RETURN TO TREASURY AGREEMENT
THIS AGREEMENT is made as of the 14th day of December, 2005
BETWEEN:
IPEX, INC., a corporation formed pursuant to the laws of the State
of Nevada and having an office for business located at 0000 Xxxxx
Xxxxxx Xxxxx, Xxx Xxxxx, XX 00000
(the "Company")
AND:
XXXXXXXX XXXXXXX, an individual having an address located at 0000
Xxxxxxxx Xxxxx, Xx Xxxxx, XX 00000
(the "Shareholder").
WHEREAS:
A. The Shareholder is the registered and beneficial owner of 18,855,900 shares
of the Company's common stock.
B. The Shareholder has previously agreed to transfer 500,000 shares of the
Company's common stock to Patient Safety Technologies, Inc., a Delaware
corporation.
C. The Shareholder was previously an officer and member of the Board of
Directors of the Company.
D. The Company and the Shareholder intend for the Shareholder to return certain
of his shares of Company common stock to the treasury of the Company.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and sum of $1.00 now paid by the Company to the Shareholder, the receipt and
sufficiency whereof is hereby acknowledged, the parties hereto hereby agree as
follows:
Surrender of Shares
1. The Shareholder hereby surrenders to the Company 14,855,900 shares of the
Company's common stock (the "Surrendered Shares"), which includes 1,936,728
shares of the Company's common stock currently held in escrow pursuant to the
RGB Escrow Agreement (defined in Section 11 of this Agreement), by delivering to
the Company a share certificate or certificates representing the Surrendered
Shares, duly endorsed for transfer in blank, signatures medallion guaranteed.
The Shareholder shall deliver the Surrendered Shares to the Company within ten
(10) business days of the date of this Agreement for the sole purpose of
retiring the Surrendered Shares.
2. In addition to the Surrendered Shares, the Shareholder hereby agrees 500,000
of the Company's common stock (the "Holdback Shares") are subject to surrender
to the Company as follows:
(a) In the event that all of the conditions set forth in Schedule A
hereto are not satisfied within twelve (12) months of the date of
this Agreement, then the Company
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shall have the right to receive 125,000 of the Holdback Shares.
(b) In the event that the Company does not enter into a license
agreement relating to the RGB Assets (defined in Schedule A) which
generates revenue for the Company within twelve (12) months from the
date of this Agreement, then the Company shall have the right to
receive 125,000 of the Holdback Shares.
(c) In the event that the Company does not file at least five (5)
patent applications relating to the RGB Assets (defined in Schedule
A) within twelve (12) months from the date of this Agreement, then
the Company shall have the right to receive 125,000 of the Holdback
Shares.
(d) In the event that the Company does not generate revenue of at
least three million dollars ($3,000,000) (calculated in accordance
with generally accepted accounting principles in the United States)
derived from the RGB Assets (defined in Schedule A) within the
twenty-four (24) months following the date of this Agreement, then
the Company shall have the right to receive 125,000 of the Holdback
Shares.
3. The Company shall use reasonable commercial efforts to facilitate achieving
each of the milestones described in Section 2. If at any time during the
twenty-four (24) months following the date of this Agreement, the Shareholder
believes the Company has not used reasonable commercial efforts to facilitate
achieving any of the milestones described in Section 2 solely as it relates to
Holdback Shares that have not been surrendered to the Company (or cash paid in
lieu of surrendering such Holdback Shares pursuant to Section 5 of this
Agreement), then the Shareholder shall deliver written notice of such belief to
the Company's Board of Directors ("Board"). Such written notice shall specify in
reasonable detail the facts and circumstances giving rise to such belief,
together with any documented evidence of the basis for the Shareholder's belief.
After receipt of such notice, the Board shall have thirty (30) calendar days to
remedy the allegations described in the written notice to the Shareholder's
satisfaction. If the Company does not remedy any such allegations to the
Shareholder's satisfaction, then the Company and the Shareholder agree to submit
disputes between them relating to Section 2 to arbitration as follows. If the
Shareholder fails to provide written notice to the Company as described above,
recovery on the Shareholder's dispute will be barred. Arbitration will be
conducted in San Diego County, California pursuant to the Commercial Rules of
the American Arbitration Association ("AAA"), as modified herein. The
arbitration shall be conducted by one (1) arbitrator chosen in accordance with
the rules of the AAA. Unless the arbitrator finds that exceptional circumstances
require otherwise, the arbitrator will grant the prevailing party in arbitration
its costs of arbitration and reasonable attorneys' fees as part of the
arbitration award. Either party will be entitled to receive in any court of
competent jurisdiction injunctive, preliminary or other equitable relief, in
addition to damages, including court costs and fees of attorneys and other
professionals, to remedy any actual or threatened violation of its rights with
respect to which arbitration is not required hereunder. The parties incorporate
the provisions of California Code of Civil Procedure Section 1283.05 into this
Agreement and make those provisions part of and applicable to any arbitration
arising under this Agreement.
4. The Shareholder hereby grants the Company a second priority security interest
in the Holdback Shares to secure the Shareholder's obligations pursuant to
Section 2 of this Agreement. The Shareholder hereby agrees to execute and
deliver to the Company such additional agreements and documents reasonably
necessary or advisable to accomplish the purposes of this Section 4.
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Retirement of Shares
5. The Company agrees to retire the Surrendered Shares and such Holdback Shares
which are later surrendered to the Company, which Surrendered Shares and
Holdback Shares shall become authorized but unissued shares; provided however,
that as to the Holdback Shares which are subject to surrender pursuant to
Section 2, the Shareholder shall have an option to retain such Holdback Shares
by paying the Company within thirty (30) days of the date of the event
triggering the obligation to surrender such Holdback Shares a sum equal to the
number of shares subject to surrender times a price per share determined by
taking the average closing price per share for the ninety (90) trading days
preceding the date of this Agreement.
Release
6. The Company hereby agrees to release and discharge the Shareholder, his
heirs, executors, administrators, successors 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
the Company, its subsidiaries, successors, officers, directors, past and present
employees, insurers 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. With respect to the
release contained herein, it is acknowledged and admitted by the Company that it
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 it 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."
7. The Company hereby agrees to support the Shareholder and use commercially
reasonable efforts to facilitate the Shareholder in obtaining a general release
from all of the participants in the Company's most recent private placement
which efforts shall include contacting all such participants behalf of the
Shareholder; provided however, that the Company shall not be in breach of this
Agreement if despite the devotion of its commercially reasonable efforts it is
not able to obtain such releases.
8. The Shareholder hereby agrees to release and discharge the Company, its
subsidiaries, successors, officers, directors, 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 the Shareholder, his heirs,
executors, administrators, 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.
With respect to the release contained herein, it is acknowledged and admitted by
the Company that it 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 it has or may have under said section,
or any comparable law under any other jurisdiction. Said section reads as
follows:
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"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."
Conditions Precedent
9. All transactions contemplated herein shall be deemed to be conditions
precedent to all other transactions contained herein and shall be deemed to
occur simultaneously.
10. All terms of this Agreement are subject to and conditioned upon termination
of: (a) that certain Escrow Agreement made as of June 7, 2005 by and among the
Company, B Tech Ltd., Xxxxxxx Xxxxxxxxx, Xxxxxxxx Xxxx, the Shareholder and
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP (the "RGB Escrow Agreement"); and (b) that
certain Irrevocable Proxy signed by the Shareholder dated May 28, 2005 in favor
of Xxxxxx "Xxxx" Xxxx, III.
11. All terms of this Agreement are subject to and conditioned upon approval by
the Company's Board.
Representations and Warranties
12. The Shareholder represents and warrants to the Company that he is the owner
of the Surrendered Shares and that he has good and marketable title to the
Surrendered Shares and that the Surrendered Shares are free and clear of all
liens, security interests or pledges of any kind whatsoever.
Positions
13. Shareholder agrees that during the two years following the execution of this
Agreement, he: (a) will not seek to be employed as an employee by the Company;
and (b) will not seek or assume a position on the Company's Board of Directors.
General
14. Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
15. Time is expressly declared to be the essence of this Agreement.
16. The provisions contained herein constitute the entire agreement among the
Company and the Shareholder respecting the subject matter hereof and supersede
all previous communications, representations and agreements, whether verbal or
written, among the Company and the Shareholder with respect to the subject
matter hereof.
17. This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
18. This Agreement is not assignable without the prior written consent of the
parties hereto.
19. This Agreement may be executed in counterparts, each of which when executed
by any party will be deemed to be an original and all of which counterparts will
together constitute one and the same Agreement. Delivery of executed copies of
this Agreement by telecopier will constitute proper delivery, provided that
originally executed counterparts are delivered to the parties within a
reasonable time thereafter.
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20. Each provision of this Agreement will be valid and enforceable to the
fullest extent permitted by law. If any provision of this Agreement or the
application of the provision to any person or circumstance will, to any extent,
be invalid or unenforceable, the remainder of this Agreement, or the application
of the provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, will not be affected by such invalidity or
unenforceability, unless the provision or its application is essential to this
Agreement.
21. This Agreement will be governed by and construed in accordance with the laws
of the State of California. For purposes of venue and jurisdiction, this
Agreement will be deemed made and to be performed in San Diego County,
California. Venue for all purposes will lie exclusively with the state and
federal courts located in San Diego County, California.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF the parties have executed this Agreement effective as
of the day and year first above written.
IPEX INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
/s/ Xxxxxxxx Xxxxxxx
-------------------------------
Xxxxxxxx Xxxxxxx
Dec. 14, 2005
Schedule A
Conditions
The below conditions relate to certain assets (the "RGB Assets") purchased
by the Company pursuant to: (a) that certain Purchase Agreement dated June 7,
2005 by and between the Company, RGB Channel SRL, Xxxxxxxx Xxxx, Xxxxxxx
Xxxxxxxxx and B Tech Ltd.; and (b) that certain Purchase Agreement dated June 7,
2005 by and between the Company, B Tech Ltd., Xxxxxxx Xxxxxxxxx and Xxxxxxxx
Xxxx.
1. The Company shall have received two written reports, prepared by an
independent third party chosen in the sole discretion of the Chief Executive
Officer of the Company, the first such written report validating the RGB Assets
(as determined by the board of directors of the Company) as transferred to the
Company, and the second such written report validating the RGB Assets (as
determined by the board of directors of the Company) as thereafter enhanced by
the Company; and
2. The Company shall have received a written report, prepared by an
intellectual property attorney (Fish & Xxxxxxxxxx, LLP or a firm that is equally
qualified as determined by the board of directors of the Company) chosen by the
board of directors of the Company, validating the software portion of the RGB
Assets (as determined by the board of directors of the Company) as transferred
to the Company.
