SUPPLEMENTAL SETTLEMENT AGREEMENT AND GENERAL RELEASE
This Supplemental Settlement Agreement and Release (the "Agreement") is
dated September 1, 2005 and is made by and between IPEX, Inc. (the "Company")
and Xxxxxx Xxxxxxxx ("Xxxxxxxx"), and supercedes a prior Settlement Agreement
and Release dated August 19, 2005 between the same parties (the "Prior
Agreement") as follows:
WHEREAS, a dispute arose between the Company and Xxxxxxxx concerning
certain monies that Xxxxxxxx alleged were owed to him by the Company (the
"Dispute"); and
WHEREAS, the parties had entered into the Prior-Agreement to resolves such
disputes, but an issue arose concerning the issuance of a Rule 144 opinion in
connection with stock that was the subject thereof; and
WHEREAS, the parties to this Agreement wish to resolve the pending dispute
and the resolution of the issue arising under the Prior-Agreement without
resulting to costly and distracting litigation; and
WHEREAS, this Agreement is a settlement of disputed claims and does not
constitute an admission of wrongdoing of any kind;
NOW THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the adequacy and receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. The Company shall pay Xxxxxxxx the total sum of Forty-Nine Thousand
Dollars and No Cents ($49,000.00) (the "Payment") upon the execution hereof.
This payment reflects the balance of the monies owed to Xxxxxxxx under the
Prior-Agreement in the amount of Forth-Five Thousand Dollars ($45,000), together
with Three Thousand Dollars ($3,000) to compensate Xxxxxxxx for his attendance
at Board of Directors Meetings and One Thousand Dollars ($1,000) to compensate
Xxxxxxxx for his legal fees incurred with the issue arising under the Prior
Agreement. The parties acknowledge that Xxxxxxxx received in July 2005, the sum
of Forty Thousand Dollars ($40,000) and in August 2005, the sum of
Thirty-Thousand Dollars ($30,000) and the total settlement is $115,000,
exclusive of the aforementioned Board of Directors' Fees and legal fees.
2. On February 20, 2004, the Company, through a predecessor company,
issued to Xxxxxxxx 218,000 shares of common stock (the "Shares"). Xxxxxxxx and
the Company executed a Lock-Up Agreement in February 2005, whereby Xxxxxxxx
agreed not to sell the Shares for a period of one year. The parties hereto waive
the provisions of the Lock-Up Agreement in its entirety and such agreement shall
be null and void. Xxxxxxxx acknowledges that he has received the stock
certificate for the Shares. At any time after the date hereof, if the Company
shall determine to register for its own account or the account of others under
the Securities Act of 1933, as amended, any of its equity securities, the
Company shall include in such registration statement the Shares. This
"piggy-back" registration right shall not apply to an offering of equity
securities registered on Form S-4 or S-8 (or their then equivalent forms)
relating to securities to be issued solely in connection with an acquisition of
any entity or business or securities issuable in connection with a stock option
or other employee benefit plan.
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3. Within 24 hours of the receipt of the Payment, Xxxxxxxx shall
immediately tender his written resignation from the Board of Directors of the
Company, effective immediately, to the Company.
4. Upon receipt of the Payment, Xxxxxxxx agrees to release and discharge
IPEX, Inc., and the Company agrees to release and discharge Xxxxxxxx, and each
of their respective heirs, executors, administrators, parent company, holding
company, subsidiaries, successors, officers, directors, principals, control
persons, past and present employees, insurers, and assigns (the "Releasees")
from all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, controversies, agreements, promises, damages, judgments, claims and
demands whatsoever, in law or equity, against the above-named Releasees which
Xxxxxxxx or the Company, as the case may be, and their heirs, executors,
successors and assigns ever had, now have or hereafter can, shall or may have,
for, upon or by reason of any matter, cause or thing whatsoever from the
beginning of the world to the date of this Agreement; provided however the
parties hereto realize that paragraph "4" does not apply to Xxxxxxxx Xxxxxxx.
With respect to the release contained herein, it is acknowledged and admitted by
Xxxxxxxx that he has been informed of the provisions of Section 1542 of the
Civil Code of the State of California, and does hereby expressly waive and
relinquish all rights and benefits which he has or may have under said Section,
or any comparable law under any other jurisdiction. Said section reads as
follows:
"A general release does not extend to claims which the creditors does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
5. Xxxxxxxx and IPEX understand and agree that this Agreement, including
the facts and circumstances underlying the dispute that gave rise to this
Agreement, shall forever be deemed confidential. Except as required under the
statutes, rules or regulations of any federal or state government, government
agency, self-regulatory organization or court of competent jurisdiction,
Xxxxxxxx and IPEX shall not disclose or divulge to others the following: the
terms or substance of this Agreement or any underlying facts of the Dispute
giving rise to this Agreement.
6. Xxxxxxxx acknowledges and agrees that disclosing, divulging, revealing
or other use of any confidential information that he obtained during the course
of his involvement with the Company as a Director, Consultant, or other
position, may be highly detrimental to the Company's business and may result in
the serious loss of business and pecuniary damage to the Company. Except as
required under the statutes, rules or regulations of any federal or state
government, government agency, self-regulatory organization or court of
competent jurisdiction, Xxxxxxxx specifically covenants and agrees to hold all
such information in the strictest of confidence, and will not, without the
Company's prior written consent, disclose, divulge, or reveal to any person
whomsoever or use any confidential information for any purpose whatsoever.
Xxxxxxxx shall be permitted to disclose the Confidential Information to his
attorneys and accountants (for purposes of preparing his tax returns). For the
purposes of this Agreement, "confidential information" includes, but is not
limited to, information about the Company's clients, client contracts, business
plans, financial information, fees and schedules, compensation and employments
policies, the Company's marketing, financial, personnel, and sales information,
any strategies for future business products or services in any form, and any and
all information learned by Xxxxxxxx while serving as a Director and/or
Consultant to the Company. Confidential information does not include any
information that (i) Xxxxxxxx possessed prior to his association with the
Company and its predecessor, (ii) the Company has disclosed to the public or
(iii) is otherwise publicly known or available.
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7. Xxxxxxxx and the Company acknowledge that the services provided by
Xxxxxxxx to the Company were special, unique, and extraordinary and, as a result
of his position with the Company, Xxxxxxxx has access to confidential and
proprietary information. Further, Xxxxxxxx and the Company recognize and
acknowledge that the Company's voice-over-internet protocol business is a
business without borders and utilized the internet, which is available
worldwide. In light of the foregoing and the consideration provided herein by
the Company, Xxxxxxxx agrees that it is reasonably necessary for the protection
of the Company's goodwill that Xxxxxxxx agree, and accordingly, Xxxxxxxx does
hereby agree, and covenant that he will not work for, consult for, serve as a
director, officer, or employee, or otherwise directly or indirectly assist, any
individual or entity that provides, anticipates providing, or owns an interest
in a entity that provides voice-over-internet protocol products and/or services
for a term of one (1) year from the date of this Agreement. Xxxxxxxx
specifically agrees that the geographical scope of this provision is without
limitation and encompasses the entire world. The parties recognize that the term
of one (1) year and world-wide scope of this covenant-not-to-compete is fair and
reasonable in order to protect the Company's legitimate business interest and
technology and does not impose an undue hardship on Xxxxxxxx. For ease of
reference, this paragraph shall be referred to as the "Covenant-Not-To-Compete."
8. In the event that Xxxxxxxx breaches the Covenant-Not-To-Compete, the
parties acknowledge that monetary damages resulting from a breach thereof may be
difficult to calculate and insufficient to remedy the injury resulting from such
breach. Accordingly, Xxxxxxxx acknowledges and admits that the Company shall be
entitled, in addition to any other right or remedy it may have in law or equity,
to a preliminary and permanent injunction, enjoining or restraining Xxxxxxxx, as
the case may be, from any violation or threatened violation of the
Covenant-Not-To-Compete. If any of the restrictions contained in the
Covenant-Not-To-Compete shall be deemed to be unenforceable by reason of the
extent, duration, or geographical scope thereof, or otherwise, then the Court
making such determination shall have the right to reduce such extent, duration,
geographical scope, or other provision thereof, and in its reduced form, the
Covenant-Not-To-Compete shall then be enforceable in the manner contemplated
thereby. Finally, nothing contained in this paragraph shall be construed as
prohibiting the Company from pursuing any other remedies available to it for any
such damages and any equitable accounting of all earnings, profits, and other
benefits arising from such violation.
9. Xxxxxxxx, Xxxxxxxx Xxxxxxx, and the Company agree that neither of them
shall, directly or indirectly, in public or in private, deprecate, impugn,
disparage or make any remarks that would be construed to defame the other, or
the Company's past or present officers, directors, or shareholders, nor shall
Xxxxxxxx, Xxxxxxxx Xxxxxxx, or the Company assist any other person firm, entity,
or company in so doing.
10. Contemporaneously with the execution of this Agreement, the Company
agrees to execute and deliver a Indemnification Agreement to Xxxxxxxx in the
form annexed hereto as Exhibit A.
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11. Aside from the attorneys' fees referenced in paragraph 1, all parties
are responsible for their own attorneys' fees and costs.
12. Upon receipt of the Payment, Xxxxxxxx shall return the original and
all copies thereof of any AICI and/or IPEX documents to the Company.
13. All parties acknowledge and represent that: (a) they have read the
Agreement; (b) they clearly understand the Agreement and each of its terms; (c)
they fully and unconditionally consent to the terms of this Agreement; (d) they
have had the benefit and advice of counsel of their own selection; (e) they have
executed this Agreement, freely, with knowledge, and without influence or
duress; (f) they have not relied upon any other representations, either written
or oral, express or implied, made to them by any person; and (g) the
consideration received by them has been actual and adequate.
14. Should any provision of this Agreement be declared or be determined by
any court or tribunal to be illegal or invalid, the validity of the remaining
parts, terms or provisions shall not be affected thereby and said illegal or
invalid part, term or provision shall be severed and deemed not to be part of
this Agreement.
15. This Agreement represents the parties' entire agreement, and no party
is relying on any oral representations not expressly contained in this
Agreement. This Agreement may not be changed except by a writing signed by all
parties.
16. In the event of a dispute arising under this Agreement including, but
not limited to, the enforcement of the Covenant-Not-To-Compete and
non-disclosure provisions hereof, the parties irrevocably consent to the
personal jurisdiction of the State and Federal Courts sitting in the County of
San Diego, State of California. Further, the parties agree that venue is proper
in such Court and waive any claim or defense of forum non-convenience and that
any such dispute shall be governed by the substantive laws of the State of
California and without regard to principles of conflicts of law thereof.
17. This Agreement may be executed in facsimile counterparts, each of
which, when all parties have executed at least one such counterpart, shall be
deemed an original, with the same force and effect as if all signatures were
appended to one instrument, but all of which together shall constitute one and
the same Agreement.
/s/ Xxxxxx Xxxxxxxx
-------------------
XXXXXX XXXXXXXX
IPEX, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, its Chief Executive Officer
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XXXXXX, LAW AND MANSFIELD
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx, Esq.,
Attorney for Xxxxxxxx
SICHENZIA XXXX XXXXXXXX XXXXXXX LLP
By: /s/ Xxxx X. Xxxx
-----------------------------
Xxxx X. Xxxx, Esq.,
Attorney for IPEX, Inc.
/s/ Xxxxxxxx Xxxxxxx
-----------------------------------
XXXXXXXX XXXXXXX, only as to the
non-disparagement provision set forth paragraph 9 hereof
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