EX-2 ACQUISITION AGREEMENT

 

EX-2                                                  ACQUISITION AGREEMENT

 

                             ACQUISITION AGREEMENT

 

THIS ACQUISITION AGREEMENT ("Agreement") is made as of January 20,

2004 by and between iBIZ Technology Corp., a Florida corporation

("iBIZ"), and the interestholders of Synosphere, LLC ("Shareholders"),

a Texas limited liability company ("Synosphere").  

 

                                   RECITALS

 

WHEREAS, the Shareholders are the owners of all the issued and

outstanding membership interests ("Interests") of equity of

Synosphere; and  

 

WHEREAS, iBIZ desires to purchase from the Shareholders, and the

Shareholders desire to sell to iBIZ, all the Interests in accordance

with the provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the respective covenants contained

herein and intending to be legally bound hereby, the parties hereto

agree as follows:

 

                                  AGREEMENTS

 

1.   Purchase and Sale.   Subject to the terms and conditions contained

in this Agreement, on the Closing (defined below), the Shareholders

shall sell, assign, transfer and deliver to iBIZ all of the Interests

representing in the aggregate Five Million (5,000,000) Interests.  

iBIZ shall sell, assign, transfer and deliver to the Shareholders 6

shares (an aggregate of Thirty Million (30,000,000) shares) of common

stock ("Common Stock") for each Interest, collectively referred to

hereinafter as the "Purchase Price."

 

At the option of the Shareholders labeled "Investors" on the

spreadsheet set forth in Exhibit A to this Agreement can receive

either his pro rata share of Common Stock or receive a cash payout

option at Closing of his pro rata portion of the total of Ninety-Two

Thousand Dollars ($92,000) or a combination of Common Stock and cash

payout at their discretion (as set forth in Exhibit A).   If an

Investor chooses the cash payout option at closing, then the Investor

shall receive the cash payout option in three equal payments that are

forty-five (45) days apart, beginning sixty (60) days following the

Closing of this transaction, as defined below.

 

The Shareholders labeled "Founders" on the spreadsheet set forth in

Exhibit B to this Agreement shall receive his portion of Common Stock

and distributed as set forth in the Registration Rights Agreement

(Exhibit C).

 

2.   Closing. The closing (the "Closing") of the sale and purchase of

the Interests shall take place on January 20, 2004, or at such other

date, time or place as may be agreed upon in writing by the parties

hereto, but not later than January 20, 2004   ("Termination Date").  

The date of the Closing is sometimes herein referred to as the "Closing."

 

2.1 Items to be Delivered Immediately Prior to or at Closing.   At the

Closing:

 

     (a)   The Shareholders shall deliver to iBIZ a certificate or

     certificates representing Five Million (5,000,000) Interests,

     duly endorsed in blank or accompanied by stock powers duly

     executed in blank, and the executed Registration Rights Agreement.

 

      (b)   iBIZ shall deliver to the Shareholders not accepting the

     cash payout option, as discussed above, a certificate or

     certificates representing an aggregate of Thirty Million

     (30,000,000) shares of Common Stock, duly endorsed in blank or

     accompanied by stock powers duly executed in blank, and the

     executed Registration Rights Agreement.

 

3.   Shareholder Representative.   The Shareholders hereby irrevocably

constitute and appoint Bryan A. Scott, with full power of

substitution and re-substitution, as its and their true and lawful

agent, attorney-in-fact and representative (such person and his

appointed and designated successor or successors being herein

referred to as the "Shareholder Representative"), with full power to

act for and on behalf of the Shareholders, and each of them, for all

purposes under this Agreement and in connection with the transactions

contemplated hereby including, without limitation, for purposes of:

(i) determining the amount of damages   suffered or incurred by the

Shareholders, (ii) receiving notices from iBIZ given under this

Agreement, of which the Shareholder Representative will give a copy

to the Investors and the Shareholders, (iv) approving and agreeing

with iBIZ as to additions, deletions, changes, modifications and

amendments to this Agreement and the Annexes hereto, except with

respect to any addition, deletion, change, modification or amendment

to a material financial term or condition of any of such documents

that would materially, financially and adversely affect the

Shareholders, and (v) settling finally and completely any disputes or

controversies among the parties hereto (other than solely among the

Shareholders) with respect to the interpretation or effect of or

damages or relief under this Agreement and any and all transactions

contemplated hereby. The Shareholder Representative shall be entitled

to reimbursement by the Shareholders from the consideration actually

payable to the Shareholders or otherwise for all reasonable costs and

expenses incurred by him in fulfilling his duties hereunder, and the

Investors and the Shareholders agree among themselves that such costs

and expenses shall be borne pro rata among them according to the

number of shares of Common Stock owned immediately after the Closing.

The Shareholders agree that the Shareholder Representative may make

reasonable requests for advances to cover such costs and expenses,

and the Shareholders shall promptly make such advances. In no event

shall iBIZ be liable for any costs or expenses of any nature incurred

by the Shareholder Representative in its capacity as such.   THE

SHAREHOLDERS JOINTLY AND SEVERALLY, AGREE THAT THE SELLER

REPRESENTATIVE SHALL HAVE NO LIABILITY TO THE SHAREHOLDERS FOR ACTION

TAKEN OR OMITTED IN GOOD FAITH IN EXERCISING THE AUTHORITY GRANTED

UNDER THIS SECTION.   iBIZ shall not have any obligation or liability

to indemnify or defend the Shareholder Representative in respect of

any claim or liability asserted against the Shareholder

Representative by any of the Shareholders or his successors or

assigns. All determinations, decisions, actions and the like made by

the Shareholder Representative shall be final, conclusive and binding

upon all the Shareholders and all persons claiming under or through them.

 

4.   Representations and Warranties of the Shareholders. The

Shareholders, individually as pertains to their particular shareholder

and not jointly, and the other Shareholders hereby represent and

warrant to iBIZ the representations and warranties, as follows:

 

4.1   Validity of Transaction.   The Shareholders own the number of

Interests set forth opposite his name on Exhibit A to this Agreement.  

The Shareholders have all requisite power and authority to execute,

deliver, and perform this Agreement and to sell to iBIZ the Interests

to be sold by the Shareholders pursuant hereto.   All necessary

corporate proceedings or other similar actions by the Shareholders

have been duly taken to authorize the execution, delivery, and

performance of this Agreement and to authorize the sale of the

Interests by the Shareholders.   This Agreement has been duly

authorized, executed, and delivered by the Shareholders, is the

legal, valid, and binding obligation of the Shareholders, and is

enforceable as to the Shareholders in accordance with its terms

except as may be limited by bankruptcy, insolvency, moratorium or

other similar laws affecting creditors' rights generally, and subject

to general principles of equity (regardless of whether enforcement is

considered in a proceeding in equity or at law).   No consent,

authorization, approval, order, license, certificate, or permit of or

from, or declaration or filing with, any federal, state, local, or

other governmental authority or of any court or other tribunal is

required by the Shareholders for the execution, delivery, or

performance of this Agreement by the Shareholders, and except as

would not affect the ability of a Shareholder to perform any of his

material obligations under this Agreement.   No consent of any party

to any contract, agreement, instrument, lease, license, arrangement,

or understanding to which a Shareholder is a party, or by which any

of its properties or assets is bound, shall be required for the

execution, delivery, or performance by a Shareholder of this

Agreement, except for such consents as have been obtained at or prior

to the date of this Agreement, and except as would not affect the

ability of a Shareholder to perform any of his material obligations

under this Agreement.   The execution, delivery, and performance of

this Agreement by a Shareholder will not violate, result in a breach

of, conflict with, or (with or without the giving of notice or the

passage of time or both) entitle any party to terminate or call a

default under, any such contract, agreement, instrument, lease,

license, arrangement, or understanding, or violate or result in a

breach of any term of the certificate or articles of incorporation or

by-laws (or other organizational document) of Synosphere, or violate,

result in a breach of, or conflict with any law, rule, regulation,

order, judgment, or decree binding on a Shareholder or to which any

of his operations, business, properties, or assets is subject, except

as would not affect the ability of such Shareholder to perform any of

its material obligations under this Agreement.   The Interests sold by

the Shareholders have been duly authorized and validly issued and are

fully paid and nonassessable and have not been issued in violation of

any preemptive right of stockholders or rights of first refusal.  

Upon the transfer of the Interests, sold by the Shareholders to iBIZ

at the Closing, iBIZ shall acquire good and valid title to such

Interests free and clear of all claims, liens, security interests,

pledges, charges, encumbrances, stockholders' agreements, and voting

trusts (other than any created for and in favor of iBIZ).

 

4.2   Finder or Broker.   No Shareholder has incurred any fee as a

result of any negotiation with any finder, broker, intermediary, or

similar person in connection with the transaction contemplated hereby

that will result in any liability to iBIZ.

 

4.3   Accredited Investor.   Each Shareholder is a "sophisticated" or

"accredited" investor, as those terms are defined in Regulation D

promulgated under the Securities Act of 1933, as amended ("Securities

Act").   The Shareholders have received all requested documents from

iBIZ, including without limitation, and has had an opportunity to ask

questions of and receive answers from the officers of iBIZ with

respect to the business, results of operations, financial condition,

and prospects of iBIZ.

 

4.4   Investment Intent.   The Shareholders are acquiring the Common

Stock for their own account for investment and not with a view to, or

for sale in connection with, any public distribution thereof in

violation of the Securities Act, it being understood that the

Shareholders the right to sell such shares in their sole discretion

in accordance with the terms of the Registration Rights Agreement, or

otherwise by the requirements of the minimum one year hold period

under Rule 144.   The Shareholders understand that the Common Stock,

as of Closing, have not been registered for sale under the Securities

Act or qualified under applicable state securities laws and that the

Common Stock shall be delivered to the Shareholders pursuant to one

or more exemptions from the registration or qualification

requirements of such securities laws and that the representations and

warranties contained in this section are given with the intention

that iBIZ may rely thereon for purposes of claiming such exemptions.  

The Shareholders understand that the Common Stock cannot be sold

unless registered under the Securities Act and qualified under state

securities laws, or unless an exemption from such registration and

qualification is available, except in connection with the rights

afforded the Shareholders under the Registration Rights Agreement.

 

4.5   Transfer of Common Stock.   The Shareholders shall not sell or

otherwise dispose of any Common Stock unless (a) a registration

statement with respect thereto has become effective under the

Securities Act and such shares have been qualified under applicable

state securities laws or (b) such registration and qualification are

not required and, if iBIZ so requests, there is presented to iBIZ a

legal opinion reasonably satisfactory to iBIZ to such effect.   The

Shareholders consent that the transfer agent for the Common Stock may

be instructed not to transfer any Common Stock acquired pursuant

hereto unless it receives satisfactory evidence of compliance with

the foregoing provisions, and that there may be endorsed upon any

certificate representing the Common Stock acquired pursuant hereto

(and any certificates issued in substitution therefor) the following

legend calling attention to the foregoing restrictions on

transferability and stating in substance:

 

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN

     ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF

     1933, AS AMENDED (THE "SECURITIES ACT"), OR QUALIFICATION

     UNDER THE BLUE SKY LAWS OF ANY JURISDICTION.   SUCH

     SECURITIES MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR

     OTHERWISE DISPOSED OF, BENEFICIALLY OR ON THE RECORDS OF

     THE CORPORATION, UNLESS THE SECURITIES REPRESENTED BY THIS

     CERTIFICATE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT

     AND QUALIFIED UNDER APPLICABLE BLUE SKY LAWS, OR AN

     EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION IS

     AVAILABLE."

 

iBIZ shall, upon the request of any holder of a certificate bearing

the foregoing legend and the surrender of such certificate, issue a

new certificate without such legend if (i) the security evidenced by

such certificate has been effectively registered under the Securities

Act and qualified under any applicable state securities law and sold

by the holder thereof in accordance with such registration and

qualification or (ii) such holder shall have delivered to iBIZ a

legal opinion reasonably satisfactory to iBIZ to the effect that the

restrictions set forth herein are no longer required or necessary

under the Securities Act or any applicable state law.

 

4.6   Corporate Existence.   Synosphere is a limited liability company

duly incorporated, validly existing and in good standing under the

laws of the State of Texas and has all corporate powers and all

governmental licenses, authorizations, permits, consents and

approvals required to carry on its business as now conducted.   

Synosphere is duly qualified to do business as a foreign corporation

and is in good standing in each jurisdiction where such qualification

is necessary, except for those jurisdictions where failure to be so

qualified would not, individually or in the aggregate, be material to

the business of Synosphere.   Synosphere is not in violation of any of

the provisions of its Articles of Organization, its Operating

Agreement, or any regulations governing them.

 

4.7   Capitalization.

 

     (a) The authorized equity of Synosphere consists of Five

Million (5,000,000) Interests, all of which are issued and

outstanding.

 

     (b)   To the knowledge of the Shareholders, (i) all outstanding

Interests have been duly authorized and validly issued and are fully

paid and non-assessable and are not subject to preemptive rights

created under Texas law, its Articles of Organization, its Operating

Agreement, or any regulations governing them, or any agreement or

document to which Synosphere is a party or by which it or its assets

are bound, (ii) all outstanding Interests have been issued and

granted in compliance with all applicable securities law and other

legal requirements and all requirements set forth in applicable

agreements or instruments, and (iii) none of the outstanding

Interests is unvested or is subject to a repurchase option, risk of

forfeiture or other condition providing that such Interests may be

forfeited or repurchased by Synosphere or otherwise vest upon

termination of an interestholder's or grantee's employment,

directorship or other relationship with Synosphere under the terms of

any restricted stock agreement or other agreement with Synosphere.

 

     (c)   Other than the Interests there are no outstanding (i)

shares of equity or voting securities of Synosphere, (ii) securities

of Synosphere convertible into or exchangeable for shares of capital

stock or voting securities of Synosphere or (iii) options or other

rights to acquire from Synosphere, or other obligation of Synosphere

to issue, any capital stock, voting securities or securities

convertible into or exchangeable for capital stock or voting

securities of Synosphere.   There are no registration rights, other

than as set forth in this Agreement, and there is no voting trust,

proxy, rights plan, anti-takeover plan or other agreement or

understanding to which Synosphere is a party.   There are no

outstanding obligations of Synosphere to repurchase, redeem or

otherwise acquire any Interests.

 

4.8   Financial Statements.   The Shareholders acknowledges that its

books and records of Synosphere fairly and correctly set out and

disclose in all material respects, in accordance with generally

accepted accounting principles ("GAAP"), the financial position of

Synosphere as at the date hereof, and all material financial

transactions of the Synosphere have been accurately recorded in such

books and records.   However, an audit of said books and records shall

be required within sixty (60) days from the date of closing of this

transaction.

 

4.9   No Undisclosed Material Liabilities.   There are no liabilities

of Synosphere of any kind whatsoever, whether accrued, contingent,

absolute, determined or determinable, and no existing condition,

situation or set of circumstances which could reasonably result in

such a liability, other than:

 

     (a)   liabilities recorded in full or reserved for; and

 

     (b)   liabilities incurred in the ordinary course of the business

of Synosphere consistent with past practice, none of which has or may

reasonably be expected to have, individually or in the aggregate, a

material adverse effect on the business, results of operations, or

financial condition of Synosphere.

 

4.10   Litigation.   There is no action, suit, investigation or

proceeding (or to the Shareholders knowledge any basis therefor)

pending against, or to the knowledge of the Shareholders, threatened

against or affecting, the Shareholders, Synosphere or any of their

respective properties before any court or arbitrator or any

governmental body, agency or official which, individually or in the

aggregate, if determined or resolved adversely in accordance with the

plaintiff's demands, could reasonably be expected to have a material

adverse effect on the business, results of operations, or financial

condition of Synosphere or which in any manner challenges or seeks to

prevent, enjoin, alter or materially delay the transactions

contemplated by this Agreement.

 

4.11   Intellectual Property.   Synosphere has good and valid title to

and ownership of all Intellectual Property (defined herein as trade

marks, trade names or copyrights, patents, domestic or foreign)

necessary for its business and operations.   There are no outstanding

options, licenses or agreements of any kind to which Synosphere is a

party or by which it is bound relating to any Intellectual Property,

whether owned by Synosphere or another person. To the knowledge of

the Synosphere, the business of Synosphere as formerly and presently

conducted did not and does not conflict with or infringe upon any

Intellectual Property right, owned or claimed by another.

 

4.12   Compliance with Laws and Court Orders.

 

     (a)   Synosphere is not in violation of, and to the knowledge of

the Shareholders is not under investigation with respect to and has

not been threatened to be charged with or given notice of any

violation of, any applicable law, rule, regulation, judgment,

injunction, order or decree, except for violations that have not had

and could not reasonably be expected to have, individually or in the

aggregate, a material adverse effect on the business, results of

operations or financial condition of Synosphere.

 

     (b)   To the knowledge of the Shareholders, each executive

officer and director of Synosphere has complied with all applicable

laws in connection with or relating to actions within the scope of

Synosphere's business, except where the failure to comply would not

be material to Synosphere.   No executive officer or director of

Synosphere is a party to or the subject of any pending or threatened

suit, action, proceeding or investigation by any governmental entity

that would have a material adverse effect on the business, results of

operations or financial condition of Synosphere.

 

4.13   Absence of Liens and Encumbrances; Title to Properties.  

Synosphere has good, valid and marketable title to all properties and

assets used in the conduct of its business free of all liens,

mortgages, pledges, charges, security interests, encumbrances or

other adverse claims of any kind, except as set forth in its

financial statements.

 

4.14   Material Contracts.   Synosphere is not a party to or bound by

any Contract (as defined below) that (a) is a material contract, or

(b) materially limits or otherwise materially restricts Synosphere or

that would, after the Closing, materially limit or otherwise

materially restrict iBIZ   or any of its subsidiaries or any successor

thereto, from engaging or competing in any material line of business

in any geographic area or that contains most favored nation pricing

provisions or exclusivity or non-solicitation provisions with respect

to customers.   As used herein, "Contract" shall mean any written or

oral agreement, contract, commitment, lease, license, contract, note,

bond, mortgage, indenture, arrangement or other instrument or

obligation.   Synosphere is not in, or has received notice of, any

violation of or default under (or any condition which with the

passage of time or the giving of notice would cause such a violation

of or default under) any Contract or any other Contract to which it

is a party or by which it or any of its properties or assets is

bound, except for violations or defaults that would not have a

material adverse effect on the business, results of operations or

financial condition of Synosphere or, after giving effect to the

Closing, iBIZ or any of its subsidiaries.

 

4.15   Taxes.  

 

     (a)   Synosphere has timely filed all tax returns required to be

filed on or before the Closing and all such tax returns are true,

correct and complete in all respects. Synosphere has paid in full on a

timely basis all taxes owed by it, whether or not shown on any tax

return, except where the failure to file such return or pay such taxes

would not have a material adverse effect.   No claim has ever been made

by any authority in any jurisdiction where Synosphere does not file

tax returns that Synosphere may be subject to taxation in that

jurisdiction.

 

     (b)   There are no ongoing examinations or claims against

Synosphere for taxes, and no notice of any audit, examination or claim

for taxes, whether pending or threatened, has been received.

Synosphere has not waived or extended the statute of limitations with

respect to the collection or assessment of any tax.

 

4.16   Interested Party Transactions. No officer, director or

stockholder of Synosphere or any "affiliate" (as such term is defined

in Rule 405 under the Securities Act) of any such person or

Synosphere has or has had, either directly or indirectly, (a) an

interest in any person that (i) furnishes or sells services or

products that are furnished or sold or are proposed to be furnished

or sold by Synosphere other than Synosphere, or (ii) purchases from

or sells or furnishes to Synosphere any goods or services, or (b) a

beneficial interest in any contract or agreement to which Synosphere

is a party or by which it may be bound or affected (other than

routine compensation and expense reimbursement programs in the

ordinary course of business).

 

5. Representations and Warranties of iBIZ.   iBIZ hereby represents and

warrants to Synosphere as follows:

 

5.1   Validity of Transaction.   iBIZ has all requisite power and

authority to execute, deliver, and perform this Agreement and to

issue and sell to the Shareholders the Common Stock of iBIZ.   All

necessary corporate proceedings of iBIZ have been duly taken to

authorize the execution, delivery, and performance of this Agreement,

and the issuance and sale to the Shareholders of the Common Stock.

This Agreement has been duly authorized, executed, and delivered by

iBIZ, is the legal, valid, and binding obligation of iBIZ, and is

enforceable as to iBIZ in accordance with its terms, except as may be

limited by bankruptcy, insolvency, moratorium, or other similar laws

affecting creditors' rights generally, and subject to general

principles of equity (regardless of whether enforcement is considered

in a proceeding in equity or at law).   Subject to the compliance with

and completion of the registration requirements of the Securities Act

as contemplated in the Registration Rights Agreement, no consent,

authorization, approval, order, license, certificate, or permit of or

from, or declaration or filing with, any Federal, state, local, or

other governmental authority or of any court or other tribunal is

required by iBIZ for the execution, delivery, or performance of this

Agreement by iBIZ, except as would not affect the ability of iBIZ to

perform any of its material obligations under this Agreement.   No

consent of any party to any contract, agreement, instrument, lease,

license, arrangement, or understanding to which iBIZ is a party, or

by which any of its properties or assets is bound, is required for

the execution, delivery, or performance by iBIZ of this Agreement,

except for such consents as have been obtained at or prior to the

date of this Agreement, and except as would not affect the ability of

iBIZ to perform any of its material obligations under this Agreement.  

The execution, delivery, and performance of this Agreement by iBIZ

will not violate, result in a breach of, conflict with, or (with or

without the giving of notice or the passage of time or both) entitle

any party to terminate or call a default under any contract,

agreement, instrument, lease, license, arrangement, or understanding

to which iBIZ is a party, or violate or result in a breach of any

term of the Articles of Incorporation or By-laws of iBIZ, or violate,

result in a breach of, or conflict with any law, rule, regulation,

order, judgment, or decree binding on iBIZ or to which any of its

operations, business, properties, or assets is subject, except as

would not affect the ability of iBIZ to perform any of its material

obligations under this Agreement.   The shares of iBIZ Common Stock

have been duly authorized and, upon receipt by the Shareholders from

iBIZ of the stock certificates representing the Common Stock being

sold pursuant to this Agreement, will be validly issued, fully paid,

and nonassessable, will not have been issued in violation of any

preemptive right of stockholders or rights of first refusal, and the

Shareholders will have good title to the Common Stock, free and clear

of all liens, security interests, pledges, charges, encumbrances,

stockholders agreements, and voting trusts (other than any created by

the Shareholders).

 

5.2   Finder or Broker.   Neither iBIZ nor any person acting on behalf

of iBIZ has negotiated with any finder, broker, intermediary, or

similar person in connection with the transaction contemplated herein.

 

5.3   Accredited Investor.   iBIZ is an "accredited investor," as that

term is defined in Rule 501 of Regulation D promulgated under the

Securities Act.

 

5.4   Investment Intent.   iBIZ is acquiring the Shares of Synosphere

for its own account for investment and not with a view to, or for

sale in connection with, any public distribution thereof in violation

of the Securities Act.   iBIZ understands that it must bear the

economic risk of its investment in Synosphere for an indefinite

period of time, and the Shares of Synosphere being purchased from the

Shareholders cannot be sold unless registered under the Securities

Act and qualified under state securities laws, unless an exemption

from such registration and qualification is available.

 

5.5   Full Disclosure.   All documents filed by iBIZ pursuant to the

Securities Exchange Act of 1934, as amended, since December 31, 2002

("iBIZ Exchange Act Documents") (i) were prepared in accordance with

the requirements of the Exchange Act and the rules and regulations

thereunder, (ii) did not at the time they were filed contain any

untrue statement of a material fact, and (iii) did not at the time

they were filed omit to state a material fact necessary to make the

statements therein, in light of the circumstances under which they

were made, not misleading.   The iBIZ Exchange Act Documents do not

omit to state a material fact necessary to make the statements

therein, in light of the circumstances under which they were made,

not misleading, except insofar as any of such documents relate to

Synosphere, as to which iBIZ makes no representation.   So far as iBIZ

is aware, from the date as of which information is given in the most

recent report filed by iBIZ under the Exchange Act to the date of

this Agreement, there has not been any material adverse change in, or

any adverse development which materially affects, the business,

results of operations, or financial condition of iBIZ and its

subsidiaries taken as a whole.

 

5.6   Other Stockholders.   iBIZ has not entered into any agreement

with any holders of Synosphere Shares, other than this Agreement with

the Shareholders, with respect to the acquisition of Synosphere

Shares by iBIZ.

 

5.7   iBIZ's Corporate Existence.   iBIZ is a corporation duly

incorporated, validly existing and in good standing under the laws of

Florida and has all corporate powers and all governmental licenses,

authorizations, permits, consents and approvals required to carry on

its business as now conducted.    iBIZ is duly qualified to do

business as a foreign corporation and is in good standing in each

jurisdiction where such qualification is necessary, except for those

jurisdictions where failure to be so qualified would not,

individually or in the aggregate, be materially adverse to the

business of iBIZ.   iBIZ is not in violation of any of the provisions

of its Articles of Incorporation or its Bylaws.

 

5.8   Capitalization.

 

     (a)   As of the date of this Agreement, the authorized capital

stock of iBIZ consists of Five Billion (5,000,000,000) shares of iBIZ

common stock.   As of the date of this Agreement, there are Two

Billion One Hundred and Twelve Million Nine Hundred and Fifty Six

Thousand Nine Hundred and Eighty Eight (2,112,956,988) shares of iBIZ

common stock, and no shares of preferred stock, issued and outstanding.

 

     (b)   All outstanding shares of capital stock of iBIZ have been

duly authorized and validly issued and are fully paid and non-

assessable and are not subject to preemptive rights created under

Florida law, the Articles of Incorporation or Bylaws of iBIZ or any

agreement or document to which iBIZ is a party or by which it or its

assets are bound.    All outstanding shares of capital stock of iBIZ

have been issued and granted in compliance with all applicable

securities law and other legal requirements and all requirements set

forth in applicable agreements or instruments.    None of the

outstanding iBIZ Securities (as defined below) is unvested or is

subject to a repurchase option, risk of forfeiture or other condition

providing that such iBIZ Securities may be forfeited or repurchased

by iBIZ or otherwise vest upon termination of stockholder's or

grantee's employment, directorship or other relationship with iBIZ or

a iBIZ Subsidiary (as defined below) under the terms of any

restricted stock agreement or other agreement with iBIZ.   No iBIZ

debt has voting rights.   As used herein, "iBIZ Subsidiary" shall mean

any entity of which securities or other ownership interests having

ordinary voting power to elect a majority of the board or directors

or other persons performing similar functions are at the time

directly or indirectly owned by iBIZ.

 

     (c)   Except as set forth in this Section, there are no

outstanding (i) shares of capital stock or voting securities of iBIZ,

(ii) securities of iBIZ convertible into or exchangeable for shares

of capital stock or voting securities of iBIZ or (iii) options or

other rights to acquire from iBIZ, or other obligation of iBIZ to

issue, any capital stock, voting securities or securities convertible

into or exchangeable for capital stock or voting securities of iBIZ

(the items in clauses (i), (ii) and (iii) of this Section 3.08(c)

being referred to collectively as the "iBIZ Securities").   There are

no registration rights and there is no voting trust, proxy, rights

plan, anti-takeover plan or other agreement or understanding to which

iBIZ or any of iBIZ's Subsidiaries is a party or by which it is bound

with respect to any iBIZ Securities.   There are no outstanding

obligations of iBIZ or any iBIZ Subsidiary to repurchase, redeem or

otherwise acquire any iBIZ Securities.

 

5.9   Litigation.   There is no action, suit, investigation or

proceeding (or to iBIZ's knowledge any basis therefor) pending

against, or to the knowledge of iBIZ, threatened against or

affecting, iBIZ or any iBIZ Subsidiary or any of their respective

properties before any court or arbitrator or any governmental body,

agency or official which, individually or in the aggregate, if

determined or resolved adversely in accordance with the plaintiff's

demands, could reasonably be expected to have a material adverse

effect on the business, results of operations, or financial condition

of iBIZ and its subsidiaries taken as a whole or which in any manner

challenges or seeks to prevent, enjoin, alter or materially delay the

transactions contemplated by this Agreement.

 

5.10   Compliance with Laws and Court Orders.

 

     (a)   Neither iBIZ nor any iBIZ Subsidiary is in violation of,

and has not since January 1, 2003 violated, and to the knowledge of

iBIZ is not under investigation with respect to and has not been

threatened to be charged with or given notice of any violation of,

any applicable law, rule, regulation, judgment, injunction, order or

decree, except for violations that have not had and could not

reasonably be expected to have, individually or in the aggregate, a

material adverse effect on the business, results of operations or

financial condition of iBIZ and its subsidiaries taken as a whole.

 

     (b)   iBIZ and each of its officers and directors have complied

in all material respects with the applicable provisions of Sarbanes-

Oxley.   iBIZ has disclosed to the Shareholder Representative any of

the information required to be disclosed by iBIZ and certain of its

officers to iBIZ's Board of Directors or any committee thereof

pursuant to the certification requirements contained in Form 10-KSB

and Form 10-QSB under the Exchange Act.   From the period beginning

January 1, 2002 through the enactment of Sarbanes-Oxley, neither iBIZ

nor any of its Affiliates made any loans to any executive officer or

director of iBIZ equal to or in excess of $60,000.   Since the

enactment of Sarbanes-Oxley, neither iBIZ nor any of its Affiliates

has made any loans to any executive officer or director of iBIZ.

 

     (c)   Each executive officer and director of iBIZ has complied

with all applicable laws in connection with or relating to actions

within the scope of iBIZ's business, except where the failure to

comply would not be material to iBIZ.   No executive officer or

director of iBIZ is a party to or the subject of any pending or

threatened suit, action, proceeding or investigation by any

governmental entity that would have a material adverse effect on the

business, results of operations or financial condition of iBIZ and

its subsidiaries taken as a whole, except as disclosed in iBIZ

Exchange Act Documents.

 

5.11   Financial Statements.   The audited consolidated financial

statements and unaudited consolidated interim financial statements of

iBIZ included in iBIZ's filings under the Exchange Act (collectively,

"iBIZ Financial Statements") (a) were prepared in accordance with and

accurately reflect in all material respects, iBIZ's books and records

as of the times and for the periods referred to therein, (b) complied

in all material respects with applicable accounting requirements and

the   published rules and regulations of the SEC with respect thereto

in effect during the periods included and (c) fairly present in all

material respects, in conformity with United States generally

accepted accounting principles applied on a consistent basis during

the periods involved (except as may be indicated in the notes thereto

and except in the unaudited financial statements as may be permitted

by Form 10-Q), the consolidated financial position of iBIZ and its

consolidated subsidiaries as of the dates thereof and their

consolidated results of operations and cash flows for the periods

then ended (subject to normal year end adjustments in the case of any

unaudited interim financial statements which were not and are not

expected to be material to iBIZ).

 

5.12   No Undisclosed Material Liabilities.   There are no liabilities

of iBIZ or any iBIZ Subsidiary of any kind whatsoever, whether

accrued, contingent, absolute, determined or determinable, and no

existing condition, situation or set of circumstances which could

reasonably result in such a liability, other than:

 

     (a)   liabilities recorded in full or reserved for in the

unaudited financial statements included in the iBIZ Exchange Act

Documents filed with respect to the fiscal period ended July 31, 2003

("iBIZ Balance Sheet Date"); and

 

     (b)   liabilities incurred in the ordinary course of the business

of iBIZ consistent with past practice since the iBIZ Balance Sheet

Date, none of which has or may reasonably be expected to have,

individually or in the aggregate, a material adverse effect on the

business, results of operations, or financial condition of iBIZ and

its subsidiaries taken as a whole.

 

6.   Survival Of Representations and Warranties; Indemnification;

 

6.1   Nature and Survival.   The covenants, representations and

warranties of the parties hereunder and all documents delivered

pursuant hereto shall survive the Closing for a period of twelve

months following the Closing and all inspections, examinations or

audits on behalf of the parties whether conducted before or after the

Closing.

 

6.2   Shareholders Indemnification.

 

     (a)   Subject to Section 6.3, each Shareholder agrees to

indemnify and hold harmless iBIZ against and in respect of its pro

rata share (determined on the basis of the percentage of the total

number of shares of iBIZ Common Stock that were issued to such

Shareholder) of any and all Damages.   "Damages," as used herein,

shall include any claim, action, demand, loss, cost, expense,

liability (joint or several), penalty and other damage, including,

without limitation, reasonable counsel fees and other costs and

expenses reasonably incurred in investigation or in attempting to

avoid the same or oppose the imposition thereof or in enforcing this

indemnity, resulting to iBIZ from (i) any inaccurate representation

made by or on behalf of Synosphere or a Shareholder in this Agreement

or any certificate or other document referenced in, this Agreement

and delivered pursuant hereto, (ii) the breach of any of the

warranties or agreements made by or on behalf of Synosphere or a

Shareholder in this Agreement or any certificate or other document

referenced in this Agreement and delivered pursuant hereto, or (iii)

the breach or default in the performance by a Shareholder of any of

the obligations to be performed by any of them hereunder.

 

     (b)   If any claim shall be asserted against iBIZ by a third

party for which iBIZ intends to seek indemnification from the

Shareholders under this Section 6.2, iBIZ shall given written notice

to the Shareholder Representative of the nature of the claim asserted

within forty-five (45) days after any executive officer of iBIZ

learns of the assertion thereof and determines that iBIZ may have a

right of indemnification with respect thereto, but the failure to

give this notice will not relieve the Sellers of any liability

hereunder in respect of this claim.   iBIZ shall have the exclusive

right to conduct, through counsel of its own choosing, which counsel

is approved by the Shareholder Representative (which approval may not

be unreasonably withheld), the defense of any such claim or action,

and may compromise or settle such claims or actions with the prior

consent of the Shareholder Representative (which shall not be

unreasonably withheld).

 

6.3   Satisfaction of Seller Indemnification.

 

     (a)   Any Damages incurred, paid or borne by iBIZ for which it is

entitled to indemnification from any Shareholder under this Section

shall be satisfied, in whole or in part, solely by such Shareholder

delivering to iBIZ for cancellation, shares of iBIZ Common Stock,

without further recourse to any Shareholder; provided, however, that

each Shareholder's indemnification obligation shall be unlimited (and

shall be satisfied by a cash payment to the extent that shares of

iBIZ Common Stock are insufficient) with respect to Damages arising

out of the intentional fraud of such Shareholder.   In the event that

any Shareholder elects to return shares of iBIZ Common Stock to

satisfy any indemnification obligation, each such share of iBIZ

Common Stock shall be valued at its Current Market Value (as defined

below) as of the date such shares are tendered to iBIZ.   Such Seller

shall also pay or reimburse iBIZ for the out-of-pocket expenses

(including without limitation any fees payable to the transfer agent

of the shares) of canceling such returned shares.

 

     (b)   "Current Market Value" of the iBIZ Common Stock as of a

particular date shall mean the average of the price of a share of

underlying iBIZ Common Stock into which such Preferred Stock can be

converted, determined on the basis of the last reported sales price

on the Over-the-Counter Bulletin Board for the ten (10) consecutive

trading days preceding such date ("Measurement Days"); or, if such

shares are not traded on the Over-the-Counter Bulletin Board, the

Current Market Value will be determined by an independent reputable

valuation and appraisal company mutually agreed upon by iBIZ and the

Shareholder Representative (which appraiser shall be instructed to

disregard any minority interest discount), and if no agreement can be

reached within a 30-day period, by the average of the two Current

Market Values as determined by independent reputable valuation and

appraisal companies retained by each of iBIZ and the Shareholder

Representative; provided, however, that the aggregate fees and

expenses of any such independent valuation and appraisal company or

companies shall be shared evenly between iBIZ, on the one hand, and

the applicable indemnifying Seller(s).

 

6.4   iBIZ Indemnification.

 

     (a)   Subject to subsection (b) below, iBIZ shall indemnify and

hold the Shareholders harmless against and in respect of all

Shareholders Damages.   "Shareholders Damages" shall mean any claim,

action, demand, loss, cost, expense, liability (joint or several),

penalty and other damage, including, without limitation, reasonable

counsel fees, and other costs and expenses reasonably incurred in

investigating or in attempting to avoid the same or oppose the

imposition thereof or in enforcing this indemnity, resulting to a

Shareholder from (A) any inaccurate representation made by iBIZ in

this Agreement or any certificate or other document referenced in

this Agreement and delivered by it pursuant hereto, (B) breach of any

of the warranties or agreements made by iBIZ in this Agreement or any

certificate or other document referenced in this Agreement and

delivered by it pursuant hereto, or (C) breach or default in the

performance by iBIZ of any of the obligations to be performed by iBIZ

hereunder.   iBIZ agrees to pay or reimburse the Shareholders for any

payment made or amount payable or loss suffered or incurred by the

Shareholders at any time from and after the Closing in respect of any

Shareholder Damages to which the foregoing indemnity relates.

 

     (b)   Any Shareholder Damages incurred, paid or borne by a

Shareholder for which it is entitled to indemnification from iBIZ

under this Section shall be satisfied, in whole or in part, solely by

iBIZ delivering to the applicable Seller, additional shares of iBIZ

Common Stock up to an aggregate maximum for all Shareholders of ten

percent (10%) of the amount of shares of iBIZ Common Stock delivered

on the Closing, without further recourse to iBIZ; provided, however,

that iBIZ's indemnification obligation shall be unlimited with

respect to Shareholder Damages arising out of the common-law fraud of

iBIZ.   In the event that iBIZ elects to deliver shares of iBIZ Common

Stock to satisfy any indemnification obligation, each such share of

iBIZ Common Stock shall be valued at its Current Market Value as of

the date such shares are tendered by iBIZ.

 

7.   Covenants of Shareholders.

 

7.1 Fulfillment of Closing Conditions.   At and prior to the Closing,

the Shareholders shall cause Synosphere to use commercially reasonable

efforts to fulfill the conditions specified in this Agreement.   In

connection with the foregoing, the Shareholders shall (a) refrain from

any actions that would cause any of their representations and

warranties to be inaccurate in any material respect as of the Closing,

(b) execute and deliver the applicable agreements and other documents

referred to herein, (c) comply in all material respects with all

applicable laws in connection with its execution, delivery and

performance of this Agreement and the transactions, (d) use

commercially reasonable efforts to obtain in a timely manner all

necessary waivers, consents and approvals required under any laws,

contracts or otherwise, and (e) use commercially reasonable efforts to

take, or cause to be taken, all other actions and to do, or cause to

be done, all other things reasonably necessary, proper or advisable to

consummate and make effective as promptly as practicable the transactions.

 

7.2   Access to Information. From the date of this Agreement to the

Closing, the Shareholders shall give to iBIZ and its officers,

employees, counsel, accountants and other representatives access to

and the right to inspect, during normal business hours, all of the

assets, records, contracts and other documents relating to Synosphere

as the other party may reasonably request.   IBIZ shall not use such

information for purposes other than in connection with the

transactions contemplated by this Agreement.

 

7.3    No Solicitation.   From and after the date hereof until the

earlier of the Termination Date or the date of termination of this

Agreement pursuant to Section 13, without the prior written consent of

the iBIZ, the Shareholders shall not, and shall not authorize or

permit their representatives to, directly or indirectly, solicit,

initiate or encourage (including by way of furnishing information) or

take any other action to facilitate knowingly any inquiries or the

making of any proposal that constitutes or may reasonably be expected

to lead to an Acquisition Proposal (defined below) from any person, or

engage in any discussion or negotiations relating thereto or accept

any Acquisition Proposal.   If the Shareholders receive any such

inquiries, offers or proposals, the Shareholders shall (a) notify iBIZ

orally and in writing of any such inquiries, offers or proposals

(including the terms and conditions of any such proposal and the

identity of the person making it), within forty-eight (48) hours of

the receipt thereof, (b) keep iBIZ informed of the status and details

of any such inquiry, offer or proposal, and (c) give iBIZ five days'

advance notice of any agreement to be entered into with, or any

information to be supplied to, any person making such inquiry, offer

or proposal.   As used herein, "Acquisition Proposal" means a proposal

or offer (other than pursuant to this Agreement) for a tender or

exchange offer, merger, consolidation or other business combination

involving any or any proposal to acquire in any manner a substantial

equity interest in, or all or substantially all of the assets of

Synosphere.   Notwithstanding the foregoing, the Shareholders shall

remain free to participate in any discussions or negotiations

regarding, furnish any information with respect to, assist or

participate in, or facilitate in any other manner, any effort or

attempt by any person to do or seek any of the foregoing to the extent

their fiduciary duties may require.

 

7.4   Confidentiality.   The Shareholders agree that after receipt (a)

all information received by it pursuant to this Agreement and (b) any

other information that is disclosed by iBIZ to it shall be considered

confidential information until such time as such information otherwise

becomes publicly available.   Each party further agrees that it shall

hold all such confidential information in confidence and shall not

disclose any such confidential information to any third party except

as required by law or regulation (including the listing rules);

provided that to the extent possible iBIZ shall have been provided

with reasonable notice and the opportunity to seek a protective order

to the extent possible prior to such disclosure, other than its

counsel or accountants nor shall it use such confidential information

for any purpose other than its investment in iBIZ; provided, however,

that the foregoing obligation to hold in confidence and not to

disclose confidential information shall not apply to any information

that (1) was   known to the public prior to disclosure by iBIZ, (2)

becomes known to the public through no fault of Synosphere, (3) is

disclosed to Synosphere on a non-confidential basis by a third party

having a legal right to make such disclosure or (4) is independently

developed by Synosphere.

 

7.5    Transfer of Assets and Business.   The Shareholders shall, and

shall cause Synosphere to, take such reasonable steps as may be

necessary or appropriate, in the judgment of iBIZ, so that iBIZ shall

be placed in actual possession and control of all of the assets and

the business of Synosphere, and Synosphere shall be owned and operated

as a wholly owned subsidiary of iBIZ.

 

7.6    Disclosure of Fundraising.   The Shareholders shall disclose to

iBIZ any fund raising activities, which shall occur prior to the

Closing.   Further, the Shareholders shall assure that all regulations,

rules and laws governing such fundraising are complied with and that

such funds will only be used in the furtherance of Synosphere's

corporate purpose and business plan.   Prior written approval of iBIZ

is required to use funds for any other purposes.

 

8.   Covenants of iBIZ.

 

8.1 Fulfillment of Closing Conditions.   At and prior to the Closing,

iBIZ shall use commercially reasonable efforts to fulfill the

conditions specified in this Agreement to the extent that the

fulfillment of such conditions is within its control.   In connection

with the foregoing, iBIZ shall (a) refrain from any actions that would

cause any of its representations and warranties to be inaccurate in

any material respect as of the Closing, (b) execute and deliver the

applicable agreements and other documents referred to herein, (c)

comply in all material respects with all applicable laws in connection

with its execution, delivery and performance of this Agreement and the

transactions, (d) use commercially reasonable efforts to obtain in a

timely manner all necessary waivers, consents and approvals required

under any laws, contracts or otherwise, and (e) use commercially

reasonable efforts to take, or cause to be taken, all other actions

and to do, or cause to be done, all other things reasonably necessary,

proper or advisable to consummate and make effective as promptly as

practicable the transactions.

 

8.2    Access to Information. From the date of this Agreement to the

Closing, iBIZ shall cause iBIZ to give to the Shareholders and their

employees, counsel, accountants and other representatives access to

and the right to inspect, during normal business hours, all of the

assets, records, contracts and other documents relating to iBIZ as the

other party may reasonably request.   The Shareholders shall not use

such information for purposes other than in connection with the

transactions contemplated by this Agreement.

 

8.3    Confidentiality.   iBIZ agrees that after receipt (a) all

information received by it pursuant to this Agreement and (b) any

other information that is disclosed by the Shareholders to it shall be

considered confidential information until such time as such

information otherwise becomes publicly available.   Each party further

agrees that it shall hold all such confidential information in

confidence and shall not disclose any such confidential information to

any third party except as required by law or regulation (including the

listing rules); provided that to the extent possible the Shareholders

shall have been provided with reasonable notice and the opportunity to

seek a protective order to the extent possible prior to such

disclosure, other than its counsel or accountants nor shall it use

such confidential information for any purpose other than its

investment in Synosphere; provided, however, that the foregoing

obligation to hold in confidence and not to disclose confidential

information shall not apply to any information that (1) was known to

the public prior to disclosure by iBIZ, (2) becomes known to the

public through no fault iBIZ, (3) is disclosed to iBIZ on a non-

confidential basis by a third party having a legal right to make such

disclosure or (4) is independently developed by iBIZ.

 

8.4    Disclosure of Fundraising.   iBIZ shall disclose to Synosphere

any fund raising activities, which shall occur prior to the Closing.  

Further, iBIZ shall assure that all regulations, rules and laws

governing such fundraising are complied with and that such funds will

only be used in the furtherance of iBIZ's corporate purpose and

business plan.   Prior written approval of the Shareholders shall be

required to use funds for any other purposes.

 

8.5   Registration Rights; Notice of Certain Events Affecting

Registration.

 

     (a)   The Shareholders shall be granted registration rights in the

     form of the agreement included herein as Exhibit C to this

     Agreement at Closing with respect to the Common Stock of iBIZ.

 

     (b)   iBIZ shall promptly notify the Shareholders upon the

     occurrence of any of the following events in respect of a

     registration statement or related prospectus covering the Common

     Stock: (a) receipt of any request for additional information by

     the Securities and Exchange Commission ("SEC") or any other

     federal or state governmental authority during the period of

     effectiveness of the registration statement for amendments or

     supplements to the registration statement or related prospectus;

 

     (b) the issuance by the SEC or any other federal or state

     governmental authority of any stop order suspending the

     effectiveness of any registration statement or the initiation of

     any proceedings for that purpose; (c) receipt of any

     notification with respect to the suspension of the qualification

     or exemption from qualification of any of the common stock

     underlying the Common Stock for sale in any jurisdiction or the

     initiation or threatening of any proceeding for such purpose;

 

     d) the happening of any event that makes any statement made in

     such registration statement or related prospectus or any

     document incorporated or deemed to be incorporated therein by

     reference untrue in any material respect or that requires the

     making of any changes in the registration statement, related

     prospectus or documents so that, in the case of a registration

     statement, it will not contain any untrue statement of a

     material fact or omit to state any material fact required to be

     stated therein or necessary to make the statements therein not

     misleading, and that in the case of the related prospectus, it

     will not contain any untrue statement of a material fact or omit

     to state any material fact required to be stated therein or

     necessary to make the statements therein, in the light of the

     circumstances under which they were made, not misleading; and

 

     (e) iBIZ's reasonable determination that a post-effective

     amendment to the registration statement would be appropriate,

     and iBIZ shall promptly make available to the Shareholders any

     such supplement or amendment to the related prospectus.

 

8.6   Employment Contracts.   iBIZ will enter into employee agreements

with Bryan A. Scott and Ramon Perales, two of the current

directors/officers of Synosphere, to employ them by Synosphere.   The

term of these employee agreements shall be two (2) years following

the Closing and transferable in the event of a sale of Synosphere to

another entity or if Synosphere is spun-off.   Mr. Scott shall receive

an annually base salary of $112,000 per year, with healthcare

benefits.   Mr. Perales shall receive an annual base salary of

$102,000 per year with healthcare benefits.   In addition, Mr. Scott

and Mr. Perales shall each receive a sign on bonus of Two Million and

Five Hundred Thousand (2,500,000) shares of Common Stock.  

Furthermore, Mr. Scott and Mr. Perales, shall each receive an Earn

Out bonus of Common Stock in Eight (8) payments, each payment made

quarterly, in the amount of $62,500.   A "golden parachute" clause

shall be put in place such that if either of the employee agreements

are terminated by iBIZ or any successor they are payable in full at

the date of their termination.   Finally, iBIZ shall appoint Mr. Scott

to its Board of Directors.   These employment agreements are contained

in Exhibit E to this Agreement and shall be effective upon Closing.

 

If the Employee's base salary is not paid according to the Employer's

normal payroll cycle, then the Employer shall issue shares of its

common stock, valued at the moving average of the share price over

the last 20 trading with a 25% discount, as an alternative payment to

the base salary.   Such shares of common stock shall be issued under a

Stock Retainer Plan, registered under a Form S-8 filed and made

effective by the Employer.   Such shares shall be issued and paid at

the end of each month during which the payment(s) was not made, until

such time that sufficient funds are available to make such payments.

 

9.   Mutual Covenants.

 

9.1   Disclosure of Certain Matters.   The Shareholders on the one hand,

and iBIZ, on the other hand, shall give iBIZ and the Shareholders,

respectively, prompt notice of any event or development that occurs

prior to the Closing that (a) had it existed or been known on the date

hereof would have been required to be disclosed by such party under

this Agreement, (b) would cause any of the representations and

warranties of such party contained herein to be inaccurate or

otherwise misleading, except as contemplated by the terms hereof, or

(c) gives any such party any reason to believe that any of the

conditions set forth in this Agreement will not be satisfied prior to

the Termination Date.

 

9.2   Public Announcements.   The Shareholders and iBIZ shall consult

with each other before issuing any press release or making any public

statement with respect to this Agreement and the transactions and,

except as may be required by applicable law or regulation, a party

hereto shall not issue any such press release or make any such public

statement without the consent of the other party hereto.

 

9.3   Confidentiality.   If the transactions are not consummated, each

party shall treat all information obtained in its investigation of

another party or any affiliate thereof, and not otherwise known to

them or already in the public domain, as confidential and shall not

use or otherwise disclose such information to any third party except

as required by law or regulation (including the listing rules), and

shall return to such other party or affiliate all copies made by it or

its representatives of confidential information provided by such other

party or affiliate.

 

10.    Conditions Precedent to Obligations of Synosphere. All

obligations of Synosphere to consummate the Transactions are subject

to the satisfaction prior thereto of each of the following conditions:

 

10.1   Representations and Warranties.   The representations and

warranties of iBIZ contained in this Agreement shall be true and

correct on the date hereof and (except to the extent such

representations and warranties speak as of an earlier date) shall also

be true and correct on and as of the Closing with the same force and

effect as if made on and as of the Closing.

 

10.2   Agreements, Conditions and Covenants.   iBIZ shall have performed

or complied with all agreements, conditions and covenants required by

this Agreement to be performed or complied with by it on or before the

Closing.

 

10.3   Legality.   No law or court order shall have been enacted,

entered, promulgated or enforced by any court or governmental

authority that is in effect and has the effect of making the purchase

and sale of the assets illegal or otherwise prohibiting the

consummation of such purchase and sale.

 

11.    Conditions Precedent to Obligations of iBIZ. All obligations of

iBIZ to consummate the transactions are subject to the satisfaction

(or waiver) prior thereto of each of the following conditions:

 

11.1   Representations and Warranties.   The representations and

warranties of the Shareholders contained in this Agreement shall be

true and correct on the date hereof and (except to the extent such

representations and warranties speak as of an earlier date) shall also

be true and correct on and as of the Closing, except for changes

contemplated by this Agreement, with the same force and effect as if

made on and as of the Closing.

 

11.2   Agreements, Conditions and Covenants.   The Shareholders shall

have performed or complied in all material respects with all

agreements, conditions and covenants required by this Agreement to be

performed or complied with by them on or before the Closing.

 

11.3   Legality.   No law or court order shall have been enacted,

entered, promulgated or enforced by any court or governmental

authority that is in effect and (a) has the effect of making the

purchase and sale of the assets illegal or otherwise prohibiting the

consummation of such purchase and sale or   (b) has a reasonable

likelihood of causing a material adverse effect.

 

12.   Post-Closing Obligations.

 

12.1   Audit.   The Shareholders shall cause an audit of Synosphere to

be completed within sixty (60) days of the Closing to comply with

applicable provisions of Regulation S-X in connection with the

acquisition of one company by another.

 

13. Termination

 

13.1 Grounds for Termination.   This Agreement may be terminated at any

time before the Closing:

 

     (a)   By mutual written consent of the Shareholders and iBIZ;

 

     (b)   By the Shareholders or iBIZ if the Closing shall not have

     been consummated on or before the Termination Date; provided,

     however, that the right to terminate this Agreement shall not be

     available to any party whose failure to fulfill any obligation

     under this Agreement has been the cause of, or resulted in, the

     failure of the Closing to occur on or before the Termination Date;

 

     (c)   By the Shareholders or iBIZ if a court of competent

     jurisdiction or governmental, regulatory or administrative agency

     or commission shall have issued a court order (which court order

     the parties shall use commercially reasonable efforts to lift)

     that permanently restrains, enjoins or otherwise prohibits the

     transactions, and such court order shall have become final and

     non-appealable;

 

     (d)   By iBIZ, if the Shareholders shall have breached, or failed

     to comply with, any of its obligations under this Agreement or

     any representation or warranty made by the Shareholders shall

     have been incorrect when made, and such breach, failure or

     misrepresentation is not cured within twenty (20) days after

      notice thereof, including failure to keep the iBIZ current in its

     filings and honor existing agreements; and

 

     (e)   By the Shareholders, if iBIZ shall have breached, or failed

     to comply with any of its obligations under this Agreement or any

     representation or warranty made by it shall have been incorrect

     when made, and such breach, failure or misrepresentation is not

     cured within twenty (20) days after notice thereof, and in either

     case, any such breaches, failures or misrepresentations,

     individually or in the aggregate, results or would reasonably be

     expected to affect materially and adversely the benefits to be

     received by the Shareholders hereunder.

 

13.2   Effect of Termination.   If this Agreement is terminated pursuant

to Section 13.1, the agreements contained in Section 9.3 shall survive

the termination hereof and any party may pursue any legal or equitable

remedies that may be available if such termination is based on a

breach of another party.

 

14. General Matters.

 

14.1   Entire Agreement; Amendment   This Agreement constitutes the

entire agreement among the parties hereto with respect to the subject

matter hereof and thereof.   This Agreement supersedes all prior

agreements and understandings among the parties hereto with respect to

the subject matter hereof and thereof.   There are no restrictions,

promises, warranties or undertakings, other than those set forth or

referred to herein and therein.   This Agreement may be amended,

modified or supplemented only by a written instrument duly executed by

each of the parties hereto.

 

14.2   Benefits; Successors.   This Agreement shall be binding upon and

inure to the benefit of and be enforceable by the respective heirs,

legal representatives, successors and permitted assigns of the

parties.   Nothing in this Agreement shall confer any rights upon any

person other than the Shareholders and iBIZ and their respective

heirs, legal representatives, successors and permitted assigns.

 

14.3   Assignment; Waiver.   No party hereto shall assign this

Agreement or any right, benefit or obligation hereunder.   Any term or

provision of this Agreement may be waived at any time by the party

entitled to the benefit thereof by a written instrument duly executed

by such party.   However, failure of any party to exercise any right

or remedy under this Agreement or otherwise, or delay by a party in

exercising such right or remedy, shall not operate as a waiver thereof.

 

14.4   Further Assurances.   At and after the Closing, the Shareholders

and iBIZ shall execute and deliver any and all documents and take any

and all other actions that may be deemed reasonably necessary by their

respective counsel to complete the transactions.

 

14.5   Interpretation. Unless the context of this Agreement clearly

requires otherwise, (a) references to the plural include the singular,

the singular the plural, the part the whole, (b) references to any

gender include all genders, (c) "or" has the inclusive meaning

frequently identified with the phrase "and/or," (d) "including" has

the inclusive meaning frequently identified with the phrase "but not

limited to" and (e) references to "hereunder" or "herein" relate to

this Agreement.   The section and other headings contained in this

Agreement are for reference purposes only and shall not control or

affect the construction of this Agreement or the interpretation

thereof in any respect. Section, subsection, Schedule and Exhibit

references are to this Agreement unless otherwise specified.   Each

accounting term used herein that is not specifically defined herein

shall have the meaning given to it under GAAP.   Any reference to a

party's being satisfied with any particular item or to a party's

determination of a particular item presumes that such standard will

not be achieved unless such party shall be satisfied or shall have

made such determination in its sole or complete discretion.

 

14.6   Severability.   If any provision of this Agreement shall be

invalid or unenforceable in any jurisdiction, such invalidity or

unenforceability shall not affect the validity or enforceability of

the remainder of this Agreement in that jurisdiction or the validity

or enforceability of any provision of this Agreement in any other

jurisdiction.

 

14.7   Counterparts.   This Agreement may be executed in two or more

counterparts, each of which shall be binding as of the date first

written above, and all of which shall constitute one and the same

instrument.   Each such copy shall be deemed an original.

 

14.8   Schedules. Any items listed or described on Schedules shall be

listed or described under a caption that identifies the Sections of

this Agreement to which the item relates.

 

14.9   Notices. All notices that are required or permitted hereunder

shall be in writing and shall be sufficient if personally delivered or

sent by mail, facsimile message or Federal Express or other delivery

service.   Any notices shall be deemed given upon the earlier of the

date when received at, or the third day after the date when sent by

registered or certified mail or the day after the date when sent by

Federal Express to, the address or fax number set forth below, unless

such address or fax number is changed by notice to the other party hereto:

 

If to Synosphere:

 

Synosphere, LLC

2435 N. Central Expy Suite 1610

Richardson, Texas 75080

Attention: Bryan A. Scott

Facsimile: (646) 365-7488

 

With copies to:

 

Fish & Richardson P.C.

5000 Bank One Center

1717 Main Street

Dallas, Texas   75201

Attention: Steve Block, Esq.

Telephone: (214) 292-4050

Facsimile: (214) 747-2091

 

If to iBIZ:

 

2238 West Lone Cactus

Phoenix, Arizona 85027

Attention: Kenneth W. Schilling

Telephone: (623) 492-9200

Facsimile: (623) 492-9921      

 

With copies to:

 

Brian F. Faulkner, A Professional Law Corporation

27127 Calle Arroyo, Suite 1923

San Juan Capistrano, California 92675

Attention:   Brian F. Faulkner, Esq.

Telephone: (949) 240-1361

Facsimile: (949) 240-1362

 

14.10   Arbitration.   Any and all disputes relating to this Agreement

or its breach   shall be settled by arbitration, by a single

arbitrator, in Phoenix, Arizona, in accordance with the then-current

rules of JAMS/Endispute; the parties waive any right they may have

under any statute or law to cause such proceeding to be transferred

to any other venue.   Judgment upon the award entered by the

arbitrator may be entered in any court having jurisdiction thereof.  

Costs of arbitration, including reasonable attorneys' fees and costs

incurred, as determined by the arbitrator, together with reasonable

attorneys' fees and costs incurred by the prevailing party in court

enforcement of the arbitration award, must be paid to the prevailing

party by the party designated by the arbitrator or court.   Service of

the Petition to Confirm Arbitration and written notice of the time

and place of the hearing thereon shall be in the same manner provided

in this Agreement.

 

Should one party either dismiss or abandon his claim or counterclaim

before hearing thereon, the other party shall be deemed the

"prevailing party" pursuant to this Agreement.   Should both parties

receive judgment or award of their respective claims, the party in

whose favor the larger judgment or award is rendered shall be deemed

the "prevailing party" pursuant to this Agreement.

 

14.11   Governing Law.   The laws of the State of Arizona shall govern

all issues concerning the relative rights of the Company and its

stockholders.   All other questions shall be governed by and

interpreted in accordance with the laws of the State of Arizona

without regard to the principles of conflict of laws.

 

IN WITNESS WHEREOF, this Acquisition Agreement has been executed by

the parties hereto as of the day and year first written above.

 

                                       iBIZ TECHNOLOGY CORP.

 

 

                                       By:   /s/   Kenneth W. Schilling

                                       Kenneth W. Schilling, President

 

 

                                       SHAREHOLDERS OF SYNOSPHERE

 

 

                                        By:   /s/   Bryan A. Scott

                                       Bryan A. Scott

 

 

                                  EXHIBIT C

 

                       REGISTRATION RIGHTS AGREEMENT

 

      This Registration Rights Agreement ("Agreement"), dated as of

January 20, 2004, is by and between iBIZ Technology Corp., a Florida

corporation ("Company"), and the undersigned interestholders of

Synosphere LLC, a Texas limited liability company ("Shareholders").

 

     WHEREAS, upon the terms and subject to the conditions of the

Acquisition Agreement between, among others, the Shareholders and the

Company ("Acquisition Agreement"), the Company has agreed to issue to

the Shareholders common shares of the Company ("Common Stock"), of

the Company; and

 

     WHEREAS, to induce the Shareholders to execute and deliver the

Acquisition Agreement, the Company has agreed to provide certain

registration rights under the Securities Act of 1933, as amended, and

the rules and regulations thereunder, or any similar successor

statute (collectively, the "1933 Act"), and applicable state

securities laws, with respect to the shares of Common Stock issuable

pursuant to the Acquisition Agreement and Common Shares.

 

     NOW, THEREFORE, in consideration of the foregoing premises and

the mutual covenants contained hereinafter and other good and

valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, the Company and the Shareholders hereby agree as

follows:

 

1.   DEFINITIONS.

 

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

following meanings:

 

     a.   "Closing" means the date that the Acquisition Agreement is

closed.

 

     b.   "Shareholders" means the Shareholders.

 

     c.   "Person" means a corporation, a limited liability

company, an association, a partnership, an organization, a business,

an individual, a governmental or political subdivision thereof or a

governmental agency.

 

     d.   "Principal Market" means either The American Stock

Exchange, Inc., The New York Stock Exchange, Inc., the Nasdaq

National Market, The Nasdaq Small Cap Market or the National

Association of Securities Dealer's, Inc. Over the Counter Bulletin

Board, whichever is the principal market on which the Common Stock is

listed.

 

     e.   "Register," "Registered," and "Registration" refer to a

registration effected by preparing and filing one or more

Registration Statements in compliance with the 1933 Act and pursuant

to Rule 415 under the 1933 Act or any successor rule providing for

offering securities on a continuous basis ("Rule 415"), and the

declaration or ordering of effectiveness of such Registration

Statement(s) by the United States Securities and Exchange Commission

("SEC").

 

     f.   "Registrable Securities" means the shares of Common Stock

issued and any shares of capital stock issued or issuable with

respect to the Common Stock as a result of any stock split, stock

dividend, recapitalization, exchange or similar event or otherwise,

which have not been (x) included in a Registration Statement that has

been declared effective by the SEC or (y) sold under circumstances

meeting all of the applicable conditions of Rule 144 (or any similar

provision then in force) under the 1933 Act.

 

     g.   "Registration Statement" means a registration statement of

the Company filed under the 1933 Act.

 

     All capitalized terms used in this Agreement and not otherwise

defined herein shall have the same meaning ascribed to them as in the

Acquisition Agreement.

 

2.   REGISTRATION.

 

     a.   Mandatory Registration.   The Company shall prepare, and, as

soon as practicable file with the SEC a Registration Statement or

Registration Statements (as is necessary) on Form SB-2 (or, if such

form is unavailable for such a registration, on such other form as is

available for such a registration), covering the resale of all of the

Registrable Securities, which Registration Statement(s) shall state

that, in accordance with Rule 416 promulgated under the 1933 Act,

such Registration Statement also covers such indeterminate number of

additional shares of Common Stock as may become issuable upon stock

splits, stock dividends or similar transactions.   The Company shall

prepare and file with the SEC, as soon as possible after the Closing

and no later than thirty (30) days following the Closing, either a

Registration Statement or an amendment to an existing Registration

Statement, in either event registering for resale by the Shareholders

a sufficient number of shares of Common Stock for the Shareholders to

sell the Registrable Securities (or such lesser number as may be

required by the SEC).   In the event the Company cannot register

sufficient shares of Common Stock, due to the remaining number of

authorized shares of Common Stock being insufficient, the Company

will use its best efforts to register the maximum number of shares it

can based on the remaining balance of authorized shares and will use

its best efforts to increase the number of its authorized shares as

soon as reasonably practicable.

 

      b.   The Company shall use its best efforts to have the

Registration Statement filed with the SEC within thirty (30) calendar

days after the Closing.

 

     c.   The Company shall use its best efforts to have the

Registration Statement declared effective by the SEC within ninety

(90) calendar days after the Closing.

 

     d.   The Company agrees not to include any other securities,

other than those for the Shareholders in this Registration Statement

without Shareholders prior written consent.   Furthermore, the Company

agrees that it will not file any other Registration Statement for

other securitie