Blueprint





  Exhibit 10.1






 



STOCK PURCHASE AGREEMENT

 


This
Stock Purchase Agreement (this “Agreement”) entered into
on as of July 3, 2018 by and among Issuer Direct Corporation, a
Delaware corporation (“Issuer Direct”),
ACCESSWIRE Canada Ltd., a body corporate incorporated under the
Business Corporations Act
(Alberta) (“ACCESSWIRE Canada”), and Fred Gautreau (the
“Seller”). Issuer Direct
and ACCESSWIRE are referred to collectively herein as the
“Buyer.” The Buyer and the
Seller are referred to collectively herein as the
“Parties.”

 



BACKGROUND

 


The
Seller in the aggregate owns all of the outstanding capital stock
of Filing Services Canada Inc., a body corporate incorporated under
the Business Corporations
Act (Alberta) (the “Target”).

 


This
Agreement contemplates a transaction in which ACCESSWIRE Canada, a
wholly-owned subsidiary of Issuer Direct, will purchase from the
Seller, and the Seller will sell to ACCESSWIRE Canada, all of the
outstanding capital stock of the Target in return for cash from
ACCESSWIRE Canada and equity of Issuer Direct.

 



AGREEMENT

 


Now,
therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as
follows.

 



1.            

Definitions.





 


“Accredited Investor” has
the meaning set forth in Regulation D promulgated under the
Securities Act and the National Instrument 45-106 of the Canadian
Securities Administrators.

 


“Adverse Consequences”
means all actions, suits, proceedings, hearings, investigations,
charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens,
losses, expenses, and fees, including court costs and reasonable
attorneys' fees and expenses.

 


“Affiliate” has the
meaning set forth in Rule 12b-2 of the regulations promulgated
under the Securities Exchange Act.

 


“Basis” means any past or
present fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to
act, or transaction that forms or could form the basis for any
specified consequence.

 


“Business
Day” means any day except any Saturday, any Sunday, any day
which is a federal legal holiday in the United States or any day on
which banking institutions in the State of North Carolina are
authorized or required by law or other governmental action to
close.

 


“Buyer” has the meaning
set forth in the preface above.

 




 

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“Closing” has the meaning
set forth in §2(d) below.

 


“Closing Balance Sheet”
has the meaning set forth in §2(c) below.

 

 


“Closing Date” has the
meaning set forth in §2(d) below.

 

 


“Closing Working
Capital” means: (a) the Current Assets of the Company, less
(b) the Current Liabilities of the Company, determined as of the
close of business on the Closing Date.

 

 


 “Confidential
Information” means any information concerning the
businesses and affairs of the Target and its Subsidiaries that is
not already generally available to the public.

 


 “Current
Assets” means
cash and cash equivalents, accounts receivable, inventory and
prepaid expenses, but excluding (a) the portion of any prepaid
expense of which Buyer will not
receive the benefit following the Closing, (b) deferred Tax assets
and (c) receivables from any of the Target’s Affiliates,
directors, employees, officers or stockholders and any of their respective Affiliates,
determined in accordance with the same accounting methods,
practices, principles, policies and procedures used by the Seller and the Target,
including consistent classifications, judgments and valuation and
estimation methodologies, that were used in the preparation of the
Most Recent Financial Statements for the most recent fiscal year
end as if such accounts were being prepared as of a fiscal year
end.

 


“Current Liabilities”
means accounts payable, accrued Taxes
and accrued expenses, but excluding payables to any of the
Target’s Affiliates, directors, employees, officers or
stockholders and any of their
respective Affiliates, deferred Tax liabilities and the current
portion of long term debt, determined in accordance with the same
accounting methods, practices, principles, policies and
procedures used by the Seller and the
Target, including consistent classifications, judgments and
valuation and estimation methodologies, that were used in the
preparation of the Most Recent Financial Statements for the most
recent fiscal year end as if such accounts were being prepared as
of a fiscal year end.

 


“Disclosure Schedule” has
the meaning set forth in §4 below.

 


“Employee Benefit Plan”
means any employee benefit plan and any other material employee
benefit plan, program or arrangement of any kind.

 


  “Environmental,
Health, and Safety Requirements” shall mean all
federal, provincial, state, local and foreign statutes,
regulations, ordinances and other provisions having the force or
effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and
pollution or protection of the environment, including without
limitation all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise or
radiation, each as amended and as now or hereafter in
effect.

 


“Escrow Agent” has the
meaning set forth in §7(b) below.


 




 

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“Escrow Agreement” has the
meaning set forth in §7(b) below.


 


“Escrow Amount” has the
meaning set forth in §2(b) below.


 


“Escrow Fund” has the
meaning set forth in §7(b) below.


 


“Estoppel Certificates”
has the meaning set forth in §6(a) below.

 


“Financial Statement” has
the meaning set forth in §4(g) below.

 


 “Indemnified
Party” has the meaning set forth in §7(d)
below.

 


 “Indemnifying
Party” has the meaning set forth in §7(d)
below.

 


 “Intellectual
Property” means all of the following in any
jurisdiction throughout the world: (a) all rights to newswire
distribution channels, partners, feeds, methods and points (b) all
inventions (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (c) all trademarks, service
marks, trade dress, logos, slogans, trade names, corporate names,
Internet domain names, and rights in telephone numbers, together
with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith,
(d) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (e) all mask
works and all applications, registrations, and renewals in
connection therewith, (f) all trade secrets and confidential
business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (g)
all computer software (including source code, executable code,
data, databases and related documentation), (h) all advertising and
promotional materials, (i) all other proprietary rights, and (j)
all copies and tangible embodiments thereof (in whatever form or
medium).

 


“Key Person Employment
Agreement” has the meaning set forth in §6(a)
below.

 


“Knowledge” means actual
knowledge after reasonable investigation.

 


“Leased Real Property”
means all leasehold or subleasehold estates and other rights to use
or occupy any land, buildings, structures, improvements, fixtures
or other interest in real property held by any of the Target or its
Subsidiaries.

 


“Leases” means all leases,
subleases, licenses, concessions and other agreements (written or
oral), including all amendments, extensions, renewals, guaranties
and other agreements with respect thereto, pursuant to which any of
the Target or its Subsidiaries holds any Leased Real Property,
including the right to all security deposits and other amounts and
instruments deposited by or on behalf of the Target or its
Subsidiaries thereunder.

 


“Liability” means any
liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or
to become due), including any liability for Taxes.

 




 

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“Material Leased Property”
has the meaning set forth in §6(a) below.

 


“Most Recent Balance
Sheet” means the balance sheet contained within the
Most Recent Financial Statements.

 


“Most Recent Financial
Statements” has the meaning set forth in §4(g)
below.

 


“Most Recent Fiscal Month
End” has the meaning set forth in §4(g)
below.

 


“Most Recent Fiscal Year
End” has the meaning set forth in §4(g)
below.

 


“Non-Disturbance
Agreements” has the meaning set forth in §6(a)
below.

 


“Ordinary Course of
Business” means the ordinary course of business
consistent with past custom and practice (including with respect to
quantity and frequency).

 


“Owned Real Property”
means all land, together with all buildings, structures,
improvements and fixtures located thereon, including all
electrical, mechanical, plumbing and other building systems, fire
protection, security and surveillance systems, telecommunications,
computer, wiring and cable installations, utility installations,
water distribution systems, and landscaping, together with all
easements and other rights and interests appurtenant thereto
(including air, oil, gas, mineral and water rights, owned by any of
the Target or its Subsidiaries).

 


“Party” has the meaning
set forth in the preface above.

 


“Permitted Encumbrances”
means with respect to each parcel of Real Property: (a) real estate
taxes, assessments and other governmental levies, fees or charges
imposed with respect to such Real Property which are not due and
payable as of the Closing Date, or which are being contested in
good faith and for which appropriate reserves have been
established; (b) mechanics liens and similar liens for labor,
materials or supplies provided with respect to such Real Property
incurred in the ordinary course of business for amounts which are
not due and payable and which would not, individually or in the
aggregate, have a material adverse effect on the Target's or its
Subsidiary's business as currently conducted thereon; (c) zoning,
building codes and other land use laws regulating the use or
occupancy of such Real Property or the activities conducted thereon
which are imposed by any governmental authority having jurisdiction
over such Real Property which are not violated by the current use
or occupancy of such Real Property or the operation of the Target's
or its Subsidiary's business as currently conducted thereon; and
(d) easements, covenants, conditions, restrictions and other
similar matters of record affecting title to such Real Property
which do not or would not impair the use or occupancy of such Real
Property in the operation of the Target's or its Subsidiary's
business as currently conducted thereon.

 


“Person” means an
individual, a partnership, a corporation, an association, a joint
stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency,
or political subdivision thereof).

 


“Pre-Closing Transaction”
means the transaction, effective June 30, 2018, whereby the board
of directors of the Target approved the payment of a dividend of
excess cash from the Target paid to the Seller prior to the
Closing.

 




 

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“Post-Closing Adjustment”
means an amount, in Canadian dollars,
equal to the Closing Working Capital minus the Target Working
Capital.

 


“Purchase Price” has the
meaning set forth in §2(b) below.

 


“Real Property” has the
meaning set forth in §4(l) below.

 


“Securities Act” means the
Securities Act of 1933, as amended.

 


“Securities Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 


“Security Interest” means
any mortgage, pledge, lien, encumbrance, charge, or other security
interest, other than (a) mechanic's, materialmen's, and similar
liens, (b) liens for Taxes not yet due and payable or for Taxes
that the taxpayer is contesting in good faith through appropriate
proceedings, (c) purchase money liens and liens securing rental
payments under capital lease arrangements, and (d) other liens
arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.

 


“Seller” has the meaning
set forth in the preface above.

 


“Stock Payment” has the
meaning set forth in §2(b) below.

 


“Subsidiary” means any
corporation with respect to which a specified Person (or a
Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to
elect a majority of the directors.

 


“Target” has the meaning
set forth in the preface above.

 


“Target Share” means any
share of Class A Voting Shares having no par value per share, of
the Target.

 


“Target Working Capital”
means CDN$25,000.00 which was determined as set forth in
Schedule 2(c)(ii)
attached hereto.

 


“Tax” means any federal,
provincial, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not.

 


“Tax Return” means any
return, declaration, report, claim for refund, or information
return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment
thereof.

 


“Third Party Claim” has
the meaning set forth in §7(d) below.

 


“Trading Day” means any
day during which the Buyer’s then current principal trading
market shall be open for trading.

 




 

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2.           Purchase
and Sale of Target Shares.

 


(a)           Basic
Transaction.
 On and subject to the terms and conditions of
this Agreement, ACCESSWIRE Canada agrees to purchase from the
Seller, and the Seller agrees to sell to ACCESSWIRE Canada, all of
his or its Target Shares for the consideration specified below in
this §2.

 


(b)           Purchase
Price. The Buyer agrees to pay to the Seller an aggregate of
USD$1,200,000 in the manner and as set forth as follows
(collectively, the “Purchase Price”). On the
Closing Date, ACCESSWIRE Canada shall do the following: (i) pay to
the Seller USD$960,000 in immediately available funds (the
“Cash Purchase
Price”); and (ii) deposit USD$180,000 with an escrow
agent pursuant to the terms of §7(b)(iii) (the
“Escrow
Amount”). In addition, on the Closing Date, Issuer
Direct shall issue to the Seller 3,402 “restricted
securities” (as such term is defined in the Securities Act)
of Issuer Direct’s common stock, par value $0.001 (the
“Stock
Payment”). All wire transfer fees or other transaction
fees related to the payment of the Cash Purchase Price and the
Escrow Amount will be to the account of ACCESSWIRE Canada and will
not be deducted from the Cash Purchase Price or the Escrow
Amount.


  


(c)           Post-Closing
Adjustment.


 


(i)           Within
twenty-five Business Days after the Closing Date, the Seller shall
prepare and deliver to the Buyer a statement setting forth its
calculation of Closing Working Capital, which statement shall
contain a balance sheet of the Target as of the Closing Date
(without giving effect to the transactions contemplated herein)
(the “Closing Balance
Sheet”), a calculation of
Closing Working Capital (the “Closing Working
Capital Statement”) and a
certificate of the Seller that the Closing Balance Sheet and
Closing Working Capital Statement were prepared in accordance with
the same accounting methods, practices, principles, policies and
procedures used by the Seller and the Target, including consistent
classifications, judgments and valuation and estimation
methodologies that were used in the preparation of the Most Recent
Financial Statements for the most recent fiscal year end as if such
Closing Balance Sheet and Closing Working Capital Statement were
being prepared as of a fiscal year end. Upon receipt, the Buyer
shall have ten Business Days to review the Closing Balance Sheet
and Closing Working Capital Statement and either approve or dispute
the Seller’s calculations. In the event the Buyer approves
the calculations, the Buyer shall determine the Post-Closing
Adjustment and deliver to the Seller. In the event the Buyer
disputes the calculations, the Buyer and the Seller shall have to
ten Business Days to cooperate to mutually determine an acceptable
Closing Balance Sheet and Closing Working Capital Statement
calculation. Upon such determination, the Buyer shall determine the
Post-Closing Adjustment and deliver to the
Seller.


  


(ii)           If
the Post-Closing Adjustment is a positive number, Buyer
shall not owe any additional consideration to the Seller. If the Post-Closing Adjustment is a negative
number, the Seller shall pay to
Buyer an amount equal to the Post-Closing
Adjustment.


 






 

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(iii)           Any
payment of the Post-Closing Adjustment, together with interest
calculated as set forth below, shall be due within ten Business
Days of the delivery of the Post-Closing Adjustment and shall be
paid by wire transfer of immediately available funds to such
account as is directed by Buyer. The amount of any Post-Closing Adjustment shall
bear interest from and including the Closing Date to but
excluding/and including the date of payment at a rate per annum
equal to 8%. Such interest shall be calculated daily on the basis
of a 365-day year and the actual number of days elapsed. In the
event the Seller does not make a required Post-Closing Adjustment payment, such
amount (including any accrued but unpaid interest) shall be
reduced from the Escrow
Amount.

 


(d)           The
Closing. The closing of the transactions contemplated by
this Agreement (the “Closing”) shall, subject
to the satisfaction or waiver of all conditions to the obligations
of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective
Parties will take at the Closing itself) occur at midnight on July
5, 2018, or such other date as the Buyer and the Seller may
mutually determine (the “Closing
Date”).

 


(e)           Deliveries
at the Closing. At the Closing, (i) the Seller will deliver
to the Buyer the various certificates, instruments, and documents
referred to in §6(a) below, (ii) the Buyer will deliver to the
Seller the various certificates, instruments, and documents
referred to in §6(b) below, (iii) the Seller will deliver to
the Buyer stock certificates representing all of his or its Target
Shares, endorsed in blank or accompanied by duly executed
assignment documents, and (iv) the Buyer will deliver to the Seller
the consideration specified in §2(b) above.

 



3.            

Representations and Warranties
Concerning the Transaction.





 


(a)           Representations
and Warranties of the Seller. The Seller represents and
warrants to the Buyer that the statements contained in this
§3(a) are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this
§3(a)) with respect to himself or itself, except as set forth
in Schedule I attached hereto.

 


(i)           Authorization
of Transaction. The Seller has full power and authority
(including, if the Seller is a corporation, full corporate power
and authority) to execute and deliver this Agreement and to perform
his or its obligations hereunder. This Agreement constitutes the
valid and legally binding obligation of the Seller, enforceable in
accordance with its terms and conditions. The Seller need not give
any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this
Agreement.

 


(ii)           Noncontravention.
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (A)
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which the Seller
is subject or, if the Seller is a corporation, any provision of its
charter or bylaws or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration 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 the Seller is a
party or by which he or it is bound or to which any of his or its
assets is subject.

 




 

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(iii)           Brokers'
Fees. The Seller has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which the Buyer
could become liable or obligated.

 


(iv)           Target
Shares. The Seller holds of record and owns beneficially 100
Target Shares of the Target, free and clear of any restrictions on
transfer (other than any restrictions under the Securities Act and
state securities laws), Taxes, Security Interests, options,
warrants, purchase rights, contracts, commitments, equities,
claims, and demands. The Seller is not a party to any option,
warrant, purchase right, or other contract or commitment that could
require the Seller to sell, transfer, or otherwise dispose of any
capital stock of the Target (other than this Agreement). The Seller
is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of
the Target. The Seller is an Accredited Investor.

 


(b)           Representations
and Warranties of the Buyer. Issuer Direct and ACCESSWIRE
Canada, jointly and severally, represent and warrant to the Seller
that the statements contained in this §3(b) are correct and
complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement
throughout this §3(b)), except as set forth in Schedule II
attached hereto.

 


(i)            
Organization of the
Buyer. Issuer Direct is a corporation duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of the State of Delaware. ACCESSWIRE Canada is a body
corporate duly incorporated, validly existing and in good standing
under the Business Corporations
Act (Alberta).

 


(ii)           
Authorization of
Transaction. Each of Issuer Direct and ACCESSWIRE Canada has
full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Issuer Direct and ACCESSWIRE,
respectively, enforceable in accordance with its terms and
conditions. Neither Issuer Direct nor ACCESSWIRE Canada need to
give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions
contemplated by this Agreement.

 


(iii)           Noncontravention.
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (A)
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which either
Issuer Direct or ACCESSWIRE Canada is subject or any provision of
its charter or bylaws or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration 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 either Issuer
Direct or ACCESSWIRE Canada is a party or by which it is bound or
to which any of its assets is subject.

 




 

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(iv)           Reporting
Company. Issuer Direct is a reporting issuer and the shares
of its common stock are (a) registered under Section 12 of the
Securities Exchange Act and (b) listed on the NYSE American under
the symbol ISDR. Issuer Direct is not in default, nor is Issuer
Direct aware of any facts or circumstances that individually or in
the aggregate could be reasonably expected to result in a default,
under any of the requirements or rules of the NYSE American that
are applicable to Issuer Direct and/or its common stock. Issuer
Direct has not received any notice from the NYSE American or any of
its affiliates that the listing of Issuer Direct’s common
stock on NYSE American is under review for non-compliance or at
risk of being suspended, cease-traded, delisted or demoted to a
lesser exchange. The shares of Issuer Direct’s common stock
that comprise the Stock Payment will, when issued, be subject to
the conditions of Rule 144 as promulgated under the Securities
Act.

 


(v)           
Brokers' Fees.
Neither Issuer Direct nor ACCESSWIRE Canada has any Liability or
obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this
Agreement for which any Seller could become liable or
obligated.

 


(vi)           Investment.
Neither Issuer Direct nor ACCESSWIRE Canada is acquiring the Target
Shares with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities
Act.

 


4.           Representations
and Warranties Concerning the Target and Its Subsidiaries.
The Seller represents and warrants to the Buyer that the statements
contained in this §4 are correct and complete as of the date
of this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date
were substituted for the date of this Agreement throughout this
§4), except as set forth in the disclosure schedule delivered
by the Seller to the Buyer on the date hereof and initialed by the
Parties (the “Disclosure Schedule”).
Nothing in the Disclosure Schedule shall be deemed adequate to
disclose an exception to a representation or warranty made herein,
however, unless the Disclosure Schedule identifies the exception
with reasonable particularity and describes the relevant facts in
reasonable detail. Without limiting the generality of the
foregoing, the mere listing (or inclusion of a copy) of a document
or other item shall not be deemed adequate to disclose an exception
to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the
document or other item itself). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this §4.

 


(a)           Organization,
Qualification, and Corporate Power. Each of the Target and
its Subsidiaries is a corporation duly organized, validly existing,
and in good standing under the laws of the Province of Alberta.
Each of the Target and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required. Each of the
Target and its Subsidiaries has full corporate power and authority
and all licenses, permits, and authorizations necessary to carry on
the businesses in which it is engaged and in which it presently
proposes to engage and to own and use the properties owned and used
by it. §4(a) of the Disclosure Schedule lists the directors
and officers of each of the Target and its Subsidiaries. The Seller
has delivered to the Buyer correct and complete copies of the
charter and bylaws of each of the Target and its Subsidiaries (as
amended to date). The minute books (containing the records of
meetings of the stockholders, the board of directors, and any
committees of the board of directors), the stock certificate books,
and the stock record books of each of the Target and its
Subsidiaries provided to the Buyer are correct and complete. None
of the Target and its Subsidiaries is in default under or in
violation of any provision of its charter or bylaws.

 




 

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(b)           Capitalization.
The entire authorized capital stock of the Target is set forth in
Schedule 4(b) attached hereto, of which 100 Target Shares are
issued and outstanding. There is no other authorized or outstanding
capital stock of the Target. All of the issued and outstanding
Target Shares have been duly authorized, are validly issued, fully
paid, and nonassessable, and are held of record by the Seller.
There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require the Target to
issue, sell, or otherwise cause to become outstanding any of its
capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar
rights with respect to the Target. There are no voting trusts,
proxies, or other agreements or understandings with respect to the
voting of the capital stock of the Target.

 


(c)           Noncontravention.
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (i)
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which any of the
Target and its Subsidiaries is subject or any provision of the
charter or bylaws of any of the Target and its Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default under,
result in the acceleration 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 the Target and its Subsidiaries is a
party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Security Interest upon
any of its assets). None of the Target and its Subsidiaries needs
to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement.

 


(d)           Brokers'
Fees. None of the Target and its Subsidiaries has any
Liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions
contemplated by this Agreement.

 


(e)           Title
to Assets. The Target and its Subsidiaries have good and
marketable title to, or a valid leasehold interest in, the
properties and assets used by them, located on their premises (if
any), or shown on the Most Recent Balance Sheet or acquired after
the date thereof, free and clear of all Security Interests, except
for properties and assets disposed of in the Ordinary Course of
Business since the date of the Most Recent Balance
Sheet.

 


(f)           Subsidiaries.
§4(f) of the Disclosure Schedule sets forth for each
Subsidiary (if any) of the Target (i) its name and jurisdiction of
incorporation, (ii) the number of shares of authorized capital
stock of each class of its capital stock, (iii) the number of
issued and outstanding shares of each class of its capital stock,
the names of the holders thereof, and the number of shares held by
each such holder, and (iv) the number of shares of its capital
stock held in treasury. All of the issued and outstanding shares of
capital stock of each Subsidiary of the Target have been duly
authorized and are validly issued, fully paid, and nonassessable.
One of the Target and its Subsidiaries holds of record and owns
beneficially all of the outstanding shares of each Subsidiary of
the Target, free and clear of any restrictions on transfer (other
than restrictions under the Securities Act and state securities
laws), Taxes, Security Interests, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands.
There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require any of the Target
and its Subsidiaries to sell, transfer, or otherwise dispose of any
capital stock of any of its Subsidiaries or that could require any
Subsidiary of the Target to issue, sell, or otherwise cause to
become outstanding any of its own capital stock. There are no
outstanding stock appreciation, phantom stock, profit
participation, or similar rights with respect to any Subsidiary of
the Target. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of any
capital stock of any Subsidiary of the Target. None of the Target
and its Subsidiaries controls directly or indirectly or has any
direct or indirect equity participation in any corporation,
partnership, trust, or other business association which is not a
Subsidiary of the Target.

 




 

10








 





 


(g)           Financial
Statements. Attached hereto as Exhibit B are the following
financial statements (collectively the “Financial Statements”):
(i) unaudited consolidated balance sheets and statements of income
as of and for the fiscal years ended December 31, 2016 and December
31, 2017 (the “Most
Recent Fiscal Year End”) for the Target and its
Subsidiaries; and (ii) unaudited consolidated and consolidating
balance sheets and statements of income (the “Most Recent Financial
Statements”) as of and for the month ended May 31,
2018 (the “Most
Recent Fiscal Month End”) for the Target and its
Subsidiaries. The Financial Statements have been prepared by the
Seller and the Target on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of the
Target and its Subsidiaries as of such dates and the results of
operations of the Target and its Subsidiaries for such periods
except that such Financial Statements do not reflect deferred
revenue or accounts receivable of the Target, are correct and
complete, and are consistent with the books and records of the
Target and its Subsidiaries (which books and records are correct
and complete).

 


(h)           Events
Subsequent to Most Recent Fiscal Year End. Since the Most
Recent Fiscal Year End, there has not been any material adverse
change in the business, financial condition (excepting thereout the
Pre-Closing Transaction), operations, results of operations, or
future prospects of any of the Target and its Subsidiaries. Without
limiting the generality of the foregoing, and excepting thereout
the Pre-Closing Transaction, since that date:

 


(i)           none
of the Target and its Subsidiaries has sold, leased, transferred,
or assigned any of its assets, tangible or intangible, other than
for a fair consideration in the Ordinary Course of
Business;

 


(ii)         
none of the Target and its Subsidiaries has entered into any
agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) either involving more
than $2,500 or outside the Ordinary Course of
Business;

 


(iii)        
no party (including any of the Target and its Subsidiaries) has
accelerated, terminated, modified, or cancelled any agreement,
contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) involving more than $2,500 to
which any of the Target and its Subsidiaries is a party or by which
any of them is bound;

 


(iv)        
none of the Target and its Subsidiaries has imposed any Security
Interest upon any of its assets, tangible or
intangible;

 


(v)         
none of the Target and its Subsidiaries has made any capital
expenditure (or series of related capital expenditures) either
involving more than $2,500 or outside the Ordinary Course of
Business;

 


(vi)        
none of the Target and its Subsidiaries has made any capital
investment in, any loan to, or any acquisition of the securities or
assets of, any other Person (or series of related capital
investments, loans, and acquisitions) either involving more than
$2,500 or outside the Ordinary Course of Business;

 




 

11








 





 


(vii)       
none of the Target and its Subsidiaries has issued any note, bond,
or other debt security or created, incurred, assumed, or guaranteed
any indebtedness for borrowed money or capitalized lease obligation
either involving more than $2,500 singly or $5,000 in the
aggregate;

 


(viii)      
none of the Target and its Subsidiaries has delayed or postponed
the payment of accounts payable and other Liabilities outside the
Ordinary Course of Business;

 


(ix)        
none of the Target and its Subsidiaries has cancelled, compromised,
waived, or released any right or claim (or series of related rights
and claims) either involving more than $2,500 or outside the
Ordinary Course of Business;

 


(x)         
none of the Target and its Subsidiaries has granted any license or
sublicense of any rights under or with respect to any Intellectual
Property;

 


(xi)        
there has been no change made or authorized in the charter or
bylaws of any of the Target and its Subsidiaries;

 


(xii)       
none of the Target and its Subsidiaries has issued, sold, or
otherwise disposed of any of its capital stock, or granted any
options, warrants, or other rights to purchase or obtain (including
upon conversion, exchange, or exercise) any of its capital
stock;

 


(xiii)      
none of the Target and its Subsidiaries has declared, set aside, or
paid any dividend or made any distribution with respect to its
capital stock (whether in cash or in kind) or redeemed, purchased,
or otherwise acquired any of its capital stock;

 


(xiv)      
none of the Target and its Subsidiaries has experienced any damage,
destruction, or loss (whether or not covered by insurance) to its
property;

 


(xv)       
none of the Target and its Subsidiaries has made any loan to, or
entered into any other transaction with, any of its directors,
officers, and employees outside the Ordinary Course of
Business;

 


(xvi)      
excepting thereout the Key Person Employment Agreement, none of the
Target and its Subsidiaries has entered into any employment
contract or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract or
agreement;

 


(xvii)     
excepting thereout the Key Person Employment Agreement, none of the
Target and its Subsidiaries has granted any increase in the
compensation of any of its directors, officers, employees,
consultants and independent contractors outside the Ordinary Course
of Business;

 


(xviii)    
excepting thereout the Key Person Employment Agreement, none of the
Target and its Subsidiaries has adopted, amended, modified, or
terminated any bonus, profit sharing, incentive, severance, or
other plan, contract, or commitment for the benefit of any of its
directors, officers, and employees (or taken any such action with
respect to any other Employee Benefit Plan);

 


(xix)      
excepting thereout the Key Person Employment Agreement, none of the
Target and its Subsidiaries has made any other change in employment
terms for any of its directors, officers, and employees outside the
Ordinary Course of Business;

 




 

12








 





 


(xx)       
none of the Target and its Subsidiaries has made or pledged to make
any charitable or other capital contribution outside the Ordinary
Course of Business;

 


(xxi)      
there has not been any other material occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course
of Business involving any of the Target and its Subsidiaries;
and

 


(xxii)     
none of the Target and its Subsidiaries has committed to any of the
foregoing.

 


(i)           Undisclosed
Liabilities. None of the Target and its Subsidiaries has any
Liability (and there is no Basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim,
or demand against any of them giving rise to any Liability), except
for (i) Liabilities set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) and (ii)
Liabilities which have arisen after the Most Recent Fiscal Month
End in the Ordinary Course of Business (none of which results from,
arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort, infringement, or
violation of law).

 


(j)           Legal
Compliance. Each of the Target, its Subsidiaries, and their
respective predecessors and Affiliates has complied with all
applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, provincial, state, local, and foreign
governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them
alleging any failure so to comply.

 


(k)           Tax
Matters.

 


(i)           Each
of the Target and its Subsidiaries has filed all Tax Returns that
it was required to file. All such Tax Returns were correct and
complete in all respects. All Taxes owed by any of the Target and
its Subsidiaries (whether or not shown on any Tax Return) have been
paid. None of the Target and its Subsidiaries currently is the
beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a
jurisdiction where any of the Target and its Subsidiaries does not
file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the assets
of any of the Target and its Subsidiaries that arose in connection
with any failure (or alleged failure) to pay any Tax.

 


(ii)         
Each of the Target and its Subsidiaries has withheld and paid all
Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.

 




 

13








 





 


(iii)        
Neither the Seller nor any director or officer (or employee
responsible for Tax matters) of any of the Target and its
Subsidiaries expects any authority to assess any additional Taxes
for any period for which Tax Returns have been filed. There is no
dispute or claim concerning any Tax Liability of any of the Target
and its Subsidiaries either (A) claimed or raised by any authority
in writing or (B) as to which the Seller and any of the directors
and officers (and employees responsible for Tax matters) of the
Target and its Subsidiaries has Knowledge based upon personal
contact with any agent of such authority. §4(k) of the
Disclosure Schedule lists all federal, provincial, state, local,
and foreign income Tax Returns filed with respect to any of the
Target and its Subsidiaries for taxable periods ended on or after
December 31, 2012 indicates those Tax Returns that have been
audited, and indicates those Tax Returns that currently are the
subject of audit. The Seller has delivered to the Buyer correct and
complete copies of all federal and provincial income Tax Returns,
examination reports, and statements of deficiencies assessed
against or agreed to by any of the Target and its Subsidiaries
since December 31, 2012.

 


(iv)        
None of the Target and its Subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.

 


(v)         
§4(k) of the Disclosure Schedule sets forth the following
information with respect to each of the Target and its Subsidiaries
(or, in the case of clause (B) below, with respect to each of the
Subsidiaries) as of the most recent practicable date (as well as on
an estimated pro forma basis as of the Closing giving effect to the
consummation of the transactions contemplated hereby): (A) the
basis of the Target or Subsidiary in its assets; (B) the basis of
the stockholder(s) of the Subsidiary in its stock; (C) the amount
of any net operating loss, net capital loss, unused investment or
other credit, unused foreign tax, or excess charitable contribution
allocable to the Target or Subsidiary; and (D) the amount of any
deferred gain or loss allocable to the Target or Subsidiary arising
out of any intercompany transaction.

 


(vi)        
The unpaid Taxes of the Target and its Subsidiaries (A) did not, as
of the Most Recent Fiscal Month End, exceed the reserve for Tax
Liability (rather than any reserve for deferred Taxes established
to reflect timing differences between book and Tax income) set
forth on the face of the Most Recent Balance Sheet (rather than in
any notes thereto) and (B) do not exceed that reserve as adjusted
for the passage of time through the Closing Date in accordance with
the past custom and practice of the Target and its Subsidiaries in
filing their Tax Returns.

 


(vii)       
None of the Target and its Subsidiaries will be required to include
any item of income in, or exclude any item of deduction from,
taxable income for any taxable period (or portion thereof) ending
after the Closing Date as a result of any: (A) change in method of
accounting for a taxable period ending on or prior to the Closing
Date under any corresponding or similar provision of federal,
provisional, state, local or foreign income Tax law); (B)
installment sale or open transaction disposition made on or prior
to the Closing Date; or (C) prepaid amount received on or prior to
the Closing Date.

 


(l)           Real
Property.

 


(i)           §4(l)(i)
of the Disclosure Schedule sets forth the address and description
of each parcel of Owned Real Property (if any).

 




 

14








 





 


(ii)         
§4(l)(ii) of the Disclosure Schedule sets forth the address of
each parcel of Leased Real Property (if any), and a true and
complete list of all Leases for each such Leased Real Property
(including the date and name of the parties to such Lease
document). Each of the Target and its Subsidiaries has delivered to
the Buyer a true and complete copy of each such Lease document, and
in the case of any oral Lease, a written summary of the material
terms of such Lease. Except as set forth in §4(l)(ii) of the
Disclosure Schedule, with respect to each of the
Leases:

 


(A)               
such Lease is legal, valid, binding, enforceable and in full force
and effect;

 


(B)               
the transaction contemplated by this Agreement does not require the
consent of any other party to such Lease (except for those Leases
for which Lease Consents (as hereinafter defined) are obtained),
will not result in a breach of or default under such Lease, and
will not otherwise cause such Lease to cease to be legal, valid,
binding, enforceable and in full force and effect on identical
terms following the Closing;

 


(C)               
None of the Target's or its Subsidiaries' possession and quiet
enjoyment of the Leased Real Property under such Lease has been
disturbed and there are no disputes with respect to such
Lease;

 


(D)               
none of the Target, its Subsidiaries or any other party to the
Lease is in breach or default under such Lease, and no event has
occurred or circumstance exists which, with the delivery of notice,
the passage of time or both, would constitute such a breach or
default, or permit the termination, modification or acceleration of
rent under such Lease;

 


(E)               
no security deposit or portion thereof deposited with respect to
such Lease has been applied in respect of a breach or default under
such Lease which has not been redeposited in full;

 


(F)               
none of the Target or its Subsidiaries owes, or will owe in the
future, any brokerage commissions or finder's fees with respect to
such Lease;

 


(G)              
the other party to such Lease is not an affiliate of, and otherwise
does not have any economic interest in, any of the Target or its
Subsidiaries;

 


(H)              
none of the Target or its Subsidiaries has subleased, licensed or
otherwise granted any Person the right to use or occupy such Leased
Real Property or any portion thereof;

 


(I)                 none
of the Target or its Subsidiaries has collaterally assigned or
granted any other security interest in such Lease or any interest
therein; and

 


(J)                 there
are no liens or encumbrances on the estate or interest created by
such Lease.

 


(iii)        
The Owned Real Property identified in §4(l)(i) of the
Disclosure Schedule and the Leased Real Property identified in
§4(l)(ii) (collectively, the “Real Property”), comprise
all of the real property used or intended to be used in, or
otherwise related to, the Target's and its Subsidiaries' business;
and none of the Target or its Subsidiaries is a party to any
agreement or option to purchase any real property or interest
therein.

 




 

15








 





 


(iv)        
Each parcel of Real Property is a separate lot for real estate tax
and assessment purposes, and no other real property is included in
such tax parcel. There are no taxes, assessments, fees, charges or
similar costs or expenses imposed by any governmental authority,
association or other entity having jurisdiction over the Real
Property (collectively, the “Real Estate Impositions”)
with respect to any Real Property or portion thereof which are
delinquent. The Title Commitments set forth all Real Estate
Impositions which are due and payable with respect to such parcel.
There is no pending or threatened increase or special assessment or
reassessment of any Real Estate Impositions for such
parcel.

 


(m)           Intellectual
Property.

 


(i)           The
Target and its Subsidiaries own and possess or have the right to
use pursuant to a valid and enforceable, written license,
sublicense, agreement, or permission all Intellectual Property
necessary or desirable for the operation of the businesses of the
Target and its Subsidiaries as presently conducted. Each item of
Intellectual Property owned or used by any of the Target and its
Subsidiaries immediately prior to the Closing hereunder will be
owned or available for use by the Target or its Subsidiaries on
identical terms and conditions immediately subsequent to the
Closing hereunder. Each of the Target and its Subsidiaries has
taken all necessary and desirable action to maintain and protect
each item of Intellectual Property that it owns or
uses.

 


(ii)         
None of the Target and its Subsidiaries has interfered with,
infringed upon, misappropriated, or otherwise come into conflict
with any Intellectual Property rights of third parties, and neither
the Seller nor any of the directors and officers (and employees
with responsibility for Intellectual Property matters) of the
Target and its Subsidiaries has ever received any charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim
that any of the Target and its Subsidiaries must license or refrain
from using any Intellectual Property rights of any third party). To
the Knowledge of the Seller and any the directors and officers (and
employees with responsibility for Intellectual Property matters) of
the Target and its Subsidiaries, no third party has interfered
with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of any of the Target
and its Subsidiaries.

 


(iii)         
§4(m)(iii) of the Disclosure Schedule identifies each patent
or registration which has been issued to any of the Target and its
Subsidiaries with respect to any of its Intellectual Property,
identifies each pending patent application or application for
registration which any of the Target and its Subsidiaries has made
with respect to any of its Intellectual Property, and identifies
each license, sublicense, agreement, or other permission which any
of the Target and its Subsidiaries has granted to any third party
with respect to any of its Intellectual Property (together with any
exceptions). The Seller has delivered to the Buyer correct and
complete copies of all such patents, registrations, applications,
licenses, sublicenses, agreements, and permissions (as amended to
date) and have made available to the Buyer correct and complete
copies of all other written documentation evidencing ownership and
prosecution (if applicable) of each such item. §4(m)(iii) of
the Disclosure Schedule also identifies each material unregistered
trademark, service mark, trade name, corporate name or Internet
domain name, computer software item (other than commercially
available off-the-shelf software purchased or licensed for less
than a total cost of $1,000 in the aggregate) and each material
unregistered copyright used by any of the Target and its
Subsidiaries in connection with any of its businesses. With respect
to each item of Intellectual Property required to be identified in
§4(m)(iii) of the Disclosure Schedule:

 




 

16








 





 


(A)                 the
Target and its Subsidiaries own and possess all right, title, and
interest in and to the item, free and clear of any Security
Interest, license, or other restriction or limitation regarding use
or disclosure;

 


(B)                 the
item is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;

 


(C)                 no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the Knowledge of the
Seller and any of the directors and officers (and employees with
responsibility for Intellectual Property matters) of the Target and
its Subsidiaries, is threatened which challenges the legality,
validity, enforceability, use, or ownership of the item, and there
are no grounds for the same;

 


(D)                 none
of the Target and its Subsidiaries has ever agreed to indemnify any
Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item;
and

 


(E)                 no
loss or expiration of the item is threatened, pending, or
reasonably foreseeable, except for patents expiring at the end of
their statutory terms (and not as a result of any act or omission
by the Seller, Target, or its Subsidiaries, including without
limitation, a failure by the Seller, Target, or its Subsidiaries to
pay any required maintenance fees).

 


(iv)           §4(m)(iv)
of the Disclosure Schedule identifies each item of Intellectual
Property that any third party owns and that any of the Target and
its Subsidiaries uses pursuant to license, sublicense, agreement,
or permission, including, but not limited to, all rights to
newswire distribution channels, partners, feeds, methods and
points. The Seller has delivered to the Buyer correct and complete
copies of all such licenses, sublicenses, agreements, and
permissions (as amended to date). With respect to each item of
Intellectual Property required to be identified in §4(m)(iv)
of the Disclosure Schedule:

 


(A)                 the
license, sublicense, agreement, or permission covering the item is
legal, valid, binding, enforceable, and in full force and
effect;

 


(B)                 the
license, sublicense, agreement, or permission will continue to be
legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby (including the assignments and assumptions
referred to in §2 above);

 


(C)                 no
party to the license, sublicense, agreement, or permission is in
breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default or permit
termination, modification, or acceleration thereunder;

 


(D)                 no
party to the license, sublicense, agreement, or permission has
repudiated any provision thereof or indicated either orally or in
writing its intent to terminate any provision thereof;

 




 

17








 





 


(E)                 with
respect to each sublicense, the representations and warranties set
forth in subsections (A) through (D) above are true and correct
with respect to the underlying license;

 


(F)                 the
underlying item of Intellectual Property is not subject to any
outstanding injunction, judgment, order, decree, ruling, or
charge;

 


(G)                 no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the Knowledge of the
Seller and any of the directors and officers (and employees with
responsibility for Intellectual Property matters) of the Target and
its Subsidiaries, is threatened which challenges the legality,
validity, or enforceability of the underlying item of Intellectual
Property, and there are no grounds for the same; and

 


(H)                 none
of the Target and its Subsidiaries has granted any sublicense or
similar right with respect to the license, sublicense, agreement,
or permission.

 


(v)           To
the Knowledge of the Seller and any of the directors and officers
(and employees with responsibility for Intellectual Property
matters) of the Target and its Subsidiaries: (A) none of the Target
and its Subsidiaries has in the past nor will interfere with,
infringe upon, misappropriate, or otherwise come into conflict
with, any Intellectual Property rights of third parties as a result
of the continued operation of its businesses as presently
conducted; (B) there are no facts that indicate a likelihood of any
of the foregoing; and (C) no notices regarding any of the foregoing
(including, without limitation, any demands or offers to license
any Intellectual Property from any third party) have been
received.

 


(vi)         
None of the Seller nor any of the directors and officers (and
employees with responsibility for Intellectual Property matters) of
the Target and its Subsidiaries has any Knowledge of any new
products, inventions, procedures, or methods of manufacturing or
processing that any competitors or other third parties have
developed which reasonably could be expected to supersede or make
obsolete any product or process of any of the Target and its
Subsidiaries or to limit the business of the Target and its
Subsidiaries as presently conducted.

 


(vii)        
The Seller has taken all necessary and desirable action to maintain
and protect all of the Intellectual Property of Target and its
Subsidiaries and will continue to maintain and protect all of the
Intellectual Property of Target and its Subsidiaries so as not to
materially adversely affect the validity or enforceability
thereof.

 


(viii)       
The Seller, Target and its Subsidiaries have complied in all
material respects with and are presently in compliance in all
material respects with all foreign, federal, provincial, state,
local, governmental (including, but not limited to, the Federal
Trade Commission and State Attorneys General), administrative or
regulatory laws, regulations, guidelines and rules applicable to
any Intellectual Property and the Seller shall take all steps
necessary to ensure such compliance until Closing.

 


(n)           Tangible
Assets. The Target and its Subsidiaries own or lease all
equipment and other tangible assets necessary for the conduct of
their businesses as presently conducted. Each such tangible asset
is free from defects (patent and latent), has been maintained in
accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which it presently is used and
presently is proposed to be used.

 




 

18








 





 


(o)           Inventory.
The inventory of the Target and its Subsidiaries consists of office
supplies, furniture, equipment and related materials, all of which
is merchantable and fit for the purpose for which it was procured,
and none of which is damaged, or defective, subject only to the
reserve for inventory writedown set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto) as adjusted
for the passage of time through the Closing Date in accordance with
the past custom and practice of the Target and its
Subsidiaries.

 


(p)           Contracts.
§4(p) of the Disclosure Schedule lists the following oral or
written contracts, understandings and other agreements to which any
of the Target and its Subsidiaries is a party:

 


(i)           any
agreement (or group of related agreements) for the lease of
personal property to or from any Person providing for lease
payments in excess of $2,500 per annum;

 


(ii)         
any agreement relating to newswire distribution channels, partners,
feeds, methods and points;

 


(iii)        
any agreement (or group of related agreements) for the purchase or
sale of materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services,
the performance of which will extend over a period of more than one
year, result in a material loss to any of the Target and its
Subsidiaries, or involve consideration in excess of
$2,500;

 


(iv)        
any agreement concerning a partnership or joint
venture;

 


(v)         
any agreement (or group of related agreements) under which it has
created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of
$2,500 or under which it has imposed a Security Interest on any of
its assets, tangible or intangible;

 


(vi)        
any agreement concerning confidentiality or
noncompetition;

 


(vii)       
any agreement with any of the Seller and his Affiliates (other than
the Target and its Subsidiaries);

 


(viii)      
any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material
plan or arrangement for the benefit of its current or former
directors, officers, and employees;

 


(ix)        
any collective bargaining agreement;

 


(x)         
excepting thereout the Key Person Employment Agreement, any
agreement for the provisions of service of any individual on a
full-time or part-time employment basis, consulting basis, or other
basis providing annual compensation in excess of $2,500 or
providing severance benefits;

 


(xi)        
any agreement under which it has advanced or loaned any amount to
any of its directors, officers, employees, consultants, or
independent contractors;

 




 

19








 





 


(xii)       
any agreement under which the consequences of a default or
termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of any of the Target and its Subsidiaries;
or

 


(xiii)      
any other agreement (or group of related agreements) the
performance of which involves consideration in excess of
$2,500.

 


The
Seller has delivered to the Buyer a correct and complete copy of
each written agreement (as amended to date) listed in §4(p) of
the Disclosure Schedule and a written summary setting forth the
terms and conditions of each oral agreement or understanding
referred to in §4(p) of the Disclosure Schedule. With respect
to each such agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) the agreement will
continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of
the transactions contemplated hereby; (C) no party is in breach or
default, and no event has occurred which with notice or lapse of
time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (D) no
party has repudiated any provision of the agreement.

 


(q)           Notes
and Accounts Receivable. All notes and accounts receivable
of the Target and its Subsidiaries are reflected properly on their
books and records, are valid receivables subject to no setoffs or
counterclaims, are current and collectible, and will be collected
in accordance with their terms at their recorded amounts, subject
only to the reserve for bad debts set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto) as adjusted
for the passage of time through the Closing Date in accordance with
the past custom and practice of the Target and its
Subsidiaries.

 


(r)           Powers
of Attorney. There are no outstanding powers of attorney
executed on behalf of any of the Target and its
Subsidiaries.

 


(s)           Insurance.
§4(s) of the Disclosure Schedule sets forth the following
information with respect to each insurance policy (including
policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which
any of the Target and its Subsidiaries are currently a party, a
named insured, or otherwise the beneficiary of
coverage:

 


(i)           the
name, address, and telephone number of the agent;

 


(ii)         
the name of the insurer, the name of the policyholder, and the name
of each covered insured;

 


(iii)        
the policy number and the period of coverage;

 


(iv)        
the scope (including an indication of whether the coverage was on a
claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and
operate) of coverage; and

 


(v)         
a description of any retroactive premium adjustments or other
loss-sharing arrangements.

 




 

20








 





 


With
respect to each such insurance policy: (A) the policy is legal,
valid, binding, enforceable, and in full force and effect; (B) the
policy will continue to be legal, valid, binding, enforceable, and
in full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (C) neither
any of the Target and its Subsidiaries nor any other party to the
policy is in breach or default (including with respect to the
payment of premiums or the giving of notices), and no event has
occurred which, with notice or the lapse of time, would constitute
such a breach or default, or permit termination, modification, or
acceleration, under the policy; and (D) no party to the policy has
repudiated any provision thereof. Each of the Target and its
Subsidiaries has been covered during the past five years by
insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned
period. §4(s) of the Disclosure Schedule describes any
self-insurance arrangements affecting any of the Target and its
Subsidiaries.

 


(t)           Litigation.
§4(t) of the Disclosure Schedule sets forth each instance in
which any of the Target and its Subsidiaries (i) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge
or (ii) is a party or , to the Knowledge of any of the Seller and
any the directors and officers (and employees with responsibility
for litigation matters) of the Target and its Subsidiaries, is
threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, provincial,
state, local, or foreign jurisdiction or before any arbitrator.
None of the actions, suits, proceedings, hearings, and
investigations set forth in §4(t) of the Disclosure Schedule
could result in any material adverse change in the business,
financial condition, operations, results of operations, or future
prospects of any of the Target and its Subsidiaries. None of the
Seller nor any of the directors and officers (and employees with
responsibility for litigation matters) of the Target and its
Subsidiaries has any reason to believe that any such action, suit,
proceeding, hearing, or investigation may be brought or threatened
against any of the Target and its Subsidiaries.

 


(u)           Service
Warranty. All services provided or delivered by the Target
and its Subsidiaries have been in conformity with all applicable
contractual commitments and all express and implied warranties, and
neither the Target nor its Subsidiaries have any Liability (and
there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any Liability) for
damages in connection therewith. No service sold, provided, or
delivered by the Target and its Subsidiaries are subject to any
indemnity by the Target or a Subsidiary to a client or customer.
The Seller has made available to the Buyer all of the agreements it
has with customers for which the Target or a Subsidiary has
provided services.

 


(v)           Service
Liability. Neither the Target nor its Subsidiaries have any
Liability (and there is no Basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim,
or demand against any of them giving rise to any Liability) arising
out of any injury to individuals or property as a result of the
ownership, possession, or use of any services sold, provided, or
delivered by the Target or its Subsidiaries.

 


 (w)           Employees,
Consultants and Independent Contractors. To the Knowledge of
any of the Seller and any of the directors and officers (and
employees with responsibility for employment matters) of the Target
and its Subsidiaries, no executive, key employee, consultant or
independent contractor, or group of employees, consultants or
independent contractors has any plans to terminate employment with
any of the Target and its Subsidiaries. None of the Target and its
Subsidiaries is a party to or bound by any collective bargaining
agreement, nor has any of them experienced any strikes, grievances,
claims of unfair labor practices, or other collective bargaining
disputes. None of the Target and its Subsidiaries has committed any
unfair labor practice. None of the Seller nor any of the directors
and officers (and employees with responsibility for employment
matters) of the Target and its Subsidiaries has any Knowledge of
any organizational effort presently being made or threatened by or
on behalf of any labor union with respect to employees of any of
the Target and its Subsidiaries.


 




 

21








 





 


(x)           Employee
Benefits.

 


(i)           §4(x)
of the Disclosure Schedule lists each Employee Benefit Plan that
any of the Target and its Subsidiaries maintains, to which any of
the Target and its Subsidiaries contributes or has any obligation
to contribute, or with respect to which any of the Target and its
Subsidiaries has any material Liability or potential
Liability.

 


(A)                 Each
such Employee Benefit Plan (and each related trust, insurance
contract, or fund) has been maintained, funded and administered in
accordance with the terms of such Employee Benefit Plan and the
terms of any applicable collective bargaining agreement and
complies in form and in operation in all material respects with the
applicable requirements of applicable laws.

 


(B)                 All
required reports and descriptions have been timely filed and/or
distributed in accordance with the applicable requirements of
provincial law and regulations with respect to each such Employee
Benefit Plan.

 


(C)                 The
Seller has delivered to the Buyer correct and complete copies of
the plan documents and summary plan descriptions, the most recent
annual report, and all related trust agreements, insurance
contracts, and other funding arrangements which implement each such
Employee Benefit Plan.

 


(ii)           None
of the Target or its Subsidiaries contributes to, has any
obligation to contribute to, or has any Liability under or with
respect to any Multiemployer Plan.

 


(iii)         
None of the Target and its Subsidiaries maintains, contributes to
or has an obligation to contribute to, or has any material
Liability or potential Liability with respect to, any Employee
Benefit Plan providing medical, health, or life insurance or other
welfare-type benefits for current or future retired or terminated
directors, officers or employees of the Target or any of its
Subsidiaries (or any spouse of other dependent
thereof).

 


(y)           Guaranties.
None of the Target and its Subsidiaries is a guarantor or otherwise
is liable for any Liability or obligation (including indebtedness)
of any other Person.

 


(z)           Environmental,
Health, and Safety Matters.

 


(i)           Each
of the Target, its Subsidiaries, and their respective predecessors
and Affiliates has complied and is in compliance with all
Environmental, Health, and Safety Requirements.

 


(ii)         
Without limiting the generality of the foregoing, each of the
Target, its Subsidiaries and their respective Affiliates has
obtained and complied with, and is in compliance with, all permits,
licenses and other authorizations that are required pursuant to
Environmental, Health, and Safety Requirements for the occupation
of its facilities and the operation of its business; a list of all
such permits, licenses and other authorizations is set forth on the
attached “Environmental and Safety Permits
Schedule.”

 




 

22








 





 


(iii)        
Neither the Target, its Subsidiaries, nor their respective
predecessors or Affiliates has received any written or oral notice,
report or other information regarding any actual or alleged
violation of Environmental, Health, and Safety Requirements, or any
liabilities or potential liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating to any
of them or its facilities arising under Environmental, Health, and
Safety Requirements.

 


(iv)        
None of the following exists at any property or facility owned or
operated by the Target or its Subsidiaries: (1) underground storage
tanks, (2) asbestos-containing material in any form or condition,
(3) materials or equipment containing polychlorinated biphenyls, or
(4) landfills, surface impoundments, or disposal
areas.

 


(v)         
None of the Target, its Subsidiaries, or their respective
predecessors or Affiliates has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled, or
released any substance, including without limitation any hazardous
substance, or owned or operated any property or facility (and no
such property or facility is contaminated by any such substance) in
a manner that has given or would give rise to liabilities,
including any liability for response costs, corrective action
costs, personal injury, property damage, natural resources damages
or attorney fees, pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
(“CERCLA”), the Solid Waste Disposal Act, as amended
(“SWDA”) or any other Environmental, Health, and Safety
Requirements.

 


(vi)        
Neither this Agreement nor the consummation of the transaction that
is the subject of this Agreement will result in any obligations for
site investigation or cleanup, or notification to or consent of
government agencies or third parties, pursuant to any of the
so-called “transaction-triggered” or “responsible
property transfer” Environmental, Health, and Safety
Requirements.

 


(vii)       
Neither the Target, its Subsidiaries, nor any of their respective
predecessors or Affiliates has, either expressly or by operation of
law, assumed or undertaken any liability, including without
limitation any obligation for corrective or remedial action, of any
other Person relating to Environmental, Health, and Safety
Requirements.

 


(viii)      
No facts, events or conditions relating to the past or present
facilities, properties or operations of the Target, its
Subsidiaries, or any of their respective predecessors or Affiliates
will prevent, hinder or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to any
investigatory, remedial or corrective obligations pursuant to
Environmental, Health, and Safety Requirements, or give rise to any
other liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise) pursuant to Environmental, Health, and
Safety Requirements, including without limitation any relating to
onsite or offsite releases or threatened releases of hazardous
materials, substances or wastes, personal injury, property damage
or natural resources damage.

 


(aa)           Certain
Business Relationships with the Target and Its Subsidiaries.
None of the Seller nor his Affiliates have been involved in any
business arrangement or relationship with any of the Target and its
Subsidiaries within the past 12 months, and none of the Seller nor
his Affiliates own any asset, tangible or intangible, which is used
in the business of any of the Target and its
Subsidiaries.

 




 

23








 





 


(bb)           Disclosure.
The representations and warranties contained in this §4 do not
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements and
information contained in this §4 not misleading.

 


5.           Post-Closing
Covenants. The Parties agree as follows with respect to the
period following the Closing.

 


(a)           General.
In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents)
as any other Party reasonably may request, all at the sole cost and
expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefore under §7 below). The
Seller acknowledges and agrees that from and after the Closing the
Buyer will be entitled to possession of all documents, books,
records (including Tax records), agreements, and financial data of
any sort relating to the Target and its Subsidiaries.

 


(b)           Litigation
Support. In the event and for so long as any Party actively
is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction on or prior to the Closing
Date involving any of the Target and its Subsidiaries, each of the
other Parties will cooperate with him or it and his or its counsel
in the contest or defense, make available their personnel, and
provide such testimony and access to their books and records as
shall be necessary in connection with the contest or defense, all
at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to
indemnification therefore under §7 below).

 


(c)           Transition.
The Seller will not take any action that is designed or intended to
have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of any of the Target and its
Subsidiaries from maintaining the same business relationships with
the Target and its Subsidiaries after the Closing as it maintained
with the Target and its Subsidiaries prior to the Closing. The
Seller will refer all customer inquiries relating to the businesses
of the Target and its Subsidiaries to the Buyer from and after the
Closing.

 


(d)           Confidentiality.
The Seller will treat and hold as such all of the Confidential
Information, refrain from using any of the Confidential Information
except in connection with this Agreement, and deliver promptly to
the Buyer or destroy, at the request and option of the Buyer, all
tangible embodiments (and all copies) of the Confidential
Information which are in his or its possession. In the event the
Seller is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information, that Seller will notify the
Buyer promptly of the request or requirement so that the Buyer may
seek an appropriate protective order or waive compliance with the
provisions of this §6(d). If, in the absence of a protective
order or the receipt of a waiver hereunder, the Seller is, on the
advice of counsel, compelled to disclose any Confidential
Information to any tribunal or else stand liable for contempt, that
Seller may disclose the Confidential Information to the tribunal;
provided, however, that the
Seller shall use his reasonable best efforts to obtain, at the
reasonable request of the Buyer, an order or other assurance that
confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as the Buyer
shall designate. The foregoing provisions shall not apply to any
Confidential Information which is generally available to the public
immediately prior to the time of disclosure.

 




 

24








 





 


(e)           Covenant
Not to Compete. For a period of two years from and after the
Closing Date, the Seller will not, other than as an employee of the
Target, the Buyer, or their Subsidiaries, engage directly or
indirectly in any business that any of the Target and its
Subsidiaries conducts as of the Closing Date in any geographic area
in which any of the Target and its Subsidiaries conducts that
business as of the Closing Date; provided, however, that the Seller
ownership of less than 1% of the outstanding stock of any
publicly-traded corporation shall not be deemed a violation of this
provision of this §6(e). If the final judgment of a court of
competent jurisdiction declares that any term or provision of this
§6(e) is invalid or unenforceable, the Parties agree that the
court making the determination of invalidity or unenforceability
shall have the power to reduce the scope, duration, or area of the
term or provision, to delete specific words or phrases, or to
replace any invalid or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified
after the expiration of the time within which the judgment may be
appealed.

 



6.            

Conditions to Obligation to
Close.





 


(a)           Conditions
to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following
conditions:

 


(i)           the
representations and warranties set forth in §3(a) and §4
above shall be true and correct in all material respects at and as
of the Closing Date;

 


(ii)         
the Seller has performed and complied with all of their covenants
hereunder in all material respects as of the Closing
Date;

 


(iii)        
the Target and its Subsidiaries shall have procured written
confirmation from the Toronto Stock Exchange that the change of
ownership of the Target contemplated by this Agreement will not
have a material adverse effect on the arrangements currently in
place between the Toronto Stock Exchange and the
Target;

 


(iv)        
the Target and the Seller having signed an employment agreement
pertaining to the employment of the Seller by ACCESSWIRE Canada for
a period of two years from Closing on terms mutually acceptable to
the Seller and the Buyer (“Key Person Employment
Agreement”);

 


(iv)        
no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, provincial, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent consummation of
any of the transactions contemplated by this Agreement, (B) cause
any of the transactions contemplated by this Agreement to be
rescinded following consummation, (C) affect adversely the right of
the Buyer to own the Target Shares and to control the Target and
its Subsidiaries, or (D) affect adversely the right of any of the
Target and its Subsidiaries to own its assets and to operate its
businesses (and no such injunction, judgment, order, decree,
ruling, or charge shall be in effect);

 




 

25








 





 


(v)         
the Seller shall have delivered to the Buyer a certificate to the
effect that each of the conditions specified above in
§6(a)(i)-(iv) is satisfied in all respects;

 


 (viii)     
the Buyer shall have received the resignations, effective as of the
Closing, of each director and officer of the Target and its
Subsidiaries other than those whom the Buyer shall have specified
in writing at least five business days prior to the
Closing;

 


(ix)        
the Buyer shall have obtained on terms and conditions reasonably
satisfactory to it all of the financing it needs in order to
consummate the transactions contemplated hereby and fund the
working capital requirements of the Target and its Subsidiaries
after the Closing; and

 


(x)         
all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer.

 


(xi)        
with respect to any Owned Real Property and Material Leased
Property located outside the United States, each of the Target and
its Subsidiaries, at Seller's cost and expense, shall provide the
Buyer with an equivalent form of title assurance in accordance with
local custom satisfactory to the Buyer for each parcel of such
Owned Real Property and Material Leased Property;

 


(xii)       
the Target and its Subsidiaries shall have obtained and delivered
to the Buyer a written consent for the assignment of each of the
Leases (if any), and, if requested by the Buyer's lender, a waiver
of landlord liens, collateral assignment of lease or leasehold
mortgage from the landlord or other party whose consent thereto is
required under such Lease in form and substance satisfactory to the
Buyer and the Buyer's lender;

 


(xiii)      
the Target and its Subsidiaries shall have obtained and delivered
to the Buyer an estoppel certificate with respect to each of the
Leases (if any), dated no more than 30 days prior to the Closing
Date, from the other party to such Lease, in form and substance
satisfactory to Buyer (the “Estoppel
Certificates”);

 


(xiv)      
the Target and its Subsidiaries shall have obtained and delivered
to the Buyer a non-disturbance agreement with respect to each of
the Leases for the Material Leased Property (if any), in form and
substance satisfactory to the Buyer, from each lender encumbering
any real property underlying the Leased Real Property for such
Lease (the “Non-Disturbance
Agreements”); and

 


 (xv)      
no damage or destruction or other change has occurred with respect
to any of the Real Property or any portion thereof that,
individually or in the aggregate, would have a material adverse
effect on the use or occupancy of the Real Property or the
operation of the Target's or its Subsidiary's business as currently
conducted thereon.

 


The
Buyer may waive any condition specified in this §6(a) if it
executes a writing so stating at or prior to the
Closing.


 




 

26








 





 


(b)           Conditions
to Obligation of the Seller. The obligation of the Seller to
consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following
conditions:

 


(i)           the
representations and warranties set forth in §3(b) above shall
be true and correct in all material respects at and as of the
Closing Date;

 


(ii)         
the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the
Closing;

 


(iii)        
the Target and its Subsidiaries shall have procured written
confirmation from the Toronto Stock Exchange that the change of
ownership of the Target contemplated by this Agreement will not
have a material adverse effect on the arrangements currently in
place between the Toronto Stock Exchange and the
Target;

 


(iv)        
ACCESSWIRE and the Seller having signed the Key Person Employment
Agreement;

 


(iii)        
no action, suit, or proceeding shall be pending before any court or
quasi-judicial or administrative agency of any federal, provincial,
state, local, or foreign jurisdiction wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by
this Agreement or (B) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation (and no such
injunction, judgment, order, decree, ruling, or charge shall be in
effect);

 


(iv)        
the Buyer shall have delivered to the Seller a certificate to the
effect that each of the conditions specified above in
§6(b)(i)-(iii) is satisfied in all respects; and

 


(v)         
all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.

 


The
Seller may waive any condition specified in this §6(b) if they
execute a writing so stating at or prior to the
Closing.

 



7.            

Remedies for Breaches of This
Agreement.





 


(a)           Survival
of Representations and Warranties. All of the
representations and warranties of the Parties contained in this
Agreement shall survive the Closing hereunder (even if the damaged
Party knew or had reason to know of any misrepresentation or breach
of warranty or covenant at the time of Closing) and continue in
full force and effect forever thereafter (subject to any applicable
statutes of limitations).

 




 

27








 





 


(b)           Indemnification
Provisions for Benefit of the Buyer.

 


(i)           In
the event any of the Seller or Target or its Subsidiaries breaches
(or in the event any third party alleges facts that, if true, would
mean the Seller has breached) any of their representations,
warranties, and covenants contained herein, and, if there is an
applicable survival period pursuant to §7(a) above, provided
that the Buyer makes a written claim for indemnification against
the Seller or Target pursuant to §7(d) below within such
survival period, then the Seller agrees to indemnify the Buyer from
and against the entirety of any Adverse Consequences the Buyer may
suffer through and after the date of the claim for indemnification
(including any Adverse Consequences the Buyer may suffer after the
end of any applicable survival period) resulting from, arising out
of, relating to, in the nature of, or caused by the breach (or the
alleged breach).

 


(ii)         
The Seller agrees to indemnify the Buyer from and against the
entirety of any Adverse Consequences the Buyer may suffer resulting
from, arising out of, relating to, in the nature of, or caused by
any Liability of any of the Target and its Subsidiaries (x) for any
Taxes of the Target and its Subsidiaries with respect to any Tax
year or portion thereof ending on or before the Closing Date (or
for any Tax year beginning before and ending after the Closing Date
to the extent allocable (determined in a manner consistent with
§8(c)) to the portion of such period beginning before and
ending on the Closing Date), to the extent such Taxes are not
reflected in the reserve for Tax Liability (rather than any reserve
for deferred Taxes established to reflect timing differences
between book and Tax income) shown on the face of the Closing
Balance Sheet, and (y) for the unpaid Taxes of any Person (other
than any of the Target and its Subsidiaries) under Reg.
§1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or
otherwise.

 


(iii)        
As of Closing and pursuant to §2 of this Agreement, each of
the Buyers, the Seller and an escrow agent to be reasonably chosen
by mutual agreement of the Buyer and the Seller (the
“Escrow
Agent”) shall execute and deliver the Escrow Agreement
in substantially the form attached hereto as Exhibit A (the
“Escrow
Agreement”), and ACCESSWIRE Canada shall deposit the
Escrow Amount with the Escrow Agent to be held as a trust fund (the
“Escrow
Fund”) for the purpose of securing the
indemnification obligations set forth in this §7 and the
post-closing adjustment payment obligations set forth in §2.
The Escrow Fund shall be held by the Escrow Agent under the Escrow
Agreement pursuant to the terms thereof. The Escrow Fund shall be
held as a trust fund and shall not be subject to any lien,
attachment, trustee process or any other judicial process of any
creditor of any party, and shall be held and disbursed solely for
the purposes and in accordance with the terms of the Escrow
Agreement. For purpose of clarity, the Escrow Agreement shall
instruct the Escrow Agent to release the Escrow Funds (to the
extent such Escrow Funds remaining available) to the Seller on the
eighteen-month anniversary of the Closing Date, including any
interest accrued on the Escrow Fund.

 


 (c)           Indemnification
Provisions for Benefit of the Seller. In the event either
Issuer Direct or ACCESSWIRE Canada breaches (or in the event any
third party alleges facts that, if true, would mean either Issuer
Direct or ACCESSWIRE Canada has breached) any of its
representations, warranties, and covenants contained herein, and,
if there is an applicable survival period pursuant to §7(a)
above, provided that any of the Seller makes a written claim for
indemnification against the Buyer pursuant to §7(d) below
within such survival period, then the Buyer agrees to indemnify the
Seller from and against the entirety of any Adverse Consequences
the Seller may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Seller may
suffer after the end of any applicable survival period) resulting
from, arising out of, relating to, in the nature of, or caused by
the breach (or the alleged breach).


 




 

28








 





 


(d)           Matters
Involving Third Parties.

 


(i)           If
any third party shall notify any Party (the “Indemnified Party”) with
respect to any matter (a “Third Party Claim”) which
may give rise to a claim for indemnification against any other
Party (the “Indemnifying Party”)
under this §7, then the Indemnified Party shall promptly
notify each Indemnifying Party thereof in writing; provided, however, that no delay on the
part of the Indemnified Party in notifying any Indemnifying Party
shall relieve the Indemnifying Party from any obligation hereunder
unless (and then solely to the extent) the Indemnifying Party
thereby is prejudiced.

 


(ii)         
Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as
(A) the Indemnifying Party notifies the Indemnified Party in
writing within 15 days after the Indemnified Party has given notice
of the Third Party Claim that the Indemnifying Party will indemnify
the Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the
Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations hereunder, (C) the Third
Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an
adverse judgment with respect to, the Third Party Claim is not, in
the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice materially adverse to
the continuing business interests of the Indemnified Party, and (E)
the Indemnifying Party conducts the defense of the Third Party
Claim actively and diligently.

 


(iii)        
So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with §7(d)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party
Claim, (B) the Indemnified Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnifying
Party (not to be withheld unreasonably), and (C) the Indemnifying
Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnified Party (not to be withheld
unreasonably).

 


(iv)        
In the event any of the conditions in §7(d)(ii) above is or
becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Parties will reimburse
the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable
attorneys' fees and expenses), and (C) the Indemnifying Parties
will remain responsible for any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim
to the fullest extent provided in this §7.

 




 

29








 





 


(e)           Determination
of Adverse Consequences. All indemnification payments under
this §7 shall be deemed adjustments to the Purchase
Price.

 


(f)           Other
Indemnification Provisions. The foregoing indemnification
provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy (including without
limitation any such remedy arising under Environmental, Health, and
Safety Requirements) any Party may have with respect to the Target,
its Subsidiaries, or the transactions contemplated by this
Agreement. The Seller hereby agrees that he will not make any claim
for indemnification against any of the Target and its Subsidiaries
by reason of the fact that he or it was a director, officer,
employee, or agent of any such entity or was serving at the request
of any such entity as a partner, trustee, director, officer,
employee, or agent of another entity (whether such claim is for
judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such claim
is pursuant to any statute, charter document, bylaw, agreement, or
otherwise) with respect to any action, suit, proceeding, complaint,
claim, or demand brought by the Buyer against such Seller (whether
such action, suit, proceeding, complaint, claim, or demand is
pursuant to this Agreement, applicable law, or
otherwise).

 


8.           Tax
Matters. The following provisions shall govern the
allocation of responsibility as between Buyer and the Seller for
certain tax matters following the Closing Date:

 


(a)           Tax
Periods Ending on or Before the Closing Date. Seller shall
prepare or cause to be prepared and file or cause to be filed all
Tax Returns for the Target and its Subsidiaries for all periods
ending on or prior to the Closing Date which are filed after the
Closing Date other than income Tax Returns with respect to periods
for which a consolidated, unitary or combined income Tax Return of
Seller will include the operations of the Target and its
Subsidiaries. Seller shall permit Buyer to review and comment on
each such Tax Return described in the preceding sentence prior to
filing. In the event the Seller does not file the required tax
returns by September 30, 2018, the Buyer shall be entitled to
prepare or cause to be prepared and filed or cause to be filed such
Tax Returns. All reasonable expenses incurred by the Buyer in such
an event will be reduced from the Escrow Amount. The Seller shall
reimburse Buyer for Taxes of the Target and its Subsidiaries with
respect to such periods within fifteen (15) days after payment by
Buyer or the Target and its Subsidiaries of such Taxes to the
extent such Taxes are not reflected in the reserve for Tax
Liability (rather than any reserve for deferred Taxes established
to reflect timing differences between book and Tax income) shown on
the face of the Closing Balance Sheet.

 


(b)           Tax
Periods Beginning Before and Ending After the Closing Date.
Buyer shall prepare or cause to be prepared and file or cause to be
filed any Tax Returns of the Target and its Subsidiaries for Tax
periods which begin before the Closing Date and end after the
Closing Date. The Seller shall pay to Buyer within fifteen (15)
days after the date on which Taxes are paid with respect to such
periods an amount equal to the portion of such Taxes which relates
to the portion of such Taxable period ending on the Closing Date to
the extent such Taxes are not reflected in the reserve for Tax
Liability (rather than any reserve for deferred Taxes established
to reflect timing differences between book and Tax income) shown on
the face of the Closing Balance Sheet. For purposes of this
Section, in the case of any Taxes that are imposed on a periodic
basis and are payable for a Taxable period that includes (but does
not end on) the Closing Date, the portion of such Tax which relates
to the portion of such Taxable period ending on the Closing Date
shall (x) in the case of any Taxes other than Taxes based upon or
related to income or receipts, be deemed to be the amount of such
Tax for the entire Taxable period multiplied by a fraction the
numerator of which is the number of days in the Taxable period
ending on the Closing Date and the denominator of which is the
number of days in the entire Taxable period, and (y) in the case of
any Tax based upon or related to income or receipts be deemed equal
to the amount which would be payable if the relevant Taxable period
ended on the Closing Date. Any credits relating to a Taxable period
that begins before and ends after the Closing Date shall be taken
into account as though the relevant Taxable period ended on the
Closing Date. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with
prior practice of the Target and its Subsidiaries.

 




 

30








 





 


(c)           Cooperation
on Tax Matters.

 


(i)           Buyer,
the Target and its Subsidiaries and the Seller shall cooperate
fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax Returns pursuant to
this Section and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and
(upon the other party's request) the provision of records and
information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and
explanation of any material provided hereunder. The Target and its
Subsidiaries and the Seller agree (A) to retain all books and
records with respect to Tax matters pertinent to the Target and its
Subsidiaries relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations
(and, to the extent notified by the Buyer or the Seller, any
extensions thereof) of the respective taxable periods, and to abide
by all record retention agreements entered into with any taxing
authority, and (B) to give the other party reasonable written
notice prior to transferring, destroying or discarding any such
books and records and, if the other party so requests, the Target
and its Subsidiaries or the Seller, as the case may be, shall allow
the other party to take possession of such books and
records.

 


(ii)           The
Buyer and the Seller further agree, upon request, to use their best
efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions
contemplated hereby).

 


(d)           Tax
Sharing Agreements. All tax sharing agreements or similar
agreements with respect to or involving the Target and its
Subsidiaries shall be terminated as of the Closing Date and, after
the Closing Date, the Target and its Subsidiaries shall not be
bound thereby or have any liability thereunder.

 


(e)           Certain
Taxes and Fees. All transfer, documentary, sales, use,
stamp, registration and other such Taxes, and all conveyance fees,
recording charges and other fees and charges (including any
penalties and interest) incurred in connection with consummation of
the transactions contemplated by this Agreement shall be paid by
the Seller when due, and the Seller will, at his own expense, file
all necessary Tax Returns and other documentation with respect to
all such Taxes, fees and charges, and, if required by applicable
law, Buyer will, and will cause its Affiliates to, join in the
execution of any such Tax Returns and other
documentation.

 



9.            

Miscellaneous.





 


(a)           Nature
of Certain Obligations.

 


(i)           The
covenants of the Seller in §3(a) above concerning the sale of
his, her, or its Target Shares to the Buyer and the representations
and warranties of the Seller in §3(a) above concerning the
transaction are several obligations. This means that the particular
Seller making the representation, warranty, or covenant will be
solely responsible to the extent provided in §7 above for any
Adverse Consequences the Buyer may suffer as a result of any breach
thereof.

 


(ii)         
The remainder of the representations, warranties, and covenants in
this Agreement are joint and several obligations. This means that
each Seller will be responsible to the extent provided in §7
above for the entirety of any Adverse Consequences the Buyer may
suffer as a result of any breach thereof.

 




 

31








 





 


(b)        
Press Releases and Public
Announcements. No Party shall issue any press release or
make any public announcement relating to the subject matter of this
Agreement prior to the Closing without the prior written approval
of the Buyer and the Seller; provided, however, that any Party may
make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will
use its reasonable best efforts to advise the other Parties prior
to making the disclosure).

 


(c)        
No Third-Party
Beneficiaries. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their
respective successors and permitted assigns.

 


(d)        
Entire Agreement.
This Agreement (including the documents referred to herein)
constitutes the entire agreement among the Parties and supersedes
any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they related in
any way to the subject matter hereof.

 


(e)        
Succession and
Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this
Agreement or any of his or its rights, interests, or obligations
hereunder without the prior written approval of the Buyer and the
Seller; provided, however,
that the Buyer may (i) assign any or all of its rights and
interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases the Buyer nonetheless shall
remain responsible for the performance of all of its obligations
hereunder).

 


(f)        
Counterparts. This
Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together will
constitute one and the same instrument.

 


(g)       
Headings. The
section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

 


(h)       
Notices. All
notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and
then two business days after) it is sent by registered or certified
mail, return receipt requested, postage prepaid, and addressed to
the intended recipient as set forth below:

 


(i)           if
to Buyer:

 


Issuer
Direct Corporation


500
Perimeter Park Drive


Suite
D


Morrisville, North
Carolina 27560

Attention: Brian R.
Balbirnie

Facsimile No.:
646.225.7104

 




 

32








 






 


with a
copy (which shall not constitute notice) to:

 


Quick
Law Group PC


1035
Pearl Street


Suite
403


Boulder, Colorado
80302


Attention: Jeffrey
M. Quick


Facsimile No.:
303.845.7315

 


(ii)           if
to Seller, to:

 


Fred
Gautreau


148
Ranchview Way NE


Medicine Hat, AB
T1C 0G6


 


with a
copy (which shall not constitute notice) to:

 


Smith
& Hersey Law Firm


Unit
104 Westside Common


2201
Box Springs Blvd. NW


Medicine Hat,
Alberta T1C 0C8


Attention: Simon J.
Hersey


Facsimile No.:
403-527-0577

 


Any
Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address
set forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary
mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are
to be delivered by giving the other Parties notice in the manner
herein set forth.

 


(i)           Governing
Law.  This
Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Delaware without giving effect to any
choice or conflict of law provision or rule (whether of the State
of Delaware or any
other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Delaware.

 


(j)           Amendments
and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by
the Buyer and the Seller. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior
or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.

 


(k)           Severability.
Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other
jurisdiction.

 




 

33








 






 


(l)           Expenses.
Each of the Buyers, the Seller, the Target, and its Subsidiaries
will bear his or its own costs and expenses (including legal fees
and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby (except as set forth in the Escrow
Agreement); provided,
however, that the Seller
will also bear the costs and expenses of the Target and its
Subsidiaries (including all of their legal fees and expenses) in
connection with this Agreement and the transactions contemplated
hereby in the event that the transactions contemplated by this
Agreement are consummated.

 


(m)           Construction.
The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any of the provisions of this
Agreement. Any reference to any federal, provincial, state, local,
or foreign statute or law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context
requires otherwise. The word “including” shall mean
including without limitation. The Parties intend that each
representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party
has not breached shall not detract from or mitigate the fact that
the Party is in breach of the first representation, warranty, or
covenant.

 


(n)           Incorporation
of Exhibits, Schedules, and Schedules. The Exhibits,
Schedules, and Schedules identified in this Agreement are
incorporated herein by reference and made a part
hereof.

 


(o)           Specific
Performance. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event
any of the provisions of this Agreement are not performed in
accordance with their specific terms or otherwise are breached.
Accordingly, each of the Parties agrees that the other Parties
shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in
any action instituted in any court of the United States or any
state thereof having jurisdiction over the Parties and the matter
(subject to the provisions set forth in §9(p) below), in
addition to any other remedy to which they may be entitled, at law
or in equity.

 


(p)           Submission
to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Raleigh,
North Carolina in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect of
the action or proceeding may be heard and determined in any such
court. Each Party also agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court.
Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any
bond, surety, or other security that might be required of any other
Party with respect thereto. Any Party may make service on any other
Party by sending or delivering a copy of the process (i) to the
Party to be served at the address and in the manner provided for
the giving of notices in §9(h) above. Nothing in this
§9(p), however, shall affect the right of any Party to bring
any action or proceeding arising out of or relating to this
Agreement in any other court or to serve legal process in any other
manner permitted by law or at equity. Each Party agrees that a
final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any
other manner provided by law or at equity.


 


* * * *
*

 




 

34








 






 


IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.

 

 


Buyers:

 

 


ISSUER
DIRECT CORPORATION


 


 


By:
/s/ Brian R.
Balbirnie 


Name:
Brian R. Balbirnie

Title: Chief
Executive Officer


 


 

 


ACCESSWIRE CANADA
LTD.


 


 


By:
/s/ Brian R.
Balbirnie 


Name:
Brian R. Balbirnie

Title: Chief
Executive Officer


 


 


Seller:


 


 


By:
/s/ Fred
Gautreau 


Name:
Fred Gautreau

Title:
President


 


 


 


 

 




 

35