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Exhibit 10.10  

 
 

ASSET PURCHASE AGREEMENT  

        THIS
ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of January 31, 2006, by and between FortuneCity.com Inc., a Delaware
corporation ("Seller"), and Hostopia.com Inc., a Delaware corporation ("Purchaser"). 

 
 

RECITALS  

        WHEREAS,
Seller among its businesses is engaged in the business of providing paid website hosting services (the "Business") through the URL
http://www.fortunecity.com; and 

        WHEREAS,
Purchaser desires to purchase from Seller, and Seller desires to sell to Purchaser, certain of the assets and rights of Seller relating to the Business (other than the Excluded
Assets, as hereinafter defined), and for Purchaser to assume certain specified liabilities, upon the terms and subject to the conditions set forth in this Agreement. 

        NOW,
THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, the parties hereby agree as follows: 

 
 

ARTICLE I
  DEFINITIONS  

        Capitalized
terms used but not otherwise defined in this Agreement shall have the meanings defined in Annex A hereto. 

 
 

ARTICLE II
  PURCHASE AND SALE  

        SECTION 2.1.
Purchase and Sale of Acquired Assets. 

        (a)   Purchase
and Sale of Acquired Assets.    Upon the terms and subject to the conditions of this Agreement, Seller agrees to sell,
assign, transfer, convey and deliver to Purchaser free and clear of all Encumbrances whatsoever (except Permitted Encumbrances), and Purchaser agrees to purchase and accept from Seller, at the Closing
on the Closing Date, all of the right, title and interest of Seller, in, to and under the following assets of Seller insofar as they relate to or are used in the Business, whether tangible or
intangible (collectively, the "Acquired Assets"): 

        (i)    each
contract or agreement of Seller with End-Users relating to the Business the form of which is set forth on
Schedule 2.1(a)(i) or is otherwise, in the reasonable discretion of the Purchaser, essential to the provision by Seller's of paid web hosting services,
(the "Contracts"); 

        (ii)   the
Books and Records relating exclusively to the Business, including (A) all Existing End-User information (e.g., all customer lists, email
addresses, addresses, phone numbers, credit card information, user ID's and passwords) as well as any database or other document or record containing Existing End-User information, and
(B) all marketing intelligence or strategies relating to the Business as well as any document or record containing such information to the extent that such marketing intelligence or strategies
relating to the Business exist; 

 

        (iii)  all
causes of action, lawsuits, judgments, deposits, refunds, rebates, choses in action, rights of recovery, rights of set-off, rights of recoupment,
claims and demands of any nature available to or being pursued by Seller with respect to the Business or ownership, use, function or value of any of the Acquired Assets or Assumed
Liabilities; and 

        (iv)  all
right, title and interest of Seller in and to the goodwill incident to the Business, including the exclusive right of the Purchaser to hold itself out as carrying
on the Business in succession to the Seller. 

        (b)   Excluded
Assets.    Notwithstanding the foregoing, the purchase and sale contemplated hereby shall not include any assets of
Seller not included in the Acquired Assets and shall not include any computer or telephone (collectively, the "Excluded Assets"): 

        SECTION 2.2.
Liabilities Assumed by Purchaser; Excluded Liabilities. 

        (a)   Subject
to Section 2.2(b), in connection with its purchase of the Acquired Assets, as of the Closing, Purchaser shall assume and agree to pay, perform and
discharge as they come due only, those obligations that are incident to the performance under the Contracts (other than the Excluded Liabilities) on or after the Closing Date (collectively, the
"Assumed Liabilities"); provided, however, that Purchaser shall assume no liability or obligation relating to any act or omission by Seller relating to the Contracts that
occurred prior to the Closing Date. Purchaser shall not assume any other Liabilities of Seller, or be obligated to pay, perform, or discharge any other Liabilities of Seller. 

        (b)   Notwithstanding
anything to the contrary set forth in this Agreement, (i) all Liabilities of Seller other than the Assumed Liabilities
(the "Excluded Liabilities") shall be retained by Seller, and (ii) Seller shall convey, transfer and assign the Acquired Assets to Purchaser, in each case
free and clear of all Encumbrances (except Permitted Encumbrances) and without any assumption by Purchaser of any Liabilities of Seller whatsoever (other than the Assumed Liabilities). Excluded
Liabilities shall include any liabilities or obligations not expressly included in the Assumed Liabilities including: 

        (i)    any
Liability for Taxes of Seller for any period; 

        (ii)   any
Liability for legal or other professional fees, costs, disbursements and expenses incurred by Seller or any Affiliate of Seller pursuant to or in connection with
this Agreement and the consummation of the Acquisition; 

        (iii)  any
Liability arising out of any Action, product liability, breach of contract, warranty, tort, infringement or violation of Law or otherwise in connection with the
operation of the Business or the ownership of the Acquired Assets prior to the Closing Date, whether known or unknown, and whether arising prior to, on or subsequent to the Closing Date; 

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        (iv)  any
Liability of Seller or any ERISA Affiliate to or in connection with any Employee or other current or former employee, director, stockholder, agent or independent
contractor of Seller or any ERISA Affiliate arising, occurring or relating to any period up until the Closing Date, or with respect to any Employee Plan established, maintained, sponsored or
contributed to by Seller or any ERISA Affiliate; 

        (v)   any
and all Liabilities related in any way to the operations, assets or properties of Seller which are not part of the Business or the Acquired Assets as of the
Closing Date; 

        (vi)  any
Liability of Seller to indemnify any Person by reason of the fact that such person was a director, officer, employee, or agent of Seller or any of its Affiliates or
was serving at the request of such entity as a partner, trustee, director, officer, employee, agent of Seller or in any other capacity with another entity; 

        (vii) any
Liabilities with respect to Indebtedness of Seller; 

        (viii) any
Liability with respect to any Excluded Asset; and 

        (ix)  any
other Liability of Seller arising under or in connection with any Contracts, leases, licenses, permits, commitments and other items of Personal Property or
intangible personal property included in the Acquired Assets or otherwise relating to the operation of the Business, in each case arising, or otherwise relating to the period, prior to the
Closing Date. 

        SECTION 2.3.
Purchase Price. Purchaser shall pay to Seller an amount of $1,132,000, subject to adjustment as provided in Section 8.5
(the "Purchase Price"): (a) $151,400 at the Closing, (b) subject to Section 8.5, within 25 days of the end of each calendar month
beginning on or after the Closing Date (each, a "Payment Month"), an amount equal to the Purchase Price Payment Percentage applicable to such Payment Month multiplied by
the Continuing End-User Revenue received by Purchaser during such Payment Month, such amount not to exceed the balance of the Purchase Price not previously paid by Purchaser to Seller
(the "Unpaid Purchase Price"). 

        SECTION 2.4.
Allocation of Purchase Price. The parties agree that the Purchase Price shall be allocated among the Acquired Assets as described in
Exhibit A, which allocation is intended to be in compliance with Section 1060 of the Code. As soon as reasonably practicable after the Closing Date,
Purchaser shall prepare and deliver to Seller a final allocation schedule consistent with Exhibit A. The parties will file all Tax Returns (including amended
returns and claims for refund) and information reports in a manner consistent with such final allocation schedule and none of them shall take any position inconsistent therewith. 

        SECTION 2.5.
Closing. Upon the terms and subject to the conditions of this Agreement, the sale and purchase of the Business and Acquired Assets
contemplated by this Agreement shall close (the "Closing") on the date set out in the first paragraph of this Agreement, referred to as the "Closing
Date". Notwithstanding the time of the Closing on the Closing Date, the parties agree that the Closing shall be deemed to have occurred on the opening of business on the
Closing Date. 

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        SECTION 2.6.
Closing Deliveries by Seller. At the Closing, Seller shall deliver or cause to be delivered to Purchaser: 

        (a)   a
duly executed Bill of Sale (the "Bill of Sale") substantially in the form of Exhibit B
transferring to Purchaser good and marketable title to all of the Acquired Assets, free and clear of all Encumbrances (other than Permitted Encumbrances); 

        (b)   a
duly executed counterpart of an Assignment and Assumption Agreement substantially in the form of Exhibit C
(the "Assignment and Assumption Agreement") assigning to Purchaser all of Seller's right, title and interest in, to and under each of the contracts, and other items
of assignable intangible personal property included in the Acquired Assets, together with the consents of any third parties which are required to make each such assignment effective as to such
third parties; 

        (c)   a
duly executed counterpart of a Marketing and License Agreement substantially in the form of Exhibit D
(the "Marketing and License Agreement"); 

        (d)   a
duly executed counterpart a Mutual Release substantially in the form of Exhibit E (the "Mutual
Release"), releasing Seller and Purchaser from certain obligations under the paid web hosting and e-mail services agreements between them dated
November 21, 2004; 

        (e)   the
certificates and other documents required to be delivered pursuant to Section 7.2; 

        (f)    such
other instruments of sale, transfer, conveyance and assignment as Purchaser and its counsel may request; and 

        (g)   such
other consents of any Person as may be required for the consummation of the Closing. 

        SECTION 2.7.
Closing Deliveries by Purchaser. At the Closing, Purchaser shall pay the amount pursuant to Section 2.3 and shall deliver
or cause to be delivered to Seller: 

        (a)   a
duly executed counterpart of the Assignment and Assumption Agreement; 

        (b)   a
duly executed counterpart of the License Agreement; 

        (c)   a
duly executed counterpart of the Marketing and Licensing Agreement; 

        (d)   a
duly executed counterpart of the Mutual Release; 

        (e)   the
certificates and other documents required to be delivered pursuant to Section 7.1; and 

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        (f)    such
other instruments of sale, transfer, conveyance and assignment as Seller and its counsel may reasonably request. 

 
 

ARTICLE III
  REPRESENTATIONS AND WARRANTIES OF SELLER  

        Seller
represents and warrants to Purchaser as follows: 

        SECTION 3.1.
Organization, Authority and Qualification. 

        (a)   Seller
is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all necessary power and authority to own,
operate or lease the properties and assets which comprise the Acquired Assets and to carry on the Business as it has been and is currently conducted 

        (b)   Seller
has full power, authority and capacity to execute, deliver and perform its obligations under this Agreement and the other Transaction Documents. All actions taken
by Seller have been duly authorized and approved by Seller's Board of Directors. This Agreement has been, and upon Seller's execution the Transaction Documents shall have been, duly executed and
delivered by Seller and this Agreement constitutes, and upon their execution, each of the Transaction Documents will constitute, a legal, valid and binding obligation of Seller enforceable against
Seller in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy and insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally. 

        (c)   None
of the Acquired Assets and no part of the Business is owned or operated through any Subsidiary or Affiliate of Seller. 

        (d)   No
vote or other consent of any stockholders of Seller is required by Delaware law, other applicable law or the certificate of incorporation, bylaws or other
organizational documents of Seller (as each such document has been amended) in connection with the Acquisition. 

        SECTION 3.2.
No Conflict. Assuming the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions if
any, the execution, delivery and performance by Seller of this Agreement and the Transaction Documents do not and will not (a) violate, conflict with or result in the breach of any provision of
the certificate of incorporation, bylaws or other organizational documents of Seller, (b) conflict with, or violate (or cause an event which is reasonably likely to have a Material
Adverse Effect as a result of) any Law or Governmental Order applicable to Seller, the Business or any of the Acquired Assets, or (c) materially conflict with, result in any material breach of,
constitute a material default (or event which with the giving of notice or lapse of time, or both, would become a material default) under, require any consent under, or give to others any
rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the Acquired Assets pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which Seller is a party or by which any of the Acquired Assets or any
assets or properties of Seller is bound or affected. 

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        SECTION 3.3.
Consents and Approvals. The execution, delivery and performance by Seller of this Agreement and the Transaction Documents do not and will
not require any consent, approval, authorization or other order of, or action by, filing with or notification to (a) any Governmental Authority or (b) any other Person. 

        SECTION 3.4.
Financial Information, Books and Records and Operating Data. The amounts stated in the Financial Statements include only web hosting and
domain registration revenues of the Business and no other amounts. 

        SECTION 3.5.
Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Since June 30, 2005, the Business has been
conducted in the ordinary course and consistent with past practice. As amplification and not in limitation of the foregoing, except in the ordinary course of the Business consistent with past practice
of Seller, since June 30, 2005, Seller has not, with respect to the Business or any of the Acquired Assets: 

        (a)   modified,
amended or cancelled any of the provisions of any contract, lease or license listed on any Schedule hereto, or the rights thereunder or entered into any new
contract that is not terminable on not more than 30 calendar days' notice; 

        (b)   permitted
or allowed any of the Acquired Assets to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior
to the Closing; 

        (c)   suffered
any Material Adverse Effect or the occurrence of any event or events which, individually, or in the aggregate, has or have had, or could reasonably be expected
to have, a Material Adverse Effect; 

        (d)   made
any material changes in the customary methods of operations of the Business; 

        (e)   sold,
transferred, leased, subleased, licensed or otherwise disposed of any properties or assets(including intangible assets), used in the Business; 

        (f)    written
down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any of the
Acquired Assets; 

        (g)   amended,
terminated, canceled or compromised any claims or waived any other rights used in the Business; 

        (h)   made
any change in any method of accounting or accounting practice or policy of Seller in respect of the Business other than such changes as are required by GAAP; 

        (i)    accelerated
or discounted the collection of Receivables, nor delayed the payment of accounts payable or otherwise made any changes in the methods, practices or
procedures relating to Receivables, accounts payable or credit policies, and collection and payment of such Receivables and accounts payable, respectively, have at all times been made in the ordinary
course of the Business consistent with past practice; 

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        (j)    failed
to maintain the Acquired Assets in all material respects in accordance with Seller's past business practice and in good operating condition and repair, reasonable
wear and tear excepted; 

        (k)   allowed
any Permit that was issued to Seller with respect to the Business or otherwise relates to the Business to lapse or terminate or failed to renew any such Permit
that is scheduled to terminate or expire within 45 calendar days of the Closing Date; 

        (l)    allowed
any insurance policy that was issued to Seller with respect to the Business or otherwise relates to the Business to lapse or terminate or failed to renew any
such insurance policy that is scheduled to terminate or expire within 45 calendar days of the Closing Date; 

        (m)  disclosed
any secret or confidential Intellectual Property (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property
(or any registration or grant thereof or any application relating thereto) relating to the Business to which, or under which, Seller has any right, title, interest or license; 

        (n)   suffered
any Liability, casualty, loss, damage with respect to any of the Acquired Assets, regardless of whether such Liability, casualty, loss, damage was covered
by insurance; 

        (o)   entered
into any transaction with respect to the Business outside the ordinary course of the Business and not consistent with Seller's past practice; or 

        (p)   agreed,
whether in writing or otherwise, to take any of the actions specified in this Section 3.5 or granted any options to purchase, rights of first
refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.5, except as expressly contemplated by
this Agreement. 

        SECTION 3.6.
Litigation. There are no Actions relating to the Business or affecting any of the Acquired Assets (including any Action relating to any
product alleged to have been sold by the Business and alleged to have been defective, improperly designed or manufactured or improperly labeled), pending, before any Governmental Authority or arbitral
tribunal or, to Seller's Knowledge, threatened to be brought by or before any Governmental Authority or arbitral tribunal. None of Seller, any Affiliate of Seller or any of the Acquired Assets is
subject to any, Governmental Order (or order of any arbitral tribunal) (nor to Seller's Knowledge, is any such Governmental Order threatened to be imposed by any Governmental Authority
(or arbitral tribunal)). 

        SECTION 3.7.
Certain Interests. Neither Seller nor any Affiliate thereof, nor any officer or director of Seller or any such Affiliate and, no relative
or spouse (or relative of such spouse) or person who resides with, or is a dependent of, any such Person: (a) has any direct or indirect financial interest in any competitor, supplier or
customer of Seller; (b) owns, directly or indirectly, in whole or in part, or has any other interest in any tangible or intangible property which Seller uses or has used in the conduct of the
Business or otherwise; (c) has outstanding any Indebtedness to Seller other than the advances for Business expenses not exceeding $10,000 in the aggregate; or (d) is a party to any
contract, agreement, or arrangement with Seller. 

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        SECTION 3.8.
Compliance with Laws; Permits. 

        (a)   Seller
and the Business are in compliance with, and the Business has been conducted and is currently being conducted and the Acquired Assets are being used in compliance
with, all Laws and Governmental Orders applicable to the Business or Seller, and Seller has not received any notice that it is in breach of any thereof. No event has occurred which, with or without
the passage of time or the giving of notice, or both, would constitute a non-compliance with or violation of applicable Law. Other than laws generally applicable to businesses in the
industry in which the Business is operated, Seller is not subject to any Law, or, to Seller's Knowledge, any proposed Law, which individually or in the aggregate has had or is reasonably likely to
have a Material Adverse Effect on the Business or the Acquired Assets or on Purchaser's ability to acquire any property or conduct Business in any area. 

        (b)   Seller
has all federal, state and local governmental licenses, permits, approvals, authorizations and consents ("Permits") necessary for the
conduct of the Business and the ownership of the Acquired Assets, and such Permits are in full force and effect, and no violations are or have been recorded in respect of any thereof, and no
proceeding is pending or, to Seller's Knowledge, threatened to revoke or limit any thereof. Seller has not entered into any agreement with, had any material dispute with, or been investigated by, any
governmental agency or authority, community group or other third party that could restrict the operation of the Business or adversely affect the ownership, use, operation or economic value of the
Acquired Assets. 

        SECTION 3.9.
Material Contracts. 

        (a)   Schedule 2.1(a)(i)
lists each of the following contracts and agreements (including oral arrangements) of Seller relating to the Business: 

        (i)    each
contract or agreement involving payment or receipt by Seller of an amount equal to or in excess of $5,000 during the remaining term of such contract
or agreement; 

        (ii)   each
purchase order or supply order in each case involving more than $5,000 in the aggregate from any one customer or supplier; 

        (iii)  each
contract or agreement which by its terms cannot be terminated without penalty within 30 calendar days; 

        (iv)  all
broker, distributor, dealer, manufacturer's representative, franchise, agency, sales promotion, market research, marketing, consulting and advertising contracts
and agreements; 

        (v)   all
management contracts and contracts with independent contractors or consultants (or similar arrangements); 

        (vi)  all
contracts and agreements with any Governmental Authority; 

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        (vii) any
agreement for the employment of any individual by or for Seller on a full-time, consulting or other basis or for the retention of any person as a sales
representative, commission agent or on any other basis; 

        (viii) all
contracts and agreements that limit or purport to limit the ability of Seller to compete in any line of business or with any Person or in any geographic area or
during any period of time and all non-solicitation or similar agreements; 

        (ix)  all
contracts, agreements and arrangements with any Employee, including any non-competition agreements, confidentiality agreements and any agreements
relating to the Intellectual Property; 

        (x)   all
contracts and agreements between or among Seller and an Affiliate of Seller; and 

        (xi)  all
other contracts and agreements, whether or not made in the ordinary course of the Business, which are material to the conduct of the Business. 

        For
purposes of this Agreement, "Material Contracts" shall mean all contracts and agreements disclosed in Schedule 2.1(a)(i). Each Material Contract
is a Contract. 

        (b)   Each
Material Contract (i) is valid and binding on Seller and, to Seller's Knowledge, on the other respective parties thereto and is in full force and effect,
(ii) upon consummation of the transactions contemplated by this Agreement, shall continue in full force and effect without penalty or other adverse consequence, and (iii) may be assigned
or transferred to Purchaser without any consent or approval from, or notification to, any Person. Neither Seller, nor any other party thereto to Seller's Knowledge, is in breach of, or default under,
any Material Contract. 

        (c)   There
is no contract, agreement or other arrangement granting any Person any preferential right to purchase, other than in the ordinary course of the Business consistent
with past practice, any of the Acquired Assets. 

        (d)   Seller
has heretofore delivered to Purchaser and its representatives true, correct and complete copies of each Material Contract and all ancillary documents
pertaining thereto. 

        SECTION 3.10.
Intellectual Property. 

        (a)   Schedule 3.10(a)
sets forth a true and complete list of all patents, trademarks, tradenames, service marks and copyrights, and applications for any of the
foregoing, and all other Intellectual Property, material to the Business (other than trade secrets, confidential business information and technical information that is not capable of being described
in Schedule 3.10(a), but which shall nevertheless be considered part of Intellectual Property) and its owner and a true and complete list of all Licensed Intellectual Property, including any
license or sublicense thereof. In each case where a registration or application for registration listed in Schedule 3.1(a) is held by assignment, the assignment has been duly recorded with the
United States Patent and Trademark Office, or in the case of any foreign registration or application for registration, with the proper Governmental Authority in such foreign jurisdiction. To
Seller's Knowledge, the rights of Seller in or to such Intellectual Property do not conflict with or infringe on the rights of any other Person, and Seller has not received any claim or notice from
any Person, to such effect. 

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        (b)   (i)
all the Owned Intellectual Property is owned by Seller free and clear of any Encumbrance (other than Permitted Encumbrances), (ii) Seller has the right,
pursuant to valid and enforceable licenses, to use the Licensed Intellectual Property in the manner in which the Licensed Intellectual Property is currently being used, and (iii) no Actions
have been made or asserted or are pending (nor, to Seller's Knowledge has any such Action been threatened) against Seller either (A) based upon or challenging or seeking to deny or restrict the
use of any of the Intellectual Property or (B) alleging that any services provided or products sold by Seller are being provided or sold in violation of any patents or trademarks, or any other
similar rights of any Person. To Seller's Knowledge, no Person is using any patents, copyrights, trademarks, service marks, trade names, trade secrets or similar property that are confusingly similar
to the Owned Intellectual Property or that infringe upon the Owned Intellectual Property or upon the rights of Seller therein. Seller has not granted any license or other right to any other Person
with respect to the Owned Intellectual Property. The consummation of the transactions contemplated by this Agreement will not result in the termination or impairment of any of the Owned Intellectual
Property or any of the rights of Seller in any of the Licensed Intellectual Property. 

        (c)   The
Intellectual Property described in Schedule 3.1(a), together with the Intellectual Property consisting of trade secrets and confidential technical and
business information, constitutes all of the Intellectual Property used, held or currently intended to be used by Seller in the conduct of the Business. 

        SECTION 3.11.
Acquired Assets. 

        (a)   Seller
owns, leases or licenses or otherwise has the legal right to use all of the Acquired Assets,, and enjoys the right to the benefits of all of the Material
Contracts. Seller has good and valid title to or, in the Acquired Assets, free and clear of all Encumbrances, except Permitted Encumbrances and Encumbrances which will be discharged at Closing. The
Acquired Assets do not include any ownership, leasehold or other interest in any real property. 

        (b)   Following
the consummation of the transactions contemplated by this Agreement, Purchaser will own, pursuant to good and marketable title, or lease, under valid and
subsisting leases, or otherwise maintain its respective interest in the Acquired Assets without incurring any penalty or other adverse consequence, including any increase in rentals, royalties, or
licenses or other fees that may be imposed, as a result of, or arising from, the consummation of the transactions contemplated by this Agreement. Immediately following the Closing, Purchaser shall
have possession of all documents, books, records, agreements and financial data of any sort necessary to conduct the Business. 

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        SECTION 3.12.
Employee Benefit Plans. 

        (a)   Employee Plans — General. 

        (i)    Schedule 3.12(a)(i)
sets forth a true and complete list of all Seller Plans. True and complete copies of each of Seller Plans and related documents have been
delivered to Purchaser. 

        (ii)   There
are no Pension Plans or Multiemployer Plans and none of the Acquired Assets is subject to a lien under ERISA or the Code. 

        (iii)  Except
as set forth on Schedule 3.12(a)(i), with respect to each of Seller Plans: (A) all payments required by any Seller Plan, any collective bargaining
agreement or other agreement, or by law (including all contributions, insurance premiums, or intercompany charges) with respect to all periods through the Closing Date shall have been made prior to
the Closing Date (on a pro rata basis where such payments are otherwise discretionary at year end) or provided for by Seller as applicable, by full accruals in accordance with GAAP as if
all targets required by such Seller Plan had been or will be met at maximum levels on its financial statements; (B) no claim, lawsuit, arbitration or other action has been threatened, asserted,
instituted, or, to Seller's Knowledge, is anticipated against Seller Plans (other than non-material routine claims for benefits, and appeals of such claims), any trustee or fiduciaries
thereof, Seller, any ERISA Affiliate, any director, officer, or employee thereof, or any of the assets of any trust of Seller Plans; and (C) there has been no "prohibited transaction" as
defined in Section 406 of ERISA or Section 4975 of the Code regarding any Seller Plan other than a transaction qualifying for a statutory or administrative exemption. 

        (iv)  Neither
Seller nor any ERISA Affiliate maintains, contributes to, or in any way provides for any benefits of any kind whatsoever (other than under Section 4980B
of the Code, the Federal Social Security Act, or a Qualified Plan) to any current or future retiree or terminee. Neither Seller nor any ERISA Affiliate has any unfunded liabilities pursuant to any
Seller Plan that is not intended to be qualified under Section 401(a) of the Code and is an "employee pension benefit plan" within the meaning of Section 3(2) of ERISA, a nonqualified
deferred compensation plan or an excess benefit plan. 

        (b)   Group
Health Plans.    Each Seller Plan (i) if a group health plan within the meaning of Section 607(1) of ERISA and
Section 5000(b)(1) of the Code, is in compliance with COBRA, and (ii) if a group health plan within the meaning of Section 733(a) of ERISA and Section 9832(a) of the Code,
is in compliance with Sections 701 through 734 of ERISA and Sections 4980D and 9801 through 9833 of the Code. Seller shall be liable for the continuation of group health
plan coverage in accordance with Sections 601 through 608 of ERISA and Section 4980B(f) of the Code for all Employees and other individuals whose loss of coverage occurred prior
to or in connection with the Transaction. For purposes of this provision, "group health plan" has the same meaning as set forth in Section 607(1) of ERISA and Section 5000(b)(1) of
the Code. 

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        SECTION 3.13.
Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller or any of its Affiliates. 

        SECTION 3.14.
Full Disclosure. No representation or warranty of Seller in this Agreement or any other Transaction Document, nor any statement or
certificate furnished or to be furnished to Purchaser pursuant to this Agreement, any other Transaction Document or otherwise in connection with the transactions contemplated by this Agreement,
contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. There is
no fact or circumstance (other than general economic conditions) known to Seller that could have a Material Adverse Effect or, in the future as now reasonably foreseeable, is likely to have a Material
Adverse Effect that is not set forth in this Agreement. 

 
 

ARTICLE IV
  REPRESENTATIONS AND WARRANTIES OF PURCHASER  

        As
an inducement to Seller to enter into this Agreement, Purchaser hereby represents and warrants to Seller as follows: 

        SECTION 4.1.
Organization and Authority of Purchaser. 

        (a)   Purchaser
is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. 

        (b)   Purchaser
has all necessary corporate power and authority to enter into this Agreement and the Transaction Documents to which it is a party, to carry out its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Transaction Documents of which Purchaser is a
signatory, the performance by Purchaser of its obligations hereunder and thereunder and the consummation by Purchaser of the transactions contemplated hereby and thereby have been duly authorized by
all requisite action on the part of Purchaser. This Agreement has been, and upon their execution, the Transaction Documents of which Purchaser is a signatory will be, duly executed and delivered by
Purchaser, and this Agreement constitutes, and upon execution the Transaction Documents of which Purchaser is a signatory will constitute, legal, valid and binding obligations of Purchaser enforceable
against Purchaser in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy and insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally. 

        SECTION 4.2.
No Conflict. Assuming the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions
referred to in Section 4.3, the execution, delivery and performance of this Agreement and the Transaction Documents of which Purchaser is a signatory do not and will not (a) violate,
conflict with or result in the breach of any provision of the certificate of incorporation or bylaws of Purchaser, (b) conflict with or violate any Law or Governmental Order applicable to
Purchaser or (c) materially conflict with, or result in any material breach of, constitute a material default (or event which with the giving of notice or lapse of time, or both, would
become a material default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation, or cancellation of, or result in the creation
of any Encumbrance on any of the assets or properties of Purchaser pursuant to any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which Purchaser is a party or by which any of such assets or properties is bound or affected which could materially adversely affect or restrict Purchaser's ability to
consummate the transactions contemplated hereby. 

12

 

        SECTION 4.3.
Governmental Consents and Approvals. The execution, delivery and performance by Purchaser of this Agreement and the Transaction Documents
of which Purchaser is a signatory do not and will not require any consent, approval, authorization or other order of, action by, filing with, or notification to any Governmental Authority. 

        SECTION 4.4.
Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser or any Affiliate of Purchaser. 

 
 

ARTICLE V
  ADDITIONAL AGREEMENTS  

        SECTION 5.1.
Conduct of Business Prior to the Closing. 

        (a)   Seller
hereby covenants and agrees that, except as contemplated by this Agreement, between the date hereof and the Closing Date, the Business shall be conducted in the
ordinary course consistent with Seller's past practices. Without limiting the generality of the foregoing, Seller shall (i) continue its advertising and promotional activities, and pricing and
purchasing policies in accordance with past practice; (ii) not shorten or lengthen the customary payment cycles for, or materially modify the terms of, any of its Receivables or payables,
respectively; (iii) use its reasonable best efforts to preserve Seller's current relationships with the customers, suppliers and other Persons with which they have business relationships with
respect to the Business; and (iv) exercise, but only after notice to and consent by Purchaser, any rights of renewal pursuant to the terms of any of the leases or subleases which by their terms
would otherwise expire. 

        (b)   Seller
covenants and agrees that, between the date hereof and the Closing Date, without the prior written consent of Purchaser, it will not do, or permit to be done, any
of the things enumerated in the second sentence of Section 3.6 (including clauses (a) through (s) thereof). 

        SECTION 5.2.
Access to Information. 

        (a)   From
the date hereof until the Closing, Seller shall and shall cause its officers, directors, employees, agents, representatives, accountants and counsel to
(i) afford the officers, employees and authorized agents, accountants, counsel and representatives of Purchaser reasonable access, during normal business hours, to the offices, properties,
warehouses, other facilities, books and records of Seller relating to the Business and to those officers, directors, management employees, agents, accountants and counsel of Seller who have any
knowledge relating to the Business, (ii) furnish to the officers, employees and authorized agents, accountants, counsel and representatives of Purchaser such additional financial and operating
data and other information regarding the Acquired Assets (or legible copies thereof) as Purchaser may from time to time reasonably request, and (iii) furnish to the officers, employees
and authorized agents, accountants, counsel and representatives of Purchaser such financial or other information or other information necessary for the preparation by Purchaser of documents required
for financing the purchase of the Acquired Assets to the extent such financial or other information currently exists or can be obtained without unreasonable effort and expense. 

13

 

        (b)   In
order to facilitate the resolution of any claims made by or against or incurred by Purchaser or Seller after the Closing Date or for any other reasonable purpose, for
a period of five years following the Closing, Seller and Purchaser shall each (i) retain the books and records in their possession which relate to the Acquired Assets and the Business for
periods prior to the Closing, and (ii) upon reasonable notice, afford the officers, employees and authorized agents and representatives of the other party reasonable access (including the right
to make photocopies), during normal business hours, to such books and records. 

        SECTION 5.3.
Confidentiality. 

        (a)   Seller
shall and shall cause its agents, representatives, Affiliates, employees, officers and directors to treat and hold as confidential (and not disclose or
provide access to any Person to) all information relating to trade secrets, processes, patent and trademark applications, product development, price, customer and supplier lists, pricing and marketing
plans, policies and strategies, details of client and consultant contracts, operations methods, product development techniques, business acquisition plans, new personnel acquisition plans and all
other confidential information with respect to the Business. In the event that Seller or any such agent, representative, Affiliate, employee, officer or director of Seller becomes legally compelled to
disclose any such information, Seller shall provide Purchaser with prompt written notice of such requirement so that Purchaser may seek a protective order or other remedy or waive compliance with this
Section 5.3. If such protective order or other remedy is not obtained, or Purchaser waives compliance with this Section 5.3, such party shall furnish only that portion of such
confidential information which is legally required to be provided and exercise its reasonable best efforts to obtain assurances that confidential treatment will be accorded such information. 

        (b)   Seller
agrees and acknowledges that remedies at law for any breach of its obligations under this Section 5.3 are inadequate and that in addition thereto the other
party shall be entitled to seek equitable relief, including injunction and specific performance, in the event of any such breach without imposing any bond or other undertaking therefor. The
obligations of Seller and its agents, representatives, Affiliates, employees, officers and directors under this Section 5.3 shall survive the Closing. 

        SECTION 5.4.
Regulatory and Other Authorizations, Notices and Consents. 

        (a)   Each
party shall use its reasonable best efforts to obtain any authorizations, consents, orders, Permits, certifications, licenses and approvals of any Person and all
Governmental Authorities and officials that may be or become necessary for its or their execution and delivery of, and the performance of its or their respective obligations pursuant to, this
Agreement and the Transaction Documents and will cooperate fully with the other parties in promptly seeking to obtain all such authorizations, consents, orders, Permits, certifications, licenses
and approvals. 

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        (b)   Seller
shall give or cause to be given promptly such notices to third parties and use its reasonable best efforts to obtain such third party consents as Purchaser may,
in its sole discretion, deem necessary or desirable in connection with the transactions contemplated by this Agreement. 

        (c)   Purchaser
shall cooperate and assist Seller in giving such notices and obtaining such consents; provided, however that Purchaser shall have no obligation to give any
guarantee or other consideration of any nature in connection with any such notice or consent or to consent to any change in the terms of any agreement or arrangement which Purchaser, in its sole
discretion, may deem adverse to the interests of Purchaser or the Business. 

        (d)   Seller
shall transfer or assign all authorizations, consents, orders, Permits, certifications, licenses and approvals to Purchaser, to the extent such of the
aforementioned are transferable or assignable; or to the extent that they are not transferable or assignable, Seller shall cooperate with Purchaser to provide any required notices to Governmental
Authorities and to secure new authorizations, consents, orders, Permits, certifications, licenses and approvals which shall be required for the continued operation of the Business. 

        (e)   Seller
and Purchaser further agree that, if any authorization, consent, order, Permit, certification, license or approval necessary or desirable to preserve for the
Business any right or benefit under any lease, license, contract, commitment or other agreement or arrangement to which Seller is a party is not obtained or received prior to the Closing, subject to
the right of Purchaser in such event not to consummate the purchase of the Acquired Assets pursuant to this Agreement, Seller will, subsequent to the Closing, cooperate fully with Purchaser in
attempting to obtain such authorizations, consents, orders, Permits, certifications, licenses and approvals as promptly thereafter as practicable. In such event, if such authorizations, consents,
orders, Permits, certifications, licenses or approvals cannot be obtained, Seller shall use its reasonable best efforts to provide Purchaser with the rights and benefits of the affected lease,
license, contract, commitment or other agreement or arrangement for the term of such lease, license, contract or other agreement or arrangement and, if Seller provides such rights and benefits to
Purchaser, Purchaser shall bear the executory obligations and burdens thereunder. In no event, however, shall any lease, license, contract, commitment or other agreement or arrangement be deemed to
have been assigned to Purchaser if such assignment would violate the terms thereof, except as Purchaser and Seller may otherwise agree in writing at such time. 

        SECTION 5.5.
Notice of Developments. Between the date hereof and the Closing Date, each party to this Agreement shall promptly notify the other party
to this Agreement in writing of any of the following matters which come to such party's attention: (a) all events, circumstances, facts and occurrences, including the commencement or threat of
any Action, arising subsequent to the date of this Agreement which are reasonably likely to result in a breach of a representation or warranty or covenant of such party in this Agreement or which has
the effect of making any representation or warranty of such party in this Agreement untrue or incorrect and (b) all other material developments affecting the Acquired Assets, Liabilities,
Business, financial condition, operations, results of operations, customer or supplier relations or employee relations, projections, forecasts, or prospects of Seller. 

15

 

        SECTION 5.6.
User Information. Both prior to and following the Closing, Seller shall take, or cause to be taken, all appropriate action, do or cause
to be done all things necessary, proper or advisable under applicable Law relating to the transfer of Existing End-User information from Seller to Purchaser, including Law relating
to privacy. 

        SECTION 5.7.
Further Action; Efforts. Each of the parties shall use its reasonable best efforts to take, or cause to be taken, all appropriate action,
do or cause to be done all things necessary, proper or advisable under applicable Law, and to execute and deliver such documents and other instruments or papers as may be required to carry out the
provisions of this Agreement and to consummate and render effective the transactions contemplated by this Agreement including using their reasonable best efforts to cause the conditions in
Section 7.1 and 7.2, as applicable, to be satisfied. 

 
 

ARTICLE VI
  ADDITIONAL POST-CLOSING COVENANTS  

        SECTION 6.1.
Non-Competition. 

        (a)   For a
period of two years following the Closing Date ("Restricted Period"), Seller agrees that it will not, and it will cause its
respective not to, engage, directly or indirectly, anywhere in the United States or any other region where the Business has operated or had sales at any time during the two-year
period prior to the Closing Date (the "Restricted Territory") in any business that provides paid web hosting and e-mail services or other services
competitive with the Business to small and medium-sized businesses ("Competitive Business") or, without the prior written consent of Purchaser, directly or indirectly, own
any interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an individual, partner, stockholder, member,
equityholder, officer, director, employee, consultant, principal, agent, advisor or otherwise, any Person which engages or intends to engage in a Competitive Business in the
Restricted Territory. 

        (b)   As
a separate and independent covenant, Seller further agrees that, during the five years following the Closing Date, Seller will not, and will cause its Affiliates not
to, in any way, directly or indirectly, for the purpose of conducting or engaging in any Competitive Business, solicit, advise or otherwise do, or attempt to do, business with any customers of
Purchaser or the Business or any Person that has been a customer of Purchaser or the Business during the last three years, or take away or interfere or attempt to interfere with any customer, trade,
business or patronage of Purchaser or the Business, or interfere with or attempt to solicit or otherwise interfere with any officers, employees, representatives or agents of Purchaser or induce or
attempt to induce any of them to leave the employ of Purchaser or violate the terms of their contracts, or any employment arrangements. 

16

 

        (c)   It
is expressly understood, acknowledged and agreed by Seller that the covenants set forth in this Section 6.1 constitute an essential element of this Agreement
and that, but for such covenants, Purchaser would not have executed and delivered this Agreement nor be willing to perform the transactions contemplated herein. 

        (d)   Seller
hereby acknowledges and agrees that the provisions of this Section 6.1 are reasonable and valid in geographical and temporal scope and in all other
respects. Without intending in any way to limit the remedies available to Purchaser, Seller further acknowledges and agrees that if Seller or any of its Affiliates breach any of the covenants
contained in this Section 6.1, Purchaser will suffer substantial damages not readily ascertainable or compensable by monetary damages and Purchaser may seek injunctive relief (without being
required to post bond or any other undertaking as a condition to obtaining such relief) in any court of competent jurisdiction to restrain the breach or the threatened breach of, or otherwise
specifically to enforce, any of such covenants. 

        (e)   The
parties agree and intend that the covenants contained in this Section 6.1 shall be construed as a series of separate covenants, one for each applicable
county, state, country or province. Except for geographic coverage, each such separate covenant shall be deemed identical in terms. It is understood and agreed that, whenever possible, each provision,
term and covenant of this Section 6.1 shall be interpreted in such a manner as to be effective and valid under applicable Law. Any provision of this Section 6.1 which is prohibited or
unenforceable in any jurisdiction shall for the purposes of that jurisdiction be adjusted rather than voided, if possible, in order to achieve the intention of the parties to the extent possible, and
Seller agrees to submit to such adjustment of the geographical or temporal or other restriction as a court of competent jurisdiction shall deem to be enforceable. 

        (f)    Seller
shall provide ongoing support and assistance as requested by Purchaser with respect to the migration of data or information by Purchaser from Seller's OpenSRS
account (including the user name, password and all other information and assistance required by Purchaser to access Seller's OpenSRS account) and Platypus Billing System, during the 90 day
period following the Closing Date. 

 
 

ARTICLE VII
  CONDITIONS TO CLOSING  

        SECTION 7.1.
Conditions to Obligations of Seller. The obligation of Seller to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing Date, of each of the following conditions, unless waived in writing by Seller, and Purchaser shall use its reasonable best efforts to cause such
conditions to be fulfilled: 

        (a)   Representations
and Warranties.    Each representation and warranty of Purchaser contained in this Agreement shall be true and
correct in all material respects, except for those representations and warranties that contain a materiality, Material Adverse Effect or similar qualification which shall be true and correct in all
respects, (i) as of the date of this Agreement, (ii) on and as of the Closing Date and (iii) to the extent any representation or warranty speaks as of an earlier date, as of such
earlier date, and Seller shall have received a certificate signed on behalf of Purchaser by an officer to such effect. 

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        (b)   Performance
of Agreements.    Purchaser shall have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date, and Seller shall have received a certificate signed on behalf of Purchaser by an officer to
such effect. 

        (c)   No
Proceeding or Litigation.    (i) No Action shall have been commenced by any Governmental Authority against Seller seeking to
restrain or materially and adversely alter the transactions contemplated by this Agreement and (ii) no injunction or order of any Governmental Authority or any Law shall be in effect that, in
the case of each of (i) and (ii), in the reasonable, good faith determination of Seller, is likely to render it impossible or unlawful to consummate such transactions; provided, however, that
the provisions of this Section 7.1(c) shall not apply if Seller or any of its Affiliates has directly or indirectly solicited or encouraged any such Action. 

        (d)   Purchaser's
Deliveries.    Purchaser shall have delivered to Seller at or before the Closing the items specified in
Section 2.7. 

        SECTION 7.2.
Conditions to Obligations of Purchaser. The obligation of Purchaser to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment, at or prior to the Closing Date, of each of the following conditions, unless waived in writing by Purchaser, and Seller shall use its reasonable best efforts to cause
such conditions to be fulfilled: 

        (a)   Representations
and Warranties.    Each representation and warranty of Seller contained in this Agreement shall be true and
correct in all material respects, except for those representations and warranties that contain a materiality, material adverse effect or similar qualification which shall be true and correct in all
respects, (i) as of the date of this Agreement, (ii) on and as of the Closing Date and (iii) to the extent any representation or warranty speaks as of an earlier date, and
Purchaser shall have received a certificate signed on behalf of Seller by an officer to such effect. 

        (b)   Performance
of Agreements.    Seller shall have performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior to the Closing Date, and Purchaser shall have received a certificate signed on behalf of Seller by an officer thereof to
such effect. 

        (c)   No
Proceeding or Litigation.    (i) No Action shall have been commenced by any Governmental Authority against Seller or Purchaser
seeking to restrain or materially and adversely alter the transactions contemplated hereby and (ii) no injunction or order of any Governmental Authority or Law shall be in effect, which, in the
case of each of (i) and (ii), is likely to render it impossible or unlawful to consummate the transactions contemplated by this Agreement or has or is reasonably likely to have a Material
Adverse Effect, in each case, in the reasonable good faith determination of Purchaser; provided, however, that the provisions of this Section 7.2(c) shall not apply if Purchaser or any of its
Affiliates has directly or indirectly solicited or encouraged any such Action. 

        (d)   Consents
and Approvals.    Purchaser and Seller shall have received, each in form and substance satisfactory to Purchaser, all
authorizations, consents, orders, approvals and Permits of all Governmental Authorities and officials and other Persons, all third party consents and all Board of Directors, shareholder, or other
corporate approvals which Purchaser, in its reasonable determination, deems necessary or required for the consummation of the transactions contemplated by this Agreement. 

18

 

        (e)   User
Information.    Purchaser, in its sole discretion, shall be satisfied that the actions taken by Seller pursuant to
Section 5.6 satisfy the requirements of applicable Law relating to the transfer of Existing End-User information from Seller to Purchaser, including Law relating to privacy. 

        (f)    No
Material Adverse Effect.    No event or events shall have occurred, or be reasonably likely to occur, which, individually or in
the aggregate, have, or is (or are) reasonably likely to have, a Material Adverse Effect. 

        (g)   Due
Diligence.    Purchaser, in its sole discretion, shall be satisfied with the results of its due diligence investigation
regarding Seller, the Business, the Acquired Assets and the Assumed Liabilities. 

        (h)   Release
of Liens.    All Encumbrances on or against the Acquired Assets shall have been released except
Permitted Encumbrances. 

        (i)    Seller's
Deliveries.    Seller shall have delivered to Purchaser at the Closing the items specified in Section 2.6. 

 
 

ARTICLE VIII
  INDEMNIFICATION  

        SECTION 8.1.
Survival of Representations and Warranties. All representations and warranties made by any party to this Agreement or pursuant hereto
shall survive the Closing for a period of one year from the Closing Date except that (a) the representations and warranties contained in or made pursuant to Sections 3.1(b), 3.14, 3.17
and 4.1(b) shall survive the Closing indefinitely, and (b) the representations and warranties contained in or made pursuant to Sections 3.10 and 3.16 shall survive the
Closing until the expiration of the applicable statute of limitations (including any extensions thereof). The expiration of any representation or warranty shall not affect any claim made in writing
prior to the date of such expiration and, absent fraud or intentional misrepresentation, neither Seller nor Purchaser shall have any liability with respect to any representation or warranty after it
shall have expired as to which no claim was made in writing prior to such expiration. The representations and warranties hereunder shall not be affected or diminished by any investigation at any time
by or on behalf of the party for whose benefit such representations and warranties were made or by the Closing of the transactions contemplated hereby. 

        SECTION 8.2.
Indemnification by Seller. Subject to the provisions of Section 8.4, Seller shall indemnify, save harmless and defend each of
Purchaser, its stockholders, Subsidiaries, Affiliates, officers, directors, employees, agents, representatives, successors and assigns (each, a "Purchaser Indemnified
Party"), from and against any and all losses, Liabilities, fines, judgments, sums required to be repaid, claims, damages, settlement payments, actions or causes of action, Encumbrances,
costs and expenses (including reasonable attorneys' fees) (collectively "Losses") incurred by any of them by reason of, arising out of or in connection with:
(a) any breach of any representation or warranty by Seller contained in this Agreement (, any Transaction Document or any certificate delivered to Purchaser in connection with the transactions
contemplated by this Agreement (provided that, solely for purposes of the calculation of Losses arising hereunder and the determination of whether a breach has occurred, each such representation and
warranty shall be read without any qualification of materiality, Material Adverse Effect or similar phrase in such representation or warranty); (b) any breach by Seller of any of their
respective covenants, obligations or agreements contained in this Agreement or any Transaction Document; (c) any claims of any broker or finder engaged by Seller or any of its Affiliates
relating to the transactions contemplated by this Agreement; (d) any Excluded Liability; and (e) any claim by a third party which, if true, would (i) indicate that a breach of a
representation, warranty or other agreement of Seller hereunder had occurred or (ii) constitute an Excluded Liability (collectively, "Purchaser's Indemnifiable
Losses"). Anything contained herein to the contrary notwithstanding, Seller shall not be liable for any amounts in the aggregate that exceed the Purchase Price. 

19

 

        SECTION 8.3.
Indemnification by Purchaser. Subject to the provisions of Section 8.4, Purchaser shall indemnify, save harmless and defend Seller
and Seller's Subsidiaries, Affiliates, officers, directors, employees, agents, representatives, successors and assigns (each, a "Seller Indemnified Party") from and
against any and all Losses incurred by any of them by reason of, arising out of or in connection with (a) any breach of any representation or warranty by Purchaser contained in this Agreement,
and (b) any claim by a third party which, if true, would (i) indicate that a breach of a representation, warranty or other agreement of Purchaser hereunder had occurred or
(ii) constitute an Assumed Liability. Anything contained herein to the contrary notwithstanding, Purchaser shall not be liable for any amounts in the aggregate that exceed the
Purchase Price. 

        SECTION 8.4.
Rules Regarding Indemnification. 

        (a)   The
rights and obligations of each party claiming a right to indemnification hereunder ("Indemnitee") from each other party from which
Indemnitee is seeking indemnification pursuant to this Article VIII ("Indemnitor") shall be governed by the following rules: 

        (i)    Indemnitee
shall give prompt written notice to the Indemnitor of any state of facts which Indemnitee determines will give rise to a claim by the Indemnitee against the
Indemnitor based on the indemnity agreements contained in this Article VIII, stating the nature and basis of such claims and the amount thereof, to the extent known. No failure to give such
notice shall affect the indemnification obligations of Indemnitor hereunder except to the extent Indemnitor can demonstrate such failure materially prejudiced Indemnitor's ability to successfully
defend the matter giving rise to the indemnification claim. 

        (ii)   If
any Action is brought against Indemnitee, with respect to which Indemnitor may have liability under the indemnity agreements contained in this Article VIII,
then upon the written acknowledgment by the Indemnitor, within 30 calendar days after notice of such claim from Indemnitee (or earlier, if Indemnitee reasonably requires an earlier
determination), that it is undertaking and will prosecute the defense of the claim under such indemnity agreements and confirming that the claim is one with respect to which Indemnitor is obligated to
indemnify and that it will be able to pay the full amount of potential liability in connection with any such claim, then subject to Section 8.4(c), the Action (including all proceedings on
appeal or for review which counsel for Indemnitee shall reasonably deem appropriate) may be defended by Indemnitor, at its sole expense with counsel selected by Indemnitor and approved by Indemnitee,
which approval shall not be unreasonably withheld. Indemnitee shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at Indemnitee's own
expense unless the employment of such counsel and the payment of such fees and expenses both shall have been specifically authorized by Indemnitor in connection with the defense of such Action or as
otherwise provided in Section 8.4(a)(iii). 

20

 

        (iii)  Notwithstanding
the foregoing, Indemnitee may employ its own counsel at the expense of Indemnitor, in lieu of counsel appointed by Indemnitor, if Indemnitee shall have
reasonably concluded and specifically notified Indemnitor that (A) there may be specific defenses available to it which are different from or additional to those available to Indemnitor and
which cannot be adequately asserted by counsel for Indemnitor or (B) that such Action involves or could have an effect upon matters beyond the scope of the indemnity agreements contained in
this Article VIII. If Indemnitee assumes the defense on the basis of subsection (B), the cost of the attorneys retained by Indemnitee shall be allocated between Indemnitee and Indemnitor
on the basis of time spent on matters covered by the indemnification and matters beyond the scope thereof. In any of the foregoing events, Indemnitor shall not have the right to direct the defense of
such Action on behalf of Indemnitee. 

        (iv)  Indemnitee
shall be kept reasonably informed by Indemnitor of such Action at all stages thereof, whether or not it is represented by separate counsel. Indemnitor shall,
at Indemnitor's expense, make available to Indemnitee and its attorneys and accountants all books and records of Indemnitor relating to such proceedings or litigation, and the parties agree to render
to each other such assistance as they may reasonably require of each other in order to ensure the proper and adequate defense of any such action, suit or proceeding. 

        (v)   Indemnitor
shall make no settlement of any claims which Indemnitor has undertaken to defend, without Indemnitee's consent unless Indemnitor fully indemnifies Indemnitee
for all Losses, there is no finding or admission of violation of any Law by, or effect on any other claims that may be made against Indemnitee and the relief granted in connection therewith requires
no action on the part of and has no effect on Indemnitee, including any claim involving equitable or injunctive relief. 

        (vi)  Notwithstanding
anything to the contrary contained herein, if Indemnitor shall not offer reasonable assurances and evidence as to its financial capacity to satisfy any
final judgment or settlement, Indemnitee may assume the defense and dispose of the claim, after 30 calendar days' prior written notice to Indemnitor. 

        SECTION 8.5.
Setoff; Withholding of Payments. 

        Purchaser
may set off against and recoup from any amount owed or otherwise payable by Purchaser to Seller pursuant to this Agreement or any of the Transaction Documents any Purchaser's
Indemnifiable Losses for which Seller is obligated to indemnify any Purchaser Indemnified Party pursuant to this Article VIII. Such set off and recoupment shall be treated as adjustments to the
Purchase Price. 

21

 

        (a)   To
the extent that, at the time that Purchaser is otherwise obligated to make a payment to Purchase pursuant to Section 2.3 or pursuant to the Marketing
and License Agreement, one or more Purchaser Indemnified Persons have asserted a claim for indemnification pursuant to this Article VIII that has not been finally resolved, to the extent that,
following such payments, the balance of the Purchase Price not previously paid by Purchaser to Seller is less than or equal to the aggregate potential amount of the Purchaser Indemnified Persons
unresolved claims for indemnification pursuant to this Article VIII (the "Aggregate Claim Amount") as of such date, instead of making such payments to
Seller, Purchaser may withhold such payments as security for payment of any indemnification obligations that Seller. If, on any date, the aggregate amount of the payments withheld by Purchaser
pursuant exceeds the Aggregate Claim Amount on such date, then Purchaser shall promptly pay to Seller the amount of excess. 

 
 

ARTICLE IX
  TERMINATION AND WAIVER  

        SECTION 9.1.
Termination. This Agreement may be terminated at any time prior to the Closing only as follows: 

        (a)   by
Purchaser if, between the date hereof and the time scheduled for the Closing: (i) a Material Adverse Effect occurs; (ii) any representation or warranty
of Seller set forth in this Agreement shall not have been true and correct in all material respects when made or ceases to be true and correct in all material respects at any time subsequent to the
date hereof and Seller shall have failed to cure any material misstatement or omission subsequent to the date hereof promptly after notice by Purchaser; (iii) Seller shall not have complied in
all material respects with each covenant or agreement to be complied with or performed prior to the Closing Date; or (iv) Seller makes a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against Seller seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up or reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any Law relating to bankruptcy, insolvency or reorganization; 

        (b)   by
Purchaser or Seller if the Closing shall not have occurred on or prior to February 1, 2006; provided, however, that the right to terminate this Agreement under
this Section 9.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the primary cause of, or shall have resulted in, the failure
of the Closing to occur on or prior to such date; 

        (c)   by
Purchaser or Seller if any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable; or 

22

 

        (d)   by
the mutual written consent of Seller and Purchaser. 

        SECTION 9.2.
Effect of Termination. In the event of termination of this Agreement as provided in Section 9.1, this Agreement shall forthwith be
canceled and rendered null and void in its entirety, except that (i) the provisions of Sections 5.3 and 10.1 shall survive any such termination and (ii) no such termination
shall serve to relieve any breaching party of any liability under this Agreement. 

        SECTION 9.3.
Waiver. Seller and Purchaser may (a) extend the time for the performance of any of the obligations or other acts of the other
party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by such other party pursuant hereto, or (c) waive
compliance with any of the agreements or conditions of the other party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party
to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. 

 
 

ARTICLE X
  GENERAL PROVISIONS  

        SECTION 10.1.
Expenses. Except as otherwise specified in this Agreement, and whether or not the transactions contemplated shall be consummated, all
costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid
by the party incurring such costs and expenses in performing and complying with all conditions to be performed under this Agreement;. 

        SECTION 10.2.
Notices. All notices, requests, claims, demands and other communications hereunder (collectively,
"Notices") shall be in writing and shall be given or made by delivery in person, by reputable overnight courier service, by facsimile, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with
this Section 10.2): 

	(a)
	if
to Purchaser: 

Hostopia.com Inc.

5915 Airport Road, Suite 1100

Mississauga, Ontario, Canada L4V 1T1

Attn:
                                        

Tel: (800) 322-9438

Fax: (800) 979-9587 

23

 

	(b)
	if
to Seller: 

FortuneCity.com Inc.

322 8th Avenue, 11th Floor

New York, NY 10001

Attn:
                                        

Tel: (212) 981-8624

Fax: (212) 981-8125 

        SECTION 10.3.
Public Announcements. No party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of
this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party other than required by law, which consent shall
not be unreasonably withheld, and the parties shall cooperate as to the timing and contents of any such press release or public announcement. 

        SECTION 10.4.
Headings and Construction. The descriptive headings contained in this Agreement are for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement. All references herein to Articles, Sections or clauses refer to specific provisions of this Agreement. This Agreement shall not be
construed for or against any party to this Agreement because the party or its legal representative drafted all or any part of this Agreement. Wherever from the context it appears appropriate, each
term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or the neuter gender shall include the masculine, the
feminine and the neuter. The term "include" and its forms shall be construed as if followed by the phrase "without limitation." 

        SECTION 10.5.
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public
policy, such term or provision shall be ineffective only to the extent invalid, illegal or incapable of being enforced, without affecting in any manner whatsoever the remainder of the term or
provision and all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is
not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated
as originally contemplated to the greatest extent possible. 

        SECTION 10.6.
Assignment. The respective rights and obligations of the parties under this Agreement may not be assigned by operation of law or
otherwise without the express written consent of Seller and Purchaser (which consent may be granted or withheld in the sole discretion of Seller or Purchaser), and any attempted assignment without
such consent shall be void. Notwithstanding the foregoing, Purchaser may without the consent of Seller assign any rights under this Agreement to an Affiliate of Purchaser. Notwithstanding any such
assignment of this Agreement, Purchaser shall continue to be liable for all of Purchaser's obligations hereunder. 

24

 

        SECTION 10.7.
No Third Party Beneficiaries. Except for the provisions of Article VIII relating to Indemnification, this Agreement shall be
binding upon and inure solely to the benefit of the parties and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 

        SECTION 10.8.
Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of,
Seller and Purchaser or (b) by a waiver in accordance with Section 9.3. 

        SECTION 10.9.
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed and performed entirely within that state. 

        SECTION 10.10.
Counterparts; Facsimile Signatures. This Agreement may be executed in one or more counterparts, and by the different parties in
separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Facsimile signatures shall be treated
as originals. 

        SECTION 10.11.
Specific Performance. The parties agree that irreparable damage would occur in the event any provision of this Agreement is not
performed in accordance with its terms and that the parties shall be entitled to specific performance of the terms of this Agreement, in addition to any other remedy at law or equity. 

        SECTION 10.12.
Entire Agreement. This Agreement and the Transaction Documents constitute the entire agreement of the parties with respect to the
subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between any of the parties with respect to the subject matter hereof and thereof. 

[SIGNATURE
PAGE FOLLOWS] 

25

        IN WITNESS WHEREOF, the parties have caused this Agreement to be executed (as applicable) individually or by their respective officers thereunto duly authorized, in each case, as
of the date first written above. 

	 

	 

	 

	 	 	HOSTOPIA.COM INC.
	

 	
 	

By:	
 	

/s/ COLIN CAMPBELL

	 	 	Name:	 	Colin Campbell

	 	 	Title:	 	President

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	FORTUNECITY.COM INC.
	

 	
 	

By:	
 	

/s/ PETER MACNEE

	 	 	Name:	 	Peter Macnee

	 	 	Title:	 	President and CEO

	 

	 

	 

	 

	 

	 

	 

	 

	 

[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT] 

 
 

Annex A
  DEFINED TERMS  

        As
used in this Agreement, the following terms shall have the following meanings: 

        "Acquired
Assets" has the meaning specified in Section 2.1. 

        "Acquisition"
means the acquisition of the Acquired Assets by Purchaser and the related transactions and arrangements contemplated by this Agreement and the
other Transaction Documents. 

        "Action"
means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority. 

        "Affiliate"
means, (i) with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified Person, (ii) with respect to an individual, any member of such individual's family residing in the same household,
and (iii) with respect to any entity, any officer, director, stockholder, partner, member or investor of such entity; provided, however, that, solely for purposes of Section 6.1, a
Person who acquires control of Seller following the Closing Date shall not be deemed to be an "Affiliate" of Seller to the extent that such Person was engaged in a Competitive Business prior to the
date that such Person acquired control of Seller. 

        "Affiliated
Group" means an affiliated group as defined in Section 1504 of the Code (or any analogous combined, consolidated or unitary group
defined under any Tax Law) of which Seller is or has been a member. 

        "Agreement"
or "this Agreement" means this Asset Purchase Agreement (including all Exhibits and Schedules), and including all
amendments made in accordance with the provisions of Section 10.8. 

        "Aggregate
Claim Amount" has the meaning given to it in Section 8.5(b). 

        "Assignment
and Assumption Agreement" has the meaning specified in Section 2.6. 

        "Assumed
Liabilities" has the meaning specified in Section 2.2. 

        "Balance
Owing" means, (a) as of the Closing Date, any amounts Seller owes to Purchaser, including (i) all outstanding payments for services
provided by Purchaser to Seller prior to the Closing, and (ii) an amount equal to all amounts paid by Existing End-Users to Seller prior to the Closing for web hosting services not
delivered by Seller prior to the Closing, that Purchaser shall be obligated to provide following the Closing, and (b) for all dates following the Closing Date, the amount referred to in
item (a) above, as reduced in each Payment Month by an amount equal to (i) the Continuing End-User Revenue for such Payment Month, multiplied by (ii) 50% minus the
Purchase Price Payment Percentage. 

 

        "Bill
of Sale" has the meaning specified in Section 2.6. 

        "Books
and Records" means the inventory, asset, employee, personnel, maintenance, repair, financial, tax and other books, records, manuals, schedules
and files of Seller relating to the Business and the Acquired Assets including advertising materials, catalogues, price lists, correspondence, mailing lists, brochures, customer lists, customer sales
orders, supplier lists, photographs, production data, sales materials and records, purchasing materials, quality control records and procedures in each case, in whatever form or medium such books and
records are maintained. 

        "Business"
has the meaning specified in the recitals to this Agreement. 

        "Business
Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of
New York. 

        "Cancelled
Continuing End-Users" means Continuing End-Users who terminate services with Purchaser during the period of time
commencing on the Closing Date and ending 90 days thereafter. 

        "Closing"
has the meaning specified in Section 2.5(a). 

        "Closing
Date" has the meaning specified in Section 2.5(a). 

        "COBRA"
means the continuation of coverage requirements of Section 4980B of the Code and Title I, Subtitle B, Part 6 of ERISA. 

        "Code"
means the Internal Revenue Code of 1986, as amended through the date hereof. 

        "Competitive
Business" has the meaning specified in Section 6.1(a). 

        "Continuing
End-Users" means Existing End-Users that, immediately following the Closing, pay for and receive web hosting services,
from Purchaser. 

        "Continuing
End-User Revenue" means all amounts invoiced and collected by Purchaser from Continuing End-Users for web hosting
services, less all taxes, credit card charge-backs and associated credit card charge-back fees, or fees for other services during any relevant period. 

        "Contracts"
has the meaning specified in Section 2.1(a). 

        "Control"
(including the terms "controlled by" and "under common control with"), with respect to the relationship between or among two or more Persons, means
the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting
securities, as trustee or executor, by contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar
body governing the affairs of such Person. 

2

 

        "Employees"
means the employees of Seller who are employed in the operation of the Business on the date hereof. 

        "Employee
Plan" means any plan, contract, commitment, program, policy, arrangement, understanding or practice providing benefits to any employee, former
employee, director or agent of a Person (whether or not the Person maintains, contributes to, or is bound by any such plan, contract, commitment, program, policy, arrangement, understanding or
practice and whether or not in writing), including (a) any "employee benefit plan" (within the meaning of Section 3(3) of ERISA), (b) any profit-sharing, deferred compensation,
bonus, stock option, stock purchase, pension, retainer, consulting, retirement, severance, welfare or incentive plan, contract, commitment, program, policy, arrangement, understanding or practice,
(c) any plan, contract, commitment, program, policy, arrangement, understanding or practice providing for "fringe benefits" or perquisites, including benefits relating to automobiles, clubs,
vacation, child care, parenting, sabbatical or sick leave and medical, dental, hospitalization, life insurance and other types of insurance, (d) any Pension Plan (e) any Multiemployer
Plan, or (f) any Qualified Plan. 

        "Encumbrance(s)"
means any security interest, pledge, mortgage, lien (including environmental and tax liens), charge, encumbrance, adverse claim, assessment,
preferential arrangement with a creditor or restriction of any kind, including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership, in each
case whether now existing or contingent on the passage of time or on the occurrence of any event or action. 

        "ERISA"
means the Employee Retirement Income Security Act of 1974 and the related regulations, in each case as amended as of the date hereof and as the same
may be amended or modified from time to time. References to titles, subtitles, sections paragraphs or other provisions of ERISA and the related regulations also refer to successor provisions. 

        "ERISA
Affiliate" means (a) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the
Code of which Seller is a member, (b) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of
Section 414(c) of the Code of which Seller is a member, (c) any member of an affiliated service group within the meaning of Section 414(m) of the Code of which Seller, any
corporation described in clause (a) or any trade or business described in clause (b) is a member or (d) any organization which is deemed to be a member of any of the
foregoing by reason of IRS Regulations under Section 414(o) of the Code. 

        "Excluded
Assets" has the meaning specified in Section 2.1(b). 

        "Existing
End-Users" means those customers of Seller that had entered into an agreement with Seller prior to the Closing Date for web hosting
services, and continue to pay for such services under such agreement as of the Closing Date. 

        "Financial
Statements" means the Revenue Reconciliation Statement, the Total Amount Sold Per Item Statement for the months of October, November and
December 2005 and the Deferred Revenue Calculation Statement, relating only to domain name and hosting revenue, as set out in Exhibit F. 

3

 

        "GAAP"
means United States generally accepted accounting principles and practices as in effect as of the date of this Agreement and as of the Closing
Date applied consistently throughout the relevant periods. All accounting and financial terms used in this Agreement shall refer to and be construed in accordance with GAAP unless otherwise expressly
specified in this Agreement. 

        "Governmental
Authority" means any United States federal, state, local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral body. 

        "Governmental
Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority. 

        "Indebtedness"
means, with respect to any Person, (a) all indebtedness of such Person, whether or not contingent, for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or services except trade accounts payable and accrued Liabilities that arise in the ordinary course of the Business that are not
overdue and are not the subject of settlement or installment payment arrangements and are not evidenced by promissory note or other instrument, (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of Seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under leases that have been or should be, in accordance with GAAP, recorded as capital leases, (f) all obligations, contingent or otherwise, of such Person under
acceptances, letters of credit or similar facilities, (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any capital stock of such Person or
any other Person or any warrants, rights or options to acquire such capital stock, valued, in the case of redeemable preferred stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, and (h) all Indebtedness of others referred to in clauses (a) through (g) guaranteed directly or indirectly in any manner by
such Person. 

        "Indemnitee"
has the meaning specified in Section 8.4(a). 

        "Indemnitor"
has the meaning specified in Section 8.4(a). 

        "Intellectual
Property" means, with respect to the Business, (a) inventions, whether or not patentable, whether or not reduced to practice, and
whether or not yet made the subject of a pending patent application or applications, (b) national (including the United States) and multinational statutory invention registrations,
patents, patent registrations and patent applications (including all reissues, divisions, continuations, continuations-in-part, extensions and reexaminations) and all rights
therein provided by international treaties or conventions and all improvements to the inventions disclosed in each such registration, patent or application, (c) trademarks, service marks, trade
dress, logos, trade names, brand names and corporate names, whether or not registered, including all common law rights, and registrations and applications for registration thereof,
(d) copyrights (registered or otherwise) and registrations and applications for registration thereof, and all rights therein provided by international treaties or conventions,
(e) computer programs, software and written proprietary processes, including source codes, operating systems operating procedures and specifications and other proprietary information used,
data, data bases, files, documentation and other materials related thereto, data and documentation, (f) trade secrets and confidential, technical and business information, (g) whether or
not confidential, technology (including know-how), manufacturing and production processes and techniques, blue prints, design specifications, engineering drawings, research and development
information, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, (h) copies and tangible
embodiments of all the foregoing, (i) all rights to obtain and rights to apply for patents, and to register trademarks and copyrights, and (j) all rights to sue or recover and retain
damages and costs and attorneys' fees for present and past infringement of any of the foregoing. 

4

 

        "Intellectual
Property License Agreement" has the meaning specified in Section 2.6. 

        "Inventories"
means all inventory, merchandise, finished goods, raw materials, work in process, packaging, supplies and similar personal property owned by
Seller and held or stored by or for Seller or in transit in connection therewith, for use in the operation of the Business as of a particular date, whether or not recorded on the books or financial
records of Seller, and any prepaid deposits for any of the same at such date. 

        "IRS"
means the Internal Revenue Service of the United States. 

        "Knowledge"
means, with respect to Seller, the actual knowledge of any director or officer of Seller. 

        "Law"
means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law. 

        "Liability"
or Liabilities" means any and all debts (including all Indebtedness), liabilities and obligations, whether accrued
or fixed, absolute or contingent, known or unknown, matured or unmatured or determined or determinable, including those arising under any Law, Action or Governmental Order and those arising under any
contract, agreement, arrangement, commitment or undertaking. 

        "Licensed
Intellectual Property" means all Intellectual Property licensed or sublicensed to Seller from a third party. 

        "Loss"
has the meaning specified in Section 8.2(a). 

        "Material
Adverse Effect" means any circumstance, change in, or effect on, the Business, the Acquired Assets, the Assumed Liabilities or Seller that,
individually or in the aggregate with any other circumstances, changes in, or effects on, the Business, the Acquired Assets, the Assumed Liabilities or Seller: that (a) is, or is reasonably
likely to be, materially adverse to the business, operations, assets or Liabilities, employee relationships (including any work stoppages or strikes or other material problems arising under any
collective bargaining agreements), customer or supplier relationships, business or financial prospects, results of operations, cash flows, or the condition (financial or otherwise) of the Business or
the Acquired Assets, or (b) is reasonably likely to materially and adversely affect the ability of Purchaser to operate or conduct the Business in the manner in which it is currently operated
or conducted by Seller. 

5

 

        "Material
Contracts" has the meaning specified in Section 3.10. 

        "Multiemployer
Plan" means an Employee Plan that is a "multiemployer plan" (within the meaning of Section 3(37) of ERISA) to which Seller or any ERISA
Affiliate or any of their respective predecessors contributes or has contributed or has or has had an obligation to contribute or otherwise participates in or participated in or in any way, directly
or indirectly, has any Liability. 

        "Mutual
Release" has the meaning specified in Section 2.6. 

        "Notices"
has the meaning specified in Section 10.2. 

        "Owned
Intellectual Property" means all Intellectual Property in and to which Seller holds title or has the right to acquire title. 

        "Payment
Month" has the meaning given to it in Section 2.3. 

        "Pension
Plan" means an Employee Plan, other than a Multiemployer Plan, that is covered by Title IV of ERISA or subject to the minimum funding standards of
Section 412 of the Code or Section 302 of ERISA, including any single employer pension plan (within the meaning of Section 4001(c)(15) of ERISA) which is subject to
Sections 4063, 4064 or 4069 of ERISA, to which Seller or any ERISA Affiliate or any of their respective predecessors contributes or has contributed or has had an obligation to contribute
or otherwise participates in or participated in or in any way, directly or indirectly, has any Liability. 

        "Permits"
has the meaning specified in Section 3.9(b). 

        "Permitted
Encumbrances" means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been
commenced and as to which appropriate reserves have been established and provided for in full on the Reference Balance Sheet included in the Financial Statements: (a) materialmen's, mechanics',
carriers', workmen's and repairmen's liens arising in the ordinary course of the Business securing obligations, in each case that (i) are not overdue, (ii) are not in excess of $5,000 in
the aggregate at any time, and (iii) are fully reserved for on the Reference Balance Sheet; and (b) those liens disclosed on Schedule 7.2(h) under the caption "Permitted
Encumbrances" in such Section. 

        "Person"
means any individual, partnership, limited liability company, firm, corporation, association, estate, trust, government, agency, unincorporated
organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. 

6

 

        "Personal
Property" has the meaning specified in Section 3.12. 

        "Purchase
Price" has the meaning specified in Section 2.3. 

        "Purchase
Price Payment Percentage" means (a) for each of the six full calendar months following the Closing Date, 37.5% (b) for the six full
calendar months immediately following the conclusion of the six-month period referred to in item (a) above, 25%, and (c) for each calendar month following the conclusion of
the twelve-month period referred to in items (a) and (b) above, 12.5%; provided, however, that, notwithstanding items (a), (b) and (c) above, if at the end of any
calendar month the Balance Owing has been reduced to zero, then the "Purchase Price Payment Percentage" for such calendar month shall be 50%. 

        "Purchaser"
has the meaning specified in the Preamble to this Agreement. 

        "Purchaser
Indemnifiable Losses" has the meaning specified in Section 8.2. 

        "Purchaser
Indemnified Party" has the meaning specified in Section 8.2. 

        "Qualified
Plan" means any Pension Plan and any other Employee Plan which is intended to satisfy the requirements of Section 401(a) of
the Code. 

        "Receivables"
means any and all accounts receivable, notes and other amounts receivable by Seller from third parties (including customers) arising from the
conduct of the Business on or prior to the Closing Date. 

        "Reference
Balance Sheet" has the meaning defined in the definition of Financial Statements above. 

        "Regulations"
means the Treasury Regulations (including Temporary Regulations) promulgated by the United States Department of Treasury with respect to
the Code or other federal tax statutes. 

        "Restricted
Period" has the meaning specified in Section 6.1(a). 

        "Restricted
Territory" has the meaning specified in Section 6.1(a). 

        "Seller"
has the meaning specified in the Preamble to this Agreement. 

        "Seller
Indemnified Party" has the meaning specified in Section 8.3. 

        "Seller
Plan" means any Employee Plan (a) established, maintained, sponsored or contributed to (or with respect to which any obligation to
contribute has been undertaken) by Seller or any ERISA Affiliate on behalf of any Employee (whether current, former or retired) or its beneficiaries or (b) with respect to which Seller or any
ERISA Affiliate has or has had any obligation on behalf of any such Employee or beneficiary. 

        "Specified
Intellectual Property" means all Intellectual Property of Seller that is essential to the operation of the Business, including the domain name
fortunecityhosting.com, the telephone number 866-638-2489, the branding, logos, trade marks and trade names associated with the Business, the look and feel of the
websites of the Business, and the source code and object code for Seller's Platypus Billing System software and all other software owned or licenced by Seller that is necessary to permit such software
to operate in Purchaser's computer system and network environment. 

7

 

        "Subsidiary"
means, with respect to Seller, any Person of which securities having the power to elect a majority of that Person's board of directors or
similar governing board (other than securities having that power only upon the happening of a contingency that has not occurred) are held by Seller or one or more of its Subsidiaries. 

        "Tax"
or "Taxes" means (a) any and all taxes, fees, levies, duties, tariffs, imposts, and other charges of any kind
(together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any government or taxing authority, including: taxes or other charges
on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, disability, workers' compensation,
unemployment compensation, natural resources, occupation or net worth; taxes or other charges in the nature of excise, withholding, advance corporate, ad valorem, stamp, transfer, value added,
alternative minimum, all-on minimum, estimated severance, premium, environmental, or gains taxes or other tax of any kind whatsoever; license, registration and documentation fees; and
customs duties, tariffs, and similar charges; (b) liability for the payment of any amounts of the type described in clause (a) arising as a result of being (or ceasing to be) a
member of any Affiliated Group (or being included (or required to be included) in any Tax Return relating thereto); and (c) liability for the payment of any amounts of the type
described in clause (a) as a result of any express or implied obligation to indemnify or otherwise assume or succeed to the liability, or pay any amount in respect of the Taxes, of any
other Person. 

        "Tax
Returns" or "Returns" means returns, declarations, reports, claims for refund, information returns or other documents
(including any related or supporting schedules, statements or information) and including any amendment thereof filed or required to be filed in connection with the determination, assessment or
collection of Taxes or the administration of any Laws relating to any Taxes. 

        "Transaction
Documents" means this Agreement, the Schedules and Exhibits to this Agreement, the Bill of Sale, the Assignment and Assumption Agreements, the
Marketing and License Agreement, the Mutual Release and any certificate, Financial Statement or other document delivered by or on behalf of Seller or Purchaser pursuant to this Agreement or in
connection with the transactions contemplated by this Agreement. 

        "Unpaid
Purchase Price" has the meaning given to it in Section 2.3. 

8

QuickLinks

ASSET PURCHASE AGREEMENT

RECITALS

ARTICLE I DEFINITIONS

ARTICLE II PURCHASE AND SALE

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER

ARTICLE V ADDITIONAL AGREEMENTS

ARTICLE VI ADDITIONAL POST-CLOSING COVENANTS

ARTICLE VII CONDITIONS TO CLOSING

ARTICLE VIII INDEMNIFICATION

ARTICLE IX TERMINATION AND WAIVER

ARTICLE X GENERAL PROVISIONS

Annex A DEFINED TERMSQuickLinks
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Exhibit 10.11  

 
 

SERVICES AGREEMENT    
    

THIS AGREEMENT made as of the 1st day of July, 2005 ("Effective Date"). 

BETWEEN:

HOSTOPIA.COM INC., a corporation incorporated under the laws of the State of Delaware

(hereinafter called "Hostopia") 

– and – 

GEEKSFORLESS INC., a corporation incorporated under the laws of Ontario

(hereinafter called "GFL") 

WHEREAS Hostopia is in the business of providing wholesale web hosting, domain and email services; 

AND WHEREAS GFL contracts with Ukrainian-based computer programmers and provides computer programming and other technical services; 

AND WHEREAS Hostopia wishes to receive from GFL, and GFL wishes to provide to Hostopia, computer programming and other services; 

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

	1.
	Services

	a.
	GFL
shall provide the Programming and Support Services, (as defined below), unless otherwise agreed to in writing by Hostopia.

	b.
	"Programming and Support Services" means the computer programming and other services provided by GFL to Hostopia and includes:

	i.
	providing
qualified Contractors to complete the computer programming code (in both object and source code form) in accordance with specifications provided by
Hostopia from time to time in Work Orders (as defined below);

	ii.
	providing
qualified Contractors to perform support and systems administration services in accordance with specifications provided by Hostopia from time to time in Work
Orders or otherwise; and

	iii.
	performing
any task requested by Hostopia, acting reasonably, to satisfy the intention of this Agreement. 

 

	c.
	"Work Orders" means the programming specifications required by Hostopia and agreed to in writing by Hostopia and GFL. Upon receiving the
signature of the parties hereto, each Work Order shall be incorporated into this Agreement. Any failure to meet the specifications or timelines of any Work Order shall be considered a breach of this
Agreement and Hostopia shall be entitled to terminate this Agreement in accordance with Section 9.

 

	2.
	GFL's Obligations and Responsibilities

	a.
	GFL
shall perform the Programming and Support Services in a professional, diligent and timely manner.

	b.
	GFL
agrees to have, and maintain no less than one hundred (100) HD FTEQ Contractors.

	c.
	"Contractor" means an HD FT Contractor, HD PT Contractor, Secondary HD FT Contractor and Secondary HD PT Contractor, all as
defined below.

	d.
	"Facility" means the facility located at: Kosmonavtov Str, 130-B Mykolayiv, 54001Ukraine.

	e.
	"HD FTEQ Contractor" means:

	i.
	an
HD FT Contractor, or

	ii.
	the
number of HD PT Contractors who, in the aggregate, provide no less than 2,000 hours of Programming and Support Services to Hostopia per year.

	f.
	"HD FT Contractor" means a person under a contract for services with GFL who:

	i.
	utilizes
a Work Station (as defined in Schedule "A") at the Facility between the hours of 8:00 AM and 5:00 PM (Mykolaev local time);

	ii.
	provides
no less than 160 hours of Programming and Support Services to Hostopia per month; and

	iii.
	does
not work for any client other than Hostopia.

	g.
	"HD PT Contractor" means a person under a contract for services with GFL who:

	i.
	utilizes
a Work Station at the Facility between the hours of 8:00 AM and 5:00 PM (Mykolaev local time);

	ii.
	provides
less than 160 hours of Programming and Support Services to Hostopia per month; and

	iii.
	does
not work for any client other than Hostopia.

	h.
	"Secondary HD FT Contractor" means a person under a contract for services with GFL who:

	i.
	utilizes
a Work Station at the Facility between the hours of 5:00 PM and 8:00 AM (Mykolaev local time);

	ii.
	provides
no less than 160 hours of Programming and Support Services to Hostopia per month; and

	iii.
	does
not work for any client other than Hostopia.

	i.
	"Secondary HD PT Contractor" means a person under a contract for services with GFL who:

	i.
	utilizes
a Work Station between the hours of 5:00 PM and 8:00 AM (Mykolaev local time); 

2

 

	ii.
	provides
less than 160 hours of Programming and Support Services to Hostopia per month; and

	iii.
	does
not work for any client other than Hostopia.

 

	3.
	Fees.

	a.
	In
consideration for the provision of Programming and Support Services by GFL, Hostopia shall pay to GFL, subject to any discounts, the fees described in Schedule "A" within
fifteen (15) days of receipt of a correct and accurate invoice.

	b.
	The
parties agree that effective on each of January 1, 2007, January 1, 2008 January 1, 2009, and January 1, 2010 the Over-Head
Contribution/Month fees payable by Hostopia set out in Schedule "A" then effective ("Existing Fees"), shall increase by an mount equal to the
Existing Fees, multiplied by the lesser of A) the Annual Ukrainian Inflation Rate (as defined below) and B) 10%.

	c.
	"Annual
Ukrainian Inflation Rate" means the annual rate of inflation in Ukraine, for the immediately preceding calendar year ended December 31, as reported by the International
Monetary Fund or other organization mutually acceptable to the parties.

 

	4.
	Covenants, Representations and Warranties — GFL.

	a.
	GFL
hereby covenants, represents and warrants to Hostopia, as follows, and confirms that Hostopia is relying upon the accuracy of each of such covenants, representations and warranties
in connection with this Agreement:

	i.
	GFL
shall, and shall cause its officers, employees and contractors, to comply at all times with applicable laws and regulations in Ukraine or otherwise, including
obtaining all licenses and permits necessary to perform their obligations hereunder, at their sole cost and expense and further including compliance with all applicable privacy protection laws
including without limitation Ontario's Personal Information Protection and Electronic Documents Act, and shall not engage in any activity that is
prohibited by the Foreign Corrupt Practices Act of the United States of America;

	ii.
	GFL
shall pay all Ukrainian or other applicable taxes when due and payable, and shall file all documents required by the Ukrainian government or otherwise, accurately
and on time;

	iii.
	GFL
shall not use, copy, modify or repurpose the Intellectual Property for any purpose not authorized by Hostopia during the term of this Agreement and thereafter, such
covenant to survive termination of this Agreement;

	iv.
	GFL
shall, during the times specified, provide the numbers of HD FTEQ Contractors specified in Section 2 above;

	v.
	GFL
shall enter into an agreement with Hostopia and each of its Contractors, employees, independent contractors, consultants, agents, and representatives, which
establishes Hostopia's sole ownership rights in the Intellectual Property and Work Product, such agreements to be in accordance with, and substantially similar to, Schedule "B" attached hereto
("IP Rights Agreement"). GFL shall not permit any Contractor to perform any Programming and Support Services where GFL has not delivered such an agreement, duly signed by such Contractor, to
Hostopia. GFL shall obtain, at its expense, any notarial seal or stamp or other evidence as may be required to validate such agreement in Ukraine. GFL shall provide Hostopia with a report each month,
with evidence confirming that all Contractors have signed the IP Rights Agreement. 

3

 

	vi.
	GFL
shall provide Hostopia with quarterly reports on March 1, June 1, September 1, December 1, of each year, that include the
following information:

	A)
	taxes
paid to any government;

	B)
	any
fees paid, or filings made, to any government;

	C)
	number
of hours, and times of day worked by each Contractor;

	D)
	total
billable hours per Contractor;

	E)
	total
number of Work Stations;

	F)
	if
not provided to Hostopia earlier, for each Contractor i) a private entrepreneur registration certificate when available, ii) a copy of the agreement signed by GFL and
each Contractor indicating the amount of remuneration and the services provided, and iii) a copy of bank documents evidencing the payment of a monthly uniform tax.

	G)
	a
certificate in writing signed by the directors and officers of GFL stating that GFL:

	a.
	has
paid all taxes when due and payable;

	b.
	has
filed all documents required by the Ukrainian government or otherwise, accurately and on time;

	c.
	its
directors, officers and employees have complied with applicable laws and regulations in Ukraine or otherwise with regard to GFL's operations; and

	d.
	its
directors, officers and employees have not engaged in any activity that is prohibited by the Foreign Corrupt Practices Act of the United States of America with regard to
GFL's operations.

	H)
	total
number of Work Stations.

 

	5.
	Indemnification.

GFL SHALL INDEMNIFY AND HOLD HARMLESS HOSTOPIA, ITS DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS (EACH AN "INDEMNIFIED PERSON"), AGAINST ANY LOSS, DEMAND, CAUSE OF ACTION, DAMAGE,
CLAIM, EXPENSE (INCLUDING REASONABLE LEGAL FEES) OR LIABILITY (COLLECTIVELY, "INDEMNIFIABLE LOSSES") ARISING FROM OR IN CONNECTION WITH (I) HOSTOPIA'S USE AND/OR OPERATION OF THE SERVICES
(II) GFL'S BREACH OF THIS AGREEMENT; (III) TAXES OWING OR PAYABLE BY GFL OR ANY OF ITS DIRECTORS, OFFICERS EMPLOYEES, CONTRACTORS, CONSULTANTS OR AGENTS TO ANY FEDERAL,
PROVINCIAL, STATE, LOCAL GOVERNMENT, GOVERNMENTAL SUBDIVISION OR TAXING AUTHORITY; OR (IV) ANY CLAIM BY A THIRD PARTY ARISING OUT OF OR IN CONNECTION WITH HOSTOPIA'S USE OF OR INABILITY TO USE
THE SERVICE OR ANY PORTION THEREOF OR ANY WORK PRODUCT OR ANY PORTION THEREOF; PROVIDED THAT THE OBLIGATION TO INDEMNIFY PURSUANT TO THIS PROVISION SHALL NOT APPLY TO INDEMNIFIABLE LOSSES ARISING FROM
WILFUL MISCONDUCT, FRAUD OR GROSS NEGLIGENCE OF AN INDEMNIFIED PERSON.

4

 
	6.
	Limitation of Liability.

IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES, SHAREHOLDERS, DIRECTORS, MANAGERS, OFFICERS, EMPLOYEES, REPRESENTATIVES AND AGENTS HAVE ANY LIABILITY TO THE OTHER PARTY OR
ANY OTHER PERSON FOR ANY INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL CLAIMS, LOSSES OR DAMAGES OF ANY KIND (INCLUDING BUT NOT LIMITED TO ANY DAMAGES OR EXPENSES FOR ANY: LOSS OF USE; LOST
PROFITS, BUSINESS, OPPORTUNITY, OR DATA; COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; AND, BUSINESS INTERRUPTION) WHETHER BASED ON CONTRACT (INCLUDING UNDER INDEMNITY), TORT (INCLUDING
NEGLIGENCE) ARISING AT COMMON LAW, UNDER STATUTE, BY MEANS OF STRICT LIABILITY OR ARISING UNDER ANY OTHER LEGAL THEORY (INCLUDING UNDER CRIMINAL LAW). IN ANY EVENT, OTHER THAN THE INDEMNITY SET OUT IN
SECTION 5, EACH PARTY'S ENTIRE LIABILITY, AND THE OTHER PARTY'S SOLE REMEDY, WITH RESPECT TO ANY DAMAGES FROM ANY CAUSE WHATSOEVER SHALL NOT EXCEED AN AMOUNT EQUAL TO THE FEES PAID BY HOSTOPIA
FOR THE PROGRAMMING AND SUPPORT SERVICES IN THE MONTH IN WHICH THE ACT OR OMISSION THAT GAVE RISE TO THE LIABILITY OCCURRED.

	7.
	Intellectual Property Ownership.

Hostopia
shall retain all ownership rights, title and interest in and to all of its Intellectual Property (as defined in Section 8.a. below). 

	8.
	Intellectual Property.

	a.
	"Intellectual Property" means all rights in the nature of intellectual property and includes without limitation all statutory and other
proprietary rights, and applications, registrations or filings for rights, in respect of trademarks, patents, circuit layout, copyrights, designs, Trade Secrets (as defined below), Confidential
Information (as defined below) Work Product (as defined below), know how, domain registrations and sales information and leads, software of any kind including executable files, source
code firmware and binary software, documentation, algorithms, processes and other information owned by Hostopia. 

5

 

	b.
	GFL
agrees, acknowledges and warrants and represents that Hostopia shall have the right to use, copy, modify and translate the Work Product in any manner in their sole discretion and
the rights assigned to Hostopia hereunder shall give Hostopia and any third party designated by Hostopia, the unlimited right to manufacture, sell, sublicense or otherwise use or exploit the Work
Product, by any method in which Hostopia, whether now known or hereafter invented or devised, and to use any trademarks, trade names or labels in connection therewith.

	b.
	GFL
shall maintain in strict confidence, and not use or disclose except pursuant to written instructions from Hostopia, any Trade Secret (as defined below) of Hostopia, for so
long as the pertinent data or information remains a Trade Secret, provided that the obligation to protect the confidentiality of any such information or data shall not be excused if such information
or data ceases to qualify as a Trade Secret as a result of the acts or omissions of GFL.

	c.
	GFL
shall maintain in strict confidence and, except as necessary to perform their duties hereunder, not use or disclose any Confidential Information (as hereinafter defined)
during the term of this Agreement and for a period of five (5) years thereafter.

	a.
	"Work Product" means all original works that result from the performance by GFL of its duties hereunder including without limitation all
notes, drawings, designs, technical data, circuit layout or topography, know how, works of authorship, derivative works, firmware, software, source code, ideas, improvements, inventions, innovations,
material, information, work or product authored, conceived, created, discovered, invented, written or first reduced to practice provided in connection with this Agreement. GFL hereby transfers and
assigns, and covenant to transfer and assign, to Hostopia in perpetuity all proprietary rights, including all rights in the nature of Intellectual Property, it may have now, at any time and from time
to time in the Work Product and shall waive all moral rights with respect thereto. GFL covenants and agrees to execute and deliver to Hostopia such documents and further assurances as may be necessary
from time to time to more fully evidence and effect such transfer and assignment. Should Hostopia elect to register claims of copyright to any such works, GFL will, at the expense of Hostopia, do such
things, sign such documents and provide such reasonable cooperation as is necessary for Hostopia to register such claims, and obtain, protect, defend and enforce such proprietary rights. GFL shall not
register any claims for Intellectual Property rights protection with respect to any such works without Hostopia's prior written consent. GFL shall have no right to use any trademarks or proprietary
marks of Hostopia without the express, prior written consent of Hostopia regarding each use. GFL hereby appoints Hostopia as its true and lawful attorney-in-fact with the right
to execute assignments of and to register any and all rights to the Work Product if GFL is for any reason unavailable. 

6

 

	b.
	GFL
agrees that, if any Contractor, employee, independent contractor, consultant, agent, and/or other representative of GFL, in the course of performing services for Hostopia, and/or
at any time, incorporates any work, software of any kind including source code, improvement, invention, development, concept, discovery, or other proprietary information into the Work Product, where
the Intellectual Property rights therein are not transferred or assigned to Hostopia for any reason, Hostopia shall have, and GFL shall obtain for Hostopia forthwith, a non-exclusive,
irrevocable, royalty-free, perpetual, transferable and worldwide license, including the right to sublicense, to use the Work Product in any manner desired by Hostopia without restriction
or accounting to GFL, including, without limitation, the right to make, have made, sell, offer for sale, rent, lease, import, copy, create derivative works, display, translate, modify, perform, and
distribute such Work Product, and which license will be in favour of Hostopia and binding on the Contractor and any third party who holds rights in the nature of Intellectual Property in such
proprietary information. To the extent the Work Product is not already the property of Hostopia and is not assignable, GFL hereby grants and agrees to grant Hostopia under any and all Intellectual
Property rights it may have in the Work Product, a non-exclusive, irrevocable, royalty-free, perpetual, transferable and worldwide license, including the right to sublicense,
to use the Work Product in any manner desired by Hostopia without restriction or accounting to GFL, including, without limitation, the right to make, have made, sell, offer for sale, rent, lease,
import, copy, create derivative works, translate, display, perform, and distribute such Work Product.

	d.
	In
the event GFL violates or threatens to violate the provisions of this Section 8, damages at law will be an insufficient remedy and Hostopia shall be entitled to equitable relief
including but not limited to injunction, monetary damages, punitive damages, and specific liquidated damages in the amount that GFL has been paid by Hostopia in accordance with this Agreement. In
addition, other remedies or rights shall be available to Hostopia and no bond or security will be required in connection with such equitable relief.

	e.
	The
existence of any claim or cause of action that GFL may have against Hostopia will not at any time constitute a defense to the enforcement by Hostopia of the restrictions or rights
provided by this Section 8.

	i.
	"Trade Secret" shall mean any information, including, but not limited to, technical or non-technical data, a
formula, a pattern, a compilation, a program, a plan, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers
or suppliers which (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 

7

 

	ii.
	"Confidential Information" shall mean any nonpublic information of a competitively sensitive or personal nature, other
than Trade Secrets, acquired by GFL in connection with performing services for Hostopia, including (without limitation) all information prepared by GFL for Hostopia, Work Orders
(and instructions relating thereto), oral and written information concerning Hostopia's financial information and results of operations (revenues, margins, assets, net income, etc.)), annual
and long-range business plans, marketing plans and methods, account invoices, oral or written customer information, and personnel information.

 

	9.
	Term and Termination.

This
Agreement shall: 

(a) commence
on the Effective Date, and continue for a period of twelve (12) months (the "Initial Term"); and 

(b) following
the end of the Initial Term, continue to renew automatically for periods of twelve (12) months; 

unless
and until terminated in accordance with this Section 9. 

This
Agreement may be terminated by: 

	a.
	either
party upon twenty-one (21) days written notice if the other party breaches any of its obligations hereunder and the breaching party fails to cure such breach
within seven (7) days after receipt of notice of such breach;

	b.
	Hostopia,
in its sole discretion, upon no less than thirty (30) days written notice to GFL; or

	c.
	GFL,
in its sole discretion, upon not less than twelve (12) months written notice at any time following June 30, 2010. 

In
the event of termination of this Agreement, GFL shall return to Hostopia any Hostopia property including without limitation Hostopia's Intellectual Property. 

GFL
acknowledges and agrees that damages may not be an adequate remedy to compensate Hostopia for any breach of GFL's obligations contained in this Agreement, and accordingly GFL agrees
that in addition to any and all other remedies available, Hostopia shall be entitled to obtain relief by way of a temporary or permanent injunction to enforce the obligations contained in
this Agreement. 

	10.
	Insurance.    GFL shall, at its own expense, immediately obtain and maintain
in effect both general liability insurance and errors and omissions insurance policies, issued by a reputable insurer approved by Hostopia (which approval shall not be unreasonable withheld or
delayed) and naming Hostopia as an additional insured on GFL's commercial general liability policy, with commercial general liability coverage of at least Cdn.$2,000,000. 

8

 
	11.
	Severable Provisions.

The
provisions of this Agreement are severable, and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions, and any
partially enforceable provision to the extent enforceable, shall nevertheless be binding and enforceable. 

	12.
	Binding Agreement.

The
rights and obligations of Hostopia under this Agreement shall enure to the benefit of and shall be binding upon the successors and assigns of Hostopia. The rights, obligations and duties of GFL
hereunder may not be assigned without Hostopia's prior written consent. 

	13.
	Relationship of Parties.

Hostopia
and GFL are independent contractors. GFL is not, and shall not claim to be, a legal agent, representative, partner, franchise or employee of Hostopia, and GFL shall not have the right or
authority to contract in the name of Hostopia, nor shall it assume or create any obligations, debts, accounts or liabilities for Hostopia. 

	14.
	Assignment.

GFL
shall not, without the approval in writing of Hostopia which can be unreasonably withheld, assign or transfer its interest in this Agreement. Any purported assignment in contravention of this
Section 13 shall be void. 

	15.
	Notices.

Any
notices or other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and delivered when delivered by email or facsimile to the
recipient at the following address or facsimile number, or to such other email address or facsimile number subsequently provided in writing by such recipient: 

If to Hostopia:

Hostopia.com Inc.

5915 Airport Road

Mississauga, Ontario

Canada L4V 1T1 

If to GFL:GeeksForLess Inc.

5915 Airport Road, Suite 110

Mississauga, Ontario,

Canada L4V 1T1 

9

 
	16.
	Waiver.

Any
party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions as to future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted the parties herein are cumulative and the waiver by a party of any single remedy shall
not constitute a waiver of such party's right to assert all other legal remedies available to him or it under the circumstances. 

	17.
	Governing Law.

This
Agreement shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, excluding their rules governing conflicts of laws. The parties irrevocably
attorn to the non-exclusive jurisdiction of the courts of Toronto, Ontario in respect of any disputes arising under this Agreement. 

	18.
	Legal Advice.

Every
party, and where appropriate the duly authorized representatives of a party, hereby acknowledges that (i) they have reviewed and fully understand the terms and binding effect of this
Agreement, (ii) they accept the terms herein voluntarily and without duress or compulsion, and (iii) each has been advised of the right to obtain independent legal and other advice in
connection with the execution of this Agreement, and have either obtained or hereby waive the obtaining of such advice. 

	19.
	Benefit of Subsidiaries.

For
purposes of this Agreement "Hostopia" shall include Hostopia and all of its subsidiaries. 

	20.
	Currency.

Except
where otherwise expressly provided, all amounts in this Agreement are stated and will be paid in the lawful currency of the United States of America. 

	21.
	Captions and Section Headings.

The
various captions and section headings contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope or intent of any of the provisions of
this Agreement. 

	22.
	Entire Agreement.

With
respect to its subject matter, this Agreement constitutes the entire understanding of the parties superseding all prior agreements, understandings, negotiations and discussions between them
whether written or oral, and there are no other understandings, representations, warranties or commitments with respect thereto. 

10

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first written above. 

	 	 	HOSTOPIA.COM INC.
	

 	
 	

Per:	
 	

/s/ HOWARD BELL
 Howard Bell
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	GEEKSFORLESS INC.
	

 	
 	

Per:	
 	

/s/ IGOR NIKOLAICHUK
 Igor Nikolaichuk

	 

	 

	 

	 

	 

	 

	 

	 

	 

[SERVICES AGREEMENT] 

11

  

 
 

SCHEDULE "A"
 
  Fees    
    

 HD FT Contractors  

	

	Contractor Category 
	 	Over-Head Contribution/Month
	 	Wage Contribution/Month

	

	HD FT Contractor	 	$388.00	 	[To Be Determined Monthly]
	

	Secondary HD FT Contractor	 	$281.30	 	[To Be Determined Monthly]
	

 HD PT Contractors  

	

	Contractor Category 
	 	Over-Head Contribution/Month
	 	Wage Contribution/Month

	

	HD PT Contractor	 	$1.99 multiplied by actual number of hours worked	 	[To Be Determined Monthly]
	

	Secondary HD PT Contractor	 	$1.44 multiplied by actual number of hours worked	 	[To Be Determined Monthly]
	

Wage, Income Tax, Pension and Insurance Contribution/Month  

Hostopia
shall pay GFL the Wage Contribution amount per Contractor, upon receipt of evidence satisfactory to Hostopia that such amounts are payable to the respective contractors. 

One-Time Fees  

Hostopia
shall pay a one-time fee of $1954.00 for each Work Station (defined below) that is purchased by GFL for the sole use of Primary HD FT Contractors and Primary HD PT
Contractors, as approved in advance in writing by Hostopia.com Inc. 

"Work Station" means the desk, computer and other infrastructure required to support Contractors. 

Discounts  

Hostopia
shall receive a discount equal to $100.00 multiplied by the aggregate number of HD FT Contractors and HD PT Contractors, not to exceed $3,200 per invoice, which will be deducted
from each monthly invoice, until such aggregate discount is equal to the amount of $70,400.00. 

12

  

 
 

SCHEDULE "B"
 
  Intellectual Property Rights Agreement    
    

IS BETWEEN the undersigned ("Contractor") and Hostopia.com Inc. ("Hostopia"), 

WHEREAS the Contractor has entered into an agreement for services ("Independent Contractor Agreement") with
GEEKSFORLESS INC. ("GFL"); 

AND WHEREAS, the Contractor wishes to provide computer programming and other related services through GFL to GFL's customer, Hostopia in
accordance with an agreement between Hostopia and GFL dated the 1st day of July, 2005 (the "Services Agreement"); 

AND WHEREAS, for good and valuable consideration, including without limitation the opportunity to participate in GFL's performance of its
obligations for Hostopia, the sufficiency of which consideration is mutually acknowledged, the Contractor hereby acknowledges and agrees to the following terms and conditions: 

DEFINITIONS  

	1.
	In
this agreement, the following words and phrases shall have the following meanings unless the context otherwise requires:

	a)
	"Business
Opportunities" means potential business ventures of all kinds, including acquisitions, sales, business arrangements and other transactions and
opportunities for new markets, products and services which have been disclosed to, investigated, studied or considered by Hostopia or by others on behalf of Hostopia;

	b)
	"Confidential
Information" means information known or used by Hostopia in connection with its business including but not limited to any formula, design,
prototype, compilation of information, data, program, code, method, technique or process, information relating to any product, device, equipment or machine, Customer Information, Financial
Information, Marketing Information, Intellectual Property, Business Opportunities, or Research and Development, but does not include any of the foregoing which was known to the Contractor prior to its
providing services to Hostopia or which is or becomes a matter of Public Knowledge other than due to the gross negligence or misconduct of the Contractor;

	c)
	"Customer
Information" means information pertaining to Hostopia's customers, customer base and markets, including customer names and addresses and the
names of employees of customers with whom Hostopia is in contact, customer requirements and Hostopia's contracts with its customers, including details about pricing and supply and shall also be deemed
to mean and include confidential information which may be the property of the customer and provided to Hostopia by the customer on terms and conditions which require Hostopia and its employees to
retain such confidential information in confidence; 

13

 

	d)
	"Developments"
includes any and all inventions, designs, works, creations, developments, software, programs, codes, source code, firmware, drawings,
sketches, notes, compilations of information, analyses, experiments, data, formula, methods, processes, techniques, prototypes, products, samples, made or created by the Contractor alone or jointly
with others at any time during the term of the Services Agreement or which result from tasks assigned to the Contractor by GFL and Developments includes any modifications or improvements made or
created by the Contractor thereto;

	e)
	"Financial
Information" means information pertaining to Hostopia's costs, sales, income, profit, profitability, pricing, salaries and wages;

	f)
	"Intellectual
Property" means any and all rights in the nature of intellectual property and includes without limitation all statutory and other proprietary
rights, and applications, registrations or filings for rights, in respect of trademarks, patents, circuit layout, copyrights, designs, Confidential Information, Developments, Marketing Information,
know how, domain registrations and sales information and leads, software of any kind including executable files, source code firmware and binary software, documentation, algorithms, processes and
other information.

	g)
	"Marketing
Information" means information including but not limited to Hostopia's marketing programs, plans, strategies and proposed future products,
services, advertising and promotions;

	h)
	"Public
Knowledge" means information that is generally known in the trade or business in which Hostopia is engaged, or is otherwise easily accessible
through lawful, non-confidential sources;

	i)
	"Research
and Development" means information pertaining to any research, development, investigation, study, analysis, experiment or test carried on or
proposed to be carried on by Hostopia; and

	j)
	"Domain
Name" means any domain name that is registered by the Contractor during the term of the Services Agreement that would not have been registered by
the Contractor had the Contractor not been provided with Confidential Information. 

ACKNOWLEDGMENTS  

	2.
	The
Contractor acknowledges that: 

14

 

	a)
	during
the term of the Services Agreement the Contractor will be exposed to and will have an opportunity to learn or otherwise become aware of Confidential Information;

	b)
	the
Confidential Information is a valuable asset which is the property of Hostopia exclusively, the unauthorized use or disclosure of which would cause very serious harm to the
economic interests of Hostopia;

	c)
	it
is important to Hostopia that the Confidential Information remain the exclusive confidential property of Hostopia and that it not be used or disclosed except in accordance with the
knowledge and consent of Hostopia and in Hostopia's best interest; and

	d)
	the
term "Hostopia" includes any previous, current or future subsidiary, partner or affiliate of Hostopia. 

CONFIDENTIAL INFORMATION TO BE KEPT IN CONFIDENCE  

	3.
	The
Contractor agrees that at all times during the term of the Services Agreement and at all times following termination thereof,

	a)
	the
Contractor shall hold in confidence and keep confidential all Confidential Information;

	b)
	the
Contractor shall not directly or indirectly use any Confidential Information except in the course of performing duties as an Contractor of GFL with the knowledge and consent of GFL
in GFL's interests; and

	c)
	the
Contractor shall not directly or indirectly disclose any Confidential Information to any person or entity, except in the course of performing duties as a contractor of GFL with the
knowledge and consent of Hostopia in Hostopia's interests.

	4.
	Nothing
in this agreement shall prevent the Contractor following termination of the Services Agreement by GFL or the Contractor from making use of or disclosing,

	a)
	any
Confidential Information other than Customer Information, which lawfully is, or lawfully becomes, a matter of Public Knowledge;

	b)
	any
Confidential Information of which the Contractor had specific knowledge prior to entering into the Services Agreement, except to the extent that such Confidential Information has
become the property of Hostopia under paragraphs 6, 7 or 8 herein; or

	c)
	any
Confidential Information of which the Contractor obtains specific knowledge following termination of the Services Agreement from a third party, unless the third party obtained such
Confidential Information directly or indirectly from an individual in violation of any duty of confidence owed to Hostopia; provided that the Contractor is able to prove the existence of the
circumstances referred to in subparagraphs 4(a), 4(b), and 4(c) herein. 

15

 

RETURN OF PROPERTY AND MATERIALS UPON TERMINATION  

	5.
	Upon
termination of the Services Agreement, the Contractor shall promptly deliver to GFL all Hostopia property, including without limitation, documents, manuals, lists, data, records,
computer programs, codes, materials, prototypes, products, samples, analyses, reports, equipment, tools and devices and any other materials relating or pertaining to Hostopia's business or containing
or pertaining to any Confidential Information, including any copies or reproductions of the same. 

OWNERSHIP OF DEVELOPMENTS AND DOMAIN NAMES  

	6.
	Any
and all Developments and all rights in the nature of Intellectual Property therein shall be and remain the exclusive property of Hostopia.com Inc. ("Hostopia") and the
Contractor shall retain no right, title or interest therein even though the Contractor may have created or contributed to the creation of any of the Developments; and Hostopia shall have the sole and
exclusive right, title and interest in and to the Developments, which right shall continue notwithstanding the termination of the Services Agreement.

	7.
	Any
Domain Name shall be and remain the exclusive property of Hostopia and the Contractor shall have no right, title or interest therein. Any Domain Name registered in the name of the
Contractor shall be held in trust for Hostopia by the Contractor and Hostopia shall have the sole and exclusive right, title and interest in and to the Domain Name, which right shall continue
notwithstanding the termination of the Services Agreement. The Contractor hereby authorizes Hostopia, on the Contractor's behalf, to alter the administrative contact or ownership information held by
the registrar of a Domain Name. 

ASSIGNMENT OF RIGHTS  

	8.
	The
Contractor hereby transfers and assigns to Hostopia any and all right, title and interest that the Contractor may have in and to the Developments and in any patent, copyright,
industrial design, trade mark and any other Intellectual Property right pertaining to the Developments which the Contractor may have by virtue of having created, made, conceived or contributed to any
such Developments. The Contractor further agrees to maintain at all times adequate and current records relating to the creation and development of the Developments, which records shall be and shall
remain the property of Hostopia. 

INTELLECTUAL PROPERTY PROTECTION  

	9.
	Hostopia
alone shall have the right to apply for, prosecute and obtain patents and copyright, industrial design and trade mark registrations and any other registrations, applications
for or grants of Intellectual Property rights or rights analogous thereto in any and all countries throughout the world in respect to the Developments and the Contractor agrees to execute on demand,
whether during or subsequent to termination of the Services Agreement, any applications, transfers, assignments and other documents as Hostopia may consider necessary or desirable from time to time
for the purpose of obtaining, maintaining or vesting in or assigning to Hostopia absolute title to any such Intellectual Property rights, including without limitation patents, copyright, industrial
design or trade mark or registrations, in the Developments, or for the purpose of applying for, prosecuting, obtaining or protecting any such Intellectual Property rights, including without limitation
patents, copyright, industrial design or trade mark registrations in any and all countries of the world; and the Contractor further agrees to cooperate and assist in every way possible in the
prosecution and protection of any such applications and the rights granted in respect thereof. 

16

 
	10.
	The
Contractor agrees that Hostopia, its assignees and their licensees are not required to designate the Contractor as the author of any Developments. The Contractor hereby waives in
whole all moral rights which the Contractor may have in the Developments, including the right to the integrity of the Developments, the right to be associated with the Developments, the right to
restrain or claim damages for any distortion, mutilation or other modification of the Developments, and the right to restrain use or reproduction of the Developments in any context and in connection
with any product, service, cause or institution.

	11.
	Listed
in Exhibit A to this Agreement are those works and inventions created by the Contractor, alone or jointly with others, prior to entering into the Services
Agreement, which are exempt from the operation of this Agreement. If nothing is listed in Exhibit A, the Contractor represents that the Contractor has made no such works or inventions as
of the date of this Agreement. 

NO CONFLICTING OBLIGATIONS  

	12.
	The
Contractor acknowledges and represents to Hostopia that it shall not breach any agreement or other obligation to keep confidential the proprietary information of any other person
or entity. The Contractor acknowledges and represents that the Contractor is not bound by any agreement or obligation with any third party which conflicts with any of the Contractor's obligations
under this Agreement.

	13.
	The
Contractor represents and agrees that the Contractor shall not use any trade secrets, confidential information and other proprietary information of any other person or entity. The
Contractor represents and agrees that in the Contractor's work creating Developments the Contractor will not knowingly infringe the Intellectual Property rights, including copyright, of any
third party. 

ENFORCEMENT  

	14.
	The
Contractor acknowledges and agrees that damages may not be an adequate remedy to compensate Hostopia for any breach of the Contractor's obligations contained in this Agreement,
and accordingly the Contractor agrees that in addition to any and all other remedies available, Hostopia shall be entitled to obtain relief by way of a temporary or permanent injunction to enforce the
obligations contained in this Agreement. 

17

 

CHANGE OF EMPLOYMENT  

	15.
	The
Contractor agrees that prior to commencing employment with any other company following termination of the Services Agreement, the Contractor shall disclose to such other company
the terms of this Agreement. 

EFFECT OF TERMINATION  

	16.
	The
terms of this Schedule "A" to the Agreement shall be binding upon the Contractor during the term of the Services Agreement and shall survive the
termination thereof. 

IN WITNESS WHEREOF, the Contractor has executed this Agreement effective as of July 1, 2005. 

	 

	 

	 

	 	 	Signature:	 	

	 	 	 	 	 
	 	 	Print Name:	 	

18

 
 

Exhibit A    
    

To:
HOSTOPIA.COM INC. 

The
following is a complete list of all works and inventions relative to the subject matter that I created prior to entering into the Services Agreement with GEEKSFORLESS INC.: 

        [            ]
No works and inventions. 

        [            ]
See below: 

        [            ]
Additional sheets attached. 

QuickLinks

SERVICES AGREEMENT

SCHEDULE "A" Fees

SCHEDULE "B" Intellectual Property Rights Agreement

Exhibit A

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]