SHARE PURCHASE AGREEMENT

Stock Purchase Agreement

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INTERNET COMMERCE CORP

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Title: SHARE PURCHASE AGREEMENT
Governing Law: Georgia Date: 11/3/2005
Industry: Software and Programming Law Firm: Cain Hibbard Myers & Cook PC Sector: Technology

SHARE PURCHASE AGREEMENT, Parties: internet commerce corp

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EXECUTION COPY

EXHIBIT 2.1

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement (this "Agreement") is made as of this 1st

day of November 2005, by and among Internet Commerce Corporation, a Delaware

corporation ("Buyer"), Connective Commerce Associates ("Seller"), a

Massachusetts business trust created by Declaration of Trust dated as of

December 14, 2001 and of which Michael J. Kirchner and Larry M. Chernicoff are

the Trustees (the "Trustees"), the shareholders of Seller listed on the

signature page hereto as Operating Shareholders (the "Operating Shareholders"),

and The Kodiak Group, Inc., a Massachusetts corporation ("Kodiak").

WHEREAS, Seller owns one share of the common stock, no par value, of

Kodiak, which constitutes all of the outstanding capital stock of Kodiak (the

"Share");

WHEREAS, Kodiak is a qualified subchapter S subsidiary of Seller and a

disregarded entity for federal and state tax purposes;

WHEREAS, Kodiak is engaged in, among other things, providing supply chain

productivity and optimization software applications and solutions, eCommerce

system integration and related services (the "Business");

WHEREAS, pursuant to the terms and conditions set forth hereinafter, Buyer

wishes to purchase from Seller, and Seller wishes to sell to Buyer, the Share

free and clear of all liens, claims, pledges, restrictions, rights of others,

voting agreements, charges or other encumbrances of any kind or nature

whatsoever ("Liens"); and

NOW, THEREFORE, in consideration of the premises and the representations,

warranties, covenants and agreements stated herein, and other good and valuable

consideration, the receipt and sufficiency of which hereby are acknowledged

conclusively, the parties hereto (collectively, the "Parties," and individually,

a "Party"), each intending to be legally bound, agree as follows:

ARTICLE I

CLOSING

1.1 Closing. The closing of the purchase and sale contemplated hereby (the

"Closing") will take place via overnight mail, email and/or fax at the offices

of Morris, Manning & Martin, LLP in Atlanta, Georgia, with an effective time for

purposes hereunder of 5:00 p.m. (Atlanta Time) on November 1, 2005 (the "Closing

Date"), provided that the fulfillment or waiver (if permissible) by Seller and

Buyer of the conditions to Closing set forth in Article VI hereof shall have

occurred, or on such other date or at such other time as may be mutually agreed

upon by Buyer and Seller. At the Closing, the Parties will deliver or cause to

be delivered the funds, documents and certificates described in Article VI.

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ARTICLE II

PURCHASE AND SALE

2.1 Share Purchase. Seller agrees to sell, assign and convey, and Buyer

agrees to purchase, as of the Closing Date, the Share.

2.2 Purchase Price. In full consideration for the sale to Buyer of the

Share, Buyer shall pay to Seller the Cash Consideration and Earn Out as provided

in this Section 2.2 (collectively, the "Purchase Price"). All payments of the

Purchase Price shall be made by certified bank check or wire transfer of

immediately available funds to an account designated by Seller.

(a) Cash Consideration. Buyer shall make a payment at Closing ("Cash

Consideration") in the aggregate amount of $1,000,000.

(b) Earn Out. Payment of the Earn Out shall be made as provided in

Section 2.3 below.

2.3 Earn Out.

2.3.1. If Kodiak Revenue (as defined in Section 2.3.1(c)) is

$3,000,000 or more, Buyer shall pay Seller, within 90 days following the first

anniversary of the Closing Date ("First Anniversary") in cash, the following

additional consideration (the "Earn Out"):

(a) First Level Earn Out. If Kodiak Revenue is at least $3,000,000,

Buyer shall pay Seller $1,000,000 (the "First Level Earn Out").

(b) Second Level Earn Out. If Kodiak Revenue is at least $3,250,000,

Buyer shall pay Seller, in addition to the First Level Earn Out, an additional

amount (the "Second Level Earn Out") that shall be determined as follows:

(i) If Kodiak Revenue is at least $4,000,000, the Second

Level Earn Out shall be $500,000.

(ii) If Kodiak Revenue is at least $3,250,000 but less

than $4,000,000, the Second Level Earn Out shall be the amount

determined by multiplying $500,000 by a percentage calculated by

dividing (x) the amount of Kodiak Revenue in excess of $3,000,000 by

(y) $1,000,000.

the gross revenue earned by Kodiak for the one-year period between the Closing

Date and the First Anniversary (the "Earn Out Period"), as accounted in

accordance with generally accepted accounting principles in the United States

applied in a manner consistent with past practice ("GAAP"). If a Kodiak employee

shall be reassigned to another subsidiary or operating division of Buyer in

violation of Section 2.3.2, the gross revenue generated by that employee for

such other subsidiary or operating division during the Earn Out Period shall be

included in Kodiak Revenue.

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(d) Buyer shall prepare and deliver to Seller within 45 days after

the First Anniversary a detailed statement of earnings for the Earn Out Period

setting forth Buyer's determination of Kodiak Revenue (the "Kodiak Revenue

Statement"). If Seller disputes Buyer's determination of Kodiak Revenue, Seller

shall give notice of such dispute to Buyer within 14 days after the Kodiak

Revenue Statement shall have been provided to Seller. Within 5 days after the

giving of such notice, Buyer and Seller shall refer the dispute to their

respective independent accountants (the "Parties' Accountants") with

instructions to attempt to resolve the dispute. Buyer shall cooperate with the

Parties' Accountants and furnish the Parties' Accountants with all information

reasonably requested by them. Within 20 days after the matter shall be referred

to them, the Parties' Accountants shall give Buyer and Seller written notice as

to whether they have been able to reach agreement as to the determination of

Kodiak Revenue. If the Parties' Accountants shall have reached agreement, such

agreement shall be conclusive and binding on the Parties. If the Parties'

Accountants shall be unable to reach agreement, they shall jointly and promptly

select a third independent certified public accounting firm (the "Third

Accountant"). The Third Accountant shall, within 30 days after the matter is

referred to it, notify Buyer and Seller in writing of its determination of

Kodiak Revenue. Any such determination by the Third Accountant shall be

conclusive and binding on the Parties. If the Third Accountant shall determine

that the Kodiak Revenue proposed by Seller shall be at least 15.0% higher than

the Kodiak Revenue determined by the Third Accountant, then the fees and

expenses of the Third Accountant and all costs associated with the Third

Accountant shall be paid by Seller. If the Third Accountant shall determine that

the Kodiak Revenue proposed by Buyer shall be at least 15.0% lower than the

Kodiak Revenue determined by the Third Accountant, then the fees and expenses of

the Third Accountant and all costs associated with the Third Accountant shall be

paid by Buyer. In all other cases, Buyer and Seller shall each pay one-half of

the fees and expenses of the Third Accountant and all other costs associated

with the Third Accountant. Buyer and Seller shall be responsible for their

respective attorneys' fees, accountants' fees and other expenses incurred in

connection with the dispute.

2.3.2 During the Earn Out Period, Buyer shall:

(a) Operate Kodiak in a commercially reasonable manner consistent

with Kodiak's current practice, and not, without the consent of the Operating

Shareholders, (1) reassign Kodiak employees to other subsidiaries or operating

divisions of Buyer or (2) change contract or credit terms for existing

customers;

(b) In cases where Kodiak shall provide services to another

subsidiary or division of Buyer, on a sub-contract or other basis, such services

shall be charged at full standard rate for purposes of the calculation of Kodiak

Revenue, unless such services shall be for a non-revenue producing internal

project (an "Internal Project");

Kodiak before assigning an Internal Project to Kodiak, which approval shall not

be withheld unless the Vice President and General Manager reasonably determines

that such Internal Project shall interfere with Kodiak's revenue-producing

customer work;

(d) Maintain Kodiak's corporate and business existence; and

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(e) Not merge or consolidate Kodiak into another entity or sell all

or substantially all of the assets of Kodiak.

2.4 Because of Kodiak's status as a disregarded entity, the sale of the

Share will be treated for tax purposes as if Buyer had purchased all of Kodiak's

assets. Buyer and Seller agree that the Purchase Price (including any additional

consideration paid to Seller pursuant to Section 2.3) shall be allocated among

Kodiak's assets, tangible and intangible, on the basis of an allocation (the

"Allocation") to be prepared by Buyer and reasonably acceptable to Seller which

(i) allocates a portion of the Purchase Price to Kodiak's fixed assets in an

amount equal to the value of such fixed assets as shown on the books of Seller

in accordance with GAAP immediately prior to the Closing, and (ii) allocates the

remainder of the Purchase Price to intangible assets and goodwill in proportions

to be determined by Buyer. Buyer and Seller may agree upon a different

allocation of the Purchase Price than set forth above, in which case such

different allocation shall be controlling. Buyer shall use its reasonable best

efforts to deliver to Seller the final version of the Allocation on or prior to

January 31, 2006, and such final version of the Allocation shall become a part

of this Agreement for all purposes. Seller and Buyer agree to use the

Allocation, in accordance with Section 1060 of the Internal Revenue Code of

1986, as amended, and the rules and regulations promulgated thereunder

(collectively, the "Code"), in the preparation and filing of all Tax Returns

(including IRS form 8594) for the applicable period. Neither Seller nor Buyer

will take any action that would call into question the bona fides of such

Allocation.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER AND OPERATING SHAREHOLDERS

Except as disclosed in a document dated as of the date of this Agreement

and delivered by Seller to Buyer prior to the execution and delivery of this

Agreement and referring to the relevant representations and warranties in this

Agreement (the "Disclosure Schedules"), as of the date of this Agreement, Seller

and the Operating Shareholders hereby jointly and severally represent and

warrant to Buyer the following:

3.1 Organization and Qualification.

(a) Seller is a Massachusetts business trust duly formed, validly

existing and in good standing under the laws of Massachusetts, with the

requisite power and authority to own, lease and operate its properties and to

carry on its business as it is now being conducted.

(b) Kodiak is a corporation duly organized, validly existing and in

good standing under the laws of Massachusetts, with the requisite corporate

power and authority to own, lease and operate its properties and to carry on its

business as it is now being conducted. Kodiak is duly qualified or licensed to

do business, and is in good standing, in each jurisdiction where the character

of the properties owned, leased or operated by it or the nature of its business

makes such qualification or licensing necessary, except for such failures to be

so qualified or licensed and in good standing that could not reasonably be

expected to have, individually or in the aggregate, a Material Adverse Effect.

For purposes of this Agreement, "Material Adverse Effect" means a

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material adverse effect on the financial condition or results of operations of

Kodiak or the Business, taken as a whole.

control, directly or indirectly, any equity interest in any corporation,

association, partnership, joint venture arrangement or other business entity. As

used herein, "Subsidiary" shall mean any corporation or other entity more than

50% of the stock or other ownership interest of which (measured by virtue of

voting rights) is directly or indirectly owned by Kodiak. Kodiak does not own

any equity interest in any partnership or joint venture arrangement or other

business entity.

3.2 Title to the Share. Seller holds of record and beneficially owns the

Share free and clear of any Liens or any other restrictions on transfer (other

than any restrictions on transfer under the Securities Act of 1933, as amended

and state securities laws). The Share constitutes all of the outstanding capital

stock of Kodiak. Neither Seller nor Kodiak is a party to any option, warrant,

right, contract, call, put or other agreement or commitment providing for the

disposition or acquisition of capital stock of Kodiak (other than this

Agreement). Seller is not a party to any voting trust, proxy or other agreement

or understanding with respect to the Share.

3.3 Articles of Organization and Bylaws. The copies of Kodiak's Articles

of Organization and Articles of Amendment thereto (collectively, "Articles") and

Bylaws attached hereto as Exhibit A are true, complete and correct copies of

Kodiak's current Articles and Bylaws and are in full force and effect. Kodiak is

not in violation of any of the provisions of its Articles or Bylaws.

3.4 Authority Relative to This Agreement. Seller and Kodiak have all

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

its obligations hereunder and to consummate the transactions contemplated

hereby. The execution and delivery of this Agreement by Seller and the

consummation by Seller of the transactions contemplated hereby have been duly

and validly authorized by all necessary action of the Trustees and Seller's

shareholders, and no other proceedings on the part of Seller are necessary to

authorize this Agreement or to consummate the transactions contemplated hereby.

The execution and delivery of this Agreement by Kodiak and the consummation by

Kodiak of the transactions contemplated hereby have been duly and validly

authorized by all necessary corporate action, and no other corporate proceedings

on the part of Kodiak are necessary to authorize this Agreement or to consummate

the transactions contemplated hereby. This Agreement has been duly executed and

delivered by Seller and Kodiak and, assuming the due authorization, execution

and delivery by Buyer, constitutes the legal, valid and binding obligation of

Seller and Kodiak, enforceable against Seller and Kodiak in accordance with its

terms, subject to applicable laws of bankruptcy, insolvency or similar laws

relating to creditors' rights generally and to general principles of equity

(whether applied in a proceeding in law or equity).

3.5 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement by Seller and Kodiak does

not, and the performance by Seller and Kodiak of their respective obligations

hereunder will not, assuming that all consents, approvals, authorizations and

permits described in Section 3.5(a) of the Disclosure Schedules have been

obtained and all filings and notifications described in Section 3.5(a) of the

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Disclosure Schedules have been made, (i) conflict with or violate any provision

of Seller's Declaration of Trust dated as of December 14, 2001 (the

"Declaration") or the Articles or Bylaws of Kodiak, (ii) conflict with or

violate any law applicable to Seller or Kodiak or by which any property or asset

of Seller or Kodiak is bound or affected or (iii) result in any breach of or

constitute a default (or an event which with the giving of notice or lapse of

time or both could reasonably be expected to become a default) under, or give to

others any right of termination, amendment, acceleration or cancellation of, or

result in the creation of a lien or other encumbrance on any material property

or asset of either Seller or Kodiak pursuant to any contract, agreement,

covenant, sale or purchase order or other arrangement (collectively,

"Contracts"), permit, franchise or other obligation to which either Seller or

Kodiak is a party or by which any property or asset of either Seller or Kodiak

is bound.

(b) The execution and delivery of this Agreement by Seller, the Operating

Shareholders and Kodiak does not, and the performance by Seller, the Operating

Shareholders and Kodiak of their respective obligations hereunder will not,

require any consent, approval, authorization or permit of, or filing with or

notification by Seller, the Operating Shareholders or Kodiak to, any

governmental entity which, if not obtained or made, would, individually or in

the aggregate, have a Material Adverse Effect.

3.6 Permits; Compliance with Laws. Kodiak is in possession of all permits

necessary for it to own, lease and operate its properties or to produce, store,

distribute and market its products or otherwise to carry on the Business as it

is now being conducted, and, as of the date of this Agreement (the "Permits"),

none of the Permits has been suspended or cancelled nor is any such suspension

or cancellation pending or, to the knowledge of the Operating Shareholders,

threatened, except for such Permits for which the failure to possess or the

suspension or termination of which would not, individually or in the aggregate,

have a Material Adverse Effect. Kodiak is not in conflict with, or in default or

violation of, (i) any law applicable to Kodiak or by which any property or asset

of Kodiak is bound or affected or (ii) any Permits, except for such conflict,

default or violation which would not have a Material Adverse Effect. Kodiak has

not received from any governmental entity any written notification with respect

to possible conflicts, defaults or violations of laws.

3.7 Financial Statements.

(a) The Operating Shareholders have delivered to Buyer in the Disclosure

Schedules true, complete and correct copies of the following financial

statements:

(i) audited statement of income and cash flows of Kodiak for the

fiscal year ended September 30, 2004, and an audited balance sheet

of Kodiak as of September 30, 2004, together with the related notes

and schedules, if any (such audited balance sheet, statements of

income and cash flows and the related notes and schedules are

referred to herein as the "2004 Financial Statements");

(ii) audited statements of income and cash flows of Kodiak for the

fiscal year ended September 30, 2003, and an audited balance sheet

of Kodiak as at September 30, 2003, together with the related notes

and schedules, if any (such

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audited balance sheet, statements of income and cash flows and the

related notes and schedules are referred to herein as the "2003

Financial Statements");

(iii) audited statements of income and cash flows of Kodiak for the

fiscal year ended September 30, 2002, and an audited balance sheet

of Kodiak as at September 30, 2002, together with the related notes

and schedules, if any (such audited balance sheet, statements of

income and cash flows and the related notes and schedules are

referred to herein as the "2002 Financial Statements"); and

(iv) unaudited statements of income and cash flows of Kodiak for the

fiscal year ended September 30, 2005, and an unaudited balance sheet

of Kodiak as at September 30, 2005 (the "Balance Sheet Date"),

together with the related notes and schedules, if any (such

unaudited balance sheet, statements of income and cash flows and the

related notes and schedules are referred to herein as the "September

30 Financial Statements" and, together with the 2004 Financial

Statements, the 2003 Financial Statements, the 2002 Financial

Statements, and the September 30 Financial Statements, the

"Financial Statements"); and

(v) a schedule of all of the liabilities of Kodiak as of the date of

this Agreement (the "Liabilities Schedule"), which schedule shall be

updated by the Operating Shareholders as of the Closing Date.

(b) Except as set forth on the September 30 Financial Statements, Kodiak

has no liabilities or obligations of any nature (whether accrued, absolute,

contingent or otherwise) that is, individually or in the aggregate, material to

the Business and that would be required to be reflected on a balance sheet or in

notes thereto prepared in accordance with GAAP, except for immaterial

liabilities or obligations incurred in the ordinary course of business

consistent with past practice since the Balance Sheet Date. All reserves

established by Kodiak and set forth in the Financial Statements are in

accordance with GAAP, consistently applied. On the Balance Sheet Date, there

were no material loss contingencies (as such term is used in Statement of

Financial Accounting Standard No. 5) that are not adequately provided for in the

September 30 Financial Statements.

financial position of Kodiak and results of operations and cash flows as of and

for the periods indicated.

3.8 Owned Real Property. Kodiak does not own any real property or hold any

option to purchase real property.

3.9 Absence of Certain Changes or Events. Since the Balance Sheet Date,

Kodiak has conducted the Business only in the ordinary course consistent with

past practice. Without limiting the generality of the foregoing, except as

specifically contemplated by this Agreement or set forth in Section 3.9 of the

Disclosure Schedules, since the Balance Sheet Date:

(a) There have been no events that, individually or in the aggregate,

would have a Material Adverse Effect;

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(b) Neither the business, properties nor assets of Kodiak have suffered a

loss (whether or not covered by insurance), as a result of fire, explosion,

earthquake, accident, labor trouble, condemnation or taking of property by any

governmental entity, flood, windstorm, pestilence, embargo, riot, act of God or

the public enemy, any other casualty or similar event or any other cause, which

loss has, will have or could reasonably be expected to have a Material Adverse

Effect;

other distribution (whether in ownership interests or property (other than cash)

or any combination thereof) in respect of any ownership interests of Kodiak;

(d) Kodiak has not purchased, redeemed or otherwise acquired (or committed

itself to purchase, redeem or acquire), directly or indirectly, any ownership

interests or other security of Kodiak;

(e) Kodiak has not made any acquisition of all or any part of the assets,

properties, capital stock or business of any other entity, other than inventory,

equipment and supplies acquired in the ordinary course of business consistent

with past practice;

(f) Kodiak has not, except in the ordinary course of business consistent

with past practice, sold or otherwise disposed of any of its material assets;

(g) Kodiak has not sold, assigned, transferred, conveyed or licensed, or

committed itself to sell, assign, transfer, convey or license, any Intellectual

Property (as defined in Section 3.14), other than in the ordinary course of

business;

(h) Kodiak has not waived or released any right or claim of material value

to its business, including any write-off or other compromise of any material

account receivable of Kodiak;

(i) Kodiak has not paid, directly or indirectly, any of its material

liabilities before the same became due in accordance with its terms other than

in the ordinary course of business consistent with past practice;

(j) Kodiak has not made any payment or commitment to pay any severance or

termination pay to any employee of Kodiak;

(k) Kodiak has not made any wage or salary increase or bonus, or increase

in any other direct or indirect compensation for or to any employee, officer,

director, consultant, agent or other representative, other than to non-officers

or non-director employees, consultants, agents or other representatives in the

ordinary course of business consistent with past practice;

(l) Kodiak has not made any loan, advance or other payment to any of its

or Seller's equity owners, officers, directors, employees, consultants, agents

or other representatives (other than travel advances made in the ordinary course

of business), or made any other loan, advance or other payment other than in the

ordinary course of business consistent with past practice;

(m) Kodiak has not pledged or otherwise, voluntarily or involuntarily,

encumbered any of its assets or properties, except for Liens for current taxes

which are not yet delinquent or which are

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being contested in good faith and purchase-money Liens arising out of the

purchase or sale of products made in the ordinary course of business and in any

event not in excess of $10,000 for any single item or $30,000 in the aggregate;

(n) Kodiak has not materially changed any of its accounting methods,

principles, procedures or practices;

(o) Kodiak has not materially changed any of its business policies or

practices, including advertising, marketing, pricing, purchasing, personnel,

sales or budget policies; and

(p) Kodiak has not entered into any agreement to do any of the foregoing.

3.10 Employee Benefit Plans; Labor Matters.

(a) (i) No asset of Kodiak is subject to any Lien relating to any

"employee benefit plan" (as such term is defined in the Employee Retirement

Income Security Act of 1974, as amended ("ERISA")) that would affect in any

manner whatsoever Buyer's right, title and interest in, or Buyer's right to use

or enjoy (free and clear of any Lien) any asset of Kodiak or any aspect of the

Business. "ERISA Affiliate" means each trade or business (whether or not

incorporated) which together with Kodiak is, or at any time for which any

relevant statute of limitations remains open was, treated as a single employer

pursuant to sections 414(b), (c), (m) or (o) of the Internal Revenue Code of

1986, as amended, and the rules and regulations promulgated thereunder

(collectively, the "Code").

(ii) Neither Kodiak nor any ERISA Affiliate has maintained, contributed

to, or incurred any liability or obligation with respect to, any employee

pension benefit plan subject to Title IV of ERISA or section 412 of the Code,

including any "multi-employer plan" (as defined in ERISA), nor to any "multiple

employer welfare arrangement" (as defined in ERISA) that could reasonably be

expected by reason of the transactions contemplated by this Agreement to become

a liability of Buyer or Kodiak or to attach to any asset of Kodiak.

(iii) Kodiak maintains for its employees the 401(k) plan described on

Section 3.10(a)(iii) of the Disclosure Schedules.

(iv) Kodiak does not maintain any employee welfare benefit plan that

provides medical or life insurance following an employee's termination of

employment, other than as required by section 4980B of the Code, Part 6 of

Subtitle B of Title I of ERISA or other applicable law. Kodiak does not have any

ERISA Affiliates.

(b) Kodiak is not a party to any collective bargaining or other labor

union contract applicable to persons employed by Kodiak, and no collective

bargaining agreement is being negotiated by Kodiak. As of the date of this

Agreement, there is no labor dispute, strike or work stoppage against Kodiak

pending or, to the knowledge of the Operating Shareholders, threatened that may

interfere with the business activities of Kodiak. As of the date of this

Agreement, to the knowledge of the Operating Shareholders, neither Kodiak nor

any of its representatives or employees has committed any unfair labor practice

in connection with the operation of the Business,

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and there is no charge or complaint against Kodiak by the National Labor

Relations Board or any comparable governmental entity pending or threatened in

writing.

applicable laws and regulations respecting employment, discrimination in

employment, terms and conditions of employment, wages, hours and occupational

safety and health and employment practices. There are no controversies pending

or, to the knowledge of the Operating Shareholders, threatened, between Kodiak

and any of its employees, which controversies have or could reasonably be

expected to result in an action, suit, proceeding, claim, arbitration or

investigation before any agency, court or tribunal, foreign or domestic, and

there are no existing factors or circumstances that could reasonably be expected

to result in such an action, suit, proceeding, claim, arbitration or

investigation. To the knowledge of the Operating Shareholders, no employees of

Kodiak are in violation of any term of any employment Contract, patent

disclosure agreement, noncompetition agreement, or any restrictive covenant to a

former employer relating to the right of any such employee to be employed by

Kodiak because of the nature of the business conducted or presently proposed to

be conducted by Kodiak or to the use of trade secrets or proprietary information

of others. Except as set forth in Section 3.10(c) of the Disclosure Schedules,

Kodiak has not received since January 1, 2005, any written or, to the Operating

Shareholders' knowledge, oral notice that any employee intends to terminate his

or her employment with Kodiak.

(d) The Operating Shareholders have delivered to Buyer in Section 3.10(d)

of the Disclosure Schedules a true, complete and correct list of all proposed or

anticipated bonuses to be paid to any employee, representative or agent of

Kodiak through or relating to activities performed prior to the Closing Date.

3.11 Contracts. Set forth in Section 3.11 of the Disclosure Schedules is a

list of the following Contracts to which Kodiak is a party or by which any of

the assets of Kodiak is bound or subject, in effect on the date hereof

(collectively, the "Material Contracts"), true and complete copies of which have

been provided or made available to Buyer:

(a) distributor, sales, marketing, vendor, advertising, financial

advisory, broker-dealer, agency or manufacturer's representative Contracts

involving more than $20,000;

(b) continuing Contracts for the purchase or provision of materials,

supplies, equipment or services involving in the case of any such Contract more

than $20,000 over the life of the Contract;

(as defined herein) other than Kodiak so as to expire, more than one year after

the date of this Agreement and involving more than $20,000 in the aggregate;

(d) trust indentures, mortgages, promissory notes, loan agreements or

other Contracts for the borrowing of money, any currency exchange, commodities

or other hedging arrangement or any leasing transaction of the type required to

be capitalized in accordance with GAAP;

(e) Contracts for capital expenditures in excess of $20,000 in the

aggregate;

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(f) Contracts currently in effect that were entered into in the ordinary

course of business and that involve the payment or receipt of consideration in

excess of $20,000;

(g) Contracts for the sale, lease or sublease of real property;

(h) Contracts for the sale of any material assets or properties of Kodiak

or for the grant to any Person any preferential rights to purchase any material

assets or properties of Kodiak, other than in the ordinary course of business;

(i) Contracts establishing joint ventures or partnerships;

(j) Contracts containing any material obligations or liabilities of any

kind to holders of ownership interests of Kodiak except for contracts for the

sale or purchase of such ownership interests which have been fully performed;

(k) Contracts relating to the acquisition by Kodiak of any operating

business or any capital stock of any other Person;

(l) Contracts requiring the payment to any Person of any material override

or similar commission or fee;

(m) Contracts with any current or former officer or director, including

any employment or deferred compensation Contract and any compensation, bonus,

incentive plan, severance or change-in-control Contract;

(n) Agreements of guarantee, support, indemnification, assumption or

endorsement of, or any similar commitment with respect to, the obligations,

liabilities (whether accrued, absolute, contingent or otherwise) or indebtedness

of any other Person that involve the potential payment by Kodiak of amounts in

excess of $25,000 in the aggregate; or

(o) Contracts that were not made in the ordinary course of business and

that are material to Kodiak taken as a whole.

Kodiak is not in violation of or in default under (nor has there occurred any

event that with the giving of notice or the expiration of any cure period would

result in such a violation of or default under) any Material Contract, except

for (i) those violations and defaults described in Section 3.11 of the

Disclosure Schedules and (ii) such violations or defaults which would not,

individually or in the aggregate, have a Material Adverse Effect. Each Material

Contract is in full force and effect and is a legal, valid and binding

obligation of Kodiak and, to the knowledge of the Operating Shareholders,

enforceable in accordance with its terms, in each case, subject to applicable

laws of bankruptcy, insolvency or similar laws relating to creditors' rights

generally and to general principles of equity (whether applied in a proceeding

in law or equity). As used herein, "Person" shall mean any person, limited

liability company, partnership, trust, corporation or other entity.

3.12 Litigation. There is no suit, claim, action, proceeding or

investigation pending or, to the knowledge of the Operating Shareholders,

threatened against Kodiak and, to the knowledge of the Operating Shareholders

after reasonable inquiry, Kodiak has not received any written or oral

<PAGE>

claim that could reasonably be expected to result in such a suit, claim, action,

proceeding or investigation. Kodiak has not received any written or, to the

knowledge of the Operating Shareholders, oral notice that could reasonably be

expected to result in the denial of insurance coverage under policies issued to

Kodiak in respect of such suits, claims, actions, proceedings and

investigations. Kodiak is not subject to any outstanding order, writ, injunction

or decree. No injunction, judgment, or other order has been issued by any court

or governmental authority in any legal action or proceeding instituted by a

third party against Seller, Kodiak or any of their assets arising by reason of

the acquisition of the Share pursuant to this Agreement, which restrains,

prohibits or invalidates or seeks to restrain, prohibit or invalidate, the

consummation of the transactions contemplated by this Agreement, or seeks

damages related thereto.

3.13 Environmental Matters. Except as would not have, individually or in

the aggregate, a Material Adverse Effect, to the knowledge of the Operating

Shareholders (i) Kodiak is in compliance with all federal, state, local and

foreign statutes, codes, laws, ordinances, regulations, rules, guidance,

notices, permits, judgments, orders and decrees applicable to it or any of its

properties, assets, operations and businesses relating to pollution or the

protection of human health or the environment ("Environmental Laws"); (ii) all

past noncompliance of Kodiak with Environmental Laws, if any, has been resolved

without any pending, ongoing or future obligation, cost or liability; and (iii)

Kodiak has not released a Hazardous Waste, Hazardous Material or Hazardous

Substance (as defined in any Environmental Law) at, or transported a Hazardous

Material to or from, any real property leased or occupied by Kodiak, in

violation of any Environmental Law.

3.14 Intellectual Property.

(a) As used in this Agreement, "Intellectual Property" shall mean Licensed

Intellectual Property (defined below), all patents, inventions, trademarks,

trade names, service marks, trade dress, Internet domain name registrations,

copyrights, copyrightable material (whether or not registered) and any renewal

rights therefor, trade secrets, know-how, computer software programs, Software

Programs (defined below) or applications in both source and object code form,

technical documentation of such software programs, registrations and

applications for any of the foregoing that are used in the Business and/or in

any product, technology or process (i) currently manufactured, used, referenced,

licensed, published, marketed, sold or owned by Kodiak, or (ii) previously or

currently under development for possible future manufacturing, publication,

marketing, licensing or other use by Kodiak.

(b) Section 3.14(b) of the Disclosure Schedules contains a true and

complete list of all of the following items of Intellectual Property owned by

Kodiak: patents, patent applications, trademark registrations, trademark

applications, other material trademarks, trade names, service mark

registrations, service mark applications, other material service marks, Internet

domain name registrations and copyright registrations and applications and

material copyrightable material.

Property consists solely of items and rights that are: (i) owned by Kodiak; (ii)

in the public domain; or (iii) used by Kodiak pursuant to a valid third party

license (the "Licensed Intellectual Property"). Section 3.14(c) of the

Disclosure Schedules contains a true and complete list of all the material

Licensed Intellectual Property used by Kodiak, including the parties, date, term

and subject matter of each such third party

<PAGE>

license agreement (each, a "License Agreement") (Buyer acknowledges that any

License Agreement to any commercially available Licensed Intellectual Property

that can be acquired or licensed for less than $5,000, individually including

without limitation, commercially available software programs, need not be set

forth in Section 3.14(c) of the Disclosure Schedules). To the Operating

Shareholders' knowledge and except as would not have a Material Adverse Effect,

Kodiak has all rights in the Intellectual Property necessary to carry out

Kodiak's current activities (and had all rights necessary to carry out its

former activities at the time such activities were being conducted), including,

without limitation, to the extent required to carry out the Business, rights to

make, use, reproduce, modify, adopt, create derivative works based on,

translate, distribute (directly and indirectly), transmit, display and perform

publicly, license, rent and lease and, other than with respect to the

Intellectual Property in the public domain and Licensed Intellectual Property,

assign and sell, the Intellectual Property. Kodiak is not in breach of any

License Agreement.

(d) Kodiak owns or possesses adequate licenses or other valid rights to

use all Intellectual Property within its Business, except as would not have a

Material Adverse Effect, and, to the knowledge of the Operating Shareholders,

the operation of the Business as currently conducted does not infringe on any

mask work or patent or any other personal or intellectual property right of any

Person. No written or, to the knowledge of the Operating Shareholders, oral

claims (i) challenging the validity, effectiveness or, other than with respect

to the Licensed Intellectual Property, ownership of any of the Intellectual

Property owned by Kodiak, (ii) challenging the validity of Kodiak's use of the

Licensed Intellectual Property in its business or claiming a breach of any

License Agreement; or (iii) to the effect that Kodiak's operation of the

Business infringes or will infringe on any intellectual property or other

personal right of any Person have been asserted or, to the knowledge of the

Operating Shareholders, are threatened by any Person, nor are there, to the

knowledge of the Operating Shareholders, any valid grounds for any bona fide

claim of any such kind. All registered, granted or issued patents, trademarks,

Internet domain name registrations and copyrights owned by Kodiak are

enforceable and subsisting. To the knowledge of the Operating Shareholders,

there is no unauthorized use, infringement or misappropriation of any of the

Intellectual Property by any third-party or any current or former agent,

director, officer, employee of Kodiak.

(e) All personnel, including employees, officers, directors, agents,

consultants and contractors, who have contributed to or participated in the

conception, use or development of the Intellectual Property have executed

agreements that require such personnel to assign any and all interest in the

Intellectual Property to Kodiak and to keep confidential all trade secrets,

proprietary data, customer information or other business information of Kodiak.

No such personnel is a party to any Contract with any Person other than Kodiak

that requires such personnel to assign interest in any Intellectual Property to

any Person other than Kodiak.

(f) Kodiak is not, nor as a result of the execution or delivery of this

Agreement will it be, in violation of any license, sublicense, agreement or

instrument to which Kodiak is a party or otherwise bound, nor will execution or

delivery of this Agreement, or performance of Kodiak's obligations hereunder,

cause the diminution, termination or forfeiture of any Intellectual Property,

except as will not have, individually or in the aggregate, a Material Adverse

Effect.

<PAGE>

(g) Section 3.14(g) of the Disclosure Schedules contains a true and

complete list of all of the material software programs owned by or under the

development of Kodiak (the "Software Programs"). Software Programs do not

include Licensed Intellectual Property. Kodiak owns full and unencumbered right

and good and marketable title to the Software Programs free and clear of all

mortgages, pledges, security interests, conditional sales agreements, charges or

other Liens of any kind, except for (i) Kodiak's licensing of the Software

Programs in the ordinary course of business and (ii) those Liens set forth in

Section 3.14(g) of the Disclosure Schedules.

(h) Except for arrangements under escrow agreements executed in the

ordinary course of business with Persons listed in Section 3.14(h) of the

Disclosure Schedules, and Persons listed in Section 3.14(h) of the Disclosure

Schedules who are bound by an appropriate confidentiality Contract, the source

code and system documentation relating to the Software Programs (i) have been

disclosed by Kodiak only to personnel who have a "need to know" the contents

thereof in connection with the performance of their duties to Kodiak, and (ii)

have not been disclosed to any third party.

3.15 Taxes.

(a) To the extent that failure to do so would adversely affect Buyer,

Kodiak, the Business or Buyer's ownership of the Share or operation of Kodiak or

the Business, each of Seller and Kodiak has timely filed all material Tax

Returns that it was required to file. All such Tax Returns have been true and

complete in all material respects. All Taxes owed by Seller or Kodiak (whether

or not shown or required to be shown on any Tax Return) have been paid to the

extent that failure to do so would adversely affect Buyer, Kodiak, the Business

or Buyer's ownership of the Share or operation of Kodiak or the Business. No

claim has ever been made in writing by an authority in a jurisdiction where

Seller or Kodiak does not file Tax Returns that Seller or Kodiak is or may be

subject to taxation in such jurisdiction. To the extent that failure to do so

would adversely affect Buyer, Kodiak, the Business or Buyer's ownership of the

Share or operation of Kodiak or the Business, Kodiak has withheld and paid all

material Taxes required to have been withheld and paid in connection with any

amounts paid or owing to any employee, independent contractor, creditor, or

stockholder or other third party, and all Forms W-2 and 1099 required with

respect thereto have been properly completed and ti

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