**Exhibit 10.28**

 

**ASSET PURCHASEAGREEMENT**

 

**Between**

 

**BUYERS UNITED INC.,**

 

**I-LINK COMMUNICATIONSINC.,**

 

**And**

 

**I-LINK INCORPORATED**

 

 

**Dated December 6,2002**

 

----

 

**Table of Contents**

 
| **Heading**                                                                     |   |
|---------------------------------------------------------------------------------|--------|
|                                                                            |
| ARTICLE I.   DEFINITIONS/PURCHASE & SALE/CLOSING                       |
| 1.1                                                                             |   | Definitions |
| 1.2                                                                             |   | Transfer and Sale of Assets |
| 1.3                                                                             |   | Purchase  Price |
| 1.4                                                                             |   | Deliveries  and Effective Date |
| 1.5                                                                             |   | Time and Place of Closing |
|                                                                            |
| ARTICLE II. REPRESENTATIONS AND WARRANTIES  OF ILC I-LINK                       |
| 2.1                                                                             |   | Organization |
| 2.2                                                                             |   | Authorization  of Transaction |
| 2.3                                                                             |   | Non-contravention |
| 2.4                                                                             |   | Permits; Compliance with Law |
| 2.5                                                                             |   | Litigation;  Orders |
| 2.6                                                                             |   | Periodic Reports |
| 2.7                                                                             |   | Subsequent  Events |
| 2.8                                                                             |   | Employee Plans |
| 2.9                                                                             |   | Environmental  Regulation, Etc. |
| 2.10                                                                            |   | Employment  Practices |
| 2.11                                                                            |   | Taxes |
| 2.12                                                                            |   | Title to Assets |
| 2.13                                                                            |   | Intellectual  Property |
| 2.14                                                                            |   | Assigned Contracts |
| 2.15                                                                            |   | No  Brokers |
| 2.16                                                                            |   | Warranties |
| 2.17                                                                            |   | Investment  Intent |
|                                                                            |
| ARTICLE  III. REPRESENTATIONS AND WARRANTIES OF BUYER                           |
| 3.1                                                                             |   | Organization and Related Matters |
| 3.2                                                                             |   | Capitalization |
| 3.3                                                                             |   | Authorization |
| 3.4                                                                             |   | Non-contravention |
| 3.5                                                                             |   | Legal Proceedings |
| 3.6                                                                             |   | Periodic  Reports |
| 3.7                                                                             |   | Buyer  Securities |
| 3.8                                                                             |   | No Brokers |
|                                                                            |
| ARTICLE  IV. COVENANTS WITH RESPECT TO CONDUCT OF BUSINESS PRIOR TO THE CLOSING |
| 4.1                                                                             |   | Access and Control |
| 4.2                                                                             |   | Material  Adverse Changes |
| 4.3                                                                             |   | Conduct of the Business |
| 4.4                                                                             |   | Notification  of Certain Matters |
| 4.5                                                                             |   | Consents |
| 4.6                                                                             |   | Preservation  of the Business Prior to the Closing |
| 4.7                                                                             |   | Offers of Employment |
|                                                                            |
| ARTICLE V. ADDITIONAL COVENANTS                                                 |
| 5.1                                                                             |   | Non-solicitation |
| 5.2                                                                             |   | Nondisclosure  of Proprietary Data |
| 5.3                                                                             |   | Tax  Cooperation |
| 5.4                                                                             |   | Tax  Matters |
|                                                                                 |        |  |  |

 

i

----

 
| 5.5                                                |   | Post-Effective  Date Financial Statement   |
|----------------------------------------------------|--------|--------------------------------------------|
| 5.6                                                |   | Redemption  Covenant                       |
|                                               |
| ARTICLE VI. CONDITIONS OF PURCHASE                 |
| 6.1                                                |   | General Conditions                         |
| 6.2                                                |   | Deliveries of Seller                       |
| 6.3                                                |   | Deliveries of Buyer                        |
|                                               |
| ARTICLE  VII. TERMINATION OF OBLIGATIONS; SURVIVAL |
| 7.1                                                |   | Termination  of Agreement                  |
| 7.2                                                |   | Effect of Termination                      |
| 7.3                                                |   | Survival of Representations and Warranties |
|                                               |
| ARTICLE  VIII. INDEMNIFICATION                     |
| 8.1                                                |   | Obligations of Sellers                     |
| 8.2                                                |   | Obligations of Buyer                       |
| 8.3                                                |   | Procedure                                  |
| 8.4                                                |   | Survival                                   |
| 8.5                                                |   | Not  exclusive Remedy                      |
| 8.6                                                |   | Offset                                     |
|                                               |
| ARTICLE IX. GENERAL                                |
| 9.1                                                |   | Amendments; Waivers                        |
| 9.2                                                |   | Schedules; Exhibits; Integration           |
| 9.3                                                |   | Best  Efforts; Further Assurances          |
| 9.4                                                |   | Governing  Law                             |
| 9.5                                                |   | No  Assignment                             |
| 9.6                                                |   | Headings                                   |
| 9.7                                                |   | Counterparts                               |
| 9.8                                                |   | Publicity and Reports                      |
| 9.9                                                |   | Confidentiality                            |
| 9.10                                               |   | Parties in Interest                        |
| 9.11                                               |   | Notices                                    |
| 9.12                                               |   | Expenses                                   |
| 9.13                                               |   | Remedies;  Waiver                          |
| 9.14                                               |   | Attorney’s  Fees                      |
| 9.15                                               |   | Knowledge Convention                       |
| 9.16                                               |   | Representation  by Counsel; Interpretation |
| 9.17                                               |   | Specific Performance                       |
| 9.18                                               |   | Severability                               |

 

ii

----

 

**ASSET PURCHASE AGREEMENT**

 

**THIS ASSET PURCHASEAGREEMENT**is entered into as of December 6, 2002,among Buyers United Inc., a Delaware corporation (“**Buyer**”), I-LinkCommunications Inc., a Utah corporation (“**ILC**”), and I-Link Incorporated, a Floridacorporation (“**I-Link**”).  ILC andI-Link are herein sometimes referred to as the “**Sellers**”.

 

**R E C I T A L S**

 

WHEREAS,Sellers desire to sell, and Buyer desires to buy, certain assets in accordancewith the terms and conditions of this Agreement.

 

**A G R E E M E N T**

 

Inconsideration of the mutual promises contained herein and intending to belegally bound the parties agree as follows:

 

**ARTICLE I.****  DEFINITIONS/PURCHASE & SALE/CLOSING**

 

**1.1          Definitions.**

 

For allpurposes of this Agreement, except as otherwise expressly provided, the termsdefined in this Article I have the meanings assigned to them in this Article Iand include the plural as well as the singular, all accounting terms nototherwise defined herein have the meanings assigned under generally acceptedaccounting principles, all references in this Agreement to designated“Articles,” “Sections” and other subdivisions are to the designated Articles,Sections and other subdivisions of the body of this Agreement, pronouns ofeither gender or neuter shall include, as appropriate, the other pronoun forms,and the words “herein,” “hereof” and “hereunder” and other words of similarimport refer to this Agreement as a whole and not to any particular Article,Section or other subdivision.

 

As used inthis Agreement and the Exhibits and Schedules delivered pursuant to thisAgreement, the following definitions shall apply, except as otherwise expresslyprovided.

 

“**Accepting Employees**”shall have the meaning set forth in Section 4.7.

 

“**AcquiredAssets**” means all tangible and intangible assets of Sellers relatingto or used in the operation of the Business, together with the business as agoing concern associated with such assets, including the following (butspecifically excluding the Excluded Assets):

 

(a)           all customeraccounts served by the Business (the “Customer Accounts”);

 

(b)           all customer dataassociated with the Customer Accounts, including all associated letters ofauthorization, customer service records, all related computer tapes and/orrecords, accounts receivable status and history reports and all customerservice and provisioning history;

 

(c)           all fixed assets,switches, machinery, equipment and other tangible personal property (includingall furnishings and fixtures, materials, supplies and other miscellaneousitems) located at the premises of ILC and each of its switch sites andcolocation facilities; and all other fixed assets, switches, machinery,equipment and other tangible personal property related to or

 

----

 

used inconnection with the Business, including all furnishings and fixtures,materials, supplies and other miscellaneous items of tangible personal propertywhether located at the foregoing premises, switch sites or colocationfacilities of ILC or at the premises of any customer or supplier, all as thesame existed or was constituted on the Effective Date;

 

(d)           all right, title andinterest in and to the Assigned Contracts and any related leasehold improvements;

 

(e)           all claims andrights against third parties relating to the Acquired Assets, includinginsurance claims, rights under manufacturers’ and vendors’ warranties, rightsof recovery, credits, and Business-related setoff rights existing on theClosing Date;

 

(f)            all financial,commercial, marketing and administrative books and records relating to theBusiness in any form or medium, including, computer databases, correspondencefiles, administrative guidelines, personnel records relating to Accepting Employeesand employee manuals and all accounting and tax files and records used inconnection with or relating to the Business, as well as files relating tolitigation that has been settled, closed, or otherwise dismissed; provided,however, that Sellers shall enjoy a continuing right of reasonable accessduring normal business hours to such assets for purposes of claims resolution,litigation, and administration;

 

(g)           all computer systemsand non-proprietary software, and all electronic databases and other dataprocessing and storage materials (regardless of format or medium), used in orrelated to the Business;

 

(h)           the CarrierIdentification Codes of ILC;

 

(i)            all Know-how,Trademarks, copyrights, copyright registrations and applications forregistration, designs, and trade secrets that are licensed to or owned bySellers; and

 

(j)            all materials,supplies, personal property and other assets, tangible or intangible, used inor relating to the Business, including the goodwill of the Business as a goingconcern.

 

“**Action**”means any action, complaint, petition, investigation, suit or other proceeding,whether civil or criminal, in law or in equity, or before any arbitrator orGovernmental Entity.

 

“**Affiliate**”means a Person that directly, or indirectly through one or more intermediaries,controls, or is controlled by, or is under common control with, a specifiedPerson.

 

“**AffiliatedGroup**” means any affiliated group withinthe meaning of Code Section 1504(a).

 

“**AllocationSchedule**” is the schedule identified in Section 6.1(d).

 

“**Agreement**”means this Agreement by and among Buyer, ILC and I-Link as amended orsupplemented together with all Exhibits and Schedules attached or incorporatedby reference.

 

“**Approval**”means any approval, authorization, consent, qualification or registration, orany waiver of any of the foregoing, required to be obtained from, or anynotice, statement or other communication required to be filed with or deliveredto, any Governmental Entity or any other Person.

 

“**AssignedContracts**” means the Contracts listed in Section 2.14 of theDisclosure Schedule.

 

“**Associate**”of a Person means a corporation or organization (other than a Party to thisAgreement) of which such Person is an officer or partner or is, directly orindirectly, the beneficial owner of 10% or more of any class of equitysecurities; any trust or other estate in which such Person has a substantialbeneficial interest or as to which such Person serves as trustee or in asimilar capacity; and any

 

2

----

 

relative or spouse of suchPerson or any relative of such spouse who has the same home as such Person orwho is a director or officer of any Party or its Affiliates.

 

“**AssumedLiabilities**” means, and is strictly limited to, those liabilitiesand obligations of Sellers and any of their Affiliates set forth on Exhibit Bto this Agreement.

 

“**BP Event**”means the occurrence of one of the following during the 14-month periodcommencing January 1, 2003:

 

(a)                                  BigPlanet, Inc., notifies Buyer that it is terminating the Wholesale ServiceProvider and Distribution Agreement with Sellers dated February 1, 2000, asamended by Amendment No. 1 dated February 15, 2001, by Amendment No. 2 datedFebruary 22, 2001, by Amendment No. 3 dated March 1, 2001, and Amendment No. 4dated September 10, 2001 (the “BP Agreement”), unless the BP Agreement isreplaced by a new agreement between Big Planet, Inc., and Buyer withsubstantially similar terms on price and service as the BP Agreement;

 

(b)                                 BigPlanet, Inc. issues a statement or other communication for general distributionto its customers and members recommending that they use a provider other thanBuyer for the same services provided under the BP Agreement; or

 

(c)                                  IfBig Planet, Inc., demands a reduction in the wholesale rate charged forservices under the BP Agreement, Sellers and Buyer shall mutually agree to acourse of action and the impact on distribution of the Earnout Shares.  If the Parties are unable to reach agreementon such course of action and impact on or before the date specified by BigPlanet, Inc., for responding to its demand (including any extensions thereofgranted by Big Planet, Inc.), then Buyer, at its election, may declare theoccurrence of a BP Event by written notice to Sellers; provided, that if Buyeraccedes to the demand and Big Planet takes action to promote the service andincrease the customer base of Buyer, then Buyer and Sellers shall mutuallyagree on the date on which the BP Event shall be deemed to have occurred (the“Deemed Event”) which shall not be less than four nor more than seven monthsfollowing the date Big Planet implements the action to promote the service.

 

“**Business**”means the operation of the real-time Internet Protocol communications network(RTIP Network) consisting of a nationwide dedicated network of ILC equipmentand leased telecommunications lines integrated through licensed software,applications that use the RTIP Network including, but not limited to, I-LinkOne Number service, wholesale and retail distribution of RTIP Network serviceand applications, and also shall be deemed to include any of the followingincidents of such business: income, cash flow, operations, condition (financialor other), assets, anticipated revenues, prospects and liabilities.

 

“**BuyerReports**” means the periodic reports of Buyer described in Section3.6.

 

“**BuyerSecurities**” has the meaning set forth in Section 1.3.

 

“**Closing**”means the consummation of the purchase and sale of the Acquired Assets underthis Agreement, and “**Closing Date**” is the date of the Closing,which shall be the date that is three business days following the date on whichall of the items contemplated by Section 6.1 have been obtained or waived.

 

 “**Code**” means the Internal Revenue Code of1986, as amended.

 

“**Contract**”means any agreement, arrangement, bond, commitment, franchise, indemnity,indenture, instrument, lease, license or understanding, whether or not inwriting.

 

“**CRS**”is Cohne, Rappaport & Segal, P.C.

 

3

----

 

“**DisclosureSchedule**” means the Disclosure Schedule dated the date of thisAgreement, as the same shall be amended from time to time up and through theClosing, and delivered by Sellers to Buyer. The Sections of the Disclosure Schedule shall be numbered to correspondto the applicable Sections of this Agreement and, together with all mattersunder each such heading, shall be deemed to qualify only that Section.

 

“**Distributor**”means a wholesale or retail distributor of services and applications sold inthe Business under distributor agreements with Sellers, whether written ororal, under which services and applications included in the Business are soldto other Persons.

 

“**EarnoutShares**” means 75,000 shares of the Buyer Securities to be held anddisbursed in accordance with Section 1.5.

 

“**EffectiveDate**” means the date on which each of the items specified in Section1.4 have been delivered as provided therein.

 

“**EmployeeBenefit Plan**” means any “employee benefit plan” (as such term isdefined in ERISA Section 3(3)) and any other material employee benefit plan,program or arrangement of any kind.

 

“**EmployeePension Benefit Plan**” has the meaning set forth in ERISA Section3(2).

 

“**EmployeeWelfare Benefit Plan**” has the meaning set forth in ERISA Section3(1).

 

“**Encumbrance**”means any claim, charge, easement, encumbrance, lease, covenant, securityinterest, lien, option, pledge, rights of others, or restriction (whether onvoting, sale, transfer, disposition or otherwise), whether imposed byagreement, understanding, law, equity or otherwise, except for any restrictionson transfer generally arising under any applicable federal or state securitieslaw.

 

“**EquitySecurities**” means, with respect to any Party, the common stock andany other capital stock of the Party or other equity interest in the Party orany securities or notes convertible into or exchangeable for capital stock ofor other equity interest in the Party or any other rights, warrants or optionsto acquire any of the foregoing securities of the Party.

 

“**ERISA**”means the Employee Retirement Income Security Act of 1974, as amended, and therelated regulations and published interpretations.

 

“**ERISAAffiliate**” means each entity that istreated as a single employer with I-Link for purposes of Code Section 414.

 

“**EscrowAgreement**” is the escrow agreement described in Section 8.1(c).

 

“**ExcludedAssets**” means (a) cash, (b) cash equivalents, (c) the accountsreceivable, billed and unbilled as of the Effective Date, associated with theCustomer Accounts, (d) any deposits or pre-payments made by Seller with respectto any of the Assigned Contracts, and (e) the personal property, Contracts,Intellectual Property and other assets listed in Exhibit A.

 

“**FinancialStatements**” has the meaning set forth in Section 2.6.

 

“**GAAP**”means generally accepted accounting principles in the United States, as ineffect from time to time.

 

“**Gross Margin**”is revenue for the applicable period less variable carrier costs.

 

“**GovernmentalEntity**” means any government or any agency, bureau, board,commission, court, department, official, political subdivision, tribunal orother instrumentality of any government, whether

 

4

----

 

federal, state or local,domestic or foreign, including the Federal Communications Commission and statepublic utility and public service commissions, and any industry self-regulatoryor administrative agency, including the North American Numbering PlanAdministrator.

 

“**HazardousSubstance**” means (but shall not be limited to) substances that aredefined or listed in, or otherwise classified pursuant to, any applicable Lawsas “hazardous substances,” “hazardous materials,” “hazardous wastes” or “toxicsubstances,” or any other formulation intended to define, list or classifysubstances by reason of deleterious properties such as ignitibility,corrosivity, reactivity, radioactivity, carcinogenicity, reproductive toxicityor “EP toxicity,” and petroleum and drilling fluids, produced waters and otherwastes associated with the exploration, development, or production of crudeoil, natural gas or geothermal energy.

 

“**I-LinkReports**” means the periodic reports of I-Link described in Section2.6.

 

“**IndemnifiableClaim**” means any Loss for or against which any party is entitled toindemnification under this Agreement; “Indemnified Party” means the partyentitled to indemnity hereunder; and “Indemnifying Party” means the partyobligated to provide indemnification hereunder.

 

“**IntellectualProperty**” means all (i) Patents, (ii) Know-how, (iii) Trademarks and(iv) copyrights, copyright registrations and applications for registration,inventions, designs, industrial and utility models (including registrations andapplications for registration thereof), trade secrets and all otherintellectual property rights whether registered or not, in each case which arelicensed to or owned by Sellers.

 

“**Know-how**”means all product specifications, processes, product designs, plans, ideas,concepts, manufacturing, engineering and other manuals and drawings, technicalinformation, data, research records, all promotional literature, customer andsupplier lists and similar data and information, and all other confidential orproprietary technical and business information that is owned by Sellers.

 

“**Knowledge**”has the meaning set forth in Section 9.15.

 

“**Law**”means any constitutional provision, statute or other law, rule, regulation, orinterpretation of any Governmental Entity and any Order.

 

“**Loss**”means any action, cost, damage, disbursement, expense, liability, loss, deficiency,diminution in value, obligation, penalty or settlement of any kind or nature,whether foreseeable or unforeseeable, including but not limited to, interest orother carrying costs, penalties, legal, accounting and other professional feesand expenses incurred in the investigation, collection, prosecution and defenseof claims and amounts paid in settlement, that may be imposed on or otherwiseincurred or suffered by the specified person.

 

“**ManagementAgreement**” is the agreement identified in Section 4.1.

 

“**MaterialAdverse Effect**” means an adverse effect that a reasonable personwould attach importance to in evaluating the Party to which it relates and thetransactions herein contemplated.

 

“**MultiemployerPlan**” has the meaning set forth in ERISA Section3(37).

 

“**Net TaxBenefit**” has the meaning set forth in Section 8.4(c).

 

“**Order**”means any decree, injunction, judgment, order, ruling, assessment or writ.

 

“**Party**”means a signatory to this Agreement and “**Parties**” means all the signatories to thisAgreement.

 

5

----

 

“**Patent**”means all patents and patent applications (including, without limitation, allreissues, divisions, continuations, continuations-in-part, renewals andextensions of the foregoing), which are owned by Sellers or their Affiliates.

 

“**Permit**”means any license, permit, franchise, consent, registration, certificate ofauthority and other approval (including, without limitation, those relating toFederal Communications Commission and state public service commissioncertifications and Carrier Identification Codes issued by the North AmericanNumbering Plan Administrator), or order, or any waiver of the foregoing,required to be issued by any Governmental Entity.

 

“**Person**”means an association, a corporation, an individual, a partnership, a trust orany other entity or organization, including a Governmental Entity.

 

“**PBGC**”means the Pension Benefit Guaranty Corporation.

 

“**PurchasePrice**” has the meaning set forth in Section 1.3.

 

“**Tax**”means any foreign, federal, state, county or local income, sales and use,excise, franchise, real and personal property, transfer, gross receipt, capitalstock, production, business and occupation, disability, employment, payroll,severance or withholding tax or charge imposed by any Governmental Entity, anyinterest and penalties (civil or criminal) related thereto or to the nonpaymentthereof, and any Loss in connection with the determination, settlement orlitigation of any Tax liability.

 

“**Tax Return**”means a report, return or other information required to be supplied to aGovernmental Entity with respect to Taxes including, where permitted orrequired, combined or consolidated returns for any group of entities thatincludes ILC.

 

“**Trademarks**”shall mean trademarks, service marks, trade names, trade dress, labels, logosand all other names and slogans associated with any products or services, orembodying associated goodwill, whether or not registered, and any applicationsor registrations there for owned by Sellers.

 

“**TransactionCosts**” has the meaning set forth in Section 9.12.

 

“**WARN Act**”means the Worker Adjustment and Retraining Notification Act, 29 USC Section2101, et seq., and the rules and regulations adopted there under.

 

**1.2.         Purchase and Sale of Assets.**

 

On and subject to the terms and conditions ofthis Agreement, the Buyer agrees to purchase from Sellers, and Sellers agreesto sell, transfer, convey, and deliver to the Buyer, all of the Acquired Assetsat the Closing for the consideration specified below in this Article 1.

 

**1.3.         Purchase Price.**

 

Subject to theterms and conditions of this Agreement, Buyer agrees to (i) except as otherwise providedherein, deliver toSellers at the Closing 205,000 shares of the Series B ConvertiblePreferred Stock (the “Buyer Securities”), described in Exhibit C attachedhereto, and (ii) assume atthe Closing the Assumed Liabilities. The Buyer will not assume or have any responsibility, however, withrespect to any other obligation or liability of Sellers or their Affiliates notincluded in the Assumed Liabilities.  The$2,050,000 value of the Buyer Securities plus the value of the AssumedLiabilities is the “Purchase Price”.

 

**1.4          Deliveries and Effective Date.**

 

The date this Agreement is signed by all Parties is the “EffectiveDate.”  On the Effective Date,immediately following the execution of this Agreement:

 

6

----

 

(a)           TheParties shall deliver the instruments, certificates, and other items describedin Sections 6.2 and 6.3 to CRS.

 

(b)           The Parties shallsign and deliver to one another the Management Agreement contemplated bySection 4.1 and Transition Services Agreement attached as Exhibit D.

 

(c)           The Parties shallsign and deliver to one another a license agreement of even date herewithpertaining to certain intellectual property that is not part of the AcquiredAssets.

 

**1.5          Time and Place ofClosing.**

 

(a)                                  TheClosing will take place at the offices of CRS in Salt Lake City, Utah,commencing at 10:00 a.m. local time on the date specified for the Closing, oron such other date as the Parties may mutually agree.  At the Closing, CRS shall deliver to Buyer the items listed inSection 6.2, to Sellers the items listed in Section 6.3 (except for the EarnoutShares), and to the agent named in the Escrow Agreement the Escrow Agreementand 25,000 shares of the Buyer Securities to be placed in escrow there under.

 

(b)           If no BP Event hasoccurred prior to the Closing, CRS shall deliver to Sellers at the Closing thatnumber of Earnout Shares equal to the product obtained by multiplying the totalnumber of Earnout Shares by a fraction, the numerator of which is the number offull calendar months that have elapsed from and including January 2003 throughthe calendar month ending immediately preceding the calendar month in which theClosing occurs, and the denominator of which is 14.  Thereafter, so long as no BP Event has occurred, CRS shalldeliver to Sellers on the first day of each calendar month beginning with themonth immediately following the month in which the Closing occurs,one-fourteenth (1/14) of the Earnout Shares until all Earnout Shares have beendelivered to Seller.  If a BP Eventoccurs, CRS shall deliver to Sellers within 30 days following the end of theMeasurement Period (as defined for “N” below) that number of Earnout Sharesdetermined on the basis of the following formula:

 
| M | =      | A x | N |   |
|---|--------|-----|---|--------|
| D |   |

 

Where            M            is the number of Earnout Shares tobe delivered to Seller.

 

A             is the number of Earnout Sharesthat have not been delivered to Sellers as of the date of the BP Event.

 

N             is the lesser of:  (i) actual cumulative gross marginpertaining to services provided and sold under the BP Agreement during theperiod (the “Measurement Period”) beginning with the first day of the month inwhich the BP Event or Deemed Event occurs, whichever is later, and continuingfor a number of full calendar months equal to the number of months within theperiod commencing with the month the BP Event occurs through February 2004;and, (ii) the value for D.

 

D             is the sum of the assumed monthlygross margins during the Measurement Period, where the assumed gross margin inthe first month is the lower of the gross margin under the BP Agreement for themonth of January 2003 and the gross margin pertaining to services provided andsold under the BP Agreement for the month immediately preceding the month inwhich the BP Event occurs, reduced by three percent, and the assumed monthlygross margin in each successive month of the Measurement Period is threepercent less than the assumed gross margin for the previous month.

 

7

----

 

(c)           Any of the EarnoutShares that are not delivered to Sellers under the provisions of Section 1.5(b)by the later of March 1, 2004 and 30 days following the end of the MeasurementPeriod as defined for “N,” above, shall be returned to the Buyer, cancelled,and treated for all purposes as a reduction of the Purchase Price.

 

**ARTICLEII****.  REPRESENTATIONS AND WARRANTIES OF****ILC ANDI-LINK**

 

ILC and I-Link,jointly and severally as to each representation and warranty set forth in thisArticle II, represent, warrant and agree as follows:

 

**2.1          Organization.**

 

ILC is acorporation duly organized, validly existing, and in good standing under thelaws of the state of Utah.  I-Link is acorporation duly organized, validly existing, and in good standing under thelaws of the state of Florida.

 

**2.2          Authorization of Transaction.**

 

Each of ILCand I-Link has full power and authority (including full corporate power and authority)to execute and deliver this Agreement and to perform its obligationshereunder.  The execution and deliveryof this Agreement and the performance by Sellers and the consummation of thetransactions contemplated hereunder have been duly authorized by the respectiveboards of directors of ILC and I-Link and no other corporate proceedings on thepart of ILC or I-Link are necessary to authorize this Agreement and thetransactions contemplated hereunder. Except as contemplated by Section 4.5, no consent of any Person not aParty to this Agreement nor consent of or filing with (including any waitingperiod) any Governmental Entity is required to be obtained or performed on thepart of ILC to execute, deliver and perform its obligations hereunder.  This Agreement constitutes the legally validand binding obligation of each of ILC and I-Link, enforceable against Sellersin accordance with its terms, except as such enforceability may be limited bybankruptcy, insolvency, reorganization, moratorium and other similar laws andequitable principles relating to or limiting creditor’s rights generally.

 

**2.3          Non-contravention.**

 

Except asdescribed in Section 2.3 of the Disclosure Schedule, neither the execution andthe delivery of this Agreement, nor the consummation of the transactionscontemplated hereby (including performance by Sellers), will (a) violate anyconstitution, statute, regulation, rule, Order, decree, charge, or otherrestriction of any Governmental Entity to which any of ILC and I-Link issubject or any provision of the charter or bylaws of ILC and I-Link or (b)conflict with, result in a breach of, constitute a default under, result in theacceleration of, create in any party the right to accelerate, terminate,modify, or cancel, or require any notice under any agreement, contract, lease,license, instrument or other arrangement to which any of ILC or I-Link is aparty or by which it or they are bound or to which any of its or their assetsis subject (or result in the imposition of any Encumbrance upon any of its ortheir assets), except where the violation, conflict, breach, default,acceleration, termination, modification, cancellation, failure to give notice,or Encumbrance could not reasonably be expected to have a Material AdverseEffect on any of ILC or I-Link or on the ability of the Parties to consummatethe transactions contemplated by this Agreement.  Except as contemplated by Section 4.5, ILC and I-Link do not needto give any notice to, make any filing with, or obtain any authorization, consent,or approval of any Governmental Entity in order for the Parties to consummatethe transactions contemplated by this Agreement, except where the failure togive notice, to file, or to obtain any authorization, consent or approval couldnot reasonably be expected to have a Material Adverse Effect on any of ILC orI-Link or on the ability of the Parties to consummate the transactionscontemplated by this Agreement.

 

8

----

 

**2.4          Permits;Compliance with Law.**

 

Except asdisclosed in Section 2.4 of the Disclosure Schedule, ILC holds all Permitsrequired for the conduct of the Business and is operating in compliancetherewith and all such Permits are valid and in full force and effect, exceptwhere the failure to hold any such Permit or to operate in compliance therewithor the invalidity or ineffectiveness thereof could not reasonably be expectedto have a Material Adverse Effect on the Business, and no suspension,cancellation or termination of such Permits has been threatened or isimminent.  ILC is organized and hasconducted the Business in compliance with all Laws applicable to it, exceptwhere the failure to comply with such Laws could not reasonably be expected tohave a Material Adverse Effect on the Business or the ability of the Parties toconsummate the transactions contemplated by this Agreement.

 

**2.5          Litigation;Orders.**

 

Except as setforth in Section 2.5 of the Disclosure Schedule, there is no Order or Actionpending or, to the Knowledge of Sellers, threatened against or affecting any ofILC or I-Link, or any director, officer, agent, employee, consultant, or otherPerson acting on the behalf of any of ILC or I-Link, or any properties of anyof the foregoing, which (individually or in the aggregate) could reasonably beexpected to have a Material Adverse Effect on the Business, or on the abilityof the Parties to consummate the transactions contemplated by thisAgreement.  There is no Order of anyGovernmental Entity outstanding against any of ILC or I-Link.  There is no matter as to which ILC or I-Linkhas received any notice, claim or assertion, or, to the Knowledge of Sellers,which otherwise has been threatened or is reasonably expected to be threatenedor initiated, against or affecting any director, officer, employee, agent orrepresentative of any of ILC or I-Link or any other Person, nor to theKnowledge of ILC or any director or officer of I-Link, is there any reasonablebasis there for, in connection with which any such Person has or may reasonablybe expected to have any right to be indemnified by ILC or I-Link.

 

**2.6          PERIODIC REPORTS.**

 

I-Link has delivered to Buyer its quarterly reports on form 10-Q forthe quarterly periods ended March 31, June 30, and September 30, 2002, and itsannual report on Form 10-K for the year ended December 31, 2001, all as filedwith the Securities and Exchange Commission under the Securities Exchange Actof 1934, as amended.  To the Knowledgeof I-Link, each such report (a) does not contain any untrue statement of a materialfact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, notmisleading with respect to the period covered by the report, and (b) thefinancial information presented in the report (the “Financial Statements”)fairly presents in all material respects the financial condition, results ofoperations, and cash flows of I-Link as of, and for, the periods presented inthe report.

 

**2.7          SubsequentEvents.**

 

Except asdescribed in Section 2.7 of the Disclosure Schedule, since September 30, 2002,there has not been:

 

(a)           Any material adversechange in the Business, the operations or future prospects of the Business, orthe Acquired Assets;

 

(b)           Any damage,destruction or loss, whether covered by insurance or not, materially andadversely affecting the Acquired Assets or the Business;

 

(c)           Any borrowing orlending of money or guarantee of any obligation by Sellers;

 

9

----

 

(d)           Any amendment to ortermination of any agreement which, if not so amended or terminated, would berequired to be disclosed on the Disclosure Schedule;

 

(e)           Any disposition ofany material properties or assets used in the Business;

 

(f)            Any engagement byILC in activities outside the ordinary course of the Business; or

 

(g)           The incurring of anyliability (absolute or contingent) relating to the Business except liabilitiesincurred in the ordinary course of the Business.

 

**2.8          Employee Plans.**

 

Section 2.8 ofthe Disclosure Schedule lists each Employee Benefit Plan that any of theSellers or their Affiliates maintains or to which any of the Sellerscontributes or has any obligation to contribute.

 

(a)           Each such EmployeeBenefit Plan (and each related trust, insurance contract, or fund) has beenmaintained, funded and administered in accordance with the terms of suchEmployee Benefit Plan and complies in form and in operation in all materialrespects with the applicable requirements of ERISA, the Code, and other applicablelaws.

 

(b)           All required reportsand descriptions (including annual reports (IRS Form 5500), summary annualreports, and summary plan descriptions) have been timely filed and/ordistributed in accordance with the applicable requirements of ERISA and theCode with respect to each such Employee Benefit Plan.  The requirements of COBRA have been met in all material respectswith respect to each such Employee Benefit Plan that is an Employee WelfareBenefit Plan subject to COBRA.

 

(c)           All contributions(including all employer contributions and employee salary reductioncontributions) which are due have been made within the time periods prescribedby ERISA and the Code to each such Employee Benefit Plan that is an EmployeePension Benefit Plan and all contributions for any period ending on or beforethe Effective Date which are not yet due have been made to each such EmployeePension Benefit Plan or accrued in accordance with the past custom and practiceof the Sellers and their Affiliates. All premiums or other payments for all periods ending on or before theEffective Date have been paid with respect to each such Employee Benefit Planthat is an Employee Welfare Benefit Plan.

 

(d)           Each such EmployeeBenefit Plan which is intended to meet the requirements of a “qualified plan”under Code §401(a), has received a determination from the Internal RevenueService that such Employee Benefit Plan is so qualified, and the none of thedirectors or officers of Sellers is aware of any facts or circumstances thatcould adversely affect the qualified status of any such Employee Benefit Plan.

 

(e)           The market value ofassets under each such Employee Benefit Plan which is an Employee PensionBenefit Plan equals or exceeds the present value of all vested and non-vestedliabilities there under (determined in accordance with then current fundingassumptions).

 

(f)            With respect toeach Employee Benefit Plan that any of the Sellers and any ERISA Affiliatemaintains, to which any of them contributes, or has any obligation to contribute,or with respect to which any of them has any material liability or potentialliability:

 

(i)                                                                                     Nosuch Employee Benefit Plan that is an Employee Pension Benefit Plan has beencompletely or partially terminated or been the subject of a Reportable Event asto which notices would be required to be filed with the PBGC.  No proceeding by the PBGC to

 

10

----

 

terminate anysuch Employee Pension Benefit Plan has been instituted or, to the Knowledge ofSellers, threatened.

 

(ii)                                                                                  Therehave been no Prohibited Transactions with respect to any such Employee BenefitPlan.  No fiduciary has any liabilityfor material breach of fiduciary duty or any other material failure to act orcomply in connection with the administration or investment of the assets of anysuch Employee Benefit Plan.  No action,suit, proceeding, hearing, or investigation with respect to the administrationor the investment of the assets of any such Employee Benefit Plan (other thanroutine claims for benefits) is pending or, to the Knowledge of Sellers,threatened.

 

(iii)                                                                               Noneof the Sellers has incurred any material liability (whether known or unknown,whether asserted or unasserted, whether absolute or contingent, whether accruedor unaccrued, whether liquidated or unliquidated, and whether due or to becomedue) to the PBGC (other than with respect to PBGC premium payments not yet due)or otherwise under Title IV of ERISA (including any withdrawal liability asdefined in ERISA §4201) or under the Code with respect to any such EmployeeBenefit Plan which is an Employee Pension Benefit Plan, or under COBRA withrespect to any such Employee Benefit Plan which is an Employee Welfare BenefitPlan.

 

(g)           None of the Sellersand any ERISA Affiliate contributes to, has any obligation to contribute to, orhas any material liability (whether known or unknown, whether asserted orunasserted, whether absolute or contingent, whether accrued or unaccrued,whether liquidated or unliquidated, and whether due or to become due),including any withdrawal liability (as defined in ERISA §4201), under or withrespect to any Multiemployer Plan.

 

(h)           None of the Sellersmaintains, contributes to, or has an obligation to contribute to, or has anymaterial liability or potential liability with respect to, any Employee WelfareBenefit Plan providing medical, health, or life insurance or other welfare-typebenefits for current or future retired or terminated employees of the Sellers(or any spouse or other dependent thereof) other than in accordance with COBRA.

 

**2.9          EnvironmentalRegulation, Etc.**

 

With respectto environmental matters, Sellers:

 

(a)                                  Haveno liability under any applicable Law or common law cause of action relating toor arising from environmental conditions on property leased, used or operatedby Sellers that could reasonably be expected to have a Material Adverse Effecton the financial condition of Sellers and any property leased, used or operatedby Sellers, and any facilities and operations of Sellers thereon have at alltimes in the past complied with, presently comply with and will continue tocomply with all applicable environmental and health and safety Laws to theextent that failure to comply could reasonably be expected to have a MaterialAdverse Effect on Sellers or the Business;

 

(b)           Has never enteredinto or been subject to any judgment, consent decree, compliance Order, oradministrative Order with respect to any environmental or health and safetymatter or received any request for information, notice, demand letter,administrative inquiry, or formal or informal complaint or claim with respectto any environmental or health and safety matter or the enforcement of anyenvironmental Law,

 

(c)           Has no reason tobelieve that any of the items enumerated in clause (b) of this Section will beforthcoming, and

 

(d)           Has never sent wastecontaining any Hazardous Substance to any location for storage, treatment ordisposal.

 

11

----

 

**2.10        EmploymentPractices.**

 

Neither Selleris a party to, or in the process of negotiating, any collective bargaining orlabor agreement or union contract. There is no

 

(a)           Charge, complaint orsuit pending or, to the Knowledge of Sellers, threatened against either Sellerrespecting employment, hiring for employment, terminating from employment,employment practices, employment discrimination, terms and conditions ofemployment, safety, wrongful termination, or wages and hours;

 

(b)           Unfair laborpractice charge or complaint pending or, to the Knowledge of Sellers,threatened against, or decision or Order in effect and binding on, eitherSeller before the National Labor Relations Board;

 

(c)           Grievance orarbitration proceeding arising out of or under collective bargaining agreementspending or, to the Knowledge of Sellers, threatened against either Seller;

 

(d)           Strike, labordispute, slow-down, work stoppage or other interference with work pending or,to the Knowledge of Sellers, threatened against either Seller; or

 

(e)           To the Knowledge ofSellers, union organizing activities or union representation questionthreatened or existing with respect to any groups of employees of eitherSeller.

 

**2.11        Taxes.**

 

(a)           ILC and I-Link havefiled, or will have filed prior to the Effective Date, all Tax Returns thateach was required to file as of the Effective Date.  All such Tax Returns were correct and complete in all materialrespects.  All Taxes owed by either ILCor I-Link (whether or not shown on any Tax Return) have been paid.  Except as specified in Section 2.11 of theDisclosure Schedule, neither ILC nor I-Link is currently the beneficiary of anyextension of time within which to file any Tax Return and has not requestedsuch an extension.  No claim has everbeen made by an authority in a jurisdiction where ILC or I-Link does not fileTax Returns that it is or may be subject to taxation by that jurisdiction.  There is no Encumbrance on any of theAcquired Assets that arose in connection with any failure (or alleged failure)to pay any Tax.  ILC and I-Link havewithheld and paid all Taxes required to have been withheld and paid inconnection with amounts paid or owing to any employee, independent contractor,creditor, stockholder or other Person.

 

(b)           Neither ILC norI-Link has been a member of an Affiliated Group filing a consolidated TaxReturn, other than a group the common parent of which is I-Link.  The Affiliated Group that includes Sellershas filed all income Tax Returns that it was required to file for each taxableperiod during which Sellers were members of the group.  All such Tax Returns were correct andcomplete in all respects.  All incomeTaxes owed by such Affiliated Group (whether or not shown on any Tax Return)have been paid for each taxable period during which Sellers were members of thegroup.  None of the directors orofficers of Sellers, expects any Governmental Entity to assess any additionalincome Taxes against the Affiliated Group for any taxable period during whichSellers were members of the group.  Thereis no dispute or claim concerning any income Tax liability of the AffiliatedGroup for any taxable period during which Sellers were members of the groupeither (a) claimed or raised by any Governmental Entity in writing, or (b) asto which Sellers, have Knowledge. Except as disclosed in Section 2.11 of the Disclosure Schedule, theAffiliated Group has not waived any statute of limitations in respect of anyincome Taxes or agreed to any extension of time with respect to an income Taxassessment or deficiency for any taxable period during which Sellers weremembers of the group.

 

12

----

 

(c)           The tax returns ofthe Affiliated Group have never been audited by a Governmental Entity, nor areany such audits in process or pending. The Affiliated Group has disclosed on its federal income tax returns allpositions taken therein that could give rise to a substantial understatementpenalty within the meaning of Code Section 6662.  No consent to the application of Code Section 341 has been filedwith respect to any of the Acquired Assets (collapsible corporation).  Books and records exist and are readilyavailable to support tax returns for which the statute of limitations has notyet expired.

 

**2.12        Title to Assets.**

 

Sellers will have at Closing good record and marketable fee title toall the Acquired Assets, free and clear of all Encumbrances, except for thefollowing Encumbrances, none of which (except for the Encumbrance described inclause (c)) could reasonably be expected to have a Material Adverse Effect on ILC:  (a) the lien of current taxes not yet dueand payable, (b) such imperfections of title, liens and easements as do notmaterially detract from the value of or interfere with the value or the presentor presently contemplated future use of the properties subject thereto oraffected thereby, or otherwise materially impair the present or presentlycontemplated future business operations at or with such properties, and (c)liens securing debt which is reflected on the most recent balance sheetincluded in the Financial Statements. All of the leases necessary in any material respect for the operation ofthe Business are valid, subsisting and enforceable and afford peaceful andundisturbed possession of the subject matter of the lease, and no materialdefault by Sellers exists under any of the provisions thereof.

 

**2.13        Intellectual Property.**

 

Sellers haveexclusive ownership of, or licenses to use, all Intellectual Property used, orto be used, in the Business.  Except asdescribed in Section 2.13 of the Disclosure Schedule, there are no claims ordemands of any other Person pertaining to any of such Intellectual Property andno proceedings have been instituted, or are pending or, to the Knowledge ofSellers, threatened, which challenge the rights of Sellers in respectthereof.  ILC has the right to use, freeand clear of claims or rights of other Persons, all Patents and Know-how,designs, manufacturing or other processes, computer software (subject toapplicable licenses), systems, surveys, data compilations, research results,and other information required for or incident to the Business as presentlyconducted or contemplated, except where the failure to have such a right wouldnot have a Material Adverse Effect on the Business.  All Patents, Trademarks and registered copyrights that are ownedby, or licensed to, Sellers and used or to be used by ILC in the Business arelisted in Section 2.13 of the Disclosure Schedule.  All of such Patents, Trademarks and registered copyrights havebeen duly registered in, filed in, or issued by, the United States Patent andTrademark Office, the United States Register of Copyrights, or thecorresponding offices of other jurisdictions as identified in Section 2.13 ofthe Disclosure Schedule, have been properly maintained and renewed inaccordance with all applicable provisions of law in the United States and eachsuch jurisdiction, and are valid and in full force and effect.  All such Trademarks are in commercial use inthe Business.  All licenses or otheragreements under which ILC is granted rights in Intellectual Property used inthe Business are listed in Section 2.13 of the Disclosure Schedule.  Except as set forth in Section 2.13 of theDisclosure Schedule, all said licenses or other agreements are in full forceand effect and there is no default by any party thereto.  To the Knowledge of Sellers, the Business,activities, services and applications of ILC do not infringe any Patent orother Intellectual Property of any other Person, except where such infringementwould not have a Material Adverse Effect on ILC or the Business.  Except as described in Section 2.13 of theDisclosure Schedule, no Action charging ILC with infringement of any adverselyheld Intellectual Property has been filed or is, to the Knowledge of Sellers, threatenedto be filed.  Sellers have not madeunauthorized use of any confidential information or trade secrets of anyPerson, including without limitation any former employer of any past or presentemployee of Sellers.  Except asdescribed in Section 2.13 of the Disclosure Schedule, neither ILC nor, to theKnowledge of Sellers, any of its employees have any agreements or arrangementswith any Persons other than Sellers related to confidential information ortrade secrets of such Persons or restricting in any way any such employee’sengagement in the Business.

 

13

----

 

**2.14        Assigned Contracts.**

 

Section 2.14of the Disclosure Schedule contains a true, complete and accurate list,categorized by subject matter, of the following Assigned Contracts to whichSellers are a party :

 

(a)           Purchase Orders andsale orders, and all agreements to or with each customer or supplier for thesale of products or services;

 

(b)           All Contracts forconstruction or for the purchase of equipment, machinery and other items;

 

(c)           All Contractsrelating to the rental or use of equipment, other personal property orfixtures;

 

(d)           All Contracts withDistributors;

 

(e)           All Contractspertaining to the licensing or use of computer software that is used or usefulin the Business;

 

(f)            Each Contract uponwhich the Business is substantially dependent or which is otherwise material tothe Business; and

 

(g)           All other Contractsaffecting the Business, except those which: (A) are cancelable on 30 days’ or less notice without any penalty orother financial obligation, or (B) if not so cancelable, involve annualaggregate payments by or to Sellers of $25,000 or less.

 

Except as set forth in Section2.14 of the Disclosure Schedule, (i) each Contract was entered into in theordinary course of the Business, (ii) is in full force and effect on the dateof this Agreement and is valid, binding and enforceable in accordance with itsterms, (iii) Sellers are not in material breach or default under any of theContracts and has not received any notice or claim of any such breach ordefault from any Person, (iv) to the Knowledge of Sellers, the relationship ofSellers with the Persons who are parties to the Contracts is good and there hasbeen no expression of any intention to terminate or materially modify any suchrelationships, (v) to the Knowledge of Sellers, there is no breach or defaultunder any Contract by any other Person who is a party thereto, which couldreasonably be expected to have a Material Adverse Effect on the Business, (vi)to the Knowledge of Sellers, no event or action has occurred, is pending or isthreatened, which, after the giving or receipt of notice, and/or passage oftime or otherwise, could constitute or result in any such breach or default bySellers or any other Person who is a party under any of the Contracts, whichwould have a Material Adverse Effect on the Business, and (vii) no materialamount claimed to be payable to Sellers under any of the Contracts is beingdisputed by any Person who is a party thereto. Except as described in Section 2.14 of the Disclosure Schedule, Sellershave the contractual right to terminate each Contract between Sellers and aDistributor by giving no more than 90 days prior written notice of terminationwithout risk of incurring a Loss, except as limited by any applicable Law.  True and correct copies of each document orinstrument set forth on the Disclosure Schedule pursuant to this Section 2.14have been made available to Buyer.

 

14

----

 

**2.15        No Brokers.**

 

Sellers haveno liability or obligation to pay any fees or commissions to any broker,finder, agent, commercial banker or other Person with respect to this Agreementor the transactions contemplated by this Agreement.

 

**2.16        Warranties**.

 

Sellers willhave no material liability after the Effective Date pursuant to the terms ofexpress written warranties in favor of its customers, which is not fullycovered by insurance or reserved on the Financial Statements relating to anyservice or application distributed or sold by ILC prior to the EffectiveDate.  ILC’s standard terms andconditions of sale, including warranties, are included in Section 2.16 of theDisclosure Schedule.

 

**2.17        Investment Intent**.

 

Sellers areaccredited investors within the meaning of Rule 501(a)(3) of Regulation Dpromulgated under the Securities Act of 1933, as amended, and are acquiring theBuyer Securities for their own respective accounts for investment purposes onlyand not with a view to or for sale in connection with the distribution thereof.

 

**ARTICLEIII****.  REPRESENTATIONS AND WARRANTIES OF BUYER**

 

Buyerrepresents, warrants and agrees as follows:

 

**3.1          Organizationand Related Matters.**

 

Buyer is a corporation duly organized, validly existing and in goodstanding under the laws of the state of Delaware.  Buyer has all necessary corporate power and authority to carry onits business as now being conducted. Buyer has the necessary corporate power and authority to execute,deliver, and perform this Agreement and the transactions contemplated hereby.

 

**3.2          Capitalization.**

 

The entireauthorized capital stock of Buyer consists of (a) 100,000,000 shares of commontock, $0.0001 par value, of which only 5,930,262 shares are issued andoutstanding, and (b) 15,000,000 shares of preferred stock, $0.0001 par value,of which (i) 1,870,000 are designated Series A 8% cumulative convertiblepreferred stock with a liquidation value of $3,740,000, and (ii) 1,234,500 aredesignated Series B 8% cumulative convertible preferred stock, of which 563,800shares are issued and outstanding with a liquidation value of $5,638,000.  All of the issued and outstanding shares ofcommon stock, Series A 8% cumulative convertible preferred stock, and Series B8% cumulative convertible preferred stock have been duly authorized and arevalidly issued, fully paid, and non-assessable and were issued in conformitywith applicable Laws.  Except asprovided above in this Section 3.2, and except as described in Buyer’s Reports,there are no Equity Securities and no outstanding or authorized options,warrants, purchase rights, subscription rights, conversion rights, exchangerights, or other rights, contracts, agreements or commitments that couldrequire Buyer to issue, sell, or otherwise cause to become outstanding any ofits authorized but unissued Equity Securities. There are no outstanding or authorized stock appreciation, phantomstock, profit participation, or similar rights with respect to Buyer.  There are no preemptive rights in respect ofany Equity Securities of Buyer.

 

15

----

 

**3.3          Authorization.**

 

Buyer has fullpower and authority (including full corporate power and authority) to executeand deliver this Agreement and to perform its obligations hereunder.  The execution and delivery of this Agreementand the performance by Buyer and the consummation of the transactionscontemplated hereunder have been duly authorized by the board of directors ofBuyer and no other corporate proceedings on the part of Buyer are necessary toauthorize this Agreement and the transactions contemplated hereunder.  Except as contemplated by Section 4.5, noconsent of any Person not a Party to this Agreement nor consent of or filingwith (including any waiting period) any Governmental Entity is required to beobtained or performed on the part of Buyer to execute, deliver and perform itsobligations hereunder.  This Agreementconstitutes the legally valid and binding obligation of Buyer, enforceableagainst Buyer in accordance with its terms, except as such enforceability maybe limited by bankruptcy, insolvency, reorganization, moratorium and othersimilar laws and equitable principles relating to or limiting creditor’s rightsgenerally.

 

**3.4          Non-contravention.**

 

Neither theexecution and the delivery of this Agreement, nor the consummation of thetransactions contemplated hereby (including performance by Buyer), will (a)violate any constitution, statute, regulation, rule, Order, decree, charge, orother restriction of any Governmental Entity to which Buyer is subject or anyprovision of the charter or bylaws of Buyer or (b) conflict with, result in abreach of, constitute a default under, result in the acceleration of, create inany party the right to accelerate, terminate, modify, or cancel, or require anynotice under any agreement, contract, lease, license, instrument or otherarrangement to which Buyer is a party or by which it is bound or to which anyof its assets is subject (or result in the imposition of any Encumbrance uponany of its assets), except where the violation, conflict, breach, default,acceleration, termination, modification, cancellation, failure to give notice,or Encumbrance could not reasonably be expected to have a Material AdverseEffect on Buyer or on the ability of the Parties to consummate the transactionscontemplated by this Agreement.  Exceptas contemplated by Section 4.5, Buyer does not need to give any notice to, makeany filing with, or obtain any authorization, consent, or approval of anyGovernmental Entity in order for the Parties to consummate the transactionscontemplated by this Agreement, except where the failure to give notice, tofile, or to obtain any authorization, consent or approval could not reasonablybe expected to have a Material Adverse Effect on Buyer or on the ability of theParties to consummate the transactions contemplated by this Agreement.

 

16

----

 

**3.5          Legal Proceedings.**

 

There is noOrder or Action pending or to the Knowledge of Buyer, threatened against Buyerthat individually or when aggregated with one or more other Actions has ormight reasonably be expected to have a Material Adverse Effect on the abilityof the Parties to consummate the transactions contemplated by this Agreement.

 

**3.6****                               Periodic Reports.**

 

Buyer has delivered to Sellers its quarterly reports on form 10-QSB forthe quarterly periods ended March 31, June 30, and September 30, 2002, and itsannual report on Form 10-KSB for the year ended December 31, 2001, all as filedwith the Securities and Exchange Commission under the Securities Exchange Actof 1934, as amended.  To the Knowledgeof Buyer, each such report (a) does not contain any untrue statement of a materialfact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, notmisleading with respect to the period covered by the report, and (b) thefinancial information presented in the report fairly presents in all materialrespects the financial condition, results of operations, and cash flows ofBuyer as of, and for, the periods presented in the report.

 

**3.7          BuyerSecurities**.

 

The BuyerSecurities to be issued to Sellers to purchase the Acquired Assets at the Closingshall be, when issued, duly authorized and validly issued, fully paid, andnon-assessable, and not issued in violation of the preemptive or other rightsof any Person.

 

**3.8          No Brokers.**

 

Buyer does nothave any liability or obligation to pay any fees or commissions to any broker,finder, agent, commercial banker or other Person with respect to this Agreementor the transactions contemplated by this Agreement.

 

**ARTICLE IV.****  COVENANTSWITH RESPECT TO CONDUCT OF****BUSINESS PRIOR TO THE CLOSING**

 

**4.1          Access and Control.**

 

Prior to theClosing, ILC shall, and the I-Link shall cause ILC to, authorize and permitBuyer and its representatives (which term shall be deemed to include itsindependent accountants and counsel) to have reasonable access during normalbusiness hours, upon reasonable notice and in such manner as will notunreasonably interfere with the business activities of Sellers, to all of theproperties, books, records, operating instructions and procedures, and allother information with respect to the Business as Buyer may from time to timereasonably request, and to make copies of such books, records and otherdocuments and to discuss the Business with such other Persons, including,without limitation, the directors, officers, employees, accountants, counsel,suppliers, customers, and creditors of Sellers, as Buyer considers necessary orappropriate for the purposes of familiarizing itself with the Business andobtaining any necessary Approvals of or Permits for the transactionscontemplated by this Agreement. Concurrently with the signing of this Agreement the Buyer and Sellersshall enter into the Management Agreement in the form attached hereto asExhibit E, pursuant to which Buyer will assume management of certain aspects ofthe Business as provided in said agreement, and Sellers agree Buyer shall havethe right to use the Acquired Assets during the term of the ManagementAgreement to provide services to Buyer’s customers, and all such customers andaccounts receivable from such customers shall be the exclusive property ofBuyer notwithstanding any provision contained in the Management Agreement.

 

17

----

 

**4.2          Material Adverse Changes.**

 

Prior to theClosing, Sellers will promptly notify Buyer of any event of which it or theyobtains Knowledge which has had or could reasonably be expected to have aMaterial Adverse Effect on the Business or which if known as of the date hereofwould have been required to be disclosed to Buyer.

 

**4.3          Conduct of the Business.**

 

Prior to theClosing, Sellers agree with and for the benefit of Buyer that they shall notwithout the prior consent in writing of Buyer, which may not be unreasonablywithheld:

 

(a)           Except as requiredby their terms, amend, terminate, renew or renegotiate any Contract included inthe Acquired Assets or default (or take or omit to take any action that, withor without the giving of notice or passage of time, would constitute a default)in any of its obligations under any Contract included in the Acquired Assets ortake any action that would jeopardize the continuance of its material supplieror customer relationships;

 

(b)           Terminate, amend orfail to renew any existing insurance coverage;

 

(c)           Terminate or fail torenew or preserve any Permits;

 

(d)           Other than aspermitted by the Management Agreement or in the ordinary course of theBusiness, incur or agree to incur any obligation or liability (absolute orcontingent) related to the Business that individually calls for payment by ILCof more than $25,000 in any specific case or $250,000 in the aggregate;

 

(e)           Sell, transfer,mortgage, encumber or otherwise dispose of any Acquired Assets or anyliabilities, except (i) for dispositions of property not greater than $5,000 inthe aggregate, (ii) in the ordinary course of the Business, or (iii) ascontemplated by the Management Agreement;

 

(f)            Dispose of orpermit to lapse any rights to the use of any Intellectual Property included inthe Acquired Assets or subject to the License Agreement or dispose of ordisclose any such Intellectual Property not a matter of public knowledge;

 

(g)           Make any Taxelection or make any change in any method or period of accounting or in anyaccounting policy, practice or procedure; or

 

(h)           Agree to or make anycommitment to take any actions prohibited by this Section 4.3.

 

**4.4          Notification of Certain Matters.**

 

Each Party shall give prompt notice to the other Parties of (a) theoccurrence, or failure to occur, of any event that would be likely to cause anyof its representations or warranties contained in this Agreement to be untrueor inaccurate in any material respect at any time from the date of thisAgreement to the Closing Date, and (b) any failure of the Party to comply withor satisfy, in any material respect, any covenant, condition or agreement to becomplied with or satisfied by it under this Agreement.  No such notification shall affect therepresentations or warranties of the Parties or the conditions to theirrespective obligations hereunder.

 

18

----

 

**4.5          Consents**

 

(a)           Sellers and Buyereach agree to cooperate and use their best efforts to obtain all Approvals fromall third parties (including Governmental Entities) that may be necessary toconsummate the transactions contemplated by this Agreement.

 

(b)           Immediatelyfollowing the Effective Date, Buyer shall, with the reasonable assistance ofand in consultation with Sellers, prepare and file, or cause to be prepared andfiled, any and all applications necessary to obtain the Approval of allrelevant Governmental Entities for Buyer to purchase the Acquired Assets andoperate the Business.  Buyer and Sellersshall prosecute such applications with all reasonable diligence and otherwiseuse their reasonable best efforts (including, with respect to Buyer, providingfinancial assurance to a Governmental Entity, to the extent required) to obtaingrants of approval as expeditiously as practicable.  Each of Buyer and Sellers shall bear their own expenses of prosecutingsuch applications; provided, that Buyer shall bear all fees payable by Buyerand/or Sellers to any Governmental Entity and local counsel fees, wherenecessary as determined in the sole discretion of Buyer, in connection with thefiling and prosecution of the applications necessary to obtain such approvals.

 

(c)           In the event theNorth American Numbering Plan Administrator fails or refuses to transfercontrol of the Carrier Identification Codes directly from Sellers to Buyer, (i)Sellers agree to transfer the Carrier Identification Codes to a subsidiary ofI-Link that has no assets, liabilities, or business operations, (ii) agreeafter such transfer to sell all of the capital stock of such subsidiary toBuyer for no consideration in addition to the Purchase Price, (iii) use itsbest efforts to obtain approval from the North American Numbering PlanAdministrator for transfer of control of the Carrier Identification Codesresulting from the sale of the subsidiary stock to Buyer, and (iv) uponobtaining such approval transfer and convey the capital stock of suchsubsidiary to Buyer.

 

(d)           Sellers and Buyereach agree to cooperate and use their best efforts to obtain all Approvals ofthird parties with respect to all material Assigned Contracts that may benecessary or which may be reasonably requested by Buyer to consummate thetransactions contemplated by this Agreement.

 

**4.6          Preservation of the Business Prior to the Closing.**

 

During theperiod beginning on the date hereof and ending on the Closing Sellers will usetheir respective best efforts to preserve the Business and to preserve thegoodwill of customers, suppliers, and others having business relations withSellers.

 

**4.7**          **Offers****ofEmployment**.

 

Sellers agreeand acknowledge that Buyer has, and may continue to make, offers of employmentto persons employed by Sellers.  Anyperson who accepts such an offer of employment with Buyer shall be an“Accepting Employee” and shall be employed by Buyer on such terms andconditions as Buyer and each such Accepting Employee may mutually agree.  In the event Buyer shall employ within 45days following the Effective Date any former employee of Sellers that wasincluded in Seller’s reduction of staff that began on the Effective Date andreceived severance or payment of unused vacation time from Seller, then Buyershall reimburse Sellers for the severance and vacation time payments made bySellers to the employee within 10 days following the date the employeecommences employment with Buyer.

 

**ARTICLE V****.  ADDITIONAL COVENANTS**

 

**5.1          Non-solicitation.**

 

(a)**          **Sellers eachagree that from and after the date of this Agreement Buyer shall be entitled tothe goodwill and going concern value of the Business and to protect andpreserve the same to the maximum extent permitted by law.  Sellers each also acknowledge that their

 

19

----

 

managementcontributions to the Business have been uniquely valuable and involveproprietary information that would be competitively unfair to make available toany competitor of the Business.  Forthese and other reasons and as an inducement to Buyer to enter into thisAgreement, Sellers each agree for themselves and their respective Affiliatesthat for a period of three years after the date hereof (the “RestrictedPeriod”), it will not, directly or indirectly, for its own benefit or as agentfor another solicit for the purpose participating in or effecting any presentor future business enterprise involving any service or application that is thesame as or similar to any service or application that is part of the Business,any Person who was a Distributor or customer (including their successors) ofILC at any time during the three-year period prior to and ending on theEffective Date.

 

(b)           Nothing containedherein shall limit during the Restricted Period the right of Sellers or theirAffiliates (or their respective officers and directors) as an investor to holdand make investments in securities of any corporation or limited partnershipthat is registered on a national securities exchange or admitted to tradingprivileges thereon or actively traded in a generally recognizedover-the-counter market, provided such Person’s equity interest therein doesnot exceed five percent of the outstanding shares or interests in suchcorporation or partnership.

 

(c)           In addition, toprotect Buyer against any efforts by Sellers to cause employees of Buyer toterminate their employment, each agrees that during the Restricted Period itwill not directly or indirectly (i) induce any employee of Buyer with a thencurrent compensation of more than $40,000 annually to leave Buyer or to acceptany other employment or position, or (ii) assist any other entity in hiring anysuch employee.

 

(d)           Each of Sellersrecognizes and agrees that a breach of any of the covenants set forth in thisSection 5.1 could cause irreparable harm to Buyer, that Buyer’s remedies at lawin the event of such breach would be inadequate, and that, accordingly, in theevent of such breach a restraining order or injunction or both may be issuedagainst it, in addition to any other rights and remedies that are available toBuyer.  If this Section 5.1 is morerestrictive than permitted by the Laws of the jurisdiction in which Buyer seeksenforcement hereof, this Section 5.1 shall be limited to the extent required topermit enforcement under such Laws. Without limiting the generality of the foregoing, the Parties intendthat the covenants contained in the preceding portions of this Section 5.1shall be construed as a series of separate covenants, one for each city, county,state or other location specified. Except for geographic coverage, each such separate covenant shall bedeemed identical in terms.  If, in anyjudicial proceeding, a court shall refuse to enforce any of the separatecovenants deemed included in this Section 5.1, then such unenforceable covenantshall be deemed eliminated from these provisions for the purpose of thoseproceedings to the extent necessary to permit the remaining separate covenantsto be enforced.

 

(e)           For income taxpurposes only, Buyer and Sellers agree that no portion of the Purchase Priceshall be allocated to the covenants in this Section 5.1.

 

**5.2          Nondisclosure of Proprietary Data.**

 

None ofSellers shall divulge or otherwise disclose, directly or indirectly, to Personsother than Buyer, any confidential information concerning the Business.

 

**5.3          Tax Cooperation.**

 

After theEffective Date, the Parties shall, and shall cause their respective directorsand officers to, cooperate fully with each other in the preparation of all TaxReturns and shall provide, or cause to be provided to each other any recordsand other information requested by such parties in connection therewith.  The Parties shall, and shall cause theirrespective directors and officers to, cooperate fully with the other Parties inconnection with any Tax investigation, audit or other proceeding.  Any information obtained pursuant to thisSection 5.3 or pursuant to any other Section hereof providing for the sharingof information or the review of any Tax Return or other schedule relating toTaxes shall be subject to Section 9.9.

 

20

----

 

**5.4          Tax Matters.**

 

(a)           Each of the Sellersagrees to indemnify the Buyer from and against the entirety of any Losses Buyersuffer resulting from, arising out of, relating to, in the nature of, or causedby any liability of Sellers for Taxes that is attributable to any period endingon or before the Effective Date and for Taxes of any Person other than Sellers(i) under Reg. §1.1502-6 (or any similar provision of state, local or foreignlaw), (ii) as a transferee or successor, (iii) by contract, or (iv) otherwise.

 

(c)           I-Link will includethe income of ILC from the Business (including any deferred income triggeredinto income by Reg. §1.1502-13 and Reg. §1.1502-14 and any excess loss accountstaken into income under Reg. §1.1502-19) on I-Link’s consolidated federalincome Tax Returns for all periods through the Effective Date and pay anyfederal income Taxes attributable to such income.  I-Link will take no position on such returns that relates to theBusiness that would adversely affect the Buyer after the date of thisAgreement.  The income of the Businesswill be apportioned to the period up to and including the Effective Date andthe period after the Effective Date by closing all transactions and accrualspertaining to the Business on the books Sellers as of the end of the EffectiveDate.  Buyer and Sellers shall file allTax Returns (including amended returns and claims for refund) and information reportsin a manner consistent with the Allocation Schedule contemplated by Section6.2(h).

 

(d)           Sellers will allowBuyer to participate at its own expense in any audits of I-Link’s consolidatedfederal income Tax Returns to the extent that such returns relate to theAcquired Assets, Assumed liabilities, or the treatment for Tax purposes of thetransactions contemplated by this Agreement. I-Link will not settle any such audit in a manner that would adverselyaffect Buyer’s Tax treatment of the transactions contemplated by this Agreementwithout the prior written consent of the Buyer, which consent shall notunreasonably be withheld.

 

**5.5          Post-Effective Date Financial Statement.**

 

Sellers shall deliver to Buyer at Buyer’s sole cost and expense anaudited balance sheet as of December 31, 2002, and audited statements ofoperations and cash flows for each of the years in the two-year period endedDecember 31, 2002, together with the notes and audit report ofPriceWaterhouseCoopers LLP pertaining thereto, for the entity, businesssegment, or other operating unit identified by Buyer as being necessary forBuyer to comply with its financial reporting obligation under the SecuritiesExchange Act of 1934 and the regulations adopted there under.

 

**5.6          Redemption Covenant.**

 

The Buyercovenants and agrees that it will not exercise its right to redeem the BuyerSecurities under Part 5 of the Certificate of Designation of the Series BConvertible Preferred Stock as on file with the Secretary of State of the Stateof Delaware on the Effective Date prior to December 6, 2007.

 

**ARTICLEVI****.  CONDITIONS OF PURCHASE**

 

**6.1          GeneralConditions.**

 

Theobligations of the Parties to effect the Closing shall be subject to thefollowing conditions unless waived in writing by the Party or Parties thatbenefit from such condition:

 

(a)           No Law or Ordershall have been enacted, entered, issued, promulgated or enforced by anyGovernmental Entity, at or prior to the Closing Date, which prohibits orrestricts, or would (if successful) prohibit or restrict, the transactionscontemplated by this Agreement, or

 

21

----

 

(with respectto obligations of Buyer only) which would not permit the Business as presentlyconducted to continue unimpaired following the Closing Date.  No Governmental Entity shall have notifiedany Party to this Agreement that consummation of the transactions contemplatedby this Agreement would constitute a violation of any Laws of any jurisdictionor that it intends to commence an Action to restrain or prohibit suchtransactions or force divestiture or rescission, unless such GovernmentalEntity shall have withdrawn such notice and abandoned any such Action prior tothe time which otherwise would have been the Closing Date, unless counsel knownto have expertise as to such matters on behalf of the Party against whom suchAction was or would be instituted renders to the Parties a favorable opinionthat such Action is or would be without merit.

 

(b)           All Approvalscontemplated by Section 4.5 that are reasonably required to be obtained fromany Governmental Entity for the operation of the Business by Buyer shall havebeen received by Buyer.  To the extentrequired by any material Assigned Contract, all Approvals contemplated bySection 4.5 that are reasonably required to be obtained from any third partyfor the assignment of such material Assigned Contracts included in the AcquiredAssets and operation of the Business shall have been received and delivered toBuyer.

 

(c)           Sellers shalldeliver to CRS duly executed releases and waivers from Winter Harbor, LLC,Counsel Communications, Inc. (formerly Counsel Springwell Communications LLC)and Counsel Corporation (US) of all rights and Encumbrances in and to theAcquired Assets in form and substance acceptable to Buyer and its counsel, andduly executed UCC termination statements for each jurisdiction where there is aUCC financing statement filing affecting any of the Acquired Assets.

 

(d)           Sellers shalldeliver to Buyer a schedule, subject to Buyer’s written acceptance on theClosing Date, that allocates the Purchase Price to the Acquired Assets for allpurposes, including Tax and financial reporting purposes (the “AllocationSchedule”).

 

(e)           The Parties shallexecute and deliver the Escrow Agreement, together with all instrumentsrequired thereby.

 

(f)            The Parties andWorldxChange Corp. shall execute and deliver a mutual service agreementcontaining in substance those terms set forth on Exhibit F attached hereto.

 

(g)           Sellers shalldeliver to Buyer such additional bills of sale, assignments, documents oftransfer and other instruments as Buyer may reasonably request to confirm inBuyer all right title and interest in and to the Acquired Assets.

 

**6.2          Deliveriesof Sellers.**

 

On the Effective Date, Sellers shall deliver or cause to be deliveredin accordance with Section 1.4 of this Agreement duly executed bills of sale inthe form attached hereto as Exhibit G.

 

**6.3          Deliveries of Buyer.**

 

On theEffective Date, Buyer shall deliver or cause to be delivered pursuant toSection 1.4 of this Agreement:

 

(a)           Duly executedassumption of liabilities for the Assumed Liabilities in the form attachedhereto as Exhibit H.

 

(b)           Certificatesrepresenting the Buyer Securities issued in the names or names designated bythe Sellers in writing prior to the Effective Date.

 

22

----

 

**ARTICLEVII****.  TERMINATION OF OBLIGATIONS; SURVIVAL**

 

**7.1          Termination of Agreement.**

 

Anythingherein to the contrary notwithstanding, this Agreement and the transactionscontemplated by this Agreement may be terminated by any Party if the Closingdoes not occur on or before the close of business on May 31, 2003 (unlessextended by mutual consent in writing of Buyer and Sellers), provided that suchfailure is not due to the action or inaction of, or breach of this Agreementby, such Party.  This Agreement and thetransactions contemplated by this Agreement may also be terminated at any timebefore the Closing by mutual consent in writing of Buyer and Sellers.

 

**7.2          Effect of Termination.**

 

In the eventthat this Agreement shall be terminated pursuant to Section 7.1, all furtherobligations of the Parties under this Agreement shall terminate without furtherliability of any Party to another; provided that the obligations of the Partiescontained in Section 9.9 (Confidentiality) and Section 9.12 (Expenses) shallsurvive any such termination.  Atermination under Section 7.1 shall not relieve any Party of any liability fora breach of, or for any misrepresentation under this Agreement, or be deemed toconstitute a waiver of any available remedy (including specific performance ifavailable) for any such breach or misrepresentation.

 

**7.3          Survival of Representations and Warranties.**

 

Allrepresentations and warranties contained in or made pursuant to this Agreementshall expire on the date that is two years following the Closing Date, exceptthat (i) the representations and warranties contained in Sections 2.1(Organization), 2.15 (No Brokers), 3.1 (Organization), 3.2 (Capitalization) and3.4 (No Brokers) shall survive the Closing and shall remain in full force andeffect indefinitely, (ii) the representations and warranties contained inSection 2.11 (Taxes) shall continue through the expiration of the applicablestatute of limitations as the same may be extended (or, if a claim has beenasserted prior to such expiration, until three months after the date of itsfinal resolution), (iii) the agreements made in this Section 7.3 and Article Vshall be continuing, and (iv) if a claim or notice is given under Article VIII(Indemnification) with respect to any representation or warranty prior to theapplicable expiration date, such representation or warranty shall continueindefinitely until such claim is finally resolved.

 

**ARTICLEVIII****.  INDEMNIFICATION**

 

**8.1          Obligationsof Sellers.**

 

(a)           Each of ILC andI-Link agree, jointly and severally, to indemnify and hold harmless Buyer andits directors, officers, stockholders, employees, Affiliates, agents andassigns from and against any and all Losses directly or indirectly a result of,or based upon or arising from, (i) any inaccuracy in or breach ornon-performance of any of the representations, warranties, covenants oragreements made by Sellers in or pursuant to this Agreement, (ii) any other matteras to which Sellers in other provisions of this Agreement have agreed toindemnify Buyer, (iii) any claim that the provisions of the WARN Act were notsatisfied, including, but not limited to, any Losses arising from a claim ordetermination that the Buyer failed to satisfy any duty or obligation under theWARN Act arising from Seller’s reduction of staff, (iv) Sellers’ ownership ofthe Acquired Assets, operation of the Business, or other activities during theperiod prior to the Effective Date, except for any of the Assumed Liabilities,and (v) claims of stockholders of I-Link based on any transaction, practice, oraction the Sellers effected or participated in, including, but not limited to,the transactions contemplated by this Agreement.

 

23

----

 

(b)           Sellers shall haveno liability under this Section 8.1 for any Losses, until the aggregate amountof all Losses resulting to Buyer and its directors, officers, stockholders,employees, Affiliates, agents and assigns exceeds $25,000 (the “Allowance”),after which Sellers shall be liable, jointly and severally, for the entireamount of the Allowance and any additional Losses in excess of the Allowance.

 

(c)           On the EffectiveDate Sellers shall deliver to the escrow agent named in the Escrow Agreement acertificate representing 25,000 shares of the Buyer Securities, duly endorsedfor transfer or with executed stock powers attached, which will be held anddistributed as provided in the Escrow Agreement in the form adopted by theParties prior to Closing.  In the eventSellers are liable to Buyer under this Section 8.1 for any Losses arising fromIndemnifiable Claims, the amount payable to Buyer shall be satisfiedexclusively by surrender to Buyer and cancellation of Buyer Securities up to aliquidation value of $250,000 in aggregate Losses on Indemnifiable Claims, andfor any Losses in excess of $250,000 shall be satisfied in cash or cashequivalents.

 

**8.2          Obligationsof Buyer.**

 

(a)           Buyer agrees toindemnify and hold harmless Sellers and their respective directors, officers,stockholders, employees, Affiliates, agents and assigns from and against anyand all Losses directly or indirectly a result of, or based upon or arisingfrom, (i) any inaccuracy in or breach or non-performance of any of therepresentations, warranties, covenants or agreements made by Buyer in orpursuant to this Agreement, (ii) the Assumed Liabilities, and (iii) any othermatter as to which Buyer in other provisions of this Agreement has agreed to indemnifySellers.

 

(b)           Buyer shall have noliability under this Section 8.2 for any Losses, until the aggregate amount ofall Losses resulting to Sellers and their respective directors, officers,stockholders, employees, Affiliates, agents and assigns exceeds $25,000 (the“Allowance”), after which Buyer shall be liable for the entire amount of theAllowance and any additional Losses in excess of the Allowance.

 

**8.3          Procedure.**

 

(a)           Each party entitledto be indemnified pursuant to Sections 8.1 and 8.2 (an “Indemnified Party”)shall notify the indemnifying party (“Indemnifying Party”) in writing of anyaction against such Indemnified Party in respect of which the IndemnifyingParty is or may be obligated to provide indemnification pursuant to Sections8.1 and 8.2 promptly after the receipt of notice of the commencementthereof.  The omission of an IndemnifiedParty so to notify the Indemnifying Party of any such action shall not relievethe Indemnifying Party from any liability which the Indemnifying Party may haveto such Indemnified Party except to the extent the Indemnifying Party shallhave been materially prejudiced by the omission of such Indemnified Party so tonotify the Indemnifying Party, pursuant to this Section 8.3.  In case any such action shall be broughtagainst any Indemnified Party and it shall notify the Indemnifying Party of thecommencement thereof, the Indemnifying Party shall be entitled to participatetherein and, to the extent that the Indemnifying Party may wish, to assume thedefense thereof, with counsel reasonably satisfactory to such IndemnifiedParty, and after notice from the Indemnifying Party to such Indemnified Partyof its election so to assume the defense thereof, the Indemnifying Party willnot be liable to such Indemnified Party under Sections 8.1 and 8.2 for anylegal or other expense subsequently incurred by such Indemnified Party inconnection with the defense thereof nor for any settlement thereof entered intowithout the consent of the Indemnifying Party;*provided, however*, that (i)if the Indemnifying Party shall elect not to assume the defense of such claimor action or (ii) if the Indemnified Party reasonably determines (A) that theremay be a conflict between the positions of the Indemnifying Party and of theIndemnified Party in defending such claim or action or (B) that there may belegal defenses available to such Indemnified Party different from or inaddition to those available to the Indemnifying Party, then separate counselfor the Indemnified Party shall be entitled to participate in and conduct the

 

24

----

 

defense, inthe case of clauses 8.3(a)(i) and (ii)(A) above, or such different defenses, inthe case of clause 8.3(a)(ii)(B) above, and the Indemnifying Party shall beliable for any reasonable legal or other expenses incurred by the IndemnifiedParty in connection with the defense; *provided, however*, that an IndemnifyingParty shall not be liable for the fees or expenses of more than one counsel tothe Indemnified Parties in connection with any one action or related actions inrespect of which indemnification is sought hereunder.  The Indemnifying Party shall not settle or compromise any actionwithout the prior written consent of the Indemnified Party, unless (x) suchsettlement does not impose any restrictions or limitations on the assets oroperations of the business of such Indemnified Party, (y) all relief providedis paid or satisfied in full by the Indemnifying Party or an affiliate thereof,and (z) there is no finding or admission of any violation of law or the rightsof any Person other than the claiming party by any Indemnified Party.

 

(b)           Any amounts payableby the Indemnifying Party to or on behalf of an Indemnified Party in respect ofa Loss shall be adjusted as follows:

 

(i)            If such IndemnifiedParty is liable for any additional Taxes as a result of the payment of amountsin respect of an Indemnifiable Claim, the Indemnifying Party will pay to theIndemnified Party in addition to such amounts in respect of the Loss within tendays after being notified by the Indemnified Party of the payment of suchliability (x) an amount equal to such additional Taxes (the “Tax ReimbursementAmount”) plus (y) any additional amounts required to pay additional Taxes imposedwith respect to the Tax Reimbursement Amount and with respect to amountspayable under this clause (y), with the result that the Indemnified Party shallhave received from the Indemnifying Party, net of the payment of Taxes, anamount equal to the Loss.

 

(ii)           The IndemnifiedParty shall reimburse the Indemnifying Party an amount equal to the netreduction in any year in the liability for Taxes (that are based upon ormeasured by income) of the Indemnified Party or any member of a consolidated orcombined tax group of which the Indemnified Party is, or was at any time, part,which reduction is actually realized with respect to any period after theEffective Date and which reduction would not have been realized but for theamounts paid (or any audit adjustment or deficiency with respect thereto, ifapplicable) in respect of a Loss, or amounts paid by the Indemnified Partypursuant to this subsection (a “Net Tax Benefit”).  The amount of any Net Tax Benefit shall be paid not later than 15days after the date on which such Net Tax Benefit shall be realized.

 

**8.4          Survival.**

 

This ArticleVIII shall survive any termination of this Agreement.  Any matter as to which a claim has been asserted by notice to theother Party that is pending or unresolved at the end of any applicablelimitation period shall continue to be covered by this Article VIIInotwithstanding any applicable statute of limitations (which the parties herebywaive) until such matter is finally terminated or otherwise resolved by theParties or by a court of competent jurisdiction and any amounts payablehereunder are finally determined and paid.

 

**8.5          Not ExclusiveRemedy.**

 

This Article VIII shall not be deemed to preclude or otherwise limit inany way the exercise of any other rights or pursuit of other remedies for thebreach of this Agreement or with respect to any misrepresentation.

 

**8.6          Offset.**

 

If any matteras to which Buyer may be able to assert a claim hereunder is pending orunresolved at the time any payment is due from Buyer to Sellers under thisAgreement on the Buyer Securities, Buyer

 

25

----

 

shall have the right, inaddition to other rights and remedies (whether under this Agreement orapplicable Law), to withhold from such payment an amount equal to the amount ofthe claim (provided it is then asserted in accordance with the provisionshereof) until such matters are resolved; provided that Buyer shall not beentitled to withhold any such payment unless and until the amount of itspotential claims exceeds the dollar amounts of the liability limitation setforth in Section 8.1(b).  If it isfinally determined that such claims are covered by this Article VIII, theamount of such claims may be offset against the retained payments and theremainder, if any, shall be delivered to Sellers pursuant to this Agreementtogether with interest on such remainder payable from the date such remainderwas withheld until paid at the rate of 6% per annum.

 

**ARTICLEIX****.  GENERAL**

 

**9.1          Amendments;Waivers.**

 

This Agreementand any Schedule or Exhibit hereto may be amended only by agreement in writingof all parties.  No waiver of anyprovision nor consent to any exception to the terms of this Agreement shall beeffective unless in writing and signed by the Party to be bound and then onlyto the specific purpose, extent and instance so provided.

 

**9.2          Schedules; Exhibits; Integration.**

 

Each Scheduleand Exhibit delivered pursuant to the terms of this Agreement shall be inwriting and shall constitute a part of this Agreement, although Schedules andExhibits need not be attached to each copy of this Agreement.  This Agreement, together with such Schedulesand Exhibits, constitutes the entire agreement among the Parties pertaining tothe subject matter hereof and supersedes all prior agreements andunderstandings of the Parties in connection herewith, including, but notlimited to, the letter of intent dated November 6, 2002, among Buyer andCounsel Springwell Communications LLC.

 

**9.3          Best Efforts;Further Assurances.**

 

(a)           Each Party will use its best effortsto cause all conditions to its obligations hereunder to be timely satisfied andto perform and fulfill all obligations on its part to be performed andfulfilled under this Agreement, to the end that the transactions contemplatedby this Agreement shall be effected substantially in accordance with its termsas soon as reasonably practicable.  TheParties shall cooperate with each other in such actions and in securingrequisite Approvals.  Each Party shallexecute and deliver both before and after Closing such further certificates,agreements, instruments of transfer, and other documents and take such otheractions as may be necessary or appropriate to consummate or implement thetransactions contemplated hereby or to evidence such events or matters.

 

(b)           As used in this Agreement, the term“best efforts” shall not mean efforts which require the performing Party to doany act that is unreasonable under the circumstances, to make any capitalcontribution or to expend any funds other than reasonable out-of-pocketexpenses incurred in satisfying its obligations hereunder, including but notlimited to the fees, expenses and disbursements of its accountants, actuaries,counsel and other professionals.

 

**9.4          Governing Law.**

 

(a)           This Agreement, the legal relationsamong the Parties and any Action, whether contractual or non-contractual,instituted by any Party with respect to matters arising under or growing out ofor in connection with or in respect of this Agreement, including but not limitedto the negotiation, execution, interpretation, coverage, scope, performance,breach, termination, validity or enforceability of this Agreement, shall begoverned by and construed in accordance with the laws of the state of Utahapplicable to contracts made and performed in such state and without regard toconflicts of law doctrines, except to the extent that certain matters arepreempted by federal law.

 

26

----

 

(b)           Each Party hereby irrevocably submitsto and accepts for itself and its properties, generally and unconditionally,the exclusive jurisdiction of and service of process pursuant to the laws ofthe state of Utah and the rules of its courts, waives any defense of forum nonconveniens and agrees to be bound by any judgment rendered thereby arisingunder or out of in respect of or in connection with this Agreement or anyrelated document or obligation.  EachParty further irrevocably designates and appoints the individual identified inor pursuant to Section 9.12 hereof to receive notices on its behalf, as itsagent to receive on its behalf service of all process in any such Action beforeany body, such service being hereby acknowledged to be effective and bindingservice in every respect.  A copy of anysuch process so served shall be mailed by registered mail to each Party at itsaddress provided in Section 9.12; *provided* that, unless otherwise providedby applicable law, any failure to mail such copy shall not affect the validityof the service of such process.  If anyagent so appointed refuses to accept service, the designating Party herebyagrees that service of process sufficient for personal jurisdiction in anyaction against it in the applicable jurisdiction may be made by registered orcertified mail, return receipt requested, to its address provided in Section9.12.  Each Party hereby acknowledgesthat such service shall be effective and binding in every respect.  Nothing herein shall affect the right toserve process in any other manner permitted by Law or shall limit the right ofany Party to bring any Action against any other Party in any otherjurisdiction, except to the extent expressly otherwise provided in this Section9.4.

 

**9.5          No Assignment.**

 

Neither thisAgreement nor any rights or obligations under it are assignable.

 

**9.6          Headings.**

 

Thedescriptive headings of the Articles, Sections and subsections of thisAgreement are for convenience only and do not constitute a part of thisAgreement.

 

**9.7          Counterparts.**

 

This Agreementand any amendment hereto or any other agreement (or document) deliveredpursuant hereto may be executed in one or more counterparts and by differentParties in separate counterparts.  Allof such counterparts shall constitute one and the same agreement (or otherdocument) and shall become effective (unless otherwise provided therein) wheneach Party has signed one or more counterparts and the signature pagesdelivered to the other Parties.

 

**9.8          Publicity andReports.**

 

I-Link andBuyer shall coordinate all publicity relating to the transactions contemplatedby this Agreement and no Party shall issue any press release, publicitystatement or other public notice relating to this Agreement, or thetransactions contemplated by this Agreement, without, in the case of Sellers, I-Link,and ILC obtaining the prior consent of Buyer and, in the case of Buyer,obtaining the prior consent of I-Link, except to the extent that independentlegal counsel to I-Link or Buyer, as the case may be, shall deliver a writtenopinion to the other Party (I-Link and ILC being considered a single Party forsuch purpose) that a particular action is required by applicable law.

 

**9.9          Confidentiality.**

 

Allinformation disclosed in writing and designated in writing as confidential byany Party whether before or after the date hereof in connection with thetransactions contemplated by or the discussions and negotiations preceding thisAgreement to any other Party shall be kept confidential by such other Party andshall not be used, directly or through an Affiliate, by any Party other than ascontemplated by this Agreement, except to the extent that such information (i)was known by the recipient when received, (ii) is or hereafter becomes lawfullyobtainable from other sources, (iii) is necessary or appropriate to disclose toa Governmental Entity having jurisdiction over the Party, (iv) as may otherwise

 

27

----

 

be required by law or (v) tothe extent such duty as to confidentiality is waived in writing by the other Party.  If this Agreement is terminated inaccordance with its terms, each Party (ILC and I-Link being considered a singleParty for such purpose) shall use all reasonable efforts to return upon writtenrequest from the other Party all documents (and reproductions thereof) receivedby it or its representatives from such other Party (and, in the case ofreproductions, all such reproductions made by the receiving Party) that includeinformation not within the exceptions contained in the first sentence of this Section9.9, unless the recipients provide assurances reasonably satisfactory to therequesting Party that such documents have been destroyed.

 

**9.10        Parties inInterest.**

 

This Agreementshall be binding upon and inure to the benefit of each Party, and nothing inthis Agreement, express or implied, is intended to confer upon any other Personany rights or remedies of any nature whatsoever under or by reason of thisAgreement, except for Sections 8.l and 8.2 (which are intended to be for thebenefit of the Persons provided for therein and may be enforced by suchPersons).  Nothing in this Agreement isintended to relieve or discharge the obligation of any third Person to anyParty to this Agreement.

 

**9.11        Notices.**

 

Any notice orother communication hereunder must be given in writing and (a) delivered inperson, (b) transmitted by telex, telefax or telecommunications mechanism,provided that any notice so given is also mailed as provided in clause (c), or(c) mailed (postage prepaid), receipt requested as follows:

 
| If to Buyer,  addressed to:  | Buyers  United, Inc.  14870 Pony Express Road  Bluffdale, Utah 84065  Telecopy:  (801) 320-3312  Attention:  Paul Jarman, Executive  Vice President         |
|------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |                                                                                                                                                                  |
| With a copy  to:             | Cohne,  Rappaport & Segal, P.C.  525 East 100 South, 5th Floor  Salt Lake City, Utah 84102  Telecopy:  (801) 355-1813  Attention:  Mark E. Lehman, Esq. |
|                         |                                                                                                                                                                  |
| If to ILC,  addressed to:    | I-Link  Communications Inc.  13751 S. Wadsworth Park Drive, Suite 200  Draper, Utah 84020  Telecopy:  (801) 576-5000  Attention:  Helen Seltzer, President  |
|                         |                                                                                                                                                                  |
| If to  I-Link, addressed to: | I-Link  Incorporated  13751 S. Wadsworth Park Drive, Suite 200  Draper, Utah 84020  Telecopy:  (801) 576-5000  Attention:  Helen Seltzer, President         |

 

or to such other address or tosuch other Person as a Party shall have last designated by such notice to theother Parties.  Each such notice orother communication shall be effective (i) if given by facsimile, whentransmitted to the applicable number so specified in (or pursuant to) thisSection 9.11 and an appropriate answerback is received, (ii) if given by mail,three days after such communication is deposited in the mails with first classpostage prepaid, addressed as aforesaid or (iii) if given by any other means,when actually received at such address.

 

28

----

 

**9.12        Expenses.**

 

ILC and I-Link(taken as a single Party for purposes of this Section 9.12) and Buyer shalleach pay their own expenses incident to the negotiation, preparation andperformance of this Agreement and the transactions contemplated hereby,including but not limited to the fees, expenses and disbursements of theirrespective accountants and counsel (“Transaction Costs”).

 

**9.13        Remedies; Waiver.**

 

To the extentpermitted by Law, all rights and remedies existing under this Agreement and anyrelated agreements or documents are cumulative to and not exclusive of, anyrights or remedies otherwise available under applicable Law.  No failure on the part of any Party toexercise or delay in exercising any right hereunder shall be deemed a waiverthereof, nor shall any single or partial exercise preclude any further or otherexercise of such right or any other right.

 

**9.14        Attorney’sFees.**

 

In the eventof any Action by any Party arising under or out of, in connection with or inrespect of this Agreement, including any participation in bankruptcyproceedings to enforce against a Party a right or claim in such proceedings,the prevailing party shall be entitled to reasonable attorney’s fees, costs andexpenses incurred in such Action. Attorney’s fees incurred in enforcing any judgment in respect of thisAgreement are recoverable as a separate item. The Parties intend that the preceding sentence be severable from theother provisions of this Agreement, survive any judgment and, to the maximumextent permitted by law, not be deemed merged into such judgment.

 

**9.15        KnowledgeConvention.**

 

Whenever anystatement herein or in any Schedule, Exhibit, certificate or other documentsdelivered to any Party pursuant to this Agreement is made to the Knowledge ofsuch Party, such Party makes such statement based upon actual knowledge of theofficers of such Party having responsibility for such matters withoutconducting an independent investigation of the subject matter thereof.

 

**9.16        Representation By Counsel; Interpretation.**

 

ILC, I-Link,and Buyer acknowledge that each Party has been represented by counsel inconnection with this Agreement and the transactions contemplated by thisAgreement.  Accordingly, any applicablerule of Law or any legal decision that would require interpretation of anyclaimed ambiguities in this Agreement against the Party that drafted it has noapplication and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonablemanner to effect the intent of the Parties.

 

**9.17        Specific Performance.**

 

I-Link, ILC,and Buyer acknowledge that, in view of the uniqueness of the Business and thetransactions contemplated by this Agreement, each such Party would not have anadequate remedy at law for money damages in the event that this Agreement hasnot been performed in accordance with its terms, and therefore agrees that theother Party shall be entitled to specific enforcement of the terms hereof inaddition to any other remedy to which it may be entitled, at law or in equity.

 

**9.18        Severability.**

 

If anyprovision of this Agreement is determined to be invalid, illegal orunenforceable by any Governmental Entity, the remaining provisions of thisAgreement to the extent permitted by Law shall remain in full force and effectprovided that the economic and legal substance of the transactions contemplatedis not affected in any manner materially adverse to any Party.  In the event of any such determination, the Partiesagree to negotiate in good faith to modify this Agreement to fulfill as closelyas possible the original intents and purposes hereof.  To the extent permitted by Law, the Parties hereby to the

 

29

----

 

same extent waive any provisionof Law that renders any provision hereof prohibited or unenforceable in anyrespect.

 

**IN WITNESS WHEREOF**,each of the Parties hereto has caused this Agreement to be executed by its dulyauthorized officers as of the day and year first above written.

 
| **BUYERS UNITED, INC.**        |
|--------------------------------|
|                           |
|                           |
| By:                            |   |   |
|                           | Theodore  Stern, Chief Executive Officer |
|                           |
|                           |
| **I-LINK COMMUNICATIONS INC.** |
|                           |
|                           |
| By:                            |   |   |
|                           | Gary J.  Wasserson, Director |
|                           |
|                           |
| **I-LINK INCORPORATED**        |
|                           |
|                           |
| By:                            |   |   |
|                           | Gary J.  Wasserson, Director |

 

30

----