STOCK PURCHASE AND EXCHANGE AGREEMENT
THIS STOCK PURCHASE AND EXCHANGE AGREEMENT (this "Agreement") is made and
entered into as of the tenth day of June 1998, by and among Interactive Buyers
Network International, Ltd., a Nevada corporation ("IBNL", and/or "Optionor"),
Xxxxxx X. XxXxxxxxxxx ("XxXxxxxxxxx"), Xxxxxx X. Xxxxxxx ("Xxxxxxx") and Xxxxx
X. Xxxxxxx ("Xxxxxxx"). XxXxxxxxxxx, Xxxxxxx and Brazier are hereinafter
collectively referred to as the "WPG Shareholders", DX3,Inc. a corporation of
the State of Washington, that is wholly owned by the WPG Shareholders,
hereinafter referred to as "DX3".
A. Xxx.xxx, Inc. ("WPG") is incorporated under the laws of the State of
Washington.
B. As of the date hereof, there are an aggregate of 1,000,000 shares of
WPG's Common Stock no par value (the "WPG Common Stock"), issued and
outstanding. There are no options or warrants or other rights outstanding to
purchase shares of WPG Common Stock or any other ownership interest in WPG.
C. All of the issued and outstanding shares of WPG Common Stock are
owned, beneficially and of record, by the WPG Shareholders, who together own an
aggregate of 1,000,000 shares of WPG Common Stock in the respective numbers of
shares set forth opposite the name of each on the signature page of this
Agreement.
D. The WPG Shareholders desire to sell to IBNL, and IBNL desires to
purchase and acquire from the WPG Shareholders, all of the shares of WPG's
Common Stock, in consideration of the exchange therefor of 500,000 shares of the
common stock of IBNL, on the terms and subject to the conditions set forth
herein; and an option to purchase an additional 500,000 shares of the common
stock of IBNL subject to the terms and conditions set forth in the "Option to
Purchase Common Stock of Interactive Buyers Network International, Ltd. "
agreement incorporated herein by this reference; and the Royalties as set forth
in paragraph "F" of this agreement.
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E. The parties hereto intend that the issuance of the shares of IBNL's
Common Stock in exchange for all of the WPG Common Stock shall qualify as a
"tax-free" reorganization as contemplated by the provisions of Section
368(a)(1)(B) of the Internal Revenue Code of 1954, as amended.
F. 1 ROYALTY. DX3, Inc. shall be paid a royalty based upon gross
sales or use, as defined in F,3, of Base Publisher ("BP"), a product now under
development by WPG with release expected by July 1998. The royalty will be
continually and perpetually paid on a quarterly basis at the rate of fifty
percent (50%) of all gross revenue, less returns, credit losses and cash
discounts, received by Optionor, from the sale or use of BP based upon financial
records of Optionor, subject to adjustment annually upon audit by Optionor's
independent auditors.
F.2. Base Publisher ("BP"), a product now under development by WPG is
to include, but not be limited to, all evolutions, revisions, enhancements,
upgrades, additions, tools, defined if F.4, and/or new versions or similar
products and to include any name changes in the product.
F.3 The term "use" as relating to the BP product as used herein is
defined as any use of the BP product, as defined, whether or not revenue is
derived from the use or sale of the BP product. If the BP is sold or marketed
without a minimum of Five dollars ($5.00) per site specific revenue or is sold
or marketed as part of a package of products or services, then IBNL will
negotiate with DX3 and agree to a fair value being assigned as revenue to the BP
sales for purposes of this agreement. If IBNL and DX3 cannot agree to a fair
value then a minimum value of Five dollars ($5.00) or Fifty percent (50%) of the
package of products, whichever is greater, per site shall be assigned as BP
revenue.
F.4 The term "Tools" shall mean any products developed in support or
the BP product or to be used in conduction with the BP product or as an add on
to the BP product. The term "ToolBox" in inclusive with the term "Tools". This
clause shall not apply to the Virtual Source product or any enhancements or
improvements to the Virtual Source product.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
ARTICLE 1
1.1 At the Closing to be held in accordance with the provisions of
Section 2 below, IBNL agrees to sell, and each of the WPG Shareholders agrees,
jointly and severally, to purchase from IBNL an aggregate of 500,000 of
authorized and newly issued shares of IBNL's Common Stock. The 500,000 shares
shall be issued in the name of DX3, Inc., a corporation of the State of
Washington that is wholly owned by the WPG Shareholders. In consideration for
the issuance and sale of IBNL's Common Stock to the WPG Shareholders, and as
payment in full of the purchase price for IBNL's Common Stock to be issued and
sold to, and purchased by, each of them pursuant to the provisions of this
Agreement, at the Closing each WPG Shareholder shall deliver to IBNL the
certificates evidencing that respective number of shares of WPG Stock owned by
each which is set forth opposite his name on the signature page hereof.
ARTICLE 2
CLOSING AND POST-CLOSING
2.1 The consummation of the sale to and purchase by the WPG
Shareholders of IBNL's Common Stock contemplated hereby (the "Closing") shall be
effective upon final execution and delivery by all of the parties of this
Agreement and each of the agreements and certificates specified in this Section
2.1 (the "Closing Date"). If the Closing fails to occur by June 30, 1998, or by
such later date to which the Closing may be extended as provided hereinabove,
this Agreement shall automatically terminate, all parties shall pay their own
expenses incurred in connection herewith, and no party hereto shall have any
further obligations hereunder; provided, however, that no such termination shall
constitute a waiver by any party or parties which is not in default of any of
its or their respective representations, warranties or covenants herein, of any
rights or remedies it or they might have at law if any other party or parties is
in default of any of its or their respective representations, warranties or
covenants under this Agreement. At the Closing, as conditions thereto,
(a) IBNL shall deliver, or cause to be delivered, to the WPG Shareholders:
(i) Certificates for the 500,000 shares of IBNL's Common Stock issued
in the name of DX3, Inc., in form and substance reasonably
satisfactory to the WPG Shareholders (these certificates will be
delivered after the Closing);
(ii) Employment Agreements between IBNL and Messrs. XxXxxxxxxxx,
Xxxxxxx and Xxxxxxx specified in Section 6.3(b) below; and
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(iii)Option Agreement between IBNL and DX3, Inc. specified in Section
6.3(c) below.
(iv) UBC filing or other security filing in favor of DX3 to protect
the terms in Clause 2.3 contained herein.
(b) The WPG Shareholders shall deliver, or cause to be delivered, to IBNL:
(i) A stock certificate or certificates evidencing the ownership of
each WPG Shareholder of all shares of WPG Stock owned by them,
duly endorsed for transfer to IBNL (these certificates will be
delivered after the Closing);
(ii) The Employment Agreements referred to in Section 6.3(b) below;
and
(iii)Resignations of WPG's officers and directors specified in
Section 6.4(c) below.
2.2 Following the Closing, WPG will become a wholly owned subsidiary of
IBNL. Subject to the terms and conditions of the Employment Agreements referred
to in Section 6.3(b) below, XxXxxxxxxxx will be the chief executive of WPG.
Xxxxxxx and Xxxxxxx will report to XxXxxxxxxxx.
2.3 In the event that IBNL ceases to operate, for any reason, including
without limitation the filing of a voluntary bankruptcy petition, making an
assignment for the benefit of creditors or ceasing all business operations, or
if IBNL is sold without WPG or the BP product as defined herein, and/or ceases
to actively sell, market, promote and/or utilize the BP product as defined
herein, the intellectual property rights to Base Publisher that are owned by
IBNL at that time, including improvements made to Base Publisher prior to such
cessation or sale, and other products developed by WPG prior to the date of this
Agreement, except for any such rights related to products of IBNL or its
subsidiary, Virtual SOURCE, Inc., a Nevada corporation, shall be transferred to
DX3, Inc.
ARTICLE 3
IBNL hereby represents and warrants to the WPG Shareholders, and each of
them, as follows (it being acknowledged that the WPG Shareholders are entering
into this Agreement in material reliance upon each of the following
representations and warranties, and that the truth and accuracy of each of which
constitutes a condition precedent to the obligations of the WPG Shareholders
hereunder):
3.1 IBNL is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, and is duly qualified and in
good standing to do business as a foreign corporation in each jurisdiction in
which such qualification is required and where the failure to be so qualified
would have a materially adverse effect upon IBNL. IBNL has all requisite
corporate power and authority to conduct its business as now being conducted and
to own and lease the properties which it now owns and leases. The Articles of
Incorporation as amended to date and the Bylaws of IBNL as amended to date,
certified by the President and the Secretary of IBNL, which have been made
available to the WPG Shareholders prior to the execution hereof are true and
complete copies thereof as in effect as of the date hereof.
3.2 IBNL has full power, legal capacity and authority to enter into
this Agreement, to execute all attendant documents and instruments necessary to
consummate the transactions herein contemplated, and to issue and sell IBNL's
Common Stock to the WPG Shareholders and to perform all of its obligations
hereunder. This Agreement and all other agreements, documents and instruments to
be executed in connection herewith have been effectively authorized by all
necessary action, corporate or otherwise, on the part of IBNL, which
authorizations remain in full force and effect, have been duly executed and
delivered by IBNL, and no other corporate proceedings on the part of IBNL are
required to authorize this Agreement and the transactions contemplated hereby.
This Agreement constitutes the legal, valid and binding obligation of IBNL and
is enforceable with respect to IBNL in accordance with its terms, except as
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
priority or other laws or court decisions relating to or affecting generally the
enforcement of creditors' rights or affecting generally the availability of
equitable remedies. Neither the execution and delivery of this Agreement, nor
the consummation by IBNL of any of the transactions contemplated hereby, or
compliance with any of the provisions hereof, will (i) conflict with or result
in a breach of, violation of, or default under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, lease, credit
agreement or other agreement, document, instrument or obligation (including,
without limitation, any of its charter documents) to which IBNL is a party or by
which IBNL or any of its assets or properties may be bound, or (ii) violate any
judgment, order, injunction, decree, statute, rule or regulation applicable to
IBNL or any of the assets or properties of IBNL. No authorization, consent or
approval of any public body or authority is necessary for the consummation by
IBNL of the transactions contemplated by this Agreement.
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3.3 The authorized capital stock of IBNL consists of 50,000,000 shares
of Common Stock, $.01 par value (defined above as the "IBNL's Common Stock"),
and 5,000,000 shares of Preferred Stock, $.01 par value. As of June 1, 1998
there are 10,054,336 shares of IBNL's Common Stock issued and outstanding (not
including outstanding warrants, options, calls, commitments or other rights to
subscribe for or to purchase from IBNL any capital stock of IBNL or any
securities convertible into or exchangeable for any shares of capital stock of
IBNL, or any other securities or agreement pursuant to which IBNL is or may
become obligated to issue any shares of its capital stock) and no shares of
Preferred Stock are outstanding. All of the outstanding shares of IBNL's Common
Stock have been, and all of IBNL's Common Stock to be issued and sold to the WPG
Shareholders pursuant to this Agreement will be, duly authorized, validly
issued, fully paid and nonassessable. There currently are no rights, agreements
or commitments of any character obligating IBNL, contingently or otherwise, to
register any shares of its capital stock under any applicable federal or state
securities laws.
3.4 True and complete copies of IBNL's financial statements for the
fiscal year ended January 31, 1997, which contains the audited financial
statements of IBNL for the year ended, have been made available to the WPG
Shareholders. Such financial statements (and the notes related thereto) are
herein sometimes collectively referred to as the "IBNL Financial Statements,"
and IBNL's balance sheet as of January 31, 1997 included therein is hereinafter
sometimes referred to as the "Balance Sheet." IBNL Financial Statements (i) are
derived from the books and records of IBNL, which books and records have been
consistently maintained in a manner which reflects, and such books and records
do fairly and accurately reflect, the assets and liabilities of IBNL, (ii)
fairly and accurately present the financial condition of IBNL on the respective
dates of such statements and the results of its operations for the periods
indicated, except as may be disclosed in the notes thereto, and (iii) have been
prepared in all material respects in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise disclosed in the notes thereto). True and complete copies
of IBNL's preliminary financial statements for the year ended January 31, 1998,
have been made available to the WPG Shareholders.
3.5 IBNL has no subsidiaries and no investments, directly or
indirectly, or other financial interest in any other corporation or business
organization, joint venture or partnership of any kind whatsoever except as
reflected in IBNL Financial Statements.
3.6 Except as and to the extent reflected or reserved against in the
Balance Sheet or other financial statements described in Section 3.4 above, IBNL
has no liability(s) or obligation(s) (whether accrued, to become due, contingent
or otherwise) which individually or in the aggregate could have a materially
adverse effect on the business, assets, properties, condition (financial or
otherwise) or prospects of IBNL.
3.7 Since January 31, 1998, except as disclosed in Exhibit B there has
been no materially adverse change in the condition (financial or otherwise) of
the Company or in its assets, liabilities, properties, business, operations or
prospects.
3.8 There are no actions, suits or proceedings pending or, to the best
of IBNL's knowledge, threatened against or affecting IBNL (including actions,
suits or proceedings where liabilities may be adequately covered by insurance)
at law or in equity or before or by any federal, state, municipal or other
governmental department, commission, court, board, bureau, agency or
instrumentality, domestic or foreign, or affecting any of the officers or
directors of IBNL in connection with the business, operations or affairs of
IBNL, which might result in any adverse change in the business, properties or
assets, or in the condition (financial or otherwise) of IBNL, or which might
prevent the sale of the Shares pursuant to this Agreement. IBNL is not subject
to any voluntary or involuntary proceeding under the United States Bankruptcy
Code and has not made an assignment for the benefit of creditors.
3.9 IBNL has no obligation to any person or entity for brokerage
commissions, finder's fees or similar compensation in connection with the
transactions contemplated by this Agreement, and IBNL shall indemnify and hold
the WPG Shareholders harmless against any liability or expenses arising out of
any such claim, asserted against either the WPG Shareholders or IBNL by any
party.
3.10 IBNL, through its current officers and directors, has the
knowledge and experience in business and financial matters to meaningfully
evaluate the merits and risks of the issuance of IBNL's Common Stock in exchange
and consideration for the WPG Stock as contemplated hereby. IBNL understands and
acknowledges that the WPG Stock was originally issued to the WPG Shareholders,
and will be sold and transferred to IBNL, without registration or qualification
under the Securities Act of 1933, as amended, or any applicable state securities
or "Blue Sky" law, in reliance upon specific exemptions therefrom, and in
furtherance thereof IBNL represents that the WPG Stock will be taken and
received by IBNL for its own account for investment, with no present intention
of a distribution or disposition thereof to others. IBNL further acknowledges
and agrees that the certificate(s) representing the WPG Stock transferred to
IBNL shall bear a restrictive legend, in substantially the following form:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), ARE "RESTRICTED
SECURITIES," AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS NOT REQUIRED TO BE REGISTERED
UNDER THE ACT."
3.11 Neither this Agreement, nor any certificate, exhibit, or other
written document or statement, furnished to the WPG Shareholders by IBNL in
connection with the transactions contemplated by this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to be stated in order to make the statements contained
herein or therein not misleading.
ARTICLE 4
Each of the WPG Shareholders hereby represents and warrants to IBNL as
follows (it being acknowledged that IBNL is entering into this Agreement in
material reliance upon each of the following representations and warranties,
that the truth and accuracy of each of which constitutes a condition precedent
to the obligations of IBNL hereunder):
4.1 Each of the WPG Shareholders has full power, legal capacity and
authority to enter into this Agreement, to execute all attendant documents and
instruments necessary to consummate the transactions herein contemplated, and to
perform all of the obligations to be performed by them hereunder. This
Agreement and all other agreements, documents and instruments to be executed by
the WPG Shareholders in connection herewith have been duly executed and
delivered and constitute the legal, valid and binding obligations of the WPG
Shareholders executing and delivering the same, and are enforceable with respect
to such WPG Shareholders in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, priority or
other laws or court decisions relating to or affecting generally the enforcement
of creditors' rights or affecting generally the availability of equitable
remedies. Neither the execution and delivery of this Agreement, nor the
consummation by any of the WPG Shareholders of any of the transactions
contemplated hereby, or compliance with any of the provisions hereof, will (i)
conflict with or result in a breach of, violation of, or default under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, lease, credit agreement or other agreement, document, instrument or
obligation to which a WPG Shareholder is a party or by which a WPG Shareholder
or any of his assets or properties may be bound, or (ii) violate any judgment,
order, injunction, decree, statute, rule or regulation applicable to WPG
Shareholder or any of the assets or properties of a WPG Shareholder. No
authorization, consent or approval of any public body or authority is necessary
for the consummation by the WPG Shareholders of the transactions contemplated
hereby.
4.2 The WPG Shareholders together collectively own an aggregate of
1,000,000 shares of WPG Stock, constituting all of the issued and outstanding
shares of capital stock of WPG, free and clear of (i) any lien, charge,
mortgage, pledge, conditional sale agreement, or other encumbrance of any kind
or nature whatsoever, and (ii) any claim as to ownership thereof or any rights,
powers or interest therein by any third party, whether legal or beneficial, and
whether based on contract, proxy or other document or otherwise. All of the
shares of WPG Stock have been duly authorized and validly issued and are fully
paid and nonassessable. At of the date hereof there are 1,000,000 shares of
WPG's Common Stock issued and outstanding, with no shares of WPG's Common Stock
held in its treasury, and no shares of Preferred Stock are outstanding. All of
the outstanding shares of WPG's Common Stock have been, and all of WPG's Common
Stock to be sold to IBNL pursuant to this Agreement will be, duly authorized,
validly issued, fully paid and nonassessable. Except as set forth above in this
Section 4.2, there are no warrants, options, calls, commitments or other rights
to subscribe for or to purchase from WPG any capital stock of WPG or any
securities convertible into or exchangeable for any shares of capital stock of
WPG, or any other securities or agreement pursuant to which WPG is or may become
obligated to issue any shares of its capital stock, nor is there outstanding any
commitment, obligation or agreement on the part of WPG to repurchase, redeem or
otherwise acquire any outstanding shares of WPG's Common Stock. There currently
are no rights, agreements or commitments of any character obligating WPG,
contingently or otherwise, to register any shares of its capital stock under any
applicable federal or state securities laws.
4.3 WPG is a corporation duly organized, validly existing and in good
standing under the laws of the State of Washington, WPG has all requisite
corporate power and authority to conduct its business as now being conducted and
to own and lease the properties which it now owns and leases. The Articles of
Incorporation of WPG as amended to date and the Bylaws of WPG as amended to
date, certified by the President and the Secretary of WPG, which have been
delivered to IBNL prior to the execution hereof are true and complete copies
thereof as in effect as of the date hereof.
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4.4 WPG was incorporated on October 23, 1996. True and complete copies
of WPG's financial statements for the period ended May 31, 1998, which contains
the unaudited financial statements of WPG, have been made available to the IBNL.
Such financial statements (and the notes related thereto) are herein sometimes
collectively referred to as the "WPG Financial Statements," and WPG's balance
sheet as of May 31, 1998, included therein is hereinafter sometimes referred to
as the "WPG Balance Sheet." WPG Financial Statements (i) are derived from the
books and records of WPG, which books and records have been consistently
maintained in a manner which reflects, and such books and records do fairly and
accurately reflect, the assets and liabilities of WPG, (ii) fairly and
accurately present the financial condition of WPG on the respective dates of
such statements and the results of its operations for the periods indicated,
except as may be disclosed in the notes thereto, and (iii) have been prepared in
all material respects in accordance with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise disclosed in the notes thereto)Effective upon the Closing, all
proprietary systems and programs, computer technology, and other intellectual
property developed or in development by WPG, or by others for WPG's benefit
(hereinafter collectively referred to as the "WPG Properties"), shall become the
property of IBNL whether now owned by WPG or the WPG Shareholders. A complete
list of the WPG Properties is described in Exhibit C attached hereto.
4.5 WPG has no subsidiaries and no investments, directly or indirectly,
or other financial interest in any other corporation or business organization,
joint venture or partnership of any kind whatsoever except as reflected in WPG's
Financial Statements.
4.6 WPG has no liability(s) or obligation(s) (whether accrued, to
become due, contingent or otherwise) which individually or in the aggregate
could have a materially adverse effect on the business, assets, properties,
condition (financial or otherwise) or prospects of WPG.
4.7 Since May 31, 1998, there has been no materially adverse change in
the condition (financial or otherwise) of WPG or in its assets, liabilities,
properties, business, operations or prospects.
4.8 There are no actions, suits or proceedings pending or, to the best
of the WPG Shareholders' knowledge, threatened against or affecting any of the
WPG Shareholders or WPG (including actions, suits or proceedings where
liabilities may be adequately covered by insurance) at law or in equity or
before any federal, state, municipal or other governmental department,
commission, court, board, bureau, agency or instrumentality, domestic or
foreign, or affecting any of the officers or directors of WPG in connection with
the business, operations or affairs of WPG which might result in any material
adverse change in the business, properties or assets, or in the condition
(financial or otherwise) of WPG, or which might prevent the purchase of IBNL's
Common Stock by the WPG Shareholders or the transfer to IBNL of the WPG Stock by
the WPG Shareholders pursuant to this Agreement or the performance by the WPG
Shareholders of any of the obligations to be performed by the WPG Shareholders
under this Agreement. Neither WPG nor any of the WPG Shareholders is subject to
any voluntary or involuntary proceeding under the United States Bankruptcy Code,
nor have any of them made an assignment for the benefit of creditors.
4.9 The WPG Shareholders have no obligation to any person or entity for
brokerage commissions, finder's fees or similar compensation in connection with
the transactions contemplated by this Agreement, and the WPG Shareholders shall
each individually indemnify and hold IBNL harmless against any liability or
expenses arising out of any such claim asserted against IBNL but only to the
extent where said individual had prior knowledge or responsibility for
circumstances leading to such claims.
4.10 Each WPG Shareholder has the knowledge and experience in business
and financial matters to meaningfully evaluate the merits and risks of the
purchase and acquisition of IBNL's Common Stock in exchange and consideration
for the shares of WPG Stock owned by him as contemplated hereby. Each WPG
Shareholder acknowledges that the shares of IBNL's Common Stock to be issued to
DX3 in the transactions contemplated hereby will be issued by IBNL without
registration or qualification or other filings being made under the Federal
Securities Act of 1933, as amended, or the securities or "Blue Sky" laws of any
state, in reliance upon specific exemptions therefrom, and in furtherance
thereof each WPG Shareholder represents that the shares of IBNL's Common Stock
to be received by DX3 will be taken for DX3's account for investment, with no
present intention of a distribution or disposition thereof to others. Each WPG
Shareholder agrees that the certificate(s) representing the shares of IBNL's
Common Stock issued to DX3 shall be subject to a stop-transfer order and shall
bear a restrictive legend, in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), ARE "RESTRICTED
SECURITIES," AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS NOT REQUIRED TO BE REGISTERED
UNDER THE ACT."
4.11 Neither this Agreement, nor any certificate, exhibit, or other
written document or statement, furnished to IBNL by the WPG Shareholders in
connection with the transactions contemplated by this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to be stated in order to make the statements contained
herein or therein not misleading.
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ARTICLE 5
IBNL and the WPG Shareholders hereby covenant to and agree with the other
that between the date hereof and the Closing:
5.1 IBNL and the WPG Shareholders shall each give to other and
authorized representatives thereof full access, during reasonable business
hours, in such a manner as not unduly to disrupt normal business activities, to
any and all of the premises, properties, contracts, books, records and affairs
of IBNL or WPG, as the case may be, and will cause the officers of IBNL or WPG,
as the case may be, to furnish any and all data and information pertaining to
its business that the other may from time to time reasonably require. Unless and
until the transactions contemplated by this Agreement have been consummated,
each party and its representatives shall hold in confidence all information so
obtained and if the transactions contemplated hereby are not consummated will
return all documents hereinabove referred to and obtained therefrom. Such
obligation of confidentiality shall not extend to any information which is shown
to have been previously (i) known to the party receiving it (ii) generally known
to others engaged in the trade or business of IBNL or WPG, as the case may be,
(iii) part of public knowledge or literature, or (iv) lawfully received from a
third party.
5.2 The current officers and directors of IBNL and the WPG Shareholders
shall each take all necessary actions to cause IBNL and WPG, respectively, to
maintain in full force and effect its corporate existence, rights, franchises
and good standing, and shall not cause or permit to be made any change in the
Articles or Bylaws of IBNL or WPG, as the case may be.
5.3 The WPG Shareholders shall take all necessary actions to cause WPG
to conduct its business diligently in the ordinary course of business as an
ongoing concern and to maintain the books, accounts and records of WPG in the
usual, regular and ordinary manner.
ARTICLE 6
The respective obligations of the parties hereto to consummate the
transactions contemplated hereby shall be subject to the fulfillment, at or
prior to the Closing, of the following conditions:
6.1 There shall have been obtained any and all permits, approvals and
qualifications of, and there shall have been made or completed all filings,
proceedings and waiting periods, required by any governmental body, agency or
regulatory authority which, in the reasonable opinion of counsel to the WPG
Shareholders and to IBNL, are required for the consummation of the transactions
contemplated hereby.
6.2 No claim, action, suit, investigation or other proceeding shall be
pending or threatened before any court or governmental agency which presents a
substantial risk of the restraint or prohibition of the transactions
contemplated by this Agreement or the obtaining of material damages or other
relief in connection therewith.
6.3 The obligation of the WPG Shareholders hereunder to consummate the
transactions contemplated by this Agreement are expressly subject to the
satisfaction of each of the further conditions set forth below, any or all of
which may be waived by the WPG Shareholders in whole or in part without prior
notice; provided, however, that no such waiver of a condition shall constitute a
waiver by the WPG Shareholders of any other condition or of any of their rights
or remedies, at law or in equity, if IBNL shall be in default or breach of any
of its representations, warranties or covenants under this Agreement:
(a) IBNL shall have performed the agreements and covenants required to
be performed by them under this Agreement prior to the Closing, there shall have
been no material adverse change in the condition (financial or otherwise),
assets, liabilities, earnings or business of IBNL since the date hereof, and the
representations and warranties of IBNL contained herein shall, except as
contemplated or permitted by this Agreement, be true in all material respects on
and as of the date of Closing as if made on and as of such date;
(b) IBNL shall have executed and delivered an Employment Agreement to
each of Messrs. XxXxxxxxxxx, Xxxxxxx and Xxxxxxx, dated as of June 16, 1998, in
the forms thereof attached hereto as Exhibits C-1, C-2 and C-3, respectively;
and
(c) IBNL shall have executed and delivered an Option Agreement between
IBNL and DX3, Inc. to the WPG Shareholders, dated as of June 10, 1998, in the
forms thereof attached hereto as Exhibit D.
6.4 The obligation of IBNL to consummate the transactions contemplated
by this Agreement is expressly subject to the further conditions set forth
below:
7
(a) The WPG Shareholders and WPG shall have performed the agreements
and covenants required to be performed by them under this Agreement prior to the
Closing, there shall have been no material adverse change in the condition
(financial or otherwise), assets, liabilities, earnings or business of the WPG
since the date hereof, and the representations and warranties of the WPG
Shareholders contained herein shall, except as contemplated or permitted by this
Agreement, be true in all material respects on and as of the date of Closing as
if made on and as of such date;
(b) Each of the current officers and directors of WPG, except
XxXxxxxxxxx, shall have resigned all of their respective offices of WPG,
effective as of the Closing Date, electing the following individuals to the
Board of Directors of WPG:
Xxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. XxXxxxxxxxx
ARTICLE 7
7.1 IBNL and the WPG Shareholders shall each pay all of their own
respective taxes, attorneys' fees and other costs and expenses payable in
connection with or as a result of the transactions contemplated hereby and the
performance and compliance with all agreements and conditions contained in this
Agreement respectively to be performed or observed by each of them.
7.2 The respective representations and warranties contained herein and
in any other document or instrument delivered by or on behalf of IBNL and the
WPG Shareholders shall survive the Closing. Nothing contained in this Section
7.2 shall in any way affect any obligations of any party under this Agreement
that are to be performed, in whole or in part, at any time after the Closing,
nor shall it prevent or preclude any party from pursuing any and all available
remedies at law or in equity for actual fraud in the event that, prior to the
Closing, any other party had actual knowledge of any material breach of any of
its representations and warranties herein but failed to disclose to or actively
concealed such knowledge prior to the Closing from the other party(s) to whom
the representations and warranties were made.
ARTICLE 8
8.1 Each of the parties hereto shall execute and deliver such other and
further documents and instruments, and take such other and further actions, as
may be reasonably requested of them for the implementation and consummation of
this Agreement and the transactions herein contemplated.
8.2 This Agreement shall be binding upon and inure to the benefit of
the parties hereto, and the heirs, personal representatives, successors and
assigns of all of them, but shall not confer, expressly or by implication, any
rights or remedies upon any other party.
8.3 This Agreement is made and shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
California.
8.4 All notices, requests or demands and other communications hereunder
must be in writing and shall be deemed to have been duly made if personally
delivered or sent by registered or certified mail, return receipt requested
(first-class, postage prepaid), to the parties as follows:
(a) If to IBNL, to:
Interactive Buyers Network International, Ltd.
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
With copies to :
Xxxxxx X. Xxxx, Esq.
Law Offices of Xxxxxx X. Xxxx
00000 Xxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
(b) If to any of the WPG Shareholders, to:
Xxxxxx X. XxXxxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000-0000
Any party hereto may change its address by written notice to the other
party given in accordance with this Section 8.4.
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8.5 This Agreement and the exhibits attached hereto contain the entire
agreement between the parties and supersede all prior agreements, understandings
and writings between the parties with respect to the subject matter hereof and
thereof. Each party hereto acknowledges that no representations, inducements,
promises or agreements, oral or otherwise, have been made by any party, or
anyone acting with authority on behalf of any party, which are not embodied
herein or in an exhibit hereto, and that no other agreement, statement or
promise may be relied upon or shall be valid or binding. Neither this Agreement
nor any term hereof may be changed, waived, discharged or terminated orally.
This Agreement may be amended or any term hereof may be changed, waived,
discharged or terminated by an agreement in writing signed by all parties
hereto. The parties understand and agree that further and mutual revisions to
this agreement are contemplated and the final version of this agreement will
incorporate the changes made herein and will supercede this agreement and will
be effective as the date of this agreement.
8.6 Prior to the Closing, neither the execution of this Agreement nor
the performance of any provision contained herein shall cause any party hereto
to be or become liable in any respect for the operations of the business of any
other party, or the condition of property owned by any other party, for
compliance with any applicable laws, requirements, or regulations of, or taxes,
assessments or other charges now or hereafter due to any governmental authority,
or for any other charges or expenses whatsoever pertaining to the conduct of the
business or the ownership, title, possession, use, or occupancy of any other
party.
8.7 The captions and headings used herein are for convenience only and
shall not be construed as a part of this Agreement.
8.8 In the event of any litigation between the parties hereto, the
non-prevailing party shall pay the reasonable expenses, including the attorneys'
fees, of the prevailing party in connection therewith.
8.9 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which taken together shall
constitute but one and the same document. For purposes of executing this
Agreement, a document signed and transmitted by facsimile machine or telecopier
is to be treated as an original document.
8.10 If any term or provision of this Agreement shall to any extent be
invalid or unenforceable, the remainder of this Agreement shall be unaffected
thereby and shall remain in full force and effect.
8.11 Each party has participated fully in the review and revision of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
INTERACTIVE BUYERS NETWORK
INTERNATIONAL, LTD.
By: /S/ Xxxxxx X. XxXxxxxxx
------------------------
Xxxxxx X. XxXxxxxxx, President
"WPG Shareholders"
/S/ Xxxxxx X. XxXxxxxxxxx /S/ Xxxxxx Xxxxxxx
------------------------------ ------------------------------
Xxxxxx X. XxXxxxxxxxx Xxxxxx Xxxxxxx
375,000 shares of WPG Stock 250,000 shares of WPG Stock
/S/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx
375,000 shares of WPG Stock
9
EXHIBIT A
IBNL'S MATERIAL ADVERSE CHANGES
For the four months ended May 31, 1998, the Company has lost approximately
$400,000 and the Notes payable by the Company have increased by approximately
the same amount
Full dilution at time of closing if all options, warrants and convertible
notes are exercised is approximately an additional Two Million Four Hundred
Thousand (2,400,000) shares.
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EXHIBIT B
WPG's PROPERTIES
All proprietary systems and programs, computer technology, or other
intellectual property developed or in development by WPG, or by others for its
benefit, shall become the property of IBNL whether now owned by WPG or the WPG
Shareholders. Any intellectual property relating to work done by WPG, or others
under WPG direction, for Virtual Source, Inc. or Interactive Buyers Network
International, Ltd., and all intellectual property relating to Base Publisher or
other products developed for commercialization by WPG, or needed for support, or
for WPG business infrastructure, or work in progress for other clients are also
included.
Due to the timeliness of this contract all cash in the WPG corporate checking
account balance as of June 12, 1998 shall be transferred to DX3, Inc. and are
not part of this stock transfer Stock holdings in the Prudential Securities
accounts shall be transferred in their entirety to DX3, Inc. as soon as
possible and is not part of this stock transfer. A new computer purchased and
installed on behalf of WPG is not part of this stock transfer and will be
reimbursed by IBNL to DX3 These three foregoing items are not to be construed
as part of WPG assets or deemed to be part of this contract.
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Resignations From XXX.xxx, Inc. of Xxxxxx Xxxxxxx and Xxxxx X. Xxxxxxx
Election of Xxxxxx X. XxXxxxxxx and Xxxxxx X. Xxxxx
I, Xxxxxx X. Xxxxxxx, effective immediately, hereby resign from all of my
offices and as a director of Xxx.xxx, Inc.
------------------------- Dated:__________________
Xxxxxx X. Xxxxxxx
I, Xxxxx X. Xxxxxxx, effective immediately, hereby resign from all of my
offices and as a director of Xxx.xxx, Inc.
------------------------- Dated:__________________
Xxxxx X. Xxxxxxx
I, Xxxxxx X. XxXxxxxxxxx, as the sole officer and director of Xxx.xxx,
Inc., do hereby accept the resignations of Xxxxx X. Xxxxxxx and Xxxxxx Xxxxxxx
and elect as their replacements on the Board of Directors, the following
persons:
Xxxxxx X. Xxxxx
Xxxxxx X. XxXxxxxxx
------------------------- Dated:__________________
Xxxxxx X. XxXxxxxxxxx
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