{"id":43739,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/subscription-agreement-integrity-interactive-corp-and-legal.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"subscription-agreement-integrity-interactive-corp-and-legal","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/subscription-agreement-integrity-interactive-corp-and-legal.html","title":{"rendered":"Subscription Agreement &#8211; Integrity Interactive Corp. and Legal Research Center Inc."},"content":{"rendered":"<pre>Legal Research Center. Inc.\n----------------------------                      -----------------------------\nName of Investor                                  Social Security Number or EIN\n\n                        INTEGRITY INTERACTIVE CORPORATION\n\n                             SUBSCRIPTION AGREEMENT\n\nSUBSCRIPTION  AGREEMENT by and between the investor named above (the  \"Investor\"\nor,  with  respect  to  Legal  Research  Center,   Inc..  \"ERG\")  and  INTEGRITY\nINTERACTIVE  CORPORATION,  a  Delaware  corporation  with  offices  at 300 Fifth\nAvenue, Waltham, Massachusetts 02451 (the \"Company\"). The Company is offering to\naccept from potential  investors up to $600,000 in subscriptions  for Shares, as\ndefined below;  provided,  however,  that the Company reserves the right, in its\nsole discretion to accept subscriptions for more than $600,000.\n\nA.   Number of Shares Subscribed for: 810,000\n\nB.   Total Purchase Price: $500,000\n\nC.   Address of Principal Residence: 331 Second Avenue South\n                                     Suite 700\n                                     Minneapolis, MN 55401\n\nThe Investor  acknowledges  that the  Investor  has  received and reviewed  this\nSubscription  Agreement  in  its  entirety,  including  without  limitation  the\nrepresentations and warranties set out in Section 2 hereof. The Investor and the\nCompany each executes this Subscription Agreement as an instrument under seal.\n\nINVESTOR:\n--------\n\nLegal Research Center. Inc.\n---------------------------\nPrint Name of Investor\n\n\/s\/ C. R. Ljungkull\n---------------------------\n(Signature)\nName: C. R. Ljungkull\nTitle: CEO\n\n     The  Company  hereby  accepts  this  subscription  subject to the terms and\nconditions set forth herein.\n\n     July 18, 2000                             INTEGRITY INTERACTIVE CORPORATION\n                                               By: \/s\/ Carl P. Nelson\n                                                  ------------------------------\n                                               Name: Carl P. Nelson\n                                               Title: President\n\n\n\n\n1. Subscription. Subject to the terms and conditions hereof, the Investor hereby\nirrevocably subscribes for and agrees to purchase the number of shares of Series\nA Convertible  Preferred  Stock of the Company,  $.001 par value (the \"Preferred\nStock\"),  described in Section A of the cover page (the  \"Shares\") for the Total\nPurchase  Price  set  forth in  Section  B of the cover  page.  The  rights  and\nprivileges of the  Preferred  Stock shall be  substantially  as set forth in the\nPreferred Stock Terms attached to this Subscription Agreement as Exhibit A. This\nsubscription  may only be accepted by the Company's  signing the cover page. The\neffective date of such  acceptance by the Company shall be the date set forth on\nthe cover page opposite the Company's signature.\n\n2. Representations and Warranties of the Investor.  The Investor understands and\nacknowledges that (a) the Shares are being offered and sold under one or more of\nthe exemptions from registration provided for in Section 4(2) or Section 3(b) of\nthe  Securities  Act of 1993,  as  amended  (the  \"Securities  Act\"),  including\nRegulation D promulgated  thereunder  (\"Regulation D\"), and any applicable state\nsecurities laws, (b) the Investor has reviewed the confidential business plan of\nthe Company entitled  \"Integrity  Interactive  Business Plan\" dated May 1, 2000,\nand such other  material  documents  of the Company as the  Investor  has deemed\nnecessary or  appropriate  for purposes of this  offering and this  Subscription\nAgreement (collectively, the \"Offering Documents\"), and (c) this transaction has\nnot been  reviewed or  approved by the United  States  Securities  and  Exchange\nCommission or by any regulatory authority charged with the administration of the\nsecurities  laws of any state or foreign  country.  The Investor also represents\nand warrants as follows:\n\n     2.1. Citizenship,  Age and Residence.  The Investor is a bona fide resident\nand domiciliary (not a temporary or transient  resident) of or has its principal\nplace of business in the state and at the address  described in Section C of the\ncover page and has no present  intention of becoming a resident of or moving the\nlocation  of its  principal  place  of  business  to any  other  state  or other\njurisdiction. If the Investor is a natural person, then Investor is a citizen of\nthe United States and is at least 21 years of age,\n\n     2.2.  Sophistication of Investor. The Investor either (i) has a preexisting\npersonal or business  relationship with the Company or its controlling  persons,\nsuch as would enable a reasonably prudent purchaser to be aware of the character\nand  general  business  and  financial  circumstances  of  the  Company  or  its\ncontrolling  persons,  or (ii) by reason of the Investor's business or financial\nexperience,  individually  or in conjunction  with the  Investor's  unaffiliated\nprofessional advisors who are not compensated by the Company or any affiliate or\nselling agent of the Company,  directly or indirectly,  is capable of evaluating\nthe  merits  and  risks of an  investment  in the  Shares,  making  an  informed\ninvestment  decision and  protecting  the Investor's own interests in connection\nwith the transactions contemplated hereby.\n\n     2.3.  Suitability.  The Investor  understands and has fully  considered for\npurposes of this investment the risks of this  investment and  understands  that\n(i) this  investment  is suitable  only for an investor  who is able to bear the\neconomic  consequences  of losing the  Investor's  entire  investment;  (ii) the\nCompany is a start-up  enterprise with no significant  operating history;  (iii)\nthe purchase of the Shares is a  speculative  investment  which  involves a high\ndegree of risk of loss by the Investor of the Investor's entire investment,  and\n(iv) there are substantial restrictions\n\n\n                                       2\n\n\n\non the  transferability  of, and there will be no public market for, the Shares,\nand  accordingly,  it may not be  possible  for the  Investor to  liquidate  the\nInvestor's investment in the Shares.\n\n     2.4.  Accredited  Investor.  The Investor is not an  \"Accredited  Investor\"\nwithin the meaning of Rule 501 of Regulation D.\n\n     2.5. Lack of Liquidity.  The Investor is able (i) to bear the economic risk\nof this  investment,  (ii) to hold the Shares for an indefinite  period of time,\nand (iii) to afford a complete loss of the Investor's investment; and represents\nthat the Investor  has  sufficient  liquid  assets so that the lack of liquidity\nassociated with this investment will not cause any undue financial  difficulties\nor affect the Investor's ability to provide for the Investor's current needs and\npossible financial contingencies.\n\n     2.6 Investment  Information.  The Investor  acknowledges  that the Offering\nDocuments  contain  the views of the  management  of the  Company,  and that the\nanalysis  of  the  market  and  of  the  Company's  strategy  contained  therein\nrepresents  a  subjective   assessment  about  which  reasonable  persons  could\ndisagree.\n\n     2.7. Access to Information. The Investor, in making the Investor's decision\nto purchase the Shares, has relied solely upon independent  investigations  made\nby the Investor and the  representations and warranties of the Company contained\nherein and the  Investor  has been given (i)  access to all  material  books and\nrecords of the Company;  (ii) access to all  material  contracts  and  documents\nrelating to this offering;  and (iii) an opportunity to ask questions of, and to\nreceive  answers  from,  the  appropriate  executive  officers and other persons\nacting  on  behalf  of the  Company  concerning  the  Company  and the terms and\nconditions of this offering,  and to obtain any additional  information,  to the\nextent  such  persons  possess  such  information  or  can  acquire  it  without\nunreasonable  effort  or  expense,  necessary  to  verify  the  accuracy  of the\ninformation set forth in the Offering Documents.  The Investor acknowledges that\nno valid  request to the Company by the  Investor  for  information  of any kind\nabout  the  Company  has been  refused  or  denied  by the  Company  or  remains\nunfulfilled as of the date thereof\n\n     2.8.  Review of Offering  Documents.  The Investor has  carefully  read the\nOffering Documents, including without limitation this Subscription Agreement. In\nevaluating the suitability of an investment in the Company, the Investor has not\nrelied upon any  representations or other information  (whether oral or written)\nother  than as set  forth  in the  Offering  Documents  or as  contained  in any\ndocuments or answers to questions furnished by the Company.\n\n     2.9. Accuracy of Information. All of the information set forth on the cover\npage of this Subscription  Agreement indicated as applicable to the Investor, is\ntrue and correct in all respects.\n\n     2.10.  Investment  Intent.  The Shares are being  acquired by the  Investor\nsolely for the Investor's own personal  account,  for investment  purposes only,\nand not with a view to,  or in  connection  with,  any  resale  or  distribution\nthereof; the Investor has no contract, undertaking,  understanding, agreement or\narrangement,  formal or informal, with any person to sell, transfer or pledge to\nany  person the Shares for which the  Investor  hereby  subscribes,  or any part\nthereof, any\n\n\n                                       3\n\n\n\ninterest  therein or any rights  thereto;  the Investor has no present  plans to\nenter into any such contract,  undertaking,  agreement or  arrangement;  and the\nInvestor understands the legal consequences of the foregoing representations and\nwarranties  to mean  that  the  Investor  must  bear  the  economic  risk of the\ninvestment  for an  indefinite  period of time  because the Shares have not been\nregistered  under the Securities Act and applicable  state  securities laws and,\ntherefore,  cannot be sold unless  they are  subsequently  registered  under the\nSecurities Act and applicable  state  securities  laws (which the Company is not\nobligated, and has no current intention, to do) or unless an exemption from such\nregistration is available.\n\n     2.11.  No  Distribution  of  Offering  Documents.   The  Investor  has  not\ndistributed any of the Offering  Documents to any other person or party, and the\nInvestor  has not used the  Offering  Documents  or any of them for any purposes\nother than to evaluate the merits of an investment in the Company.\n\n     2.12. Control of Funds. The Investor represents that the funds provided for\nthis investment are separate  property of the Investor or are otherwise funds as\nto which the Investor has the sole right of management.\n\n     2.13. No Brokers. The Investor has not engaged any broker,  dealer, finder,\ncommission agent or other similar person in connection with the offer, offer for\nsale, or sale of the Shares and is not under any  obligation to pay any broker's\nfee or commission in connection with the Investor's investment.\n\n     2.14.  Securities Act Compliance.  The Investor understands that the Shares\nhave not been  registered  under the  Securities  Act,  by reason of a  specific\nexemption  under the provisions of the Securities Act which depends in part upon\nthe investment  intent and the aforesaid  representations  and warranties of the\nInvestor and that, in issuing the Shares to the Investor, the Company is relying\nupon said representations and warranties. The Investor also understands that any\nroutine sales of the Shares in reliance upon Rule 144 under the Securities  Act,\nif the provisions of such Rule should then be available as to the Shares, can be\nmade only after the holding  period  specified in the Rule, in limited  amounts,\nand in  accordance  with all the terms and  conditions of that Rule and that, in\nthe case of securities  to which that Rule is not  applicable,  compliance  with\nRegulation A under the Securities Act or some other  exemption will be required.\nThe Investor  understands  that Rule 144 is not now  available as to the Shares.\nThe Investor understands that the Company is under no obligation to register the\nShares  or to  comply  with  Regulation  A or  any  other  exemption  under  the\nSecurities  Act or to supply any  information  necessary to permit routine sales\nunder Rule 144. The Investor understands that the Company may, if it so desires,\npermit the  transfer  of the Shares  only when such shares are the subject of an\neffective  registration  statement  under the Securities Act or when the Company\nhas received an opinion of counsel that such  registration is not required under\nthe  Securities  Act. The  Investor  agrees to furnish  such  documentation  and\nundertakings as the Company and its counsel may reasonably require in connection\nwith any such opinion,  whether under Rule 144 or some specific  exemption under\nthe Act.\n\n3.  Representations  and Warranties of the Company.  The Company  represents and\nwarrants to\n\n\n                                       4\n\n\n\nthe  Investor  except  as set  forth in the  Disclosure  Schedule  (attached  as\nSchedule 1) as follows:\n\n     3.1 Organization and Standing. The Company is a corporation duly organized,\nvalidly  existing and in good  standing  under the laws of the State of Delaware\nand has full corporate  power and authority to conduct its business as presently\nconducted  and as proposed to be  conducted  by it and to enter into and perform\nthis  Subscription  Agreement and to carry out the transactions  contemplated by\nthis Subscription  Agreement.  The Company is duly qualified to do business as a\nforeign corporation and is in good standing in The Commonwealth of Massachusetts\nand in any other  jurisdiction  in which the failure to so qualify  would have a\nmaterial adverse effect on the operations or financial condition of the Company.\nThe Company has  furnished to special  counsel to the Investor true and complete\ncopies of its Certificate of Incorporation and By-laws,  each as amended to date\nand presently in effect.\n\n     3.2   Capitalization.   The   authorized   capital  stock  of  the  Company\n(immediately  prior to the Closing)  consists of (a) 12.000,000 shares of common\nstock,  $0.001  par value per share (the  \"Common  Stock\"),  of which  7,932,000\nshares are  issued  and  outstanding  and (b)  973,384  of Series A  Convertible\nPreferred  Stock,  $0.001  par  value  per  share,  none of which is  issued  or\noutstanding.  At the Closing, the Common Stock and the Preferred Stock will have\nthe voting powers,  designations,  preferences,  rights and qualifications,  and\nlimitations or restrictions set forth in the Certificate of  Incorporation.  All\nof the issued and  outstanding  shares of Common Stock have been duly authorized\nand validly issued and are fully paid and nonassessable.\n\n     3.3 Issuance of Shares.  The  issuance,  sale and delivery of the Shares in\naccordance with this  Subscription  Agreement,  and the issuance and delivery of\nthe shares of Common Stock  issuable upon  conversion  of the Shares,  have been\nduly  authorized by all necessary  corporate  action on the part of the Company,\nand all such shares have been duly  reserved  for  issuance.  The Shares when so\nissued,  sold and delivered  against  payment  therefor in  accordance  with the\nprovisions  of this  Subscription  Agreement,  and the  shares of  Common  Stock\nissuable upon conversion of the Shares,  when issued upon such conversion,  will\nbe duly and validly issued, fully paid and non-assessable.\n\n     3.4 Authority for Agreement. The execution, delivery and performance by the\nCompany of this Subscription  Agreement,  and the consummation by the Company of\nthe transactions  contemplated hereby and thereby,  have been duly authorized by\nall  necessary  corporate  action.  This  Subscription  Agreement  has been duly\nexecuted  and  delivered  by  the  Company  and  constitute  valid  and  binding\nobligations  of the Company  enforceable  in  accordance  with their  respective\nterms. The execution of and performance of the transactions contemplated by this\nSubscription  Agreement and compliance with their provisions by the Company will\nnot violate any  provision  of law and will not  conflict  with or result in any\nbreach of any of the terms, conditions or provisions of, or constitute a default\nunder, or require a consent or waiver under, its Certificate of Incorporation or\nBy-laws (each as amended to date) or any  indenture,  lease,  agreement or other\ninstrument  to  which  the  Company  is a  party  or by  which  it or any of its\nproperties is bound, or any decree, judgment, order, statute, rule or regulation\napplicable to the Company.\n\n\n                                       5\n\n\n\n     3.5 Governmental Consents. No consent, approval, order or authorization of,\nor  registration,  qualification,  designation,  declaration or filing with, any\ngovernmental authority is required on the part of the Company in connection with\nthe execution and delivery of this Subscription Agreement,  the offer, issuance,\nsale and delivery of the Shares, or the other  transactions to be consummated at\nthe Closing, as contemplated by this Subscription Agreement, except such filings\nas shall  have  been  made  prior to and  shall  be  effective  on and as of the\nClosing.  Based on the representations made by the Investor in Section 2 of this\nSubscription Agreement, the offer and sale of the Shares to the Investor will be\nexempt  from the  registration  requirements  of  applicable  Federal  and state\nsecurities laws.\n\n     3.6  Litigation.  There is no action,  suit or proceeding,  or governmental\ninquiry or investigation,  pending,  or, to the best of the Company's knowledge,\nany basis therefor or threat thereof,  against the Company,  which questions the\nvalidity  of this  Subscription  Agreement  or the right of the Company to enter\ninto it, or which might result, either individually or in the aggregate,  in any\nmaterial  adverse  change  in the  business,  prospects,  assets  or  condition,\nfinancial or otherwise, of the Company, nor is there any litigation pending, or,\nto the best of the Company's  knowledge,  any basis therefor or threat  thereof,\nagainst  the  Company  by reason  of the past  employment  relationships  of its\nemployees,  the proposed  activities  of the  Company,  or  negotiations  by the\nCompany with possible investors in the Company.\n\n     3.7  Financial  Statements.  The Company has  furnished to the Investor the\nunaudited  balance  sheet of the  Company  as of June 30,  2000 and the  related\nstatement  of  income  for  the   seven-month   period   ending  June  30,  2000\n(collectively,  the \"Financial Disclosure  Schedule\").  The Financial Disclosure\nSchedule is complete,  correct and fairly  represents the financial  position of\nthe Company as of the date  thereof and the  results of its  operations  through\nthat date.\n\n     3.8 Events  Subsequent to the Date of the Balance Sheet.  Since the date of\nthe Balance Sheet and except as specifically provided for hereunder, the Company\nhas not (i) issued any stock, bond, warrant, option or other corporate security,\n(ii) split,  combined or  reclassified  its stock;  (iii) borrowed any amount or\nincurred or become subject to any liability  (absolute,  accrued or contingent),\nexcept current liabilities incurred and liabilities under contracts entered into\nin the ordinary  course of business,  (iv)  discharged  or satisfied any lien or\nencumbrance or incurred or paid any obligation or liability  (absolute,  accrued\nor  contingent)  other than current  liabilities  shown on the Balance Sheet and\ncurrent liabilities incurred since the date of the Balance Sheet in the ordinary\ncourse  of  business,  (v)  declared  or made any  payment  or  distribution  to\nstockholders  or purchased  or redeemed any share of its capital  stock or other\nsecurity,  (vi) mortgaged,  pledged,  encumbered or subjected to lien any of its\nassets, tangible or intangible,  other than liens of current real property taxes\nnot yet due and payable, (vii) sold, assigned or transferred any of its tangible\nassets  except in the  ordinary  course of business,  or  cancelled  any debt or\nclaim, (viii) sold, assigned,  transferred or granted any exclusive license with\nrespect to any patent,  trademark,  trade name, service mark,  copyright,  trade\nsecret or other intangible  asset,  (ix) suffered any loss of property or waived\nany  right  of  substantial  value  whether  or not in the  ordinary  course  of\nbusiness,  (x) made any change in officer  compensation  except in the  ordinary\ncourse of business and  consistent  with past  practice,  (xi) made any material\nchange in the manner of business or  operations  of the Company,  (xii)  entered\ninto any transaction except in the ordinary course of\n\n\n                                       6\n\n\n\nbusiness or as otherwise contemplated hereby, (xiii) purchased capital assets or\nmade  capital  expenditures  in  excess of  $50,000,  (xiv)  changed  accounting\nmethodology,   (xv)  voluntarily  terminated  any  agreement  which  would  have\nconstituted a material  contract other than  termination  by  expiration,  (xvi)\nsuffered  business  interruption  or property  damage  which had or could have a\nmaterially adverse effect, or (xvii) entered into any commitment  (contingent or\notherwise) to do any of the foregoing.\n\n     3.9  Absence  of  Liabilities.  Except as set forth in  Section  3.9 of the\nDisclosure  Schedule,  the Company  does not have any  liabilities  of any type,\nwhether absolute or contingent, which in the aggregate exceed $25,000.\n\n     3.10  Taxes.  The  Company has filed or has  obtained  presently  effective\nextensions  with respect to all federal,  state,  county,  local and foreign tax\nreturns which are required to be filed by it, such returns, if any, are true and\ncorrect  and all  taxes  shown  thereon  to be due have  been  timely  paid with\nexceptions  not  material  to the  Company.  Federal  income tax  returns of the\nCompany  have  not  been  audited  by  the  Internal  Revenue  Service,  and  no\ncontroversy  with respect to taxes of any type is pending or, to the best of the\nCompany's knowledge, threatened. The Company has withheld or collected from each\npayment made to its employees the amount of all taxes required to be withheld or\ncollected  therefrom  and has paid all such  amounts to the  appropriate  taxing\nauthorities when due.\n\n     3.11  Property  and  Assets.  The  Company  has good  title  to, or a valid\nleasehold  interest  in,  all  of  its  properties  and  assets,  including  all\nproperties and assets  reflected in the Financial  Disclosure  Schedule,  except\nthose disposed of since the date thereof in the ordinary course of business, and\nnone of such  properties  or assets is subject to any  mortgage,  pledge,  lieu,\nsecurity  interest,  lease,  charge or encumbrance other than those the material\nterms of which are described in the Financial Disclosure Schedule.\n\n     3.12 Intellectual Property\n\n     (a) No third party has claimed or, to the best of the Company's  knowledge,\nhas reason to claim that any person  employed by or affiliated with the Company,\nin connection with his or her employment by or affiliation with the Company, (i)\nhas violated or is violating any of the terms or  conditions of his  employment,\nnon-competition  or  non-disclosure  agreement  with such third party,  (ii) has\ndisclosed or is  disclosing  or has utilized or is utilizing any trade secret or\nproprietary  information  or  documentation  of such  third  party or (iii)  has\ninterfered or is interfering in the employment  relationship  between such third\nparty and any of its present or former  employees.  No third party has requested\ninformation  from  the  Company  which  suggests  that  such a  claim  might  be\ncontemplated.  To the best of the Company's knowledge,  no person employed by or\naffiliated  with the Company has employed or proposes to employ any trade secret\nor any information or documentation  proprietary to any former employer,  and to\nthe best of the Company's  knowledge,  no person  employed by or affiliated with\nthe Company has violated  any  confidential  relationship  which such person may\nhave had with any third party, in connection with the  development,  manufacture\nor sale of any product or  proposed  product or the  development  or sale of any\nservice or proposed service of the Company, and the Company has\n\n\n                                       7\n\n\n\nno reason to believe there will be any such employment or violation. To the best\nof  the  Company's  knowledge,  none  of  the  execution  or  delivery  of  this\nSubscription  Agreement,  or the  carrying  on of business of the Company by any\nofficer,  director or key  employee of the  Company,  or the conduct or proposed\nconduct of the business of the Company, will conflict with or result in a breach\nof the terms,  conditions  or  provisions  of or  constitute a default under any\ncontract, covenant or instrument under which any such person is obligated.\n\n     (b) Set forth in Section 3.12 of the  Disclosure  Schedule is a list of all\ndomestic and foreign patents,  patent rights,  patent applications,  trademarks,\ntrademark  applications,  service marks, service mark applications,  trade names\nand copyrights,  and all applications for such which are in the process of being\nprepared,  owned by or  registered  in the name of the Company,  or of which the\nCompany is a licensor or licensee or in which the Company has any right,  and in\neach case a brief  description of the nature of such right.  The Company owns or\npossesses  licenses or other  rights to use all  patents,  patent  applications,\ntrademarks,  trademark  applications,  service marks, service mark applications,\ntrade names,  copyrights,  manufacturing  processes,  formulae,  trade  secrets,\ncustomer lists and know-how  (collectively,  \"Intellectual  Property\") necessary\nfor the conduct of its  business as conducted  and as proposed to be  conducted,\nand no claim is pending or, to the best of the Company's  knowledge,  threatened\nto the effect that the operations of the Company  infringe upon or conflict with\nthe asserted rights of any other person under any Intellectual Property, and, to\nthe  best of the  Company's  knowledge,  there is no  basis  for any such  claim\n(whether or not pending or threatened). No claim is pending or threatened to the\neffect that any such Intellectual  Property owned or licensed by the Company, or\nwhich the Company otherwise has the right to use, is invalid or unenforceable by\nthe Company, and, to the best of the Company's knowledge,  there is no basis for\nany such  claim  (whether  or not  pending  or  threatened).  To the best of the\nCompany's knowledge, all technical information developed by and belonging to the\nCompany which has not been patented has been kept confidential.  The Company has\nnot granted or assigned to any other person or entity any right to  manufacture,\nhave  manufactured,  assemble or sell the  products  or proposed  products or to\nprovide the services or proposed services of the Company.\n\n     3.13 Compliance.  The Company has, in all material respects,  complied with\nall laws, regulations and orders applicable to its present and proposed business\nand has all material permits and licenses required thereby.  There is no term or\nprovision of any mortgage, indenture, contract, agreement or instrument to which\nthe Company is a party or by which it is bound, or, to the best of the Company's\nknowledge,  of any provision of any state or Federal  judgment,  decree,  order,\nstatute,  rule or regulation  applicable  to or binding upon the Company,  which\nmaterially  adversely affects or, so far as the Company may now foresee,  in the\nfuture is  reasonably  likely to  materially  adversely  affect,  the  business,\nprospects,  assets or condition,  financial or otherwise, of the Company. To the\nbest of the Company's  knowledge,  neither any founder nor any other employee of\nthe Company is in violation of any term of any contract or covenant (either with\nthe Company or with another entity) relating to employment, patents, proprietary\ninformation disclosure, non-competition or non-solicitation.\n\n     3.14  ERISA.  The  Company  does not  have or  otherwise  contribute  to or\nparticipate  in any employee  benefit  plan  subject to the Employee  Retirement\nIncome Security Act of 1974.\n\n\n                                       8\n\n\n\n     3.15  Insurance.  The  Company  currently  maintains a  commercial  general\nliability  insurance  policy with a general  aggregate limit of $2,000,000 as to\nits properties and business.\n\n     3.16 Subscription Agreement. Each of Carl Nelson, Jonathan H. Cook, Russell\nF. Gee and Kirk S. Jordan  (collectively,  the \"Original Investors\") has entered\ninto separate subscription  agreements (\"Purchase Agreement\") dated May 31, 2000\nwith Integrity Interactive Corporation,  a Massachusetts  corporation (Integrity\nInteractive--MA)  which  has since  reincorporated  as a  Delaware  corporation.\nPursuant to each Original Investor's Purchase Agreement,  the Original Investors\neach  purchased  860 shares of Common Stock in Integrity  Interactive  - MA at a\npurchase price of $10.00 per share.\n\n     3.17 Convertible Note Purchase  Agreement.  Each of the Original  Investors\nhas entered  into a  Convertible  Note  Purchase  Agreement  (\"Convertible  Note\nPurchase  Agreement\")  dated as of May 31, 2000 with Integrity  Interactive - MA\nwhereby each Original Investor purchased a note in the original principal amount\nof $25,000, with interest accruing at the rate of 6.62% per annum (the \"Notes\").\nAccording to each Original Investor's  Convertible Note Purchase Agreement,  the\nprincipal  of each Note (and at the option of the Company any accrued but unpaid\ninterest  thereon),   shall  be  treated  by  the  Company  as  surrendered  for\ncancellation and exchanged into the equity  securities  issued by the Company at\nthe closing of the next Qualified Financing at the same price and subject to the\nsame terms of the Qualified Financing. \"Qualified Financing\" shall mean the next\nsale or related  group of sales by the  Company of capital  stock or  securities\nconvertible  into  capital  stock  (other  than the  Notes),  in an  arms-length\ntransaction  which sale  generated  gross  proceeds  to the  Company of at least\n$500,000,  excluding amounts received by the Company from the sale of the Notes.\nUpon  receipt  and  acceptance  by the  Company  of at least  $500,000  from the\nInvestor or other investors in accordance  with the terms and conditions  hereof\nand as part of the  transactions  contemplated  hereby,  such  investment  shall\nconstitute a Qualified Financing under the Convertible Note Purchase Agreement.\n\n     3.18  Restricted  Stock Purchase  Agreement.  Each of Messrs.  Cook and Gee\nentered  into a  Restricted  Stock  Purchase  Agreement  dated May 24, 2000 with\nIntegrity  Interactive - MA whereby each of Messrs. Cook and Gee purchased 1,500\nshares of  Integrity  Interactive  - MA's  Common  Stock at a purchase  price of\n$10.00 per share.\n\n     3.19 Common Stock of Integrity Interactive - MA. Each share of Common Stock\nin Integrity  Interactive  - MA was  subsequently  converted  into 300 shares of\nCommon  Stock of the Company  pursuant to an  Agreement  of Merger dated June 8,\n2000 and  effective  filing of  Articles  of Merger  with the  Secretary  of the\nCommonwealth of  Massachusetts  and the Certificate of Merger with the Secretary\nof State of the State of Delaware.\n\n     3.20 Material  Contracts.  Except as set forth in the Disclosure  Schedule,\nthe  Company is not a party to any  written  contract,  obligation,  instrument,\ncorporate  restriction or commitment  which  involves a potential  commitment in\nexcess of $25,000 or which is material,  to the business,  assets,  liabilities,\nfinancial condition, results of operations or prospects of the Company.\n\n\n                                       9\n\n\n\n     3.21 Disclosures. No representation or warranty by the Company contained in\nthis Subscription  Agreement and no statement contained in any of the Disclosure\nSchedules,  certificate  or other  document  or  instrument  delivered  or to be\ndelivered  pursuant to this  Subscription  Agreement by the Company  contains or\nwill contain any untrue  statement  of a material  fact or omits or will omit to\nstate any  material  fact  necessary in order to make the  statements  contained\nherein or therein not misleading,  provided,  however, that the Company does not\nguarantee the  achievement  of any  projections  which have been provided to the\nInvestor.\n\n4. Restrictive Legend. The Investor consents to the placement of certain legends\non the certificate(s)  for the Shares as required by applicable laws,  including\nlegends in forms substantially as follows:\n\n     THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN  REGISTERED\n     UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED,  OR  APPLICABLE  STATE\n     SECURITIES LAWS AND NONE OF SUCH SECURITIES,  NOR ANY INTEREST THEREIN, MAY\n     BE SOLD, TRANSFERRED,  ASSIGNED, MADE THE SUBJECT OF ANY SECURITY INTEREST,\n     OR OTHERWISE  DISPOSED OF,  UNLESS THE COMPANY SHALL FIRST HAVE RECEIVED AN\n     OPINION OF COUNSEL,  IN FORM AND SUBSTANCE  SATISFACTORY TO THE COMPANY, TO\n     THE EFFECT THAT SUCH  SECURITIES  OR  INTEREST  THEREIN,  AND THE  PROPOSED\n     DISPOSITION THEREOF, ARE THE SUBJECT OF A CURRENTLY EFFECTIVE  REGISTRATION\n     STATEMENT  UNDER SUCH ACT AND  APPLICABLE  STATE  SECURITIES  LAW,  OR THAT\n     REGISTRATION UNDER SUCH ACT AND LAW IS NOT REQUIRED IN CONNECTION WITH SUCH\n     DISPOSITION.\n\n     THE  SHARES  REPRESENTED  BY THIS  CERTIFICATE  ARE  SUBJECT  TO A  CERTAIN\n     SUBSCRIPTION  AGREEMENT,  BY AND BETWEEN THE COMPANY AND THE HOLDER OF THIS\n     CERTIFICATE,  A COPY OF WHICH  AGREEMENT IS AVAILABLE FOR INSPECTION AT THE\n     OFFICES OF THE COMPANY UPON WRITTEN REQUEST THEREFOR.\n\n5.  Transferability.  The  Investor  agrees  not  to  transfer  or  assign  this\nSubscription  Agreement,  or any of the Investor's  interest herein, and further\nagrees that the assignment and transfer of the Shares  acquired  pursuant hereto\nshall be made only in accordance  with all applicable  laws,  this  Subscription\nAgreement and the Company's Certificate of Incorporation, as amended.\n\n6. Revocation.  The Investor agrees that the Investor may not cancel,  terminate\nor revoke this  Subscription  Agreement or any  agreement  of the Investor  made\nhereunder  and that  this  Subscription  Agreement  shall  survive  the death or\ndisability  of the  Investor  and shall be binding  upon the  Investor's  heirs,\nexecutors, administrators, successors and assigns.\n\n7.  Distribution  Agreement.  The  investment  made by LRC  hereunder is made in\nconnection  with and in accordance with a certain letter  agreement  between LRC\nand the Company dated as of\n\n\n                                       10\n\n\n\nMay 3, 2000 (the \"Distribution  Agreement\") and such an investment shall satisfy\nthe condition set forth in Paragraph H thereof.\n\n8. Miscellaneous.\n\n     8.1. Notices.  All notices or other  communications given or made hereunder\nshall be in writing  and shall be  delivered  or mailed by  registered  or first\nclass  mail,  postage  prepaid  or express  overnight  courier  service,  to the\naddresses set forth on the cover page hereof.\n\n     8.2.  Governing Law. This  Subscription  Agreement shall be governed by and\nconstrued in  accordance  with the laws of the  Commonwealth  of  Massachusetts,\nexcluding its conflicts of laws and choice of laws rules.\n\n     8.3. Entire Agreement.  This Subscription  Agreement constitutes the entire\nagreement  between the parties with respect to the subject matter hereof and may\nbe amended or superseded only by a writing executed by the parties.\n\n     8.4.  Gender.  Whenever the context may require,  any pronoun shall include\nthe  corresponding  masculine,  feminine and neuter forms,  the singular  number\nshall include the plural, and the plural shall include the singular.\n\n9. Continuing Effect of  Representations,  Warranties and  Acknowledgments.  The\nInvestor  and the  Company  agree that the  representations  and  warranties  of\nSection 2 and Section 3,  respectively,  are true and accurate as of the date of\nthis  Subscription  Agreement  and shall be true and  accurate as of the date of\ndelivery to and acceptance by the Company of this  Subscription  Agreement,  and\nshall survive such  delivery and  acceptance,  subject to applicable  statute of\nlimitations.   If  in  any  respect   such   representations,   warranties   and\nacknowledgments  shall  not be true  and  accurate  prior to such  delivery  and\nacceptance,  the  Investor  or the  Company,  as the  case  may be,  shall  give\nimmediate  written  notice  of  such  fact  to the  other  party  and  to  their\nrepresentative(s),  if any, specifying which  representations and warranties and\nacknowledgments are not true and accurate and the reasons therefor.\n\n10.  Indemnification.  The Investor and the Company  understand  the meaning and\nlegal consequences of their respective  representations and warranties contained\nin Section 2 and Section 3, and each party (the \"Indemnifying  Party\") agrees to\nindemnify  and  hold  harmless  the  other  party,  its  officers  or any of its\naffiliates,  controlling shareholders,  agents, directors, or employees from and\nagainst any and all loss,  damage or liability  (including  costs and reasonable\nattorney's  fees)  due to or  arising  out of a  breach  of any  representation,\nwarranty  or  acknowledgment  of  the  Indemnifying   Party  contained  in  this\nSubscription Agreement,  provided however that the Company's liability hereunder\nshall not exceed the amount of funds  received by the Company  from the Investor\nhereunder.\n\n\n                                       11\n\n\n\n                                    Exhibit A\n\n                              Preferred Stock Terms\n\n\n                                       12\n\n\n\n                                   Schedule I\n\n                              Disclosure Schedules\n\n\n     Nothing  in  these  Schedules  is  intended  to  broaden  the  scope of any\nrepresentation  or warranty  of the Company  contained  in the  Agreement  or to\ncreate any  covenant on the part of the  Company.  Inclusion  of any item in the\nSchedules (1) does not represent a  determination  by the Company that such item\n(a) is material,  nor shall it be deemed to establish a standard of materiality,\nor (b) did not  arise in the  ordinary  course  of  business  and (2)  shall not\nconstitute,  or be deemed to be, an admission to any third party concerning such\nitem by the Company.\n\n     All  references  to  \"Section\"  or  \"subsection\"  refer  to  a  Section  or\nsubsection  in  the  Agreement,  unless  the  context  otherwise  requires.  All\nreferences  to  \"Schedules\"  refer to one of the  Schedules,  unless the context\notherwise requires. The reference \"see attachments\" means further information is\nincluded  in the  documents  attached  to the  Schedules,  The  headings  in the\nSchedules  are for  convenience  of  reference  only and  shall not  affect  the\ndisclosures contained herein.\n\n     Whenever the Schedules includes  descriptions of certain documents or brief\nsummaries of certain aspects of the Company or its business,  such  descriptions\nand  summaries  are  qualified  by  reference  to the actual  documents or other\nmatters to which they refer.\n\nSection 3.7    Financial Statements\n\nPlease see the attached.\n\nSection 3.9    Absence of Liabilities\n\nThe following lists the liabilities of the Company as of 6\/30\/2000:\n\n           Convertible notes                                            $100,000\n           Accounts payable in normal course of business                  $6,988\n           Accruals for:\n                    Consulting fees                                      $25,000\n                    Travel reimbursement                                 $36,800\n                    Legal                                                 $5,000\n                    Asset purchases                                      $13,800\n                    Other                                                   $500\n                                                                        --------\n           Total                                                        $188,088\n\n\n                                       13\n\n\n\nSection 3.12 Intellectual Property\n\n     The mark is \"Integrity Interactive\" is presently registered with the United\nStates Patent and Trademark Office in the name of Compliance Systems Legal Group\n(\"CSLG\").  CSLG has  commenced the process to transfer the  registration  to the\nCompany.\n\nSection 3.20 Material Contracts\n\nThe  Company  has the  following  material  contracts  in  effect as of the date\nhereof:\n\n(a) Joint  Development  Agreement  dated as of November 30, 1999, by and between\nVIS Development Corporation and the Company\n\n(b) Hosting and Development  Agreement dated as of June 30, 2000, by and between\nVIS Development Corporation and the Company\n\n(c) Letter  agreement  dated May 3, 2000, by and between the Company and LRC (to\nbe amended and  restated (or  otherwise  superseded)  as part of the  investment\ncontemplated herein).\n\nThe Company is presently negotiating the following agreements:\n\n(a) Master Services  Agreement by and between  Nextel  Communications,  Inc. and\nthe Company; and\n\n(b) Letter  Agreement by and between the Company and  Pinkerton  Services  Group\ncurrently dated as of June 12. 2000.\n\n\n                                       14\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8037],"corporate_contracts_industries":[9504],"corporate_contracts_types":[9622,9627],"class_list":["post-43739","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-legal-research-center-inc","corporate_contracts_industries-services__legal","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43739","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=43739"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43739"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43739"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}