereof,
transferring to Purchaser all of Seller's and ▇▇▇▇▇▇▇▇▇'▇ right, title, and
interest in and to the Assets to be transferred, sold, assigned, and conveyed by
Seller and ▇▇▇▇▇▇▇▇▇ to Purchaser pursuant to the provisions of this Agreement.
8.5 Escrow Agreement. The Seller and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the former Chief
Executive Officer or the Purchaser, shall have executed and delivered an Escrow
Agreement, in substantially the form of Exhibit C hereto.
9. CONDITIONS OF SELLER'S OBLIGATIONS.
The obligations of Seller hereunder are subject to the fulfillment to the
reasonable satisfaction of Seller, at the Closing, of each of the following
conditions:
9
9.1 Governance. Purchaser shall deliver to Seller copies, certified by the
Secretary of Purchaser, of the unanimous written consent of the Board of
Directors of Purchaser authorizing this Agreement and the other agreements and
instruments to be delivered pursuant thereto and the transactions contemplated
hereby and thereby.
9.2 Employment Letter. The Purchaser shall have executed and delivered to
▇▇▇▇▇▇▇▇▇ an Employment Letter, in substantially the form of Exhibit A hereto.
9.3 Covenant Not to Compete and Confidentiality Agreement. The Purchaser
shall have executed and delivered a Covenant Not to Compete and Confidentiality
Agreement, in substantially the form of Exhibit B hereto.
10. INDEMNIFICATION BY B TECH AND ▇▇▇▇▇▇▇▇▇.
10.1 Indemnification.
(a) B Tech and ▇▇▇▇▇▇▇▇▇ (collectively, the "Selling Parties") hereby
agree jointly and severally to indemnify, defend, and hold Purchaser
and each of its officers and directors (collectively with Purchaser,
the "Purchasing Parties") harmless from and against the amount of
any actual damage, loss, cost, or expense (including reasonable
attorneys' fees and settlement costs) to Purchasing Parties ("Loss")
occasioned or caused by, resulting from, or arising out of:
(i) Any failure by a Selling Party to perform, abide by, or
fulfill any of the agreements, covenants, or obligations set forth
in or entered into in this Agreement (with the exclusion of the
Employment Letter attached hereto as Exhibit A) to be so performed
or fulfilled by such Selling Party.
(ii) Any material inaccuracy in or breach of any of the
representations or warranties set forth in this Agreement, or any
certificate or Schedule or other writing furnished pursuant hereto.
(iii) Any failure on the part of Purchaser to withhold from
the Purchase Price any amount due by either Seller to any
governmental authority or other person that results in a Loss to
Purchaser.
The amount of any Loss shall be the amount of cash reimbursement or
set-off when received by the Purchasing Party or Purchasing Parties incurring
such loss, shall place such Purchasing Party or Purchasing Parties in the same
financial position it or they would have been in if such Loss has not occurred;
provided, however, except as otherwise expressly provided herein, no
indemnification shall be payable by the Selling Parties except to the extent
that the total of claims for indemnification by Purchasing Parties shall exceed
ten thousand dollars ($10,000) (the "Threshold") (such amount being a threshold
amount versus merely a deductible). Notwithstanding the foregoing, in no event
shall Selling Parties' liability under this Section 10.1 exceed an amount equal
to the Purchase Price, provided, however, in the event that the value of the
Common Stock is less than the Purchase Price, the Selling Parties' liability
under this Section 10.1 shall be such amount. To the extent that a Loss under
this Article 10 is as a result of a claim by a person not a party to this
Agreement, the Loss will only be reimbursed to the Purchasing Party to the
extent that the Purchasing Party is the prevailing party.
10
10.2 Notice of Claim. Purchasing Parties shall give prompt written notice
to Selling Parties of any claim (actual or threatened) or other event that in
the judgment of either Purchasing Party might result or has resulted in a Loss
by a Purchasing Party hereunder, and Selling Parties shall have the right to
assume the defense of such claim or any litigation resulting therefrom; provided
that counsel for the Selling Parties, who shall conduct the defense of such
claim (actual, threatened, or asserted) or litigation, shall be reasonably
satisfactory to the Purchasing Parties, and Purchasing Parties may participate
in such defense at their expense, and provided, further, that the omission by
Purchasing Parties to give notice as provided herein shall not relieve Selling
Parties of their obligations hereunder except to the extent that the omission
results in a failure of actual notice to the Selling Parties and Selling Parties
are damaged solely as a result of the failure to give notice. No Selling Party,
in the defense of any such claim or litigation, shall, except with the consent
of each Purchasing Party, consent to the entry of any judgment or decree or
enter into any settlement that does not include as an unconditional term thereof
the giving by the claimant or plaintiff to Purchasing Parties of a release from
all liability in respect to such claim or litigation, and no Selling Party shall
have liability with respect to any payment made by a Purchasing Party in
connection with the settlement, satisfaction, or compromise of any claim unless
the Selling Parties shall have approved thereof in advance in writing, which
approval shall not unreasonably be withheld or delayed. If the Purchasing
Parties shall not have received notice that the Selling Parties shall assume the
defense of such claim within twenty (20) days after the notice is sent to the
Selling Parties of the existence of such claim, the Purchasing Parties shall be
free to proceed with the defense of such claim. Each such notice shall be
accompanied (or followed as promptly as is reasonably practicable after the
amount of such Loss becomes determinable) by a certificate signed by the
President of Purchaser or such officer or director as the case may be, and
setting forth in reasonable detail the calculation of the amount of such Loss in
accordance with the provisions hereof, and accompanied by copies of all relevant
documents and records. The omission to give such notice or provide such
certificate by Purchasing Parties shall not relieve Selling Parties of their
obligation under this Section 10.2 except to the extent such omission results in
a failure of actual notice to the Selling Parties and Selling Parties are
damaged solely by such failure to give notice. No Loss shall be considered to
have occurred with respect to any payment made by any Purchasing Parties in
settlement, satisfaction, or compromise of any claim unless the Selling Parties
shall have approved thereof in advance and in writing. Prior to filing any
action in law in any court, the Purchasing Parties agree to submit a Claim to
nonbinding mediation in San Diego, California within three (3) months of the
date of the Claim; provided, however, that if the statute of limitations for a
Claim is about to expire, the Purchasing Parties may file a lawsuit if the
Selling Parties have not signed a tolling agreement of the statute of
limitations.
11
10.3 Set-Off or Reimbursement. Purchasing Parties shall have the right to
set-off against the payment of the Purchase Price payable by Purchaser as
provided for herein (or, if such amounts have theretofore been paid, then to
receive prompt reimbursement from Selling Parties of an amount equal to, and in
the absence or prompt reimbursement, a reduction in the Common Stock of B Tech
and ▇▇▇▇▇▇▇▇▇ in accordance with Section 10.4) the amount of all Losses incurred
by Purchasing Parties. Purchasing Parties shall deliver to Selling Parties a
written notice explaining the nature and amount of each such set-off or required
reimbursement as promptly as is reasonably practicable after Purchasing Parties
shall have determined to make such set-off or to require such reimbursement.
Purchasing Parties may make such set-offs or require such reimbursements in any
order they choose.
10.4 Payment in Shares. The Purchaser, in its sole discretion, pursuant to
Section 10.3, herein, may reduce the shares of Common Stock of Selling Parties
in an amount equal to the Loss divided by the price per share (computed as the
average of the closing bid and asked prices of the Common Stock quoted in the
Over-The-Counter Market Summary for the five (5) trading days prior to date the
delivery of the written notice provided in accordance with Section 10.3). By way
of example, if the Loss is $100,000, and the computation of the price per share
is $20, the Seller's interest in the Common Stock would be reduced by 5,000
shares of the Common Stock ($100,000 / $20 = 5,000). Selling Parties authorize
the Purchaser to make the reduction on its books and records, and the Selling
Parties agree to remit the shares of Common Stock upon written request.
11. BROKERAGE FEE.
B Tech and ▇▇▇▇▇▇▇▇▇ and Purchaser each represent that no broker has been
involved in this transaction and each party agrees to indemnify and hold the
others harmless from payment of any brokerage fee, finder's fee, or commission
claimed by any party who claims to have been involved because of association
with such party.
12. AMENDMENTS; WAIVERS.
This Agreement constitutes the entire agreement of the parties related to
the subject matter of this Agreement, supersedes all prior or contemporary
agreements, representations, warranties, covenants, and understandings of the
parties. This Agreement may not be amended, nor shall any waiver, change,
modification, consent, or discharge be affected, except by an instrument in
writing executed by or on behalf of the party against whom enforcement of any
amendment, waiver, change, modification, consent, or discharge is sought.
Any waiver of any term or condition of this Agreement, or of the breach of
any covenant, representation, or warranty contained herein, in any one instance,
shall not operate as or be deemed to be or construed as a further or continuing
waiver of such term, condition, or breach of covenant, representation, or
warranty, nor shall any failure at any time or times to enforce or require
performance of any provision hereof operate as a waiver of or affect in any
manner such party's right at a later time to enforce or require performance of
such provision or of any other provision hereof; and no such written waiver,
unless it, by its own terms, explicitly provides to the contrary, shall be
construed to effect a continuing waiver of the provision being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance with such provision.
12
13. ASSIGNMENT; SUCCESSORS AND ASSIGNS.
This Agreement shall not be assignable by any party without the written
consent of the others. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
14. SEVERABILITY.
If any provision or provisions of this Agreement shall be, or shall be
found to be, invalid, inoperative, or unenforceable as applied to any particular
case in any jurisdiction or jurisdictions, or in all jurisdictions or in all
cases, because of the conflict of any provision with any constitution or statute
or rule of public policy or for any other reason, such circumstance shall not
have the effect of rendering the provision or provisions in question invalid,
inoperative, or unenforceable in any other jurisdiction or in any other case or
circumstance or of rendering any other provision or provisions herein contained
invalid, inoperative, or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute, or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, or unenforceable provision
had never been contained herein and such provision reformed so that it would be
valid, operative, and enforceable to the maximum extent permitted in such
jurisdiction or in such case.
15. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument, and in pleading or proving any provision of this Agreement
it shall not be necessary to produce more than one such counterpart. Delivery of
executed copies of this Agreement by facsimile will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
16. SECTION AND OTHER HEADINGS.
The headings contained in this Agreement are for reference purposes only
and shall not in any way effect the meaning or interpretation of this Agreement.
17. NOTICES.
All notices, requests, demands, and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered or
mailed, postage prepaid, certified mail, return receipt requested, emailed or
delivered by facsimile transmission:
13
(a) TO SELLER OR ▇▇▇▇▇▇▇▇▇: If to Seller or ▇▇▇▇▇▇▇▇▇:
3076 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Highway
PO BOX 3463 Road Town, Tortola
British Virgin Islands
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) TO PURCHASER: If to Purchaser, to:
IPEX, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ "▇▇▇▇" Alt, Chief Executive Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ Law Group
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇. ▇▇▇▇, Esq.
Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
14
and/or to such other person(s) and address(es) as either party shall have
specified in writing to the other.
18. GENDER.
Whenever used herein, the singular number shall include the plural, the
plural shall include the singular, and the use of any gender shall include all
genders.
19. LAW TO GOVERN.
This Agreement shall be governed by and construed and enforced in
accordance with the law (other than the law governing conflict of law questions)
of California.
20. COURTS.
Any action to enforce, arising out of, or relating in any way to, any of
the provisions of this Agreement may be brought and prosecuted in such court or
courts located in San Diego County, California as is provided by law; and the
parties consent to the jurisdiction of the court or courts located in San Diego
County, California and to service of process by registered mail, return receipt
requested, or in any other manner provided by law.
21. CONFIDENTIALITY.
Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement are confidential and that
if this Agreement is terminated pursuant to the preceding section the parties
agree to return to one another any and all financial, technical and business
documents delivered to the other party or parties in connection with the
negotiation and execution of this Agreement and shall keep the terms of this
Agreement and all information and documents received from Purchaser and the
contents thereof confidential and not utilize nor reveal or release same;
provided, however, that Purchaser will be required to issue news releases
regarding the execution and consummation of this Agreement and file a Current
Report on Form 8-K with the Securities and Exchange Commission respecting the
proposed Merger contemplated hereby together with such other documents as are
required to maintain the currency of Purchaser's filings with the Securities and
Exchange Commission.
22. POST-CLOSING MATTERS.
Forthwith after the Closing, Seller and the Purchaser agree to use all
their best efforts to issue a news release reporting the Closing.
[Signature page follows.]
15
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be
executed as of the date first above written.
PURCHASER
IPEX, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ "▇▇▇▇" Alt
Title: Chief Executive Officer
SELLER
B Tech Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Director
-------------------------------------
▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
BONI
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇
1
EXHIBIT A
EMPLOYMENT LETTER
2
EXHIBIT B
COVENANT NOT TO COMPETE AND CONFIDENTIALITY AGREEMENT
3
EXHIBIT C
ESCROW AGREEMENT
4
SCHEDULE 5.1
SELLER'S JURISDICTIONS
[None]
5
SCHEDULE 5.4
MATERIAL CONTRACTS
Material Contracts include a contract with ▇▇▇▇▇▇▇▇ ▇▇▇▇ in which the RGB
Channel has agreed to pay him five percent (5%) of any consideration received in
the transaction contemplated by this Agreement and an additional one percent
(1%) from The ▇▇▇▇▇▇▇▇▇ Trust.
6
SCHEDULE 5.5
LITIGATION
[None]
7
SCHEDULE 5.6
SELLER'S INTELLECTUAL PROPERTY
A.) Presentation of work in html ▇▇▇▇▇▇
▇.) Comparison of compressor with JPEG
C.) Visual demo of compression ratio 100:1
D.) Demo geometric white point
E.) Demo quadratic circular filter colors
F.) Demo dark geometric point
G.) Demo zipex compression
H.) Demo jpeg dark compression
I.) Demo one pixel color comparison
J.) Demo dark motion
K.) Demo music executable
L.) Demo 41 colors simulation
M.) Demo 61 colors simulation
N.) Demo 81 colors simulation
O.) 2004 notary deposit index
P.) 2005 notary deposit index
Q.) Quadratic formula description
R.) Circular formula description
S.) Demo of flow pixel (transformation of video into one image)
T.) Demo of dark film compressor with image size of 1.8 KB
U.) Source code and explanation of 100:1 compressor
V.) The trademark "Luminaxys"
W.) The domain name "▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇"
8