AGREEMENT TO ACQUIRE TECHNOLOGY
BETWEEN:
MAINFRAME SECURITY CORP.
(a Delaware Corporation)
Xxxxx 0, 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
AND:
BARRACUDA SECURITY DEVICES INTERNATIONAL INC.
(a British Columbia Corporation)
00000 Xxxxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
WHEREAS, Barracuda Security Devices International Inc.
("Barracuda"), is the holder of all proprietary rights to
certain technology relating to computer security devices
and programs.
WHEREAS, Mainframe Security Corp. ("Mainframe") has the capability
of providing the corporate structure and financing to accomplish
that marketing.
NOW, THEREFORE, in consideration of those premises and the mutual
agreements of the parties, the undersigned hereby agree as follows:
1. Sale of Barracuda Security Devices International Inc.:
Barracuda sells and agrees to convey to Mainframe, subject only to
the contingency set forth in Xxxxxxx 0, 0 xxx 0 xxxxx,
(x) the exclusive rights to the Barracuda technology and all future
modifications, improvements and enhancements thereto, and
(b) the exclusive rights to all trade marks, trade names, copyrights
and other materials relating to that technology. The conveyance of
that technology will occur by execution and delivery by Barracuda to
Mainframe of a mutually agreed on Xxxx of Sale upon the closing of
this agreement.
2. Transfer of Stock:
In consideration of the transfer of that technology and the
assignment of that contract, Mainframe shall cause to be issued
to Barracuda, five million (5,000,000) shares of common stock of
Mainframe. That stock shall be issued under an exemption from
registration and the certificates evidencing those shares shall
carry an appropriate legend as required by applicable law. As a
condition to the issuance of certificates for those shares, Barracuda
agrees that it shall deliver to Mainframe a letter containing such
representations and acknowledgments as are required to qualify for
such exemption.
3. Private Placement of Shares for Working Capital:
Mainframe agrees that commencing immediately upon listing, it will
undertake one or more private placements or public offerings to
provide working and expansion capital. Any offering of shares will
be made in compliance with Regulations of the US Securities & Exchange
Commission, applicable US State securities laws and the applicable
provisions of the BC Securities Regulations.
4. Limitation of Outstanding Shares:
Mainframe warrants to Barracuda that, at the conclusion of this
exchange of technology for stock under Section 2 above, Mainframe
will have outstanding a total of 8,500,000 shares. There will be
no options, warrants or rights held by any persons for any other
shares. The parties consent to the issuance by Mainframe of a further
1,500,000 shares for the purpose of raising funds through an Offering
Memorandum. This will increase the outstanding shares of Mainframe to
a maximum of 10,000,000 shares. Except for those shares, no other
warrants, options or rights for shares shall be issued without the
approval of the new board of directors to be elected under Section 8(b)
below.
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5. Limited Right of Rescission:
The parties specifically agree that, notwithstanding the transfer of
the technology under Sections 1 and 2 above, Barracuda shall retain
the right to rescind its obligations under this agreement and the
conveyance of the technology and assignment of contract if Mainframe
should fail to deliver the 5,000,000 shares described in Section 2.
6. Manner of Exercise of Right of Rescission:
To exercise its rights under the foregoing section, Barracuda may,
at any time prior to issuance of the 5,000,000 shares described in
Section 2, notify Mainframe of this fact in writing. Barracuda may
then issue final notice that its transfer of the technology is
rescinded and shall thence forth be void.
Immediately upon receipt of such tender and final notice, Mainframe
shall forthwith cease and desist from any claim to the technology
and deliver to Barracuda all items relating to its ownership.
7. Expiration of Right of Rescission:
Unless exercised earlier, the right for Barracuda to rescind the
transfer of technology under the foregoing Sections 5 and 6 shall
terminate upon the issuance of the 5,000,000 shares described in
Section 2 and 5.
8. Corporate Restructuring:
The parties agree that as soon as immediately convenient, Mainframe
will do the following:
(a) Amendment of Articles: Mainframe will Amend its Articles of
Incorporation; (i) to change its name if deemed necessary, (ii)
provide an indemnification of officers and directors to the extent
allowed by law, and (iii) provide authorized capital of fifty million
(50,000,000) shares of common stock.
(b) Initial Board of Directors: Unless otherwise agreed by the
directors, Mainframe will cause its initial board of directors to
consist of:
Ed Xxxxxxxxxxxxx
Xxxxx Power
Xxx Xxxxx
(c) Audit, Corporate Information, Etc.: Mainframe will (i) complete
an audit, if required, confirming no liabilities (ii) make application
with a US Stock Exchange for listing and a symbol, and (iii) appoint a
public stock registrar and transfer agent to maintain its list of
shareholders and all future transfers of its securities.
9. Cooperation:
In addition to the actions and documents specifically discussed herein,
each party hereby agrees to execute, acknowledge and deliver any and
all documents and do any and all other acts which are necessary,
expedient, reasonable or appropriate and are requested by the other
party to more fully carry out the full intents and purposes of this
Agreement.
10. Survival:
All of the representations, warranties and provisions of this Agreement
shall survive its closing and the dissolution of either or both of the
respective parties.
11. Headings:
The headings of the several sections of this Agreement are inserted for
convenience of reference only and are not intended to affect the meaning
or interpretation of this Agreement.
12. Amendments and Modifications:
This Agreement may be modified, amended or cancelled only by a document
signed by each of the parties to this Agreement.
13. Binding Effect:
The various terms and provisions hereof shall inure to the benefit of,
and the same shall be binding upon, the successors and assigns of the
respective parties.
14. Arbitration Clause:
Any dispute involving the enforcement or interpretation of this Agreement
shall be settled by binding arbitration pursuant to the Commercial Rules
of the British Columbia Arbitration Council.
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15. Facsimile:
This Agreement may also be delivered by telecopier which delivery shall
be deemed to be valid and sufficient.
16. By his signature, or by authorizing the placement of a signature
or xxxx, on this agreement, each party acknowledges that this agreement
binds and benefits the parties and their respective heirs, executors,
administrators, personal representatives and successors.
This Agreement is Acknowledged and Accepted by the undersigned and is
effective as of the 20th day of April, 1999.
MAINFRAME SECURITY CORP. BARRACUDA SECURITY DEVICES
per: INTERNATIONAL INC.
per:
Xxxxx Power, President Xxxxxx Xxxxxxxxxxxxx, President
Xxx Xxxxx, Director
