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
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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, Perfumania.com, Inc., a Florida
corporation (Perfumania.com), Sundog, Acquisition, and Rock entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement"); and
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WHEREAS, on February 28, 2000, Perfumania.com assigned all of
its right, title, and interest in the Stock Purchase Agreement to Envision;
WHEREAS, the parties desire to amended 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
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Sundog Technologies, Inc. 1,482,000
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 Jones & Pinegar, 111 East Broadway, Suite 900, Salt Lake City,
Utah, as soon as practicable following the satisfaction or waiver of the
conditions set forth in Articles 6, 7, and 8. The Closing regarding the
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Post-Approval Shares shall occur at the offices of Durham Jones & Pinegar within
two (2) business days following 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
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Thousand (550,000) shares of Series A Preferred Stock are authorized and Five
Hundred Fifty Thousand (550,000) shares are issued and outstanding, and Two
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 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.
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(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
THE PROVISIONS OF RULE 144 UNDER THE ACT, COMPLIANCE WITH THE
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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 Jones & Pinegar 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.
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(c) This Agreement (with respect to Rock) constitutes
the legal, 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
COMPANY HAS FIRST RECEIVED AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY IN FORM AND SUBSTANCE, THAT SUCH
REGISTRATION IS NOT REQUIRED.
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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
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relative 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
similar laws affecting the rights of creditors generally or by general
principles of equity).
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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 exemptions from the registration requirements of those
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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
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opportunity to ask questions of and 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 Jones & Pinegar 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. Envision shall file all reports
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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.
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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".
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7.6 Assignment of Investor Rights. At initial Closing,Sundog
and Rock 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 Merlin Fish 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, 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.
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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.
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8.10 Voting Agreements. Alta and Dominion shall have
delivered voting 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 Jones & Pinegar 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 Jones & Pinegar may rely upon representations and covenants set
forth in this Agreement and in Stockholders' and officers' certificates
delivered by the parties 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.
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(b) Envision's and Acquisition Co.'s Representations.
All representations and warranties and all covenants of Envision and Acquisition
Co. 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
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).
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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.
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9.5 Settlement or Compromise. Any settlement or compromise
made or caused to be made by the Indemnified Party or, the indemnifying party,
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.
4505 Wasatch Boulevard
Suite 340
Salt Lake City, Utah 84124
Facsimile: 801-424-0033
Attn: Alan Rudd,
Chief Executive Officer
With a copy to:
Durham Jones & Pinegar
111 Broadway
Suite 900
Salt Lake City, Utah 84111
Facsimile: 801-415-3000
Attn: Jeffrey M. Jones, Esq.
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To Rock:
RockMountain Ventures Fund, LP
2450 Coyote Run
Suite 700
Rockwell, Texas 75087
Facsimile: 719-538-0200
Attn: General Partner
With a copy to:
Holland & Hart
555 17th Street, Suite 3200
Denver, Colorado
Facsimile: 303-727-5815
Attn: Betty Arkell, Esq.
To Envision/Acquisition Co.:
11701 N.W. 101st Road
Miami, Florida 33178
Facsimile: 305-889-1602
Attn: William Patch,
President and Chief Operating Officer
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Facsimile: 212-455-2502
Attn: Gary Horowitz, 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.
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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.
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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.]
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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/ ALAN RUDD
----------------
Alan Rudd, Chief Executive Officer
ROCKMOUNTAIN VENTURES FUND, LP,
a Delaware limited partnership
By:/s/ BARTON SKALLA
--------------------
Barton Skalla
ENVISION: ENVISION DEVELOPMENT CORPORATION
a Florida corporation
By:/s/ W.J. PATCH
-----------------
William Patch, President and
Chief Operating Officer
ACQUISITION CO.: QV ACQUISITION CORPORATION,
a Delaware corporation
By:/s/ W.J. PATCH
-----------------
William Patch, President
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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 USA.net, 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.
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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.
<PAGE>
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.
