Filed by sedaredgar.com - Carbiz Inc. - Exhibit 10.1






Exhibit 10.1 

ASSET PURCHASE AGREEMENT 

THIS AGREEMENT is made as of the 2nd day of July
2008

BETWEEN: 

Constellation Homebuilder Systems
Inc., a corporation incorporated under the laws of the State of Delaware
(“CHS USA”)

- and -

Constellation Homebuilder Systems,
Corp., a corporation incorporated under the laws of the Province of Ontario
(“CHS Canada”)

(CHS USA and CHS Canada are referred to
collectively as the “Purchaser”)

- and -

Carbiz Inc. a corporation
incorporated under the laws of the Province of Ontario (“Vendor”).

WHEREAS:

	(a) 	
      the Vendor carries on the business of software
      development and marketing; and

	 	 
	(b) 	
      the Vendor desires to sell and CHS USA desires to
      purchase certain of the assets of the Vendor pertaining to the Purchased
      Business (as hereafter defined) upon and subject to the terms and
      conditions hereinafter set forth; and

	 	 
	(c) 	
      the Vendor desires to sell and CHS Canada desires to
      purchase the Software and Intellectual Property (as hereafter defined)
      upon and subject to the terms and conditions hereinafter set
  forth;



NOW THEREFORE, in consideration of the premises and the
covenants and agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

	1. 	
      INTERPRETATION

	 	 
	1.1 	
      Definitions. In this Agreement, unless
      something in the subject matter or context is inconsistent
    therewith:








	 	(a) 	
      “Accounts Payable” means the accounts payable and
      accrued expenses of the Purchased Business on the Closing Date.

	 	 	 
	 	(b) 	
      “Agreement” means this agreement and all schedules
      and exhibits hereto and all amendments made hereto and thereto by written
      agreement between the Vendor and the Purchaser.

	 	 	 
	 	(c) 	
      “Assets” means the assets and undertakings
      referred to or described in Sections 2.1 and 2.2.

	 	 	 
	 	(d) 	
      “Assumed Liabilities” means the prepaid software
      support and unfilled orders of the Purchased Business.

	 	 	 
	 	(e) 	
      “Benefit Plan” means any plan, program, policy,
      practice, contract, agreement or other arrangement providing for
      compensation, severance, termination pay, deferred compensation,
      performance awards, stock or stock-related awards, fringe benefits or
      other employee benefits or remuneration of any kind, whether written or
      unwritten or otherwise, funded or unfunded, including, without limitation,
      each “employee benefit plan”, within the meaning of Section 3(3) of the
      Employee Retirement Income Security Act of 1974 (ERISA) which is
      maintained, contributed to, or required to be contributed to, by the
      Vendor or any affiliate of the Vendor for the benefit of any Employee, or
      with respect to which the Vendor or any affiliate of the Vendor has or may
      have any liability or obligation.

	 	 	 
	 	(f) 	
      “Business Day” means a day other than a Saturday,
      Sunday or statutory holiday in the State of Florida, USA.

	 	 	 
	 	(g) 	
      “Claims” means all losses, damages, expenses,
      liabilities (whether accrued, actual, contingent, latent or otherwise),
      claims and demands of whatever nature or kind including, without
      limitation, all legal fees and costs on a solicitor and client basis, but
      excluding consequential, indirect, exemplary, punitive damages or any
      damages measured by lost profits or a multiple of earnings.

	 	 	 
	 	(h) 	
      “Closing Date” means July 2, 2008 or such other
      date as may be agreed to in writing between the Vendor and the
      Purchaser.

	 	 	 
	 	(i) 	
      “Closing Date Balance Sheet” has the meaning set
      out in Section 2.7(b).

	 	 	 
	 	(j) 	
      “Contracts” means any contract, agreement,
      entitlement, commitment or license by which the Purchased Business is
      bound including, without limitation, all licenses, support and maintenance
      contracts applicable to the Software.

	 	 	 
	 	(k) 	
      “Deferred Revenue” means any deferred or prepaid
      revenue of the Purchased Business as of the Closing Date.

	 	 	 
	 	(l) 	
      “Disclosure Schedule” means the list, set out in
      Schedule D, of exceptions to the Warrantor’s representations and
      warranties.



2 





	 	(m) 	
      “Effective Date” means July 2, 2008.

	 	 	 
	 	(n) 	
      “Employees” means those employees listed on
      Schedule G who are currently employed by the Vendor in the Purchased
      Business.

	 	 	 
	 	(o) 	
      “Excluded Assets” means the property and assets
      described in Section 2.3.

	 	 	 
	 	(p) 	
      “Financial Statements” has the meaning set out in
      Section 3.1(g)(i).

	 	 	 
	 	(q) 	
      “GAAP” means generally accepted accounting
      principles as defined by the American Institute of Certified Accountants
      applied in a consistent manner.

	 	 	 
	 	(r) 	
      “Holdback Release Date” means the date ninety (90)
      days from the Closing Date.

	 	 	 
	 	(s) 	
      “Intellectual Property” has the meaning set out in
      Section 2.1(b).

	 	 	 
	 	(t) 	
      “Interim Date” means March 31, 2008.

	 	 	 
	 	(u) 	
      “Leases” means all leases or agreements in the
      nature of a lease and any interest therein, whether of real or personal
      property, to which the Vendor or any of its affiliates is a party, whether
      as lessor or lessee.

	 	 	 
	 	(v) 	
      “Letter of Intent” means the letter of intent to
      enter into an agreement between the Vendor and the Purchaser, dated May
      30, 2008.

	 	 	 
	 	(w) 	
      “Lien” includes any security interest, mortgage,
      encumbrance, option, lien or charge of any kind, including any limitation
      on transfer, use, receipt of income or other exercise of any attributes of
      ownership of the Assets, and includes a license for use or possession of
      the Assets.

	 	 	 
	 	(x) 	
      “Permitted Liens” means (i) mechanics’,
      materialmens’, carriers’, workmens’, repairmens’, contractors’ and
      warehousemens’ Liens arising or incurred in the ordinary course of
      business and for amounts which are not delinquent and which would not,
      individually, result in a material adverse effect on the Purchased
      Business, and (ii) Liens for taxes not yet due and payable or which are
      being contested in good faith by the Vendor or the Warrantor and for which
      reasonable reserves have been established.

	 	 	 
	 	(y) 	
      “Principals” (or “Principal” as the case
      may be) means the officers and the individual members of the Board of
      Directors of the Vendor.

	 	 	 
	 	(z) 	
      “Purchase Price” has the meaning set out in
      Section 2.4.

	 	 	 
	 	(aa) 	
      “Purchased Business” means the business of
      developing, marketing, licensing and supporting the Software as presently
      and previously carried on by the Vendor and to be sold to the Purchaser
      hereunder.



3 





	 	(bb) 	
      “Software” means the computer programs known by
      the names as set out in Schedule C, including all versions thereof, and
      all related documentation, manuals, source code and object code, program
      files, data files, computer related data, field and data definitions and
      relationships, data definition specifications, data models, program and
      system logic, interfaces, program modules, routines, sub-routines,
      algorithms, program architecture, design concepts, system designs, program
      structure, sequence and organization, screen displays and report layouts,
      and all other material related to the said computer programs, all as they
      exist at the Time of Closing, whether under development or as currently
      being marketed by the Vendor.

	 	 	 
	 	(cc) 	
      “Tangible Assets” means the following Assets of
      the Purchased Business: accounts receivable, net fixed assets, licenses
      for third party software, bankers forms agreement, and
inventory.

	 	 	 
	 	(dd) 	
      “Tangible Net Assets” means the book value of the
      Tangible Assets less the book value of the Assumed Liabilities, determined
      in accordance with GAAP consistently applied, as of the Closing
    Date.

	 	 	 
	 	(ee) 	
      “Third Party Programs” has the meaning set forth
      in Section 3.1(j)(iv).

	 	 	 
	 	(ff) 	
      “Time of Closing” means 4:30 p.m. (Eastern
      Standard Time) on the Closing Date.

	 	 	 
	 	(gg) 	
      “Warrantor” means the Vendor, including its
      successors and permitted assigns.




	1.2 	
      Extended Meanings. In this Agreement words
      importing any gender include all genders and words importing persons
      include individuals, partnerships, associations, trusts, unincorporated
      organizations and corporations.

	 	 
	1.3 	
      Accounting Principles. Wherever in this
      Agreement reference is made to a calculation to be made or an action to be
      taken in accordance with generally accepted accounting principles or GAAP,
      such reference will be deemed to be to the generally accepted accounting
      principles from time to time approved by the American Institute of
      Chartered Accountants, or any successor institute, applicable as at the
      date on which such calculation or action is made or taken or required to
      be made or taken in accordance with generally accepted accounting
      principles.

	 	 
	1.4 	
      Currency. All references to currency herein
      are to lawful money of the United States.

	 	 
	1.5 	
      Schedules. The following are the Schedules
      attached hereto and incorporated by reference and deemed to be part
      hereof:



Schedule A - Financial Statements

Schedule B - Computer and Other Equipment 
Schedule C - Software and
Intellectual Property 
Schedule D - Disclosure Schedule 
Schedule E -
Employee and Contractor Agreements

4 




Schedule F - Inventory
Schedule G -
List of Transferred Employees 
Schedule H - Assumed Contracts 
Schedule I
- Assumed Liabilities 
Schedule J - Accounts Receivable 
Schedule K - Form
of Employment Agreement 
Schedule L - Unfilled Orders
Schedule M -
Software Maintenance and Support Revenue 
Schedule N - Template Tangible Net
Asset (TNA) Calculation 
Schedule O – not used 
Schedule P - Purchase
Price Allocation

	2. 	
      SALE AND PURCHASE

	 	 
	2.1 	
      Purchase and Sale of Software and Intellectual
      Property.



Upon and subject to the terms and conditions hereof, the Vendor
will sell, assign and transfer in perpetuity to CHS Canada free and clear of all
Liens, other than Permitted Liens, and CHS Canada will purchase:

	 	(a) 	
      the Software and all intellectual property rights
      worldwide in the Software; and

	 	 	 	 
	 	(b) 	
      all intellectual property owned or purported to be owned
      by the Vendor, to the extent used in the Purchased Business, and used or
      currently being developed for use by the Vendor in the Purchased Business
      and all rights of the Vendor therein, worldwide, whether registered or
      unregistered (the “Intellectual Property”), including without
      limitation in each case to the extent used in the Purchased
    Business:

	 	 	 	 
	 		(i) 	
      Copyrights - copyrights owned or purported to be
      owned by the Vendor, including, without limitation, all copyrights in and
      to the computer software programs listed in Schedule C, including the
      Software and all applications and registrations of such
  copyrights;

	 	 	 	 
	 		(ii) 	
      Trade-marks; Domain Names - trade-marks,
      trade-names, service marks, brand names, logos, domain names or the like
      owned or purported to be owned by the Vendor, whether used in association
      with wares or services, including, without limitation, those trade-marks
      listed in Schedule C and all applications, registrations, renewals,
      modifications and extensions of such trade-marks and domain
  names;

	 	 	 	 
	 		(iii) 	
      Patents - patents, patent applications and other
      patent rights, if any, of the Vendor related to the Software;

	 	 	 	 
	 		(iv) 	
      Technology - technology created, developed or
      acquired by the Vendor whether or not patented or patentable and whether
      or not fixed in any medium whatsoever, including, without limitation, all
      inventions, know how, techniques, processes, procedures, methods, trade
      secrets, research



5 





	 		
      and technical data, records, formulae, designs,
      industrial designs, sketches, patterns, databases, specifications,
      schematics, blue prints, flow charts or sheets, equipment and parts lists
      and descriptions, samples, reports, studies, findings, algorithms,
      instructions, guides, manuals, and plans for new or revised products
      and/or services; and

	 	 	 
	 	(v) 	
      Licenses - licenses, sub-licenses and franchises
      related to the Vendor in which the Vendor is a licensee or a licensor of
      intellectual property of a nature described in paragraphs (i) - (iv)
      above.




	2.2 	
      Purchase and Sale of Other Assets. Upon and
      subject to the terms and conditions hereof, the Vendor will sell, assign
      and transfer to CHS USA free and clear of all Liens, other than Permitted
      Liens, and CHS USA will purchase from the Vendor as a going concern, as of
      and with effect from the opening of business on the Effective Date, the
      following assets:

	 	 	 
		(a) 	
      Computer and Other Equipment - all computer and
      other equipment and accessories and supplies of all kinds which are
      specifically listed on Schedule B;

	 	 	 
		(b) 	
      Contracts, Agreements - the full benefit of all
      unfilled orders received by the Vendor in connection with the Purchased
      Business, the specifics of which are listed in Schedule L hereto, and all
      right, title and interest of the Vendor in, to and under all Contracts
      listed on Schedule H attached hereto;;

	 	 	 
		(c) 	
      Work in Process - all work in process relating to
      the Purchased Business;

	 	 	 
		(d) 	
      Prepaid Expenses - all prepaid expenses and
      deposits pertaining to the Purchased Business;

	 	 	 
		(e) 	
      Inventory - any inventory listed on Schedule
    F;

	 	 	 
		(f) 	
      Loans/Advances - all loans and advances made by
      the Vendor to suppliers of the Vendor pertaining to the Purchased
      Business;

	 	 	 
		(g) 	
      Warranty Rights - the full benefit of all
      representations, warranties, guarantees, indemnities, undertakings,
      certificates, covenants, agreements and the like and all security
      therefore received by the Vendor on the purchase or other acquisition of
      any part of the Assets;

	 	 	 
		(h) 	
      Records - all books, records or files relating to
      the Purchased Business including, without limitation, all financial,
      production, personnel, sales and customer records (except to the extent
      any of the foregoing are or relate to Excluded Assets);

	 	 	 
		(i) 	
      Accounts Receivable - all accounts receivable (net
      of any required allowance for doubtful accounts), trade accounts, notes
      receivable, book debts and other debts due or accruing due to the Vendor
      in connection with the Purchased Business



6 




(except to the extent any of the
foregoing are or relate to Excluded Assets), all of which are listed in Schedule
J hereto.

	2.3 	
      Excluded Assets. There shall be
      specifically excluded from the purchase and sale of the Purchased Business
      the following:

	 	 	 
		(a) 	
      life insurance proceeds receivable in respect of the life
      of any Principal;

	 	 	 
		(b) 	
      income taxes refundable and all refundable sales taxes,
      excise taxes, municipal taxes and like taxes and interest thereon
      refundable to the Vendor on account of the Purchased Business in respect
      of any period ending prior to the Effective Date;

	 	 	 
		(c) 	
      all notes receivable, or other debts due or accruing due
      to the Vendor from any Principal;

	 	 	 
		(d) 	
      all cash, term or time deposits owned or held by or for
      the account of the Vendor on account of the Purchased Business;

	 	 	 
		(e) 	
      all books and records relating to the Excluded Assets and
      the corporate charter, taxpayer and other identification numbers, seals,
      minute books, unit transfer records and other documents related to the
      organization, maintenance and existence of the Vendor as a legal
      entity;

	 	 	 
		(f) 	
      all of the Vendor’s rights under this
Agreement;

	 	 	 
		(g) 	
      all financial statements, tax returns and other tax
      records and related information of the Vendor;

	 	 	 
		(h) 	
      all rights, duties and obligations of the Vendor in and
      to any Leases;

	 	 	 
		(i) 	
      all insurance policies owned and maintained by the Vendor
      and all rights thereunder; and

	 	 	 
		(j) 	
      all claims of the Vendor against third parties related to
      the Excluded Assets, whether choate or inchoate, known or unknown,
      contingent or noncontingent.

	 	 	 
	2.4 	
      Purchase Price and Allocation Thereof. The
      purchase price payable by the Purchaser to the Vendor for the Assets (such
      amount being hereinafter referred to as the “Purchase Price”) will
      be $2,700,000, subject to any adjustment under Sections 2.5(b) and
    2.7.

	 	 	 
	2.5 	
      Payment of Purchase Price. The Purchase
      Price will be payable by the Purchaser to the Vendor by certified cheque,
      bank draft or wire transfer as follows:

	 	 	 
		(a) 	
      $2,500,000 will be paid at the Time of Closing;

	 	 	 
		(b) 	
      the balance of $200,000 (the “Holdback”), subject
      to adjustment (if any) pursuant to the terms of Section 2.7 and any Claims
      by Purchaser under the



7 




representations and warranties, will
be retained by the Purchaser and paid to the Vendor on the Holdback Release
Date.

	2.6 	
      Determination of Amounts; Elections. The
      Vendor and the Purchaser covenant and agree with each other that the
      Purchase Price shall be allocated among the Assets as set forth on
      Schedule P attached hereto. The Vendor and the Purchaser agree to
      cooperate in the filing of such elections under the Internal Revenue
      Code, and similar tax statutes in the United States as may be
      necessary or desirable to give effect to such allocation for tax purposes.
      The Vendor and the Purchaser agree to prepare and file their respective
      tax returns in a manner consistent with the aforesaid allocations and
      elections. If either party fails to file its tax returns as aforesaid, it
      shall indemnify and save harmless the other of them in respect of any
      additional tax, interest, penalty and legal and/or accounting costs paid
      or incurred by the other of them as a result of the failure to file as
      aforesaid.

	 	 	 
	2.7 	
      Purchase Price Adjustment.

	 	 	 
		(a) 	
      The Purchase Price has been determined on the basis that
      the Tangible Net Assets will have a value on July 1, 2008 of $200,000
      (such value being the “Estimated TNA”)to be calculated consistent
      with the methodology set out in Schedule N.

	 	 	 
		(b) 	
      Within 30 days after the Closing Date, the Vendor shall
      deliver to the Purchaser a statement indicating the value of the Tangible
      Net Assets of the Purchased Business as at July 1, 2008 (such value being
      the “Closing TNA” and such statement being the “Closing Date
      Balance Sheet”).

	 	 	 
			
      The Vendor shall provide along with the Closing Date
      Balance Sheet any required schedules and supporting documentation required
      for the determination of the value of the Tangible Net Assets as at July
      1, 2008. The Purchaser shall work cooperatively with the Vendor during the
      thirty (30) day period following the delivery of the Closing Date Balance
      Sheet to verify the amounts on the Closing Date Balance Sheet. If the
      Vendor or the Purchaser have not been able to agree upon a resolution of
      any related dispute within sixty (60) days of receipt by Purchaser of the
      Closing Date Balance Sheet, then any such dispute shall be resolved by an
      independent accounting firm (the “Reviewing Accountant”) selected
      jointly by the Vendor and the Purchaser. If these parties cannot agree on
      a Reviewing Accountant within ten (10) days, either of them may apply to a
      court to have one appointed by the court. The Reviewing Accountant shall
      be instructed to resolve any matters in dispute as promptly as
      practicable, but in no event more than thirty (30) days after submission.
      The fees of the Reviewing Accountant will be borne equally by the Vendor
      and the Purchaser. The resolution of the dispute by the Reviewing
      Accountant shall be final and binding on the parties hereto.

	 	 	 
		(c) 	
      If the Closing Date Balance Sheet shows the Closing TNA
      to be equal to or greater than the Estimated TNA (any excess over $1 being
      the “Excess”), then the Purchaser will pay the Vendor the Holdback
      together with the amount of the



8 





	 		
      Excess on the Holdback Release Date and the Purchase
      Price will be increased by the amount of the Excess.

	 	 	 
	 	(d) 	
      If the Closing Date Balance Sheet shows the Closing TNA
      is less than the Estimated TNA (the difference, expressed as a positive
      number, being the “Shortfall”), the Purchaser will, unless the
      Shortfall is equal to or greater than the Estimated TNA, pay to the Vendor
      the Holdback less the amount of the Shortfall, on the Holdback Release
      Date, and the Purchase Price will be reduced by the Shortfall.

	 	 	 
	 	(e) 	
      If the Shortfall is equal to or greater than the
      Estimated TNA then the Purchaser shall retain the Holdback and the Vendor
      shall, on the Holdback Release Date, pay to the Purchaser the full amount
      of the Shortfall less the Holdback, and the Purchase Price will be reduced
      by the amount of the Holdback and the Shortfall.

	 	 	 
	 	(f) 	
      Notwithstanding Sections 2.7(c), (d) and (e), Purchaser
      may withhold from payment of the Holdback an amount in respect of a Claim
      under the representations and warranties of the Vendor or any of the
      indemnities contained in this Agreement provided written notice of such
      Claim has been given to the Vendor in accordance with Section 4.3 of this
      Agreement prior to the Holdback Release Date.




	2.8 	
      Assumption of Obligations and
      Liabilities.

	 	 	 
		(a) 	
      Except as otherwise expressly provided herein, CSH USA
      will assume, fulfill and perform only those obligations and liabilities of
      the Vendor under the contracts and other commitments specifically
      described in paragraph 2.2(b) hereof and listed on Schedule H hereto which
      (i) initially accrue or arise after the Closing Date; and (ii) are not the
      result of or caused by any breach or default of the Vendor thereunder on
      or before the Closing Date.

	 	 	 
		(b) 	
      Effective as of the Closing Date, CHS USA will assume
      only those payables and liabilities of the Vendor set out in the list of
      payables and liabilities found in Schedule I, which list shall include the
      Assumed Liabilities.

	 	 	 
		(c) 	
      The Purchaser shall only be responsible for liabilities
      and obligations arising out of or based upon the Purchaser’s ownership and
      operation of the Assets from and after the Closing Date.

	 	 	 
	2.9 	
      Obligations and Liabilities Not Assumed.
      Except as otherwise expressly provided herein, the Purchaser does not
      assume and will not be liable for any obligations or liabilities of the
      Vendor whatsoever, including, without limiting the generality of the
      foregoing, (i) any taxes under the Internal Revenue Code or any
      other taxes whatsoever that may be or become payable by the Vendor,
      including any income or other taxes resulting from or arising as a
      consequence of the sale by the Vendor to the Purchaser of the Assets
      herein contemplated, (ii) any indebtedness of the Vendor owing to its
      bankers, its shareholders, or any other lender to the Vendor, (iii) any
      obligations owing by the Vendor to end users of the Software in respect of
      prepaid but unutilized services



9 





		
      of the Vendor other than those obligations listed in
      Schedule L, (iv) any obligations of the Vendor in respect of policies of
      insurance on the life of any Principal, (v) any Claims directly arising
      out of the conduct of the Vendor prior to the Time of Closing, or (vi) the
      Accounts Payable.

	 	 
	3. 	
      REPRESENTATIONS AND WARRANTIES

	 	 
	3.1 	
      Warrantor’s Representations and Warranties.
      The Warrantor represents and warrant to the Purchaser
  that:




	 	(a) 	
      Corporate - The Vendor is a corporation duly
      incorporated, organized and subsisting under the laws of the Province of
      Ontario with the corporate power to own its assets and to carry on its
      business and has made all necessary filings under all applicable
      corporate, securities and taxation laws or any other laws to which the
      Vendor is subject.

	 	 	 	 
	 	(b) 	
      Authority - The Vendor has good and sufficient
      power, authority and right to enter into and deliver this Agreement and to
      transfer the legal and beneficial title and ownership of the Assets to the
      Purchaser free and clear of all Liens, other than Permitted Liens, and the
      execution, delivery and performance of this Agreement and the consummation
      of the transactions contemplated under this Agreement have been duly and
      validly authorized and approved by all necessary corporate action on the
      part of the Vendor. No approval, order, consent or filing with any
      governmental authority (including any regulatory authority and agency) is
      required on the part of the Vendor in connection with the execution,
      delivery and performance of this Agreement.

	 	 	 	 
	 	(c) 	
      Binding Agreement - This Agreement and all other
      agreements, documents and instruments to be executed by the Vendor
      constitute a valid and legally binding obligation of the Vendor,
      enforceable against the Vendor in accordance with their terms subject to
      applicable bankruptcy and insolvency laws and to equitable remedies being
      always in the discretion of a court.

	 	 	 	 
	 	(d) 	
      No Options - Except as expressly listed in
      Section 3.1(d) of the Disclosure Schedule, there is no contract, option or
      any other right of another binding upon or which at any time in the future
      may become binding upon the Vendor to sell, transfer, assign, pledge,
      charge, mortgage or in any other way dispose of or encumber any of the
      Assets other than pursuant to the provisions of this Agreement.

	 	 	 	 
	 	(e) 	
      No Conflict - Neither the entering into nor the
      delivery of this Agreement nor the completion of the transactions
      contemplated hereby by the Vendor or any Warrantor which is a corporation
      will result in the violation of:

	 	 	 	 
	 		(i) 	
      any of the provisions of the Article of Incorporation,
      Certificate of Formation or the like or by-laws of the Vendor or any
      Warrantor which is a corporation, as applicable,



10 





	 	(ii) 	
      except for those Contracts which require consent to their
      assignment or transfer and which are expressly listed in section
      3.1(e)(ii) of the Disclosure Schedule, any agreement or other instrument
      to which the Vendor or any Warrantor which is a corporation, as
      applicable, is a party or by which the Vendor or such Warrantor is bound,
      or

	 	 	 
	 	(iii) 	
      any applicable law, rule or
regulation.




	 	(f) 	
      Books and Records - The books and records of the
      Vendor relating to the Purchased Business are true and correct in all
      material respects and present fairly and disclose in all material respects
      the financial position of the Purchased Business, and all material
      financial transactions and legal and corporate proceedings of the Vendor
      relating to the Purchased Business have been accurately recorded in such
      books and records and, to the extent possible, such financial books and
      records have been prepared in accordance with GAAP, consistently
      applied.

	 	 	 	 
	 	(g) 	
      Financial Statements - The financial statements
      for the Purchased Business attached as Schedule A hereto for the fiscal
      year ended January 31, 2008 and for the three months ended April 30, 2008
      (hereinafter collectively referred as the “Financial
      Statements”):

	 	 	 	 
	 		(A) 	
      are in accordance with the books and accounts of the
      Vendor as at the dates set forth on the Financial Statements for such
      periods,

	 	 	 	 
	 		(B) 	
      are true and correct and present fairly the financial
      position of the Purchased Business as at the dates set forth on the
      Financial Statements for such periods,

	 	 	 	 
	 		(C) 	
      have been prepared in accordance with generally accepted
      accounting principles, consistently applied, and

	 	 	 	 
	 		(D) 	
      present fairly all of the assets and liabilities of the
      Purchased Business as at the dates set forth on the Financial Statements
      for such periods including, without limiting the generality of the
      foregoing, all contingent liabilities of the Purchased Business as at the
      dates set forth on the Financial Statements for such periods.

	 	 	 	 
	 	(h) 	
      Financial Position - Since April 30, 2008: (i) the
      Purchased Business has been carried on in its usual and ordinary course
      and the Vendor has not entered into any transaction (including any
      transfer or sale of assets) out of the usual and ordinary course of the
      Purchased Business; (ii) there has been no change in the affairs,
      business, operations or condition of the Purchased Business, financial or
      otherwise, whether arising as a result of any legislative or regulatory
      change, revocation of any license or right to do business, fire,
      explosion, accident, casualty, labour dispute, flood, drought, riot,
      storm, condemnation, act of God,



11 





	 		
      public force or otherwise, except changes occurring in
      the usual and ordinary course of business which have not adversely
      affected the affairs, business, operations or condition of the Purchased
      Business, financial or otherwise; (iii) no single capital expenditure in
      excess of $10,000 or capital expenditures in the aggregate in excess of
      $10,000 have been made or authorized by or in respect of the Purchased
      Business; (iv) the Purchased Business has not materially changed its price
      lists, manner of pricing or billing, or the credit lines it makes
      available to customers; and (v) there are no outstanding liabilities in
      respect of the Purchased Business except trade debts incurred in the usual
      and ordinary course of business and shown on the Financial Statements and
      on the list of payables set out in Schedule I.

	 	 	 	 
	 	(i) 	
      Intellectual Property -

	 	 	 	 
	 		(i) 	
      Owned Intellectual Property. Except as set forth
      in Section 3.1(i)(ii), the Vendor owns all of the Intellectual Property
      (which for purposes of this clause (i) and subsections 3.1(1) and (p)
      includes all rights in the Software and related training materials) that
      is currently used in the Purchased Business. Schedule C sets forth a full,
      complete and true list of all United States and any other patents,
      trade-marks, registered copyrights, trade names and service marks, and any
      applications therefor included in the Intellectual Property, and specifies
      the jurisdictions in which such Intellectual Property has been issued or
      registered or in which an application for such issuance and registration
      has been filed, including the respective registration or application
      numbers and the names of all registered owners, together with a list of
      all of the Vendor’s currently marketed software products and an indication
      as to which, if any, of such software products have been registered for
      copyright protection with the United States or other relevant Copyright
      Office and any foreign offices and by whom such items have been
      registered. The Vendor is the sole and exclusive owner of, with all right,
      title and interest in and to (free and clear of any Liens, other than
      Permitted Liens) the Intellectual Property, and has sole and exclusive
      rights (and is not contractually obligated to pay any compensation to any
      third party in respect thereof) to the use thereof or the material covered
      thereby in connection with the services or products in respect of which
      the Intellectual Property is being used. The Intellectual Property is in
      full force and effect and has not been used or enforced, or failed to be
      used or enforced, in a manner that would result in its abandonment,
      cancellation or unenforceability. The Vendor has not transferred ownership
      of the Intellectual Property to any other person. There is no and has not
      been any unauthorized use, infringement or misappropriation of any of the
      Intellectual Property by any person, former employee or other third
      party.

	 	 	 	 
	 		(ii) 	
      Licensed Technology. Section 3.1(i)(ii) of the
      Disclosure Schedule lists all third party software and any other
      technology and technical information (other than the Third Party Programs
      referred to in Section



12 




3.1(j)(iv)) licensed to the Vendor by
third parties related to the Purchased Business (such material, together with
the Third Party Programs, the “Licensed Technology”). The Vendor is using
or holding the Licensed Technology with the consent of a license from the owner
of such Licensed Technology under a Contract referred to in Section 3.1(k) . The
Vendor has, and as a result of the transactions contemplated hereby the
Purchaser will have, the right to use, pursuant to valid licenses, all Licensed
Technology, development tools and all Third Party Programs that are used in the
Purchased Business, including in the creation, modification, compilation,
operation or support of the Software.

	 	(j) 	
      Software -

	 	 	 	 
	 		(i) 	
      Developers. The Software was written only by the
      individuals (the “Developers”) listed in Section 3.1(j)(i) of the
      Disclosure Schedule other than minor components of the Software which, in
      the aggregate, do not comprise more than 5% of the source code for the
      current version of any individual Software program;

	 	 	 	 
	 		(ii) 	
      Status of Developers. All Developers, at the time
      they wrote the Software, were either full-time employees of the Vendor
      employed as software programmers, or they were contractors who assigned
      their intellectual property rights in the Software to the Vendor pursuant
      to written agreements. The Developers have waived their moral rights in
      the Software;

	 	 	 	 
	 		(iii) 	
      Government Funding. No government funding,
      facilities of a university, college or other educational institution or
      research centre or funding from third parties was used in the development
      of the Software;

	 	 	 	 
	 		(iv) 	
      Third Party Software. Except for the third party
      software (“Third Party Programs”) listed in Section 3.1(j)(iv) of
      the Disclosure Schedule, the Software neither contains nor embodies nor
      uses nor requires any third party software, including development tools
      and utilities, and the Software, together with the Third Party Programs,
      contains all materials necessary for the continued maintenance and
      development of the Software as presently maintained and developed by the
      Vendor. Except as disclosed in Section 3.1(j)(iv) of the Disclosure
      Schedule, no open source software was or is used in, incorporated into,
      integrated or bundled with any of the Software;

	 	 	 	 
	 		(v) 	
      Third Party Licenses. Copies of all the license,
      distribution and maintenance agreements for the Third Party Programs have
      been provided by the Vendor to the Purchaser, except in respect of Third
      Party Programs that are shrink wrapped software and that are purchased
      off- the-shelf by the Vendor in order to be passed through to the Vendor’s
      customers or to be used by the Vendor, and such license and distribution
      agreements give the Vendor the right to grant unlimited run-time
      licenses



13 





	 		
      of the respective Third Party Program to the customers of
      the Vendor for the royalties set out in Section 3.1 (j )(v) of the
      Disclosure Schedule;

	 	 	 
	 	(vi) 	
      Object Code. Only object code versions of the
      Software have been provided to those licensee customers of the Software
      listed in Section 3.1(j)(vi) of the Disclosure Schedule, and no person
      except for such licensees have been provided with a copy of the object
      code of the Software;

	 	 	 
	 	(vii) 	
      Source Code. The source code for the Software has
      not been delivered or made available to any person and the Vendor has not
      agreed to or undertaken to or in any other way promised to provide such
      source code to any person. The source code is currently stored only in the
      Vendor’s premises in Sarasota, Florida. The sale of the Assets of the
      Vendor resulting from the transactions contemplated by this Agreement will
      not entitle any customer to obtain a copy of the source code for the
      Software, nor will it result in any third party being granted any right
      with respect to the Software or the Intellectual Property;

	 	 	 
	 	(viii) 	
      Customer Licenses and Other Agreements. Section
      3.1(j)(viii) of the Disclosure Schedule lists all the other licenses,
      maintenance or support agreements, development contracts and all other
      agreements, whether written or oral (other than proposals or request for
      proposals which are referred to in such agreements) between the Vendor and
      users of the Software, copies of each of which have been provided to the
      Purchaser. With respect to the users of the Software listed in Sections
      3.1(j)(viii) and 3.1(j)(vi) of the Disclosure Schedule, all such users
      have non- transferable, non-exclusive, single-site licenses to use only
      object code versions of the Software. With respect to the maintenance
      agreements between the Vendor and users of the Software, except as noted
      in Section 3.1(j)(viii) of the Disclosure Schedule, no maintenance
      agreement has a term of greater than 12 months, and the Vendor has not
      agreed with any user to limit future increases in maintenance
  fees;

	 	 	 
	 	(ix) 	
      Software Defects. Except as listed in Section
      3.1(j)(ix) of the Disclosure Schedule, to the Warrantor’s knowledge, there
      are no problems or defects in the Software including bugs, logic errors or
      failures of the Software to operate as described in their related
      documentation or specifications, and, except for such disclosed problems
      or defects, the Software operates substantially in accordance with its
      documentation and specifications;

	 	 	 
	 	(x) 	
      Development Plans. Section 3.1(j)(x) of the
      Disclosure Schedule accurately describes the current development plans for
      the Software;

	 	 	 
	 	(xi) 	
      Disabling Devices. Except as listed in Section 3.1
      (j)(xi) of the Disclosure Schedule, to the Warrantor’s knowledge, the
      Software does not contain any disabling mechanisms or protection features
      which are



14 





	 		
      designed to disrupt or prevent the use of the Software,
      including time locks or computer viruses;

	 	 	 
	 	(xii) 	
      Distributors. Except as listed in Section
      3.1(j)(xii) of the Disclosure Schedule, there are no distributors, joint
      venturers, partners, sales agents, representatives or any other persons,
      including VARs, OEMs or resellers, who have rights to market, distribute
      or license the Software. No entity listed on Section 3.1(j)(xii) of the
      Disclosure Schedule has been guaranteed pricing for the Software. No
      entity listed in Section 3.1(j)(xii), and no entity that previously had
      rights to distribute the Software, has or had exclusive rights to do so in
      any geographic, product or customer market; and

	 	 	 
	 	(xiii) 	
      Regulatory Approvals. The Vendor has obtained all
      applicable government, regulatory, technical and similar approvals in all
      jurisdictions where the Software is sold or may otherwise be
    required.




	 	(k) 	
      Third Party and Customer Contracts - The Contracts
      listed in Schedule 3.1(k) of the Disclosure Schedule are the only
      contracts and agreements, whether written or oral, by which the Purchased
      Business is bound. The unfilled orders listed in Schedule L are the only
      obligations owing by the Vendor to end users of the Software in respect of
      prepaid but unutilized training and support services of the Vendor and the
      estimated costs listed in Schedule L are a reasonable estimate of the
      resources needed to satisfy such unfilled orders. The Contracts represent
      the entire agreement of the Vendor and the respective parties to such
      contracts. All Contracts (including the related RFP’s and proposals) are
      not in default or breach, but rather are in full force and effect, in good
      standing and, to the Warrantor’s knowledge, there exists no condition,
      event or act that, with the giving of notice or lapse of time or both,
      would constitute such a default or breach. All Contracts are in full force
      and effect without amendment thereto and the Vendor is entitled to all
      benefits thereunder, and the Vendor has performed all obligations required
      to be performed by it under the Contracts. To the Warrantor’s knowledge,
      other than warranty claims disclosed to the Purchaser elsewhere pursuant
      to this Agreement, if any, no customer of the Vendor has any intention of
      making any warranty claims in respect of the Software or terminating any
      customer or partner Contract. The Vendor has made no commitments to
      release or develop any updates, versions or releases of the Software
      except as may be provided in such customer Contracts. No Contract to which
      the Vendor is a party limits the freedom of the Vendor to compete in any
      line of business or any geographic area, or to acquire goods or services
      from any supplier, or establish the prices at which it may sell any goods
      or services. The information set out in Schedule M is materially true and
      accurate.

	 	 	 
	 	(l) 	
      Infringement - The Intellectual Property does not
      infringe upon or violate any intellectual property right, including
      copyrights, patents, trade secrets or other proprietary rights, of any
      third party, nor has the Vendor received written notice from any person
      claiming that the Intellectual Property infringes any
  third



15 





	 		
      party’s intellectual property rights. Except as provided
      in the customer Contracts referred to in Section 3.1(j), the Vendor has
      not entered into any agreement to indemnify any other person against any
      charge of infringement of any of the Intellectual Property.

	 	 	 
	 	(m) 	
      Non-Disclosure - The Vendor has taken all
      reasonable steps required to protect the Vendor’s rights in confidential
      information and trade secrets associated with the Assets. Section 3.1(m)
      of the Disclosure Schedule contains a list of each current and former
      employee of and consultant to the Vendor who provided services in respect
      of the Purchased Business and who has signed a Proprietary Rights and
      Confidentiality Agreement in the Vendor’s standard form as certified by
      the Vendor and delivered to the Purchaser, and, except as disclosed in the
      Disclosure Schedule, to the Warrantor’s knowledge, there are no breaches
      of any of such Proprietary Rights and Confidentiality Agreements. To the
      Warrantor’s knowledge, the employment by the Vendor of any of such
      employees does not violate any non-disclosure or non- competition
      agreement between an employee and a third party.

	 	 	 
	 	(n) 	
      Litigation - There are no actions, suits, claims
      in progress or proceedings (whether or not purportedly on behalf of the
      Vendor) pending or, to the knowledge of the Warrantor, threatened against
      or adversely affecting, or which could adversely affect, the Purchased
      Business, the Intellectual Property, or the Assets or before or by any
      federal, provincial, municipal or other governmental court, department,
      commission, board, bureau, agency or instrumentality, domestic or foreign,
      whether or not insured, and which might involve the possibility of any
      lien, charge, encumbrance or any other right of another against the
      Assets. To the Warrantor’s knowledge, there is no existing ground on which
      any such action, suit, Claims or proceedings might be commenced with any
      reasonable likelihood of success. There is no judgment, decree,
      injunction, rule or order of any court, governmental authority or
      arbitrator outstanding against the Vendor.

	 	 	 
	 	(o) 	
      Orders - There are no outstanding orders, notices
      or similar requirements relating to the Purchased Business or to the
      Assets issued by any building, environmental, fire, health, labour or
      police authorities or from any other federal, state or municipal authority
      including, without limitation, occupational health and safety authorities
      and there are no matters under discussion with any such authorities
      relating to orders, notices or similar requirements.

	 	 	 
	 	(p) 	
      No Encumbrances - Except as disclosed in Section
      3.1(p) of the Disclosure Schedule, the Vendor is the owner of the
      Intellectual Property and the other Assets with a good and marketable
      title, free and clear of all Liens, other than Permitted Liens, and any
      other rights of others.

	 	 	 
	 	(q) 	
      Accounts Receivable; Accounts Payable - All of the
      accounts receivable of the Vendor relating to the Purchased Business as at
      the Closing Date, including details as to the customer, the amount and the
      age of the receivable, are set out in



16 





	 		
      Schedule J hereto. The accounts receivable of the
      Purchased Business are valid and genuine accounts receivable and are
      generally due within ninety (90) days after being billed and are not
      subject to any defense, counterclaim or setoff. The only accounts payable,
      debts, accrued liabilities and contingent liabilities of the Vendor
      relating to the Purchased Business, including any of the foregoing owing
      by the Vendor and persons not at arm’s length with the Vendor, including
      all intercompany accounts, and amounts owing to governments, are set out
      in Schedule I. The inventories have been recorded on the books of the
      Vendor in accordance with GAAP consistent with past practice and can be
      readily sold in the ordinary course of business.

	 	 	 
	 	(r) 	
      Equipment - Schedule B sets out a complete list of
      the equipment used in the business of the Purchased Business, all such
      equipment is owned by the Vendor free and clear of all Liens, other than
      Permitted Liens, except as disclosed in the Disclosure Schedule, and such
      equipment comprises the only equipment used by the Vendor to carry on the
      Purchased Business prior to the Closing Date as it is being presently
      conducted. All such equipment has been properly maintained and is in good
      working order for the purposes of on-going operation, subject to ordinary
      wear and tear for machinery and equipment of comparable age.

	 	 	 
	 	(s) 	
      Insolvency - No order has been made or petition
      presented or resolution passed for the winding up of the Vendor nor has
      any distress execution or other process been levied against the Vendor or
      action taken to repossess goods in the possession of the Vendor. No steps
      have been taken for the appointment of an administrator or receiver of any
      part of the property of the Vendor. No floating charge created by the
      Vendor has crystallised and there are no circumstances likely to cause
      such floating charge to crystallise. The Vendor has not been party to any
      transaction which could be avoided in a winding up. The Vendor has not
      made or proposed any arrangement or composition with its creditors or any
      class of its creditors. The Vendor has not been party to a transaction
      pursuant to or as a result of which an asset owned, purportedly owned or
      otherwise held by it is liable to be transferred or re-transferred to
      another person or which gives or may give rise to a right of compensation
      or other payment in favour of another person under the provisions of any
      bankruptcy legislation in the United States or Canada.

	 	 	 
	 	(t) 	
      Transactions With Interested Persons - Neither
      Vendor nor any direct or indirect shareholder, officer, director or
      employee of the Vendor or any affiliate of any of the foregoing owns,
      directly or indirectly, on an individual or joint basis, any material
      interest in, or serves as an officer, director or employee of, any
      customer, competitor or supplier of Vendor, or any corporation,
      partnership, trust or other entity or organization which has a material
      contract or arrangement with Vendor.

	 	 	 
	 	(u) 	
      Sufficiency of Assets - The Assets comprise all
      the assets used in the operation of the Purchased Business as of the
      Closing Date.



17 





	 	(v) 	
      Guarantees - The Vendor is not a party to or bound
      by any guarantee, indemnification, surety or similar obligation pertaining
      to the Purchased Business.

	 	 	 	 
	 	(w) 	
      No Subsidiaries - Any subsidiaries of the Vendor
      do not own or have any other rights in or to any of the Assets. The
      Purchased Business does not have any agreements, options or commitments to
      acquire any securities of any corporation or to acquire or lease any real
      property or assets to be used in or in connection with the Purchased
      Business other than, in the latter case, those assets that are to be used
      in the usual and ordinary course of business of the Purchased
    Business.

	 	 	 	 
	 	
      (x) 
	
      No Royalties - Except as disclosed in the
      Disclosure Schedule, the Vendor is not a party to or bound by any contract
      or commitment to pay any royalty, licence fee or management fee pertaining
      to the Purchased Business.

	 	 	 	 
	 	(y) 	
      Employees; Independent Contractors
  -

	 	 	 	 
			(i) 	
      The Vendor has no employment contract with any Employee
      listed in Schedule G except such contracts as are listed in Schedule E
      attached hereto, and such Schedule correctly sets out whether such
      contracts are in writing and the Employee’s most recent salary with the
      Vendor (including particulars of all profit sharing, incentive and bonus
      arrangements applicable to the Employee), and his start date with the
      Vendor. Schedule E also sets out a complete list of the contracts between
      the Vendor and independent contractors related to the Purchased Business.
      Except for remuneration paid to employees, directors and independent
      contractors in the ordinary course of business and made at current rates
      of remuneration, or as set out in Section 3.1(y) of the Disclosure
      Schedule, no payments have been made or authorized since the signing of
      the Letter of Intent by the Vendor to Employees listed on Schedule G or to
      independent contractors of the Vendor related to the Purchased Business.
      No current or former director, officer, shareholder, employee or
      independent contractor of the Vendor or any person not dealing at arm’s
      length within the meaning of the Internal Revenue Code with any
      such person is indebted to the Vendor. All benefit plans listed in the
      Disclosure Schedule are in compliance in all material respects with all
      applicable legislation, including, without limiting the generality of the
      foregoing, the Employee Retirement Income Security Act of 1974
      (“ERISA”), as amended, and the Internal Revenue Code. No employer
      contributions are required under any such plans. Neither the Vendor nor
      any “party in interest” (within the meaning of Section 4975 of the Code)
      has engaged in a transaction or transactions in connection with which the
      Vendor could be subject, individually or in the aggregate, to other civil
      penalties assessed pursuant to Section 502(i) of ERISA or tax liabilities
      imposed by Section 4975 of the Code. No liability under Title IV of ERISA
      has been incurred either directly or indirectly by the Vendor or any ERISA
      Affiliate. There is no pending or, to the Vendor’s



18 





	 		
      knowledge, threatened claim against or otherwise
      involving any plan, or any fiduciary thereof, by or on behalf of any
      participant or beneficiary under any plan (other than routine claims for
      benefits), nor is there any pending or, to the Vendor’s knowledge,
      threatened claim by or on behalf of any of the plans, which has or could
      have an adverse effect on the Vendor.

	 	 	 
	 	(ii) 	
      Section 3.1(y)(ii) of the Disclosure Schedule lists all
      Benefit Plans applicable to the Employees (the “Disclosed Plans”). Except
      for the Disclosed Plans, there are no health or accident plans, programs,
      contracts, understandings or arrangements in which any employee, former
      employee, retired employee (or beneficiary of any of them) of the Vendor
      is entitled to participate.

	 	 	 
	 	(iii) 	
      All required employer contributions under any of the
      Disclosed Plans have been made and the applicable funds have been funded
      in accordance with the terms of the plans and no past service funding
      liabilities exist thereunder.

	 	 	 
	 	(iv) 	
      Each of the Disclosed Plans has at all times been
      operated in accordance with the health care continuation provisions of the
      Employee Retirement Income Security Act of 1974, the Internal Revenue
      Code, the Consolidated Omnibus Budget Reconciliation Act of 1985 and
      state health care continuation laws, the Health Insurance Portability and
      Accountability Act of 1996, the Newborns’ and Mother’s Health Protection
      Act of 1996, the Mental Health Parity Act of 1996 and the Women’s Health
      and Cancer Act of 1998. With respect to any individuals who lose coverage
      under any of the Disclosed Plans in connection with the transactions
      contemplated by this Agreement, the Vendor will provide all notices,
      elections and other rights concerning health care continuation privileges
      required of the Vendor and the Purchaser under such statutes, will provide
      any elected continuation coverage through one or more of the Vendor’s
      group health plans, and will indemnify and hold harmless Purchaser and its
      affiliated entities for any damages or expenses incurred by them in this
      regard.

	 	 	 
	 	(v) 	
      Vendor will comply with all applicable employee
      termination notice and similar laws as they impact on the transactions
      contemplated by this Agreement.

	 	 	 
	 	(vi) 	
      Vendor will comply with all applicable requirements of
      the Worker Adjustment and Retraining Notification Act and all similar laws
      as they impact on the transactions contemplated by this Agreement, or
      alternatively, with respect to the transactions contemplated by this
      Agreement, the Vendor represents and warrants that no such actions under
      such laws are required.



19 





	 	(vii) 	
      No employees, former employees or retired employees of
      the Vendor, as a result of their employment with the Vendor, are
      participants in any “multiemployer plan” which is a “pension plan” as such
      terms are defined in ERISA, and Vendor has no current, contingent or
      potential liability of any kind, including withdrawal liability, with
      respect to any such plan except for contributions due in the ordinary
      course which are due but not yet payable. As of the Closing Date, if
      Vendor withdrew from any multiemployer plan, the Vendor would not incur
      any withdrawal liability.

	 	 	 
	 	(viii) 	
      It is understood and agreed that effective as of the
      Effective Date, the Purchaser will offer employment to the Employees and
      will enter into an employment agreement with each of them substantially in
      the form attached as Schedule K.

	 	 	 
	 	(ix) 	
      The Vendor has complied in all material respects with all
      laws, rules and regulations relating to the employment of labour,
      including those relating to wages, hours, pay equity, overtime,
      occupational safety, discrimination and the payment of social security and
      other payroll related taxes, and has not received any written notice
      alleging failure to comply in any material respect with any such laws,
      rules or regulations. No controversies, disputes or proceedings are
      pending or, to the Vendor’s knowledge, threatened, between the Vendor and
      any employee of the Vendor. There is no labour strike, dispute, slowdown,
      representation campaign or work stoppage actually pending or, to the
      Vendor’s knowledge, threatened with respect to the Vendor’s
    employees.

	 	 	 
	 	(x) 	
      Since the Balance Sheet Date, there has not been any
      increase in the rate or terms of compensation payable by the Vendor to, or
      any increase in the rate or terms of any bonus, insurance, pension, or
      other employee benefit plan on behalf of its employees, except increases
      occurring in the ordinary course of business in accordance with its
      customary practices (which shall include normal period performance reviews
      and related compensation and benefit
increases).




	 	(z) 	
      Collective Agreement - The Vendor is not bound by
      or a party to:

	 	 	 	 
	 		(i) 	
      any collective bargaining agreement, or

	 	 	 	 
	 		(ii) 	
      any benefit plan, including, without limiting the
      generality of the foregoing, any pension plan maintained by or on behalf
      of the Vendor for any of its employees,

	 	 	 	 
	 			
      and relating to the Purchased Business.

	 	 	 	 
	 	(aa) 	
      Bargaining Rights - No trade union, council of
      trade unions, employee bargaining agency or affiliated bargaining
      agent:



20 





	 	(i) 	
      holds bargaining rights with respect to any of the
      Vendor’s employees by way of certification, interim certification,
      voluntary recognition, designation or successor rights,

	 	 	 
	 	(ii) 	
      has applied to be certified as the bargaining agent of
      any of the Vendor’s employees, or

	 	 	 
	 	(iii) 	
      has applied to have the Vendor declared a related
      employer or successor employer pursuant to applicable labour
      legislation.




	 	(bb) 	
      Compliance With Rules - Except as disclosed in
      Section 3.1(bb) of the Disclosure Schedule in respect of the foreign
      jurisdictions (“Foreign Jurisdictions”) in which the Purchased Business
      has operations, the Purchased Business does not conduct business in any
      jurisdiction other than the State of Florida. The Purchased Business is
      conducting its business in material compliance with all applicable laws,
      rules, regulations, notices, approvals and orders. The Purchased Business
      is not in material breach of any laws, rules, regulations, notices,
      approvals or orders and is duly licensed, registered or qualified to carry
      on its business as now conducted and to own its assets, and all such
      licenses, registrations and qualifications are valid and subsisting and in
      good standing and none of the same contains any term, provision, condition
      or limitation which has or may have an adverse effect on the operation of
      the Purchased Business or which may be affected by the completion of the
      transactions contemplated hereby. The Vendor, to the extent required by
      law, has a written privacy policy which governs its collection, use and
      disclosure of personal information and the Vendor is in compliance with
      such privacy policy. All required consents to the collection, use or
      disclosure of personal information in connection with the conduct of the
      Purchased Business have been obtained.

	 	 	 
	 	(cc) 	
      No Brokers - The Vendor has not engaged any broker
      or finder in connection with the transactions contemplated by this
      Agreement, and no person or entity is entitled to any fee or other
      compensation with respect to this Agreement or the transactions it
      contemplates.

	 	 	 
	 	(dd) 	
      Disclaimer - Except as expressly set forth
      in this Section 3.1, the Warrantor makes no representation or warranty,
      express or implied, at law or in equity and any such representations and
      warranties are hereby expressly disclaimed, including any implied
      representation or warranty as to condition, merchantability, suitability
      or fitness for a particular purpose. The Purchaser hereby acknowledges and
      agrees to such disclaimer and that, except as specifically set forth in
      this Section 3.1, the Purchaser is purchasing the Assets on an “as is,
      where is” basis.




	3.2 	
      Survival of Representations, Warranties and
      Covenants of the Warrantor.

	 	 	 
		(a) 	
      The representations and warranties of the Warrantor set
      forth in Section 3.1 will survive the completion of the transactions
      contemplated by this Agreement and,



21 




notwithstanding such completion, will
continue in full force and effect for the benefit of the Purchaser:

	 	(i) 	
      in the case of representations and warranties relating in
      any manner to taxation, until the day following the expiration of all
      periods allowed for any assessment or reassessment by any taxing
      authority;

	 	 	 
	 	(ii) 	
      in the case of the representations and warranties in
      Sections 3.1(i), 3.1(j), 3.1(1) and 3.1(p), for a period of three (3)
      years after the Closing Date; and

	 	 	 
	 	(iii) 	
      in the case of all other representations and warranties
      other than those referred to in clauses (i) and (ii) hereof, for a period
      of two (2) years from the Closing Date.




	 		
      No investigations made by or on behalf of the Purchaser
      at any time, nor any disclosure of information made to the Purchaser
      (except as set out in this Agreement and the Schedules (including, without
      limitation, the Disclosure Schedule) hereto), shall have the effect of
      waiving, diminishing the scope or otherwise affecting any representation
      or warranty made by a Warrantor.

	 	 	 
	 	(b) 	
      The covenants of the Warrantor set forth in this
      Agreement (other than the covenant set forth in Section 4.1(b) with
      respect to representations and warranties being true at the Time of
      Closing) will survive the completion of the sale and purchase of the
      Assets herein provided for and, notwithstanding such completion, will
      continue in full force and effect for the benefit of the Purchaser in
      accordance with the terms thereof and subject to Section 3.2(a)
    hereof




	3.3 	
      Purchaser’s Representations and Warranties.
      The Purchaser represents and warrants to the Warrantor that:

	 	 	 
		(a) 	
      Each of CHS USA and CHS Canada is a corporation duly
      incorporated, organized and subsisting under the laws of its jurisdiction
      of incorporation.

	 	 	 
		(b) 	
      Each of CHS USA and CHS Canada has good and sufficient
      power, authority and right to enter into and deliver this Agreement and to
      complete the transactions to be completed by the Purchaser contemplated
      hereunder, and the execution, delivery and performance of this Agreement
      and the consummation of the transactions contemplated under this Agreement
      have been duly and validly authorized and approved by all necessary
      corporate action on the part of each of CHS USA and CHS Canada.

	 	 	 
		(c) 	
      This Agreement and all other agreements, documents and
      instruments to be executed by the Purchaser constitute a valid and legally
      binding obligation of each of CHS USA and CHS Canada, enforceable against
      each of CHS USA and CHS Canada in accordance with its terms subject to
      applicable bankruptcy and insolvency laws and to equitable remedies being
      always in the discretion of a court.



22 





	 	(d) 	
      Neither the entering into nor the delivery of this
      Agreement nor the completion of the transactions contemplated hereby by
      each of CHS USA and CHS Canada will result in the violation of:

	 	 	 	 
	 		(i) 	
      any of the provisions of its Articles of Incorporation,
      Certificate of Formation or the like or by-laws,

	 	 	 	 
	 		(ii) 	
      any agreement or other instrument to which it is a party
      or by which it is bound, or

	 	 	 	 
	 		(iii) 	
      any applicable law, rule or regulation.

	 	 	 	 
	 	(e) 	
      Neither CHS USA nor CHS Canada has engaged any broker or
      finder in connection with the transactions contemplated by this Agreement,
      and no person or entity is entitled to any fee or other compensation with
      respect to this Agreement or the transactions it
  contemplates.




	3.4 	
      Survival of Purchaser’s Representations, Warranties
      and Covenants.

	 	 	 	 
		(a) 	
      The representations and warranties of the Purchaser set
      forth in Section 3.3 will survive the completion of the sale of the
      Purchased Business herein provided for and, notwithstanding such
      completion, will continue in full force and effect for the benefit of the
      Vendor for a period of two years from the Closing Date.

	 	 	 	 
		(b) 	
      The covenants of the Purchaser set forth in this
      Agreement (other than the covenant set forth in Section 4.2(b) with
      respect to representations and warranties being true at the Time of
      Closing) will survive the completion of the sale and purchase of the
      Purchased Business herein provided for and, notwithstanding such
      completion, will continue in full force and effect for the benefit of the
      Vendor in accordance with the terms thereof and subject to Section 3.4(a)
      hereof.

	 	 	 	 
	4. 	
      COVENANTS; INDEMNIFICATION

	 	 	 	 
	4.1 	
      Covenants of the Warrantor.

	 	 	 	 
		(a) 	
      In addition to the other indemnities provided by the
      Warrantor herein and subject to Section 3.2(a) above and Section 4.1(c)
      below, the Warrantor shall indemnify, save, hold harmless, discharge and
      release the Purchaser and its affiliates, subsidiaries, shareholders,
      managers, members, directors, employees and agents from and against any
      and all Claims arising from or based on:

	 	 	 	 
			(i) 	
      any inaccuracy in any representation or warranty made by
      the Warrantor in this Agreement or any other agreement to be entered into
      in connection with the transactions contemplated hereby (collectively, the
      “Vendor’s Documents”);



23 





	 	(ii) 	
      any breach of any covenant of any Warrantor set forth in
      this Agreement or in the Vendor’s Documents;

	 	 	 
	 	(iii) 	
      any liability or other Claims or obligations, except for
      those disclosed in the Financial Statements or the Disclosure Schedule or
      any other schedule hereto, reserved for or reflected on the Closing Date
      Balance Sheet or assumed by the Purchaser pursuant to Section 2.8, in
      respect of the Purchased Business which arose prior to the Effective Date
      or in respect of services performed or products supplied to customers of
      the Purchased Business before the Effective Date;

	 	 	 
	 	(iv) 	
      any Claims of any employees for unpaid wages or accrued
      and unpaid vacation pay respecting the employment of such employees by the
      Vendor prior to the Effective Date that are not reserved for or reflected
      on the Closing Date Balance Sheet;




	 	(b) 	
      The Warrantor will ensure that the representations and
      warranties of the Warrantor are true and correct at the Time of Closing
      and that the conditions of closing for the benefit of the Purchaser have
      been performed or complied with by the Time of Closing.

	 	 	 	 
	 	(c) 	
      The following limitation will apply with regard to the
      Claims for which the Warrantor would otherwise have indemnification
      obligations under this Agreement:

	 	 	 	 
	 		(i) 	
      except as otherwise specified herein, the indemnities set
      forth in this Agreement shall not apply until the aggregate of all Claims
      total more than $10,000, in which event the indemnities under this
      Agreement shall apply to all Claims brought under this Agreement which in
      the aggregate are in excess of $10,000;

	 	 	 	 
	 		(ii) 	
      the maximum aggregate liability of the Warrantor to the
      Purchaser for Claims related to the representations and warranties shall
      not exceed an amount equal to the Purchase Price.

	 	 	 	 
	 	(d) 	
      Notwithstanding the foregoing, the limitations set out
      above do not apply to Claims of any amount arising (i) under Section 2.7
      hereof or (ii) from fraud (including without limitation fraudulent
      misrepresentation) on the part of the Warrantor, either of which may be
      brought by the Purchaser at any time notwithstanding the foregoing
      limitation.



24 





	4.2 	
      Covenants of the Purchaser.

	 	 	 	 
		(a) 	
      In addition to the other indemnities provided by the
      Purchaser herein, the Purchaser shall indemnify, save, hold harmless,
      discharge and release the Warrantor, and their respective affiliates,
      subsidiaries, shareholders, managers, members, directors, employees and
      agents, from and against any and all Claims arising from or based
    on:

	 	 	 	 
			(i) 	
      subject to subsection 3.4(a), any inaccuracy in any
      representation or warranty made by the Purchaser in this Agreement or any
      other agreement to be entered into in connection with the transactions
      contemplated hereby or any certificates delivered or to be delivered by or
      on behalf of the Purchaser pursuant to the terms of this Agreement
      (collectively, the “Purchaser’s Documents”);

	 	 	 	 
			(ii) 	
      any breach of any covenant of the Purchaser set forth in
      this Agreement or in the Purchaser’s Documents;

	 	 	 	 
			(iii) 	
      any liability or obligation assumed by the Purchaser
      pursuant to Section 2.8;

	 	 	 	 
			(iv) 	
      the delivery to Purchaser of automatic payment forms
      containing customer credit card or banking information or any similar
      disclosure to Purchaser by Vendor of such customer information regarding
      payment and the use of any such customer information by the Purchaser;
      or

	 	 	 	 
			(v) 	
      any liability or other Claims or obligations respecting
      the Purchased Business which arise subsequent to the Effective Date or
      respecting services performed or products supplied to customers of the
      Purchased Business after the Effective Date.

	 	 	 	 
		(b) 	
      The Purchaser will ensure that the representations and
      warranties of the Purchaser are true and correct at the Time of Closing
      and that the conditions of closing for the benefit of the Vendor have been
      performed or complied with by the Time of Closing.

	 	 	 	 
		(c) 	
      The Purchaser shall not have any indemnification
      obligations under this Agreement until the aggregate of all Claims total
      more than $10,000, in which event the indemnities under this Agreement
      shall apply to all Claims brought under this Agreement which in the
      aggregate are in excess of $10,000. Notwithstanding the foregoing, the
      limitations set out above do not apply to Claims of any amount arising
      from fraud (including without limitation fraudulent misrepresentation) on
      the part of the Purchaser.

	 	 	 	 
	4.3 	
      Notice; Right to Defend. Each party shall
      give reasonably prompt written notice to the other of the assertion or
      commencement of any third party Claim (“Third Party Claim”) in respect of
      which indemnity is or may be sought hereunder, other than Claims in which
      the parties are litigating claims against each other (“Direct Claims”). If
      the indemnified



25 





		
      party fails to give such reasonably prompt notice, such
      failure shall not preclude the indemnified party from obtaining
      indemnification, but its right to indemnification may be reduced to the
      extent that such delay prejudiced the defense of the Claim or increased
      the amount of liability or cost of defense. The indemnifying party shall
      have the right and obligation to assume the defense or settlement of any
      Third Party Claim in respect of which it is obligated to provide indemnity
      hereunder; provided, however, that the indemnifying party shall not settle
      or compromise any such Claim without the indemnified party’s prior written
      consent thereto, unless the terms of such settlement or compromise
      discharge and release the indemnified party from any and all liabilities
      and obligations thereunder. Notwithstanding the foregoing: (i) the
      indemnified party at all times shall have the right, at its option and
      expense, to participate fully in the defense or settlement of such Third
      Party Claim; and (ii) if the indemnifying party does not proceed
      diligently to defend or settle such Claim within 30 days after its receipt
      of notice of the assertion or commencement thereof, then (a) the
      indemnified party shall have the right, but not the obligation, to
      undertake the defense or settlement of such Third Party Claim for the
      account and at the risk of the indemnifying party, and (b) the
      indemnifying party shall be bound by any defense or settlement that the
      indemnified party may make as to such Third Party Claim. Each party shall
      cooperate fully in defending or settling any Third Party Claim, and the
      defending or settling party shall have reasonable access to the books and
      records and personnel of the other party that are relevant to such
      Claim.

	 	 	 
	4.4 	
      Bulk Sales Legislation. The parties hereto
      believe that, assuming compliance with this Agreement by both the Vendor
      and the Purchaser, it is both unnecessary for the protection of the
      Vendor’s creditors and impracticable to comply with the bulk sales
      legislation of the various jurisdictions in which the Assets are located.
      Accordingly, in the event that any creditor of the Vendor should make any
      claim against either the Purchaser or the Assets which is wholly or
      partially based on the premise that the sale of the Assets did not conform
      to the requirements of bulk sales legislation of any jurisdiction in which
      the Assets are situated, the Warrantor agrees to indemnify and save the
      Purchaser harmless in principal, interest and costs, including reasonable
      legal fees, against and from any such claim, whether or not the claim is
      ultimately proved to be well founded.

	 	 	 
	4.5 	
      Resolution of Disputes.

	 	 	 
		(a) 	
      Subject to clause (i) hereof, any controversy or claim
      arising out of or relating to this Agreement or the breach hereof
      involving only a claim as between the parties hereto, shall be settled by
      arbitration in accordance with commercial rules of the American
      Arbitration Association (AAA). Arbitration proceedings conducted pursuant
      to this Section 4.5 shall be held in New York City.

	 	 	 
		(b) 	
      The Purchaser and the Vendor shall mutually select an
      arbitrator to conduct the arbitration. If the Purchaser and the Vendor are
      unable to mutually agree upon such an arbitrator, then the Purchaser and
      the Vendor shall each select an arbitrator and within five (5) days after
      their selection, those two arbitrators shall select a third arbitrator,
      which third arbitrator shall conduct the arbitration (hereinafter referred
      to as the “Arbitrator”). The Arbitrator must be a
  person



26 





	 		
      experienced in corporate law or the law of mergers and
      acquisitions and must have sewed as an arbitrator in at least one prior
      commercial arbitration involving primarily questions of commercial or
      corporate law conducted under the AAA rules. The Arbitrator may not be a
      person who ever has been an affiliate of or attorney for any party or for
      any of their respective affiliates.

	 	 	 
	 	(c) 	
      The parties shall allow and participate in discovery in
      accordance with the United States Federal Rules of Civil Procedure for a
      period of 180 days after the filing of an answer or other responsive
      pleading. Unresolved discovery disputes may be brought to the attention of
      the Arbitrator for resolution.

	 	 	 
	 	(d) 	
      Any provisional remedy that would be available from a
      court of law shall be available from the Arbitrator to the parties pending
      arbitration. Any party may, without inconsistency with the Agreement,
      apply to any court of proper jurisdiction and seek injunctive relief to
      maintain the status quo until the arbitration award is rendered or the
      controversy is otherwise resolved.

	 	 	 
	 	(e) 	
      The Arbitrator’s award shall be made in writing and shall
      make written findings of fact and conclusions of law. The Arbitrator shall
      have no authority to award punitive or other damages not measured by the
      prevailing party’s actual damages and may not, in any event, make any
      ruling, finding, or award that does not conform to the terms and
      conditions of this Agreement. Judgment on any arbitration award may be
      entered by the Arbitrator or by any party in any court having jurisdiction
      thereof No party or Arbitrator may disclose the existence, content, or
      results of any arbitration or arbitration award without the prior written
      consent of both parties except to the extent necessary to enter and
      enforce a judgment based upon such an award.

	 	 	 
	 	(f) 	
      The award of the Arbitrator shall be final and not
      subject to appeal. Each party hereby waives the benefit of any applicable
      law which would permit it to appeal the decision of the Arbitrator to any
      court or other authority.

	 	 	 
	 	(g) 	
      All fees and expenses of the arbitration shall be borne
      by the parties equally. However, each party shall bear the expense of its
      own counsel, experts, witnesses, and preparation and presentation of
      proofs. Notwithstanding the foregoing, the Arbitrator shall be entitled to
      tax and assess costs against any party (including the fees of attorneys
      and arbitrators) to the extent that the Arbitrator finds that such party’s
      claim or any portion thereof was unreasonable, speculative or primarily
      for the purpose of delaying the exercise of rights by the prevailing
      party.

	 	 	 
	 	(h) 	
      The provisions of this Section 4.5 shall survive
      termination of this Agreement. Any dispute regarding the applicability of
      this Section 4.5 to a particular claim or controversy shall be arbitrated
      as provided in this Section 4.5.

	 	 	 
	 	(i) 	
      The provisions of this Section 4.5 shall not apply to
      matters relating, in whole or in part, to Section
6.0.



27 




4.7       Closing Date
Accounts Receivable. Within thirty (30) days of the date that is
immediately following the two months anniversary of the Closing Date, Purchaser
will send to the Vendor a list of all accounts receivables included on the
Closing Date Balance Sheet but not collected as of the date of the two months
anniversary of the Closing Date (such statement, the “A/R Statement” and
such accounts receivable, the “Uncollected A/R”). Purchaser agrees to use
its commercially reasonable efforts after the Closing to collect the accounts
receivable included on the Closing Date Balance Sheet. The parties agree that
one-half of the dollar value of the Uncollected A/R shall be used to reduce the
value of the Tangible Assets in the calculation of the purchase price adjustment
in Section 2.7 and the remaining one-half shall be an indemnification claim of
Purchaser pursuant to Section 4.1 and subject to the limitations in Section 4.1.
In the event that there exists Uncollected A/R, Purchaser shall assign to the
Vendor the right to one half of all collections of the Uncollected A/R on the
date that the A/R Statement is provided, free and clear of any liens. Purchaser
covenants to continue to send statements to the pertinent customers for any
Uncollected A/R thereafter as if Purchaser were still the owner of them and to
remit one half of any payments made by these customers for any such Uncollected
A/R to the Vendor promptly upon receipt thereof. The one half of the payments
made by these customers for any such Uncollected A/R that is retained by
Purchaser shall reduce Purchaser’s indemnification claim for Uncollected A/R.
Purchaser agrees to cooperate with the efforts of the Vendor to collect the
accounts receivable set forth on the A/R Statement.

	5. 	
      CLOSING

	 	 
	5.1 	
      Deliveries. The parties will make the
      following deliveries at Closing:




	 	(a) 	
      the Purchaser will be furnished with such certificates or
      other instruments (including, without limiting the generality of the
      foregoing, a certified copy of resolutions of the board of directors of
      the Vendor approving the sale of the Assets to the Purchaser, instruments
      of conveyance with respect to the Assets, etc.) of the Vendor or of
      officers of the Vendor as the Purchaser or the Purchaser’s counsel may
      reasonably think necessary in order to establish that the terms, covenants
      and conditions contained in this Agreement to have been performed or
      complied with by the Vendor at or prior to the Time of Closing have been
      performed or complied with and that the representations and warranties of
      the Warrantor herein given are true and correct at the Time of
    Closing;

	 	 	 
	 	(b) 	
      the Vendor shall have obtained from the parties to all
      Contracts, engagements, or commitments or leases referred to in the
      Disclosure Schedule or otherwise, where required, the consent to the
      assignment of the Vendor’s interest in its contracts or engagements to the
      Purchaser;

	 	 	 
	 	(c) 	
      there will be an employment agreement, which shall
      include non-solicitation and non-competition terms, entered into between
      the Purchaser and each of Laura Kinard, Scott Blight, and Greg
      Carmichael.;

	 	 	 
	 	(d) 	
      the Purchaser will have entered into a written agreement
      with the Vendor for a sub-lease of the business premises located at 7405
      N. Tamiami Trail, Sarasota, Florida, at rate of $3,200 per month plus
      utilities;



28 





	 	(e) 	
      the Vendor will have delivered to the Purchaser an
      undertaking, in a form reasonably satisfactory to the Purchaser, to
      provide within ninety days of the Closing Date, a certificate issued by
      the applicable state authorities indicating that the Vendor has paid all
      taxes collectable or payable under applicable taxation legislation up to
      the Closing Date or has entered into an arrangement satisfactory to the
      said authorities for the payment of such taxes;

	 	 	 
	 	(f) 	
      the Vendor will have delivered to Purchaser all copies of
      the Software within their possession or control and a certificate signed
      by the President of the Vendor attesting that the Vendor no longer retains
      any copies of the Software;

	 	 	 
	 	(g) 	
      the Purchaser shall have received from the lienholders a
      full and final release of all liens which apply to the Assets, in form and
      content reasonably satisfactory to the Purchaser’s Counsel;

	 	 	 
	 	(h) 	
      the Vendor and the Purchaser shall have entered into a
      software license agreement with respect to the Software, in form and
      content reasonably satisfactory to the Purchaser’s counsel;

	 	 	 
	 	(i) 	
      the Vendor and the Purchaser shall have entered into
      written undertaking to execute a software escrow agreement with respect to
      the Software, in form and content reasonably satisfactory to the Vendor’s
      counsel;

	 	 	 
	 	(j) 	
      the Vendor and the Purchaser shall have entered into a
      written undertaking to execute a transition services agreement, in form
      and content reasonably satisfactory to the Purchaser’s counsel;
  and

	 	 	 
	 	(k) 	
      the Warrantor will have signed a release and assignment
      of intellectual property in favour of Purchaser in a form reasonably
      satisfactory to Purchaser.




	6. 	
      NON-COMPETITION; NON-DISCLOSURE

	 	 	 
	6.1 	
      Non-Competition. In consideration of the
      completion of the transaction contemplated hereunder, the Warrantor agrees
      that it will not, directly or indirectly, or through any person or entity
      for a period of five (5) years following the Closing Date in the United
      States, Canada, or any where else where the Purchased Business or
      successor sells its products or services at the Time of Closing:

	 	 	 
		(a) 	
      own, manage, operate, join, control, finance or
      participate in the ownership (exclusive of holding 5% or less of the
      shares of a publicly traded company with which the Warrantor is otherwise
      not associated), management, operation, control or financing of any
      business or enterprise that develops or markets products or services
      competitive with the products or services offered by the Purchased
      Business at the Time of Closing; or

	 	 	 
		(b) 	
      develop, sell, offer or provide products or services that
      are competitive with the products or services of the Purchased Business at
      the Time of Closing.



29 





	6.2 	
      Non-Disclosure. The Warrantor agrees that
      it will not, directly or indirectly disclose, divulge or communicate
      orally, in writing or otherwise any confidential information, trade
      secrets or confidential data of the Purchased Business or the Purchaser to
      any other person, firm or corporation.

	 	 
	6.3 	
      Non-Solicitation of Employees. The
      Warrantor shall not solicit or offer employment to or retain as an
      independent contractor any of the employees or independent contractors of
      the Purchased Business then engaged by Purchaser for a period of five (5)
      years after the Closing Date.

	 	 
	6.4 	
      Non-Solicitation of Customers. The
      Warrantor agrees that for a period of five (5) years after the Closing
      Date the Warrantor shall not solicit, approach or sell to entities that
      were customers of the Purchased Business as at the Closing Date, or
      Prospects of the Purchased Business, products or services that are
      competitive with the products or services produced, licensed or sold by
      the Purchased Business as at the Closing Date. For the purposes of this
      Section 6.4, “Prospects” means organizations or persons that appear on
      Purchaser’s list of sales leads at or prior to the Closing Date and which
      organizations or persons have the potential to license software or
      purchase services from Purchaser.

	 	 
	7. 	
      GENERAL

	 	 
	7.1 	
      Further Assurances. The Warrantor and the
      Purchaser will from time to time execute and deliver all such further
      documents and instruments and do all acts and things as the other party
      may, either before or after the Closing Date, reasonably require to
      effectively carry out or better evidence or perfect the full intent and
      meaning of this Agreement.

	 	 
	7.2 	
      Transition Period. From the Closing Date
      until the date that is thirty (30) days thereafter the Vendor shall
      collect on the Purchaser’s behalf any monies received in respect of the
      Purchased Business and shall remit such funds to the Purchaser forthwith
      upon receipt. Notwithstanding the foregoing, the Vendor shall, after
      expiration of the Transition Period, continue to remit to the Purchaser
      any monies or invoices received in respect of the Purchased Business
      forthwith upon receipt.

	 	 
	7.3 	
      Time of the Essence. Time is of the essence
      of this Agreement.

	 	 
	7.4 	
      Fees. Each party hereto shall bear its own
      legal, accounting, due diligence and out-of- pocket costs and expenses
      incurred by each party hereto in connection with the preparation,
      execution and delivery of this Agreement and all documents and instruments
      executed pursuant hereto.

	 	 
	7.5 	
      Benefit of the Agreement. This Agreement
      will inure to the benefit of and be binding upon the respective heirs,
      executors, administrators, successors and permitted assigns of the parties
      hereto.

	 	 
	7.6 	
      Entire Agreement. This Agreement
      constitutes the entire agreement between the parties hereto with respect
      to the subject matter hereof and cancels and supersedes any prior
      understandings and agreements between the parties hereto with respect
      thereto.



30 





		
      There are no representations, warranties, terms,
      conditions, undertakings or collateral agreements, express, implied or
      statutory, between the parties other than as expressly set forth in this
      Agreement.

	 	 
	7.7 	
      Amendments and Waivers. No amendment to
      this Agreement will be valid or binding unless set forth in writing and
      duly executed by all of the parties hereto. No waiver of any breach of any
      provision of this Agreement will be effective or binding unless made in
      writing and signed by the party purporting to give the same and, unless
      otherwise provided, will be limited to the specific breach
  waived.

	 	 
	7.8 	
      Assignment. This Agreement may not be
      assigned by either party without the written consent of the other, but may
      be assigned by the Purchaser without the consent of the Vendor to an
      associated nominee of the Purchaser, provided that such associated nominee
      enters into a written agreement with the Vendor to be bound by the
      provisions of this Agreement in all respects and to the same extent as the
      Purchaser is bound and the Purchaser is not released from its obligations
      under this Agreement.

	 	 
	7.9 	
      Notices. Any demand, notice or other
      communication to be given in connection with this Agreement will be given
      in writing and will be given by personal delivery, by registered mail or
      by electronic means of communication addressed to the recipient as
      follows:

	 	 
		
      To the Purchaser:

	 	 
		
      Constellation HomebuilderSystems, Inc. 
Attention:
      Chief Executive Officer 
75 Frontenac Drive 
Markham, Ontario,
      Canada L3R 6H2

	 	 
		
      To the Vendor:

	 	 
		
      Carbiz Inc.

		
      Attention: Carl Ritter, Chief Executive Officer 
7115
      16th Street East, Unit 105 
Sarasota, Florida 34243

	 	 
		
      or to such other address, individual or electronic
      communication number as may be designated by notice given by either party
      to the other. Any demand, notice or other communication given by personal
      delivery will be conclusively deemed to have been given on the day of
      actual delivery thereof and, if given by registered mail, on the fifth
      Business Day following the deposit thereof in the mail and, if given by
      electronic communication, on the day of transmittal thereof if confirmed
      and given during the normal business hours of the recipient and on the
      Business Day during which such normal business hours next occur if not
      given during such hours on any day. If the party giving any demand, notice
      or other communication knows or ought reasonably to know of any
      difficulties with the postal system that might affect the delivery of
      mail, any such



31 





		
      demand, notice or other communication may not be mailed
      but must be given by personal delivery or by electronic
    communication.

	 	 
	7.11 	
      Counterparts. This Agreement may be
      executed by the parties in separate counterparts each of which when so
      executed and delivered (by facsimile transmission or otherwise) shall be
      an original, but all such counterparts shall together constitute one and
      the same instrument.

	 	 
	7.12 	
      Announcements. All announcements, public
      notices and any other communication regarding this Agreement and the
      transactions contemplated hereby to be made by either party must be
      approved in writing in advance by the other.

	 	 
	7.13 	
      Governing Law. This Agreement is governed
      by and will be construed in accordance with the laws of the Province of
      Ontario and the laws of the Province of Ontario applicable therein.
      Subject to Section 4.5, the parties hereto hereby agree to attorn to the
      non-exclusive jurisdiction of the Province of Ontario.

	 	 
	7.14 	
      Knowledge of Vendor or Warrantor. For the
      purposes of this Agreement, “to the Warrantor’s knowledge”, “to the
      knowledge of the Warrantor” and all similar phrases means the actual
      knowledge, or awareness of the existence or absence of a fact, after
      reasonable investigation of Carl Ritter and Stan Heintz.

	 	 
	7.15 	
      Schedules. Headings and designations in the
      Disclosure Schedules are for convenience only and shall not be used to
      interpret any provision of the Disclosure Schedules. Capitalized terms
      used in the Disclosure Schedules, unless otherwise defined, shall have the
      respective meanings assigned to such terms in this Agreement.

	 	 
	7.16 	
      Assignment of Contracts. If there are any
      consents or approvals required to be obtained under any Contracts in order
      to assign the Vendor’s interest in such Contracts to the Purchaser, and
      such consents or approvals have not yet been obtained (or otherwise are
      not in full force and effect) as of the Closing Date, in the case of each
      Contract as to which such consent or approval was not obtained (or
      otherwise are not in full force and effect) (each, a “Restricted
      Contract”), the parties shall use their respective commercially
      reasonable efforts, and cooperate with each other, to obtain the consent
      or approval relating to each Restricted Contract as quickly as practicable
      following the Closing Date. Prior to the obtaining of such consent or
      approval, the parties shall cooperate with each other in any reasonable
      and lawful arrangements designed to provide to the Purchaser the material
      benefits of use of any and all Restricted Contracts for their respective
      terms (or any right or benefit arising thereunder, including the
      enforcement for the benefit of the Purchaser of any and all rights of the
      Vendor against a third party thereunder). When a consent or approval for
      the sale, assignment, assumption, transfer, conveyance and delivery of a
      Restricted Contract is obtained, Vendor shall promptly assign, transfer,
      convey and deliver such Restricted Contract to the Purchaser, and the
      Purchaser shall assume the obligations under such Restricted Contract
      assigned to the Purchaser from and after the Closing Date pursuant to an
      assignment and assumption agreement. Unless and until each Restricted
      Contract is assigned to the Purchaser, the Vendor shall continue its
      corporate existence and shall hold such Restricted Contracts for the
      exclusive benefit of the Purchaser and the



32 




Purchaser shall to the extent
permissible and lawful, act as the Vendor’s subcontractor and perform all of the
obligations of the Vendor under the Restricted Contracts. To the extent that any
payment is made to the Vendor in respect of a Restricted Contract after the
Closing Date the Vendor shall receive such payment as trustee and shall account
to the Purchaser for the same within ten Business Days of receipt.
Notwithstanding the foregoing or anything in this Agreement to the contrary,
this Agreement shall not constitute an agreement to sell, convey, assign or
transfer any Restricted Contract if any attempted sale, conveyance, assignment
or transfer of such Restricted Contract, without the requisite consent to such
transfer, would constitute a breach by the Vendor with respect to such
Restricted Contract. 

[signature page follows] 

 

 

 

 

 

33 




IN WITNESS WHEREOF the parties have executed this Agreement.


	Constellation Homebuilder Systems Inc. 	  
	  	  
	  	  
	By:     /s/ Dexter
      Salna                                 
    	July 2, 2008 
	Name: Dexter Salna 	Date 
	Title: President 	  



 

	Constellation Homebuilder Systems, Corp. 	  
	  	  
	  	  
	By:     /s/ Dexter
      Salna                                 
    	July 2, 2008 
	Name: Dexter Salna 	Date 
	Title: President 	  



 

	Carbiz Inc. 	  
	  	  
	  	  
	By:     /s/ Carl
      Ritter                                      	July 2, 2008 
	Name: Carl Ritter 	Date 
	Title: Chief Executive Officer 	  


34