SHARE purchase and sale agreement
by and between
Incandent CAPITAL, L.L.C.,
as Seller,
and
BIB HOLDINGS, LTD.,
as Purchaser,
Dated August 26, 2004
V.8.26.04
SHARE PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 26th day of August, 2004
AMONG:
BIB HOLDINGS, LTD., a corporation formed pursuant to the laws of the
State of Nevada and having an office for business located at 0000
Xxx Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx 00000 ("BIB")
AND:
INCODE CORPORATION, a company formed pursuant to the laws of the
State of Delaware and having an office for business located at XX
Xxx 000, Xxxxx Xxxxxxxxx, Xxx Xxxxxx 00000 ("Incode")
AND:
INCANDENT CAPITAL, L.L.C., a Delaware limited liability company,
having an address of XX Xxx 000, Xxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
("Incandent")
WHEREAS:
A. Incandent owns 100% of the presently issued and outstanding Incode Shares;
B. Incode owns 100% of the presently issued and outstanding shares of capital
stock of Intrance Corporation, a Delaware corporation ("Intrance"), Inseq
Corporation, a Delaware corporation ("Inseq"), Insys Corporation, a Delaware
corporation ("Insys"), and Intrance owns 100% of the presently issued and
outstanding shares of capital stock of KK Corporation, a Delaware Corporation
("KK") (Intrance, Inseq, Insys and KK shall collectively be referred to herein
as the "Incode Subsidiaries");
C. BIB is a reporting company whose common stock is quoted on the NASD "Bulletin
Board"; and
D. The respective Boards of Directors of BIB, Incode and Incandent deem it
advisable and in the best interests of BIB and Incode that Incode become a
wholly-owned subsidiary of BIB (the "Acquisition") pursuant to this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement the following terms will have the following meanings:
(a) "Acquisition" means the Acquisition, at the Closing, of Incode by BIB
pursuant to this Agreement;
(b) "Acquisition Shares" means the 1,000,000 fully paid and non-assessable
shares of BIB Series A Convertible Preferred Stock to be issued to Incode at
Closing pursuant to the terms of the Acquisition, issued pursuant to the form of
Certificate of Designation attached hereto as Exhibit 1.1(b);
(c) "Agreement" means this share purchase agreement among BIB, Incode, and
Incandent;
(d) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 9 hereof;
(e) "Closing Date" means the day on which all conditions precedent to the
completion of the transaction as contemplated hereby have been satisfied or
waived;
(f) "Cornell Facility" means BIB's current equity line of credit and
convertible debenture financing with Cornell Capital Partners, L.P.;
(g) "BIB Accounts Payable and Liabilities" means all accounts payable and
liabilities of BIB, on a consolidated basis, due and owing or otherwise
constituting a binding obligation of BIB and its subsidiaries (other than a BIB
Material Contract) as of June 30, 2004;
(h) "BIB Accounts Receivable" means all accounts receivable and other
debts owing to BIB, on a consolidated basis, as of June 30, 2004;
(i) "BIB Assets" means the undertaking and all the property and assets of
the BIB Business of every kind and description wheresoever situated including,
without limitation, BIB Equipment, BIB Inventory, BIB Material Contracts, BIB
Accounts Receivable, BIB Cash, BIB Intangible Assets and BIB Goodwill, and all
credit cards, charge cards and banking cards issued to BIB;
(j) "BIB Business" means all aspects of any business conducted by BIB and
its subsidiaries, except for matters solely related to being a publicly traded
company;
(k) "BIB Cash" means all cash on hand or on deposit to the credit of BIB
and its subsidiaries on the Closing Date;
(l) "BIB Common Shares" means the shares of common stock in the capital of
BIB;
(m) "BIB Debt to Related Parties" means the debts owed by BIB to any
affiliate, director or officer of BIB;
(n) "BIB Equipment" means all machinery, equipment, furniture, and
furnishings used in the BIB Business;
(o) "BIB Financial Statements" means, collectively, the audited
consolidated financial statements of BIB for the fiscal year ended December 31,
2003, and the unaudited consolidated financial statements of BIB for the six
month period ended June 30, 2004;
(p) "BIB Goodwill" means the goodwill of the BIB Business including the
right to all corporate, operating and trade names associated with the BIB
Business, or any variations of such names as part of or in connection with the
BIB Business, all books and records and other information relating to the BIB
Business, all necessary licenses and authorizations and any other rights used in
connection with the BIB Business;
(q) "BIB Insurance Policies" means the public liability insurance and
insurance against loss or damage to the BIB Assets and the BIB Business as
described in Schedule "Q" hereto;
(r) "BIB Intangible Assets" means all of the intangible assets of BIB and
its subsidiaries, including, without limitation, BIB Goodwill, all trademarks,
logos, copyrights, designs, and other intellectual and industrial property of
BIB and its subsidiaries;
(s) "BIB Inventory" means all inventory and supplies of the BIB Business
as of June 30, 2004;
(t) "BIB Material Contracts" means the burden and benefit of and the
right, title and interest of BIB and its subsidiaries in, to and under all trade
and non-trade contracts, engagements or commitments, whether written or oral, to
which BIB or its subsidiaries are entitled whereunder BIB or its subsidiaries
are obligated to pay or entitled to receive the sum of $10,000 or more
including, without limitation, any pension plans, profit sharing plans, bonus
plans, loan agreements, security agreements, indemnities and guarantees, any
agreements with employees, lessees, licensees, managers, accountants, suppliers,
agents, distributors, officers, directors, attorneys or others which cannot be
terminated without liability on not more than one month's notice, each as set
forth on Schedule "T";
(u) "BIB Real Property" means a complete list of (i) all real property and
interests in real property owned in fee by BIB and its subsidiaries
(individually, a "BIB Owned Property" and collectively, the "BIB Owned
Properties"), and (ii) all real property and interests in real property leased
by BIB or its subsidiaries as lessee or lessor set forth on Schedule "U".
(v) "Place of Closing" means the offices of Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP, or such other place as BIB, Incode and Incode may mutually agree
upon;
(w) "Incode Accounts Payable and Liabilities" means all accounts payable
and liabilities of Incode and Incode Subsidiaries, due and owing or otherwise
constituting a binding obligation of Incode and Incode Subsidiaries (other than
an Incode or Incode Subsidiaries Material Contract) as of June 30, 2004;
(x) "Incode Accounts Receivable" means all accounts receivable and other
debts owing to Incode or Incode Subsidiaries, as of June 30, 2004;
(y) "Incode Assets" means all the property and assets of the Incode
Business of every kind and description wheresoever situated including, without
limitation, Incode Equipment, Incode Inventory, Incode Material Contracts,
Incode Accounts Receivable, Incode Cash, Incode Intangible Assets and Incode
Goodwill, and all credit cards, charge cards and banking cards issued to Incode
or Incode Subsidiaries;
(z) "Incode Business" means all aspects of the business conducted by
Incode and Incode Subsidiaries;
(aa) "Incode Cash" means all cash on hand or on deposit to the credit of
Incode or Incode Subsidiaries on the June 30, 2004;
(bb) "Incode Debt to Related Parties" means the debts owed by Incode and
its subsidiaries to Incode or to any family member thereof, or to any affiliate,
director or officer of Incode, Incode Subsidiaries or Incandent;
(cc) "Incode Equipment" means all machinery, equipment, furniture, and
furnishings used in the Incode Business;
(dd) "Incode Financial Statements" means, collectively, the unaudited
consolidated financial statements of Incode and Incode Subsidiaries for the two
fiscal years ended December 31, 2003, and the unaudited consolidated financial
statements of Incode for the six month period ended June 30, 2004;
(ee) "Incode Goodwill" means the goodwill of the Incode Business together
with the exclusive right of BIB to represent itself as carrying on the Incode
Business in succession of Incode subject to the terms hereof, and the right to
use any words indicating that the Incode Business is so carried on including the
right to use the name "Incode" or "Incode Corporation" or any variation thereof
as part of the name of or in connection with the Incode Business or any part
thereof carried on or to be carried on by Incode, the right to all corporate,
operating and trade names associated with the Incode Business, or any variations
of such names as part of or in connection with the Incode Business, all
telephone listings and telephone advertising contracts, all lists of customers,
books and records and other information relating to the Incode Business, all
necessary licenses and authorizations and any other rights used in connection
with the Incode Business;
(ff) "Incode Insurance Policies" means the public liability insurance and
insurance against loss or damage to the Incode Assets and the Incode Business as
described in Schedule "FF" hereto;
(gg) "Incode Intangible Assets" means all of the intangible assets of
Incode, including, without limitation, Incode Goodwill, all trademarks, logos,
copyrights, designs, and other intellectual and industrial property of Incode
and its subsidiaries;
(hh) "Incode Inventory" means all inventory and supplies of the Incode
Business as of the Closing Date;
(ii) "Incode Material Contracts" means the burden and benefit of and the
right, title and interest of Incode or Incode Subsidiaries in, to and under all
trade and non-trade contracts, engagements or commitments, whether written or
oral, to which Incode or Incode Subsidiaries is entitled in connection with the
Incode Business whereunder Incode is obligated to pay or entitled to receive the
sum of $10,000 or more including, without limitation, any pension plans, profit
sharing plans, bonus plans, loan agreements, security agreements, indemnities
and guarantees, any agreements with employees, lessees, licensees, managers,
accountants, suppliers, agents, distributors, officers, directors, attorneys or
others which cannot be terminated without liability on not more than one month's
notice, each as set forth on Schedule "II");
(jj) "Incode Real Property" means a complete list of (i) all real property
and interests in real property owned in fee by Incode and its subsidiaries
(individually, a "Incode Owned Property" and collectively, the "Incode Owned
Properties"), and (ii) all real property and interests in real property leased
by Incode or its subsidiaries as lessee or lessor, set forth on Schedule "JJ".
(kk) "Incode Related Party Debts" means the debts owed by Incode or by any
family member thereof, or by any affiliate, director or officer of Incode or
Incode, to Incode; and
(ll) "Incode Shares" means all of the issued and outstanding shares of
Incode's equity stock.
Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
Captions and Section Numbers
1.2 The headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this Agreement or any
provision thereof.
Section References and Schedules
1.3 Any reference to a particular "Article", "section", "paragraph", "clause" or
other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by letter will
mean the appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this Agreement
Severability of Clauses
1.4 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.
ARTICLE 2
THE ACQUISITION
Sale of Shares
2.1 Incandent hereby agrees to sell to BIB the Incode Shares in exchange for the
Acquisition Shares on the Closing Date and to transfer to BIB on the Closing
Date a 100% undivided interest in and to the Incode Shares free from all liens,
mortgages, charges, pledges, encumbrances or other burdens with all rights now
or thereafter attached thereto.
Allocation of Consideration
2.2 The Acquisition Shares shall be allocated to Incode on the basis of one
Acquisition Share for each one Incode Share held by Incandent.
Adherence with Applicable Securities Laws
2.2 Incandent agrees that it is acquiring the Acquisition Shares for investment
purposes and will not offer, sell or otherwise transfer, pledge or hypothecate
any of the Acquisition Shares 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 BIB;
(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 Acquisition Shares are 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
BIB an opinion of counsel to that effect or such other written
opinion as may be reasonably required by BIB.
Incandent acknowledges that the certificates representing the
Acquisition Shares shall bear the following legend:
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, IN RESPECT OF SUCH
SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE TO SAID SHARES.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BIB
Representations and Warranties
3.1 BIB hereby represents and warrants in all material respects to Incandent and
Incode, with the intent that Incandent and Incode will rely thereon in entering
into this Agreement and in approving and completing the transactions
contemplated hereby, that:
BIB - Corporate Status and Capacity
(a) Incorporation. BIB and its wholly-owned subsidiary, BIB, Ltd., are
corporations duly incorporated and validly subsisting under the laws
of the State of Nevada, and is in good standing with the office of
the Secretary of State for the State of Nevada;
(b) Carrying on Business. BIB conducts the business described in its
filings with the Securities and Exchange Commission and does not
conduct any other business. BIB is duly authorized to carry on such
business, in good standing in Delaware and New York and such other
jurisdictions where the nature of its business requires it to be so
authorized (such certificates of authority and good standing are
included herewith in Exhibit 3.1(b)), except where the failure to be
so authorized would not have a Material Adverse Effect. The nature
of the BIB Business does not require BIB to register or otherwise be
qualified to carry on business in any other jurisdictions;
(c) Corporate Capacity. BIB has the corporate power, capacity and
authority to own the BIB Assets and to enter into and complete this
Agreement;
(d) Reporting Status; Listing. BIB is required to file reports with the
Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, the BIB Common Shares are quoted on the NASD
"Bulletin Board", and all reports required to be filed by BIB with
the Securities and Exchange Commission or NASD have been timely
filed (the "Public Reports");
BIB - Capitalization
(e) Authorized Capital. The authorized capital of BIB consists of
300,000,000 BIB Common Shares, $0.001 par value and 5,000,000 shares
of preferred stock, $0.001 par value, of which 181,020,170 BIB
Common Shares, and no shares of preferred stock, are presently
issued and outstanding. The authorized capital of BIB Ltd consists
of 2,000 common shares, $0.001 par value and 2,000 shares of
preferred stock, $0.001 par value, of which 2,000 common shares, and
no shares of preferred stock, are presently issued and outstanding;
(f) No Option, Warrant or Other Right. No person, firm or corporation
has any agreement, option, warrant, preemptive right or any other
right capable of becoming an agreement, option, warrant or right for
the acquisition of BIB Common Shares or Preferred Stock, or for the
purchase, subscription or issuance of any of the unissued shares in
the capital of BIB, except as disclosed in the Public Reports. No
person, firm or corporation has any agreement, option, warrant,
preemptive right or any other right capable of becoming an
agreement, option, warrant or right for the acquisition of BIB Ltd.
common shares, or for the purchase, subscription or issuance of any
of the unissued shares in the capital of BIB Ltd.;
(g) Compliant Issuance. All of the issued capital stock of BIB has been
issued in compliance with all federal and state securities laws;
BIB - Records and Financial Statements
(h) Charter Documents. The charter documents of BIB and its subsidiaries
(which subsidiaries are disclosed in Exhibit 3.1(h) herewith) have
not been altered since the incorporation of each, respectively,
except as filed with the Secretary of State of Nevada;
(i) Corporate Minute Books. The corporate minute books of BIB and its
subsidiaries are complete and each of the minutes contained therein
accurately reflect the actions that were taken at a duly called and
held meeting or by consent without a meeting. All actions by BIB and
its subsidiaries which required director or shareholder approval are
reflected on the corporate minute books of BIB and its subsidiaries.
BIB and its subsidiaries are not in violation or breach of, or in
default with respect to, any term of their respective Certificates
of Incorporation (or other charter documents) or by-laws, and
statue, rule or regulation or judgment, order or decree of any court
or governmental authority, or any contract, agreement or other
instrument to which BIB is a party or by which BIB or its
subsidiaries or any of their respective properties or assets may be
bound.
(j) BIB Financial Statements. The BIB Financial Statements present
fairly, in all material respects, the assets and liabilities
(whether accrued, absolute, contingent or otherwise) of BIB, on a
consolidated basis, as of the respective dates thereof, and the
sales and earnings of the BIB Business during the periods covered
thereby, in all material respects and have been prepared in
accordance with generally accepted accounting principles
consistently applied;
(k) BIB Accounts Payable and Liabilities. There are no liabilities,
contingent, disputed or otherwise, of BIB or its subsidiaries which
are not disclosed in Exhibit 3.1(k) hereto or reflected in the BIB
Financial Statements and the BIB Financial Statements, except those
incurred in the ordinary course of business since the date of such
Exhibit and neither BIB nor its subsidiaries have guaranteed or
agreed to guarantee any debt, liability or other obligation of any
person, firm or corporation;
(l) BIB Accounts Receivable. All the BIB Accounts Receivable result from
bona fide business transactions and services actually rendered
without, to the knowledge and belief of BIB, any basis for a claim
by the obligor for set-off or counterclaim;
(m) Disclosed Liabilities. Except as set forth in the BIB Financial
Statements or as disclosed in a disclosure schedule hereto, BIB and
its subsidiaries have no liabilities which would be required by GAAP
to be set forth on a balance sheet of BIB, except as incurred in the
ordinary course of business;
(n) No Debt to Related Parties. Except as disclosed in Public Reports,
neither BIB nor any of its subsidiaries is, and on Closing will not
be, indebted to any affiliate, director or officer of BIB except
accounts payable on account of bona fide business transactions of
BIB incurred in normal course of the BIB Business, including
employment agreements, none of which are more than 60 days in
arrears;
(o) No Related Party Debt to BIB. No director or officer or affiliate of
BIB is now indebted to or under any financial obligation to BIB or
any subsidiary on any account whatsoever, except for advances on
account of travel and other expenses;
(p) No Dividends. No dividends or other distributions on any shares in
the capital of BIB have been made, declared or authorized since the
date of BIB Financial Statements;
(q) No Payments. No payments of any kind have been made or authorized
since the date of the BIB Financial Statements to or on behalf of
officers, directors, shareholders or employees of BIB or its
subsidiaries or under any management agreements with BIB or its
subsidiaries, except payments made in the ordinary course of
business and at the regular rates of salary or other remuneration
payable to them;
(r) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting BIB;
(s) No Adverse Events. Since the date of the BIB Financial Statements
(i) there has not been any material adverse change in the
consolidated financial position or condition of BIB, its
subsidiaries, its liabilities or the BIB Assets or any damage,
loss or other change in circumstances materially affecting
BIB, the BIB Business or the BIB Assets or BIB's right to
carry on the BIB Business, other than changes in the ordinary
course of business,
(ii) there has not been any damage, destruction, loss or other
event (whether or not covered by insurance) materially and
adversely affecting BIB, its subsidiaries, the BIB Business or
the BIB Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by BIB to any of BIB' officers,
employees or agents or any bonus, payment or arrangement made
to or with any of them,
(iv) the BIB Business has been and continues to be carried on in
the ordinary course,
(v) BIB has not waived or surrendered any right of material value,
and
(vi) neither BIB nor its subsidiaries have discharged or satisfied
or paid any lien or encumbrance or obligation or liability
other than current liabilities in the ordinary course of
business.
BIB - Income Tax Matters
(t) Tax Returns. All tax returns and reports of BIB and its subsidiaries
required by law to be filed have been filed and are true, complete
and correct, and any taxes payable in accordance with any return
filed by BIB and its subsidiaries or in accordance with any notice
of assessment or reassessment issued by any taxing authority have
been so paid;
(u) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by BIB or its subsidiaries. BIB is not aware of any
contingent tax liabilities or any grounds which would prompt a
reassessment including aggressive treatment of income and expenses
in filing earlier tax returns;
(v) No Liens. No tax liens have been filed with respect to the assets of
BIB or any subsidiary and no claims have been asserted in writing
with respect to any taxes of BIB or any subsidiary.
(w) Accruals. All taxes required to be accrued have been accrued or
reserved on the books and records of BIB in accordance with
generally accepted accounting principles. Each of BIB and its
subsidiaries has complied with all applicable laws, rules and
regulations related to the payment and withholding of taxes and has
duly and timely withheld from employees' salaries, wages and other
compensation and have paid over the appropriate taxing authorities
all amounts required to be so withheld and paid over for all periods
under all applicable laws, except where the failure of any of the
foregoing would not have a material adverse effect on BIB and its
subsidiaries taken as a whole;
(x) Assessment. No written agreement or other document extending the
period of assessment or collection of any taxes, and no power of
attorney with respect to any such taxes has been executed or filed
with the IRS or any other taxing authority;
(y) No Deficiencies. Neither the IRS nor any other taxing authority is
as of the date of this Agreement asserting in writing against either
of BIB or any of its subsidiaries any deficiency or claim for
additional taxes or any adjustment of taxes
BIB - Applicable Laws and Legal Matters
(z) Licenses. BIB and its subsidiaries hold all licenses and permits as
may be requisite for carrying on the BIB Business in the manner in
which it has heretofore been carried on, which licenses and permits
have been maintained and continue to be in good standing except
where the failure to obtain or maintain such licenses or permits
would not have a material adverse effect on the BIB Business;
(aa) Applicable Laws. Neither BIB nor its subsidiaries have been charged
with or received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which they are subject or
which apply to them the violation of which would have a material
adverse effect on the BIB, and to BIB's knowledge, neither BIB nor
its subsidiaries are in breach of any laws, ordinances, statutes,
regulations, bylaws, orders or decrees the contravention of which
would result in a material adverse impact on the BIB;
(bb) Pending or Threatened Litigation. There is no litigation or
administrative or governmental proceedings pending or threatened
against, claimed or relating to BIB, its subsidiaries, the BIB
Business, or any of the BIB Assets nor does BIB have any knowledge
of any deliberate act or omission of BIB or its subsidiaries that
would form any material basis for any such action or proceeding (all
pending or threatened litigation or claims or governmental
proceedings are disclosed in the schedule attached hereto as Exhibit
3.1(bb));
(cc) No Bankruptcy. Neither BIB nor its subsidiaries have made any
voluntary assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been filed
or presented against BIB or its subsidiaries and no order has been
made or a resolution passed for the winding-up, dissolution or
liquidation of BIB or its subsidiaries;
(dd) Labor Matters. Neither BIB nor its subsidiaries are party to any
collective agreement relating to the BIB Business with any labor
union or other association of employees and no part of the BIB
Business has been certified as a unit appropriate for collective
bargaining or, to the knowledge of BIB, has made any attempt in that
regard;
(ee) Finder's Fees. Neither BIB nor its subsidiaries are party to any
agreement which provides for the payment of finder's fees, brokerage
fees, commissions or other fees or amounts which are or may become
payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated herein;
Execution and Performance of Agreement
(ff) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated
hereby, have been duly and validly authorized by all necessary
corporate action on the part of BIB;
(gg) No Violation or Breach. Other than with respect to matters for which
waivers will be obtained prior to the Closing Date, the execution
and performance of this Agreement will not:
(i) violate the charter documents of BIB or result in any breach
of, or default under, any loan agreement, mortgage, deed of
trust, or any other agreement to which BIB or its subsidiaries
are party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, the BIB Material Contracts, or
any right or rights enjoyed by BIB or its subsidiaries,
(iii) result in any alteration of BIB' or its subsidiaries'
obligations under any agreement to which BIB or its
subsidiaries are party including, without limitation, the BIB
Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance
or restriction of any nature whatsoever in favor of a third
party upon or against BIB or the BIB Assets,
(v) result in the imposition of any tax liability to BIB or its
subsidiaries, or
(vi) violate any court order or decree to which either BIB or its
subsidiaries are subject;
The BIB Assets - Ownership and Condition
(hh) Business Assets. The BIB Assets comprise all of the property and
assets of the BIB Business, and no other person, firm or corporation
owns any assets used by BIB or its subsidiaries in operating the BIB
Business, whether under a lease, rental agreement or other
arrangement;
(ii) Title. BIB or its subsidiaries are the legal and beneficial owner of
the BIB Assets, free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims
whatsoever, save and except as disclosed in the Public Reports;
(jj) BIB Material Contracts. The BIB Material Contracts listed in
Schedule "T" constitute all of the material contracts of BIB and its
subsidiaries;
(kk) No Default. There has not been any default in any material
obligation of BIB or any other party to be performed under any of
the BIB Material Contracts, each of which is in good standing and in
full force and effect and unamended (except as disclosed in Schedule
"T" hereto), and BIB is not aware of any default in the obligations
of any other party to any of the BIB Material Contracts;
(ll) BIB Insurance Policies. BIB and its subsidiaries maintain the public
liability insurance and insurance against loss or damage to the BIB
Assets and the BIB Business as described in Schedule "Q" hereto;
(mm) BIB Real Property. Schedule U sets forth a complete list of (i) all
real property and interests in real property owned in fee by BIB and
its subsidiaries (individually, a "BIB Owned Property" and
collectively, the "BIB Owned Properties"), and (ii) all real
property and interests in real property leased by BIB or its
subsidiaries as lessee or lessor (individually, a "BIB Real Property
Lease" and collectively the "BIB Real Property Leases"; collectively
with the BIB Owned Properties, the "BIB Property"). BIB and its
subsidiaries have good and marketable fee title to all BIB Owned
Property, free and clear of all liens or encumbrances of any nature
whatsoever ("Liens"), except Liens set forth on Schedule U. The BIB
Property constitutes all interests in real property currently used
or currently held for use in connection with the business of BIB and
its subsidiaries which are necessary for the continued operation of
the BIB Business. BIB or its subsidiaries has valid and enforceable
leasehold interest under each of the BIB Real Property Leases,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), and neither BIB nor any subsidiary
has received any written notice of any default or event that with
notice or lapse of time, or both, would constitute a default by the
BIB or any subsidiary under any of the BIB Real Property Leases. All
of the BIB Property, buildings, fixtures and improvements thereon
owned or leased by BIB and its subsidiaries are in good operating
condition and repair (subject to normal wear and tear).
(nn) Environmental Matters. The operations of BIB and its subsidiaries
are in compliance with all applicable environmental laws. BIB and
each of its subsidiaries has obtained all permits required under all
applicable environmental laws necessary to operate its business.
Neither BIB nor any of its subsidiaries is the subject of any
outstanding written order or agreement with any governmental
authority or person respecting environmental laws or any remedial
action relating to environmental laws. Neither BIB nor any of its
subsidiaries has received any written communication alleging that
BIB or any of its subsidiaries may be in violation of any
environmental law. There is not located at any of the properties of
BIB or any of its subsidiaries any underground storage tanks or
hazardous materials, expect a used in the ordinary course of
business.
(oo) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of BIB or its
subsidiaries. Neither BIB nor its subsidiaries are obliged to pay
benefits or share profits with any employee after termination of
employment except as required by law;
BIB Assets - BIB Equipment
(pp) BIB Equipment. The BIB Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such
equipment is in good working condition;
BIB Assets - BIB Goodwill and Other Assets
(qq) BIB Goodwill. BIB and its subsidiaries does not carry on the BIB
Business under any other business or trade names. BIB does not have
any knowledge of any infringement by BIB or its subsidiaries of any
patent, trademarks, copyright or trade secret;
The BIB Business
(rr) Maintenance of Business. Since the date of the BIB Financial
Statements, BIB and its subsidiaries have not entered into any
material agreement or commitment except in the ordinary course and
except as disclosed herein.
BIB - Miscellaneous
Acquisition Shares. The Acquisition Shares when delivered to
Incandent pursuant to the Acquisition shall be validly issued and
outstanding as fully paid and non-assessable shares and the
Acquisition Shares shall be transferable upon the books of BIB, in
all cases subject to the provisions and restrictions of all
applicable securities laws;No Misrepresentation
No Misrepresentation. No representation or warranty of BIB contained
in this Agreement or in any schedule hereto or in any certificate or
other instrument furnished by BIB to Incandent pursuant to the terms
hereof, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained
herein or therein not misleading.
Liabilities. Upon consummation of the sale of BIB Ltd., the
aggregate liabilities of BIB shall not exceed $500,000.
Xxxxxxxx-Xxxxx Certifications. The certifications filed by BIB with
the Securities and Exchange Commission pursuant to the
Xxxxxxxx-Xxxxx Act of 2002, since August 16, 2003, are true and
correct in all material respects.
Non-Merger and Survival
3.2 The representations and warranties of BIB contained herein will be true at
and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by Incandent or Incode; the representations
and warranties of BIB shall survive the Closing and shall be enforceable against
BIB's wholly-owned subsidiary, BIB Ltd., the stock of which subsidiary shall be
sold immediately subsequent to the Closing hereof.
Indemnity and Survival
3.3 BIB and BIB Ltd., jointly and severally agree to indemnify and save harmless
Incode and Incandent from and against any and all claims, demands, actions,
suits, proceedings, assessments, judgments, damages, costs, losses and expenses,
whether relating asserted by any third party or the parties hereto, including
any payment made in good faith in settlement of any claim (subject to the right
of BIB or BIB Ltd. to defend any such claim), resulting from any conduct of BIB
or BIB Ltd., whether relating to the BIB Business or otherwise, prior to the
Closing, or the breach by BIB of any representation or warranty made under this
Agreement, or from any misrepresentation in or omission from any certificate or
other instrument furnished or to be furnished by BIB to Incandent or Incode
hereunder; this indemnity shall survive the Closing and shall be enforceable
against BIB's wholly-owned subsidiary, BIB Ltd.
ARTICLE 4
COVENANTS OF BIB
Covenants
4.1 BIB covenants and agrees with Incandent and Incode that it will:
(a) Conduct of Business. Until the Closing, conduct the BIB Business
diligently and in the ordinary course consistent with the manner in
which the BIB Business generally has been operated up to the date of
execution of this Agreement;
(b) Preservation of Business. Until the Closing, use its best efforts to
preserve the BIB Business (including without limitation its
corporate status and good standing, and good standing with the SEC
and the NASD) and the BIB Assets and, without limitation, preserve
for Incode, BIB's and its subsidiaries' relationships with any third
party having business relations with them;
(c) Additional Funding. Until the Closing, draw no more than an
additional one hundred thousand dollars ($100,000) on its equity
and/or convertible debt facility with Cornell Capital Partners,
L.P.;
(d) Access. Until the Closing, give Incandent, Incode, and their
representatives full access to all of the properties, books,
contracts, commitments and records of BIB, and furnish to Incandent,
Incode and their representatives all such information as they may
reasonably request;
(e) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party
consents required to permit the Acquisition and to preserve and
maintain the BIB Assets notwithstanding the change in control of
Incode arising from the Acquisition;
(f) Sale of BIB Ltd. Immediately subsequent to the Closing hereof, BIB
shall sell BIB Ltd., pursuant to the terms and conditions of the
Subsidiary Stock Purchase Agreement (attached hereto as Exhibit
4.1(f)), to be executed upon and performed immediately subsequent to
the Closing hereof; and
(g) Closing Contingency. Close hereunder as soon as practicable upon the
reduction of the Cornell Facility from its current balance of about
Nine Hundred Fifty Thousand Dollars ($950,000) to a balance of Five
Hundred Thousand Dollars ($500,000) and the release by Cornell of
its lien on the PA Building.
Authorization
4.2 BIB hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting BIB and its subsidiaries to release any and all
information in their possession respecting BIB and its subsidiaries to Incode.
BIB shall promptly execute and deliver to Incode any and all consents to the
release of information and specific authorizations which Incode reasonably
requires to gain access to any and all such information.
Survival
4.3 The covenants set forth in this Article shall survive the Closing for the
benefit of Incandent and Incode.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF INCANDENT AND INCODE
Representations and Warranties
5.1 Incandent and Incode hereby jointly and severally represent and warrant in
all material respects to BIB, with the intent that it will rely thereon in
entering into this Agreement and in approving and completing the transactions
contemplated hereby, that:
Company Status and Capacity
(a) Formation. Each of Incode, Incode Subsidiaries and Incandent is a
company duly formed and validly subsisting under the laws of the
States of Delaware and/or New Jersey;
(b) Carrying on Business. Incode and Incode Subsidiaries carry on the
Incode Business primarily in New Jersey and do not carry on any
material business activity in any other jurisdiction. Incode and
Incode Subsidiaries are duly authorized to carry on the Incode
Business in New Jersey (such certificates of authority and good
standing are included herewith in Exhibit 5.1(b)). The nature of the
Incode Business does not require Incode or Incode Subsidiaries to
register or otherwise be qualified to carry on business in any other
jurisdiction except where the failure to be so qualified would not
have a Material Adverse Effect;
(c) Legal Capacity. Incode has the legal power, capacity and authority
to own Incode Assets, to carry on the Business of Incode and to
enter into and complete this Agreement. Incode Subsidiaries has the
legal capacity to carry on its business and operations. Incode has
the legal power, capacity and authority to enter into and complete
this Agreement;
Incode - Capitalization
(d) Authorized Capital. The authorized capital of Incode consists of
110,000,000 shares of capital stock. The authorized capital of each
of the Incode Subsidiaries consists of 110,000,000 shares of capital
stock;
(e) Ownership of Incode and Incode Subsidiaries Shares. The issued and
outstanding share capital of Incode will on Closing consist of
1,000,000 shares of common stock (being the Incode Shares), which
shares on Closing shall be validly issued and outstanding as fully
paid and non-assessable shares. Incode will be at Closing the
registered and beneficial owners of the Incode Shares. The Incode
Shares owned by Incandent will on Closing be free and clear of any
and all liens, charges, pledges, encumbrances, restrictions on
transfer and adverse claims whatsoever. The issued and outstanding
share capital of each of the Incode Subsidiaries will on Closing
consist of 1,000,000 shares of common stock, which shares on Closing
shall be validly issued and outstanding as fully paid and
non-assessable shares. Incode will be at Closing the registered and
beneficial owners of the issued and outstanding Incode Subsidiaries
capital stock. The Incode Subsidiaries capital stock owned by Incode
will on Closing be free and clear of any and all liens, charges,
pledges, encumbrances, restrictions on transfer and adverse claims
whatsoever;
(f) No Option, Warrant or Other Right. No person, firm or corporation
has any agreement, option, warrant, preemptive right or any other
right capable of becoming an agreement, option, warrant or right for
the acquisition of Incode Shares held by Incode or for the purchase,
subscription or issuance of any of the unissued shares in the
capital of Incode. No person, firm or corporation has any agreement,
option, warrant, preemptive right or any other right capable of
becoming an agreement, option, warrant or right for the acquisition
of Incode Subsidiaries shares held by Incode or for the purchase,
subscription or issuance of any of the unissued shares in the
capital of Incode Subsidiaries;
(g) No Restrictions. There are no restrictions on the transfer, sale or
other disposition of Incode Shares contained in the charter
documents of Incode or under any agreement;
Incode - Records and Financial Statements
(h) Charter Documents. The charter documents of Incode and Incode
Subsidiaries have not been altered since its formation date, except
as filed in the record books of Incode;
(i) Minute Books. The minute books of Incode and Incode Subsidiaries are
complete and each of the minutes contained therein accurately
reflect the actions that were taken at a duly called and held
meeting or by consent without a meeting. All actions by Incode or
Incode Subsidiaries which required director or shareholder approval
are reflected on the corporate minute books of Incode and Incode
Subsidiaries. Neither Incode nor Incode Subsidiaries is in violation
or breach of, or in default with respect to, any term of its
Certificate of Incorporation (or other charter documents) or
by-laws.
(j) Incode Financial Statements. The Incode Financial Statements will
present fairly, in all material respects, the assets and liabilities
(whether accrued, absolute, contingent or otherwise) of Incode and
Incode Subsidiaries as of the date thereof, and the sales and
earnings of the Incode Business during the periods covered thereby,
in all material respects, and have been prepared in substantial
accordance with generally accepted accounting principles
consistently applied;
(k) Incode Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of Incode which will not be
reflected in the Incode Financial Statements, except those incurred
in the ordinary course of business since the date of the Incode
Financial Statements, and Incode has not guaranteed or agreed to
guarantee any debt, liability or other obligation of any person,
firm or corporation;
(l) Incode Accounts Receivable. All the Incode Accounts Receivable
result from bona fide business transactions and services actually
rendered without, to the knowledge and belief of Incode, any claim
by the obligor for set-off or counterclaim;
(m) No Debt to Related Parties. Except as disclosed in the Incode
Financial Statements, Incode is not and on Closing will not be,
indebted to Incode nor to any family member thereof, nor to any
affiliate, director or officer of Incode or Incode except accounts
payable on account of bona fide business transactions of Incode
incurred in normal course of Incode Business, including employment
agreements with Incode, none of which are more than 60 days in
arrears;
(n) No Related Party Debt to Incode. Except as set forth in the Incode
Financial Statements, no Incode Shareholder nor any director,
officer or affiliate of Incode is now indebted to or under any
financial obligation to Incode on any account whatsoever, except for
advances on account of travel and other expenses;
(o) No Dividends. No dividends or other distributions on any shares in
the capital of Incode have been made, declared or authorized since
the date of the Incode Financial Statements;
(p) No Payments. No payments of any kind have been made or authorized
since the date of the Incode Financial Statements to or on behalf of
Incode or to or on behalf of officers, directors, shareholders or
employees of Incode or under any management agreements with Incode,
except payments made in the ordinary course of business and at the
regular rates of salary or other remuneration payable to them;
(q) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting Incode, except as set forth in the Incode Financial
Statements;
(r) No Adverse Events. Since the date of the Incode Financial
Statements:
(i) there has not been any material adverse change in the
consolidated financial position or condition of Incode or
Incode Subsidiaries, their liabilities or the Incode Assets or
any damage, loss or other change in circumstances materially
affecting Incode, Incode Subsidiaries, the Incode Business or
the Incode Assets or Incode's right to carry on the Incode
Business, other than changes in the ordinary course of
business,
(ii) there has not been any damage, destruction, loss or other
event (whether or not covered by insurance) materially and
adversely affecting Incode, the Incode Business or the Incode
Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by Incode to Incode or to any of
Incode's officers, employees or agents or any bonus or payment
made to or with any of them,
(iv) the Incode Business has been and continues to be carried on in
the ordinary course,
(v) Neither Incode nor Incode Subsidiaries have not waived or
surrendered any right of material value,
(vi) Neither Incode nor Incode Subsidiaries have not discharged or
satisfied or paid any lien or encumbrance or obligation or
liability other than current liabilities in the ordinary
course of business.
Incode - Income Tax Matters
(s) Tax Returns. All tax returns and reports of Incode or Incode
Subsidiaries required by law to be filed have been filed and are
true, complete and correct, and any taxes payable in accordance with
any return filed by Incode or Incode Subsidiaries or in accordance
with any notice of assessment or reassessment issued by any taxing
authority have been so paid;
(t) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by Incode or Incode Subsidiaries. Neither Incode nor
Incode Subsidiaries is aware of any contingent tax liabilities or
any grounds which would prompt a reassessment including aggressive
treatment of income and expenses in filing earlier tax returns;
Incode - Applicable Laws and Legal Matters
(u) Licenses. Incode and Incode Subsidiaries hold all licenses and
permits as may be requisite for carrying on the Incode Business in
the manner in which it has heretofore been carried on, which
licenses and permits have been maintained and continue to be in good
standing except where the failure to obtain or maintain such
licenses or permits would not have a material adverse effect on the
Incode Business;
(v) Applicable Laws. Neither Incode nor Incode Subsidiaries has been
charged with or received notice of breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees to which they are
subject or which applies to them the violation of which would have a
material adverse effect on the Incode Business, and, to the
knowledge of Incode, neither Incode nor Incode Subsidiaries is not
in breach of any laws, ordinances, statutes, regulations, by-laws,
orders or decrees the contravention of which would result in a
material adverse impact on the Incode Business;
(w) Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened
against or relating to Incode, Incode Subsidiaries, the Incode
Business, or any of the Incode Assets, nor do Incode have any
knowledge of any deliberate act or omission of Incode or Incode
Subsidiaries that would form any material basis for any such action
or proceeding;
(x) No Bankruptcy. Neither Incode nor Incode Subsidiaries has made any
voluntary assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been filed
or presented against Incode or Incode Subsidiaries and no order has
been made or a resolution passed for the winding-up, dissolution or
liquidation of Incode or Incode Subsidiaries;
(y) Labor Matters. Neither Incode nor Incode Subsidiaries is not party
to any collective agreement relating to the Incode Business with any
labor union or other association of employees and no part of the
Incode Business has been certified as a unit appropriate for
collective bargaining or, to the knowledge of Incode, has made any
attempt in that regard;
(z) Finder's Fees. Neither Incode nor Incode Subsidiaries is a party to
any agreement which provides for the payment of finder's fees,
brokerage fees, commissions or other fees or amounts which are or
may become payable to any third party in connection with the
execution and delivery of this Agreement and the transactions
contemplated herein;
Execution and Performance of Agreement
(aa) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated
hereby, have been duly and validly authorized by all necessary
corporate action on the part of Incandent and Incode;
(bb) No Violation or Breach. The execution and performance of this
Agreement will not
(i) violate the charter documents of Incandent or Incode or result
in any breach of, or default under, any loan agreement,
mortgage, deed of trust, or any other agreement to which
Incode is a party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, Incode Material Contracts, or
any right or rights enjoyed by Incode,
(iii) result in any alteration of Incode's obligations under any
agreement to which Incode is a party including, without
limitation, the Incode Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance
or restriction of any nature whatsoever in favor of a third
party upon or against the Incode Assets,
(v) result in the imposition of any tax liability to Incode
relating to Incode Assets or the Incode Shares, or
(vi) violate any court order or decree to which either Incode is
subject;
Incode Assets - Ownership and Condition
(cc) Business Assets. The Incode Assets, comprise all of the property and
assets of the Incode Business, and neither Incode nor any other
person, firm or corporation owns any assets used by Incode in
operating the Incode Business, whether under a lease, rental
agreement or other arrangement;
(dd) Title. Incode or Incode Subsidiaries is the legal and beneficial
owner of the Incode Assets, free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims
whatsoever;
(ee) No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the purchase
of any of the Incode Assets;
(ff) Incode Material Contracts. The Incode Material Contracts listed in
Schedule II constitute all of the material contracts of Incode and
the Incode Subsidiaries;
(gg) No Default. There has not been any default in any material
obligation of Incode or Incode Subsidiaries or any other party to be
performed under any of Incode Material Contracts, each of which is
in good standing and in full force and effect and unamended (except
as disclosed in Schedule "II"), and neither Incode nor Incode
Subsidiaries is aware of any default in the obligations of any other
party to any of the Incode Material Contracts;
(hh) Incode Insurance Policies. Incode and its subsidiaries maintain the
public liability insurance and insurance against loss or damage to
the Incode Assets and the Incode Business as described in Schedule
"FF" hereto;
(ii) Incode Real Property. Schedule JJ sets forth a complete list of (i)
all real property and interests in real property owned in fee by
Incode and its subsidiaries (individually, a "Incode Owned Property"
and collectively, the "Incode Owned Properties"), and (ii) all real
property and interests in real property leased by Incode or its
subsidiaries as lessee or lessor (individually, a "Incode Real
Property Lease" and collectively the "Incode Real Property Leases";
collectively with the Incode Owned Properties, the "Incode
Property"). Incode and its subsidiaries have good and marketable fee
title to all Incode Owned Property, free and clear of all Liens,
except Liens set forth on Schedule JJ. The Incode Property
constitutes all interests in real property currently used or
currently held for use in connection with the business of Incode and
its subsidiaries which are necessary for the continued operation of
the Incode Business. Incode or its subsidiaries has valid and
enforceable leasehold interest under each of the Incode Real
Property Leases, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity), and neither Incode nor
any subsidiary has received any written notice of any default or
event that with notice or lapse of time, or both, would constitute a
default by the Incode or any subsidiary under any of the Incode Real
Property Leases. All of the Incode Property, buildings, fixtures and
improvements thereon owned or leased by Incode and its subsidiaries
are in good operating condition and repair (subject to normal wear
and tear).
(jj) Environmental Matters. The operations of Incode and its subsidiaries
are in compliance with all applicable environmental laws. Incode and
each of its subsidiaries has obtained all permits required under all
applicable environmental laws necessary to operate its business.
Neither Incode nor any of its subsidiaries is the subject of any
outstanding written order or agreement with any governmental
authority or person respecting environmental laws or any remedial
action relating to environmental laws. Neither Incode nor any of its
subsidiaries has received any written communication alleging that
Incode or any of its subsidiaries may be in violation of any
environmental law. There is not located at any of the properties of
Incode or any of its subsidiaries any underground storage tanks or
hazardous materials, expect a used in the ordinary course of
business.
(kk) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of Incode or Incode
Subsidiaries. Neither Incode nor Incode Subsidiaries is not obliged
to pay benefits or share profits with any employee after termination
of employment except as required by law;
Incode Assets - Incode Equipment
(ll) Incode Equipment. The Incode Equipment has been maintained in a
manner consistent with that of a reasonably prudent owner and such
equipment is in good working condition;
Incode Assets - Infringement
(mm) Incode Goodwill. Incode do not have any knowledge of any
infringement by Incode or Incode Subsidiaries of any patent,
trademark, copyright or trade secret;
The Business of Incode
(nn) Maintenance of Business. Since the date of the Incode Financial
Statements, the Incode Business has been carried on in the ordinary
course and Incode has not entered into any material agreement or
commitment except in the ordinary course; and
(oo) Subsidiaries. Except for Incode Subsidiaries, Incode does not own
any subsidiaries and does not otherwise own, directly or indirectly,
any shares or interest in any other corporation, partnership, joint
venture or firm.
No Misrepresentation
No Misrepresentation. No representation or warranty of Incode
contained in this Agreement or in any schedule hereto or in any
certificate or other instrument furnished by Incode to BIB pursuant
to the terms hereof, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
Non-Merger and Survival
5.2 The representations and warranties of Incandent and Incode contained herein
will be true at and as of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by BIB, the
representations and warranties of Incandent and Incode shall survive the
Closing.
Indemnity
5.3 Inandent agrees to indemnify and save harmless BIB from and against any and
all claims, demands, actions, suits, proceedings, assessments, judgments,
damages, costs, losses and expenses, including any payment made in good faith in
settlement of any claim (subject to the right of Incandent to defend any such
claim), resulting from the breach by any of them of any representation or
warranty of such party made under this Agreement or from any misrepresentation
in or omission from any certificate or other instrument furnished or to be
furnished by Incandent or Incode to BIB hereunder.
ARTICLE 6
COVENANTS OF INCODE AND INCANDENT
Covenants
6.1 Incode and Incandent covenant and agree with BIB that they will:
(a) Conduct of Business. Until the Closing, conduct the Incode Business
diligently and in the ordinary course consistent with the manner in
which the Incode Business generally has been operated up to the date
of execution of this Agreement;
(b) Preservation of Business. Until the Closing, use their best efforts
to preserve the Incode Business and the Incode Assets and, without
limitation, preserve for BIB Incode's relationships with their
suppliers, customers and others having business relations with them;
(c) Access. Until the Closing, give BIB and its representatives full
access to all of the properties, books, contracts, commitments and
records of Incode relating to Incode, Incode Subsidiaries, the
Incode Business and the Incode Assets, and furnish to BIB and its
representatives all such information as they may reasonably request;
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party
consents required to permit the Acquisition and to preserve and
maintain the Incode Assets, including the Incode Material Contracts,
notwithstanding the change in control of Incode arising from the
Acquisition;
(h) Closing Contingency. Close hereunder as soon as practicable upon the
reduction of the Cornell Facility from its current balance of about
Nine Hundred Fifty Thousand Dollars ($950,000) to a balance of Five
Hundred Thousand Dollars ($500,000) and the release of lien by
Cornell on the PA Building;
(e) Reporting and Internal Controls. From and after the Closing, Incode
shall forthwith take all required actions to implement internal
controls on the business of Incode to ensure that Incode and BIB
comply with Section 13(b)(2) of the Securities and Exchange Act of
1934;
(f) Delivery of Incode Financial Statements. Within 64 days of the
Closing Date, Incode shall deliver the Incode Financial Statements,
including a signed audit report thereon, to BIB; and
(g) 1934 Act Reports. From and after the Closing Date, take all such
steps as are necessary to discharge all reporting obligations
imposed upon them by the Securities Exchange Act of 1934.
Authorization
6.2 Incode hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting Incode to release any and all information in
their possession respecting Incode to BIB. Incode shall promptly execute and
deliver to BIB any and all consents to the release of information and specific
authorizations which BIB reasonably require to gain access to any and all such
information.
Survival
6.3 The covenants set forth in this Article shall survive the Closing for the
benefit of BIB.
ARTICLE 7
CONDITIONS PRECEDENT
Conditions Precedent in favor of BIB
7.1 BIB's obligations to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to BIB hereunder will have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by Incode or Incandent at or prior to the
Closing will have been complied with or performed;
(c) title to the Incode Shares held by Incode and to the Incode Assets
will be free and clear of all mortgages, liens, charges, pledges,
security interests, encumbrances or other claims whatsoever, save
and except as disclosed herein, and the Incode Shares shall be duly
transferred to BIB;
(d) BIB shall have completed a due diligence of Incode and the
Subsidiaries to the sole satisfaction of BIB. Notwithstanding the
foregoing, such due diligence review shall be completed by September
15, 2004, or this provision shall be of no further force or effect;
(e) BIB shall have received any consent required from Cornell and
Cornell shall have released the lien on the PA Building;
(f) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or
condition of Incode, its liabilities or the Incode Assets or
any damage, loss or other change in circumstances materially
and adversely affecting Incode, the Incode Business or the
Incode Assets or Incode's right to carry on the Incode
Business, other than changes in the ordinary course of
business, none of which has been materially adverse, or
(ii) any damage, destruction, loss or other event, including
changes to any laws or statutes applicable to Incode or the
Incode Business (whether or not covered by insurance)
materially and adversely affecting Incode, the Incode Business
or the Incode Assets; and
(g) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any.
Waiver by BIB
7.2 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of BIB and any such condition may be waived in whole or in
part by BIB at or prior to the Closing by delivering to Incode a written waiver
to that effect signed by BIB. In the event that the conditions precedent set out
in the preceding section are not satisfied on or before the Closing, BIB shall
be released from all obligations under this Agreement.
Conditions Precedent in Favor of Incode and Incandent
7.3 The obligations of Incode and Incandent to carry out the transactions
contemplated hereby are subject to the fulfillment of each of the following
conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed and delivered
to Incode hereunder will have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by BIB at or prior to the Closing will have
been complied with or performed;
(c) BIB will have delivered the Acquisition Shares to be issued pursuant to
the terms of the Acquisition to Incode at the Closing and the Acquisition
Shares will be registered on the books of BIB in the name of the holder of
Incode Shares at the time of Closing;
(d) title to the Acquisition Shares will be free and clear of all mortgages,
liens, charges, pledges, security interests, encumbrances or other claims
whatsoever;
(e) Incode and Incandent shall have completed a due diligence review of BIB to
the sole satisfaction of Incode and Incandent;
(f) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or
condition of BIB, its subsidiaries, their liabilities or the
BIB Assets or any damage, loss or other change in
circumstances materially and adversely affecting BIB, the BIB
Business or the BIB Assets or BIB's right to carry on the BIB
Business, other than changes in the ordinary course of
business, none of which has been materially adverse, or
(ii) any damage, destruction, loss or other event, including
changes to any laws or statutes applicable to BIB or the BIB
Business (whether or not covered by insurance) materially and
adversely affecting BIB, its subsidiaries, the BIB Business or
the BIB Assets; and
(g) the transactions contemplated hereby shall have been approved by all other
regulatory authorities having jurisdiction over the subject matter hereof,
if any.
Waiver by Incode and Incandent
7.4 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of Incode and Incandent and any such condition may be
waived in whole or in part by Incode or Incandent at or prior to the Closing by
delivering to BIB a written waiver to that effect signed by Incode and
Incandent. In the event that the conditions precedent set out in the preceding
section are not satisfied on or before the Closing, Incode and Incandent shall
be released from all obligations under this Agreement.
Nature of Conditions Precedent
7.5 The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favor of the other party or parties set forth in this
Article.
Termination
7.6 Notwithstanding any provision herein to the contrary, if the Closing does
not occur on or before October 31, 2004, this Agreement will be at an end and
will have no further force or effect, unless otherwise agreed upon by the
parties in writing.
Confidentiality
7.7 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 Incode and BIB and the
contents thereof confidential and not utilize nor reveal or release same,
provided, however, that BIB will be required to issue a news release 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
Acquisition contemplated hereby together with such other documents as are
required to maintain the currency of BIB's filings with the Securities and
Exchange Commission.
ARTICLE 8
RISK
Material Change in the Business of Incode
8.1 If any material loss or damage to the Incode Business occurs prior to
Closing and such loss or damage, in BIB's reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, BIB shall, within two
(2) days following any such loss or damage, by notice in writing to Incode, at
its option, either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or damage
will, as a condition precedent to BIB's obligations to carry out the
transactions contemplated hereby, be vested in Incode or otherwise
adequately secured to the satisfaction of BIB on or before the
Closing Date.
Material Change in the BIB Business
8.2 If any material loss or damage to the BIB Business occurs prior to Closing
and such loss or damage, in Incode's reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, Incode shall, within two (2) days
following any such loss or damage, by notice in writing to BIB, at its option,
either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or damage
will, as a condition precedent to Incode's obligations to carry out
the transactions contemplated hereby, be vested in BIB or otherwise
adequately secured to the satisfaction of Incode on or before the
Closing Date.
ARTICLE 9
CLOSING
Closing
9.1 The Acquisition and the other transactions contemplated by this Agreement
will be closed at the Place of Closing in accordance with the closing procedure
set out in this Article.
Documents to be Delivered by Incode
9.2 On or before the Closing, Incode and Incandent will deliver or cause to be
delivered to BIB:
(a) the original or certified copies of the charter documents of Incode
and all corporate records documents and instruments of Incode, the
corporate seal of Incode and all books and accounts of Incode;
(b) all reasonable consents or approvals required to be obtained by
Incode for the purposes of completing the Acquisition and preserving
and maintaining the interests of Incode under any and all Incode
Material Contracts and in relation to Incode Assets;
(c) certified copies of such resolutions of the shareholders and
directors of Incode as are required to be passed to authorize the
execution, delivery and implementation of this Agreement;
(d) an acknowledgement from Incode and Incandent of the satisfaction of
the conditions precedent set forth in section 7.3 hereof;
(e) the certificates or other evidence of ownership of the Incode
Shares, together with such other documents or instruments required
to effect transfer of ownership of the Incode Shares to BIB; and
(f) such other documents as BIB may reasonably require to give effect to
the terms and intention of this Agreement.
Documents to be Delivered by BIB
9.3 On or before the Closing, BIB shall deliver or cause to be delivered to
Incode and Incandent:
(a) share certificates representing the Acquisition Shares duly
registered in the names of the holders of shares of Incode Common
Stock;
(b) certified copies of such resolutions of the directors of BIB as are
required to be passed to authorize the execution, delivery and
implementation of this Agreement;
(c) a certified copy of a resolution of the directors of BIB dated as of
the Closing Date appointing the nominees of Incode as officers of
Incode, appointing the nominees of Incode to the board of directors
of BIB, and accepting the resignation of all current directors and
officers of BIB;
(d) resignation of all current directors and officers of BIB;
(e) the acknowledgement and agreement of the purchasers of BIB Ltd.,
regarding the enforceability of Sections 3.2 and 3.3;
(f) an acknowledgement from BIB of the satisfaction of the conditions
precedent set forth in section 7.1 hereof;
(g) such other documents as Incode and Incandent may reasonably require
to give effect to the terms and intention of this Agreement.
ARTICLE 10
POST-CLOSING MATTERS
Contemporaneous Matters
Immediately subsequent to the Closing hereof, BIB, Incode and
Incandent, as the case may be, shall execute, deliver and fully discharge its
obligations under the Subsidiary Stock Purchase Agreement by and between Xxxx
Xxxxxx and Xxxx Xxxxxx and BIB (attached hereto as Exhibit 4.1(f)).
Subsequent Matters
Forthwith after the Closing, BIB, Incode and Incandent, as the case may
be, agree to use all their best efforts to:
(a) issue a news release reporting the Closing;
(b) file with the Securities and Exchange Commission a report on Form
14f1 disclosing the change in control of BIB;
(c) file a Form 8-K with the Securities and Exchange Commission
disclosing the terms of this Agreement within 4 days of the Closing
and, not more than 60 days following the filing of the Form 8-K,
file an amended Form 8-K which includes the audited financial
statements of Incode as well as pro forma financial information of
Incode and BIB as required by Item 310 of Regulation SB as
promulgated by the Securities and Exchange Commission; and
(d) file reports on Forms 13D and 3 with the Securities and Exchange
Commission disclosing the acquisition of the Acquisition Shares by
Incode.
ARTICLE 11
GENERAL PROVISIONS
Notice
11.1 Any notice required or permitted to be given by any party will be deemed to
be given when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid single certified or registered mail, or
telecopier. Any notice delivered by mail shall be deemed to have been received
on the fourth business day after and excluding the date of mailing, except in
the event of a disruption in regular postal service in which event such notice
shall be deemed to be delivered on the actual date of receipt. Any notice
delivered personally or by telecopier shall be deemed to have been received on
the actual date of delivery.
Addresses for Service
11.2 The address for service of notice of each of the parties hereto is as
follows:
(a) BIB:
BIB Holdings, Ltd.
0000 Xxx Xxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxx Xxxxxx, Chairman
Phone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxx, Esq.
Phone: (000) 000-0000
Telecopier: (000) 000-0000
(b) Incode or Incandent:
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxx Xxxxxxx
Phone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx, Esq.
Xxxx & Xxxxxxx, L.L.C.
00 Xxxx Xxxxx Xxxxx 0
Xxxxxxx, Xxx Xxxxxx 00000
Phone: (000) 000-0000
Telecopier: (000) 000-0000
Change of Address
11.3 Any party may, by notice to the other parties change its address for notice
to some other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.
Further Assurances
11.4 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.
Expenses
11.5 Each of the parties hereto shall pay its own fees and expenses (including
the fees of any attorneys, accountants, or others engaged by such party) in
connection with this Agreement and the transactions contemplated hereby whether
or not the transactions contemplated hereby are consummated.
Entire Agreement
11.6 The provisions contained herein constitute the entire agreement among
Incode, Incode and BIB respecting the subject matter hereof and supersede all
previous communications, representations and agreements, whether verbal or
written, among Incandent, Incode and BIB with respect to the subject matter
hereof.
Enurement
11.7 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.
Assignment
11.8 This Agreement is not assignable without the prior written consent of the
parties hereto. Counterparts
11.9 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.
Applicable Law
11.10 This Agreement shall be governed by the laws of the State of New Jersey
and the United States of America (regardless of the laws that might be
applicable under principles of conflicts of law or international law) as to all
matters including, but not limited to, matters of validity, construction, effect
and performance.
Consent to Jurisdiction.
11.11 The parties hereto hereby submit and consent to the exclusive venue and
jurisdiction of the Superior Court of the State of New Jersey, County of Bergen,
in respect of the interpretation and enforcement of the provisions of this
Agreement, and hereby waive and agree not to assert as a defense in any action,
suit or proceeding for the interpretation or enforcement of this Agreement, that
it is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that this Agreement may not be
enforced in or by said courts or that its property is exempt or immune from
execution, that the suit, action or proceeding is brought in an inconvenient
forum, or that the venue of the suit, action or proceeding is improper. The
parties agree that service of process may be made in any manner permitted by the
laws of the State of New Jersey or the federal laws of the United States in any
such action, suit or proceeding against any party with respect to this
Agreement, and BIB and the Incode Shareholder hereby irrevocably designate and
appoint Xxxxxx X. Xxxx, Esq., and Xxxxxxx Xxxxxxx, Esq., as their respective
authorized agents upon which process may be served in any such action, suit or
proceeding, it being understood that such appointment and designation shall
become effective without any further action on the part of the parties. Service
of process upon such authorized agent shall be deemed, in every respect,
effective service of process upon a party and shall remain effective until any
party shall appoint another agent for service or process acceptable to the other
Party. The parties agree that final judgment (with all right of appeal having
expired or been waived) against it in any such action, suit or proceeding shall
be conclusive and that the other party is entitled to enforce such judgment in
any other jurisdiction by suit on the judgment, a certified copy of which shall
be conclusive evidence of the fact and amount of indebtedness arising from such
judgment.
IN WITNESS WHEREOF the parties have executed this Agreement effective
as of the day and year first above written.
BIB HOLDINGS, LTD.
By: /S/ Xxxx Xxxxxx
-----------------------------
Xxxx Xxxxxx, CEO
INCANDENT CAPITAL, L.L.C.
By: /S/ X. Xxxxxxxx
-----------------------------
X. Xxxxxxxx, Member
INCODE CORPORATION
By: /S/ X. Xxxxxxxx
-----------------------------
X. Xxxxxxxx, Attorney in Fact
Solely with respect to Section 3.3:
BIB LTD.
By: /S/ Xxxx Xxxxxx
------------------------------
Xxxx Xxxxxx, CEO
