PURCHASE AGREEMENT
THIS AGREEMENT (THE "AGREEMENT") IS MADE THIS 9TH,
DAY OF FEBRUARY 2005 BETWEEN
MEGOLA INC., (the "Purchaser") a corporation incorporated under the laws of the
Nevada with its principal office in the city of Corunna, wherein the Vendor and
Megola Inc. hereinafter shall be jointly referred in this Agreement as the
parties (the "Parties")
-AND-
UV - INNOVATION INC., a Canadian corporation with its principal office in the
city of Camlachie, Ontario, (the "Vendor")
RECITAL:
For the purpose of facilitating the acquisition described herein between the
Parties, the Parties wish to enter into this Purchase Agreement in order that
their respective obligations with respect to the terms and the conditions of the
business relationship (the "Relationship" or "Agreement") can be defined and
agreed to.
THEREFORE IN CONSIDERATION OF THE TERMS AND CONDITIONS SET OUT IN THIS AGREEMENT
AND THE NON-DISCLOSURE AGREEMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION,
THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES AGREE
AS FOLLOWS:
This Purchase Agreement memorializes the acquisition of certain Intellectual
Property Rights (IP) between UV-Innovation, A Canadian corporation ("UVI") and
Megola, Inc. ("MGOA"), a Nevada corporation.
MGOA is a public company whose stock is traded on the OTCBB. At the closing, as
hereinafter described, Megola will acquire and own the following products
developed and protected by certain IP Rights owned by UVI:
o UV Innovations UV-Air Disinfection Unit; Models #1, #2, #3
("UV-Air")
o UV Innovations UV-Water Disinfection Unit ("UV-Water")
o IP Rights to above product line
CONSIDERATION
Upon Closing MGOA will pay a consideration of MGOA restricted common stock
("Stock Consideration") of 300,000 shares as per Rule 144 and MGOA shall issue
such stock in the name of UVI and or its assigns.
Name Change. Immediately following the Closing, MGOA may change the name of the
UV-Air and UV-Water devices to a MGOA brand name.
o MGOA acknowledges that UV Innovations is supplying Excell Clean Air
a UV-Air device and is being installed as a Sear Canada branded
device named and trademarked the "Germinator".
o MGOA further acknowledges that the "Germinator" trademark is owned
by Sears Canada and may not be changed.
o MGOA acknowledges that UV Innovations is supplying Westheat
Industries with UV-Air devices.
Approval. On or before the Closing Date, each Party shall take all appropriate
and necessary corporate action to authorize the transactions in this Purchase
Agreement and obtain all required approvals and consents to the Acquisition,
including but not limited to approval by their respective Boards of Directors
and approval by their shareholders, if necessary.
1. CONFIDENTIALITY, AND FURTHER COVENANTS
On Closing, UVI will supply MGOA and its authorized representatives, their:
a. warranty programs on the UVI devices;
b. agreements and obligations with present UVI distributors;
c. supplier agreements for the manufacturing of the UV-Air and UV-Water
devices;
d. distributor agreements for the manufacturing of the UV-Air and
UV-Water devices
e. records of past warranty work provided by UVI to its customers;
f. standards, testing and ratings that have been approved for the UVI
devices;
The Parties agree to cooperate with each other in complying with any requests
and providing such materials as the other Party may request.
(b) All confidential information which each Party or any of its
officers, employees, agents, consultants, or representatives (the
"Receiving Party"), may possess or may receive in the future
pertaining to the business, affairs and financial or other condition
of the other Party (the "Disclosing Party"), shall not be utilized,
disclosed or made available to any other person or entity other than
current members of the Board of Directors, officers, employees,
agents, consultants, or representatives of either Party without the
express written consent of the Disclosing Party. Notwithstanding the
foregoing, neither Party will be obliged to maintain confidentiality
in respect of information that:
(c) Notwithstanding the foregoing, the Parties acknowledge and agree
that:
(i) each Party shall, on or before Closing, execute all such
documents as may be required to be executed by it under any
applicable laws or regulations in order to consummate the
transactions in this Purchase Agreement;
(ii) each Party shall co-operate with the other Parties with
respect to all such documents, including providing all
information about the Party that such other Parties may
require for such filings;
(iii) without limiting the generality of the foregoing, all
documents required to be filed with the SEC shall be filed,
containing such information as required by the SEC; and
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(iv) all other public notices to third parties and all other
publicity or press releases concerning the transactions in
this Purchase Agreement shall be jointly planned and
co-ordinated by the Parties and no Party shall act
unilaterally in this regard without the prior consent of the
other Party, such approval not to be unreasonably withheld.
2. REPRESENTATIONS AND WARRANTIES
Each party represents and warrants to the other as follows and acknowledges that
each is relying on these representations and warranties in entering into
Purchase Agreement and performing its obligations hereunder.
Due Incorporation - MGOA is a corporation duly incorporated and validly existing
under the laws of Nevada. UVI is a corporation duly incorporated and validly
existing under the laws of Ontario.
Capacity and Due Authorization - Each party has the power and capacity and good
and sufficient right and authority to enter into this Purchase Agreement on the
terms and conditions herein set forth, to perform its obligations under this
Purchase Agreement. The execution and delivery of this Purchase Agreement and
the completion of the transactions contemplated herein has been duly and validly
authorized by all necessary corporate action on the part of each party.
Manufacturing - UVI presently manufactures these devices and sells them directly
to their customers and distributors. At closing, UVI will continue to
manufacture these devices and supply them to MGOA so that MGOA may continue to
supply existing and new distributors, until MGOA has established its own
manufacturing source at which time MGOA will not be obligated to have UVI
manufacture the devices for MGOA.
Claim or Liens - UVI warrants that there are no liens, encumbrances or any third
party claims as it may pertain to royalties or ownership to the IP rights of the
UVI devices.
Litigation -There are no actions, suits, grievances or proceedings commenced,
pending or threatened against by or relating to UVI which may result in the
imposition of an encumbrance on the UVI IP Assets, impose material liabilities
on MGOA, or which may prevent, delay, make illegal or otherwise interfere with
the consummation of the transactions in this Purchase Agreement.
Each party hereby represents and warrants to the other as follows and
acknowledges that each Company is relying on these representations made herein.
Due Incorporation - MGOA is a corporation duly incorporated and validly existing
under the laws of the State of Nevada.
Consideration Guarantee - MGOA guarantees that on the 12 months anniversary of
the signing of this Purchase Agreement the stock consideration given to UVI will
have a value of no less then $200,000 USD ("Minimum Value") and if there is a
shortfall of that minimum value, MGOA will remedy that by either of the
following:
a. issuing UVI additional MGOA common stock for the difference;
b. issue UVI a cash consideration for the difference;
c. MGOA will have the discretion of either issuing common stock or cash
and/or a combination thereof
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Buy Back Option - On the 12 months anniversary of the signing of the definitive
agreement, Megola will have the option of buying back the issued stock to UVI
for a price of no more than $4.00 per share.
3. INDEMNIFICATION
Each party agrees to indemnify and hold harmless the other and its officers,
directors, agents, servants and employees with respects to all losses arising
out of any breach of representation, warranty or covenant made pursuant to the
agreement, including, without limitation, any representation or warranty with
respect to the existence of litigation or threatened litigation which may effect
the Assets.
Each party will agree to indemnify and hold harmless the other with respect to
all losses arising out of any breach of any representation, warranty or covenant
made pursuant to the Agreement.
5. GOVERNING LAWS
The validity and interpretation of this Purchase Agreement shall be governed by
and construed in accordance with the laws of the State of Nevada. The parties to
this Purchase Agreement agree that any litigation arising out of the terms of
the proposed Merger set forth herein shall be commenced in courts located in the
State of Nevada, Xxxxx County. All parties consent to the exclusive jurisdiction
and venue of the federal and state courts located in Xxxxx County with respect
to any action arising under this Purchase Agreement.
6. AMENDMENT
This Purchase Agreement shall be amended only with the written consent of the
Parties.
7. COUNTERPARTS
This Purchase Agreement may be executed in multiple counterparts by original or
facsimile signature, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
8. BROKERS' OR FINDERS' FEES
Each Party shall indemnify and hold the other Party harmless from any claim for
brokerage or finders' fees arising out the transactions contemplated hereby by
any person claiming to have been engaged by either Party.
9. EXPENSES
Except as provided herein, each party shall bear its own expenses in connection
with the preparation for the consummation of the transaction in this Purchase
Agreement.
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10. NO BINDING EFFECT
The understandings contained herein constitutes a binding agreement between the
parties
The foregoing Purchase Agreement is accepted, approved and agreed to by
Megola Inc., this 9th day of February, 2005
MEGOLA INC.
By:______________________
Name: Xxxx Xxxxxxx
Title: President & CEO
The foregoing Purchase Agreement is accepted, approved and agreed to by UV
Innovations Inc., this 9th day of February, 2005
UV INNOVATIONS INC.
By:_______________________
Name: Xxxx Xxxx
Title: President
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