AMENDED AND RESTATED
STOCK ACQUISITION AGREEMENT
THIS AMENDED AND RESTATED STOCK ACQUISITION AGREEMENT (the "Agreement") is
made and entered into as of the 31st day of March, 2000, by and among (i)
ENVISION DEVELOPMENT CORPORATION, a Florida corporation ("Envision"), and QV
ACQUISITION CORPORATION, a Delaware corporation ("Acquisition Co."), and (ii)
SUNDOG TECHNOLOGIES, INC., a Delaware corporation ("Sundog"), and ROCKMOUNTAIN
VENTURES FUND, LP ("Rock"), a Delaware limited partnership (individually, a
"Stockholder" and collectively, the "Stockholders").
RECITALS
WHEREAS, Acquisition Co. is a duly incorporated Delaware subsidiary of
Envision formed for the purpose of the share exchange contemplated by this
Agreement, with authorized capital stock consisting of 1,000 shares of common
stock, $0.01 par value, all of which are owned by Envision; and
WHEREAS, the Stockholders own voting stock of QUI VIVE, INC., a Delaware
corporation ("QV"); and
WHEREAS, the Boards of Directors of Envision and Sundog and the Manager of
Rock have approved the acquisition of voting stock of QV by Acquisition Co. from
the Stockholders in exchange for Common Stock of Envision (the "Exchange")
pursuant to the terms and subject to the conditions of this Agreement; and
WHEREAS, the common stock of Envision is listed and traded on the American
Stock Exchange, Inc. (the "AMEX"); and
WHEREAS, the rules of the AMEX require the approval of the shareholders for
issuance of stock equal to or more than twenty percent (20%) of the issued and
outstanding stock of Envision.; and
WHEREAS, for federal income tax purposes, it is intended that the Exchange
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986 (the "Code"); and
WHEREAS, the parties hereto desire to make certain representations,
warranties, and agreements in connection with the Exchange and also to prescribe
certain conditions to the Exchange; and
WHEREAS, on February 7, 2000, Xxxxxxxxxx.xxx, Inc., a Florida corporation
("Xxxxxxxxxx.xxx"), Sundog, Acquisition, and Rock entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement"); and
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WHEREAS, on February 28, 2000, Xxxxxxxxxx.xxx assigned all of its right,
title, and interest in the Stock Purchase Agreement to Envision;
WHEREAS, the parties desire to amend and restate the Stock Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each signatory hereto, it is agreed that the
Stock Purchase Agreement is amended and restated in its entirety as follows:
ARTICLE 1
EXCHANGE TRANSACTION
1.1 Exchange Transaction. At the closing ("Closing"), each Stockholder
shall transfer, assign, grant, convey, and set over to Acquisition Co., and its
successors and assigns forever, and Acquisition Co. shall accept and receive
from each such Stockholder, free and clear of any and all encumbrances, all of
such Stockholder's right, title, and interest in, to, and under voting shares of
QV ("QV Voting Stock") as follows:
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Stockholder QV Voting Stock
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Sundog Technologies, Inc. 550,000 shares of Series A Preferred Stock
RockMountain Ventures Fund, LP 107,000 shares of Series B Preferred Stock
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1.2 Exchange Consideration. In consideration of the Stockholders' transfer
of their shares of QV Voting Stock to Acquisition Co., at the Closing, Envision
shall issue and deliver to each Stockholder, and each Stockholder shall accept
and receive from Envision, free and clear of any all encumbrances, common stock
of Envision ("Envision Common Stock") as follows:
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Stockholder Shares of Envision Common Stock
--------------------------------------------------------------------------------
Sundog Technologies, Inc. 1,482,000
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RockMountain Ventures Fund, LP 321,000
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For purposes of this Agreement, the term "Envision Shares" shall mean the shares
of Envision Common Stock issuable as the consideration for the Exchange and the
conveyance of the License described in Section 1.3 below. Upon the initial
Closing hereof, Envision shall issue and deliver to (a) Sundog One Million Two
Hundred Nineteen Thousand Five Hundred (1,219,500) shares of the Envision
Shares, which includes the Ten Thousand (10,000) Envision Shares to which Sundog
is entitled pursuant to Section 1.3, below, and (b) Rock Two Hundred and Seventy
Three Thousand (273,000) shares of the Envision Shares. Thereafter, within two
(2) business days after the approval by the shareholders of Envision or the
expiration of any waiting period required by Regulation 14C of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") with respect to the
issuance to (x) Sundog of the remaining Two Hundred Seventy Two Thousand Five
Hundred (272,500) shares of Envision Common Stock and (y) Rock of the remaining
Forty Eight Thousand (48,000) shares of Envision Common Stock (the
"Post-Approval Shares") to which Sundog and Rock are respectively entitled
pursuant to this Section 1.2, Envision shall issue and deliver to Sundog and
Rock the Post-Approval Shares; provided, however, that should Envision issue
additional Envision Common Stock to third persons (the "Third Party Shares")
between the date of the initial Closing and the date the shareholders of
Envision approve the issuance of the Post-Approval Shares, Envision shall (i)
obtain the written agreement of the holders of the Third Party Shares to vote in
favor of the issuance of the Post-Approval Shares that remain to be issued to
Sundog and Rock at the time of any vote by the shareholders of Envision in
connection with the issuance thereof and (ii) subject to applicable rules of the
AMEX, promptly issue to Sundog and Rock, pro rata, that number of Envision
Shares equal to nineteen and nine tenths percent (19.9%) of the Third Party
Shares up to a maximum of the Post-Approval Shares. The Post-Approval Shares to
be issued to Sundog and Rock as described in the preceding sentence, or such
lesser amount as that amount may be adjusted downward as is also described in
the preceding sentence, are hereinafter referred to as the "Post-Approval
Shares". The Post-Approval Shares shall be issued to Sundog and Rock upon
fulfillment of the conditions set forth in Article 6 and Sections 8.2 and 8.6.
1.3 Transfer of Software License Agreement. In addition to the Exchange
provided for herein, Sundog agrees at the initial Closing to transfer all of its
right, title and interest arising under, in and to that certain Software License
Agreement and Software Technical Support Agreement Addendum between Sundog and
QV, both executed on November 8, 1999 (collectively, the "License"). As
consideration for the conveyance of Sundog's interest in the License, Envision
agrees to issue Ten Thousand (10,000) shares of Envision Common Stock to Sundog
at the initial Closing.
1.4 Closings. The initial Closing shall take place at the offices of Durham
Xxxxx & Xxxxxxx, 000 Xxxx Xxxxxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx, as soon as
practicable following the satisfaction or waiver of the conditions set forth in
Articles 6, 7, and 8. The Closing regarding the Post-Approval Shares shall occur
at the offices of Durham Xxxxx & Xxxxxxx within two (2) business days following
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the receipt of approval for the issuances of the Post-Approval Shares from the
shareholders of Envision (unless required earlier pursuant to the fourth
sentence of Section 1.2).
1.5 Tax Consequences. It is intended that the Exchange shall constitute a
reorganization within the meaning of Section 368(a) of the Code, and that this
Agreement shall constitute a "plan of reorganization" for purposes of Section
368 of the Code.
1.6 Registration Rights. The Envision Shares issued to the Stockholders as
the consideration for the Exchange as provided in Section 1.2 and the conveyance
of the License as provided in Section 1.3 above shall be entitled to "piggyback"
registration rights pursuant to the terms of Registration Rights Agreement (the
"Rights Agreement") in the form attached hereto as Exhibit "A".
1.7 Adjustments. If, through or as a result of any merger, consolidation or
sale of all or substantially all of the assets of the Envision not heretofore
publicly announced, or any reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, or other similar transaction
prior to any Closing, (i) the outstanding shares of Envision Common Stock are
increased or decreased or are exchanged for a different number or kind of shares
or other securities of the Envision, or (ii) additional shares or new or
different shares or other securities of Envision or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportionate adjustment shall be made in number of shares of
Envision Common Stock to be distributed to the Stockholders pursuant to the
provisions of Section 1.2, above, without changing the shares of QV to be
transferred to Envision pursuant to Section 1.1, above.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SUNDOG
Sundog hereby represents and warrants to Acquisition Co. and Envision as
follows:
2.1 Organization of QV. QV is a corporation duly organized under the laws
of the State of Delaware.
2.2 Capitalization of QV. As of the date of this Agreement, to the
reasonable best knowledge of Sundog, the only authorized capital stock of QV
consists of Thirty Million (30,000,000) shares of QV Common Stock, $0.001 par
value per share, of which Seventy Thousand Seven Hundred Seventy-Five (70,775)
shares are issued and outstanding, and Ten Million (10,000,000) shares of QV
Preferred Stock, $0.001 par value per share, of which Five Hundred Fifty
Thousand (550,000) shares of Series A Preferred Stock are authorized and Five
Hundred Fifty Thousand (550,000) shares are issued and outstanding, and Tw
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Hundred Thirty-Two Thousand Five Hundred (232,500) shares of Series B Preferred
Stock are authorized and One Hundred Eighty Thousand (180,000) shares are issued
and outstanding. There are no shares or classes of capital stock of QV which are
non-voting.
2.3 Business of QV. To the reasonable best knowledge of Sundog, (i) the
material contracts of QV are as set forth on Schedule 2.3(i) hereof, (ii) QV has
cash of at least $50,000, (iii) except as disclosed in Schedule 2.3(i), QV's
aggregate indebtedness does not exceed $90,000, (iv) except as disclosed in
Schedule 2.3(iv), QV owns or is licensed to use, in each case free and clear or
any encumbrances, all its intellectual property (including rights to
technology), (v) there is no pending litigation against QV, (vi) QV is not in
violation of any law, rule or regulation that would have a material adverse
effect on QV, its properties or business, (vii) QV has no employee benefit plans
except as described in Schedule 2.3(vii) hereof, (viii) there are 410,125
options issued to acquire Common Stock of QV, no more than 9,600 of which by
their terms accelerate, or are entitled to a shortened vesting period, due to a
change of control of QV, and (ix) QV has timely paid all federal, state or local
taxes that have become due and payable and has timely filed all returns and
reports with respect to such taxes.
2.4 Ownership of Shares. Upon conveyance of the QV Voting Stock of Sundog
to Envision at the Closing, and assuming (i) that the representations and
warranties of Rock set forth in Section 2A are true and correct and (ii) that
Rock conveys to Envision its QV Voting Stock pursuant to Section 1.1 hereof, to
the reasonable best knowledge of Sundog, Envision will own 80.05% of the voting
power of all voting stock of QV. Each of the shares of QV Voting Stock to be
tendered by Sundog at the Closing is owned beneficially by Sundog, free and
clear of any encumbrance and is duly authorized, validly issued, fully paid,
non-assessable and free of any preemptive rights, except for such rights of
first refusal as may exist in favor of QV, if any. At the Closing, each of such
shares of QV Voting Stock conveyed by Sundog to Envision will be free of any
encumbrance or preemptive rights. Sundog has full power and authority to convey
good marketable title to its shares of QV Voting Stock.
2.5 Authority.
(a) The execution, delivery, and performance of this Agreement by
Sundog and conveyance of its QV Voting Stock to Envision has been duly and
validly authorized and approved by all necessary corporate action of Sundog and
no other corporate proceedings on the part of the Stockholders are necessary to
authorize the execution, delivery, and performance of this Agreement by the
Stockholders. The execution and delivery of this Agreement by Sundog, compliance
by Sundog with the terms and provisions of this Agreement and the conveyance of
its QV Voting Stock will not (i) conflict with or result in a breach of any of
the terms, conditions, or provisions of the Articles of Incorporation of Sundog,
as amended, or the Bylaws or other governing instruments of Sundog, each as
amended, or of any judgment, order, decree, or ruling of any court of
governmental authority or of any agreement, contract, or commitment to which
Sundog is a party, or of any injunction to which it is subject or (ii) require
the affirmative consent or approval of any nongovernmental third party, except
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for the concurrence of QV and its counsel in the determination that the transfer
of the Sundog QV Voting Stock is not subject to the registration requirements of
the Securities Act.
(b) Sundog is not required to submit any notice, report, or other
filing with any federal, state, or local governmental authority in connection
with the execution or delivery or performance by Sundog of this Agreement or the
consummation of the transactions contemplated herein, including the conveyance
of the Sundog QV Voting Stock.
(c) This Agreement (with respect to Sundog) constitutes the legal,
valid, and binding obligations of Sundog, enforceable in accordance with their
respective terms (except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting the rights of
creditors generally or by general principles of equity).
2.6 Broker's Fees. There are no broker's or finder's fees or obligations
due to persons engaged by Sundog in connection with the transactions
contemplated by this Agreement, except for the fees and expenses of its counsel
and accountants.
2.7 Restricted Shares. Sundog understands and acknowledges that the
Envision Shares have not been registered under the Securities Act of 1933, as
amended) (the "Act"), or any state securities laws, and that they will be issued
in reliance upon certain exemptions from the registration requirements of those
laws, and thus cannot be resold, offered or transferred unless they are
registered under the Act or unless Envision has first received an opinion of
competent securities counsel reasonably satisfactory in form and substance to
Envision that registration is not required for such resale. Sundog agrees that
it will not resell, offer or transfer any Envision Shares unless such resale,
offer or transfer transaction is in accordance with the limitations set forth in
the Rights Agreement, in accordance with Rule 144 under the Act, pursuant to
registration under the Act, or pursuant to another available exemption from
registration. With regard to the restrictions on resales of the Envision Shares,
Sundog is aware (i) of the limitations and applicability of Rule 144 of the Act;
(ii) that Envision will issue stop transfer orders to its stock transfer agent;
and (iii) that a restrictive legend will be placed on certificates representing
the Envision Shares, to the extent such restrictions apply, which legend will
read substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION
OR QUALIFICATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND STATE SECURITIES LAWS AND THEREFORE
HAVE NOT BEEN REGISTERED UNDER THE ACT OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT COMPLIANCE WITH
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THE PROVISIONS OF RULE 144 UNDER THE ACT, COMPLIANCE WITH THE
REGISTRATION OR QUALIFICATION PROVISIONS OF THE ACT AND
APPLICABLE STATE LAWS, OR PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. THE COMPANY
WILL INSTRUCT ITS STOCK TRANSFER AGENT NOT TO RECOGNIZE ANY
SALE OF THESE SECURITIES UNLESS SUCH SALE IS MADE PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR THE
COMPANY HAS FIRST RECEIVED AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY IN FORM AND SUBSTANCE, THAT SUCH
REGISTRATION IS NOT REQUIRED.
2.8 Investment Representations of Sundog. Sundog represents and warrants to
Envision that Sundog is aware that the Envision Shares issued in the Exchange
have not been registered under the Act or any applicable state securities laws,
and covenants to Envision that such Envision Shares will not be offered or sold
in the absence of registration under the Act and any applicable state securities
laws or an exemption from the registration requirements of the Act and any
applicable state securities laws. Sundog will not transfer, distribute,
exchange, sell, pledge, hypothecate or otherwise dispose of the Envision Shares,
unless they are registered under the Act or unless Envision has first received
an opinion of competent securities counsel reasonably satisfactory in form and
substance to Envision that registration is not required for such resale. Sundog
is acquiring the Envision Shares for its own account and for investment, and not
with a view to the distribution thereof or with any present intention of
distributing or selling any of the Envision Shares except in compliance with the
Act. Sundog has (i) reviewed Envision's Form S-1 and the other reports and
documents of Envision (collectively, the "SEC Filings") filed with the
Securities and Exchange Commission (the "SEC"), (ii) had an opportunity to ask
questions of and received answers from Envision concerning the terms and
conditions of the Envision Shares and (iii) such knowledge and experience in
business and financial matters that it is capable of evaluating the relative
rules and merits of the Exchange.
2.9 The License. The License (i) is in full force and effect; (ii) may be
freely assigned to Envision; (iii) is not subject to any current default by
Sundog or, to the reasonable best knowledge of Sundog, by QV; and (iv) is not
subject to any outstanding, or to the reasonable best knowledge of Sundog,
threatened disputes or disagreements.
2.10 Tax Opinion Representation. To the best reasonable knowledge of
Sundog, there are no facts or circumstances relating to the Exchange that would
prevent Durham Xxxxx & Xxxxxxx from delivering the opinion referred to in
Section 8.11, as of the date hereof.
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ARTICLE 2A
REPRESENTATIONS AND WARRANTIES OF ROCK
Rock hereby represents and warrants to Acquisition Co. and Envision as
follows:
2A.1 Ownership of Shares. Each of the shares of QV Voting Stock to be
tendered by Rock at the Closing is owned beneficially by Rock, free and clear of
any encumbrance and is duly authorized, validly issued, fully paid,
non-assessable and free of any restrictions on transfer except for such rights
of first refusal as may exist in favor of QV, if any, set forth in the Investor
Rights Agreement, dated November 8, 1999 among QV, Sundog and Rock Equity
Ventures, LLC (the "Investor Agreement") and restrictions imposed by applicable
federal and state securities laws. Except for (a) the right of first refusal set
forth in Article 9 of the Bylaws of QV, as amended, and assuming that QV
delivers a waiver of its rights under said Article 9 prior to the Closing, and
(b) the restrictions on transfer set forth in the Investor Agreement and
assuming the conditions set forth in the Investor Agreement are satisfied prior
to Closing, at the Closing each of such shares of QV Voting Stock conveyed by
Rock will be free of any encumbrance or restrictions on transfer (except for
restrictions imposed by applicable federal and state securities laws). Rock has
full power and authority to convey good and marketable title to its shares of QV
Voting Stock.
2A.2 Authority.
(a) The execution, delivery, and performance of this Agreement by
Rock and conveyance of its QV Voting Stock to Envision has been duly and validly
authorized and approved by all necessary action of Rock and no other partnership
proceedings on the part of Rock are necessary to authorize the execution,
delivery, and performance of this Agreement by the Stockholders. The execution
and delivery of this Agreement by Rock, compliance by Rock with the terms and
provisions of this Agreement and the conveyance of the QV Voting Stock will not
(i) conflict with or result in a breach of any of the terms, conditions, or
provisions of the Limited Partnership Agreement of Rock, as amended, or any
other governing instruments of Rock, as amended, or of any judgment, order,
decree, or ruling of any court of governmental authority or of any agreement,
contract, or commitment to which Rock is a party, or of any injunction to which
it is subject or (ii) require the affirmative consent or approval of any
nongovernmental third party, except for the concurrence of QV and its counsel in
the determination that the transfer of its QV Voting Stock is not subject to the
registration requirements of the Securities Act.
(b) Rock is not required to submit any notice, report, or other
filing with any federal, state, or local governmental authority in connection
with the execution or delivery or performance by Rock of this Agreement or the
consummation of the transactions contemplated herein, including the conveyance
of its QV Voting Stock.
(c) This Agreement (with respect to Rock) constitutes the legal,
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valid, and binding obligations of Rock, enforceable in accordance with their
respective terms (except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting the rights of
creditors generally or by general principles of equity).
2A.3 Broker's Fees. There are no broker's or finder's fees or obligations
due to persons engaged by Rock or any of its affiliates in connection with the
transactions contemplated by this Agreement, except for the fees and expenses of
its counsel and accountants.
2A.4 Restricted Shares. Rock understands and acknowledges that the Envision
Shares have not been registered under the Act or any state securities laws, and
that they will be issued in reliance upon certain exemptions from the
registration requirements of those laws, and thus cannot be resold, offered or
transferred unless they are registered under the Act or unless Envision has
first received an opinion of competent securities counsel reasonably
satisfactory in form and substance to Envision that registration is not required
for such resale. Rock agrees that it will not resell, offer or transfer any
Envision Shares unless such resale, offer or transfer transaction is in
accordance with the limitations set forth in the Rights Agreement, in accordance
with Rule 144 under the Act, pursuant to registration under the Act, or pursuant
to another available exemption from registration. With regard to the
restrictions on resales of the Envision Shares, Rock is aware (i) of the
limitations and applicability of Rule 144 of the Act; (ii) that Envision will
issue stop transfer orders to its stock transfer agent; and (iii) that a
restrictive legend will be placed on certificates representing the Envision
Shares, to the extent such restrictions apply, which legend will read
substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION
OR QUALIFICATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND STATE SECURITIES LAWS AND THEREFORE
HAVE NOT BEEN REGISTERED UNDER THE ACT OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT COMPLIANCE WITH
THE PROVISIONS OF RULE 144 UNDER THE ACT, COMPLIANCE WITH THE
REGISTRATION OR QUALIFICATION PROVISIONS OF THE ACT AND
APPLICABLE STATE LAWS, OR PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. THE COMPANY
WILL INSTRUCT ITS STOCK TRANSFER AGENT NOT TO RECOGNIZE ANY
SALE OF THESE SECURITIES UNLESS SUCH SALE IS MADE PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR THE
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COMPANY HAS FIRST RECEIVED AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY IN FORM AND SUBSTANCE, THAT SUCH
REGISTRATION IS NOT REQUIRED.
2A.5 Investment Representations of Rock. Rock represents and warrants to
Envision that Rock is aware that the Envision Shares issued in the Exchange have
not been registered under the Act or any applicable state securities laws, and
covenants to Envision that such Envision Shares will not be offered or sold in
the absence of registration under the Act and any applicable state securities
laws or an exemption from the registration requirements of the Act and any
applicable state securities laws. Rock will not transfer, distribute, exchange,
sell, pledge, hypothecate or otherwise dispose of the Envision Shares, unless
they are registered under the Act or unless Envision has first received an
opinion of competent securities counsel reasonably satisfactory in form and
substance to Envision that registration is not required for such resale. Rock is
acquiring the Envision Shares for its own account and for investment, and not
with a view to the distribution thereof or with any present intention of
distributing or selling any of the Envision Shares except in compliance with the
Act. Rock (i) has reviewed the SEC Filings, (ii) had an opportunity to ask
questions of and received answers from Envision concerning the terms and
conditions of the Envision Shares and (iii) has such knowledge and experience in
business and financial matters that it is capable of evaluating the relative
rules and merits of the Exchange.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ENVISION AND ACQUISITION CO.
Envision and Acquisition Co. hereby represent and warrant to the
Stockholders as follows:
3.1 Organization and Good Standing. Envision and Acquisition Co. are both
corporations duly organized, validly existing, and in good standing under the
laws of the State of Florida and Delaware, respectively and have full corporate
power and authority to own their respective properties and carry on their
respective businesses and to enter into and perform their respective obligations
under this Agreement.
3.2 Capitalization of Envision and Acquisition Co.
(a) As of March 31, 2000, the authorized capital stock of Envision
consists of Twenty Million (20,000,000) shares of common stock, par value $0.01,
of which Seven Million Five Hundred Thousand (7,500,000) shares are issued and
outstanding, and Five Million (5,000,000) shares of Preferred Stock, par value
$0.01, of which none is issued and outstanding. All issued and outstanding
shares of Envision Stock have been duly authorized and are validly issued, fully
paid, and nonassessable. The rights, powers, preferences, and relative
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participating, optional or other special rights, qualifications, limitations, or
restrictions applicable to the Envision Stock are as set forth in the Amended
and Restated Articles of Incorporation of Envision, a copy of which has been
previously delivered to the Stockholders. All issued and outstanding shares of
Envision Stock have been and will be issued and sold in material compliance with
all applicable state, federal, and foreign laws and regulations.
(b) As of the date of this Agreement, the authorized capital stock of
Acquisition Co. consists of one thousand (1,000) shares of Acquisition Co.
common stock, par value $0.01, all of which shares are, and immediately prior to
the Closing will be, issued and outstanding and owned beneficially and of record
by Envision. All of the Acquisition Co. common stock outstanding on the date
hereof has been duly authorized and validly issued and is fully paid and
nonassessable.
3.3 Authority.
(a) The execution, delivery, and performance of this Agreement by
Envision and Acquisition Co. and the issuance and delivery by Envision of the
Envision Shares, have been duly and validly authorized and approved by all
necessary corporate action of Envision and Acquisition Co. and, other than
obtaining the approval of the shareholders of Envision in connection with the
issuance of the Post-Approval Shares and the AMEX, no other corporate
proceedings on the part of Envision or Acquisition Co. are necessary to
authorize the execution, delivery, and performance of this Agreement by Envision
and Acquisition Co. The execution and delivery of this Agreement by Envision and
Acquisition Co., compliance by Envision and Acquisition Co. with the terms and
provisions of this Agreement and the issuance and delivery by Envision of the
Envision Shares will not (i) conflict with or result in a breach of any of the
terms, conditions, or provisions of the Articles of Incorporation of Envision or
Acquisition Co., each as amended, or the Bylaws or other governing instruments
of Envision or Acquisition Co., each as amended, or of any judgment, order,
decree, or ruling of any court or governmental authority or of any agreement,
contract, or commitment to which Envision or Acquisition Co. is a party, or of
any injunction to which they are subject or (ii) require the affirmative consent
or approval of any nongovernmental third party other than the AMEX and the
shareholders of Envision.
(b) Envision is not required to submit any notice, report, or other
filing with any federal, state, or local governmental authority in connection
with the execution or delivery or performance by Envision or Acquisition Co. of
this Agreement or the consummation of the transactions contemplated herein,
including the issuance and delivery of the Envision Shares, except as required
by Regulation 14A or 14C of the Exchange Act with respect to the issuance of the
Post-Approval Shares.
(c) This Agreement (with respect to Envision and Acquisition Co.)
constitutes the legal, valid, and binding obligations of such parties,
enforceable in accordance with their respective terms (except as such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
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similar laws affecting the rights of creditors generally or by general
principles of equity).
3.4 Envision Shares. As of the Closing, the Envision Shares shall have been
duly reserved for delivery pursuant to the terms of this Agreement, shall have
been listed on the AMEX and shall, when so delivered and paid for, be duly
authorized, validly issued, fully paid, and nonassessable shares and will be
free and clear of all encumbrances imposed by or through Envision.
3.5 Legal Matters. Except as disclosed in the SEC Filings there is no
claim, suit, action, arbitration, governmental investigation, or other
proceeding, nor any order, decree, or judgment pending or in effect, or, to the
best knowledge of Envision, threatened, against, or relating to Envision or any
of the properties, assets, or business of Envision or any of its subsidiaries,
or the transactions contemplated hereby, which if determined adversely could
have a material adverse effect on the business, assets, properties, operations,
or condition of Envision and its subsidiaries, taken as a whole. There are no
judgments, decrees, or orders enjoining Envision in respect of, or the effect of
which is to prohibit, any business practice or the acquisition of any property
or the conduct of business in any area that is material to the business of
Envision.
3.6 The SEC Filings. The SEC Filings have been duly filed, were in
substantial compliance with the requirements of their respective report forms,
were complete and correct in all material respects as of the dates at which the
information therein was furnished, (or as amended if filed before the date
hereof) as of such date, contained no untrue statement of a material fact, nor
omitted to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of Envision and the related
notes and schedules included in the SEC Filings comply in all material respects
with the requirements of the Exchange Act and present fairly the consolidated
financial position in accordance with generally accepted accounting principles
of Envision, as of the dates indicated, and the results of its operations and
changes in financial position for the periods therein specified (subject, in the
case of unaudited interim financial statements, to normal year-end adjustments).
Since the date of the filing with the SEC of Envision's most recent 10-Q, there
has been no material adverse change in the financial condition or results of
operations of Envision that has resulted in a material adverse effect on
Envision.
3.7 Broker's Fees. There are no broker's or finder's fees or obligations
due to persons engaged by either of the Stockholders in connection with the
transactions contemplated by this Agreement, except for the fees and expenses of
its counsel and accountants.
3.8 Restricted Shares. Each of Envision and Acquisition Co. understands and
acknowledges that the QV Voting Stock has not been registered under the Act or
any state securities laws, and that they will be issued in reliance upon certain
12
exemptions from the registration requirements of those laws, and thus cannot be
resold unless they are registered under the Act or unless Envision and
Acquisition Co. have first received an opinion of competent securities counsel
reasonably satisfactory in form and substance to QV that registration is not
required for such resale. With regard to the restrictions on resales of the QV
Voting Stock, each of Envision and Acquisition Co. is aware (i) of the
limitations and applicability of Rule 144 of the Act; (ii) that QV will issue
stop transfer orders to its stock transfer agent; and (iii) that a restrictive
legend will be placed on any new certificates issued to Envision and/or
Acquisition Co. representing the QV Voting Stock, to the extent such
restrictions apply, which legend will read substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION
OR QUALIFICATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND STATE SECURITIES LAWS AND THEREFORE
HAVE NOT BEEN REGISTERED UNDER THE ACT OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT COMPLIANCE WITH
THE PROVISIONS OF RULE 144 UNDER THE ACT, COMPLIANCE WITH THE
REGISTRATION OR QUALIFICATION PROVISIONS OF THE ACT AND
APPLICABLE STATE LAWS, OR PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. THE COMPANY
WILL INSTRUCT ITS STOCK TRANSFER AGENT NOT TO RECOGNIZE ANY
SALE OF THESE SECURITIES UNLESS SUCH SALE IS MADE PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR THE
COMPANY HAS FIRST RECEIVED AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY IN FORM AND SUBSTANCE, THAT SUCH
REGISTRATION IS NOT REQUIRED.
3.9 Investment Representations. Each of Envision and Acquisition Co. agrees
that the QV Voting Stock acquired by them will not be offered or sold in the
absence of registration under the Act and any applicable state securities laws
or an exemption from the registration requirements of the Act and any applicable
state securities laws. Each of Envision and Acquisition Co. is acquiring the QV
Stock acquired by them for its own account and for investment, and not with a
view to the distribution thereof or with any present intention of distributing
or selling any of the QV Voting Stock except in compliance with the Act. Each of
Envision and Acquisition Co. (i) have had a opportunity to ask questions of and
13
receive answers from QV concerning the terms and conditions of the QV Voting
Shares and the business and properties of QV; and (ii) have such knowledge and
experience in business and financial matters that they are capable of evaluating
the relative merits of an investment in the QV Voting Shares.
3.10 Tax Opinion Representation. To the best reasonable knowledge of
Envision and Acquisition Co., there are no facts or circumstances relating to
the Exchange that would prevent Durham Xxxxx & Xxxxxxx from delivering the
opinion referred to in Sections and 8.11 as of the date hereof.
ARTICLE 4
COVENANTS OF ENVISION AND ACQUISITION CO.
4.1 Envision Shareholders Meeting/Consents. Envision hereby covenants that
it shall as promptly as reasonably possible call a meeting of its shareholders
for the purpose of obtaining the approval of its shareholders for the issuance
of the Post-Approval Shares to Sundog and Rock. Alternatively, should the
written consents of a majority of its shareholders for the issuance of the
Post-Approval Shares be obtained and that doing so will not violate the
applicable rules of the AMEX, Envision shall promptly prepare and file with the
SEC and thereafter circulate to all of its shareholders an Information Statement
under Regulation 14C of the Exchange Act.
4.2 Further Efforts.
(a) Envision and Acquisition Co. agree to use diligent efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Exchange and the other transactions
contemplated hereby in accordance with the terms of this Agreement.
(b) As soon as reasonably practicable after the date hereof, and in
any event on or prior to the Closing of the Post-Approval Shares, Envision and
Acquisition Co. will use diligent efforts to obtain the consents of all
necessary governmental entities and other persons to the conveyance thereof,
including the filing and diligent prosecution of the AMEX Additional Listing
Application for the Post-Approval Shares.
ARTICLE 5
COVENANTS OF ALL PARTIES
5.1 Advice of Changes; Government Filings. Prior to the Closing, each party
shall confer on a regular and frequent basis with the other parties and promptly
advise the others orally and in writing of any change or event having, or which,
insofar as can reasonably be foreseen, could have, a material adverse effect on
such party or on QV or which would cause or constitute a material breach of any
of the representations, warranties or covenants of such party contained herein.
14
Envision shall file all reports required by regulation to be filed by it with
the SEC between the date of this Agreement and the Closing and shall deliver to
the Stockholders copies of all such reports promptly after the same are filed.
Except where prohibited by applicable statutes and regulations, each party shall
promptly provide the other parties (or their counsel) with copies of all other
filings made by such party with any state or federal government entity in
connection with this Agreement or the transactions contemplated hereby.
5.2 Tax Matters. The parties agree to treat the transactions contemplated
by this Agreement as a tax free reorganization under Section 368(a) of the Code.
All of the parties hereto represent, warrant, and covenant that they shall use
their best efforts not to take any action, whether before, during, or after the
Closing, that would be inconsistent with treating this transaction as a tax free
reorganization under Section 368(a) of the Code. The representations,
warranties, and covenants set forth in this Section 5.2 shall survive the
Closing of the transaction.
5.3 Charter Amendment. Sundog and Rock shall cause QV to file the Charter
Amendment (as defined in Section 8.12, below) no earlier than immediately prior
to the Closing.
ARTICLE 6
GENERAL CONDITIONS PRECEDENT
The obligations of each party hereto to consummate the Exchange and the
other transactions contemplated by this Agreement shall be subject to
fulfillment on or prior to the Closing of each of the following conditions:
6.1 No Injunctions. No injunction or restraining or other order issued by a
court of competent jurisdiction which prohibits the consummation of the
transactions contemplated by this Agreement shall be in effect (each party
agreeing to use diligent efforts to have any such injunction or order lifted),
and no governmental action or proceeding shall have been commenced or threatened
in writing seeking any injunction or restraining or other order that seeks to
prohibit, restrain, invalidate or set aside consummation of the transactions
contemplated by this Agreement.
6.2 No Governmental Proceedings. No action will have been taken, and no
statute, rule or regulation will have been enacted, by any state or federal
government agency that would render the consummation of the Exchange illegal.
6.3 Governmental Approvals. Except for the filings with respect to the
Post-Approval Shares, all governmental filings or approvals required in
connection with the consummation of the transactions contemplated by this
Agreement, including, without limitation, compliance with all applicable federal
and state securities laws, shall have been made or received.
15
ARTICLE 7
CONDITIONS PRECEDENT TO ENVISION'S AND
ACQUISITION CO.'S OBLIGATIONS TO CLOSE THE EXCHANGE
The obligations of Envision and Acquisition Co. to consummate the Exchange
contemplated by this Agreement are subject to the fulfillment at or prior to the
Closing of each of the following conditions, as applicable (unless waived)
pursuant to Section 10.3 hereof):
7.1 Consents. Any and all filings, consents or approvals required to be
made, taken or obtained in connection with the consummation of the transactions
contemplated hereunder shall have been made, taken or obtained and any waiting
period therefor shall have expired and with respect to the Post-Approval Shares,
approval of the shareholders of Envision and the expiration of any waiting
period required by Regulation 14C of the Exchange Act, if applicable.
7.2 Certificates of Stockholders. The representations and warranties of the
Stockholders under Article 2, above, shall have been true in all material
respects when made and shall be true in all material respects as of the Closing
with the same effect as though made at such time, except for changes occurring
or arising after the date of this Agreement and approved in writing by Envision.
At the Closing, each of the Stockholders shall have delivered certificates,
signed by an executive officer of such Stockholder, dated as of the Closing
Date, certifying that (i) the Stockholder shall have performed all obligations
and complied with all covenants and conditions required by this Agreement to be
performed or complied with by them at or prior to the Closing, and (ii) the
representations and warranties of the Stockholders contained in Article 2,
above, are true and complete in all material respects.
7.3 Resolutions. The Stockholders each shall have delivered to Envision and
Acquisition Co. true and complete copies of the resolutions or minutes of their
respective Boards of Directors or general partners pursuant to which the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby were duly and validly authorized, certified to
such effect by an executive officer or general partner of such Stockholder.
7.4 No Legislation. No legislation (whether by statute, regulation, rule,
or otherwise) shall have been enacted or introduced subsequent to the date of
this Agreement which, in the reasonable opinion of Envision, materially and
adversely affects or may materially and adversely affect the operations,
business, properties or prospects of QV.
7.5 Assignment of License. At the initial Closing, Sundog shall have
delivered to Envision an Assignment of License in the form attached hereto as
Exhibit "B".
7.6 Assignment of Investor Rights. At initial Closing, Sundog and Rock
16
shall have delivered to Envision as assignment of its rights in and to that
certain Investor Rights Agreement between the Stockholders and QV dated November
8, 1999, which assignment shall be in the form attached hereto as Exhibit "C".
7.7 QV Directors. Sundog shall cause Xxxxxx Xxxx to resign as a director of
QV as of the initial Closing.
7.8 AMEX. With respect to each Closing, Envision shall have received
approval of the issuance of Envision Shares thereat from the AMEX.
7.9 Preemptive Rights and Encumbrances. To Envision's and its counsel's
reasonable satisfaction, there shall be no liens, encumbrances, rights of first
refusal of any kind or other preemptive right relating to the QV Voting Stock to
be delivered at such Closing, except as they may have been waived or
extinguished in writing.
7.10 [Intentionally Omitted]
7.11 Voting and Assignment Agreements. The Stockholders shall have
delivered voting agreements to Alta Limited ("Alta"), and Dominion Income
Management Corp. and Dominion Income Management Profit Sharing Plan
(collectively "Dominion"), which voting agreements shall be in the form attached
hereto as Exhibits "D" and "E".
ARTICLE 8
CONDITIONS PRECEDENT AND POST-CLOSING CONDITIONS
TO THE STOCKHOLDERS' OBLIGATIONS
TO CLOSE THE EXCHANGE
The obligations of the Stockholders to consummate the Exchange and the
other transactions contemplated by this Agreement are subject to the fulfillment
prior to, at or within a reasonable time after, as the case may be, the Closing
of each of the following conditions (unless waived):
8.1 Consents. Except for the filings with respect to the Post-Approval
Shares, any and all filings, consents or approvals required to be made, taken or
obtained in connection with the consummation of the transactions contemplated
hereunder shall have been made, taken or obtained and any waiting period
therefor shall have expired.
8.2 AMEX Additional Listing Application. Envision shall have made all
appropriate filings under the rules of the AMEX and shall have received
notification from the AMEX that the Envision Shares have been approved for
listing, subject to notice of issuance with respect to each Closing.
17
8.3 Certificates of Envision and Acquisition Co. The representations and
warranties and covenant of Envision and Acquisition Co. under Articles 3 and 4,
above, shall have been true in all material respects when made and shall be true
in all material respects as of the Closing with the same effect as though made
at such time, except for changes occurring or arising after the date of this
Agreement and approved in writing by a Stockholder. At Closing, Envision and
Acquisition Co. shall have delivered certificates, signed by an executive
officer of Envision and Acquisition Co., dated as of the Closing Date,
certifying that (i) Envision and Acquisition Co. shall have performed all
obligations and complied with all covenants and conditions required by this
Agreement to be performed or complied with by them at or prior to the Closing,
and (ii) the representations and warranties and covenants of Envision and
Acquisition Co. contained in Articles 3 and 4, above, are true and complete in
all material respects. At Closing, Envision and Acquisition Co. shall have
delivered certificates, signed by an executive officer of Envision and
Acquisition Co., date as of the Closing Date, to legal counsel for the
Stockholders certifying each matter set forth in Section 3.9.
8.5 Resolutions. Envision and Acquisition Co. shall have delivered to the
Stockholders true and complete copies of the resolutions or minutes of their
respective Boards of Directors pursuant to which the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby were
duly and validly authorized, certified to such effect by an executive officer of
Envision and Acquisition Co.
8.6 Envision Shares. Envision shall have delivered to the Stockholders the
Envision Shares constituting the consideration; provided, however, that Envision
shall not be obligated to issue and deliver the Post-Approval Shares until after
the shareholders of Envision have approved the issuance thereof.
8.7 Registration Rights Agreements. Envision shall have executed and
delivered to each of the Stockholders a Rights Agreement in the form attached
hereto as Exhibit "A".
8.8 No Changes. On the Closing Date, there shall have been no material
adverse change in the assets, liabilities, financial condition or business
(financial or otherwise) of Envision since the date hereof. Between the date of
this Agreement and the Closing Date, there shall not have occurred an event
which, in the reasonable opinion of the Stockholders, materially and adversely
affects or may materially or adversely affect the operations or business of
Envision.
8.9 No Legislation. No legislation (whether by statute, regulation, rule,
or otherwise) shall have been enacted or introduced subsequent to the date of
this Agreement which, in the reasonable opinion of Stockholders, materially and
adversely affects or may materially and adversely affect the operations,
business, or prospects of Envision.
8.10 Voting Agreements. Alta and Dominion shall have delivered voting
18
agreements to Sundog and Rock which voting agreements shall be in the form
attached hereto as Exhibits "D" and "E".
8.11 Tax Opinion. The Stockholders shall have received an opinion of Durham
Xxxxx & Xxxxxxx dated as of the Closing Date, in form and substance reasonably
satisfactory to the Stockholders, substantially to the effect that, on the basis
of the facts, representations and assumptions set forth in such opinion, the
Exchange should constitute a tax-free reorganization under Section 368(a)(1)(B)
of the Code and, therefore, no gain or loss should be recognized for federal
income tax purposes by the Stockholders upon their exchange of QV Voting Stock
solely for the Envision Shares. In rendering such opinion, Durham Xxxxx &
Xxxxxxx may rely upon representations and covenants set forth in this Agreement
and in Stockholders' and officers' certificates delivered by the parties and QV
at Closing.
8.12 Charter Amendment. An amendment to the QV Certificate of Incorporation
in the form attached hereto as Exhibit "F" shall have been filed with the
Secretary of State of the State of Delaware.
ARTICLE 9
SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATIONS
9.1 Survival of Representations.
(a) The Stockholders' Representations. All representations and
warranties and all covenants of the Stockholders contained in this Agreement
will remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the parties to this Agreement until the
earlier of the termination of this Agreement in accordance with its terms or the
expiration of the second (2nd) anniversary of the final Closing, and,
thereafter, to the extent a claim is made prior to such expiration with respect
to any breach of such representation, warranty or covenant, until the resolution
of such claim, provided, however, that the representations and warranties of the
Stockholders contained in Article 2, above, but not covenants in such Article 2,
will remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the parties to this Agreement until the
earlier of the termination of this Agreement in accordance with its terms or the
expiration of the first (1st) anniversary of the final Closing, and, thereafter,
to the extent a claim is made prior to such expiration with respect to any
breach of such representation or warranty, until the resolution of such claim.
Any judgment or settlement of a claim against either or both of the Stockholders
for a breach of its/their obligations hereunder brought after the date of
Closing will be settled in Envision Shares valued at the then fair market value
of such Shares up to a maximum, for each stockholder, of the total number of
Envision Shares received by such Stockholder, according to its separate
liability.
(b) Envision's and Acquisition Co.'s Representations. All
representations and warranties and all covenants of Envision and Acquisition Co.
19
contained in this Agreement will remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the parties to this
Agreement until the earlier of the termination of this Agreement in accordance
with its terms or the expiration of the second (2nd) anniversary of the Closing,
and, thereafter, to the extent a claim is made prior to such expiration with
respect to any breach of such representation, warranty or covenant, until the
resolution of such claim; provided, however, that the representations and
warranties and covenants of Envision and Acquisition Co. contained in Articles 3
and 4, above, will remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the parties to this Agreement until
the earlier of the termination of this Agreement in accordance with its terms or
the expiration of the first (1st) anniversary of the Closing, and, thereafter,
to the extent a claim is made prior to such expiration with respect to any
breach of such representation, warranty, or covenant, until the resolution of
such claim. Any judgment or settlement of a claim against either Envision or
Acquisition Co. for a breach of its/their obligations hereunder brought after
the date of Closing will be settled with respect to a Stockholder or other
Indemnified Person of such Stockholder in Envision Common Stock valued at the
then fair market value of such shares, up to a maximum of the total number of
shares of Envision Common Stock issued with respect to such Stockholder by
Envision.
9.2 Indemnification by the Stockholders.
(a) Each of the Stockholders will severally and not jointly indemnify
and hold harmless Envision and Acquisition Co. and their respective officers,
directors, agents and employees (each, an "Indemnified Person" and collectively,
the "Indemnified Persons"), from and against any and all claims, demands,
actions, causes of actions, losses, costs, damages, liabilities, and expenses,
including, without limitation, legal fees and expenses ("Damages"), arising out
of or relating to any misrepresentation or breach of or default or other action
or omission in connection with either (i) any of the representations,
warranties, and covenants given or made by such Stockholder in this Agreement,
or any certificate, document or instrument delivered by or on behalf of such
Stockholder pursuant hereto and (ii) any and all actions, suits, claims, or
legal, administrative, arbitration, governmental, or other proceedings or
investigations against any Indemnified Persons that relate to such Stockholder
and the transactions contemplated by this Agreement in which the principal event
giving rise thereto occurred prior to the Closing or which result from or arise
out of any action or inaction prior to the Closing of such Stockholder.
(b) Notwithstanding the foregoing, the Stockholders shall have no
liability with respect to the matters described in paragraph (a) above unless
and until the aggregate Damages, losses, deficiencies, liabilities, costs and
expenses (collectively, the "Losses") incurred or suffered by Envision and/or
Acquisition Co. as a result of the acts, events or omissions described in
paragraph (a) equal or exceed One Hundred Thousand Dollars ($100,000) (the
"Threshold Amount"). At such time as the aggregate Losses equal or exceed the
20
Threshold Amount, Envision and/or Acquisition Co. shall be indemnified to the
full extent of Losses (excluding Losses, except Losses with respect to
misrepresentations or breaches of warranty of Section 2.4 and 2A.1, counted in
determining whether the aggregate Losses equal or exceed the Threshold Amount).
9.3 Indemnification by Envision and Acquisition Co. Envision and
Acquisition Co. will indemnify and hold harmless the Stockholders (also
Indemnified Persons), from and against any and all Damages arising out of or
relating to any misrepresentation or breach of or default or other action or
omission in connection with any of the representations, warranties, and
covenants given or made by Envision and Acquisition Co. in this Agreement, or
any certificate, document, or instrument delivered by or on behalf of Envision
or Acquisition Co. pursuant hereto. Claims against Envision pursuant to this
Article 9 shall be subject to the Threshold Amount set forth in Section 9.2(b),
above and any judgment or settlement of a claim against either Envision or
Acquisition Co. pursuant to this Section 9.3 shall be paid or settled in shares
of Envision Common Stock as described in Section 9.1(b) above.
9.4 Notice of Third-Party Claims; Assumption of Defense. Each Indemnified
Person shall give reasonably prompt notice of a claim ("Claims Notice") to each
indemnifying party, in accordance with the terms of Section 11.3, of the
assertion of any claim, or the commencement of any suit, action or proceeding by
any third party in respect of which indemnity may be sought hereunder, and shall
give the indemnifying parties such information with respect thereto as the
indemnifying parties may reasonably request. The giving of such Claims Notice
shall not be a condition precedent to indemnification hereunder; provided,
however, that failure to give reasonably prompt notice shall reduce the
Indemnified Person's recovery from the indemnifying parties only by an amount
equal to the damages, costs and expenses (including attorneys fees), if any,
caused by such delay. Upon receipt of such notice, each indemnifying party may,
at its own expense, (i) participate in and (ii) upon notice to each Indemnified
Person of such indemnifying party's written agreement that the Indemnified
Person is entitled to indemnification pursuant to this Article 9 for Losses
arising out of such third-party claim, suit, action or proceeding, at any time
during the course of any such claim, suit, action, or proceeding, assume the
defense thereof; provided, that (x) the indemnifying party's counsel is
reasonably satisfactory to the Indemnified Person; (y) the indemnifying party
shall thereafter consult with the Indemnified Person upon the Indemnified
Person's reasonable request for such consultation from time to time with respect
to such claim, suit, action or proceeding and (z) the Indemnified Person shall
not be required to permit the indemnifying party to assume the defense of any
third-party claim which if not first paid, discharged, or otherwise complied
with would result in an imminent, material interruption or cessation of the
conduct of the Indemnified Party's business or any material part thereof. If the
indemnifying party assumes such defense, the Indemnified Party shall have the
right (but not the duty) to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
indemnifying party. Whether or not the indemnifying party chooses to defend or
prosecute any such claim, suit, action, or proceeding, all of the parties hereto
shall cooperate in the defense or prosecution thereof.
9.5 Settlement or Compromise. Any settlement or compromise
made or caused to be made by the Indemnified Party or, the indemnifying party,
21
as the case may be, of any third party claim, suit, action or proceeding of the
kind referred to in this Article 9 shall also be binding upon the indemnifying
party or the Indemnified Party, as the case may be, in the same manner as if a
final judgment or decree had been entered by a court of competent jurisdiction
in the amount of such settlement or compromise. The Indemnified Person will give
the indemnifying party at least thirty (30) days notice of any proposed
settlement or compromise of any claim, suit, action or proceeding it is
defending, during which time an indemnifying party may assume the defense of
such claim, suit, action or proceeding and if it does so the proposed settlement
or compromise may not be made.
9.6 Failure of Indemnifying Party to Act. In the event that an indemnifying
party does not elect to assume the defense of any claim, suit, action, or
proceeding, then any failure of the Indemnified Person to defend or to
participate in the defense of any such claim, suit, action, or proceeding or to
cause the same to be done, shall not relieve the indemnifying party of its
obligations hereunder.
9.7 Procedure for Indemnification. Upon becoming aware of a claim for
indemnification hereunder (whether as a result of any third-party claim, suit,
action, or proceeding of the kind referred to in Section 9.5, or in connection
with any other Losses which the Indemnified Party deems to be within the ambit
of this Article 9), the Indemnified Party shall give, in accordance with the
terms of Section 11.3, a Claims Notice to the indemnifying party. If the
indemnifying party does not object to such claim within thirty (30) days of
receiving such Claims Notice, the Indemnified Person shall be conclusively
entitled to recover the amount of such claim.
ARTICLE 10
TERMINATION; PAYMENT OF EXPENSES
10.1 Termination. Should the initial Closing not occur before July 31,
2000, this Agreement (except for any confidentiality provision and the
agreements in Section 10.2 and Article 11) shall terminate on such date.
Otherwise, this Agreement (except for any confidentiality provision and the
agreements of Sections 2.7, 2.8, 2.10, 2A.5, 3.8, 3.9, 3.10, 4.2, 5.2, 10.2 and
Article 11) shall terminate on the date four (4) years after the final Closing.
10.2 Payment of Expenses. The Stockholders will pay out of their own funds
all of the respective costs and expenses (including fees and expenses of legal
counsel, accountants, and financial advisors) incurred by the Stockholders in
connection with the transactions contemplated by this Agreement through the
Closing. Envision will pay out of its own funds all of its costs and expenses
(including fees and expenses of legal counsel, accountants, and financial
advisors) incurred by Envision in connection with the transactions contemplated
by this Agreement.
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ARTICLE 11
GENERAL
11.1 Amendments. Subject to applicable law, this Agreement, and any exhibit
attached hereto or thereto may be amended by the parties hereto at any time
prior to the Closing; provided, however, that any such amendment must be in
writing and executed by all parties hereto.
11.2 Assignment. The rights under this Agreement shall not be assignable
nor the duties delegatable by any party without the written consent of the other
parties and any such purported assignment or delegation shall be void.
11.3 Notices. All demands, notices, and other communications to be given
hereunder, if any, shall be in writing and shall be sufficient for all purposes
if personally delivered, sent by facsimile, sent by nationally-recognized
courier service, or if sent by registered or certified United States mail,
return receipt requested, postage prepaid, and addressed to the respective party
at the postal address set forth below or to such other address or addresses as
such party may hereafter designate in writing to the other party as herein
provided. The present addresses of the parties hereto are as follows:
To Sundog:
Sundog Technologies, Inc.
0000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile: 000-000-0000
Attn: Xxxx Xxxx,
Chief Executive Officer
With a copy to:
Durham Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile: 801-415-3500
Attn: Xxxxxxx X. Xxxxx, Esq.
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To Rock:
RockMountain Ventures Fund, LP
0000 Xxxxxx Xxx
Xxxxx 000
Xxxxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
Attn: General Partner
With a copy to:
Holland & Xxxx
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx
Facsimile: 000-000-0000
Attn: Xxxxx Xxxxxx, Esq.
To Envision/Acquisition Co.:
00000 X.X. 000xx Xxxx
Xxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
Attn: Xxxxxxx Patch,
President and Chief Operating Officer
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attn: Xxxx Xxxxxxxx, Esq.
If personally delivered, notice under this Agreement shall be deemed to have
been given and received and shall be effective when personally delivered. Notice
by facsimile and nationally-recognized courier service shall be deemed to have
been given when received. Notice by mail shall be deemed effective and complete
three (3) days after deposit in the United States mail.
24
11.4 Entire Agreement. This Agreement and Section B.3 of the Letter of
Intent of January 17, 2000 (the "LOI") (including all exhibits attached hereto
and thereto and all documents delivered as provided for herein and therein)
contain the entire agreement among the parties hereto with respect to the
subject matter hereof and the transactions contemplated hereby and supersedes
all prior negotiations, discussions, agreements, including the LOI except for
Section B.3 thereof, and undertakings, both written and oral, among the parties
hereto, with respect to the subject matter hereof.
11.5 Interpretation. Unless otherwise provided, all terms shall have the
meaning given them in the ordinary English usage and as customarily used. Words
in any gender shall include both other genders. Whenever the context requires,
the singular shall include the plural, the plural shall include the singular,
and the whole shall include any part thereof.
11.6 Invalidity. The invalidity or unenforceability of any particular
provision of this Agreement shall not effect the other provisions hereof, and
the Agreement shall be construed in all respects as if such invalid provisions
were omitted.
11.7 Headings. The paragraph and other headings contained in this Agreement
are for purposes of reference only and shall not limit, expand, or otherwise
affect the construction of any of the provisions of this Agreement
11.8 Persons Having Rights Under This Agreement. Nothing in this Agreement
expressed and nothing that may be implied from any of the provisions hereof is
intended, or shall be construed, to confer upon, or give to, any person or
entity other than the parties hereto, any right, benefit, remedy, or claim under
or by reason of this Agreement or of any covenant, condition, stipulation,
promise or agreement contemplated hereby. All covenants, conditions,
stipulations, promises and agreements contained in this Agreement shall be for
the sole and exclusive benefit of the parties hereto and their successors and
permitted assigns.
11.9 No Waiver. Acceptance by either party of any performance less than
required hereby shall not be deemed to be a waiver of such party to enforce all
of the terms and conditions hereof. No waiver of any such right hereunder shall
be binding unless reduced to writing and signed by the party to be charged
therewith.
11.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.11 Governing Law. This Agreement shall be construed by and enforced in
accordance with the laws of the State of Delaware without giving effect to the
principles of the conflicts of laws.
25
11.12 Authorized Execution. The individuals signing below each represent
and warrant as to themselves (i) that they are authorized to execute this
Agreement for and on behalf of the party for whom they are signing, (ii) that to
the best of his knowledge, such party shall be bound in all respects hereby, and
(iii) that to the best of his knowledge, such execution presents no conflict
with any other agreement of such party.
11.13 Facsimile Signatures. The parties hereto agree that transmission to
the other party of this Agreement with its facsimile signatures shall bind the
party transmitting this Agreement by facsimile in the same manner as if such
party's original signature had been delivered. Without limiting the foregoing,
each party who transmits this Agreement with its facsimile signature covenants
to deliver the original thereof to the other party as soon as possible
thereafter.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.]
26
IN WITNESS WHEREOF, the parties have duly executed this Acquisition
Agreement as of the date first written above.
STOCKHOLDERS: SUNDOG TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxx Xxxx
-------------------------------------
Xxxx Xxxx, Chief Executive Officer
ROCKMOUNTAIN VENTURES FUND, LP,
a Delaware limited partnership
By: ROCKMOUNTAIN VENTURES, LLC
General Partner
By: /s/ Xxxxxx Xxxxxx
------------------------------------
ENVISION: ENVISION DEVELOPMENT CORPORATION
a Florida corporation
By: /s/ X.X. Patch
-------------------------------------
Xxxxxxx Patch, President and
Chief Operating Officer
ACQUISITION CO.: QV ACQUISITION CORPORATION,
a Delaware corporation
By: /s/ X.X. Patch
-------------------------------------
Xxxxxxx Patch, President
27
Schedule 2.3(i)
Material Contracts
QV has engaged a public relations firm, SRB Communications, Inc. through
February 28, 2000, and has paid that firm approximately $35,000 over the last 6
months. QV expects to extend the contract with SRB for another 6 months, and
expects that the resulting contract liability will be approximately $50,000 to
$60,000.
QV has signed three MOUs with XXX.xxx, United Messaging and Cable &
Wireless. QV is currently negotiating a beta license with each of these parties.
The scope of these license agreements, and the corresponding restrictions, are
not yet known.
QV has issued one transferable object code server license to Sundog
covering the following products:
1 Web-Based Interosa Consumer Portal Product. Software
which applies a policy based email system designed to enforce both
sender and recipient rights in web-based email actions.
2 Consumer Email Migration software. Software which automates
customer migration from web-based email services to the Consumer Portal
Product. The Consumer Email Migration software, as provided
currently, is provided on an "as is" basis; the patented architecture
is complete, and a "proof of concept" model has been developed, but
while QV intends to complete the development thereof, there can be no
guarantee that QV will be able to complete or deliver a fully
functional product.
3
QV has a lease for its office suite on Campus Drive in Colorado Springs has
approximately 27 months remaining on its term, at approximately $6,000 per
month. In connection with this lease and in lieu of a security deposit, QV
posted a $35,000 letter of credit with State Bank & Trust as security. The
letter of credit is secured by a $35,000 certificate of deposit which is owned
by QV. The lease provides that the landlord must approve any transaction(s)
during a twelve (12) month period in which more than 50% of QV's capital stock
is transferred or conveyed. The landlord's consent may not be unreasonably
withheld.
28
Schedule 2.3(iv)
Intellectual Property
Two assignment agreements executed by the inventors of certain QV
technology state that the assignments are made and given to "QV, Inc., a Utah
corporation" rather than Qui Vive, Inc., a Delaware corporation. Patent counsel
to QV has advised that the inventors executed amended and restated assignment
agreements, dated as of the dates of the original assignment agreements, in
favor of Qui Vive, Inc., a Delaware corporation, which amended and restated
assignments will then be filed with the PTO.
29
Schedule 2.3(vii)
Employee Benefit Plans
The QV 401k plan is available for all full-time employees, with employer
matching contributions from some portion of employee contributions. QV matches
employee contributions dollar for dollar for the first 3% of gross salary, and
$.50 for each employee dollar for the next 2%.
The 401k plan is managed by "Best of America" through Nationwide Insurance. The
plan provides employees with a selection of 10 mutual funds, from very low risk
government bond funds, to higher risk growth stock funds. Employees can access
their accounts via the internet, and can adjust fund allocations daily.
Health insurance for QV employees is through Humana Corp., which provides
medical and dental coverage through a Preferred Provider Organization (PPO)
system. The company pays the full cost of this benefit, at an average monthly
cost per (married-children) employee of $530. See attachments for a summary of
medical and dental benefits.
QV also provides life insurance ($250k) and disability benefits to full-time
employees, at an average monthly cost per employee of $145 (most of that cost is
for the disability insurance). Life insurance and disability benefits are
provided by Mutual of Omaha.
QV has granted, and plans to grant stock options to new and existing employees
based on a variety of criteria, including experience (for new hires) and overall
performance (for existing employees). QV is in the process of establishing a
formal plan for granting incentive options based on performance to existing
employees.
