\n1. Sale and Delivery of the Assets to be Sold; Release………………………………..2
\n 1.1 Delivery of the Assets to be Sold………………………………………..2
\n 1.2 Further Assurances……………………………………………………..4
\n 1.3 Purchase Price…………………………………………………………4
\n 1.4 Assumption of Liabilities……………………………………………….4
\n 1.5 The Closing……………………………………………………………4
\n 1.6 General Procedure………………………………………………………5<\/p>\n2. Representations of the Seller……………………………………………………5
\n 2.1 Organization and Standing……………………………………………….5
\n 2.2 Authority for Agreement; No Conflict……………………………………..5
\n 2.3 Governmental Consents…………………………………………………..6
\n 2.4 Ownership of the Assets to be Sold……………………………………….6
\n 2.5 Intellectual Property…………………………………………………..6
\n 2.6 Tangible Properties…………………………………………………….7
\n 2.7 Contracts and Commitments……………………………………………….8
\n 2.8 Litigation…………………………………………………………….9
\n 2.9 Employees and Consultants……………………………………………….9
\n 2.10 Disclosures……………………………………………………………9
\n 2.11 Investment…………………………………………………………….9
\n 2.12 Experience…………………………………………………………….9<\/p>\n
3. Representations of the Parent and Buyer………………………………………….10
\n 3.1 Organization and Standing………………………………………………10
\n 3.2 Authority for Agreement; No Conflict…………………………………….10
\n 3.3 Governmental Consents………………………………………………….11
\n 3.4 Capitalization………………………………………………………..11
\n 3.5 Securityholder Lists and Agreements……………………………………..12
\n 3.6 Issuance of Shares…………………………………………………….12
\n 3.8 Absence of Undisclosed Liabilities………………………………………12
\n 3.9 Ownership of Assets……………………………………………………12
\n 3.10 Intellectual Property………………………………………………….12
\n 3.11 Tangible Properties……………………………………………………13
\n 3.13 Taxes………………………………………………………………..13
\n 3.14 Litigation……………………………………………………………13
\n 3.15 Compliance……………………………………………………………14
\n 3.16 Permits………………………………………………………………14
\n 3.17 Environmental Matters………………………………………………….14
\n 3.18 Insurance…………………………………………………………….15
\n 3.19 Employees and Consultants………………………………………………15
\n 3.20 ERISA………………………………………………………………..15
\n 3.21 Year 2000 Compliance…………………………………………………..15
\n 3.22 Subsidiaries, Etc……………………………………………………..15<\/p>\n
i<\/p>\n
4. Access to Information; Public Announcements………………………………………15
\n 4.1 Access to Management, Properties and Records……………………………..15
\n 4.2 Confidentiality……………………………………………………….15
\n 4.3 Public Announcements…………………………………………………..16<\/p>\n
5. Pre-Closing Covenants………………………………………………………….16
\n 5.1 Conduct of Business……………………………………………………16
\n 5.2 Absence of Material Changes…………………………………………….16
\n 5.3 Taxes………………………………………………………………..17<\/p>\n
6.1 Conditions to the Obligations of the Buyer……………………………………….17
\n 6.1 Consents; Absence of Legal Proceedings…………………………………..17
\n 6.2 Accuracy of Representations and Warranties……………………………….17
\n 6.3 Performance…………………………………………………………..17
\n 6.4 Compliance Certificates………………………………………………..18
\n 6.5 Certificates and Documents……………………………………………..18<\/p>\n
7. Condition to the Obligations of the Seller……………………………………….19
\n 7.1 Consents; Absence of Legal Proceedings…………………………………..19
\n 7.2 Accuracy of Representations and Warranties……………………………….19
\n 7.3 Performance…………………………………………………………..19
\n 7.4 Compliance Certificates………………………………………………..19
\n 7.5 Certificates and Documents……………………………………………..20<\/p>\n
8. Transfer of Shares…………………………………………………………….21
\n 8.1 Restricted Shares……………………………………………………..21
\n 8.2 Requirements for Transfer………………………………………………21
\n 8.3 Legend……………………………………………………………….21<\/p>\n
9. Indemnification……………………………………………………………….21
\n 9.1 By the Seller…………………………………………………………21
\n 9.2 By the Parent and the Buyer…………………………………………….22
\n 9.3 Claims for Indemnification……………………………………………..22
\n 9.4 Defense by Indemnifying Party…………………………………………..23
\n 9.5 Payment of Indemnification Obligation……………………………………23
\n 9.6 Survival of Representations; Claims for Indemnification……………………23
\n 9.7 Limitations…………………………………………………………..23<\/p>\n
10. Post-Closing Agreements………………………………………………………..24
\n 10.1 Proprietary Information………………………………………………..24
\n 10.2 Non-Competition Agreement………………………………………………24
\n 10.3 Cooperation in Litigation………………………………………………24
\n 10.4 Transition……………………………………………………………25
\n 10.5 Insurance…………………………………………………………….25
\n 10.7 Employee Stock Options…………………………………………………25
\n Stockholders Meeting…………………………………………………………..25
\n Employees…………………………………………………………………….25<\/p>\n
ii<\/p>\n
11. Termination of Agreement……………………………………………………….25
\n 11.1 Termination by Lapse of Time……………………………………………25
\n 11.2 Termination by Agreement of the Parties………………………………….26
\n 11.3 Effect of Termination………………………………………………….26<\/p>\n
12. Transfer Taxes, Governmental Fees and Charges; Certain Income Taxes…………………26<\/p>\n
13. Other Provisions………………………………………………………………26
\n 13.1 Successors and Assigns…………………………………………………26
\n 13.2 Expenses……………………………………………………………..26
\n 13.3 Brokers………………………………………………………………27
\n 13.4 Severability………………………………………………………….27
\n 13.5 Specific Performance…………………………………………………..27
\n 13.6 Governing Law…………………………………………………………27
\n 13.7 Notices………………………………………………………………27
\n 13.8 Complete Agreement…………………………………………………….28
\n 13.9 Amendments and Waivers…………………………………………………28
\n 13.10 Pronouns……………………………………………………………..29
\n 13.11 Counterparts; Facsimile Signatures………………………………………29
\n 13.12 Section Headings………………………………………………………29
\n<\/c><\/s><\/caption>\n<\/table>\n
iii<\/p>\n
Exhibits
\nA-1 – List of Intangible Properties
\nA-2 – List of Tangible Properties
\nA-3 – List of Assumed Contracts and Assumed Liabilities
\nA-4 – July 4, 1999 Agreement
\nA-5 – Seller Consulting Agreement
\nA-6 – Parent Consulting Agreement
\nA-7 – Annex I to November 26, 1999 Agreement
\nB – Instrument of Assumption of Liabilities
\nC – Bill of Sale
\nD-1 – Seller’s Disclosure Schedule
\nD-2 – Buyer’s Disclosure Schedule
\nE-1 – Form of Seller’s Non-Disclosure of Proprietary Information Agreement
\nE-2 – Form of Seller’s Non-Competition and Non-Solicitation Agreement
\nF – Certificate of Amendment to the Buyer’s Certificate of Incorporation
\nG – Software License
\nH – Corporate Services Agreement
\nI – Internet Services Agreement
\nJ – Share Escrow Agreement<\/p>\n
iv<\/p>\n
ASSET PURCHASE AGREEMENT<\/p>\n
Agreement made as of December 29, 1999, among eliance Corporation, a
\nDelaware corporation with its principal office at 7800 Equitable Drive, Suite
\n250, Minneapolis, MN 55344 (the “Seller”), Webhelp.com Inc., a Delaware
\ncorporation formerly known as BlueSky Ventures Inc. with its principal office at
\nOne Dundas Street West, Suite 2500, Toronto, Ontario M5G 1Z3 (the “Parent”), and
\niSpoke.com Inc., a Delaware corporation and a wholly owned subsidiary of Parent
\nwith its principal office at, One Dundas Street West, Suite 2500, Toronto,
\nOntario M5G 1Z3 (the “Buyer”).<\/p>\n
PRELIMINARY STATEMENT<\/p>\n
WHEREAS, Seller and Parent, deeming it to be advisable and in the best
\ninterests of both companies to combine their internet operations and technology,
\nincluding Seller’s eBus transaction engine and Parent’s system architecture for
\nits web site, Webhelp.com, and expertise in the operation thereof, and to
\nthereby create valuable synergies, entered into an agreement on July 4, 1999,
\npursuant to which Parent was to acquire common stock of Seller in exchange for
\nParent’s contribution of certain assets and the employment of Parent’s
\nstockholders, Kerry Adler (“Adler”), Laura Hantho (“Hantho”) and Hugh Cumming
\n(“Cumming”), with Seller (the “July 4, 1999 Agreement”);<\/p>\n
WHEREAS, Adler, Hantho and Cumming resigned from their employment with
\nSeller effective November 21, 1999;<\/p>\n
WHEREAS, Seller and Parent, deeming it to be advisable and in the best
\ninterests of both companies to restructure the transaction set forth in the July
\n4, 1999 Agreement, entered into an agreement on November 29, 1999, pursuant to
\nwhich Seller was to acquire Common Stock, $.01 par value (“Parent Common
\nStock”), of Parent, in exchange for Seller’s contribution of certain assets
\nwhich were to be used with Parent’s Webhelp.com web site under the July 4, 1999
\nAgreement and for other consideration, including Seller’s licensing of the eBus
\ntransaction engine to the Buyer, certain services to be provided to Parent and
\nParent’s agreement to employ Adler, Hantho and Cumming (“November 29, 1999
\nAgreement”);<\/p>\n
WHEREAS, Seller and Parent have deemed it to be advisable and in the
\nbest interests of both companies to restructure the transaction set forth in the
\nNovember 29, 1999 Agreement in order to remove the liens on certain hardware and
\nother properties to be transferred by Seller to Parent and for other reasons;
\nand<\/p>\n
WHEREAS, the Buyer desires to purchase, and the Seller desires to sell,
\ncertain assets of the Seller described herein for the consideration set forth
\nbelow and the assumption of certain of the Seller’s liabilities set forth below,
\nsubject to the terms and conditions of this Agreement.<\/p>\n
NOW, THEREFORE, in consideration of the mutual premises hereinafter set
\nforth and other good and valuable consideration, the receipt of which is hereby
\nacknowledged, the parties hereby agree as follows:<\/p>\n
1. SALE AND DELIVERY OF THE ASSETS TO BE SOLD; RELEASE<\/p>\n
1.1 (a) Delivery of the Assets to be Sold<\/p>\n
Subject to and upon the terms and conditions of this
\nAgreement, at the closing of the transactions contemplated by this Agreement
\n(the “Closing”), the Seller shall sell, transfer, convey, assign and deliver to
\nthe Buyer and the Buyer shall purchase and acquire from the Seller, all of
\nSeller’s right, title and interest, as of the date of Closing, in and to all of
\nthe assets of Seller identified below, free and clear of all Encumbrances (as
\ndefined in Section 2.4):<\/p>\n
(i) All fixtures, furniture, equipment, computer hardware
\nand tangible embodiments of computer software and other tangible property set
\nforth on EXHIBIT A-2 attached hereto and all of such property located at Suite
\n2500, One Dundas Street West, Toronto, Ontario (collectively, the “Tangible
\nProperties”);<\/p>\n
(ii) All rights (collectively, the “Contract Rights”) of
\nthe Seller under the contracts, agreements, leases, licenses and other
\ninstruments set forth on EXHIBIT A-3 attached hereto, the “face contracts” for
\nthe Webhelp.com site and the lease for Suite 2500, One Dundas Street West,
\nToronto, Ontario (collectively, the “Assumed Contracts”);<\/p>\n
(iii) The name and URL “webhelp.com” or any combination of
\nwords in which the name “webhelp.com” or “webhelp” appears or any rights
\nassociated with such name or any right to use such name in all jurisdictions in
\nwhich Seller either currently uses any such name or has any right to use any
\nsuch name; and<\/p>\n
(iv) The trademarks “webhelpme”, “webhelpme buy”,
\n“webhelpme sell” and “webhelpme shop.”<\/p>\n
The Tangible Properties, Contract Rights and other assets
\nand rights described in this paragraph (a) shall be referred to collectively as
\nthe “Assets to be Sold.”<\/p>\n
(b) RELEASES<\/p>\n
(i) Seller, on behalf of itself and each of its directors
\nor any their respective successors or assigns, or any heirs, executors or
\nadministrators of any of the foregoing persons, on behalf of the Seller, and
\ntheir respective successors and assigns, and any heirs, executors and
\nadministrators of any of the foregoing persons (collectively, the “Releasors”),
\nin consideration of this Agreement and for other good and valuable consideration
\nreceived from Parent, receipt of which is hereby acknowledged by Seller, hereby
\nreleases Parent, Buyer and each of Parent’s current stockholders, directors,
\nofficers and employees, and their respective successors and assigns, and any
\nheirs, executors or administrators of any such persons (collectively, the
\n“Releasees”) from all claims, actions, causes of action, suits, debts, dues,
\nsums of money, accounts, covenants, contracts, controversies, agreements,
\npromises, damages, judgments, executions and demands whatsoever, in law or
\nequity (collectively, “Claims”), which (A) any Releasors, or (B) any of Seller’s
\nstockholders, officers or employees or any of their respective successors or
\nassigns, or any heirs, executors or administrators of any of the foregoing
\npersons, ever had, now has or hereafter can, shall or may have, in the case of
\nany person in<\/p>\n
2<\/p>\n
clause (B) on behalf of the Seller to the extent they can be released by the
\nSeller, against any Releasees arising out of or relating to:<\/p>\n
(x) the following agreements, copies of which are attached hereto
\n as Exhibits: (1) July 4, 1999 Agreement (Exhibit A-4), (2) the
\n agreement dated October 20, 1999 between Screaming Solutions
\n Ventures Inc. and the Seller (Exhibit A-5), (3) the agreement
\n between Screaming Solutions Ventures Inc and the Parent (Exhibit
\n A-6), and (4) the November 29, 1999 Agreement (Exhibit
\n A-7);<\/p>\n
(y) the following interests: (1) ownership of any of the Assets
\n to be Sold or the computer software components set forth in
\n Exhibit A-1, (2) any licensing fees or other amount for the eBus
\n transaction engine other than pursuant to the terms and
\n conditions set forth in the Software License, and (3) any fees or
\n other amounts for the services and space provided by Seller to
\n Buyer and Parent prior to the Closing except at expressly set
\n forth in the Corporate Services Agreement; or<\/p>\n
(z) Adler’s, Hantho’s, Cumming’s, Robert Foran’s and Dan Walter’s
\n employment with or other provision of services to Seller and the
\n termination of such employment or other provision of services,
\n including, without limitation, arising out of or relating to the
\n covenants set forth in Section 4 of the individual Employment
\n Agreements between Seller and Adler, Hantho and Cumming.<\/p>\n
(ii) Each of Parent and Buyer, on behalf of itself and
\neach of the individuals who were their stockholders, directors or officers on
\nthe day prior to the Closing Date, and their respective successors and assigns
\n(collectively, the “Seller Releasors”), in consideration of this Agreement and
\nfor other good and valuable consideration received from Seller, receipt of which
\nis hereby acknowledged by Parent and Buyer, hereby releases Seller and each of
\nSeller’s current stockholders, directors, officers and employees, and their
\nrespective successors and assigns, and any heirs, executors or administrators of
\nany such persons (collectively, the “Seller Releasees”) from all Claims which
\nany Seller Releasors ever had, now has or hereafter can, shall or may have
\nagainst any Seller Releasees arising out of or relating to:<\/p>\n
(x) the following agreements, copies of which are attached hereto
\n as Exhibits: (1) July 4, 1999 Agreement (Exhibit A-4), (2) Seller
\n Consulting Agreement (Exhibit A-5), (3) Parent Consulting
\n Agreement (Exhibit A-6), and (4) the November 26, 1999 Agreement
\n (Exhibit A-7); or<\/p>\n
(y) Adler’s, Hantho’s, Cumming’s, Robert Foran’s and Dan Walter’s
\n employment with or other provision of services to Seller and the
\n termination of such employment or other provision of services.<\/p>\n
The releases set forth in this Section 1.1(b) does not apply to
\nany claims, actions, causes of action, suits, debts, dues, sums of money,
\naccounts, covenants, contracts, controversies, agreements, promises, damages,
\njudgments, executions and demands whatsoever, in law or equity, which arise out
\nof or relate to events, acts or occurrences after the date of this Agreement.
\nThe release set forth in Section 1.1(b)(ii) shall not apply to any claims for
\nindemnification, contribution or advancement of expenses that the Releasors
\nhave, whether at law, by contract or <\/p>\n
3<\/p>\n
pursuant to the Seller’s or its subsidiary’s certificate of incorporation or
\nby-laws, in respect of Claims by individuals or entities who are not Seller
\nReleasees.<\/p>\n
1.2 FURTHER ASSURANCES. At any time and from time to time after the
\nClosing, at the Buyer’s reasonable request and without further consideration,
\nthe Seller shall promptly execute and deliver such instruments of sale,
\ntransfer, conveyance, assignment and confirmation, and take such other action,
\nas the Buyer may reasonably request to more effectively transfer, convey and
\nassign all of the Assets to be Sold, to put the Buyer in actual possession and
\noperating control thereof, to assist the Buyer in exercising all rights with
\nrespect thereto and to carry out the purpose and intent of this Agreement.<\/p>\n
1.3 (a) PURCHASE PRICE. The purchase price for the Assets to be Sold
\n(the “Purchase Price”) shall consist of (i) cash in the amount of $4,500,000
\npayable by wire transfer or other immediately available funds and (ii) 8,500,000
\nshares (the “Shares”) of the Parent’s Common Stock, $0.01 par value (the “Parent
\nCommon Stock”), free and clear of all Encumbrances of any kind; 3,000,000 shares
\nof Parent Common Stock shall be delivered to the Seller at the Closing and
\n5,500,000 shares of Parent Common Stock shall be delivered into the Escrow
\nAccount (as defined in the Escrow Agreement) and released in accordance with the
\nprovisions of the Escrow Agreement by and among Parent, Seller, Buyer and
\ncertain stockholders of Parent in the form of Exhibit J hereto (the “Escrow
\nAgreement”). The Shares shall constitute 17% of all shares of Parent Common
\nStock issued and outstanding, on a fully diluted basis (after giving effect to
\nconversion of the outstanding Series A Convertible Preferred Stock of Parent and
\na stock option pool equal to 5% of all such shares on a fully diluted basis),
\nimmediately following the Closing.<\/p>\n
(b) ADJUSTMENT TO PURCHASE PRICE. In the event that the Seller is
\nunable to transfer to the Buyer at the Closing any of the Assets to be Sold free
\nand clear of all Encumbrances, at the option of the Buyer, the cash portion of
\nthe Purchase Price to be delivered at the Closing shall be reduced in an
\naggregate amount equal to the stated value of such encumbered assets as set
\nforth on Exhibits A-2 or A-3, as the case may be and such assets shall not be
\ndeemed to be Assets to be Sold.<\/p>\n
1.4 ASSUMPTION OF LIABILITIES.<\/p>\n
(a) The Buyer will execute and deliver to the Seller an Instrument
\nof Assumption of Liabilities in the form attached hereto as EXHIBIT B, pursuant
\nto which it shall assume and agree to perform, pay and discharge all obligations
\nand liabilities arising under the Assumed Contracts from and after the Closing
\nDate (collectively, the “Assumed Liabilities”). At the Closing, the Buyer shall
\ndeliver such Instrument of Assumption of Liabilities to the Seller.<\/p>\n
(b) The Buyer shall not assume or agree to perform, pay or
\ndischarge, and the Seller shall remain unconditionally liable for, all
\nobligations, liabilities or commitments, fixed or contingent, of the Seller
\nother than the Assumed Liabilities. <\/p>\n
1.5 . The Closing shall take place at the offices of Dorsey & Whitney LLP, 220 South Sixth Street, Minneapolis, Minnesota 55402, on the second
\nbusiness day following the satisfaction of the conditions set forth in Articles
\n6 and 7 or on such other date as is <\/p>\n
4<\/p>\n
mutually agreeable to the Parent and the Seller (the “Closing Date”). The
\ntransfer of the Assets to be Sold by the Seller to the Buyer shall be deemed to
\noccur at 9:00 a.m., Minneapolis time, on the Closing Date.<\/p>\n
1.6 GENERAL PROCEDURE. At the Closing, each party shall deliver to the
\nparty entitled to receipt thereof the documents required to be delivered
\npursuant to Sections 6 and 7 hereof and such other documents, instruments and
\nmaterials (or complete and accurate copies thereof, where appropriate) as may be
\nreasonably required in order to effectuate the intent and provisions of this
\nAgreement, and all such documents, instruments and materials shall be
\nsatisfactory in form and substance to counsel for the receiving party. The
\nconveyance, transfer, assignment and delivery of the Assets to be Sold shall be
\neffected by Seller’s execution and delivery to Buyer of a bill of sale
\nsubstantially in the form attached hereto as EXHIBIT C (the “Bill of Sale”) and
\nsuch other instruments of conveyance, transfer, assignment and delivery as Buyer
\nshall reasonably request to cause Seller to transfer, convey, assign and deliver
\nthe Assets to be Sold to Buyer.<\/p>\n
2. REPRESENTATIONS OF THE SELLER<\/p>\n
Except as disclosed by the Seller in its disclosure schedule contained
\nin EXHIBIT D-1 hereto, the Seller hereby represents and warrants to the Parent
\nand the Buyer that the following statements are true, complete and correct. The
\nSeller’s disclosures contained in EXHIBIT D-1 shall be arranged in paragraphs
\ncorresponding to the numbered and lettered paragraphs contained in this Section
\n2, and the disclosures in any paragraph of EXHIBIT D-1 shall qualify only the
\ncorresponding paragraph of this Section 2, unless otherwise specified.<\/p>\n
2.1 ORGANIZATION AND STANDING. The Seller is a corporation duly
\norganized, validly existing and in good standing under the laws of the State of
\nDelaware and has full corporate power and authority to own and lease its
\nproperties and assets and to conduct its business as presently conducted and as
\nproposed to be conducted by it and to enter into and perform this Agreement and
\nall other agreements required to be executed by the Seller at or prior to the
\nClosing pursuant to Section 6.5 (the “Seller’s Ancillary Agreements”) and
\npursuant to the other provisions of this Agreement and to carry out the
\ntransactions contemplated by this Agreement and the Seller’s Ancillary
\nAgreements. The Seller is duly qualified to do business as a foreign corporation
\nand is in good standing in every jurisdiction in which the failure so to qualify
\nwould have a material adverse effect on the business, prospects, assets or
\ncondition (financial or otherwise) of the Seller. The Seller has made available
\nto the Buyer true and complete copies of its Certificate of Incorporation and
\nBy-Laws, each as amended to date and presently in effect.<\/p>\n
2.2 AUTHORITY FOR AGREEMENT; NO CONFLICT. The execution, delivery and
\nperformance by the Seller of this Agreement and the Seller’s Ancillary
\nAgreements, and the consummation by the Seller of the transactions contemplated
\nhereby and thereby, have been duly authorized by all necessary corporate action.
\nThis Agreement has been, and the Seller’s Ancillary Agreements when executed at
\nthe Closing will be, duly executed and delivered by the Seller and constitute
\nvalid and binding obligations of the Seller enforceable in accordance with their
\nrespective terms, except as such enforcement may be limited by applicable
\nbankruptcy, insolvency, reorganization, moratorium or other laws of general
\napplication affecting enforcement of creditors’ rights or by general principles
\nof equity. The execution of and performance of the transactions contemplated by
\nthis Agreement and the Seller’s Ancillary Agreements and compliance with their
\nrespective <\/p>\n
5<\/p>\n
provisions by the Seller will not (a) conflict with or violate any provision of
\nthe Certificate of Incorporation or By-Laws of the Seller, each as amended to
\ndate, (b) conflict with, result in a breach of, constitute (with or without due
\nnotice or lapse of time or both) a default under, result in the acceleration of,
\ncreate in any party the right to accelerate, terminate, modify or cancel, or
\nrequire any notice, consent or waiver under, any material contract, lease,
\nsublease, license, sublicense, franchise, permit, indenture, agreement or
\nmortgage for borrowed money, instrument of indebtedness, document creating or
\npertaining to an Encumbrance (as defined in Section 2.4 below) or other
\narrangement to which the Seller is a party or by which the Seller is bound or to
\nwhich its assets are subject, (c) result in the imposition of any Encumbrance
\nupon any Assets to be Sold or (d) violate any order, writ, injunction, decree,
\nstatute, rule or regulation applicable to the Seller or any of the Assets to be
\nSold.<\/p>\n
2.3 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
\nof, or registration, qualification, designation, declaration or filing with, any
\ncourt, arbitrational tribunal, administrative agency or commission or other
\ngovernmental or regulatory authority or agency (each of the foregoing is
\nhereafter referred to as a “Governmental Entity”) is required on the part of the
\nSeller in connection with the execution and delivery of this Agreement or the
\nSeller’s Ancillary Agreements or the other transactions to be consummated at the
\nClosing, as contemplated by this Agreement and the Seller’s Ancillary
\nAgreements, except such filings as shall have been made prior to and shall be
\neffective on and as of the Closing, all of which filings are specified in
\nEXHIBIT D-1.<\/p>\n
2.4 OWNERSHIP OF THE ASSETS TO BE SOLD. SECTION 2.4(I) of EXHIBIT D-1
\nsets forth a list of all claims, liabilities, liens, mortgages, security
\ninterests, pledges, charges, encumbrances and equities of any kind materially
\nand adversely affecting the Assets to be Sold (collectively, the
\n“Encumbrances”). The Seller is, and at the Closing will be, the true and lawful
\nowner of or have a valid lease, license or right to use the Assets to be Sold,
\nand at the Closing will have the right to sell and transfer to the Buyer good
\nand marketable title to the Assets to be Sold owned by the Seller , whether
\narising by contract or by operation of law, free and clear of all Encumbrances
\nof any kind, except for (a) liens for taxes not yet due and payable or (b) such
\nimperfections of title, easements, mortgages or other Encumbrances, if any, as
\nare not, individually or in the aggregate, substantial in character, amount or
\nextent and do not materially detract from the value, or interfere with the
\npresent use, of the property subject thereto or affected thereby, or otherwise
\nmaterially impair business operations. The delivery to the Buyer of the
\ninstruments of transfer of ownership contemplated by this Agreement will vest
\ngood and marketable title to the Assets to be Sold owned by the Seller in the
\nBuyer, free and clear of all Encumbrances.<\/p>\n
2.5 INTELLECTUAL PROPERTY.<\/p>\n
(a) The Seller owns, free and clear of all Encumbrances, or has the
\nvalid right to use all Intellectual Property (as defined in this Section 2.5)
\nincluded as part of the Assets to be Sold. No third party (other than licensors
\nof software that is generally commercially available, licensors of Intellectual
\nProperty under the <\/p>\n
6<\/p>\n
agreements disclosed pursuant to paragraph (b) below and non-exclusive licensees
\nof the Intellectual Property in the ordinary course of the Seller’s business)
\nhas any rights (other than patent rights) to any of the Intellectual Property
\nincluded as part of the Assets to be Sold. To the Seller’s knowledge, no third
\nparty (other than licensors of software that is generally commercially
\navailable, licensors of Intellectual Property under the agreements disclosed
\npursuant to paragraph (b) below and non-exclusive licensees of the Intellectual
\nProperty in the ordinary course of the Seller’s business) has any patent rights
\nowned or used by the Seller. To the Seller’s knowledge, no third party is
\ninfringing, violating or misappropriating any of the Intellectual Property that
\nthe Seller owns that is included as part of the Assets to be Sold. For purposes
\nof this Agreement, “Intellectual Property” means all (i) patents, patent
\napplications, patent disclosures and all related continuation,
\ncontinuation-in-part, divisional, reissue, reexamination, utility model,
\ncertificate of invention and design patents, patent applications, registrations
\nand applications for registrations, (ii) trademarks, service marks, trade dress,
\nlogos, trade names and corporate names and registrations and applications for
\nregistration thereof, (iii) copyrights and registrations and applications for
\nregistration thereof, (iv) computer software (in both source code and object
\ncode form), data and documentation, and (v) trade secrets, whether patentable or
\nunpatentable and whether or not reduced to practice, know-how and copyrightable
\nworks.<\/p>\n
(b) EXHIBIT D-1 hereto identifies each agreement with a third party
\npursuant to which the Seller obtains rights to Intellectual Property included as
\npart of the Assets to be Sold (other than software that is generally
\ncommercially available) that is owned by a party other than the Seller. Other
\nthan license fees for software that is generally commercially available, the
\nSeller is not obligated to pay any royalties or other compensation to any third
\nparty in respect of its ownership, use or license of any of its Intellectual
\nProperty included as part of the Assets to be Sold. <\/p>\n
(c) The Seller has taken reasonable precautions (i) to protect its
\nrights in the Intellectual Property and (ii) to maintain the confidentiality of
\nits trade secrets, know-how and other confidential intellectual property, and to
\nthe Seller’s knowledge, there have been no acts or omissions (other than those
\nmade based on reasonable, good faith business decisions) by the officers,
\ndirectors and employees of the Seller the result of which would be to materially
\ncompromise the rights of the Seller to apply for or enforce appropriate legal
\nprotection of the Intellectual Property. <\/p>\n
(d) Notwithstanding the foregoing, no action or condition arising
\nout of the activities of any stockholders of the Parent since they became
\nemployees of the Seller within the scope of their employment shall give rise to
\na breach of any of the representations or warranties contained in Sections 2.4
\nor 2.5. <\/p>\n
2.6 TANGIBLE PROPERTIES. All of the Seller’s Tangible Properties
\nincluded as part of the Assets to be Sold are suitable for the uses in which
\nthey are currently employed, are in good operating condition and are free from
\nany defects, except such minor defects as do not interfere with the conduct of
\nthe Seller’s business.<\/p>\n
2.7 CONTRACTS AND COMMITMENTS.<\/p>\n
(a) Copies of all Assumed Contracts have previously been delivered
\nor made available by the Seller to the Buyer.<\/p>\n
(b) Except as set forth in EXHIBIT D-1:<\/p>\n
7<\/p>\n
(i) The Seller is not in material breach of or default under
\nany Assumed Contract; and<\/p>\n
(ii) To the knowledge of the Seller, there is no existing
\nbreach or default by any other party to any Assumed Contract. <\/p>\n
(C) EXHIBIT D-1 lists each consent of any third party that is required
\nunder any Assumed Contract, as a result of the execution, delivery and
\nperformance of this Agreement or the consummation of the transactions
\ncontemplated hereby and, assuming receipt of such consents, the enforceability
\nof any such contract will not be affected in any adverse manner by the
\nexecution, delivery and performance of this Agreement or the consummation of the
\ntransactions contemplated hereby.<\/p>\n
(d) EXHIBIT D-1 lists and describes briefly all real property and
\npersonal property leased or subleased to the Seller and included as part of the
\nAssets to be Sold and lists the term of such lease, any extension and expansion
\noptions, and the rent payable thereunder. The Seller has delivered or made
\navailable to the Buyer correct and complete copies of the leases and subleases
\n(as amended to date) listed therein. With respect to each such lease and
\nsublease: <\/p>\n
(i) The lease or sublease is legal, valid, binding,
\nenforceable and in full force and effect;<\/p>\n
(ii) The lease or sublease will continue to be legal, valid,
\nbinding, enforceable and in full force and effect immediately following the
\nClosing in accordance with the terms thereof as in effect prior to the Closing;<\/p>\n
(iii) The Seller is not in material breach or material
\ndefault, and no event has occurred which, with notice or lapse of time, would
\nconstitute a material breach or material default by Seller or permit
\ntermination, modification, or acceleration thereunder; <\/p>\n
(iv) There are no disputes, oral agreements or forbearance
\nprograms in effect as to the lease or sublease;<\/p>\n
(v) The Seller has not assigned, transferred, conveyed,
\nmortgaged, deeded in trust or otherwise encumbered any interest in the leasehold
\nor subleasehold; <\/p>\n
(vi) All facilities leased or subleased thereunder are
\nsupplied with utilities and other services necessary for the operation of said
\nfacilities; and <\/p>\n
(vii) To the knowledge of Seller, the owner of the facility or
\npersonal property leased or subleased has good and clear record and marketable
\ntitle to the parcel of real property or such personal property, free and clear
\nof any security interest, easement, covenant or other restriction, except for
\nrecorded easements, covenants, and other restrictions which do not impair the
\nintended uses, occupancy or value of the property subject thereto. <\/p>\n
2.8 LITIGATION. There is no action, suit or proceeding, or governmental
\ninquiry or investigation, pending, or, to the Seller’s knowledge, any basis
\ntherefor or threat thereof, against <\/p>\n
8<\/p>\n
the Seller or any of the Seller’s stockholders, which questions the validity of
\nthis Agreement or the right of the Seller to enter into it or perform its
\nobligations hereunder.<\/p>\n
2.9 EMPLOYEES AND CONSULTANTS. All employees and consultants of the
\nSeller who have access to confidential or proprietary information of the Seller
\nrelated to the Assets to be Sold have executed and delivered nondisclosure
\nagreements in the form of EXHIBIT E-1 and non-competition agreements in the form
\nof EXHIBIT E-2, and all of such agreements are in full force and effect.<\/p>\n
2.10 DISCLOSURES. Neither this Agreement nor any Exhibit hereto, nor
\nany report, certificate or instrument furnished to the Buyer in connection with
\nthe transactions contemplated by this Agreement when read together, contains or
\nwill contain any untrue statement of a material fact or omits or will omit to
\nstate a material fact necessary in order to make the statements contained herein
\nor therein, in light of the circumstances under which they were made, not
\nmisleading.<\/p>\n
2.11 INVESTMENT. The Seller is acquiring the Shares for its own account
\nfor investment and not with a view to, or for sale in connection with, any
\ndistribution thereof, nor with any present intention of distributing or selling
\nthe same; and, except as contemplated by this Agreement and the Exhibits hereto,
\nthe Seller has no present or contemplated agreement, undertaking, arrangement,
\nobligation, indebtedness or commitment providing for the disposition thereof.
\nThe Seller is an “accredited investor” as defined in Rule 501(a) under the
\nSecurities Act . The Seller has not been organized, reorganized or recapitalized
\nspecifically for the purpose of acquiring the Shares. The Seller has not
\nparticipated in any general solicitation or any securities of the Parent.<\/p>\n
2.12 EXPERIENCE. The Seller has carefully reviewed the representations
\nconcerning the Parent contained in this Agreement and has made detailed inquiry
\nconcerning Parent, its business and its personnel; the officers of the Parent
\nhave made available to the Seller any and all written information which it has
\nrequested and have answered to the Seller’s satisfaction all inquiries made by
\nthe Seller; and the Seller has sufficient knowledge and experience in finance
\nand business that it is capable of evaluating the risks and merits of its
\ninvestment in the Buyer and the Seller is able financially to bear the risks
\nthereof.<\/p>\n
3. REPRESENTATIONS OF THE PARENT AND BUYER. Except as disclosed by the Parent
\nand Buyer in their disclosure schedule contained in EXHIBIT D-2 hereto, the
\nParent and the Buyer hereby jointly and severally represent and warrant to the
\nSeller that the following statements are true, complete and correct. The Parent
\nand Buyer’s disclosures contained in EXHIBIT D-2 shall be arranged in paragraphs
\ncorresponding to the numbered and lettered paragraphs contained in this Section
\n3, and the disclosures in any paragraph of EXHIBIT D-2 shall qualify only the
\ncorresponding paragraph of this Section 3, unless otherwise specified.<\/p>\n
3.1 ORGANIZATION AND STANDING. Each of the Parent and the Buyer is a
\ncorporation duly organized, validly existing and in good standing under the laws
\nof the State of Delaware and has full corporate power and authority to own and
\nlease its properties and assets and to conduct its business as presently
\nconducted and as proposed to be conducted by it and to enter into and perform
\nthis Agreement and all other agreements required to be executed by the Buyer<\/p>\n
9<\/p>\n
and\/or Parent at or prior to the Closing pursuant to Section 7.5 (the
\n“Parent\/Buyer’s Ancillary Agreements”) and to carry out the transactions
\ncontemplated by this Agreement and the Parent\/Buyer’s Ancillary Agreements. On
\nthe Closing Date, the Buyer will be duly qualified to do business as a foreign
\ncorporation and will be in good standing in the States of Minnesota and North
\nDakota and in every other jurisdiction in which the failure so to qualify would
\nhave a material adverse effect on the business, prospects, assets or condition
\n(financial or otherwise) of the Buyer or the Parent. Each of the Parent and the
\nBuyer has furnished to the Seller true and complete copies of its Certificate of
\nIncorporation and By-Laws, each as amended to date and presently in effect. Each
\nof the Parent and the Buyer has at all times complied with all provisions of its
\nCertificate of Incorporation and By-Laws and is not in default under, or in
\nviolation of, any such provision. EXHIBIT D-2 lists all affiliated entities of
\nthe Parent and Buyer, the assumed names of each such affiliated entity, and a
\ndescription of the business and operations of each. Neither the Parent nor the
\nBuyer have any predecessor entities.<\/p>\n
3.2 AUTHORITY FOR AGREEMENT; NO CONFLICT. The execution, delivery and
\nperformance by each of the Parent and the Buyer of this Agreement and the
\nParent\/Buyer’s Ancillary Agreements, and the consummation by each of the Parent
\nand the Buyer of the transactions contemplated hereby and thereby, have been
\nduly and validly authorized by all necessary corporate action. This Agreement
\nhas been, and the Parent\/Buyer’s Ancillary Agreements when executed at the
\nClosing will be, duly executed and delivered by the Parent and the Buyer and
\nconstitute valid and binding obligations of each of the Parent and the Buyer
\nenforceable in accordance with their respective terms, except as such
\nenforcement may be limited by applicable bankruptcy, insolvency, reorganization,
\nmoratorium or other laws of general application affecting enforcement of
\ncreditors’ rights or by general principles of equity. The execution of and
\nperformance of the transactions contemplated by this Agreement and the
\nParent\/Buyer’s Ancillary Agreements and compliance with their respective
\nprovisions by the Parent or the Buyer will not (a) conflict with or violate any
\nprovision of the Certificate of Incorporation or By-Laws of the Parent or the
\nBuyer, each as amended through the Closing Date, (b) conflict with, result in a
\nbreach of, constitute (with or without due notice or lapse of time or both) a
\ndefault under, result in the acceleration of, create in any party the right to
\naccelerate, terminate, modify or cancel, or require any notice, consent or
\nwaiver under, any material contract, lease, sublease, license, sublicense,
\nfranchise, permit, indenture, agreement or mortgage for borrowed money,
\ninstrument of indebtedness, Encumbrance or other arrangement to which the Parent
\nor the Buyer is a party or by which the Parent or the Buyer is bound or to which
\nits assets are subject, (c) result in the imposition of any Encumbrance upon any
\nassets of the Parent or the Buyer or (d) assuming the Seller’s representations
\nand warranties contained in Sections 2.11 and 2.12 are true and correct, violate
\nany order, writ, injunction, decree, statute, rule or regulation applicable to
\nthe Parent or the Buyer or any of its properties or assets.<\/p>\n
3.3 GOVERNMENTAL CONSENTS. Assuming the Seller’s representations and
\nwarranties contained in Sections 2.11 and 2.12 are true and correct, no consent,
\napproval, order or authorization of, or registration, qualification,
\ndesignation, declaration or filing with, any Governmental Entity is required on
\nthe part of the Parent or the Buyer in connection with the execution and
\ndelivery of this Agreement or the Parent\/Buyer’s Ancillary Agreements, the
\noffer, issuance, sale and delivery of the Shares, or the other transactions to
\nbe consummated at the Closing, as contemplated by this Agreement and the
\nParent\/Buyer’s Ancillary Agreements, except such filings as shall have been made
\nprior to and shall be effective on and as of the <\/p>\n
10<\/p>\n
Closing and such filings required to be made after the Closing under applicable
\nU.S. federal and state securities laws and Canadian Securities Laws, all of
\nwhich filings are specified in EXHIBIT D-2. Based on the representations made by
\nthe Seller in Section 2 of this Agreement, the offer and sale of the Shares will
\nbe in compliance with applicable U.S. federal and state securities laws.<\/p>\n
3.4 CAPITALIZATION. The authorized capital stock of the Parent
\n(immediately prior to the Closing, after giving effect to the filing of an
\namendment to the Parent’s Certificate of Incorporation in the form of EXHIBIT F
\nattached hereto) will consist of 55,000,000 shares of Common Stock, of which
\n24,000,000 shares are issued and outstanding, 2,500,000 shares of which have
\nbeen reserved for issuance pursuant to the Webhelp.com Inc. 1999 Long Term
\nIncentive Plan (the “Parent’s Incentive Plan”) and 8,500,000 shares of which
\nhave been reserved for issuance to the Seller pursuant to the terms of this
\nAgreement, and 16,000,000 shares of Preferred Stock, $0.01 par value per share,
\nof which 15,000,000 shares will be issued and outstanding prior to the Closing
\nand designated as Series A Convertible Preferred Stock. All of the issued and
\noutstanding shares of Common Stock and Preferred Stock have been duly authorized
\nand validly issued and are fully paid and nonassessable. Except as set forth in
\nEXHIBIT D-2 and except as provided in this Agreement or in the Parent’s
\nIncentive Plan, (i) no subscription, warrant, option, convertible security or
\nother right (contingent or otherwise) to purchase or acquire any shares of
\ncapital stock of the Parent is authorized or outstanding, (ii) the Parent has no
\nobligation (contingent or otherwise) to issue any subscription, warrant, option,
\nconvertible security or other such right or to issue or distribute to holders of
\nany shares of its capital stock any evidences of indebtedness or assets of the
\nParent, (iii) the Parent has no obligation (contingent or otherwise) to
\npurchase, redeem or otherwise acquire any shares of its capital stock or any
\ninterest therein or to pay any dividend or make any other distribution in
\nrespect thereof, and (iv) there are no outstanding or authorized stock
\nappreciation, phantom stock or similar rights with respect to the Parent.
\nAssuming the Seller’s representations and warranties contained in Sections 2.11
\nand 2.12 are true and correct, all of the issued and outstanding shares of
\ncapital stock of the Parent have been offered, issued and sold by the Parent in
\ncompliance with applicable federal and state securities laws and applicable
\nsecurities laws of any province of Canada (“Canadian Security Laws”). The Parent
\nowns, beneficially and of record, 100% of the capital stock of the Buyer free
\nand clear of any claims, liens, equities, encumbrances or other restrictions.<\/p>\n
3.5 SECURITYHOLDER LISTS AND AGREEMENTS. EXHIBIT D-2 contains a true
\nand complete list of the securityholders of the Parent, showing the number of
\nshares of Common Stock or other securities of the Parent held by each
\nstockholder as of the date of this Agreement and, in the case of options,
\nwarrants and other convertible securities, the exercise price thereof and the
\nnumber and type of securities issuable thereunder. Except as described in
\nEXHIBIT D-2, there are no agreements, written or oral, between the Parent and
\nany holders of its securities, or to the Parent’s knowledge, among any holders
\nof its securities, relating to the acquisition (including without limitation
\nrights of first refusal, antidilution or pre-emptive rights), disposition,
\nregistration under the Securities Act of 1933, as amended (the “Securities Act
\n“), or voting of the capital stock of the Parent.<\/p>\n
3.6 ISSUANCE OF SHARES. The issuance, sale and delivery of the Shares
\nhave been, or will be on or prior to the Closing, duly authorized by all
\nnecessary corporate action on the part of <\/p>\n
11<\/p>\n
the Parent, and all such shares have been duly reserved for issuance. The Shares
\nwhen so issued, sold and delivered against the stated consideration therefor in
\naccordance with the provisions of this Agreement will be duly and validly
\nissued, fully paid and nonassessable.<\/p>\n
3.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in all of
\nthe Sections of EXHIBIT D-2, the Parent does not have any material liability
\n(whether known or unknown and whether absolute or contingent), except for
\nliabilities which have arisen since the Parent’s Balance Sheet Date in the
\nordinary course of business.<\/p>\n
3.8 OWNERSHIP OF ASSETS. SECTION 3.9 of EXHIBIT D-2 sets forth a list
\nof all Encumbrances materially and adversely affecting the Parent’s assets. The
\nParent is, and at the Closing will be, the true and lawful owner of, or shall
\nhave a valid right to use, all assets used in its business. The Buyer does not
\nown any assets.<\/p>\n
3.9 INTELLECTUAL PROPERTY.<\/p>\n
(a) The Parent owns, free and clear of all Encumbrances, or has the
\nvalid right to use all Intellectual Property (as defined in Section 2.5) used by
\nit in its business as currently conducted or as currently proposed to be
\nconducted. The Buyer does not own or use any Intellectual Property. To the
\nknowledge of the Parent, no third party has any rights (other than patent
\nrights) to any of the Intellectual Property owned or used by the Parent. To the
\nParent’s knowledge, no third party has any patent rights owned by the Parent. To
\nthe Parent’s knowledge, no third party is infringing, violating or
\nmisappropriating any of the Intellectual Property that the Parent owns.<\/p>\n
(b) None of the activities or business conducted by the Parent
\ninfringes, violates or constitutes a misappropriation of any Intellectual
\nProperty of any other person or entity. The Parent has not received any
\ncomplaint, claim or notice alleging any such infringement, violation or
\nmisappropriation. <\/p>\n
(c) EXHIBIT D-2 hereto identifies all Intellectual Property used by
\nthe Parent in its business as currently conducted or currently proposed to be
\nconducted, including each (i) patent that has been issued or assigned to the
\nParent with respect to any of its Intellectual Property, (ii) pending patent
\napplication that the Parent has made with respect to any of its Intellectual
\nProperty, (iii) any copyright or trademark registration or application with
\nrespect to the Parent’s Intellectual Property, and (iv) license or other
\nagreements pursuant to which the Parent has granted any rights to any third
\nparty with respect to any of its Intellectual Property. <\/p>\n
(d) EXHIBIT D-2 hereto identifies each agreement with a third party
\npursuant to which the Parent obtains rights to Intellectual Property material to
\nthe business of the Parent (other than software that is generally commercially
\navailable) that is owned by a party other than the Parent. Other than license
\nfees for software that is generally commercially available, the Parent is not
\nobligated to pay any royalties or other compensation to any third party in
\nrespect of its ownership, use or license of any of its Intellectual Property.<\/p>\n
(e) The Parent has taken reasonable precautions (i) to protect its
\nrights in its Intellectual Property and (ii) to maintain the confidentiality of
\nits trade secrets, know-how and other confidential Intellectual Property, and to
\nthe Parent’s knowledge, there have been no acts <\/p>\n
12<\/p>\n
or omissions (other than those made based on good faith business decisions) by
\nthe officers, directors and employees of the Parent the result of which would be
\nto materially compromise the rights of the Parent to apply for or enforce
\nappropriate legal protection of the Parent’s Intellectual Property. 3.10<\/p>\n
3.10 TANGIBLE PROPERTIES.<\/p>\n
(a) Neither the Parent nor the Buyer owns any real property.<\/p>\n
(b) The Parent’s furniture, fixtures, computer hardware and
\ntangible embodiments of software, equipment and other tangible personal property
\nare suitable for the uses in which they are currently employed, are in good
\noperating condition and are free from any defects, except such minor defects as
\ndo not interfere with the conduct of the Parent’s business. <\/p>\n
3.11 TAXES. The Parent has filed or has obtained presently effective
\nextensions with respect to all federal, state, provincial, county, local and
\nforeign tax returns which are required to be filed by it, such returns, if any,
\nare true and correct in all material respects and all taxes, if any, shown
\nthereon to be due have been timely paid with exceptions not material to the
\nParent. Federal income tax returns of the Parent, if any, have not been audited
\nby the Internal Revenue Service, and no controversy with respect to taxes of any
\ntype is pending or, to the Parent’s knowledge, threatened. Neither the Parent
\nnor any of its stockholders has ever filed (a) an election pursuant to Section
\n1362 of the Code, that the Parent be taxed as an S Corporation or (b) consent
\npursuant to Section 341(f) of the Code relating to collapsible corporations.<\/p>\n
3.12 LITIGATION. There is no action, suit or proceeding pending, or, to
\nthe Parent’s knowledge, governmental inquiry or investigation threatened against
\nthe Parent, the Buyer or any of the Parent’s stockholders, which questions the
\nvalidity of this Agreement or the right of the Parent to enter into it or
\nperform its obligations hereunder, or which might result, either individually or
\nin the aggregate, in a material adverse effect on the business, prospects,
\nassets or condition (financial or otherwise) of the Parent nor is there any
\nlitigation pending, or, to the Parent’s knowledge, any basis therefor or threat
\nthereof, against the Parent or any of the Parent’s stockholders by reason of the
\npast employment relationships of any of the Parent’s stockholders, the proposed
\nactivities of the Parent, or negotiations by the Parent and\/or any of the
\nParent’s stockholders with possible investors in the Parent. The Parent is not
\nsubject to any outstanding judgment, order or decree.<\/p>\n
3.13 COMPLIANCE. Neither the Parent nor the Buyer is in violation of or
\ndefault under any law, regulation or order applicable to it, the effect of
\nwhich, individually or in the aggregate with such other violations and defaults,
\ncould reasonably be expected to have a material adverse effect on the business
\nor financial condition of its present business.<\/p>\n
3.14 PERMITS. EXHIBIT D-2 sets forth a list of all Permits from any
\nGovernmental Entity issued to or held by the Parent or Buyer. Such listed
\nPermits are the only Permits that are required for the Parent or Buyer to
\nconduct its business as presently conducted, except for those the absence of
\nwhich would not have a material adverse effect on its financial condition of its
\npresent business. Each such Permit is in full force and effect and, to the
\nknowledge of the <\/p>\n
13<\/p>\n
Parent, no suspension or cancellation of such Permit is threatened and there is
\nno reasonable basis for believing that such Permit will not be renewable upon
\nexpiration. <\/p>\n
3.15 ENVIRONMENTAL MATTERS.<\/p>\n
(a) The Parent has complied in all material respects with all
\napplicable Environmental Laws. There is no pending or, to the knowledge of the
\nParent, threatened civil or criminal litigation, written notice of violation,
\nformal administrative proceeding, or investigation, inquiry or information
\nrequest by any Governmental Entity, relating to any Environmental Law involving
\nthe Parent. For purposes of this Agreement, “Environmental Law” means (x) any
\nU.S. federal, state or local law, statute, rule or regulation or the common law
\nrelating to the protection of human health or the environment, including without
\nlimitation CERCLA (as defined below), the Resource Conservation and Recovery Act
\nof 1976, any statute, regulation or order pertaining to (i) treatment, storage,
\ndisposal, generation and transportation of industrial, toxic or hazardous
\nmaterials or substances or solid or hazardous waste; (ii) air, water and noise
\npollution; (iii) groundwater and soil contamination; (iv) the release or
\nthreatened release into the environment of industrial, toxic or hazardous
\nmaterials or substances, or solid or hazardous waste, including without
\nlimitation, emissions, discharges, injections, spills, escapes or dumping of
\npollutants, contaminants, or chemicals; (v) the protection of wild life, marine
\nlife and wetlands, including without limitation all endangered and threatened
\nspecies; (vi) storage tanks, vessels, abandoned or discarded barrels, containers
\nand other closed receptacles; (vii) health and safety of employees and other
\npersons; and (viii) manufacture, processing, use, distribution, treatment,
\nstorage, disposal, transportation or handling of pollutants, contaminants, toxic
\nor hazardous materials or substances or oil or petroleum products or solid or
\nhazardous waste or (y) any similar Canadian law. As used in this Section 2.27,
\nthe terms “release” and “environment” shall have the meaning set forth in the
\nfederal Comprehensive Environmental Response, Compensation and Liability Act of
\n1980 (“CERCLA”).<\/p>\n
(b) Neither the Parent nor the Buyer has ever owned, operated or
\ncontrolled any parcel of real property or any facility. <\/p>\n
(c) The Parent is not aware of any material environmental
\nliability of the solid and hazardous waste transporters and treatment, storage
\nand disposal facilities that have been utilized by the Parent and has not
\nundertaken any independent investigation relating to the same.<\/p>\n
3.16 INSURANCE. As of the date of this Agreement, neither the Parent
\nnor the Buyer maintains any insurance policies.<\/p>\n
3.17 EMPLOYEES AND CONSULTANTS. Neither the Parent nor the Buyer has
\never had any employees.<\/p>\n
3.18 ERISA. EXHIBIT D-2 hereto lists any employees benefit plans (as
\ndefined in Section 3(3) of ERISA) maintained by the Parent. Each of such
\nemployee benefit plans complies in all material respects with (i) all applicable
\nrequirements of ERISA and (ii) all applicable requirements of the Code.<\/p>\n
3.19 YEAR 2000 COMPLIANCE. The Parent has reviewed its operations and
\nthose of its subsidiaries, to evaluate the extent to which the business or
\noperations of the Parent or any of its <\/p>\n
14<\/p>\n
subsidiaries will be affected by the Year 2000 Problem. As a result of such
\nreview, the Parent has no reason to believe and does not believe, that the Year
\n2000 Problem will have a material adverse effect on the business or condition
\n(financial or otherwise) of the Parent.<\/p>\n
3.20 SUBSIDIARIES, ETC. Except for the Buyer, the Parent has no
\nsubsidiaries and does not own any shares of capital stock of or any interest in
\nor control, directly or indirectly, any other corporation or any partnership,
\njoint venture or other non-corporate business enterprise. The Buyer was formed
\nsolely for the purpose of engaging in the transactions contemplated by this
\nAgreement and has not engaged in any business activities or conducted any
\noperations other than in connection with the transactions contemplated by this
\nAgreement.<\/p>\n
3.21 DISCLOSURES. This Agreement and the Exhibits hereto, when read
\ntogether, do not contain any untrue statement of a material fact or omit to
\nstate a material fact necessary in order to make the statements contained herein
\nand therein, in light of the circumstances under which they were made, not
\nmisleading.<\/p>\n
4. ACCESS TO INFORMATION; PUBLIC ANNOUNCEMENTS<\/p>\n
4.1 ACCESS TO MANAGEMENT, PROPERTIES AND RECORDS. From the date of this
\nAgreement until the Closing Date, each of the Seller and the Parent shall afford
\nthe officers, attorneys, accountants and other authorized representatives of the
\nother party access to its offices, facilities, records and personnel upon
\nreasonable notice and during normal business hours so that the other party may
\nhave a reasonable opportunity to make such inquiry as the other party shall
\nreasonably need to make in connection with this Agreement.<\/p>\n
4.2 CONFIDENTIALITY. All information not concerning the Assets to be
\nSold or the Assumed Liabilities not previously disclosed to the public or
\ngenerally known to persons engaged in the respective businesses of the Seller,
\nthe Parent or the Buyer which shall have been furnished by the Seller, the
\nParent or Buyer to the other party in connection with the transactions
\ncontemplated hereby or as provided pursuant to this Section 4 shall not be
\ndisclosed (i) to any person other than their respective employees, directors,
\nattorneys, accountants or financial advisors who have been advised of the
\nprovisions of this Agreement and only for purposes of evaluating and
\neffectuating the transactions contemplated hereby or (ii) otherwise than as
\ncontemplated herein. In the event that the transactions contemplated by this
\nAgreement shall not be consummated, all such information which shall be in
\nwriting shall be returned to the party furnishing the same, including, to the
\nextent reasonably practicable, all copies or reproductions thereof which may
\nhave been prepared, and neither party shall at any time thereafter disclose to
\nthird parties, or use, directly or indirectly, for its own benefit, any such
\ninformation, written or oral, about the business of the other party hereto.
\nNotwithstanding the above, to the extent required by law (a) the Parent or Buyer
\nmay include in any Registration Statement or periodic report filed by either of
\nthem with the Securities and Exchange Commission or any state securities
\ncommission or any stock market and (b) each party may otherwise disclose, to the
\nextent reasonably advised by counsel as being required by applicable law, any
\ninformation regarding the Assets to be Sold, the Seller and\/or the terms of this
\nAgreement. If either party intends to make any such disclosure, it shall provide
\na copy to the other party prior to such disclosure and provide the other party
\nwith an opportunity to comment on such disclosure if the other party wishes to
\ndo so.<\/p>\n
15<\/p>\n
4.3 PUBLIC ANNOUNCEMENTS. Except as otherwise required by law, the
\nparties agree not to make any public announcements or other public
\ncommunications concerning this Agreement and the purchase of the Assets to be
\nSold by the Buyer without the prior written approval of the other party,
\nprovided, however, that a party making a public disclosure which it believes in
\ngood faith to be required by law shall use its best efforts to advise the other
\nparty prior to making the disclosure and provide such other party with an
\nopportunity to comment on such public disclosure if it wishes to do so.<\/p>\n
5. PRE-CLOSING COVENANTS. From and after the date hereof and until the Closing
\nDate:<\/p>\n
5.1 CONDUCT OF BUSINESS. Each of the Seller and the Parent shall
\noperate its business (except, in the case of the Seller, its business unrelated
\nto the Assets to be Sold, so long as the operation of such unrelated business
\ndoes not have or could not reasonably be expected to have an adverse effect on
\nthe Assets to be Sold) in a manner consistent with past practice. All of the
\nproperty of each party shall be used, operated, repaired and maintained in a
\nnormal business manner materially consistent with past practice.<\/p>\n
5.2 ABSENCE OF MATERIAL CHANGES. Without the prior written consent of
\nthe other parties, no party shall until the Closing:<\/p>\n
(a) Sell, assign or transfer any of its assets, except in the
\nordinary course of business (or, in the case of the Seller, a sale, assignment
\nor transfer of any assets not included as part of the Assets to be Sold, so long
\nas such sale, assignment or transfer of such unincluded assets does not have or
\ncould not reasonably be expected to have an adverse effect on the Assets to be
\nSold);<\/p>\n
(b) Mortgage, pledge, or subject any of its assets (other than, in
\nthe case of the Seller, assets not included as part of the Assets to be Sold, so
\nlong as the mortgage, pledge or encumbrance of such unrelated assets does not
\nhave or could not reasonably be expected to have an adverse effect on the Assets
\nto be Sold) to any lien, charge or any other Encumbrance (except for Permitted
\nEncumbrances and except for subsequently acquired property becoming subject to
\nEncumbrances under bank financing arrangements in effect on the date hereof);<\/p>\n
(c) Merge or consolidate with or into any corporation or other
\nentity; <\/p>\n
(d) Modify or amend any of the Assumed Contracts or Contract
\nRights; or <\/p>\n
(e) Commit or agree to do any of the foregoing. <\/p>\n
5.3 TAXES. Subject to Section 12 hereof, each of the Seller and the
\nBuyer will, on a timely basis, file all tax returns for and pay any and all
\ntaxes which shall become due or shall have accrued on account of the ownership
\nof its assets on or prior to the Closing Date (including personal property and
\nexcise taxes payable with respect to the Assets to be Sold).<\/p>\n
16<\/p>\n
6. CONDITIONS TO THE OBLIGATIONS OF THE BUYER. The obligation of the Buyer to
\npurchase the Assets to be Sold at the Closing is subject to the fulfillment, or
\nthe waiver by the Buyer, of each of the following conditions on or before the
\nClosing:<\/p>\n
6.1 CONSENTS; ASBENCE OF LEGAL PROCEEDINGS. The Seller shall have
\nobtained (and shall have provided copies thereof to the Buyer) all of the
\nwaivers, permits, consents, approvals or other authorizations, and effected all
\nof the registrations, filings and notices, which are required on the part of the
\nSeller, except for any the failure of which to obtain or effect would not have a
\nmaterial adverse effect on the Seller or on the ability of the parties to
\nconsummate the transactions contemplated by this Agreement. No legal proceeding
\nshall be pending wherein an unfavorable judgment, order, decree, stipulation or
\ninjunction would (i) prevent consummation of any of the transactions
\ncontemplated by this Agreement, (ii) cause any of the transactions contemplated
\nby this Agreement to be rescinded following consummation or (iii) have a
\nmaterial adverse effect, and no such judgment, order, decree, stipulation or
\ninjunction shall be in effect.<\/p>\n
6.2 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
\nand warranties contained in Section 2 shall be true and correct in all material
\nrespects on and as of the date of this Agreement and the Closing Date with the
\nsame effect as though made on and as of the Closing Date, except to the extent
\nsuch representations and warranties are specifically made as of a particular
\ndate or as of the date of this Agreement (in which case such representations and
\nwarranties shall be true and correct as of such date).<\/p>\n
6.3 PERFORMANCE. The Seller shall have performed and complied in all
\nmaterial respects with its agreements and covenants contained in this Agreement
\nrequired to be performed or complied with by the Seller prior to or at the
\nClosing.<\/p>\n
6.4 COMPLIANCE CERTIFICATES. The Seller shall have delivered to the
\nBuyer a certificate, executed by the Chairman of the Board of the Seller, dated
\nthe Closing Date, certifying to the fulfillment of the conditions specified in
\nSections 6.2 and 6.3 of this Agreement.<\/p>\n
6.5 CERTIFICATES AND DOCUMENTS. The Seller shall have delivered to the
\nBuyer:<\/p>\n
(a) The Bill of Sale;<\/p>\n
(b) A software license agreement, substantially in the form
\nattached hereto as EXHIBIT G (the “Software License”), duly executed by Seller;<\/p>\n
(c) A corporate service agreement, substantially in the form
\nattached hereto as EXHIBIT H (the “Corporate Services Agreement”), duly executed
\nby Seller; <\/p>\n
(d) An internet services agreement, substantially in the form
\nattached hereto as EXHIBIT I (the “Internet Services Agreement”), duly executed
\nby Seller; <\/p>\n
(e) Such assignments of patents and trademarks and other
\ninstruments of conveyance, assignment and transfer, if any, in form and
\nsubstance reasonably satisfactory to the Buyer, as are appropriate to convey,
\ntransfer and assign to, and to vest in, the Buyer or its subsidiaries, good and
\nmarketable title to the Assets to be Sold; <\/p>\n
17<\/p>\n
(f) Executed UCC termination statements or amendments with respect to
\nall UCC financing statements that relate to the Assets to be Sold, if any; <\/p>\n
(g) Executed releases with respect to any Encumbrances, if any,
\nrelating to the Assets to be Sold created in connection with any financings; <\/p>\n
(h) Tax lien waivers from any Governmental Entities which may be
\nrequired, if any; <\/p>\n
(i) A certificate of the Secretary of State of the State of Delaware as
\nto the legal existence and good standing of the Seller in Delaware; <\/p>\n
(j) Certificates, as of the most recent practicable dates, as to the
\ncorporate good standing of the Seller issued by the Secretary of State of the
\nState of Minnesota and the Secretary of State of the State of North Dakota; <\/p>\n
(k) Resolutions of the Board of Directors of the Seller, authorizing
\nand approving all matters in connection with this Agreement and the transactions
\ncontemplated hereby, certified by the Secretary or Assistant Secretary of the
\nSeller as of the applicable closing date; <\/p>\n
(l) Certificates of the Secretary, Assistant Secretary or other
\nappropriate officer of the Seller attesting to the incumbency of the Seller’s
\nofficers; and <\/p>\n
(m) Such other certificates of each Seller’s officers and such other
\ndocuments as the Buyer has reasonably requested; <\/p>\n
(n) The Escrow Agreement, executed by the Seller; <\/p>\n
(o) Releases from the directors of the Seller and their affiliates in
\nthe form of Section 2.1(b)(i); <\/p>\n
(p) Agreements by each of the directors of the Seller and their
\naffiliates and all preferred stockholders of the Seller to attend and vote in
\nfavor of this Agreement and transactions contemplated hereby at any meeting of
\nstockholder of the Seller; <\/p>\n
(q) The Order Granting Motion for Ex Parte Temporary Injunction in
\nDAVID ERICKSON VS. ELIANCE CORPORATION (Civ. No. 51-99-C 01321) shall have been
\nlifted and there shall be no similar order in place and such case shall be
\ndismissed with prejudice. <\/p>\n
7. CONDITION TO THE OBLIGATIONS OF THE SELLER. The obligations of the Seller to
\nbe performed at the Closing are subject to fulfillment, or the waiver, of the
\nfollowing conditions, on or before the Closing:<\/p>\n
7.1 CONSENTS; ABSENCE OF LEGAL PROCEEDINGS. The Parent shall have
\nobtained (and shall have provided copies thereof to the Seller) all of the
\nwaivers, permits, consents, approvals or other authorizations, and effected all
\nof the registrations, filings and notices, which are required on the part of the
\nParent or the Buyer, except for any the failure of which to obtain or effect
\nwould not have a material adverse effect on the Parent or the Buyer or on the
\nability of the <\/p>\n
18<\/p>\n
parties to consummate the transactions contemplated by this Agreement. No legal
\nproceeding shall be pending wherein an unfavorable judgment, order, decree,
\nstipulation or injunction would (i) prevent consummation of any of the
\ntransactions contemplated by this Agreement, (ii) cause any of the transactions
\ncontemplated by this Agreement to be rescinded following consummation or (iii)
\nhave a material adverse effect, and no such judgment, order, decree, stipulation
\nor injunction shall be in effect.<\/p>\n
7.2 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
\nwarranties contained in Section 3 shall be true and correct in all material
\nrespects on and as of the date of this Agreement and the Closing Date with the
\nsame effect as though made on and as of the Closing Date, except to the extent
\nsuch representations and warranties are specifically made as of a particular
\ndate or as of the date of this Agreement (in which case such representations and
\nwarranties shall be true and correct as of such date).<\/p>\n
7.3 PERFORMANCE. The Parent and the Buyer shall have performed or
\ncomplied in all material respects with its agreements and covenants contained in
\nthis Agreement required to be performed or complied with by the Parent and\/or
\nthe Buyer prior to or at the Closing Date.<\/p>\n
7.4 COMPLIANCE CERTIFICATES. The Parent and the Buyer shall have
\ndelivered to the Seller a certificate, executed by the President of the Parent
\nand the Buyer, respectively, dated the Closing Date, certifying as to the
\nfulfillment of the conditions specified in Sections 7.2 and 7.3 of this
\nAgreement.<\/p>\n
7.5 CERTIFICATES AND DOCUMENTS. The Seller or the Escrow Agent (as
\ndefined in the Escrow Agreement), as the case may be, shall have received each
\nof the following documents on the Closing Date:<\/p>\n
(a) Stock certificates representing the Shares, as provided in
\nSection 1.3;<\/p>\n
(b) The Instrument of Assumption of Liabilities executed by the
\nBuyer and countersigned by the Seller; <\/p>\n
(c) The Software License, duly executed by Buyer; <\/p>\n
(d) The Corporate Services Agreement, duly executed by the Parent;<\/p>\n
(e) The Internet Services Agreement, duly executed by Buyer; <\/p>\n
(f) The Escrow Agreement, executed by the Buyer, the Parent,
\ncertain stockholders of the Parent and Tory Haythe; <\/p>\n
(g) The Certificate of Incorporation of each of the Parent and the
\nBuyer, as amended and in effect as of the closing date certified by the
\nSecretary of State of the State of Delaware; <\/p>\n
(h) By-Laws of each of the Parent and the Buyer, certified by its
\nSecretary as of the closing date; <\/p>\n
19<\/p>\n
(i) A certificate of the Secretary of State of the State of
\nDelaware as to the legal existence and good standing of each of the Parent and
\nthe Buyer in Delaware; <\/p>\n
(j) Certificates, as of the most recent practicable dates, as to
\nthe corporate good standing of the Parent and Buyer issued by the Secretaries of
\nState of the States of Minnesota and North Dakota. <\/p>\n
(k) Resolutions of the Board of Directors of each of the Parent and
\nthe Buyer, authorizing and approving all matters in connection with this
\nAgreement and the transactions contemplated hereby, certified by the Secretary
\nof each of the Parent and the Buyer, respectively, as of the closing date; <\/p>\n
(l) A certificate of the Secretary of each of the Parent and the
\nBuyer, respectively, attesting to the incumbency of the Parent and the Buyer’s
\nrespective officers; <\/p>\n
(m) Such certificates of the Parent or the Buyer’s officers and
\nsuch other documents as the Seller have reasonably requested.<\/p>\n
8. TRANSFER OF SHARES.<\/p>\n
8.1 RESTRICTED SHARES. “Restricted Shares” means (i) the Shares and
\n(ii) any other shares of capital stock of the Parent issued in respect of such
\nshares (as a result of stock splits, stock dividends, reclassifications,
\nrecapitalizations, or similar events); PROVIDED, HOWEVER, that shares of Parent
\nCommon Stock which are Restricted Shares shall cease to be Restricted Shares (x)
\nupon any sale pursuant to a registration statement under the Securities Act,
\nSection 4(1) of the Securities Act or Rule 144 under the Securities Act or (y)
\nat such time as they become eligible for sale under Rule 144(k) under the
\nSecurities Act.<\/p>\n
8.2 REQUIREMENTS FOR TRANSFER.<\/p>\n
(a) Restricted Shares shall not be sold or transferred unless
\neither (i) they first shall have been registered under the Securities Act, or
\n(ii) the Parent first shall have been furnished with an opinion of legal
\ncounsel, reasonably satisfactory to the Parent, to the effect that such sale or
\ntransfer is exempt from the registration requirements of the Securities Act .<\/p>\n
(b) Notwithstanding the foregoing, no registration or opinion of
\ncounsel shall be required for a transfer by the Seller to its stockholders, a
\ntransfer by a holder to an affiliate, spouse or child or by a holder which is a
\ncorporation to a wholly owned subsidiary of such corporation, a transfer by a
\nholder which is a partnership to a partner of such partnership or a retired
\npartner of such partnership who retires after the date hereof, or to the estate
\nof any such partner or retired partner, or a transfer by a holder which is a
\nlimited liability company to a member of such limited liability company or a
\nretired member who resigns after the date hereof or to the estate of any such
\nmember or retired member; provided that the transferee in each case agrees in
\nwriting to be subject to the terms of this Section 8 to the same extent as if it
\nwere the original holder hereunder. <\/p>\n
8.3 LEGEND. Each certificate representing Restricted Shares shall bear
\na legend substantially in the following form:<\/p>\n
20<\/p>\n
“The shares represented by this certificate have not been
\n registered under the Securities Act of 1933, as amended, and may
\n not be offered, sold or otherwise transferred, pledged or
\n hypothecated unless and until such shares are registered under
\n such Act or an opinion of counsel satisfactory to the issuer is
\n obtained to the effect that such registration or qualification is
\n not required.”<\/p>\n
The foregoing legend shall be removed from the certificates representing any
\nRestricted Shares, at the request of the holder thereof, at such time as they
\nbecome eligible for resale pursuant to Rule 144(k) under the Securities Act .<\/p>\n
9. INDEMNIFICATION<\/p>\n
9.1 BY THE SELLER. From and after the Closing Date, subject to the
\nprovisions of this Section 9, the Seller hereby agrees to indemnify and hold
\nharmless the Parent and the Buyer and their respective officers, directors and
\nagents against all claims, damages, losses, liabilities, costs and expenses
\n(including, without limitation, settlement costs and any legal, accounting or
\nother expenses for investigating or defending any actions or threatened actions)
\n(collectively, “Loss”) reasonably incurred by the Parent or the Buyer in
\nconnection with each and all of the following:<\/p>\n
(a) Any breach by the Seller of any representation or warranty made
\nby it in this Agreement;<\/p>\n
(b) Any breach of any covenant, agreement or obligation of the
\nSeller contained in this Agreement or any other agreement, instrument or
\ndocument contemplated by this Agreement; <\/p>\n
(c) Any misrepresentation contained in any statement, certificate
\nor schedule furnished by the Seller pursuant to this Agreement or in connection
\nwith the transactions contemplated by this Agreement; and <\/p>\n
(d) Except for the Assumed Liabilities, any claims, damages, or
\nliabilities arising out of the conduct of the business and operations of the
\nSeller or any other liabilities or obligations of the Seller. <\/p>\n
9.2 BY THE PARENT AND THE BUYER. From and after the Closing Date,
\nsubject to the provisions of this Section 9, each of the Parent and the Buyer,
\njointly and severally, hereby agrees to indemnify and hold harmless the Seller
\nand its officers, directors and agents against all Loss reasonably incurred by
\nthe Seller in connection with each and all of the following:<\/p>\n
(a) Any breach by the Parent or Buyer of any representation or
\nwarranty made by it in this Agreement;<\/p>\n
(b) Any breach of any covenant, agreement or obligation of the
\nParent or Buyer contained in this Agreement or any other agreement, instrument
\nor document contemplated by this Agreement; <\/p>\n
21<\/p>\n
(c) Any misrepresentation contained in any statement, certificate or
\nschedule furnished by the Parent or Buyer pursuant to this Agreement or in
\nconnection with the transactions contemplated by this Agreement; and <\/p>\n
(d) Any claims, damages, or liabilities arising out of the conduct
\nof the business and operations of the Parent or the Buyer, or the Assumed
\nLiabilities. <\/p>\n
9.3 CLAIMS FOR INDEMNIFICATION. Whenever any claim shall arise for
\nindemnification hereunder the party seeking indemnification (the “Indemnified
\nParty”) shall promptly notify the party from whom indemnification is sought (the
\n“Indemnifying Party”) of the claim and, when known, the facts constituting the
\nbasis for such claim. In the event of any such claim for indemnification
\nhereunder resulting from or in connection with any claim or legal proceedings by
\na third party, the notice to the Indemnifying Party shall specify, if known, the
\namount or an estimate of the amount of the liability arising therefrom. The
\nIndemnified Party shall not settle or compromise any claim by a third party for
\nwhich it is entitled to indemnification hereunder without the prior written
\nconsent of the Indemnifying Party, which shall not be unreasonably withheld,
\nunless suit shall have been instituted against it and the Indemnifying Party
\nshall not have taken control of such suit after notification thereof as provided
\nin Subsection 9.4 of this Agreement.<\/p>\n
9.4 DEFENSE BY INDEMNIFYING PARTY. In connection with any claim giving
\nrise to indemnity hereunder resulting from or arising out of any claim or legal
\nproceeding by a person who is not a party to this Agreement, the Indemnifying
\nParty at its sole cost and expense may, upon written notice to the Indemnified
\nParty, assume the defense of any such claim or legal proceeding, provided that
\nsuch assumption of the defense shall not constitute a waiver of the Indemnifying
\nParty’s right to challenge the existence or extent of its obligation to
\nindemnify with respect to such claim or legal proceedings. The Indemnified Party
\nshall be entitled to participate in (but not control) the defense of any such
\naction, with its counsel and at its own expense. If the Indemnifying Party does
\nnot assume the defense of any such claim or litigation resulting therefrom
\nwithin 20 days after the date such claim is made, (a) the Indemnified Party may
\ndefend against such claim or litigation, in such manner as it may deem
\nappropriate, including, but not limited to, settling such claim or litigation,
\nafter giving notice of the same to the Indemnifying Party, on such terms as the
\nIndemnified Party may deem appropriate, and (b) the Indemnifying Party shall be
\nentitled to participate in (but not control) the defense of such action, with
\nits counsel and at its own expense. If the Indemnifying Party thereafter seeks
\nto question the manner in which the Indemnified Party defended such third-party
\nclaim or the amount or nature of any such settlement, the Indemnifying Party
\nshall have the burden to prove by a preponderance of the evidence that the
\nIndemnified Party did not defend or settle such third-party claim in a
\nreasonably prudent manner.<\/p>\n
9.5 PAYMENT OF INDEMNIFICATION OBLIGATION. All indemnification by the
\nParent, the Buyer or the Seller hereunder shall be effected by payment of cash
\nor delivery of a cashier’s or certified check in the amount of the
\nindemnification liability; provided that the Buyer shall have the right to
\noffset any amounts due to Buyer hereunder against amounts due from Buyer under
\nthe Instrument of Assumption of Liabilities and in accordance with the Escrow
\nAgreement.<\/p>\n
22<\/p>\n
9.6 SURVIVAL OF REPRESENTATIONS; CLAIMS FOR INDEMNIFICATION. All
\nrepresentations and warranties made by the parties herein or in any
\ninstrument or document furnished in connection herewith shall survive the
\nsigning of this Agreement and any investigation at any time made by or on
\nbehalf of the parties hereto. All such representations and warranties shall
\nexpire on the second anniversary of the Closing Date, except for claims, if
\nany, asserted in writing prior to such second anniversary of the Closing
\nDate, which shall survive until finally resolved and satisfied in full. All
\nclaims and actions for indemnity pursuant to this Section 9 for breach of any
\nrepresentation or warranty shall be asserted or maintained in writing by a
\nparty hereto within two years after the Closing Date.<\/p>\n
9.7 LIMITATIONS. Notwithstanding anything to the contrary herein,
\nthe aggregate liability of each of the Seller and the Parent under this
\nArticle 9 shall include only that portion of the aggregate damages of the
\nIndemnified Party which exceeds $50,000.<\/p>\n
10. POST-CLOSING AGREEMENTS<\/p>\n
The Seller and the Parent agree that from and after the Closing Date:<\/p>\n
10.1 PROPRIETARY INFORMATION. The Seller shall hold in confidence, and
\nuse its best efforts to have all of the Seller’s officers, directors, managers,
\nmembers and personnel hold in confidence, all knowledge and information of a
\nsecret or confidential nature with respect to the Assets to be Sold and shall
\nnot disclose, publish or make use of the same without the consent of the Parent,
\nexcept to the extent that such information shall be required by law or valid
\nlegal process or shall have become public knowledge other than by breach of this
\nAgreement by the Seller.<\/p>\n
10.2 NON-COMPETITION AGREEMENT.<\/p>\n
(a) As a material and valuable inducement for the Parent and the
\nBuyer to enter into this Agreement, pay and deliver the Purchase Price and
\nconsummate the transactions provided for herein, the Seller agrees that, without
\nthe prior approval of the Parent, for a period of five years after the Closing
\nDate, the Seller shall not engage directly or indirectly in the business of
\ndesigning, developing, manufacturing, marketing or selling products or services
\nwhich are competitive with the business being conducted by the Parent on the
\nClosing Date in the United States or Canada.<\/p>\n
(b) The parties hereto agree that the duration and geographic
\nscope of the non-competition provision set forth in this Subsection 10.2 are
\nreasonable. In the event that any court determines that the duration or the
\ngeographic scope, or both, are unreasonable and that such provision is to that
\nextent unenforceable, the parties hereto agree that the provision shall remain
\nin full force and effect for the greatest time period and in the greatest area
\nthat would not render it unenforceable. The parties intend that this
\nnon-competition provision shall be deemed to be a series of separate covenants,
\none for each and every county of each and every state of the United States of
\nAmerica and each and every political subdivision of each and every country
\noutside the United States of America where this provision is intended to be
\neffective. The Seller agrees that damages are an inadequate remedy for any
\nbreach of this provision and that the Parent shall, whether or not it is
\npursuing any potential remedies at law, be entitled to equitable relief in the<\/p>\n
23<\/p>\n
form of preliminary and permanent injunctions without bond or other security
\nupon any actual or threatened breach of this non-competition provision. <\/p>\n
10.3 COOPERATION IN LITIGATION. Each party hereto will fully cooperate
\nwith the others in the defense or prosecution of any litigation or proceeding
\nalready instituted or which may be instituted hereafter against or by such party
\nrelating to or arising out of the conduct of the business by the Seller prior to
\nor after the Closing Date (other than litigation or proceedings arising out the
\ntransactions contemplated by this Agreement). The party requesting such
\ncooperation shall pay the reasonable out-of-pocket expenses (including legal
\nfees and disbursements), as incurred, of the party providing such cooperation
\nand of its officers, directors, managers, members, employees and agents
\nreasonably incurred in connection with providing such cooperation, but shall not
\nbe responsible to reimburse the party providing such cooperation for such
\nparty’s time spent in such cooperation or the salaries or costs of fringe
\nbenefits or similar expenses paid by the party providing such cooperation to its
\nofficers, directors, managers, members, employees and agents while assisting in
\nthe defense or prosecution of any such litigation or proceeding.<\/p>\n
10.4 TRANSITION. The Seller will not take any action that is designed
\nor intended to have the effect of dissuading any licensor, customer, supplier,
\nor other business associate from maintaining the same business relationships in
\nregard to the Assets to be Sold with the Buyer after the Closing as it
\nmaintained with the Seller prior to the Closing. The Seller will refer all
\ncustomer inquiries relating to the Assets to be Sold to the Buyer from and after
\nthe Closing.<\/p>\n
10.5 INSURANCE. The Parent will, and will cause the Buyer to, obtain
\nand maintain in force such property damage, public liability, directors and
\nofficers liability, business interruption, worker’s compensation, indemnity
\nbonds and other types of insurance as the Parent’s executive officers, after
\nconsultation with an accredited insurance broker, shall determine to be
\nnecessary or appropriate to protect the Parent from the insurable hazards or
\nrisks associated with the conduct of the Parent’s business. The Parent’s
\nexecutive officers shall periodically report to the Board of Directors on the
\nstatus of such insurance coverage.<\/p>\n
All insurance shall be maintained in at least such amounts and to such
\nextent as shall be determined to be reasonable by the Board of Directors; and
\nall such insurance shall be effected and maintained in force under a policy or
\npolicies issued by insurers of recognized responsibility, except that the Parent
\nor any subsidiary may effect worker’s compensation or similar insurance in
\nrespect of operations in any state or other jurisdiction either through an
\ninsurance fund operated by such state or other jurisdiction or by causing to be
\nmaintained a system or systems of self-insurance which is in accord with
\napplicable laws.<\/p>\n
10.6 EMPLOYEE STOCK OPTIONS. The Parent agrees to grant to current
\nemployees of the Seller and employees of the Seller who shall have become
\nemployees of the Parent or the Buyer from time to time options to purchase an
\naggregate of 500,000 shares of Parent Common Stock on or before December 31,
\n1999.<\/p>\n
10.7 STOCKHOLDERS MEETING. Promptly following the execution hereof, the
\nSeller shall call a meeting of its stockholders (which shall occur within 20
\ndays of the notice thereof) at <\/p>\n
24<\/p>\n
which meeting this Agreement and the transactions contemplated hereby shall be
\npresented to such stockholders for ratification.<\/p>\n
10.8 EMPLOYEES. The Parent and the Buyer shall be permitted to offer
\nemployment to the employees of the Seller and its subsidiary from time to time.<\/p>\n
11. TERMINATION OF AGREEMENT<\/p>\n
11.1 TERMINATION BY LAPSE OF TIME. This Agreement shall terminate at
\n5:00 p.m., Minneapolis time, on December 31, 1999, if the Closing contemplated
\nhereby has not been consummated, unless such date is extended by the written
\nconsent of the Buyer and the Seller.<\/p>\n
11.2 TERMINATION BY AGREEMENT OF THE PARTIES. This Agreement may be
\nterminated by the mutual written agreement of the parties hereto.<\/p>\n
11.3 EFFECT OF TERMINATION. If any party terminates this Agreement
\npursuant to this Section 11 all rights and obligations of the parties hereunder
\nshall terminate without liability of any party to the other party except for
\nbreach of its covenants hereunder.<\/p>\n
12. TRANSFER TAXES, GOVERNMENTAL FEES AND CHARGES; CERTAIN INCOME TAXES.<\/p>\n
(a) Notwithstanding any provision of law imposing the burden of
\nTransfer Taxes (as hereinafter defined) on the Seller or the Buyer, as the case
\nmay be, any sales, use, and other transfer taxes imposed in connection with the
\nconsummation of the transactions contemplated by this Agreement (collectively,
\n“Transfer Taxes”) shall be borne by the Seller. The Seller and the Buyer agree
\nto cooperate in good faith with each other, and to use their commercially
\nreasonable efforts, to minimize Transfer Taxes. Without limiting the generality
\nof the preceding sentence, (i) the Buyer shall promptly and properly complete,
\nexecute and deliver to the Seller resale, exemption, and\/or similar certificates
\nor other documentation necessary or appropriate under any applicable law to
\nclaim and\/or evidence that all or any portion of the sale or transfer of the
\nAssets under this Agreement is exempt from or otherwise not subject to Transfer
\nTaxes imposed under such applicable law, and (ii) the parties shall consult and
\ncooperate in good faith on a timely basis in order to effectively handle and
\ncontest any audit, examination, investigation, or administrative court, or other
\nproceeding relative to Transfer Taxes.<\/p>\n
(b) The Seller shall pay and be responsible for all filing,
\nrecordation, transfer or other governmental fees or charges, in each case
\nrelating to the sale or transfer of any of the Assets to be Sold hereunder. <\/p>\n
(c) If a party hereto shall fail to pay on a timely basis any
\namount such party is responsible for under this Section 12, the other party may
\npay such amount to the appropriate governmental authority or authorities or
\nother appropriate third party or parties, and the party responsible for payment
\nof such amount shall promptly reimburse the other party for such amount so paid.<\/p>\n
(d) The Buyer waives compliance with the provisions of any
\napplicable bulk sales laws or other similar laws of any jurisdiction as respects
\nthe transactions contemplated by this Agreement. <\/p>\n
25<\/p>\n
13. OTHER PROVISIONS<\/p>\n
13.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
\ninure to the benefit of the parties and their respective successors and
\npermitted assigns.<\/p>\n
13.2 EXPENSES. If the Closing occurs, the Seller shall pay all
\nout-of-pocket expenses incurred by it and by the Parent including, without
\nlimitation, the reasonable fees and disbursements of Dorsey & Whitney LLP,
\ncounsel to the Seller, and of Tory Haythe, counsel to the Parent, incurred in
\nconnection with the matters contemplated by this Agreement. If the Closing does
\nnot occur, all expenses shall be borne solely and entirely by the party that has
\nincurred the same.<\/p>\n
13.3 BROKERS. Each of the Seller, the Parent and the Buyer (i)
\nrepresents and warrants to the other parties hereto that it has not retained a
\nfinder or broker in connection with the transactions contemplated by this
\nAgreement, and (ii) will indemnify and save the other party harmless from and
\nagainst any and all claims, liabilities or obligations with respect to brokerage
\nor finders’ fees or commissions, or consulting fees in connection with the
\ntransactions contemplated by this Agreement asserted by any person on the basis
\nof any statement or representation alleged to have been made by such
\nindemnifying party.<\/p>\n
13.4 SEVERABILITY. The invalidity or unenforceability of any provision
\nof this Agreement shall not affect the validity or enforceability of any other
\nprovision of this Agreement.<\/p>\n
13.5 SPECIFIC PERFORMANCE. In addition to any and all other remedies
\nthat may be available at law in the event of any breach of this Agreement, the
\nBuyer shall be entitled to specific performance of the agreements and
\nobligations of the Seller hereunder and to such other injunctive or other
\nequitable relief as may be granted by a court of competent jurisdiction.<\/p>\n
13.6 GOVERNING LAW. This Agreement shall be governed by and construed
\nin accordance with the internal laws of the State of Minnesota (without
\nreference to the conflicts of law provisions thereof).<\/p>\n
13.7 NOTICES. All notices, requests, consents, and other communications
\nunder this Agreement shall be in writing and shall be deemed delivered (i) two
\nbusiness days after being sent by registered or certified mail, return receipt
\nrequested, postage prepaid or (ii) one business day after being sent via a
\nreputable nationwide overnight courier service guaranteeing next business day
\ndelivery, in each case to the intended recipient as set forth below:<\/p>\n
To the Parent: Webhelp.com Inc.
\n One Dundas Street West
\n Suite 2500
\n P.O. Box 84565
\n Toronto, Ontario M5G 1Z3<\/p>\n
26<\/p>\n
With a copy to: Tory Haythe
\n Suite 3000, Aetna Tower
\n Toronto Dominion Center
\n Toronto, Ontario M5K 1N2
\n Attn: James J. Duffield, Esq.<\/p>\n
To the Buyer: iSpoke.com Inc.
\n One Dundas Street West
\n Suite 2500
\n P.O. Box 84565
\n Toronto, Ontario M5G 1Z3<\/p>\n
With a copy to: Tory Haythe
\n Suite 3000, Aetna Tower
\n Toronto Dominion Center
\n Toronto, Ontario M5K 1N2
\n Attn: James J. Duffield, Esq.<\/p>\n
To the Seller: eliance Corporation
\n 7800 Equitable Drive
\n Suite 250
\n Minneapolis, MN 55344
\n Attn: Paul Eidsness, Esq.<\/p>\n
With copies to: Dorsey & Whitney
\n 220 South Sixth Street
\n Minneapolis, MN 55402
\n Attn: Robert A. Kuhns, Esq.<\/p>\n
Any party may give any notice, request, consent or other communication
\nunder this Agreement using any other means (including, without limitation,
\npersonal delivery, messenger service, telecopy, first class mail or electronic
\nmail), but no such notice, request, consent or other communication shall be
\ndeemed to have been duly given unless and until it is actually received by the
\nparty for whom it is intended. Any party may change the address to which
\nnotices, requests, consents or other communications hereunder are to be
\ndelivered by giving the other parties notice in the manner set forth in this
\nSection.<\/p>\n
13.8 COMPLETE AGREEMENT. This Agreement (including its Exhibits) and
\nthe Parent\/Buyer’s and Seller’s Ancillary Agreements constitute the entire
\nagreement and understanding of the parties hereto with respect to the subject
\nmatter hereof and supersedes all prior agreements and understandings relating to
\nsuch subject matter including, without limitation, that certain letter of intent
\ndated July 4, 1999, and that certain letter of intent dated November 29, 1999.<\/p>\n
13.9 AMENDMENTS AND WAIVERS. Except as otherwise expressly set forth in
\nthis Agreement, any term of this Agreement may be amended or terminated and the
\nobservance of any term of this Agreement may be waived (either generally or in a
\nparticular instance and either<\/p>\n
27<\/p>\n
retroactively or prospectively), with the written consent of the Seller and the
\nParent. No waivers of or exceptions to any term, condition or provision of this
\nAgreement, in any one or more instances, shall be deemed to be, or construed as,
\na further or continuing waiver of any such term, condition or provision. <\/p>\n
13.10 PRONOUNS. Whenever the context may require, any pronouns used in
\nthis Agreement shall include the corresponding masculine, feminine or neuter
\nforms, and the singular form of nouns and pronouns shall include the plural, and
\nvice versa.<\/p>\n
13.11 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
\nexecuted in any number of counterparts, each of which shall be deemed to be an
\noriginal, and all of which shall constitute one and the same document. This
\nAgreement may be executed by facsimile signatures.<\/p>\n
13.12 SECTION HEADINGS. The section headings are for the convenience of
\nthe parties and in no way alter, modify, amend, limit, or restrict the
\ncontractual obligations of the parties.<\/p>\n
* * * * *<\/p>\n
28<\/p>\n
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
\nhereto as of and on the date first above written.<\/p>\n
SELLER:<\/p>\n
ELIANCE CORPORATION<\/p>\n
ATTEST: By: \/s\/ Jeffrey Farstad
\n ——————————-
\n Name: Jeffrey Farstad
\n————————— ————————-
\n Title: Chairman
\n ————————-<\/p>\n
PARENT:<\/p>\n
WEBHELP.COM, INC.<\/p>\n
ATTEST: By: \/s\/ Kerry Adler
\n ——————————-
\n Name: Kerry Adler
\n————————— ————————-
\n Title: President
\n ————————-<\/p>\n
BUYER:<\/p>\n
iSPOKE.COM INC.<\/p>\n
ATTEST: By: \/s\/ Kerry Adler
\n ——————————-
\n Name: Kerry Adler
\n————————— ————————-
\n Title: President
\n ————————-<\/p>\n
29<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9302],"corporate_contracts_industries":[],"corporate_contracts_types":[9623,9622],"class_list":["post-43292","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-webhelpcom-inc","corporate_contracts_types-planning__asset","corporate_contracts_types-planning"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43292","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43292"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43292"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43292"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43292"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}