8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 18, 2007
Date of report (date of earliest event reported)

Innuity, Inc.

(Exact name of registrant as specified in its charter)

Utah	0-29129	87-0370820
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer Identification No.)
of incorporation)

8644 154th Avenue NE
Redmond, WA 98052
(Address of principal executive offices)(Zip Code)

(425) 497-9909
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

     As used in this current report on Form 8-K, unless the context otherwise requires, the terms “we,” “us,” “the Company,” and “Innuity” refer to Innuity, Inc., a Utah corporation.

Item 1.01 Entry into a Material Definitive Agreement.

     On May 18, 2007, we entered into an additional note purchase and global amendment agreement with Imperium Master Fund, Ltd., providing for the issuance of the second of two 15% senior secured promissory notes to Imperium. Under the terms of the global amendment agreement, we received the second $1.0 million on May 24, 2007, as part of the previously announced $2.0 million raised through a private placement. The private placement, governed by the securities purchase agreement, dated May 3, 2007, between Innuity and Imperium, provided for the issuance of 15% senior secured notes and warrants to purchase up to 1,128,000 shares of our common stock at an exercise price of $0.01 per share.

     The notes bear interest at 15% per annum, payable monthly, and are due May 3, 2008. In connection with the financing, we granted Imperium a security interest in all of our assets, including our equity interests in Vista.com, our wholly-owned subsidiary, and Jadeon, Inc., a wholly-owned subsidiary of Vista.com.

     Under the terms of the securities purchase agreement, until such time as the warrants are no longer outstanding, if we issue securities in a subsequent financing we agreed to issue to Imperium, for no consideration, an amount of each type of security being issued in such financing to prevent dilution resulting from such financing. In addition, we agreed to file a registration statement on Form SB-2 with the Securities and Exchange Commission covering the resale of the shares of common stock underlying the warrants.

     The placement agent for the financing was Kaufman Bros., L.P. Under the terms of our engagement agreement, we agreed to pay Kaufman Bros. a cash fee equal to six percent of the aggregate proceeds raised in the financing for services rendered as placement agent.

     A complete copy of the 15% senior secured promissory note, the additional note purchase and global amendment agreement and our press release related to the second financing tranche are attached hereto as Exhibits 4.1, 10.1 and 99.1, respectively, and are incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

     The information set forth in Item 1.01 above is hereby incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.		Description
	4.1	15% Senior Secured Note
	10.1	Additional Note Purchase and Global Amendment Agreement, dated as of May 18, 2007, between Innuity, Inc. and Imperium Master Fund, Ltd.
	99.1	Press release of Innuity, Inc., dated May 24, 2007

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INNUITY, INC.
Dated: May 24, 2007	By:	/s/ John R. Wall
		John R. Wall
		Chief Executive Officer

EX-4.1

Exhibit 4.1

INNUITY, INC.

15% SENIOR SECURED NOTE

THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER HEREOF IN ORDER TO EFFECT A PARTIAL PAYMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT SHOWN BELOW.

$1,000,000

Issue Date: May 18, 2007

     FOR VALUE RECEIVED, INNUITY, INC., a Utah corporation (the “Company”), hereby promises to pay to the order of IMPERIUM MASTER FUND, LTD. or its permitted successors or assigns (the “Holder”) the sum of ONE MILLION DOLLARS ($1,000,000) in same day funds, on or before May 3, 2008 (the “Maturity Date”). Except as specifically provided by the terms of Section 4 hereof, the Company shall not have the right to prepay any portion of this Note.

     The Company has issued this Note pursuant to an Additional Note Purchase and Global Amendment Agreement, dated as of the date hereof (the “Additional Purchase Agreement”). The Note issued by the Company pursuant to the Securities Purchase Agreement, dated as of May 3, 2007 (the “Securities Purchase Agreement”), and this Note are together referred to herein as the “Notes”.

     The Company’s obligations under the Notes, including, without limitation, its obligation to make payments of interest thereon, are guaranteed by the Company Subsidiaries and secured by the assets and properties of the Company and the Company Subsidiaries. The following terms shall apply to this Note:

1. DEFINITIONS.

          “Business Day” means any day other than a Saturday, a Sunday or a day on which the Principal Market is closed or on which banks in the City of New York are required or authorized by law to be closed.

          “Change of Control” means the existence, occurrence or public announcement of, or entering into an agreement contemplating, any of the following: (a) the sale, conveyance, disposition or other transfer of more than fifty percent (50%) of the total assets owned by the Company and the Company Subsidiaries to any Person (other than a transfer of assets from one Company Subsidiary to another Company Subsidiary); (b) the effectuation of a transaction or series of transactions in which more than twenty-five percent (25%) of the equity or voting power of the Company is disposed of; (c) the effectuation of a transaction or series of transactions in which any

of the equity or voting power of any Company Subsidiary is disposed to a Person other than the Company or another Company Subsidiary; (d) the consolidation, merger or other business combination of the Company with or into any other entity, immediately following which the prior stockholders of the Company fail to own, directly or indirectly, at least seventy-five percent (75%) of the surviving entity; (e) the consolidation, merger or other business combination of any Company Subsidiary with or into any other entity other than the Company or another Company Subsidiary; and (f) the Continuing Directors do not at any time constitute at least a majority of the Board of Directors of the Company.

          “Continuing Director” means, at any date, a member of the Company’s Board of Directors (i) who was a member of such board on the date of the Securities Purchase Agreement or (ii) who was nominated or elected by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Company’s Board of Directors was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or such lesser number comprising a majority of a nominating committee if authority for such nominations or elections has been delegated to a nominating committee whose authority and composition have been approved by at least a majority of the directors who were Continuing Directors at the time such committee was formed.

          “Default Interest Rate” means the lower of eighteen (18%) and the maximum rate permitted by applicable law or by the applicable rules or regulations of any governmental agency or of any stock exchange or other self-regulatory organization having jurisdiction over the Company or the trading of its securities.

          “Event of Default” means the occurrence of any of the following events:

                    (i) a Liquidation Event occurs or is publicly announced;

                    (ii) the Company fails to make any payment of principal or interest on this Note in full (including, without limitation, any Optional Redemption Price) as and when such payment is due, and such payment remains unpaid for two (2) Business Days after such due date;

                    (iii) other than a breach described in clause (ii) above, the Company or any Company Subsidiary breaches or provides notice of its intent to breach any material term or condition of this Note or any other Transaction Document (including, without limitation, an Exercise Default (as defined in the Warrants) and Registration Default (as defined in the Registration Rights Agreement)) (provided that a Registration Default shall not constitute an Event of Default if the Company has timely paid all Registration Default Payment Amounts (as defined in the Registration Rights Agreement) with respect to such Registration Default); and such breach continues for a period of five (5) Business Days following written notice thereof from the Holder;

                    (iv) any representation or warranty made by the Company or any Company Subsidiary in this Note or any other Transaction Document was inaccurate or misleading in any material respect as of the date such representation or warranty was made;

                    (v) a default occurs or is declared, or any amounts are accelerated, under or with respect to any instrument that evidences Debt of the Company or any Company Subsidiary in a principal amount exceeding $50,000; or

                    (vi) a material adverse change to (x) the business, operations, properties, financial condition, prospects or results of operations of the Company and the Company Subsidiaries taken as a whole, or (y) the Company’s cash balances or cash flows; in either case, since the Issue Date.

          “Interest” and “Interest Payment Date” have the respective meanings set forth in Section 2(a) of this Note.

          “Issue Date” means the date on which this Note is issued pursuant to the Securities Purchase Agreement.

          “Liquidation Event” means where (i) the Company or any Company Subsidiary shall make a general assignment for the benefit of creditors or consent to the appointment of a receiver, liquidator, custodian, or similar official of all or substantially all of its properties, or any such official is placed in control of such properties, or the Company or any Company Subsidiary shall commence any action or proceeding or take advantage of or file under any federal or state insolvency statute, including, without limitation, the United States Bankruptcy Code, seeking to have an order for relief entered with respect to it or seeking adjudication as a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, administration, a voluntary arrangement, or other relief with respect to it or its debts; or (ii) there shall be commenced against the Company or any Company Subsidiary any action or proceeding of the nature referred to in clause (i) above or seeking issuance of a warrant of attachment, execution, distraint, or similar process against all or any substantial part of its property, which results in the entry of an order for relief which remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there is initiated the dissolution or other winding up of the Company or any material Company Subsidiary, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy proceedings; or (iv) there is initiated any assignment for the benefit of creditors or any marshalling of the material assets or material liabilities of the Company or any Company Subsidiary.

          “Mandatory Redemption,” “Mandatory Redemption Date,” “Mandatory Redemption Notice” and “Mandatory Redemption Price” have the respective meanings set forth in Section 3(a) of this Note.

          “Maturity Date” has the meaning set forth in the preamble to this Note.

          “Optional Redemption,” “Optional Redemption Month,” “Optional Redemption Notice,” and “Optional Redemption Price” have the respective meanings set forth in Section 4(a) of this Note.

          “Scheduled Interest Payment Date” means June 1, 2007 and the first Business Day of each calendar month thereafter until the Maturity Date.

          “Warrants” means the warrants issued pursuant to the Securities Purchase Agreement.

          All definitions contained in this Note are equally applicable to the singular and plural forms of the terms defined. The words “hereof”, “herein” and “hereunder” and words of similar import refer to this Note as a whole and not to any particular provision of this Note.

          Any capitalized term used but not defined herein has the meaning specified in the Securities Purchase Agreement, as amended by the Additional Purchase Agreement.

2. PAYMENT OF PRINCIPAL AND INTEREST.

     (a) Scheduled Interest Payments. This Note shall bear interest on the unpaid principal amount hereof (“Interest”) at an annual rate equal to fifteen percent (15%), computed on the basis of a 360-day year and calculated using the actual number of days elapsed since the Issue Date or the date on which Interest was most recently paid, as the case may be, and if not timely paid as provided herein, compounded monthly. The Company shall pay accrued Interest (including default interest (if any)) in arrears (i) on each Scheduled Interest Payment Date, (ii) on the Maturity Date and (iii) on any date on which all or any portion of the principal amount of this Note is paid (each of the foregoing clauses (i), (ii) and (iii) being referred to herein as an “Interest Payment Date”).

     (b) Payment at Maturity. The outstanding principal amount of this Note plus all accrued and unpaid Interest (including default interest (if any)) thereon shall be paid in full on the Maturity Date at a redemption price equal to the sum of (i) one hundred fifteen percent (115%) of the unpaid principal amount of this Note outstanding on the Maturity Date plus (ii) the accrued and unpaid Interest (including default interest (if any)) thereon.

     (c) Default Interest. Any amount of principal, Interest or any other amount that is not paid as and when due in accordance with this Note shall bear interest until paid at the Default Interest Rate, compounded monthly.

     (d) All Payments Made in Cash. All payments on this Note shall be paid in cash by wire transfer of immediately available funds pursuant to the written wire transfer instructions provided or to be provided by the Holder to the Company.

3. REDEMPTION BY THE HOLDER.

     (a) Mandatory Redemption upon Event of Default or Change of Control. In the event that an Event of Default or a Change of Control occurs, the Holder shall have the right, upon written notice to the Company (a “Mandatory Redemption Notice”), to have all or any portion of the unpaid principal amount of this Note, plus all accrued and unpaid Interest (including default interest (if any)) thereon, redeemed by the Company (a “Mandatory Redemption”). The mandatory redemption price shall be hundred and forty percent (140%) of the sum of (A) the unpaid principal amount of this Note being redeemed plus (B) all accrued and unpaid Interest (including default interest) thereon (the “Mandatory Redemption Price”). The Mandatory Redemption Notice shall specify the effective date of such Mandatory Redemption (the “Mandatory Redemption Date”), which date must be at least two (2) Business Days following the Business Day on which the Mandatory Redemption Notice is delivered to the Company, and the amount of principal and interest (and other amounts, if any) to be redeemed.

     (b) Payment of the Mandatory Redemption Price; Return of Note. The Company shall pay the Mandatory Redemption Price to the Holder on the Mandatory Redemption Date. In the event that the Company redeems the entire remaining unpaid principal amount of this Note, and pays to the Holder in cash the Mandatory Redemption Price and all other amounts in connection therewith, the Holder shall return this Note to the Company for cancellation.

4. REDEMPTION BY THE COMPANY.

     (a) Redemption Prior to Maturity by the Company. From and after the Issue Date and prior to the Maturity Date, for as long as no Event of Default has occurred and is continuing, the Company at its option shall have the right to redeem all or any portion of the unpaid principal amount of this Note plus all accrued and unpaid Interest (including default interest (if any)) thereon in accordance with this Section 4 (an “Optional Redemption”). The Company shall be permitted to effectuate an Optional Redemption only on the first Business Day of a calendar month, commencing with June 1, 2007. The redemption price payable by the Company for an Optional Redemption shall be equal to the product of (x) the Applicable Factor (as defined below) corresponding to the calendar month on which such Optional Redemption is being made (the “Optional Redemption Month”) and (y) the unpaid principal amount of this Note being redeemed (the “Optional Redemption Price”). As used herein, the term “Applicable Factor” means:

Optional Redemption Month	Applicable Factor
June 2007		1.0250
July 2007		1.0250
August 2007		1.0250
September 2007		1.0250
October 2007		1.0250
November 2007		1.0250
December 2007		1.0750
January 2008		1.0875
February 2008		1.1000
March 2008		1.1125
April 2008		1.1250
May 2008		1.1375

In order to effect an Optional Redemption, the Company must deliver to the Holder written notice thereof (an “Optional Redemption Notice”) specifying the amount of principal to be redeemed and the Optional Redemption Month on which the Company is electing to effectuate such Optional Redemption, and such notice must be delivered to the Holder on or prior to the date that is five Business Days prior to the first Business Day of such Optional Redemption Month. In the event that the Company effects an Optional Redemption with respect to this Note, it must contemporaneously effect an Optional Redemption with respect to each other Note on a pro rata basis (taking into account the principal amount of each Note then outstanding). Notwithstanding the delivery by the Company of an Optional Redemption Notice, the right of the Company to exercise its redemption rights under this Section 4(a) shall be subordinate to and shall not limit in any way the right of the Holder to effect a Mandatory Redemption pursuant to Section 3(a).

     (b) Payment of the Optional Redemption Price; Return of Note. The Company shall pay the Optional Redemption Price to the Holder on the first Business Day of the Optional Redemption Month specified in the applicable Optional Redemption Notice. For the avoidance of doubt, the Company shall, in addition to the payment of the Optional Redemption Price, be obligated to pay the applicable Interest (including default interest (if any)) due on the date on which such Optional Redemption Price is also due in accordance with Section 2(a). In the event that the Company redeems the entire remaining unpaid principal amount of this Note, and pays to the Holder in cash the Optional Redemption Price, the Holder shall return this Note to the Company for cancellation.

5. MISCELLANEOUS.

     (a) Failure to Exercise Rights not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof. All rights and remedies of the Holder hereunder are cumulative and not exclusive of any rights or remedies otherwise available. In the event that the Company does not pay any amount under this Note when such amount becomes due, the Company shall bear all costs incurred by the Holder in collecting such amount, including without limitation reasonable legal fees and expenses.

     (b) Notices. Any notice, demand or request required or permitted to be given by the Company or the Holder pursuant to the terms of this Note shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows:

If to the Company:

Innuity, Inc.
8644 154th Avenue NE
Redmond, Washington 98052
Attn: John Wall
Tel: 425-479-9909
Fax: 425-278-1209

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

DLA Piper US LLP
701 Fifth Avenue, Suite 7000
Seattle, Washington 98104
Attn: Michael Hutchings
Tel: 206-839-4800
Fax: 206-839-4801

and if to the Holder, to such address for the Holder as shall appear on the signature page of the Securities Purchase Agreement executed by the Holder, or as shall be designated by the Holder in writing to the Company in accordance this Section 5(b).

     (c) Amendments. No amendment, modification or other change to this Note or waiver of any agreement or other obligation of the Company under this Note may be made or given unless such amendment, modification or waiver is set forth in writing and is signed by the Company and by the holders of a majority of the aggregate principal of the Notes then outstanding, it being understood that upon the satisfaction of the preceding conditions, this and each other Note (including any Note held by a holder thereof that did not execute the instrument specified in the preceding clause) shall be deemed to incorporate any amendment, modification, change or waiver effected thereby as of the effective date thereof. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

     (d) Transfer of Note. The Holder may sell, transfer or otherwise dispose of all or any part of this Note (including without limitation pursuant to a pledge) to any person or entity as long as such sale, transfer or disposition is made in accordance with the applicable provisions of the Securities Purchase Agreement. From and after the date of any such sale, transfer or disposition, the transferee hereof shall be deemed to be the holder of a Note in the principal amount acquired by such transferee, and the Company shall, as promptly as practicable and at the Company’s cost and expense, issue and deliver to such transferee a new Note identical in all respects to this Note, in the name of such transferee. The Company shall be entitled to treat the original Holder as the holder of this entire Note unless and until it receives written notice of the sale, transfer or disposition hereof.

     (e) Lost or Stolen Note. Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Note, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of the Note, if mutilated, the Company shall at the Company’s cost and expense execute and deliver to the Holder a new Note identical in all respects to this Note.

     (f) Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York.

     (g) Successors and Assigns. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors (whether by merger or otherwise) and permitted assigns of the Company and the Holder. The Company may not assign its rights or obligations under this Note except as specifically required or permitted pursuant to the terms hereof.

     (h) Usury. This Note is subject to the express condition that at no time shall the Company be obligated or required to pay interest hereunder at a rate which could subject the Holder to either civil or criminal liability as a result of being in excess of the maximum interest rate which the Company is permitted by applicable law to contract or agree to pay. If by the terms of this Note, the Company is at any time required or obligated to pay interest hereunder at a rate in excess of such maximum rate, the rate of interest under this Note shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be computed at such maximum rate and all prior

interest payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in reduction of the principal balance of this Note.

[Signature Page to Follow]

     IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by its duly authorized officer on the date first above written.

INNUITY, INC.

By:
	Name:
	Title:

EX-10.1

Exhibit 10.1

ADDITIONAL NOTE PURCHASE
AND GLOBAL AMENDMENT AGREEMENT

          ADDITIONAL NOTE PURCHASE AND GLOBAL AMENDMENT AGREEMENT (this “Agreement”), dated as of May 18, 2007, by and among INNUITY, INC., a Utah corporation (the “Company”), Vista.com, Inc., a Washington corporation (“Vista”), Jadeon, Inc., a Nevada corporation (“Jadeon” and, collectively with the Company and Vista, the “Company Entities”), and Imperium Master Fund, Ltd. (the “Investor”). Capitalized terms used in this Agreement and not otherwise defined have the respective meanings ascribed thereto in the Securities Purchase Agreement (as defined below).

     A. The Company and the Investor entered into that certain Securities Purchase Agreement, dated as of May 3, 2007 (the “Securities Purchase Agreement”), pursuant to which the Company sold to the Investor a 15% Senior Secured Note (the “First Note”) and a Warrant exercisable for shares of the Company’s common stock (the “Warrant”).

     B. The Company’s obligations under the Securities Purchase Agreement and the other Transaction Documents, including, without limitation, its obligation to make payments of principal and interest on the First Note, are guaranteed by Vista, Jadeon and the future direct and indirect subsidiaries of the Company (collectively, the “Company Subsidiaries”) pursuant to a Subsidiary Guarantee, dated as of May 3, 2007 (the “Subsidiary Guarantee”), and are secured by the assets of the Company and the Company Subsidiaries pursuant to the terms of a Security Agreement, dated as of May 3, 2007 (the “Security Agreement”, and together with the Guarantee, the “Security Documents”).

     C. Pursuant to Section 1.1(b) of the Securities Purchase Agreement, the Company wishes to issue and sell to the Investor, and the Investor wishes to purchase from the Company, upon the terms and subject to the conditions set forth in this Agreement, an additional 15% Senior Secured Note with terms substantially similar to the First Note and in the form attached hereto as Exhibit A (the “Additional Note”).

     In consideration of the mutual promises made herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

1. PURCHASE AND SALE OF ADDITIONAL NOTE.

     Upon the terms and subject to the satisfaction or waiver of the conditions set forth herein, the Company agrees to sell to the Investor, and the Investor agrees to purchase from the Company, an Additional Note with a principal amount equal to the amount set forth below the Investor’s name on the signature page hereof. The date on which the closing of such purchase and sale occurs (the “Second Closing”) is hereinafter referred to as the “Second Closing Date”. The Second Closing will be deemed to occur at the offices of Mazzeo Song LLP, 708 Third Avenue, 19th Floor, New York, New York 10017 when (A) this Agreement has been executed

and delivered by the Company and the Investor, (B) the Company has executed and delivered the Additional Note to the Investor, (C) each of the other conditions to the Second Closing described in this Agreement has been satisfied or waived as specified therein, and (D) payment by the Investor of an amount equal to the principal amount of the Additional Note has been made by wire transfer of immediately available funds to the Company’s account.

1. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.

     The Investor hereby represents and warrants to the Company and agrees with the Company that, as of the date hereof:

     1.1 Authorization; Enforceability. The Investor is duly and validly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization as set forth below the Investor’s name on the signature page hereof with the requisite corporate power and authority to purchase the Additional Note and to execute and deliver this Agreement. This Agreement constitute the Investor’s valid and legally binding obligation, enforceable in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws of general application relating to or affecting the enforcement of creditors’ rights generally and (ii) general principles of equity.

     1.2 No Conflicts. The execution and performance of this Agreement do not conflict in any material respect with any agreement to which the Investor is a party or is bound, any court order or judgment applicable to the Investor, or the constituent documents of the Investor.

     1.3 Certain Trading Activities. The Investor has not, in violation of the securities laws, directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Investor, engaged in any transactions in the securities of the Company since the time that the Investor was first contacted by the Company or Kaufman Bros., L.P. regarding the investment in the Company contemplated by this Agreement. The Investor covenants that neither it nor any Person acting on its behalf or pursuant to any understanding with it will engage in any transactions in the securities of the Company prior to the time that the transactions contemplated by this Agreement are publicly disclosed pursuant to Section 3.2.

2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY ENTITIES. Each of the Company Entities hereby represents and warrants to the Investor and agrees with the Investor that, as of the hereof:

     2.1 Organization, Good Standing and Qualification. Each of the Company Entities is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all requisite power and authority to carry on its business as now conducted. Each of the Company Entities is duly qualified to transact business and is in good standing in each jurisdiction in which it conducts business except where the failure so to qualify has not had or would not reasonably be expected to have a Material Adverse Effect.

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     2.2 Authorization; Consents. Each of the Company Entities has the requisite corporate power and authority to enter into and perform its obligations under this Agreement (and the Additional Note, in the case of the Company). All corporate action on the part of each of the Company Entities by its officers, directors and stockholders necessary for the authorization, execution and delivery of, and the performance by each of the Company Entities of its obligations under this Agreement (and the Additional Note, in the case of the Company) has been taken, and no further consent or authorization of any of the Company Entities, their boards of directors, stockholders, any Governmental Authority or any other Person is required (pursuant to any rule of the Principal Market or otherwise).

     2.3 Enforcement. This Agreement has been duly executed and delivered by each of the Company Entities, and at the Second Closing, the Company will have duly executed and delivered the Additional Note. This Agreement constitutes the valid and legally binding obligations of the Company Entities (and at the Second Closing, the Additional Note will constitute the valid and legally binding obligations of the Company), enforceable against the Company Entities in accordance with their respective terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other similar laws of general application relating to or affecting the enforcement of creditors’ rights generally and (ii) general principles of equity.

     2.4 Due Authorization; Valid Issuance. The Additional Note is duly authorized and, when issued, sold and delivered in accordance with the terms of this Agreement, will be duly and validly issued, free and clear of any Liens imposed by or through the Company.

     2.5 No Conflict. The execution, delivery and performance of this Agreement (and the Additional Note, in the case of the Company), and the consummation of the transactions contemplated hereby and thereby, will not result in any violation of any provisions of any of the Company Entities’ charter, bylaws or any other governing document or in a default under any provision of any instrument or contract to which any of the Company Entities is a party or by which they or any of their assets are bound, or in violation of any provision of any Governmental Requirement applicable to any of the Company Entities or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument or contract or an event which results in the creation of any Lien upon any assets of any of the Company Entities.

     2.6 Additional Representation. The representations and warranties of the Company Entities set forth in the Securities Purchase Agreement and in the other Transaction Documents are true and correct in all material respects as of the date hereof as if made on the date hereof (except that to the extent that any such representation or warranty relates to a particular date, in which case, such representation or warranty is true and correct in all material respects as of such particular date).

3. GLOBAL AMENDMENTS TO TRANSACTION DOCUMENTS; OTHER AGREEMENTS.

     3.1 Amendments to Transaction Documents. Each of the Transaction Documents, including, without limitation, the Securities Purchase Agreement, the First Note, the Warrant, the Registration Rights Agreement, the Subsidiary Guarantee and the Security Agreement, is hereby

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amended so that (i) references to “Notes” therein shall be deemed to include the Additional Notes, and (ii) references to “Transaction Documents” therein shall be deemed to include this Agreement and the Additional Notes.

     3.2 Filings and Disclosure Reports. The Company agrees with the Investor that the Company will, (i) on or prior to 8:30 a.m. (eastern time) on the second Business Day following the date hereof, issue a press release disclosing the material terms of this Agreement and the Additional Note and the transactions contemplated hereby and thereby, and (ii) on or prior to 5:00 p.m. (eastern time) on the fourth Business Day following the date hereof, file with the Commission a Current Report on Form 8-K disclosing the material terms of and including as exhibits this Agreement and the Additional Note and the transactions contemplated hereby and thereby; provided, however, that the Investor shall have a reasonable opportunity to review and comment on any such press release or Form 8-K prior to the issuance or filing thereof; and provided, further, that if the Company fails to issue a press release disclosing the material terms of this Agreement and the Additional Note within the time frames described herein, the Investor may issue a press release disclosing such information without any notice to or consent by the Company. Thereafter, the Company shall timely file any filings and notices required by the Commission or applicable law with respect to the transactions contemplated hereby.

     3.3 Use of Proceeds. The Company shall use the proceeds from the sale of the Additional Notes for general working capital purposes.

     3.4 Indemnification of the Investor. The Company will indemnify and hold the Investor and its directors, managers, officers, shareholders, members, partners, employees and agents (each, an “Investor Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Investor Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by any of the Company Entities in this Agreement or (b) any action instituted against the Investor, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of the Investor, with respect to any of the transactions contemplated by this Agreement or the Additional Note (unless such action is based upon a breach of the Investor’s representation, warranties or covenants under this Agreement or any agreements or understandings the Investor may have with any such stockholder or any violations by the Investor of state or federal securities laws or any conduct by the Investor which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Investor Party in respect of which indemnity may be sought pursuant to this Agreement, such Investor Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing. Any Investor Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Investor Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time following such Investor Party’s written request that it do so, to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such Investor Party. The Company will not be liable to any Investor Party under this Agreement (i) for any settlement by an Investor Party effected without the

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Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to such Investor Party’s wrongful actions or omissions, or gross negligence or to such Investor Party’s breach of any of the representations, warranties, covenants or agreements made by such Investor in this Agreement.

     3.5 [Reserved.]

4. CONDITIONS TO SECOND CLOSING.

     4.1 Conditions to the Investors’ Obligations at the Second Closing. The Investor’s obligations to effect the Second Closing, including without limitation its obligation to purchase the Additional Note at the Second Closing, are conditioned upon the fulfillment (or waiver by the Investor in its sole and absolute discretion) of each of the following events as of the Second Closing Date, and the Company shall use commercially reasonable efforts to cause each of such conditions to be satisfied:

4.1.1	the Company shall have delivered to the Investor written lock-up agreements of each the Key Employees listed on Schedule 4.2(f) to the Securities Purchase Agreement;
4.1.2	there shall have occurred no material adverse change in the Company’s consolidated business or financial condition since the date of the Company’s most recent financial statements contained in the Disclosure Documents;
4.1.3	there shall be no injunction, restraining order or decree of any nature of any court or Government Authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and the Additional Note;
4.1.4	the Company shall have delivered to the Investor an opinion of counsel for the Company, dated as of the Second Closing Date, in the form and substance reasonably satisfactory to the Investor; and
4.1.5	the Company shall have paid the expenses described in Section 6.9 of this Agreement.

     4.2 Conditions to Company’s Obligations at the Second Closing. The Company’s obligations to effect the Second Closing with the Investor are conditioned upon the fulfillment (or waiver by the Company in its sole and absolute discretion) of each of the following events as of the Second Closing Date:

4.2.1 the representations and warranties of the Investor set forth in this Agreement shall be true and correct in all material respects as of such

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	date as if made on such date (except that to the extent that any such representation or warranty relates to a particular date, such representation or warranty shall be true and correct in all material respects as of that date); and
4.2.2	there shall be no injunction, restraining order or decree of any nature of any court or Government Authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and by the Additional Note.

5 MISCELLANEOUS.

     5.1 Survival; Severability. The representations, warranties, covenants and indemnities made by the parties herein and in the Additional Notes shall survive the Second Closing notwithstanding any due diligence investigation made by or on behalf of the party seeking to rely thereon. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that in such case the parties shall negotiate in good faith to replace such provision with a new provision which is not illegal, unenforceable or void, as long as such new provision does not materially change the economic benefits of this Agreement to the parties.

     5.2 No Reliance. Each party acknowledges that (i) it has such knowledge in business and financial matters as to be fully capable of evaluating this Agreement, the Additional Note and the transactions contemplated hereby and thereby, (ii) it is not relying on any advice or representation of any other party in connection with entering into this Agreement, the Additional Note or such transactions (other than the representations made in this Agreement), (iii) it has not received from any other party any assurance or guarantee as to the merits (whether legal, regulatory, tax, financial or otherwise) of entering into this Agreement or the Additional Note or the performance of its obligations hereunder and thereunder, and (iv) it has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent that it has deemed necessary, and has entered into this Agreement and the Additional Note based on its own independent judgment and, if applicable, on the advice of such advisors, and not on any view (whether written or oral) expressed by any other party.

     5.3 Injunctive Relief. Each of the Company Entities and the Investor acknowledges and agrees that a breach by it of its obligations hereunder will cause irreparable harm to the other and that the remedy or remedies at law for any such breach will be inadequate and agrees, in the event of any such breach, in addition to all other available remedies, the non-breaching party shall be entitled to an injunction restraining any breach and requiring immediate and specific performance of such obligations without the necessity of showing economic loss or the posting of any bond.

     5.4 Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be governed by and construed under the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York. Each party hereby irrevocably submits

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to the exclusive jurisdiction of the state and federal courts sitting in the City and County of New York for the adjudication of any dispute hereunder or any other Transaction Document or in connection herewith or therewith or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

          (b) EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES AND AGREES THAT ANY DISPUTE OR CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT OR THE ADDITIONAL NOTE, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.4(b).

     5.5 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. An Investor may assign its rights and obligations hereunder in connection with any private sale or transfer of the Additional Note or any other Securities, in accordance with the terms hereof, the Additional Note and of the Securities Purchase Agreement, as long as, as a condition precedent to such transfer, the transferee executes an acknowledgment agreeing to be bound by the applicable provisions of this Agreement, in which case the term “Investor” shall be deemed to refer to such transferee as though such transferee were an original signatory hereto. No Company Entity may assign its rights or obligations under this Agreement.

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     5.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by facsimile transmission.

     5.7 Headings. The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

     5.8 Notices. Any notice, demand or request required or permitted to be given by the Company Entities or the Investor pursuant to the terms of this Agreement shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows:

If to the Company and/or any Company Entity:
Innuity, Inc.
8644 154th Avenue NE
Redmond, Washington 98052
Attn:	John Wall
Tel:	425-479-9909
Fax:	425-278-1209
with a copy (which shall not constitute notice) to:
DLA Piper US LLP
701 Fifth Avenue, Suite 7000
Seattle, Washington 98104
Attn:	Michael Hutchings
Tel:	206-839-4800
Fax:	206-839-4801

and if to the Investor, to such address for the Investor as shall appear on the signature page hereof executed by the Investor, or as shall be designated by the Investor in writing to the Company in accordance with this Section 5.8.

     5.9 Expenses. The Company and the Investor shall pay all costs and expenses that it incurs in connection with the negotiation, execution, delivery and performance of this Agreement or the Additional Note, provided, however, that that the Company shall, at the Second Closing, pay to Imperium Advisers, LLC (“Imperium”) an amount of $15,000 in immediately available funds as reimbursement for its out-of-pocket expenses (including without limitation legal fees and expenses) incurred or to be incurred by it in connection with its due diligence investigation of the Company and the negotiation, preparation, execution, delivery and performance of this Agreement and the

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Additional Note. At the Second Closing, the amount due for such fees and expenses may be netted out of the purchase price payable by the Investor for the Additional Note.

     5.10 Entire Agreement; Amendments. This Agreement, the Additional Note and the other Transaction Documents constitute the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties. No amendment, modification or other change to this Agreement or waiver of any agreement or other obligation of the parties under this Agreement may be made or given unless such amendment, modification or waiver is set forth in writing and is signed by the Company and (i) prior to the first date on which neither a First Note nor an Additional Note is outstanding, by the holders of a majority of the aggregate principal of the First Note and the Additional Note then outstanding and the holders of a majority of the aggregate number of the Warrant Shares into which the Warrants then outstanding are exercisable (without regard to any limitation on the exercise of the Warrants), and (ii) on and after the first date on which neither a First Note or an Additional Note is outstanding, by the holders of a majority of the aggregate number of the Warrant Shares into which the Warrants then outstanding are exercisable (without regard to any limitation on the exercise of the Warrants). Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

[Signature Pages to Follow]

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

INNUITY, INC.

By:
	Name:
	Title:

JADEON, INC.

By:
	Name:
	Title:

VISTA.COM, INC.

By:
	Name:
	Title:

IMPERIUM MASTER FUND, LTD.

By:	Imperium Advisers, LLC
	By:
		Name:
		Title:

Principal Amount of Note Purchased at Second Closing: $ 1,000,000

ADDRESS:

c/o Imperium Advisers, LLC
153 East 53^rd Street- 29^th Floor
New York, NY 10022
Attn: Maurice Hryshko, Esq.
Tel: (212) 433-1360
Fax: (212) 433-1361

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Innuity, Inc. Receives Second Financing Tranche from
Previous Agreement

Completed Due Diligence Encourages Imperium Master Fund, Ltd. To Issue Second Round of Financing

REDMOND, Wash. (May 24, 2007) — Innuity, Inc. (OTCBB: INNU), a Software as a Service (SaaS) company that designs, acquires and integrates applications to deliver affordable solutions to small businesses, has received the second $1.0 million tranche of the previously announced debt financing with Imperium Master Fund, Ltd., through which Innuity raised an aggregate of $2.0 million through a private placement of 15% senior secured notes and warrants to purchase up to 1,128,000 shares of its common stock at an exercise price of $0.01 per share. The notes bear interest at 15% per annum, payable monthly, and are due May 3, 2008. The warrants are exercisable for a period of three years.

Under terms of the Securities Purchase Agreement, Imperium’s obligation to make the second $1.0 million investment was subject to certain conditions, including the completion of Imperium’s additional due diligence.

“We are pleased to have received this second round of funds from Imperium” said John Wall, Innuity’s chairman and chief executive officer. “In addition to providing us with necessary capital to improve our balance sheet and financial position, this additional capital will allow us to continue to move forward with our core business initiatives that are aimed at both customer acquisition and growing revenue per customer.”

In connection with the financing, Innuity agreed to file a registration statement on Form SB-2 with the Securities and Exchange Commission covering the resale of the shares of common stock issuable upon exercise of the warrants. Kaufman Bros., L.P. acted as the exclusive financial advisor to Innuity for this financing. For additional information, please refer to Innuity’s current report on Form 8-K with respect to this transaction.

About Innuity
Headquartered in Redmond, WA, Innuity is a Software as a Service (SaaS) company that designs, acquires and integrates applications to deliver solutions for small business. Innuity’s Internet technology is based on an affordable, on-demand model that allows small businesses to simply interact with customers, business partners and vendors and efficiently manage their businesses. Innuity delivers its on-demand applications through its Internet technology platform, Innuity Velocity™. The Velocity technology platform enables use-based pricing, provides the opportunity to choose applications individually or as an integrated suite and ensures minimum start-up costs and maintenance. For more information on Innuity, go to www.innuity.com.

Forward-Looking Statements
This release contains information about management’s view of Innuity’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions

under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of a variety of factors, including, but not limited to, risks and uncertainties associated with our ability to develop or offer additional internet technology applications and solutions in a timely and cost-effective manner. If we are unable to develop, license, acquire or otherwise offer through arrangements with third parties the additional services that our customers desire, or if any of our existing or future relationships with these third parties were to be terminated, we could lose our ability to provide key internet technology solutions at cost-effective prices to our customers, which could hinder our ability to introduce new products and services and could cause our revenues to decline. Additional risks and uncertainties include our financial condition and those other risk factors described in our quarterly reports on Form 10-QSB, our annual report on Form 10-KSB, and other documents we file periodically with the Securities and Exchange Commission.

Contacts:
Jordan Silverstein or Christine Berni
The Investor Relations Group
212-825-3120 (office)
jsilverstein@investorrelationsgroup.com
cberni@investorrelationsgroup.com

Shivonne Byrne
Innuity, Inc.
425-968-0306
shivonne@innuity.com