Asset Purchase Agreement among Relationserve Access, Inc., Omni Point Marketing, LLC, and Members

 Exhibit 2.3 ASSET PURCHASE AGREEMENT This ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of May 12, 2005 by and among RELATIONSERVE ACCESS, INC., a Delaware corporation ("Relationserve") and wholly-owned subsidiary of RELATIONSERVE, INC. ("Parent"); OMNI POINT MARKETING, LLC, a Florida limited liability company (the "Company"); and the Members of the Company listed on the execution page of this Agreement (collectively, the "Members"). Certain other capitalized terms used herein are defined in Article XI and throughout this Agreement. RECITALS The Company is in the business of providing internet media and online and offline marketing programs, including permission based e-mail advertising, e-mail database append services, online surveys, ad serving networks and internet compiled direct mail lists (the "Business"). Relationserve desires to purchase and the Company desires to sell, certain of its assets, properties and business to Relationserve which constitute the Business as now being conducted (the "Acquisition"), which sale does not represent all or substantially all of the assets of Company, as more fully described on the Schedules and Exhibits annexed hereto, on the terms and subject to the conditions set forth in this Agreement. TERMS OF AGREEMENT In consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein, and intending to be legally bound, the parties hereto agree as follows: ARTICLE I 1.1 PURCHASED ASSETS. Upon the terms and subject to the conditions of this Agreement, at the Closing (as defined in Article III), the Company will sell, convey, transfer, assign and deliver to Relationserve (or one or more of its assignees) all of the right, title and interest in and to the assets, properties, business and rights of every kind and description, whether real, personal or mixed, tangible or intangible, wherever located (except those assets of the Company which are specifically excluded as provided in Section 1.2 hereof) as they shall exist on the Closing Date (as defined in Article III) that constitute the Business and such other assets, properties, business and rights, whether or not appearing on the Current Balance Sheet (as defined in Section 5.7) or the books or records of the Company appearing on any Schedule hereto as Purchased Assets (collectively, the "Purchased Assets"), free and clear of any Lien (as defined in Section 11.1) other than as permitted herein. Without limiting the generality of the foregoing, the Purchased Assets shall include, but not be limited to, the following: (a) Database. All information contained in the databases maintained by the Company (the "Database"). (b) Other Tangible Personal Property. The machinery, computer equipment, computer software, equipment, tools, supplies, leasehold improvements, construction in progress, furniture and fixtures, trucks, automobiles, vehicles and any other fixed assets owned or leased by the Company,  as more particularly described on Schedule 1.1(b) attached hereto not related to the Excluded Assets, and whether or not such appear on Schedule 1.1(b) if such Other Tangible Personal Property is necessary or useful to the Business; (c) Customer Accounts. All of the customer accounts and customer account contracts (the "Customer Contracts") of the Company, as more particularly described on Schedule 1.1(c) attached hereto as shall be made available in written or electronic form, including as are recorded in any accounting or other system or software, which shall also constitute Purchased Assets hereunder; (d) Assumed Contracts. All of the interest, rights and benefits accruing to the Company under any dealer, sales or service agreements or any other Contracts (as defined in Section 11.1) to which the Company is a party which are set forth on Schedule 1.1(d) attached hereto (the "Assumed Contracts"); (e) Prepayments. All prepaid and deferred items of the Company, including without limitation, prepaid rentals, insurance, taxes, tax refunds and unbilled charges and deposits relating to the operations of the Company; (f) Receivables. All receivables of the Company (collectively, "Receivables"), including without limitation all trade accounts receivables, notes receivable, receivables arising as a result of contracts in transit and receivables from manufacturers, insurance companies, service contract providers and any other vendors or suppliers of the Company not related to the Excluded Assets; (g) Equipment Leases. All of the interest of and the rights and benefits accruing to the Company as lessee under leases of machinery, vehicles, equipment, tools, furniture and fixtures and other fixed assets ("Equipment Leases"), as more particularly described on Schedule 1.1(h) attached hereto; (h) Intangible Property. All of the proprietary rights of the Company, including without limitation all Intellectual Property and other similar intangible property and rights relating to the Business, and all goodwill developed through the use of such property and rights, as more particularly described on Schedule 1.1(i) attached hereto; (i) Licenses and Permits. To the extent assignable, all permits, licenses, certificates of authority, franchises, accreditations, registrations and other authorizations issued or used in connection with the Business; and (j) Books, Records and Other Assets. All operating data and records of the Company, including without limitation, customer lists and records, financial, accounting and credit records, correspondence, budgets and other similar documents and records, and all of the Company's telephone and telecopier numbers, and post office boxes, including, without limitation, all accounting, bookkeeping, recordkeeping, financial, and similar software and systems, as are presently maintained by Company, all vendor, customer, and account identification information and numbers, files and records related thereto, and the system as is presently operated by the Company, including all hardware, software, licenses, records, workstations, manuals, guides, support, helpdesk accounts and similar items known as "MAX 90" system and software. 2  1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary set forth in Section 1.1, the Purchased Assets shall exclude the following assets of the Company ("Excluded Assets"): (i) the Purchase Price (as defined in Section 2.1) and other rights of the Company under this Agreement; (ii) the organizational records and ownership records of the Company; (iii) any assets, properties, business and rights not related to the Business; (iv) any assets, properties, business and rights related to any software known as "L-Soft" wherever located and any assets, properties, business and rights related to the L-Soft Software Claims (as described in Schedule 5.10 hereto); (v) any leased premises of the Company and any claims or rights of Company as tenant against any landlord thereunder, including the claim to refund of any security deposits with respect to such leased premises or other Real Property or Real Property Leases claims or rights; (vi) any claims or contract rights against Cenuco, Inc. for damages or indemnification as a result of the Cenuco Purchase (as hereinafter defined); and (vii) the stock of subsidiaries, if any. 1.3 ASSIGNMENT OF CONTRACTS. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an assignment of any claim, contract, license, franchise, lease, commitment, sales order, sales contract, supply contract, service agreement, purchase order or purchase commitment if an attempted assignment thereof, without the consent of a third party thereto, would constitute a breach thereof or in any way adversely affect the rights of Relationserve thereunder. If such consent is not obtained, or if any attempt at an assignment thereof would be ineffective or would affect the rights of the Company thereunder so that Relationserve would not in fact receive all such rights, the Company shall reasonably cooperate with Relationserve to the extent necessary to provide for Relationserve the benefits under such claim, contract, license, franchise, lease, commitment, sales order, sales contract, supply contract, service agreement, purchase order or purchase commitment, including subcontracting all rights and obligations thereunder to Relationserve and enforcement for the benefit of Relationserve of any and all rights of the Company against a third party thereto arising out of the breach or cancellation by such third party or otherwise to the fullest extent permitted by law or agreement. ARTICLE II PURCHASE PRICE; ASSUMED LIABILITIES 2.1 PURCHASE PRICE. (a) The total purchase price to be paid to the Company for the Purchased Assets (the "Purchase Price") shall be paid as follows: (i) 3,500,000 shares (less the Deferred Amount described in Section 2.2(b)), of common stock, par value $.0001 per share of Parent (the "Relationserve Common Stock"); and (ii) $400,000 by wire transfer of immediately available funds, which shall be used by the Company at Closing to pay Indebtedness (as defined in Article XI) in such amounts and to such payees as shall be determined by Company, with the consent of Relationserve, 3  which consent shall not be unreasonably withheld, provided no cash amounts shall be utilized for payment to Members or their affiliates without consent of Relationserve in its sole discretion. (b) A total of 350,000 shares of Parent Common Stock (the "Deferred Amount") (including any securities of any other issued received in exchange for such shares) shall be held by Parent and subject to cancellation as provided by Article X hereof. (c) All certificates representing any shares of the capital stock of the Parent (and any successor to parent) issuable under this Agreement shall have endorsed thereon a legend substantially as follows: "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OR REGULATIONS OF ANY STATE AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF ("TRANSFER") IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. TRANSFERS OF THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF AN AGREEMENT BY AND BETWEEN THE HOLDER AND THE ISSUER THEREOF, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY" 2.2 ASSUMED LIABILITIES. As of the Closing, Relationserve shall assume and agree to pay, discharge and perform when lawfully due (provided that Relationserve reserves all rights to seek indemnification pursuant to Article X hereof) all of the obligations, duties and liabilities of the Company with respect to the following (the "Assumed Liabilities"): (a) Customer Contracts, Assumed Contracts, and Equipment Leases; and (b) current liabilities of the Company as reflected on the Current Balance Sheet (including Tax accruals for sales, employee withholding and payroll taxes, limited to the amount of such accrual and as accrued or incurred in the ordinary course of business consistent with past practices), net of payments of such current liabilities that are paid as directed by Company at Closing from the cash portion of the Purchase Price. 2.3 EXCLUDED LIABILITIES. Except for the Assumed Liabilities, the parties expressly agree that Relationserve shall not assume or otherwise become liable for any other obligations or liabilities of the Company including but not limited to any of the following liabilities (the "Excluded Liabilities"): (a) any liability or obligation relating to Indebtedness, other liabilities or Taxes (as defined in Article XI) of the Company; (b) any Environmental Liability (as defined in Article XI); (c) any liability or obligation relating to any default under any of the Assumed Liabilities to the extent such default existed prior to the Closing; (d) any liability or obligation (which is not an Assumed Liability), whether in tort, contract or for violation of any law, statute, rule or regulation of the Company or the Members or any officer, director, employee or agent of the Company, that arises out of or results from any act, omission, occurrence or state of facts prior to the Closing; (e) any liability or obligation of the Company with respect to or arising out of any Employee Benefit Plan (as defined in Section 5.16), collective bargaining agreements or any other plans or arrangements for the benefit of any current or former employees, leased employees, officers, Members or directors of the Company or any affiliated 4  companies, which are maintained by the Company, any affiliated company or any third party; (f) any liability or obligation of the Company or the Members with respect to the Excluded Assets (including, without limitation, Relationserve shall not assume any liability or obligation with respect to or related to L-Soft Software or the L-Soft Software Claims); (g) any liability or obligation of the Company to the Members or any of its or their Affiliates, whether by contract, pursuant to law, or otherwise; (h) any liability under any Real Property or Real Property Leases; and (i) any liability or obligation to Cenuco, Inc. or in connection with any matter related to an Asset Purchase Agreement, dated as of October 21, 2004 with Cenuco, Inc. (the "Cenuco Purchase") or the termination thereof or any claims or agreements related thereto; and (j) any obligations to Company employees not hired by Relationserve. 2.4 NO EXPANSION OF THIRD PARTY RIGHTS. The assumption by Relationserve of the Assumed Liabilities, and the transfer thereof by the Company, shall in no way expand the rights or remedies of any third party against Relationserve or the Company as compared to the rights and remedies which such third party would have had against the Company had Relationserve not assumed such liabilities. Without limiting the generality of the preceding sentence, the assumption by Relationserve of the Assumed Liabilities shall not create any third party beneficiary rights. 2.5 TAX-FREE TREATMENT. The parties hereto intend that the transactions contemplated by this Agreement (in conjunction with other transfers contemplated by Relationserve) shall be treated as a tax-free contribution of the Purchased Assets to Parent pursuant to Section 351 of the Code. In addition, it is agreed that such treatment shall be consistently reflected by each party on their respective federal income tax returns. The Company shall furnish Relationserve/Parent with the respective tax bases of the Purchased Assets and other tax information that Relationserve/Parent may reasonably request. 2.6 CLOSING AUDIT. (a) Within twenty-five (25) days after the Closing Date, the Company's auditor shall deliver to Relationserve an audit of the financial statements (statements of income and operations and balance sheets) of the Company as at and for the period ended December 31, 2004 and 2003 and an unaudited financial statement for the quarter ended March 31, 2005 and reviewed by such auditor in accordance with the rules of the Securities and Exchange Commission (the "Financial Statements") in such form and meeting the requirements for small business issuers under the rules and regulations of the Securities and Exchange Commission ("SEC") for inclusion in a Form 8-K to be filed by Parent or a successor to Parent, and all other financial information (including notes to the year end financial statements), together with the consent of the Company's auditors suitable for filing with the SEC. The audited financial statements shall be prepared in accordance with GAAP and comply with the requirement for be prepared for the purpose of inclusion of such report or SEC filing. The fees and expenses of the audit shall be borne by the Company. ARTICLE III CLOSING Subject to and after fulfillment or waiver of the conditions set forth in Article VIII and Article IX of this Agreement, the Closing of the purchase and sale of the Purchased Assets (the "Closing") shall take place on a 5  date selected by Relationserve within three (3) business days after satisfaction or waiver of such conditions, at the offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP, 65 East 55th Street, New York, NY 10022 or such other time and place as the parties may otherwise agree. The date on which the Closing occurs shall be referred to herein as the "Closing Date". ARTICLE IV REPRESENTATIONS AND WARRANTIES OF RELATIONSERVE As a material inducement to the Company and the Members to enter into this Agreement and to consummate the transactions contemplated hereby, Relationserve makes the following representations and warranties to the Company: 4.1 CORPORATE STATUS. Relationserve is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. 4.2 CORPORATE POWER AND AUTHORITY. Relationserve has the corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Relationserve has taken all action necessary to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby. 4.3 ENFORCEABILITY. This Agreement has been duly executed and when delivered by Relationserve will constitute the legal, valid and binding obligation of Relationserve, enforceable against Relationserve in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and general equitable principles regardless of whether such enforceability is considered in a proceeding at law or in equity. 4.4 NO COMMISSIONS. Relationserve has not incurred any obligation for any finder's or broker's or agent's fees or commissions or similar compensation in connection with the transactions contemplated hereby. 4.5 PARENT COMMON STOCK. Upon consummation of the Acquisition and the issuance and delivery of certificates representing Parent Common Stock pursuant to Section 2.2(a), such Parent Common Stock will be duly authorized, validly issued, fully paid and non assessable and free of any preemptive rights. The authorized capital stock of Parent consists of 40,000,000 shares of Common Stock, par value $0.0001 per share, and 1,000,000 shares of Preferred Stock, par value $0.0001 per share, of which 5,266,000 shares of Common Stock were issued and outstanding as of the Closing Date, and 6,632,500 warrants to purchase Common Stock were issued, prior to giving effect to the transactions contemplated hereunder, and prior to issuance of any additional shares contemplated in connection with any further acquisitions that may be undertaken by Parent whether or not presently contemplated. 4.6 NO VIOLATION. The execution and delivery of this Agreement by Relationserve, the performance by Relationserve (and Parent) of its obligations 6  hereunder and the consummation by Relationserve (and Parent) of the transactions contemplated hereby will not (i) contravene any provision of the Certificate of Incorporation or bylaws of Relationserve (or Parent), (ii) violate or conflict with any law, statute, ordinance, rule, regulation, decree, writ, injunction, judgment or order of any Governmental Authority or of any arbitration award which is either applicable to, binding upon or enforceable against Relationserve (or Parent), (iii) conflict with, result in any breach of, or constitute a default (with or without the passage of time or the giving of notice or both) under, or give rise to a right to terminate, amend, modify, abandon or accelerate, any Contract which is applicable to, binding upon or enforceable against Relationserve (or Parent), or (iv) require the consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, any court or tribunal or any other Person. 4.7 RECENT ORGANIZATION. Relationserve was organized on May 29, 2005. Relationserve has not under taken any material business or activity other than in contemplation of its organization and the acquisition of one or more businesses engaged in Internet advertising and related activities, fund raising, and start-up capital and has no liabilities other than incurred in the ordinary course of its formation and business, and up to $240,000 original principal amount of bridge loans. ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE MEMBERS As a material inducement to Relationserve to enter into this Agreement and to consummate the transactions contemplated hereby, the Company and the Members, jointly and severally, make the following representations and warranties to Relationserve and Parent: 5.1 CORPORATE STATUS. The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Florida, and has the requisite power and authority to own or lease its properties and assets and to carry on its business as now being conducted. The Company is qualified to transact business as a foreign limited liability company in each jurisdiction in which the nature or character of its properties or assets or the conduct of its business requires except in those jurisdictions where the failure to so qualify would not have a Material Adverse Effect. The Company has fully complied with all of the requirements of any statute governing the use and registration of fictitious names, and has the legal right to use the names under which it operates its business. There is no pending or threatened proceeding for the dissolution, liquidation, insolvency or rehabilitation of the Company. 5.2 POWER AND AUTHORITY. The Company has the power and authority to execute and deliver of this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The Company has taken all action necessary to authorize the execution and delivery this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby. The Members have the requisite competence, power and authority to execute and deliver this Agreement, to perform their respective obligations hereunder and to consummate the transactions contemplated hereby. 7  5.3 ENFORCEABILITY. This Agreement has been duly executed and delivered by the Company and the Members, and this Agreement constitutes the legal, valid and binding obligation of each of them, enforceable against each of them in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and general equitable principles regardless of whether such enforceability is considered in a proceeding at law or in equity. 5.4 CAPITALIZATION. Schedule 5.4 sets forth, with respect to the Company, all outstanding membership interests, the name and address of each holder of any such membership interests and percentage or amount of such membership interests held by each Member as of the date hereof and the Closing Date. There are no outstanding or authorized rights, options, warrants, convertible securities, subscription rights, conversion rights, exchange rights or other agreements or commitments of any kind that could require the Company to issue or sell any membership interests (or securities convertible into or exchangeable for membership interests). There are no outstanding stock appreciation, phantom stock, profit participation or other similar rights with respect to the Company. Other than as set forth herein and as set forth on Schedule 5.4, there are no proxies, voting rights or other agreements or understandings with respect to the voting or transfer of the membership interests of the Company. Except as set forth on Schedule 5.4, the Company is not obligated to redeem or otherwise acquire any of its outstanding membership interests. The Members are the record and beneficial owners of all of such membership interests and the Members owns such membership interests free and clear of all Liens, restrictions and claims of any kind. 5.5 NO VIOLATION. Except as set forth on Schedule 5.5, the execution and delivery of this Agreement by the Company and the Members, the performance by the Company and the Members of their respective obligations hereunder and the consummation by the Company and the Members of the transactions contemplated hereunder will not (i) contravene any provision of the articles of organization or operating agreement of the Company, (ii) violate or conflict with any law, statute, ordinance, rule, regulation, decree, writ, injunction, judgment or order of any Governmental Authority or of any arbitration award which is either applicable to, binding upon or enforceable against, the Company, the Members or the Purchased Assets, (iii) conflict with, result in any breach of, or constitute a default (with or without the passage of time or the giving of notice or both, constitute a default) under, or give rise to a right to terminate, amend, modify, abandon or accelerate, any Contract which is applicable to, binding upon or enforceable against, the Company, the Members or the Purchased Assets, (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the Purchased Assets, or (v) require the consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, any court or tribunal or any other Person. 5.6 SUBSIDIARIES. Except as set forth on Schedule 5.6, the Company does not own, directly or indirectly, any outstanding voting securities of or other interests in, or control, any other corporation, partnership, joint venture or other business entity. 5.7 FINANCIAL STATEMENTS. The Company and the Members have delivered to Relationserve (or will following Closing which post-Closing deliveries shall be included for the purposes of these representations and warranties and which shall survive the Closing) true, correct and complete copies of the audited 8  financial statements of the Company (i) as at, and for the year ending December 31, 2003 and December 31, 2004, and (ii) unaudited quarterly financial statement for each of the calendar quarters from January 1, 2004 through and including December 31, 2004, and as at, and for the three-month period ended March 31, 2005, including the notes thereto (in the case of annual financial statements (the "Financial Statements"), copies of which are to be attached to Schedule 5.7 hereto. The balance sheet dated as of March 31, 2005 of the Company included in the Financial Statements is also referred to herein as the "Current Balance Sheet." The Financial Statements fairly present the financial condition of the Company at each of the balance sheet dates and the results of operations as of the last day of the period covered and for the period covered thereby, and have been prepared in accordance with GAAP consistently applied throughout the periods indicated, except as described on Schedule 5.7. The books and records of the Company fully and fairly reflect all transactions, properties, assets and liabilities of the Company. Except as set forth on Schedule 5.7 there are no extraordinary or non-recurring items of income or expense during the periods covered by the Financial Statements and the balance sheets included in the Financial Statements do not reflect any write-up or revaluation increasing the book value of any assets, except as specifically disclosed in the notes thereto. The Company did not have any liability (actual, contingent or accrued) not reflected on such Financial Statements, other than potential contingent liability which may arise under the L-Soft Software Claims (which liability is an Excluded Liability), of which the Company and the Members represent and warrant that no claim has as of the Closing date been asserted against the Company in writing.. The Financial Statements reflect all adjustments necessary for a fair presentation of the financial information contained therein. There has been no change in any significant accounting policies, practices or procedures of the Company in connection with the Business other than as may be disclosed in the Notes to the Financial Statements. 5.8 CHANGES SINCE THE CURRENT BALANCE SHEET DATE. Since the date of the Current Balance Sheet, the Company has operated in the ordinary course of business and has not (i) issued any membership interests or other securities; (ii) made any distribution of or with respect to its membership interests or other securities or purchased or redeemed any of its membership interests or securities; (iii) paid any bonus to or increased the rate of compensation of any of its officers or employees or amended any other terms of employment of such persons; (iv) sold, leased or transferred any of its properties or assets other than in the ordinary course of business consistent with past practices; (v) made or obligated itself to make capital expenditures out of the ordinary course of business consistent with past practices; (vi) made any payment in respect of its liabilities other than in the ordinary course of business consistent with past practices; (vii) incurred any obligations or liabilities (including any Indebtedness) or entered into any transaction or series of transactions involving in excess of Ten Thousand Dollars ($10,000) in the aggregate out of the ordinary course of business, consistent with past practices except for this Agreement and the transactions contemplated hereby; (viii) suffered any theft, damage, destruction or casualty loss, (whether or not covered by insurance) of its assets; (ix) suffered any extraordinary losses (whether or not covered by insurance); (x) waived, canceled, compromised or released any rights; (xi) made or adopted any change in its accounting practice or policies; (xii) made any adjustment to its books and records other than in respect of the conduct of its business activities in the ordinary course consistent with past practices; (xiii) entered into any transaction with any Affiliate; (xiv) entered into any 9  employment agreement; (xv) entered into, terminated, amended or modified any agreement; (xvi) imposed any security interest or other Lien on any of its assets; (xvii) delayed paying any accounts payable which are due and payable except to the extent being contested in good faith; (xviii) made or pledged any charitable contribution; (xix) entered into any other transaction or been subject to any event which has or may have a Material Adverse Effect on the Company, the Business or the Purchased Assets; (xx) acquired any interest in any corporation, partnership or other venture; (xxi) made any loans to any third party or employee except in the ordinary course of business consistent with past practices; or (xxii) agreed to do or authorized any of the foregoing. 5.9 LIABILITIES OF THE COMPANY; INDEBTEDNESS. The Company does not have any liabilities or obligations, whether accrued, absolute, contingent or otherwise, whether due or to become due, probable of assertion or not, except (a) to the extent reflected or disclosed in the Current Balance Sheet, (b) set forth on Schedule 5.9 or (c) retained by the Company. Schedule 5.9 is a true and complete list of all Indebtedness of the Company, including the name of the lender, payoff amount, per diem interest and any prepayment penalties or premiums. 5.10 LITIGATION. Except as set forth on Schedule 5.10, there is no action, suit, or other legal or administrative proceeding or governmental investigation pending, or to the knowledge of the Company or the Members threatened or contemplated, against, by or affecting, the Company, the Members, the Business or the Purchased Assets (or the use, operation or value thereof), or which questions the validity or enforceability of this Agreement, the Company's ability to perform this Agreement or any aspect of the transactions contemplated hereby, and there is no basis for any of the foregoing. Except as set forth on Schedule 5.10, there has been no action, suit or other legal or administrative proceeding or governmental investigation against, by or affecting the Company, the Members, the Business or the Purchased Assets. There are no outstanding orders, decrees, stipulations or agreements issued by any Governmental Authority in any proceeding or agreed to by the Company or the Members to which the Company or the Members are or were a party which have not been complied with in full. 5.11 ENVIRONMENTAL MATTERS. The Company is and has at all times been in full compliance with all Environmental Laws governing its business, operations, properties and assets. The Company, in connection with the Business, has not generated, used, transported, treated, stored, released or disposed of, or has suffered or permitted anyone else to generate, use, transport, treat, store, release or dispose of, any hazardous substance in violation of any Environmental Law; (ii) to the best of the Company's knowledge, there has not been any generation, use, transportation, treatment, storage, release or disposal of any hazardous substance in connection with the conduct of the Business or the use of any property or facility of the Company or to any nearby or adjacent properties which has created or might reasonably be expected to create any liability under any Environmental Law or which would require reporting to or notification of any Governmental Authority; (iii) to the best of the Company's knowledge, no asbestos or polychlorinated biphenyl or underground storage tank is contained in or located at any facility occupied or used by the Company; and (iv) any hazardous substance handled or dealt with in any way in connection with the Business, whether before or during the Company's ownership, has been and is being handled or dealt with in all respects in compliance with all applicable Environmental Laws. 5.12 REAL ESTATE. The Company does not own any parcels of real property. 10  5.13 GOOD TITLE, ADEQUACY AND CONDITION OF PURCHASED ASSETS. The Company has good and marketable title to the Purchased Assets, including, but not limited to the Database, with full power to sell, convey, transfer, assign and deliver the same, free and clear of any Liens, other than Liens for personal property taxes not yet due and payable, to Relationserve in accordance with the terms of this Agreement. The Purchased Assets constitute, in the aggregate, all of the assets and properties necessary for the conduct of the Business in the manner in which and to the extent to which such Business is currently being conducted. The Purchased Assets are in good operating condition and repair, normal wear and tear excepted, and have been maintained in accordance with all applicable specifications and warranties and good industry practice. 5.14 COMPLIANCE WITH LAWS; LICENSES AND PERMITS. (a) The Company has complied with all laws, regulations and orders applicable to it, its Business and operations as presently or previously conducted, including, without limitation, all federal, state and local privacy laws, rules and regulations, and all other applicable laws of similar tenor and effect, all laws relating to occupational health and safety, equal employment opportunities, fair employment practices and discrimination, privacy, security and exchange of information, the Digital Millennium Copyright Act, the CAN-SPAM Act of 2003, rules and regulations promulgated by the Federal Trade Commission and the Federal Communications Commission, and other laws, rules, and regulations, applicable to the Business or any of its properties or assets. None of the Fair Credit Reporting Act, the Consumer Credit Protection Act, the Truth in Lending Act, the Fair Credit Billing Act, the Equal Credit Opportunity Act, the Fair Debt Collections Practices Act, the Graham-Leach-Bliley Act, nor any rules and regulations promulgated pursuant to these laws are applicable to the operations of the Business. The Company has obtained all material federal, state, local and foreign governmental Permits which are required for the conduct of the Business presently or proposed to be conducted by Company, which Permits are in full force and effect and no violations are outstanding or uncured with respect to any such Permits and no proceeding is pending or, to the knowledge of the Company, threatened to revoke or limit any such Permit. Schedule 5.14 lists all Permits of Company which are required for, used in or relate to the Business or the Purchased Assets. The Company has furnished to Relationserve true and correct copies of all such Permits. (b) Schedule 5.14 sets forth the consumer privacy policies that have been adopted by the Company in connection with the Business and that are currently in effect for the Company. The Company thereof has complied in all material respects with all such consumer privacy policies and any applicable privacy policies posted on its web sites. The Company has taken all commercially reasonable steps to protect and maintain the confidential nature of the personal information provided to the Company by Persons who do not consent to the disclosure of such information. All personally identifiable information collected by the Company has been used in accordance with the applicable privacy policy. (c) All information contained in the Databases maintained by Company (the "Database Information") has been at all times (i) collected in compliance with fair information collection practices (including but not limited to (a) the guidelines promulgated by the Online Privacy Alliance; (b) the standards 11  promulgated by the Direct Marketing Association, and (c) all applicable laws, rules and regulations, domestic and foreign, including but not limited to those relating to the use or collection of information collected from or about consumers) so that, at a minimum and prior to submitting any information to the Company or its agents, Internet users received notice of how the information will be used and a choice whether to submit such information; and (ii) stored, maintained and used in accordance with such notices and all laws, rules and regulations, domestic and foreign. The Company has the right to use and commercially exploit the Database Information, free of consideration to any Person. The Databases contain approximately Fifty Million (50,000,000) Valid and Unique Records. For purposes of this Agreement, a "Valid and Unique Record" is (i) a Record with an e-mail address that accepts delivery of email transmissions (i.e., emails not rejected as "undeliverable"); (ii) the post office address of the residence of the person with the applicable e-mail address; and (iii) a subject Record is not duplicative of other Records contained in any of the Databases. The Company has Fifty Million (50,000,000) records meeting the criteria of (i) and (iii) of the definition of Valid and Unique Records. For purposes of this Agreement, a "Record" is a set of information consisting of: (i) one "opt-in" or "permission-based" e-mail address, and (ii) the first and last name of the e-mail user that uses such e-mail address. In determining whether there are Fifty Million (50,000,000) Valid and Unique Records, a duplicative Record will be counted only once. 5.15 LABOR AND EMPLOYMENT MATTERS. Schedule 5.15 sets forth the name, address and current rate of compensation and/or commission of each employee of the Company. The Company is not a party to or bound by any collective bargaining agreement or any other agreement with a labor union, and there has been no effort by any labor union during the twenty-four (24) months prior to the date hereof to organize any employees of the Company into one or more collective bargaining units. There is no pending, or to the knowledge of the Company and the Members threatened, labor dispute, strike or work stoppage which affects or which may affect the Company or the Business or which may interfere with its continued operations. Neither the Company nor any agent, representative or employee thereof has within the last twenty-four (24) months committed any unfair labor practice as defined in the National Labor Relations Act, as amended, and there is no pending, or to the knowledge of the Company and the Members threatened, charge or complaint against the Company by or with the National Labor Relations Board or any representative thereof. Neither the Company nor the Members is aware that any employee has any plans to terminate his employment with the Company and the Company has no plans to terminate any employees. There has been no strike, walkout or work stoppage involving any of the employees of the Company during the twenty-four (24) months prior to the date hereof. Schedule 5.15 sets forth all commission and/or incentive compensation plans and the terms of such plans. Except as set forth on Schedule 5.15, there are no employment, non-compete, consulting, severance, indemnification or other Contracts between the Company and any of its officers, directors, employees and Affiliates. The Members are not party to any Contract with any employee or consultant of the Company or have any other arrangement to pay any salary, bonus or other compensation to any such Person after the Closing Date. The Company has complied in all respects with applicable laws, rules and regulations relating to employment, civil rights and equal employment opportunities, including but not limited to, the Civil Rights Act of 1964, the Fair Labor Standards Act, the Americans with Disabilities Act, as amended and the Immigration Reform and Control Act of 1986, as amended. Relationserve shall, in its sole discretion, determine those employees of the Company, to whom Relationserve may extend an offer of employment. Neither Relationserve nor its 12  assignee(s) shall have any obligation to employ or offer to employ any other persons currently or formerly employed by the Company. All liabilities or obligations to any employee of the Company resulting from Relationserve's failure to offer employment to any employee shall be and remain the sole responsibility and liability of the Company. The Company has paid to date all accrued wages, salary, bonus, commissions, vacation and sick pay due to be paid on or before the Closing Date for all of its employees, agents and representatives, including payroll overheads, subject to normal payroll practices. The Company shall indemnify, defend and hold harmless Relationserve, its shareholders, directors, officers, employees, Affiliates, agents, representatives and their respective successors and assigns from and against any liability that may be incurred by reason of the Company having failed to make such payments. 5.16 EMPLOYEE BENEFIT PLANS. (a) Schedule 5.16 contains a true and complete list of each employee benefit plan as defined in Section 3(2) of ERISA employee welfare benefits plan as defined in Section 3(1) of ERISA, and each deferred compensation, stock option, stock purchase, bonus, medical, welfare, disability, severance or termination pay, insurance or incentive plan, and each other employee benefit plan, program, agreement or arrangement, (whether funded or unfunded, written or oral, qualified or nonqualified), sponsored, maintained or contributed to or required to be contributed to by the Company or by any trade or business, whether or not incorporated, that together with the Company would be deemed a "single employer" within the meaning of Section 4001 of ERISA (a "Company ERISA Affiliate"), for the benefit of any employee, terminated employee, leased employee or former leased employee, director, officer, shareholder or independent contractor of the Company or any Company ERISA Affiliate (the "Employee Benefit Plans"). Schedule 5.16 identifies each plan that is an "employee benefit plan," within the meaning of Section 3(3) of ERISA. The Company has no liability with respect to any plan, arrangement or practice of the type described in this Section 5.16 other than the Employee Benefit Plans set forth on Schedule 5.16. (b) The Company does not participate currently and has never participated in and is not required currently and has never been required to contribute to or otherwise participate in any "multi employer plan," as defined in Sections 3(37)(A) and 4001(a)(3) of ERISA and Section 414(f) of the Code or any "multiple employer plan" within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code. (c) No Employee Benefit Plan is or at any time was a "defined benefit plan" as defined in Section 3(35) of ERISA or a pension plan subject to the funding standards of Section 302 of ERISA or Section 412 of the Code. The Company does not participate currently and has never participated in and is not required currently and has never been required to contribute to or otherwise participate in any plan, program or arrangement subject to Title IV of ERISA. (d) With respect to each Employee Benefit Plan of the Company: (i) each has been administered in compliance with its terms and with all applicable laws including, without limitation, ERISA and the Code; (ii) no actions, suits, claims or disputes are pending or threatened against any such Plan, the trustee or fiduciary of any such Plan, the Company or any assets of any such Plan; (iii) no audits, proceedings, claims or demands are pending with any Governmental Authority including, without limitation, the Internal Revenue Service and the 13  Department of Labor; (iv) all reports, returns and similar documents required to be filed with any Governmental Authority or distributed to any such Plan participant have been duly or timely filed or distributed; (v) no "prohibited transaction", within the meaning of ERISA or the Code, or breach of any duty imposed on "fiduciaries" pursuant to ERISA has occurred; (vi) all required or discretionary (in accordance with historical practices) payments, premiums, contributions, reimbursements or accruals for all periods ending prior to or as of the Closing shall have been made or properly accrued on the Current Balance Sheet or will be properly accrued on the books and records of the Company as of the Closing; (vii) no such plan has any unfunded liabilities which are not reflected on the Current Balance Sheet or the books and records of the Company. (e) The Company shall be solely liable for all contributions, benefits and other obligations with respect to all Employee Benefit Plans of which the Company is or ever has been a party or by which it is or ever has been bound in connection with the Business, including without limitation, (i) any profit-sharing, deferred compensation, bonus, stock option, phantom stock, stock purchase, pension, retainer, consulting, retirement, severance, welfare or incentive plan, agreement or arrangement (including, without limitation, all employee benefit plans which are intended to be qualified under Section 401(a) of Code (including any "multiemployer" plans within the meaning of Section 3(37) of ERISA)), (ii) any plan, agreement or arrangement providing for "fringe benefits" or perquisites to employees, officers, directors or agents, including, but not limited to, benefits relating to automobiles, clubs, vacation, child care, parenting, sabbatical, sick leave, medical, dental, hospitalization, life insurance and other types of insurance of the Business, (iii) any employment agreement, or (iv) any other "employee benefit plan" within the meaning of ERISA. The Company has no responsibility for and has not assumed any pension-related liability of any predecessor business or Person. Relationserve shall have no liability or obligations (as a successor or otherwise) with respect to the Plans, except to the extent, if any, that liability is expressly assumed by Relationserve. (f) True and complete copies of each Employee Benefit Plan and a copy of the Employee Handbook of the Company have been furnished to Relationserve. In the case of any unwritten Employee Benefit Plan, a written description of such plan has been furnished to Relationserve. All amendments required to bring any Employee Benefit Plan into conformity with any applicable provisions of ERISA and the Code have been duly adopted. (g) With respect to each Employee Benefit Plan of the Company intended to qualify under Code Section 401(a) or 403(a), (i) the Internal Revenue Service has issued a favorable determination letter, which has not been revoked, that any such plan is tax-qualified and each trust created thereunder has been determined by the Internal Revenue Service to be exempt from federal income tax under Code Section 501(a); (ii) nothing has occurred or will occur through the Closing which would cause the loss of such qualification or exemption or the imposition of any penalty or tax liability; (iii) no reportable event (within the meaning of Section 4043 of ERISA) has occurred; and (iv) the present value of all liabilities under any such plan will not exceed the current fair market value of the assets of such plan (determined using the actuarial assumption used for the most recent actuarial valuation for such plan). (h) No Employee Benefit Plan obligates the Company to pay separation, severance, termination or similar benefits as a result of any transaction contemplated by this Agreement or solely as a result of a "change of control" (as defined in Section 280G of the Code) and no individual shall accrue 14  or receive any additional benefits, service or accelerated rights to payments of benefits under any Employee Benefit Plan as a result of the actions contemplated by this Agreement. (i) No Employee Benefit Plan provides medical or dental benefits for any current or former employees of the Company or its predecessors after termination of employment other than the rights that may be provided by law. (j) The Company has complied with the notice and continuation of coverage requirements of Section 4980B of the Code, and the regulations thereunder, and Part 6 of Title I of ERISA ("COBRA") and has complied with the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") with respect to any group health plan within the meaning of Code Section 5000(b)(1). The Company will be responsible for the continued compliance with COBRA and HIPAA with respect to all of its current and former employees at the time of the Closing. (k) Relationserve will not suffer any loss, cost or liability as a result of any claim that the Company or any entity that would be aggregated with the Company under Code Section 414(b), (c), (m) or (o), has not complied with the provisions of this Section 5.16 with respect to each Employee Benefit Plan maintained by any such entity. 5.17 TAX MATTERS. All Tax Returns required to be filed on or prior to the Closing Date with respect to the Company, the Business and the Purchased Assets have been or will be timely filed, each such Tax Return has been prepared in compliance with all applicable laws and regulations, and all such Tax Returns are true and accurate in all respects. All liabilities for Taxes incurred but unpaid whether or not a Tax Return was due or the Tax required to be paid by or with respect to the Company, the Business and the Purchased Assets have been paid or are accrued on the Current Balance Sheet. The Company has withheld and paid all Taxes to the appropriate Governmental Authority required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder, or other Person. With respect to each taxable period of the Company: (i) no deficiency or proposed adjustment which has not been settled or otherwise resolved for any amount of Taxes has been asserted or assessed by any taxing authority against the Company; (ii) the Company has not consented to extend the time in which any Taxes may be assessed or collected by any taxing authority; (iii) the Company has not requested or been granted an extension of the time for filing any Tax Return to a date later than the Closing; (iv) there is no action, suit, taxing authority proceeding, or audit or claim for refund now in progress, pending, or to the knowledge of the Company and the Members threatened, against or with respect to the Company, the Business or the Purchased Assets regarding Taxes; and (v) there are no Liens for Taxes (other than for current Taxes not yet due and payable) upon the Company, the Business or the Purchased Assets. No sales or use tax (other than sales tax on motor vehicles), non-recurring intangible tax, documentary stamp tax or other excise tax (or comparable tax imposed by any governmental entity) will be payable by the Company or Relationserve by virtue of the transactions contemplated in this Agreement. 5.18 INSURANCE. The Company is, and at all times since its inception, and the Business has been, covered by valid, outstanding and enforceable policies of insurance from reputable insurers covering all risks 15  involving the Business normally insured against by companies in the same or similar lines of business and in coverage amounts typically carried by such companies (the "Insurance Policies"). Such Insurance Policies and all bonds maintained by the Company are in full force and effect, and all premiums due thereon have been paid. The Company has complied with the provisions of such Insurance Policies in all material respects. Schedule 5.18 contains a complete and correct list of all Insurance Policies and all amendments and riders thereto (copies of which have been provided to Relationserve), and identifies the insurer, type of coverage and policy period for each policy. During the three year period prior to the Closing Date, the Company has not made any claims under any of the Insurance Policies, and has suffered no losses that would give rise to any such claims, for an amount in excess of Ten Thousand Dollars ($10,000) except as set forth on Schedule 5.18. The Company has not failed to give, in a timely manner, any notice required under any of the Insurance Policies to preserve its rights thereunder. The Company has not received any notice or other indication from any insurer or agent of any intent to cancel or not to renew any of such Insurance Policies. There are no outstanding requirements or recommendations by any insurer that issued a policy with respect to the Business or the Purchased Assets. 5.19 RECEIVABLES. All Receivables being transferred to Relationserve hereunder are valid and legally binding, represent bona fide transactions and arose in the ordinary course of business of the Company. All of the Receivables are good and collectible receivables, and will be collected in full in accordance with the terms of such Receivables (and in any event within nine (9) months following the Closing), without dispute, setoff or counterclaims, subject to the allowance for doubtful accounts, if any, set forth on the Current Balance Sheet and calculated in accordance with GAAP and further subject to the occurrence of events outside the reasonable control of Company causing any such receivable to be uncollectible. Schedule 5.19 is a true, complete and correct list of all Receivables as of the date hereof. The Company will deliver to Relationserve a true, complete and correct list of all Receivables of the Business as of a date not more than five (5) days prior to the Closing Date. 5.20 INTELLECTUAL PROPERTY. (a) Schedule 5.20 sets forth, the Intellectual Property (as defined in Article XI) owned by the Company, a complete and accurate list of all United States and foreign patent, copyright, trademark, service mark, trade dress, domain name and other registrations and applications, indicating for each the applicable jurisdiction, registration number (or application number), and date issued or filed, and all unregistered Intellectual Property. (b) All registered Intellectual Property of the Company is currently in compliance with all legal requirements (including timely filings, proofs and payments of fees), is valid and enforceable, and is not subject to any filings, fees or other actions falling due within 90 days after the Closing Date. No registered Intellectual Property of the Company has been or is now involved in any cancellation, dispute or litigation, and, to the knowledge of the Company or the Members, no such action is threatened. Except as set forth in Schedule 5.20, no patent of the Company has been or is now involved in any interference, reissue, re-examination or opposition proceeding. 16  (c) Schedule 5.20 sets forth a complete and accurate list of all licenses, sublicenses, consent, royalty or other agreements concerning Intellectual Property to which the Company is a party or by which any of its assets are bound (other than generally commercially available, non-custom, off-the-shelf software application programs having a retail acquisition price of less than $10,000 per license) (collectively, "License Agreements"). All of the Company's License Agreements are valid and binding obligations of Company that are parties thereto, enforceable in accordance with their terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and general equitable principles regardless of whether such enforceability is considered in a proceeding at law or in equity, and there exists no event or condition which will result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default by the Company under any such License Agreement. (d) The Company owns (and Relationserve shall following Closing own) or has the valid right to use all of the Intellectual Property necessary for the conduct of the Business as currently conducted or contemplated to be conducted and for the ownership, maintenance and operation of the Company's Business and assets. No royalties, honoraria or other fees are payable by the Company to any Person for the use of or right to use any Intellectual Property, except as set forth in Schedule 5.20. (e) All Intellectual Property owned by the Company is described in Schedule 5.20. The Company exclusively owns, free and clear of all Liens or obligations to license all such owned Intellectual Property, and the Company has executed all necessary agreements and performed all necessary due diligence to make the foregoing statement. The Intellectual Property of the Business is fully assignable free and clear of any Liens. The Company has a valid, enforceable and, subject to obtaining required consents set forth in Schedule 5.20, transferable right to use all licensed Intellectual Property. Except as disclosed in Schedule 5.20, the Company has the right to use all of its owned and licensed Intellectual Property in all jurisdictions in which it conducts or proposes to conduct its businesses. (f) The Company has taken all commercially reasonable steps to maintain, police and protect the Intellectual Property which it owns, including the proper policing activities and the execution of appropriate confidentiality agreements and intellectual property and work product assignments and releases. Except as disclosed in Schedule 5.20, (i) to the knowledge of the Company or the Members, the conduct of the Company's businesses as currently conducted or planned to be conducted does not infringe or otherwise impair or conflict with ("Infringe") any Intellectual Property rights of any Person, and the Intellectual Property rights of the Company is not being Infringed by any Person; and (ii) there is no litigation or order pending or outstanding, or to the knowledge of the Company or the Members, threatened or imminent, that seeks to limit or challenge or that concerns the ownership, use, validity or enforceability of any Intellectual Property of the Company and the Company's use of any Intellectual Property owned by a third party, and, to the knowledge of the Company or the Members, there is no valid basis for the same. (g) Schedule 5.20 lists all software (i) (other than generally commercially available, non-custom, off-the-shelf software application programs having a retail acquisition price of less than $10,000 per license) which are 17  owned, licensed to or by the Company, leased to or by the Company or otherwise used by the Company, and identifies which software is owned, licensed, leased or otherwise used, as the case may be; and (ii) which are sold, licensed, leased or otherwise distributed by the Company to any third party, and identifies which software is sold, licensed, leased, or otherwise distributed, as the case may be. All software owned by the Company, and all software licensed from third parties by the Company, (i) to the knowledge of the Company, is free from any material defect, bug, virus, or programming, design or documentation error; (ii) operates and runs in a reasonable and efficient business manner; and (iii) to the knowledge of the Company, conforms in all material respects to the specifications and purposes thereof. The Company has taken all reasonable steps to protect the Company's rights in its confidential information and trade secrets. Except as disclosed in the Schedule 5.20, each employee, consultant and contractor who has had access to proprietary Intellectual Property has executed an agreement to maintain the confidentiality of such Intellectual Property has executed appropriate agreements that are substantially consistent with the Company's standard forms thereof (true and complete copies of which have been delivered to Relationserve). Except under confidentiality obligations, there has been no material disclosure of any of the Company's confidential information or trade secrets to any third party. (h) For the purposes of the representations and warranties provided in this Section 5.20, the Company's "Max 90" system shall be deemed "Intellectual Property" and software therefore shall be deemed "software" with respect to which the foregoing representations and warranties contained in Section 5.20 (a) through 5.20 (g) shall be true and correct. Such representations and warranties shall not be the exclusive representations and warranties with respect to the Max 90 system. 5.21 CONTRACTS. Schedule 5.21 sets forth a list of each Contract to which the Company is a party or by which it or its properties and assets are bound and which is material to its business, assets, properties or prospects (the "Material Contracts"), true, correct and complete copies (in the case of written Contracts) and summaries (in the case of oral Contracts) of which have been provided to Relationserve, excluding standard customer contracts entered into in the ordinary course of business, without material modification from the preprinted forms used by the Company in the ordinary course of business, copies of which have been supplied to Relationserve. Each Material Contract is a legal, valid and binding obligation of the Company, and to the knowledge of the Company, the other parties thereto, enforceable against the Company, and to the knowledge of the Company, the other parties thereto in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and general equitable principles regardless of whether such enforceability is considered in a proceeding at law or in equity. 5.22 The copy of each written Material Contract or summary of each oral Material Contract furnished to Relationserve is a true and complete copy of the document it purports to represent or summary, as the case may be, and reflects all amendments thereto made through the Closing Date. The Company has not violated any of the terms or conditions of any Material Contract or any term or condition which would permit termination or modification of any Material Contract, and to the knowledge of the Company and the Members all of the covenants to be performed by any other party thereto have been fully performed, and there are no claims for breach or indemnification or notice of default or 18  termination under any Material Contract. No event has occurred which constitutes, or after notice or the passage of time, or both, would constitute, a default by the Company under any Material Contract, and to the knowledge of the Company and the Members, no such event has occurred which constitutes or would constitute a default by any other party. The Company is not subject to any liability or payment resulting from renegotiation of amounts paid under any Material Contract. As used in this Section 5.21, Material Contracts shall include, without limitation: (a) loan agreements, indentures, mortgages, pledges, hypothecations, deeds of trust, conditional sale or title retention agreements, security agreements, letters of credit, commitment letters, equipment financing obligations or guaranties, or other sources of contingent liability in respect of any Indebtedness; (b) contracts obligating the Company to provide or purchase products or services for a period of one year or more; (c) leases of real property and leases of personal property not cancelable without penalty on notice of sixty (60) days or less or calling for payment of an annual gross rental exceeding Ten Thousand Dollars ($10,000); (d) distribution, sales agency or franchise or similar agreements, or agreements providing for an independent contractor's services, or letters of intent with respect to same; (e) employment agreements, management service agreements, consulting agreements, confidentiality agreements, non-competition agreements, employee handbooks, policy statements and any other agreements relating to any employee, officer or director of the Company; (f) licenses, assignments or transfers of trademarks, trade names, service marks, patents, copyrights, trade secrets or know how, or other agreements regarding proprietary rights or intellectual property; (g) any Contract relating to pending capital expenditures by the Company; (h) any non-competition agreements restricting the Company in any manner; and (i) other material Contracts or understandings, irrespective of subject matter and whether or not in writing, not entered into in the ordinary course of business by the Company and not otherwise disclosed on the Schedules. Consummation of the transactions contemplated by this Agreement will not (and will not give any Person a right to) terminate or modify any rights of or accelerate or augment any obligation of, the Company under any Contract. 5.23 ACCURACY OF INFORMATION FURNISHED BY THE COMPANY AND THE MEMBERS. No statement or information made or furnished by or on behalf of the Company or the Members to Relationserve or any of Relationserve' representatives, including those contained in this Agreement the Schedules attached hereto and in any related agreements and the other information and statements referred to herein and previously furnished by or on behalf of the Company or the Members, contains or shall contain any untrue statement of fact or omits or shall omit any fact necessary to make the information contained therein not misleading in any material manner. The Company and the Members have provided Relationserve with true, accurate and complete copies of all documents listed or described in the various Schedules attached hereto. There is no fact or information known to the Company or the Members that has or is likely to have a Material Adverse Effect on the Business or the Purchased Assets or the ability of the Company to perform under this Agreement, and the Company has not received notice of any deficiencies in the condition or operation of any of the Purchased Assets and, after making due inquiry of its employees, the Company is not aware of any notice having been given with respect to the foregoing, whether or not in writing. 5.24 CUSTOMERS. Schedule 5.24 provides a customer list which identifies the contact person for each customer and identifies the top twenty-five customers of the Company as measured by annual revenue for the last twelve (12) months. True, correct and complete copies of the form of the Company's standard customer contracts have been furnished by the Company to 19  Relationserve. The Company has not violated in any material manner any of the terms or conditions of any of its customer contracts, and to the knowledge of the Company and the Members all of the material covenants to be performed by any other Person thereto have been fully performed and there are no claims for breach or indemnification or notice of default or termination thereunder. The Company is providing services to such customers on a direct bill basis and reasonably believes that such customers have the financial capability to pay for such services. There are (i) no customers of the Company accounting for more than 10% of the gross revenues of the Business for the last twelve month period, and (ii) no sole source suppliers of significant goods or services (other than electricity, gas, telephone or water) to the Company in connection with the Business, with respect to which alternative sources of supply are not readily available on comparable terms and conditions. Nether the Company nor the Members have received in the last twelve-month period any written or oral communications from any customer to the effect that such customer intends to discontinue or reduce the amount of business conducted with the Company or seeks to adjust downward the price of services and products supplied by the Company to such customer. 5.25 NAMES; PRIOR ACQUISITIONS. All names under which the Company does business as of the date hereof are specified on Schedule 5.25. The Company has not changed its name or used any assumed or fictitious name, or been the surviving entity in a merger, acquired any business or changed its principal place of business or chief executive office, within the past three (3) years. 5.26 NO COMMISSIONS. Except as set forth on Schedule 5.26, neither the Company nor the Members has incurred any obligation for any finder's or broker's or agent's fees or commissions or similar compensation in connection with the transactions contemplated hereby. 5.27 PRODUCT WARRANTIES AND REBATES. The Company does not make and has not made any express or implied product warranties or altered, amended, varied or expanded any manufacturers' product warranty in connection with the sale or lease of any products. Schedule 5.26 contains a true and complete list and description of any and all customer rebates, discounts or reimbursement programs or special terms or conditions (including, without limitation, products supplied to customers on a demonstration basis) which have been or will be offered by the Company in connection with the Business at any time prior to the Closing and pursuant to which any obligations or liabilities of the Company, of any nature whatsoever and whether matured or unmatured, remain outstanding. 5.28 RELATED PARTY TRANSACTIONS. None of the Company, the Members and any Person with an interest in Members, nor any entity in which Members or a Person with an interest in Members owns any beneficial interest, have any direct or indirect interest in any customer, supplier or competitor of the Company or in any Person from whom or to whom the Company leases real or personal property. No Affiliate of the Company or its Members, has any interest in any of the Purchased Assets or any property used in or pertaining to the Business. Except as set forth on Schedule 5.27, no officer, director or the Members of the Company, no Person with an interest in the Members, nor any entity in which any such Person owns any beneficial interest, is a party to any Contract or transaction with the Company or has any interest in any property used by the Company. 20  5.29 POWERS OF ATTORNEY. The Company has not given any power of attorney (irrevocable or otherwise) to any Person for any purpose relating to the Business or the Purchased Assets, other than powers of attorney given to regulatory authorities in connection with routine qualifications to do business. 5.30 BOOKS AND RECORDS. The books of account and other financial and corporate records (including, without limitation, general ledgers, sales invoices, registers and ledgers, duplicate check vouchers and supporting documents, payroll registers, check registers, bank statements, cost accounting records, inspection reports and warranty and quality control records) of the Company are in all material respects complete and correct, are maintained in accordance with good business practices and have been accurately reflected in the Current Balance Sheet. The minute books of the Company contain accurate records of all meetings and accurately reflect all other company actions of the Members. 5.31 PAYMENT OF INDEBTEDNESS. The Company will pay or make adequate provision for payment of all amounts of Indebtedness required to be paid for the ongoing nature of the Business that are recurring or similar charges unpaid as of the Closing Date with the cash portion of the Purchase Price, on the Closing Date. ARTICLE VI CONDUCT OF BUSINESS PENDING THE CLOSING 6.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE CLOSING. The Company and the Members covenant and agree that, except with the prior written consent of Relationserve, between the date of this Agreement and the Closing Date, the Business shall be conducted only in, and the Company shall not take any action except in, the ordinary course of business consistent with past practice. The Company shall use its reasonable best efforts to preserve intact its business organization, to keep available the services of its current officers, employees and consultants, and to preserve its present relationships with customers, suppliers and other persons with which it has business relations. By way of amplification and not limitation, except as contemplated by this Agreement, the Company and the Members shall not between the date of this Agreement and the Closing Date, directly or indirectly, do or propose or agree to do any of the following without the prior written consent of Relationserve: (a) amend or otherwise change its articles of organization or operating agreement; (b) issue or authorize the issuance of, any membership interests, or any options, warrants, convertible securities or other rights of any kind to acquire any membership interests or other ownership interest of the Company; (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its membership interests; (d) transfer any of the outstanding membership interests of the Company; (e) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its membership interests; (f) acquire (including, without limitation, for cash, or shares of stock, property or services, by merger, consolidation or acquisition of stock or assets) any interest in any corporation, partnership or other business organization or division thereof; (g) incur any additional Indebtedness other than in the ordinary course of business consistent with past practices; (h) create Liens on any currently existing assets; (i) make (or commit to make) any capital expenditures except in the ordinary course of business; (j) make any loans or 21  advances to any Person or guarantee the indebtedness of any Person; (k) sell or dispose of any of its assets, other than in the ordinary course of business, consistent with past practice; (l) enter into, modify or terminate, any Contract, other than in the ordinary course of business consistent with past practice; (m) pay any bonus to or increase the compensation or benefits payable or to become payable to its employees, independent contractors or consultants; (n) pay, discharge or satisfy any existing claims, liabilities, obligations or Indebtedness other than in the ordinary course of business consistent with past practice; (o) increase or decrease prices charged to its customers, except for previously announced price changes, or take any other action which might reasonably result in any increase in the loss of customers; or (p) agree, in writing or otherwise, to take or authorize any of the foregoing actions or any other action which would make any representation or warranty in Article V untrue or incorrect. The Company shall give written notice to Relationserve promptly following the occurrence of any event which has had (or which is likely to have) a Material Adverse Effect upon its assets, business, operations, prospects, properties or condition (financial or otherwise). ARTICLE VII CERTAIN AGREEMENTS AND COVENANTS OF THE PARTIES 7.1 FURTHER ASSURANCES; COMPLIANCE WITH COVENANTS. Each party shall execute and deliver such additional instruments and other documents and shall take such further actions as may be necessary or appropriate to effectuate, carry out and comply with all of the terms of this Agreement and the transactions contemplated hereby and to satisfy the conditions set forth in Article VIII and Article IX. The Members and the Company shall, and shall cause the Company's accountants to cooperate with Relationserve' accountants from time to time in connection with any audit of the assets, property and business of the Company including the execution and delivery by the Members and the Company of customary audit representation letters. The Members shall cause the Company to comply with all of the covenants of the Company under this Agreement. At the Closing, the Company and the Members covenant and agree to deliver to Relationserve the certificates and other documents required to be delivered to Relationserve pursuant to Article VIII, and Relationserve covenants and agrees to deliver to the Company and the Members the certificates and other documents required to be delivered to the Company and the Members pursuant to Article IX. 7.2 OTHER ACTIONS. The Company shall take all appropriate actions, and do, or cause to be done, all things necessary, proper or advisable under any applicable laws, regulations and Contracts to consummate and make effective the transactions contemplated herein, including, without limitation, filing any notice, statement or other communication, obtaining and providing to Relationserve all Permits of any Governmental Authority and parties to Contracts with the Company as are necessary for the consummation of the transactions contemplated hereby and do all such other acts and things, all as may be reasonably requested by Relationserve to assure to Relationserve all the rights and interests granted or intended to be granted under this Agreement. The Company shall take or cause to be taken such other reasonable actions as Relationserve may require to more effectively transfer, convey and assign to, and vest in, Relationserve, and put Relationserve in possession of, the Purchased Assets as contemplated by this Agreement. 22  7.3 NOTIFICATION OF CERTAIN MATTERS. The Company and the Members shall give prompt notice to Relationserve of the occurrence or non-occurrence of any event which would likely cause any representation or warranty contained herein to be untrue or inaccurate, or any covenant, condition, or agreement contained herein not to be complied with or satisfied. 7.4 CONFIDENTIALITY; PUBLICITY. Except as may be required by law or as otherwise permitted or expressly contemplated herein, no party hereto or their respective Affiliates, employees, agents or representatives shall disclose to any third party this Agreement or the subject matter or terms hereof without the prior consent of the other parties hereto. No press release or other public announcement related to this Agreement or the transactions contemplated hereby shall be issued by the Company or the Member on one hand or Relationserve on the other hand without the prior approval of the other. 7.5 NO OTHER DISCUSSIONS. So long as this Agreement is in force and effect, the Company, the Members, and their respective Affiliates, employees, agents and representatives will not (i) initiate or encourage the initiation by others of, discussions or negotiations with third parties or respond to solicitations by third persons relating to any merger, sale or other disposition of any substantial part of the assets, business or properties of the Company (whether by merger, consolidation, sale of stock or otherwise) or (ii) enter into any agreement or commitment (whether or not binding) with respect to any of the foregoing transactions. For so long as this Agreement is in force and effect, the Company and the Members will immediately notify Relationserve if any third party attempts to initiate any solicitation, discussion or negotiation with respect to any of the foregoing transactions. 7.6 RESTRICTIVE COVENANTS. The Company and the Members each agree that after the Closing Relationserve shall be entitled to the goodwill and going concern value of the Business and to protect and preserve the same to the maximum extent permitted by law. The Company and the Members each also acknowledge that its management contributions to the Business have been uniquely valuable and involve proprietary information that would be competitively unfair to use or to make available to any competitor of the Business. For these and other reasons and, as an inducement to Relationserve to enter into this Agreement, and in order to assure that Relationserve will realize the benefits of the transactions contemplated hereby, the Company and each of the Members agree that they will not: (a) for a period of five (5) years following the Closing Date (the "Noncompete Period"), directly or indirectly, alone or as a partner, joint venturer, officer, director, member, manager, employee, consultant, agent, independent contractor, lender or security holder, of any company or business, through an Affiliate, for its own benefit or as an agent for another, engage in any activities, carry on or participate in the ownership, management or control of, or allow its name or reputation to be used in or by, any other present or future business enterprise that competes with Relationserve in the activities of or is substantially similar to the Business; provided, however, that the beneficial ownership of less than one percent (1%) of outstanding shares or interests of any entity actively traded on a national securities exchange or recognized over-the-counter market shall not be deemed, in and of itself, to violate the prohibitions of this Section 7.6; 23  (b) during the Noncompete Period, directly or indirectly, either for itself or any other Person, (i) induce or attempt to induce any employee of Relationserve or any of its Affiliates (collectively, the "Relationserve Companies") to leave the employ of the Relationserve Companies, (ii) in any way interfere with the relationship between the Relationserve Companies and any employee of the Relationserve Companies, (iii) employ or otherwise engage, or offer to employ or otherwise engage, any Person who is then (or was at any time within six months before the time of such employment, engagement or offer thereof) an employee, sales representative or agent of the Company (or of the Relationserve Companies as successor to the Business), or (iv) induce or attempt to induce any customer, supplier, licensee, or business relation of the Relationserve Companies to cease its relationship with the Relationserve Companies; (c) during the Noncompete Period, directly or indirectly, employ or enter into any arrangement to pay salary, bonus or other compensation to any person who was employed by the Relationserve Companies during the previous six (6) months, or in any manner seek to induce any employee of the Relationserve Companies to leave his or her employment; and (d) at any time following the Closing Date, directly or indirectly, in any way utilize, disclose, copy, reproduce or retain in their possession any of the Relationserve Companies' proprietary or confidential rights, records or information acquired hereunder, including, but not limited to, any customer lists. The Company and the Members agree and acknowledge that the restrictions contained in this Section 7.6 are reasonable in scope and duration, and are necessary to protect the Relationserve Companies. The Company and the Members agree and acknowledge that any breach of this Section 7.6 will cause irreparable injury to the Relationserve Companies and upon any breach or threatened breach of any provision of this Section 7.6, the Relationserve Companies shall be entitled to injunctive relief, specific performance or other equitable relief, without the necessity of posting bond; provided, however, that this shall in no way limit any other remedies which the Relationserve Companies may have as a result of such breach, including the right to seek monetary damages. The parties hereto agree that Relationserve may assign, without limitation, the foregoing restrictive covenants to any successor to the Business. The provisions of this Section 7.6 shall be construed as an agreement on the part of the Company and the Members independent of any other part of this Agreement or any other agreement, and the existence of any claim or cause of action of the Company or any of the Members against Relationserve or the Relationserve Companies, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Relationserve of the provisions of this Section 7.6. In addition, all Persons with an interest in a Member and those Persons listed on Schedule 7.6 shall execute a non-compete agreement containing the provisions of this Section 7.6 (the "Noncompete Agreements") 7.7 CONSENTS. Prior to the Closing, the Company shall use its best efforts to obtain and receive consents to the transactions contemplated hereby and waivers of rights to terminate or modify any rights or obligations of the Company from any Person(s) from whom such consent or waiver is required under any Contract to which the Company or the Purchased Assets are bound (including the Customer Contracts, the Assumed Contracts, the Equipment Leases and the Real 24  Property Leases), or who, as a result of the transactions contemplated hereby, would have the right to terminate or modify such Contracts, either by the terms thereof or as a matter of law. 7.8 PAYOFF AND ESTOPPEL LETTERS. Prior to the Closing, the Company shall request and deliver to Relationserve payoff and estoppel letters from all holders of any Indebtedness of the Company to be paid off on or prior to the Closing, which letters shall contain payoff amounts, per diem interest, wire transfer instructions and an agreement to deliver to Relationserve, upon full payment of any such Indebtedness, UCC-3 termination statements, satisfactions of mortgage or other appropriate releases and any original promissory notes or other evidences of indebtedness marked canceled. At Closing, the Company shall deliver to Relationserve appropriately completed UCC-3 Termination Statements ready for execution by each creditor that is named in a financing statement on file against any of the Company's assets and shall have caused to be filed UCC-3 Termination Statements for financing statements on file against the Company's assets pertaining to inactive or previously terminated financings. 7.9 RECEIVABLES. At or prior to the Closing Date, the Company shall deliver to Relationserve a true, complete and correct list of all Receivables to be transferred to Relationserve pursuant to Section 1.1(g). From and after the Closing, the Company shall cooperate with Relationserve upon Relationserve's request to notify each payor of any Receivables of such transfer to Relationserve. The Company and the Members hereby agree and acknowledge that any and all payments in respect of such Receivables that are received by the Company or any Members after the Closing shall be held in trust for the benefit of Relationserve and delivered to Relationserve as soon as practicable. 7.10 POST-CLOSING ACTIONS OF THE COMPANY. At Closing, the Company shall change its name to a name that does not include the words Omni Point or any derivation thereof and shall immediately discontinue and no longer use the name Omni Point or any deviation thereof. At the request of Relationserve, the Company will notify vendors, customers, banks, and others of the assignment of accounts receivables and other transfers pursuant to this Agreement and shall authorize and advise all such persons that the Business has been acquired by Relationserve which shall be authorized to take all actions with respect to the Business on and following Closing. 7.11 EXECUTION OF FURTHER DOCUMENTS. From and after the Closing, upon the reasonable request of Relationserve, the Company shall execute, acknowledge and deliver all such further deeds, bills of sale, assignments, transfers, conveyances, powers of attorney and assurance as may be required or appropriate to convey and transfer to and vest in Relationserve and protect its right, title and interest in all of the Purchased Assets and to carry out the transactions contemplated by this Agreement. 7.12 TRANSACTION DOCUMENTS. At Closing, the Company shall enter into the Bill of Sale, Assignment and Assumption Agreement, in the form attached as Exhibit A, the Noncompete Agreements in the form attached as Exhibit B, and such other closing documents requested by Relationserve. 25  7.13 PASSAGE OF TITLE AND RISK OF LOSS. Legal title, equitable title and risk of loss with respect to the property and rights to be transferred hereunder shall not pass to Relationserve until the property or right is transferred at the Closing and possession thereof is delivered to Relationserve. 7.14 EXPENSES AND TAXES. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense. Any transfer, documentary, sales, use, registration, value added and other similar Taxes applicable to the conveyance and transfer from the Company to Relationserve of the Purchased Assets and related fees (including any penalties, interest and additions to Tax) shall be paid by the Company. 7.15 ACCESS TO INFORMATION AND COOPERATION. The Company shall provide to Relationserve and its counsel, accountants, consultants and other representatives, full access, during normal business hours, to all of its properties, books, accounts, tax returns, contracts, commitments and records, furnish to Relationserve all such information concerning its business and affairs as Relationserve reasonably may request and cause its independent public accountants to permit Relationserve and its representatives to examine all records and working papers in order to permit an independent accounting firm selected by Relationserve to conduct an audit of the Business's financial statements in a diligent manner. Such cooperation shall include, but not be limited to, issuing representation letters to Relationserve's accountants with respect to all financial statements of Seller covering dates or periods on or prior to the Closing Date. 7.16 TRANSITION INSURANCE. If requested by Relationserve prior to the Closing Date, and to the extent permissible under the subject insurance policies, the Company shall maintain in effect for a period of sixty (60) days following the Closing Date the Company's insurance policies covering the Purchased Assets at the same level of coverage as in effect prior to and on the Closing Date. Buyer shall reimburse the Company for the out-of-pocket cost of maintaining such coverage after the Closing Date. 7.17 WARN. The Company hereby represents and warrants that for purposes of the Worker Adjustment and Retraining Notification Act ("WARN") and with respect to employees performing services for the Business (i) in the previous thirty (30) days there has been no employment loss at a single site of fifty (50) or more employees, (ii) no single site of employment of the Business has, or during the past ninety (90) days has had, fifty (50) or more employees. Company shall be responsible for WARN Act compliance, and cost thereof, with respect to the transactions contemplated by this Agreement. 7.18 COOPERATION. Company and each Member will cooperate with Relationserve, and Company and each Member will use its best efforts to have the officers, directors and other employees of Company cooperate with Relationserve, at Relationserve's request and expense, on and after the date hereof, in endeavoring to effect the collection of accounts and notes receivable owing to Company at the Closing Date and in furnishing information, evidence, testimony and other assistance in connection with any actions, proceedings, arrangements or disputes involving the Company and/or Relationserve and based upon contracts, arrangements, commitments or acts of Company which were in effect or occurred on or prior to the date hereof. 26  7.19 AUTHORIZATION; MAIL. Company agrees that Relationserve shall have the right and authority to collect for the account of Company all receivables and other items which shall be transferred to Relationserve as provided herein, and to endorse with the name of Company any checks received on account of any such receivables or other items. Company agrees that it will promptly transfer and deliver to Relationserve any cash or other property that Company may receive in respect of any such receivables or other items. Company authorizes and empowers Relationserve from and after the date hereof (i) to receive and open mail addressed to Company and (ii) to deal with the contents thereof in any manner Relationserve sees fit, providing such mail and the contents thereof relate to the Purchased Assets or otherwise to the business of Company, as conducted by Relationserve or to any of the liabilities or obligations assumed by Relationserve hereunder. Company agrees to deliver to Relationserve promptly upon receipt any mail, checks or other documents received by them pertaining to the Purchased Assets or the Business, as conducted by Relationserve, or any of the liabilities or obligations assumed by Relationserve hereunder. Relationserve agrees to deliver to Company any mail which it receives to which it is not entitled by reason of this Agreement or otherwise and to which Company is entitled. 7.20 EMPLOYEES. From and after the Closing Date, the Company will use its best efforts to keep available to Relationserve the services of the present employees of Company and, from and after the date hereof, agree to use its best efforts to cause each employee of Company to become and remain an employee of Relationserve from and after the Closing Date. ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF RELATIONSERVE The obligation of Relationserve and Parent to effect the transactions contemplated hereby shall be subject to the fulfillment at or prior to the Closing Date of the following conditions, any or all of which may be waived in whole or in part in writing by Relationserve: 8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH OBLIGATIONS. The representations and warranties of the Company and the Members contained in this Agreement shall be true and correct at and as of the Closing Date with the same force and effect as though made at and as of that time except (i) for matters specifically permitted by or disclosed on any Schedule to this Agreement, and (ii) that those representations and warranties which address matters only as of a particular date shall remain true and correct as of such date. The Company and the Members shall have performed and complied with all of their respective obligations required by this Agreement to be performed or complied with at or prior to the Closing Date. The Company and the Members shall have delivered to Relationserve a certificate, dated as of the Closing Date, duly signed (in the case of the Company, by its President), certifying that such representations and warranties are true and correct and that all such obligations have been complied with and performed. 8.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY. Between the date hereof and the Closing Date, (i) there shall have been no Material Adverse Change in the Purchased Assets or the Business, (ii) there shall have been no adverse federal, state or local legislative or regulatory change affecting in any material respect the Purchased Assets or the Business, and 27  (iii) none of the Purchased Assets shall have been damaged by fire, flood, casualty, act of God or the public enemy or other cause (regardless of insurance coverage for such damage) and there shall have been delivered to Relationserve a certificate to that effect, dated the Closing Date and signed by or on behalf of the Company and the Members. 8.3 CORPORATE CERTIFICATE. The Company shall have delivered to Relationserve (i) copies of its Articles or Organization and Operating Agreement of the Company as in effect immediately prior to the Closing Date, (ii) copies of resolutions adopted by the Board of Directors and the Members of the Company authorizing and approving the execution and delivery of this Agreement and the performance of the transactions contemplated by this Agreement, (iii) a certificate of incumbency, dated as of the Closing, of the Members, directors and officers executing this Agreement or any related agreements, instruments or certifications for Closing, (iv) a certificate of good standing of the Company issued by the Secretary of State of the State of Florida as of a date not more than five (5) days prior to the Closing Date, certified in the case of subsections (i) and (ii) of this Section as of the Closing Date by the Secretary of the Company as being true, correct and complete. 8.4 DELIVERY OF PURCHASED ASSETS. (a) At the Closing, the Company shall duly execute and deliver to Relationserve (or its assignee) Bills of Sale and Assignment and Assumption Agreements in the form attached hereto as Exhibit A and such other instruments of transfer of title as are necessary to transfer to Relationserve (or its assignee) good and marketable title to the Purchased Assets (including endorsed titles for unencumbered vehicles transferred hereunder) free and clear of any Liens other than the Assumed Liabilities, and shall deliver to Relationserve (or its assignee) immediate possession of the Purchased Assets. 8.5 CONSENTS. The Company shall have received and shall deliver evidence of all necessary Permits, to the transactions contemplated hereby and waivers of rights to terminate or modify any rights or obligations of the Company from any Person from whom such consent or waiver is required under any Contract to which the Company or the Purchased Assets are bound (including the Customer Contracts, the Assumed Contracts, the Equipment Leases and the Real Property Leases) as of a date not more than ten (10) days prior to the Closing Date, or who, as a result of the transactions contemplated hereby, would have such rights to terminate or modify such Contracts, either by the terms thereof or as a matter of law. 8.6 NO ADVERSE LITIGATION. There shall not be pending or threatened any action or proceeding by or before any court or other governmental body which shall seek to restrain, prohibit, invalidate or collect damages arising out of the transactions contemplated hereby, and which, in the judgment of Relationserve, makes it inadvisable to proceed with the transactions contemplated hereby. 8.7 BOARD AND SHAREHOLDER APPROVAL. The Board of Directors of Relationserve shall have authorized and approved this Agreement and the transactions contemplated hereby. 8.8 GOVERNMENTAL CONSENTS. Relationserve shall have received all necessary approvals, consents, reviews, and/or waivers from all applicable Governmental Authorities. 28  8.9 CLOSING DOCUMENTS. The Company and Members and the other applicable parties shall have executed and delivered the documents required by this Agreement to have been executed and delivered by them. 8.10 DELIVERY OF FINANCIAL STATEMENTS. The Company shall deliver to Relationserve the Financial Statements. ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND THE MEMBERS The obligations of the Company and the Members to effect the transactions contemplated hereby shall be subject to the fulfillment at or prior to the Closing Date of the following conditions, any or all of which may be waived in whole or in part in writing by the Company and the Members: 9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH OBLIGATIONS. The representations and warranties of Relationserve contained in this Agreement shall be true and correct as of the Closing Date with the same force and effect as though made at and as of that time except (i) for changes specifically permitted by or disclosed pursuant to this Agreement, and (ii) that those representations and warranties which address matters only as of a particular date shall remain true and correct as of such date. Relationserve shall have performed and complied with all of its obligations required by this Agreement to be performed or complied with at or prior to the Closing. Relationserve shall have delivered to the Company and the Members a certificate, dated as of the Closing Date, and signed by an officer, certifying that such representations and warranties are true and correct and that all such obligations have been complied with and performed in all material respects. 9.2 PURCHASE PRICE. At the Closing, Relationserve shall pay to the Company the Purchase Price (other than the Deferred Amount) in accordance with Section 2.1, execute the Bill of Sale, Assignment and Assumption Agreement and assume the Assumed Liabilities. 9.3 NO ORDER OR INJUNCTION. There shall not be pending or threatened any action or proceeding by or before any court or other governmental body an order or injunction restraining or prohibiting the transactions contemplated hereby. 9.4 CLOSING DOCUMENTS. Relationserve shall have executed and delivered the documents required by this Agreement to have been executed and delivered by it. ARTICLE X INDEMNIFICATION 10.1 (a) The Company and the Members, jointly and severally, agree to indemnify and hold Relationserve and each of its shareholders, officers, directors, employees, Affiliates, agents, representatives, successors and assigns (collectively, the "Relationserve Indemnitees") harmless from and against any action, cost, damage, disbursement, claim, expense, liability, loss, 29  deficiency, diminution in value, obligation, penalty, fine, award, judgment, sanction, charge, demand, payment, assessment or settlement of any kind or nature, whether foreseeable or unforeseeable, including, but not limited to, interest or other carrying costs, penalties, reasonable legal, accounting and other professional fees and expenses incurred in the investigation, collection, prosecution and defense of claims, actual or threatened, inquiries, hearings or other legal or administrative proceedings, and amounts paid in settlement of any claim, lawsuit or arbitration (each a "Loss"), that may be imposed on or otherwise incurred or suffered by Relationserve arising out of or resulting from (i) any inaccuracy in or breach or non-performance of any representation, warranty, covenant, certification or agreement made by the Company or the Members in or pursuant to this Agreement, (ii) the failure of the Company or the Members to perform fully any covenant, provision or agreement to be performed or observed by it pursuant to this Agreement, (iii) any other matter as to which the Company or the Members in other provisions of this Agreement have agreed to indemnify Relationserve, (iv) any liability or obligation of the Company (whether absolute or contingent, liquidated or unliquidated, or due or to become due), other than the Assumed Liabilities, resulting from the Company's ownership or operation of the Purchased Assets or the Business prior to Closing including, without limitation, the Excluded Liabilities or related to the Excluded Assets, (v) any Environmental Liability, (vi) any failure to have obtained all Permits required in connection with this Agreement, (vii) any liability to any employee of the Business resulting from Relationserve's failure to offer employment to such employee (collectively, "Relationserve Indemnifiable Damages"). Notwithstanding the foregoing, Relationserve shall not be entitled to any Indemnifiable Damages for breaches of the representations and warranties unless the aggregate of all Indemnifiable Damages for breaches of the representations and warranties exceeds $100,000 (the "Indemnification Threshold"), in which case Relationserve shall be entitled to the full amount of such Indemnifiable Damages in excess of the Indemnification Threshold. Notwithstanding anything herein to the contrary, the maximum amount of indemnification hereunder shall not exceed the Purchase Price. (b) Relationserve agrees to indemnify and hold the Company and the Members and each of their shareholders, officers, directors, employees, Affiliates, agents, representatives, heirs, successors and assigns (collectively, the "Company Indemnitees") harmless from and against any Loss, that may be imposed on or otherwise incurred or suffered by the Company and the Members arising out of or resulting from (i) any inaccuracy in or breach or non-performance of any representation, warranty, covenant, certification or agreement made by Relationserve in or pursuant to this Agreement, (ii) the failure of Relationserve to perform fully any covenant, provision or agreement to be performed or observed by it pursuant to this Agreement, (iii) any other matter as to which Relationserve in other provisions of this Agreement has agreed to indemnify the Company and the Members (collectively, "Company Indemnifiable Damages" and together with Relationserve Indemnifiable Damages, the "Indemnifiable Damages"). 10.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties contained in or made pursuant to this Agreement shall survive for a period of one (1) year after the Closing Date except: (i) as to any matter as to which a claim has been submitted in writing to the other party before such date and identified as a claim for indemnification pursuant to Article X, (ii) as to any matter which is based successfully upon fraud with respect to which the cause of action shall expire only upon expiration of the applicable statute 30  of limitations, (iii) those representations and warranties contained in Section 5.11 (Environmental Matters); (iv) those representations and warranties contained in Section 5.13 (Good Title, Adequacy and Condition of Purchased Assets); (v) those representations and warranties contained in Section 5.16 (Employee Benefit Plans) which shall remain in full force and effect indefinitely, and (vi) the representations and warranties contained in Section 5.17 (Tax Matters) shall continue through the expiration of the applicable statute of limitation (or, if a claim has been asserted prior to such expiration, until 24 months after the date of its final resolution). Notwithstanding any knowledge of facts determined or determinable by any party by investigation, each party shall have the right to fully rely on the representations, warranties, covenants and agreements of the other parties contained in this Agreement or in any other documents or papers delivered in connection herewith. Each representation, warranty, covenant and agreement of the parties contained in this Agreement is independent of each other representation, warranty, covenant and agreement. 10.3 THIRD PARTY ACTIONS. Promptly after receipt by a party of notice of commencement of any action by a third party which could give rise to Indemnifiable Damages (an "Indemnified Party") the Indemnified Party will, if a claim thereof is to be made against the other parties hereto (an "Indemnifying Party"), notify the Indemnifying Party of the commencement thereof; provided, however, that the omission to so notify the Indemnifying Party will not relieve them from any liability which they may have hereunder unless the Indemnifying Party have been materially prejudiced thereby. The parties agree that with respect to any such third party action the Indemnified Party shall (i) assume the defense thereof with its own legal counsel, (ii) provide the Indemnifying Party with all information that they reasonably request relating to the handling of such claim, (iii) confer with the Indemnifying Party as to the most cost-effective manner in which to handle such claim, and (iv) use its reasonable efforts to minimize the cost of handling such claim. With respect to any action commenced by a third party which could give rise to Indemnifiable Damages and which seeks recovery solely of money damages, the Indemnifying Party shall have the right to participate in, and, to the extent that they may wish, jointly or individually, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party; provided, that prior to the assumption of such defense the Indemnifying Party assuming such defense must acknowledge in writing to the Indemnified Party that they shall be fully responsible (with no reservation of rights) for all Indemnifiable Damages relating to such claim; provided, further, if the defendants in any action include both the Indemnified Party and any of the Indemnifying Parties and there is a conflict of interest which would prevent such counsel from also representing the Indemnified Party, then the Indemnified Party shall have the right to select separate counsel to participate in the defense of such action on behalf of the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of their election to so assume the defense thereof, the Indemnifying Party, as applicable, will not be liable to the Indemnified Party pursuant to the provisions of Section 10.1 for the related counsel fees and expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation, unless (i) the Indemnified Party shall have employed counsel in accordance with the provisions of the preceding sentence; (ii) the Indemnifying Party shall not have employed counsel satisfactory to the Indemnified Party to represent it within a reasonable time after notice of the commencement of the action, or (iii) the Indemnifying Party shall not have authorized the employment of counsel for the 31  Indemnified Party at the expense of the Indemnifying Party, as applicable. Notwithstanding anything to the contrary in this Section 10.3, the Indemnifying Party shall have the right to settle or compromise any action for which it has assumed the defense if the settlement or compromise provides for any injunctive or other equitable relief against the Indemnified Party or otherwise provides for any continuing obligations of any nature against the Indemnified Party or loss of rights of the Indemnified Party, and nothing stated in this Section 10.3 shall otherwise affect the Indemnifying Party's obligation to pay the Indemnified Party all Indemnifiable Damages pursuant to Section 10.1. With respect to any such third party action assumed by the Indemnifying Party, as applicable, the parties agree to provide each other with all information that they reasonably request relating to the handling of such matter. 10.4 SET OFF. Relationserve may set off against the Deferred Amount and/or Indemnifiable Damages for which the Company or the Members may be responsible pursuant to this Agreement, subject, however, to the following terms and conditions: (a) Relationserve shall give written notice to the Company and the Members of any claim for Indemnifiable Damages or any other damages hereunder, which notice shall set forth (i) the amount of Indemnifiable Damages or other loss, damage, cost or expense which Relationserve claims to have sustained by reason thereof, and (ii) the basis of the claim therefore. (b) Such set off shall be effected on the later to occur of the expiration of ten (10) days from the date of such notice (the "Notice of Contest Period") or, if such claim is contested, the date the dispute is resolved. (c) If, prior to the expiration of the Notice of Contest Period, the Company or the Members shall notify Relationserve in writing of an intention to dispute the claim and if such dispute is not resolved within thirty (30) days after expiration of such period, then Relationserve may take any action or exercise any remedy available to it by appropriate legal proceedings to collect the Indemnifiable Damages. (d) All set offs and payments of Indemnifiable Damages pursuant to this Section 10.4 shall be treated as adjustments to the Purchase Price. (e) The Deferred Amount shall constitute a deferred payment obligation of Relationserve to the Company, which amount shall be (i) paid to the Company in accordance with Section 10.5 hereof, and (ii) subject to set off as provided in this Section 10.4. 10.5 DELIVERY OF DEFERRED AMOUNT. Relationserve agrees to deliver to the Members no later than three (3) business days following the one-year anniversary of the Closing Date any Deferred Amount then held by it unless there then remains unresolved any claim for Indemnifiable Damages or other damages hereunder as to which notice has been given, in which event that portion of the Deferred Amount subject to an ongoing claim shall continue to be held and the remaining portion of the Deferred Amount not subject to a claim shall be released. Any Deferred Amount remaining on deposit after such claim shall have been satisfied shall be returned to the Company promptly after the time of satisfaction. 10.6 NO BAR. If the Deferred Amount is insufficient to set off any claim for Indemnifiable Damages made hereunder (or has been delivered to the 32  Company prior to the making or resolution of such claim), then Relationserve may take any action or exercise any remedy available to it by appropriate legal proceedings to collect the Indemnifiable Damages. ARTICLE XI DEFINITIONS 11.1 DEFINED TERMS. As used herein, the following terms shall have the following meanings: "Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, as in effect on the date hereof. "Assignment and Assumption Agreement" shall mean the Bill of Sale, Assignment and Assumption Agreement, the form of which is attached as EXHIBIT B hereto. "Code" means the Internal Revenue Code of 1986, as amended, and treasury regulations promulgated thereunder. "Contract" means any agreement, contract, commitment, undertaking, obligation, understanding or arrangement whether written or oral, express or implied. "Environmental Laws" means all federal, state, regional or local statutes, laws, rules, regulations, codes, orders, plans, injunctions, decrees, rulings, and changes or ordinances or judicial or administrative interpretations thereof, or similar laws of foreign jurisdictions, whether currently in existence or hereafter enacted or promulgated, any of which govern (or purport to govern) or relate to pollution, protection of the environment, public health and safety, air emissions, water discharges, hazardous or toxic substances, solid or hazardous waste or occupational health and safety, as any of these terms are or may be defined in such statutes, laws, rules, regulations, codes, orders, plans, injunctions, decrees, rulings and changes or ordinances, or judicial or administrative interpretations thereof. "Environmental Liability" means any and all liabilities and obligations relating to or arising out of environmental matters or claims relating to or arising from events or occurrences taking place or conditions existing (whether known or unknown) prior to the Closing Date or relating to or arising from events or occurrences taking place or conditions existing (whether known or unknown) on or after the Closing Date to the extent such matters relate to or arise from the Company's actions on any premises on which the Business was conducted, including, without limitation, (i) any violation or alleged violation of any Environmental Laws including the obligations thereunder to investigate or remediate or otherwise undertake removal of hazardous substances or (ii) any actual or alleged handling or discharging of hazardous substances. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder and published interpretations related thereto. 33  "GAAP" means generally accepted accounting principles as in effect in the United States from time to time. "Governmental Authority" means any nation or government, any state, regional, local or other political subdivision thereof, and any entity or official exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Indebtedness" means all obligations of the Company (i) which in accordance with GAAP should be classified upon a balance sheet of the Company as indebtedness, (ii) for borrowed money or purchase money financing which has been incurred in connection with the acquisition of property or services, guaranties, letters of credit, or deferred purchase price, (iii) secured by any lien or other charge upon property or assets owned by the Company, even though the Company has not assumed or become liable for the payment of such obligations, (iv) created or arising under any conditional sale or other title retention agreement with respect to property acquired by the Company, whether or not the rights and remedies of the lender or lessor under such agreement in the event of default are limited to repossession or sale of the property, or (v) for remaining payments under any leases (including, but not limited to, equipment leases, operating leases and capital leases), or rental purchase options, in each case including, without limitation, accrued and unpaid interest, and prepayment or early termination payments or penalties associated with any of the foregoing items (i) through (v) whether mandatory or optional. "Intellectual Property" means all United States and foreign intellectual property, including all worldwide trademarks, service marks, trade names, URLs and Internet domain names, designs, slogans, logos, and trade dress, together with all goodwill related to the foregoing; patents, copyrights, processes, operating rights, computer software, technology, trade secrets and other confidential information, customer and supplier lists and data, know-how, processes, techniques, formulae, algorithms, models, user interfaces, inventions, plans, proposals, advertising and promotional materials, and all registrations, applications, recordings, renewals, continuations, continuations-in-part, divisions, reissues, reexaminations, foreign counterparts, and other legal protections and rights related to the foregoing. "Lien" means any mortgage, option, pledge, right, claim, charge, security interest, encumbrance, easement, lease, covenant, lien, adverse claim or preferential arrangement of any kind (whether on sale, transfer, disposition or otherwise), whether imposed by agreement, understanding, law, equity or otherwise. "Material Adverse Change (or Effect)" means a change (or effect), in the condition (financial or otherwise), properties, assets, liabilities, rights, obligations, operations, business or prospects which change (or effect) individually or in the aggregate, is materially adverse to such condition, properties, assets, liabilities, rights, obligations, operations, business or prospects. "Permit" means any license, permit, agreement, consent, approval, franchise, certificate of authority, authorization, qualification or order, or any waiver of the foregoing, required by any Person in connection with, and necessary to the operation of, the Business or the use or ownership of the Purchase Assets. 34  "Person" means an individual, partnership, corporation, business trust, joint stock company, estate, trust, unincorporated association, joint venture, Governmental Authority or other entity, of whatever nature. "Tax Return" means any report, return, filing or other information required to be filed in connection with or with respect to any Taxes. "Taxes" means all taxes, fees, charges or other assessments, including, but not limited to, income, excise, property, sales, franchise, intangible, transfer, gross receipt, capital stock, production, business, occupation, disability, employment, payroll, severance, withholding, social security and unemployment taxes imposed by any Government Authority, and any interest or penalties (civil or criminal) related thereto or to the non-payment, late payment or underpayment thereof, and any Loss or liability in connection with the determination, settlement or litigation of any Tax liability. 11.2 OTHER DEFINITIONAL PROVISIONS. All terms defined in this Agreement shall have the defined meanings when used in any certificates, reports or other documents made or delivered pursuant hereto or thereto, unless the context otherwise requires. Terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. All matters of an accounting nature in connection with this Agreement and the transactions contemplated hereby shall be determined in accordance with GAAP applied on a basis consistent with prior periods, where applicable. As used herein, the neuter gender shall also denote the masculine and feminine, and the masculine gender shall also denote the neuter and feminine, where the context so permits. ARTICLE XII SECURITIES LAW MATTERS In addition to the other representations, warranties and covenants set forth herein, as a material inducement to Relationserve to enter into this Agreement and to consummate the transactions contemplated hereby, the Company and the Members make the following representations, warranties and covenants, as applicable. 12.1 INVESTMENT INTENT. Each Member is acquiring the Relationserve Common Stock hereunder for his/her/its own account and with no present intention of distributing or selling such shares and further agrees not to transfer such shares in violation of the Securities Act or any applicable state securities law, and no one other than the Members have any beneficial interest in the shares. The Member agrees that he/she/it will not sell or otherwise dispose of any of the Relationserve Common Stock unless such sale or other disposition has been registered under the Securities Act or, in the opinion of counsel acceptable to Relationserve, is exempt from registration under the Securities Act and has been registered or qualified or, in the opinion of such counsel acceptable to the Relationserve, is exempt from registration or qualification under applicable state securities laws. Each Member understands that the offer and sale by the Relationserve of the Relationserve Common Stock being acquired by each Member hereunder has not been registered under the Securities Act by reason of their contemplated issuance in transactions exempt from the registration and prospectus delivery requirements of the Securities Act pursuant 35  to Section 4(2) thereof, and that the reliance of Relationserve on such exemption from registration is predicated in part on these representations and warranties of each of the Members. 12.2 ACCREDITED MEMBER. Each Member is an "accredited investor" as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment to be made by it hereunder. Notwithstanding the foregoing, the Company may transfer shares of Relationserve Common Stock (or any securities received in exchange therefore) to the Company's Members upon such Members' execution of standard investment letters and other documentation deemed reasonably acceptable to Relationserve's counsel with regard to an exemption from registration under what is referred to as Section 4(1 1/2) of the Securities Act and applicable state securities laws, with such additional restrictions on transfer that are applicable to shares of Relationserve Common Stock held by Company prior to such transfer. 12.3 ADEQUATE INFORMATION. Each Member has received from Relationserve, and has reviewed, such information which such Member considers necessary or appropriate to evaluate the risks and merits of an investment in the Relationserve Common Stock. 12.4 OPPORTUNITY TO QUESTION. Each Member has had the opportunity to question, and has questioned, to the extent deemed necessary or appropriate, representatives of Relationserve so as to receive answers and verify information obtained in the Member's examination of Relationserve, including the information that the Member has received and reviewed in relation to his/her/its investment in the Relationserve Common Stock. 12.5 NO OTHER REPRESENTATIONS. No oral or written representations have been made to any Member in connection with the Member's acquisition of the Relationserve Common Stock which were in any way inconsistent with the information reviewed by the Member. The Member acknowledges that no representations or warranties of any type or description have been made to it by any Person with regard to Relationserve, any of its subsidiaries, any of their respective businesses, properties or prospects or the investment contemplated herein, other than the representations and warranties set forth in Article IV hereof. 12.6 KNOWLEDGE AND EXPERIENCE. Each Member has such knowledge and experience in financial, tax and business matters, including substantial experience in evaluating and investing in common stock and other securities (including the common stock and other securities of speculative companies), so as to enable the Member to utilize the information made available by Relationserve to such Member in order to evaluate the merits and risks of an investment in the Relationserve Common Stock and to make an informed investment decision with respect thereto. 12.7 INDEPENDENT DECISION. Each Member is not relying on Relationserve or on any legal or other opinion in the materials reviewed by the Member with respect to the financial or tax considerations of the Member relating to its investment in the Relationserve Common Stock. Each Member has relied solely on the representations and warranties, covenants and agreements of Relationserve in this Agreement (including the Exhibits hereto) and on its examination and independent investigation in making its decision to acquire the Parent Common Stock. 36  ARTICLE XIII GENERAL PROVISIONS 13.1 NOTICES. All notices, requests, demands, claims, and other communications hereunder shall be in writing and shall be delivered by certified or registered mail (first class postage pre-paid), guaranteed overnight delivery, or facsimile transmission if such transmission is confirmed by delivery by certified or registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the following addresses and facsimile numbers (or to such other addresses or facsimile numbers which such party shall designate in writing to the other party): (a) IF TO RELATIONSERVE OR Relationserve Access, Inc. PARENT TO: 6421 Congress Avenue Suite 201 Boca Raton, Florida 33487 Attn: President Telephone: 561 ###-###-#### Facsimile: 561 ###-###-#### WITH A COPY TO: Olshan Grundman Frome Rosenzweig & Wolosky LLP Park Avenue Tower 65 East 55th Street New York, New York 10022 Attn: Harvey J. Kesner, Esq. Telephone: 212 ###-###-#### Facsimile: 212 ###-###-#### (b) IF TO THE COMPANY OR Omni Point Marketing, LLC THE MEMBERS TO: 6700 N. Andrews Avenue, 2nd Floor Ft. Lauderdale, Florida 33309 Attn: Richard Hill Telephone: 954 ###-###-#### Facsimile: _____________ WITH A COPY TO: Harris Cramer LLP 1555 Palm Beach Lakes Blvd., Suite 310 West Palm Beach, FL ###-###-#### Attn: Michael Harris, Esq. Telephone: 561 ###-###-#### Facsimile: 561 ###-###-#### 37  or to such other address as any of them, by notice to the other may designate from time to time. The transmission confirmation receipt from the sender's facsimile machine shall be evidence of successful facsimile delivery. Time shall be counted from the date of transmission. Notice shall be deemed given on the date sent if sent by facsimile transmission and on the date delivered (or the date of refusal of delivery) if sent by overnight delivery or certified or registered mail. 13.2 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement (including the Exhibits and Schedules attached hereto) and other documents delivered at the Closing pursuant hereto, contains the entire understanding of the parties in respect of its subject matter herein and supersedes all prior agreements and understandings (oral or written) between the parties with respect to such subject matter. The parties agree that prior drafts of this Agreement shall not be deemed to provide any evidence as to the meaning of any provision hereof or the intent of the parties with respect thereto. The Exhibits and Schedules constitute a part hereof as though set forth in full above. Except for the Relationserve Affiliates and other persons expressly stated herein to be indemnitees, this Agreement is not intended to confer upon any Person, other than the parties hereto, any rights or remedies hereunder. 13.3 AMENDMENT; WAIVER. This Agreement may not be modified, amended, supplemented, canceled or discharged, except by written instrument executed by all parties. No failure to exercise, and no delay in exercising, any right, power or privilege under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other right, power or privilege. No waiver of any breach of any provision shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision, nor shall any waiver be implied from any course of dealing between the parties. No extension of time for performance of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance of any other obligations or any other acts. The rights and remedies of the parties under this Agreement are in addition to all other rights and remedies, at law or equity, that they may have against each other. 13.4 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this Agreement shall bind and inure to the benefit of the parties and their respective successors and assigns. The rights and obligations of any party under this Agreement may not be assigned without the prior written consent of the other parties hereto except that Relationserve may assign its rights to any entity that controls, is controlled by or is under common control with Relationserve or to any entity which acquires substantially all of the assets of Relationserve or survives any merger with Relationserve. 13.5 COUNTERPARTS. This Agreement or any other agreement (or document) delivered pursuant hereto may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one and the same instrument. A facsimile signature of any party shall be considered to have the same binding legal effect as an original signature. 38  13.6 INTERPRETATION. When a reference is made in this Agreement to an article, section, paragraph, clause, schedule or exhibit, such reference shall be deemed to be to this Agreement unless otherwise indicated. The headings contained herein and on the Schedules are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement or the Schedules. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." 13.7 CONSTRUCTION. The parties agree and acknowledge that they have jointly participated in the negotiation and drafting of this Agreement. In the event of an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumptions or burdens of proof shall arise favoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. If any party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the party has not breached shall not detract from or mitigate the fact that the party is in breach of the first representation, warranty, or covenant. The mere listing (or inclusion of copy) of a document or other item shall not be deemed adequate to disclose an exception to a representation or warranty made herein (unless the representation or warranty relates solely to the existence of the document or other items itself). 13.8 GOVERNING LAW; SEVERABILITY. This Agreement shall be construed in accordance with and governed for all purposes by the internal laws of the State of Delaware without reference to principles of conflicts of laws. If any word, phrase, sentence, clause, section, subsection or provision of this Agreement as applied to any party or to any circumstance is adjudged by a court to be invalid or unenforceable, the same will in no way affect any other circumstance or the validity or enforceability of any other word, phrase, sentence, clause, section, subsection or provision of this Agreement. If any provision of this Agreement, or any part thereof, is held to be unenforceable because of the duration of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision, and/or to delete specific words or phrases, and in its reduced form, such provision shall then be enforceable and shall be enforced. 13.9 ARM'S LENGTH NEGOTIATIONS. Each party herein expressly represents and warrants to all other parties hereto that (a) before executing this Agreement, said party has fully informed itself of the terms, contents, conditions and effects of this Agreement; (b) said party has relied solely and completely upon its own judgment in executing this Agreement; (c) said party has had the opportunity to seek and has obtained the advice of counsel before executing this Agreement; (d) said party has acted voluntarily and of its own free will in executing this Agreement; (e) said party is not acting under duress, whether economic or physical, in executing this Agreement; and (f) this Agreement is the result of arm's length negotiations conducted by and among the parties and their respective counsel. 39  13.10 RIGHT OF FIRST REFUSAL. (a) For a period commencing on the Closing Date and continuing through a date that is the thirty (30) months anniversary following such date following the Closing Date as Parent shall, by merger, become a wholly-owned subsidiary of a company who maintains a class of securities that may be traded on any securities exchange or whose shares are quoted on the regulated over-the-counter bulletin board market maintained by the National Association of Securities Dealers, Inc. (the "Restricted Period"), each of the Company, each Member, and any transferee from Company or any Member ("Seller") agrees that it or they will not sell, transfer, grant any lien upon or security interest in, or otherwise convey ("Transfer") any Relationserve Common Stock, including any shares of any other company received in any merger, consolidation or otherwise on account of any Relationserve Common Stock, that such person holds, except in accordance with the provisions of this Section 13.10. (b) If a Seller desires to Transfer any of its Relationserve Common Stock during the Restricted Period it shall provide written notice thereof (a "Transfer Notice") to JH Associates, Inc., or its assignee, of the rights provided herein ("Purchaser"). The Transfer Notice shall set forth the aggregate number of Relationserve Common Stock that such Seller desires to Transfer and shall be deemed an irrevocable offer, expiring at 5:00 pm Eastern Standard Time, on the fifth (5th) day following the date such Transfer Notice is received, to sell to Purchaser the total number of Relationserve Common Stock covered in such Transfer Notice at a price per share equal to fifty (50%) percent of the closing price on the last trading day immediately preceding the date of the Transfer Notice. (c) If Purchaser desires to accept an offer in a Transfer Notice, such Purchaser shall provide written notice thereof to the Seller (an "Acceptance Notice"). Such notice shall set forth the number of Relationserve Common Stock Purchaser desires to purchase. Promptly following acceptance of the offer contained in the Transfer Notice (but in no event later than two days following the date of delivery of an Acceptance Notice), Purchaser shall pay to the Seller the aggregate purchase price for the Relationserve Common Stock that such Purchaser agrees to purchase and Seller will deliver to such Purchaser the Relationserve Common Stock to be purchased by such Purchaser. The parties hereto acknowledge that any Purchaser may assign to any other party its rights to purchase Relationserve Common Stock pursuant to an offer contained in a Transfer Notice. (d) To the extent the offer contained in a Transfer Notice expires unexercised, then the Seller shall, for a period of forty-eight (48) hours after expiration of such offer, be permitted to sell the number of Relationserve Common Stock set forth in such Transfer Notice as to which such offer has expired unexercised to a third party. If such Shares are not sold within such forty-eight (48) hour period, they shall again become subject to the provisions of this Section 13.10. (e) Subject to satisfaction of the rights of Purchaser and procedures set forth in Section 13.10(b)-(d), Sellers agree that they shall not Transfer the Relationserve Common Stock prior to the five (5) year anniversary of this Agreement, PROVIDED, HOWEVER, Seller(s) may Transfer, collectively (giving effect to all transfers by any other Seller during the applicable period) up to 175,000 shares of Relationserve Common Stock, in each of the 40  twelve full consecutive calendar months immediately following the end of the calendar month following commencement of the Restricted Period. Each of the Members shall be responsible to each of the other Members and to the Company to allocate such limitations and any sales in excess of such amount, or request for sales, may be rejected by JH Associates, Inc. and appropriate stop transfer instructions provided to any transfer agent. 13.11 PIGGY-BACK REGISTRATION. The Company intends that shares of any other company received in any merger, consolidation or otherwise on account of any Relationserve Common Stock following the Closing Date that are quoted for sale on the regulated quotation service of the National Association of Securities Dealers, Inc. known as the over-the-counter bulleting board, or that are listed on any exchange, shall have available unlimited and customary "piggyback" registration rights with respect to such shares of Common Stock as are received by the Company as Purchase Price hereunder or following any registration of the securities of the Parent under the Securities Act of 1933 (the "Act") or upon the Parent's merger with a company (or subsidiary thereof) that is a publicly reporting company under the Act (the "Trigger Date"). Relationserve covenants and agrees that should the Parent or Relationserve undertake a merger under which shares in the Parent will be exchanged for shares of any successor or other company, the terms of such merger will include an undertaking that should such company seek to file any registration statement under the Act following the Trigger Date, that it will provide to Company advance notice of its intention to file such registration under the Act and provide Company the opportunity to include in such registration all shares of capital stock represented by the Purchase Price (other than shares which may then be sold pursuant to Rule 144). Such piggyback registration rights may be subject to cutback or lockup provisions but only to the same proportional extent as such provisions affect the capital stock of the senior executives of the Parent, or its public successor. 41  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. RELATIONSERVE ACCESS, INC. By: /s/ Jonathan Honig -------------------------------- Name: Jonathan Honig Title: President OMNI POINT MARKETING, LLC By: /s/ Scott Hirsch -------------------------------- Name: Scott Hirsch Title: CEO MEMBERS: COBALT HOLDINGS, LLC By: /s/ Richard Hill -------------------------------- Richard Hill, Manager MCCALL AND ESTES ADVERTISING, INC. By: /s/ Scott Hirsch -------------------------------- Name: Scott Hirsch Title: Vice President ------------------------------------ Scott Hirsch, individually, as to the representations and warranties contained in Article V hereof applicable to Members, subject to the limitations set forth in Section 10.1 (a), and for the purpose of acknowledging to be bound by the provisions of Section 13.10 as a Seller and in the event such person owns or controls, directly or indirectly, any person who owns or controls any securities as to which the restrictions of Section 13.10 apply. ------------------------------------ Richard Hill, individually solely for the purpose of acknowledging to be bound by the provisions of Section 13.10 as a Seller and in the event such person owns or controls, directly or indirectly, any person who owns or controls any securities as to which the restrictions of Section 13.10 apply. 42  LIST OF EXHIBITS AND SCHEDULES EXHIBIT A Form of Bill of Sale, Assignment and Assumption Agreements Schedule 1.1(b) Other Tangible Personal Property Schedule 1.1(c) Customer Accounts Schedule 1.1(d) Assumed Contracts Schedule 1.1(h) Equipment Leases Schedule 1.1(i) Intangible Property Schedule 5.4 Capitalization Schedule 5.5 Required Consents Schedule 5.6 Subsidiaries Schedule 5.7 Financial Statements Schedule 5.9 Liabilities of the Company, Indebtedness Schedule 5.10 Litigation Schedule 5.14 Permits; Policies Schedule 5.15 Employees Schedule 5.16 Employee Benefit Plans Schedule 5.18 Insurance Policies Schedule 5.19 Receivables Schedule 5.20 Intellectual Property Schedule 5.21 Material Contracts Schedule 5.24 Customers Schedule 5.25 Names Schedule 5.26 Commissions Schedule 5.27 Product Rebates and Discounts Schedule 5.28 Related Party Transactions Schedule 7.6 Interested Persons