Unassociated Document


    


       

      AGREEMENT
        AND PLANS OF MERGERS

       

      dated

       

      March
        15,
        2006

       

       

      by
        and
        among

       

      Accoona
        Corp., a Delaware corporation,

       

      as
        the
        Parent,

       

      SN
        Acquisition Corp., a Delaware corporation,

       

      ZS
        Acquisition Corp., a Delaware corporation,

       

      as
        the
        Merger Subs,

       

      Skynet
        Communications Corp.

      a
        New
        York corporation,

      


      Zylonet
        Systems Inc.

      a
        New
        York corporation,

      


      as
        the
        Companies,

      


      the
        Shareholders named herein

      


      and

      


      Allen
        Benzaken,

      as
        Representative

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      TABLE
        OF CONTENTS


       

      
        
          	
                   

                	
                   

                	
                  Page 

                
	 	 	 
	
                  ARTICLE
                    I     DEFINITIONS

                	 	
                  1

                
	 	
                  1.1.

                	 	
                  Definitions

                	
                       

                	
                  1

                
	 	 	 	 
	
                  ARTICLE
                    II     THE CLOSINGS

                	 	
                  8

                
	 	 	 	 	 	 
	
                    

                	
                  2.1.

                	
                       

                	
                  Effective
                    Time of the Mergers

                	 	
                  8

                
	 	
                  2.2.

                	 	
                  Closings
                    .

                	 	
                  9

                
	 	
                  2.3.

                	 	
                  Effects
                    of the Mergers.

                	 	
                  9

                
	 	
                  2.4.

                	 	
                  Effect
                    on Capital Stock

                	 	
                  10

                
	 	
                  2.5.

                	 	
                  Computation
                    of Merger Consideration

                	 	
                  11

                
	 	
                  2.6.

                	 	
                  Procedure
                    to Establish Net Profits, Indebtedness, Tangible Personal Property
                    and
                    Minimum Required EBITDA.

                	 	
                  14

                
	 	 	 	 
	
                  ARTICLE
                    III     REPRESENTATIONS AND WARRANTIES OF THE
                    COMPANIES AND SHAREHOLDERS

                	 	
                  16

                
	 	 	 	 	 	 
	 	
                  3.1.

                	 	
                  Corporate
                    Existence and Power

                	 	
                  16

                
	 	
                  3.2.

                	 	
                  Corporate
                    Authorization.

                	 	
                  16

                
	 	
                  3.3.

                	 	
                  Charter
                    Documents; Legality

                	 	
                  17

                
	 	
                  3.4.

                	 	
                  Capitalization
                    and Ownership of the Companies

                	 	
                  17

                
	 	
                  3.5.

                	 	
                  Subsidiaries

                	 	
                  17

                
	 	
                  3.6.

                	 	
                  Affiliates

                	 	
                  17

                
	 	
                  3.7.

                	 	
                  Assumed
                    Names

                	 	
                  18

                
	 	
                  3.8.

                	 	
                  Governmental
                    Authorization

                	 	
                  18

                
	 	
                  3.9.

                	 	
                  Consents

                	 	
                  18

                
	 	
                  3.10.

                	 	
                  Financial
                    Statements.

                	 	
                  18

                
	 	
                  3.11.

                	 	
                  Accounts
                    Receivable

                	 	
                  20

                
	 	
                  3.12.

                	 	
                  Books
                    and Records.

                	 	
                  20

                
	 	
                  3.13.

                	 	
                  Absence
                    of Certain Changes.

                	 	
                  20

                
	 	
                  3.14.

                	 	
                  Real
                    Property.

                	 	
                  21

                
	 	
                  3.15.

                	 	
                  Tangible
                    Personal Property.

                	 	
                  21

                
	 	
                  3.16.

                	 	
                  Intellectual
                    Property.

                	 	
                  22

                
	 	
                  3.17.

                	 	
                  Inventory.

                	 	
                  22

                
	 	
                  3.18.

                	 	
                  Suppliers
                    and Business Relationships.

                	 	
                  23

                
	 	
                  3.19.

                	 	
                  Litigation

                	 	
                  24

                
	 	
                  3.20.

                	 	
                  Contracts.

                	 	
                  24

                
	 	
                  3.21.

                	 	
                  Licenses
                    and Permits

                	 	
                  26

                
	 	
                  3.22.

                	 	
                  Compliance
                    with Laws

                	 	
                  26

                
	 	
                  3.23.

                	 	
                  Pre-payments

                	 	
                  26

                
	 	
                  3.24.

                	 	
                  Employees

                	 	
                  26

                
	 	
                  3.25.

                	 	
                  Compliance
                    with Labor Laws and Agreements

                	 	
                  26

                
	 	
                  3.26.

                	 	
                  Pension
                    and Benefit Plans

                	 	
                  27

                
	 	
                  3.27.

                	 	
                  Employment
                    Matters

                	 	
                  27

                
	 	
                  3.28.

                	 	
                  Tax
                    Matters

                	 	
                  28

                
	 	
                  3.29.

                	 	
                  Finders’
                    Fees

                	 	
                  28

                
	 	
                  3.30.

                	 	
                  Investment
                    Representations.

                	 	
                  29

                


        

         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                   

                	
                   

                	
                   

                	
                   

                	
                  Page

                
	 	 	 	 	 	 
	 	
                  3.31.

                	 	
                  Software.

                	 	
                  33

                
	 	
                  3.32.

                	 	
                  Business
                    Operations; Servers.

                	 	
                  34

                
	 	
                  3.33.

                	 	
                  Powers
                    of Attorney and Suretyships

                	 	
                  35

                
	 	
                  3.34.

                	 	
                  Other
                    Information

                	 	
                  35

                
	 	 	 	 
	
                  ARTICLE
                    IV     REPRESENTATIONS AND WARRANTIES OF
                    PARENT

                	 	
                  35

                
	 	 	 	 	 	 
	 	
                  4.1.

                	 	
                  Due
                    Incorporation

                	 	
                  35

                
	 	
                  4.2.

                	 	
                  Corporate
                    Authorization

                	 	
                  35

                
	 	
                  4.3.

                	 	
                  Governmental
                    Authorization

                	 	
                  36

                
	 	
                  4.4.

                	 	
                  No
                    Violation

                	 	
                  36

                
	 	
                  4.5.

                	 	
                  Charter
                    Documents

                	 	
                  36

                
	 	
                  4.6.

                	 	
                  Consents

                	 	
                  36

                
	 	
                  4.7.

                	 	
                  Issuance
                    of Parent Class C Common Stock

                	 	
                  37

                
	 	
                  4.8.

                	 	
                  Finders’
                    Fees

                	 	
                  37

                
	 	
                  4.9.

                	 	
                  Other
                    Information

                	 	
                  37

                
	 	 	 	 
	
                  ARTICLE
                    V     COVENANTS OF THE COMPANIES AND THE
                    SHAREHOLDERS PENDING CLOSING

                	 	
                  37

                
	 	 	 	 	 	 
	 	
                  5.1.

                	 	
                  Conduct
                    of the Business

                	 	
                  37

                
	 	
                  5.2.

                	 	
                  Access
                    to Information.

                	 	
                  40

                
	 	
                  5.3.

                	 	
                  Notices
                    of Certain Events

                	 	
                  40

                
	 	 	 	 
	
                  ARTICLE VI     COVENANTS
                    OF THE COMPANIES AND THE SHAREHOLDERS

                	 	
                  40

                
	 	 	 	 	 	 
	 	
                  6.1.

                	 	
                  Confidentiality

                	 	
                  40

                
	 	
                  6.2.

                	 	
                  Conduct
                    of the Business

                	 	
                  41

                
	 	
                  6.3.

                	 	
                  Exclusivity

                	 	
                  42

                
	 	
                  6.4.

                	 	
                  Reporting
                    and Compliance With Law

                	 	
                  42

                
	 	
                  6.5.

                	 	
                  Injunctive
                    Relief

                	 	
                  42

                
	 	
                  6.6.

                	 	
                  Covenants
                    with respect to Parent Class C Common Stock.

                	 	
                  43

                
	 	 	 	 
	
                  ARTICLE
                    VII     COVENANTS OF ALL PARTIES
                    HERETO

                	 	
                  45

                
	 	 	 	 	 	 
	 	
                  7.1.

                	 	
                  Best
                    Efforts; Further Assurances

                	 	
                  45

                
	 	
                  7.2.

                	 	
                  Confidentiality
                    of Transaction

                	 	
                  45

                
	 	
                  7.3.

                	 	
                  Best
                    Efforts to Obtain Consents

                	 	
                  45

                
	 	
                  7.4.

                	 	
                  Tax
                    Matters.

                	 	
                  46

                
	 	 	 	 
	
                  ARTICLE
                    VIII     CONDITIONS TO CLOSING

                	 	
                  47

                
	 	 	 	 	 	 
	 	
                  8.1.

                	 	
                  Condition
                    to the Obligations of Parent, Merger Subs and the
                    Companies

                	 	
                  47

                
	 	
                  8.2.

                	 	
                  Conditions
                    to Obligations of Parent and Merger Subs

                	 	
                  48

                
	 	
                  8.3.

                	 	
                  Conditions
                    to Obligations of Companies

                	 	
                  50

                


        

         

        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

        

         

        
          	 	 	 	
                   Page

                
	 	 	 	 
	
                  ARTICLE
                    IX     RELIANCE ON REPRESENTATIONS AND
                    WARRANTIES

                	 	
                  51

                
	 	 	 	 	 	 
	 	
                  9.1.

                	 	
                  Reliance
                    on Representations and Warranties of each Company and the
                    Shareholders

                	 	
                  51

                
	 	
                  9.2.

                	 	
                  Reliance
                    on Representations and Warranties of Parent

                	 	
                  51

                
	 	 	 	 
	
                  ARTICLE
                    X     INDEMNIFICATION

                	 	
                  52

                
	 	 	 	 	 	 
	 	
                  10.1.

                	 	
                  Indemnification
                    of Parent, Merger Subs and Surviving Corporations.

                	 	
                  52

                
	 	
                  10.2.

                	 	
                  Indemnification
                    of Shareholders

                	 	
                  53

                
	 	
                  10.3.

                	 	
                  Procedure

                	 	
                  53

                
	 	
                  10.4.

                	 	
                  Periodic
                    Payments

                	 	
                  55

                
	 	
                  10.5.

                	 	
                  Right
                    of Set Off

                	 	
                  55

                
	 	
                  10.6.

                	 	
                  Payment
                    of Indemnification by Shareholders

                	 	
                  55

                
	 	
                  10.7.

                	 	
                  Insurance

                	 	
                  56

                
	 	
                  10.8.

                	 	
                  Survival
                    of Indemnification Rights

                	 	
                  56

                
	 	 	 	 
	
                  ARTICLE
                    XI     DISPUTE RESOLUTION

                	 	
                  56

                
	 	 	 	 	 	 
	 	
                  11.1.

                	 	
                  Arbitration.

                	 	
                  56

                
	 	
                  11.2.

                	 	
                  Waiver
                    of Jury Trial; Exemplary Damages

                	 	
                  58

                
	 	
                  11.3.

                	 	
                  Attorneys'
                    Fees

                	 	
                  58

                
	 	 	 	 
	
                  ARTICLE
                    XII     TERMINATION

                	 	
                  58

                
	 	 	 	 	 	 
	 	
                  12.1.

                	 	
                  Termination
                    Without Default

                	 	
                  58

                
	 	
                  12.2.

                	 	
                  Termination
                    Upon Default.

                	 	
                  58

                
	 	
                  12.3.

                	 	
                  Survival

                	 	
                  59

                
	 	 	 	 
	
                  ARTICLE
                    XIII     MISCELLANEOUS

                	 	
                  59

                
	 	 	 	 	 	 
	 	
                  13.1.

                	 	
                  Notices

                	 	
                  59

                
	 	
                  13.2.

                	 	
                  Amendments;
                    No Waivers.

                	 	
                  60

                
	 	
                  13.3.

                	 	
                  Ambiguities

                	 	
                  60

                
	 	
                  13.4.

                	 	
                  Publicity

                	 	
                  60

                
	 	
                  13.5.

                	 	
                  Expenses

                	 	
                  60

                
	 	
                  13.6.

                	 	
                  Successors
                    and Assigns

                	 	
                  61

                
	 	
                  13.7.

                	 	
                  Governing
                    Law

                	 	
                  61

                
	 	
                  13.8.

                	 	
                  Counterparts;
                    Effectiveness

                	 	
                  61

                
	 	
                  13.9.

                	 	
                  Entire
                    Agreement

                	 	
                  61

                
	 	
                  13.10.

                	 	
                  Severability

                	 	
                  61

                
	 	
                  13.11.

                	 	
                  Captions

                	 	
                  61

                
	 	
                  13.12.

                	 	
                  Construction.

                	 	
                  61

                
	 	
                  13.13.

                	 	
                  Shareholders’
                    Representative.

                	 	
                  62

                


        

      

      
 

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

     

     

    AGREEMENT
      AND PLANS OF MERGERS,
      dated
      as of March 15, 2006 (this “Agreement”), made by and among Accoona Corp., a
      Delaware corporation (“Parent”), SN Acquisition Corp., a Delaware corporation
      and wholly owned subsidiary of Parent (“SN Merger Sub”), ZS Acquisition Corp., a
      Delaware corporation and wholly-owned subsidiary of Parent (“ZS Merger Sub” and
      together with SN Merger Sub, “Merger Subs” and each individually a “Merger
      Sub”), Skynet Communications Corp., a New York corporation (“Skynet”), Zylonet
      Systems Inc., a New Jersey corporation (“Zylonet” and together with Skynet, the
“Companies”, and each individually a “Company”), the persons listed on
Schedule
      I
      hereto
      (each individually a “Shareholder” and collectively, the “Shareholders”) and
      Allen Benzaken (“Benzaken”), in his capacity as Representative (as hereinafter
      defined). Each of Parent, Merger Subs, the Companies and the Shareholders may
      be
      individually referred to herein as a “Party”, or collectively, the
“Parties”.

     

    ARTICLE
      I

     

    DEFINITIONS

     

    1.1. Definitions.
      The
      following terms, as used herein, have the following meanings:

     

      “Accounts
      Receivable” has the meaning set forth in Section 3.11.

     

      “Action”
      means any legal action, suit, investigation, hearing or proceeding, including
      any audit for taxes or otherwise.

     

      “Additional
      Agreements” means each of the Employment Agreements and Restrictive Covenants
      Agreements.

     

      “Adjusted
      Tangible Personal Property” means all Tangible Personal Property plus any cash
      and cash equivalents, including any marketable securities (equal to the closing
      price on the third business day prior to the Closing Date) (except for common
      stock of Dynamic Marketing, Inc.), prepaid expenses, deposits and accounts
      receivable (including credit card receivables but excluding any loans payable
      and net of a reserve for doubtful accounts of 1%).

     

      “Affiliate”
      means, with respect to any Person, any Person directly or indirectly
      controlling, controlled by, or under common control with such other Person.
      With
      respect to any natural person, the term Affiliate shall also include any member
      of said person's immediate family, any family limited partnership for said
      person and any trust, voting or otherwise, of which said person is a trustee
      or
      of which said person or any of said person's immediate family is a beneficiary.
      For avoidance of any doubt (i) with respect to all periods prior to the
      Closing, each Shareholder and Buyer's Edge is an Affiliate of the Companies,
      and
      (ii) with respect to all periods subsequent to the Closing, Parent is an
      Affiliate of the Companies.

     

      “Arbitrator”
      has the meaning set forth in Section 11.1.

     

      “Asset
      Purchase Agreement” means the Asset Purchase Agreement, dated as of the date
      hereof by an among, Parent, BE Acquisition Corp., Buyer's Edge and the
      Members.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

      “Authority”
      shall mean any governmental, regulatory or administrative body, agency or
      authority, any court or judicial authority, any arbitrator, or any public,
      private or industry regulatory authority, whether international, national,
      Federal, state, or local.

     

      “Books
      and Records” means all books and records, ledgers, employee records, customer
      lists, files, correspondence, and other records of every kind (whether written,
      electronic, or otherwise embodied) owned or used by a Company or in which a
      Company's assets, business, or transactions are otherwise
      reflected.

     

      “Business”
      means all services engaged in by the Companies including, internet retail sales
      and related services.

     

      “Business
      Day” means any day other than a Saturday, Sunday or a legal holiday on which
      commercial banking institutions in New York are not open for
      business.

     

      “Buyers
      Edge” means Internet Media Group, LLC, a New York limited liability
      company.

     

      “Charter
      Documents” has the meaning set forth in Section 3.3.

     

      “Closings”
      has the meaning set forth in Section 2.2.

     

      “Closing
      Date” has the meaning set forth in Section 2.2.

     

      “Code”
      means the Internal Revenue Code of 1986, as amended.

     

      “Collection
      Period” has the meaning set forth in Section 2.5(a).

     

      “Companies”
      has the meaning set forth in the Preamble.

     

      “Company”
      has the meaning set forth in the Preamble.

     

      “Company
      Consents” has the meaning set forth in Section 3.9.

     

      “Contingent
      Payment” has the meaning set forth in Section 2.5(c).

     

      “Contingent
      Payment Period” has the meaning set forth in Section 2.3.

     

      “Contracts”
      means Real Property Leases and all the other contracts, agreements, leases
      (including equipment leases and capital leases), licenses, commitments, client
      contracts, sales and purchase orders and other instruments to which each
      respective Company is a party or by which any of any Company's assets are bound
      and all rights and benefits thereunder, including all rights and benefits
      thereunder with respect to all cash and other property of third parties under
      such Company's dominion or control.

     

      “Constituent
      Corporations” has the meaning set forth in Section 2.3(a).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

      “EBITDA”
      means earnings with respect to any Person before interest income and expense,
      income Taxes (whether federal, state or local, and domestic or foreign),
      depreciation and amortization, and in each case shall be determined pursuant
      to
      GAAP on a consolidated basis (but after subtracting any minority interests)
      consistent with Parent's accounting practices; provided,
      that in
      making such determinations advertising costs shall be expensed as incurred
      and
      neither the proceeds from nor any dividends or refunds with respect to, nor
      any
      increases in the cash surrender value of, any life insurance policy under which
      such Person, or any subsidiary thereof, is the named beneficiary or otherwise
      entitled to recovery, shall be included as income, and the premium expense
      related to any such life insurance policy shall not be treated as an expense;
      provided further that the amount of earnings for the relevant period shall
      only
      be from the sale of electronic products and other goods through the Websites
      and
      telephone orders, and, in the case of Skynet, its retail store, amounts paid
      for
      services related to the foregoing, including for coverage for repairs or
      warranties, special handling charges, restocking fees, supplier rebates, spiffs
      and co-op and marketing funds from suppliers, payments for advertising received
      by such Person, net of all factoring charges and commissions, other rebates,
      discounts, refunds, credits, cancellations and similar items and shall not
      include: any amounts until the cash with respect thereto is received, or, in
      the
      case of checks or money orders, until such amounts have cleared (provided such
      cash is collected within, or within 30 days after the termination of, the
      applicable earnings period); reserves released by banks or credit card
      companies; commissions, fees or similar payments made by banks or credit card
      companies, whether for signing up customers or otherwise; cancellation fees;
      any
      sales until the expiration date for the return period has passed and no notice
      of return had been given (provided once such return period has passed without
      notice of return then the sale will be counted as of the date of the sale,
      rather than the date of the expiration of the return period); and sales tax
      and
      any other pass through items and shall be after subtracting all costs and
      expenses paid or payable by the Companies with respect to the transactions
      contemplated by this Agreement.

     

      “Effective
      Time” has the meaning set forth in Section 2.1.

     

      “Employment
      Agreements” has the meaning set forth in Section 8.2(1).

     

      “ERISA”
      means the Employment Retirement Income Security Act of 1974, as amended from
      time to time.

     

      “Exchange
      Act” means the Securities Exchange Act of 1934, as amended.

     

      “Excluded
      Persons” has the meaning set forth in Section 6.5.

     

      “Financial
      Statements” has the meaning set forth in Section 3.10.

     

      “GAAP”
      means U.S. generally accepted accounting principles.

     

      “GCL”
      means the General Corporation Law of the State of Delaware, as
      amended.

     

      “Holdback
      Amount” has the meaning set forth in Section 2.3(i).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

      “Indebtedness”
      means with respect to any Person, (a) all obligations of such Person for
      borrowed money, or with respect to deposits or advances of any kind (including
      amounts by reason of overdrafts and amounts owed by reason of letter of credit
      reimbursement agreements) including with respect thereto, all interests, fees
      and costs, (b) all obligations of such Person evidenced by bonds, debentures,
      notes or similar instruments, (c) all obligations of such Person under
      conditional sale or other title retention agreements relating to property
      purchased by such Person, (d) all obligations of such Person issued or assumed
      as the deferred purchase price of property or services (other than accounts
      payable to creditors for goods and services incurred in the ordinary course
      of
      business), (e) all Indebtedness of others secured by (or for which the holder
      of
      such Indebtedness has an existing right, contingent or otherwise, to be secured
      by) any lien or security interest on property owned or acquired by such Person,
      whether or not the obligations secured thereby have been assumed, (f) all
      obligations of such Person under leases required to be accounted for as capital
      leases under GAAP, and (g) all guarantees by such Person other than intercompany
      guarantees.

     

      “Indemnification
      Notice” has the meaning set forth in Section 10.3.

     

      “Indemnified
      Parties” has the meaning set forth in Section 10.3.

     

      “Indemnifying
      Party” has the meaning set forth in Section 10.3.

     

      “Initial
      Payment” is the aggregate of the consideration paid to the Shareholders,
      pursuant to Sections 2.5(a)(i) and (ii) and (b)(i) and (ii).

     

      “Initial
      Public Offering” means the registration of any class of Parent’s securities with
      the SEC under the Act or the Securities Exchange Act of 1934, as
      amended.

     

      “Intellectual
      Property Right” means any trademark, service mark, registration thereof or
      application for registration therefor, trade name, license, invention, patent,
      patent application, trade secret, trade dress, know-how, copyright,
      copyrightable materials, copyright registration, application for copyright
      registration, software programs, data bases, the “Skynet” or “Zylonet” name and
      all derivations thereof, u.r.l.s, and any other type of proprietary intellectual
      property right, and all embodiments and fixations thereof and related
      documentation, registrations and franchises and all additions, improvements
      and
      accessions thereto, in each case which is owned or licensed or filed by the
      respective Company or used or held for use in the Business, whether registered
      or unregistered or domestic or foreign.

     

      “Interim
      Balance Sheets” has the meaning set forth in Section 3.10.

     

      “Interim
      Parent Balance Sheet” has the meaning set forth in Section 4.8.

     

      “Labor
      Agreements” has the meaning set forth in Section 3.26(a).

     

      “Law”
      means any domestic or foreign Federal, state, municipality or local law,
      statute, ordinance, code, rule or regulation or common law.

     

      “Lien”
      means, with respect to any asset, any mortgage, lien, pledge, charge, security
      interest or encumbrance of any kind in respect of such asset, including any
      agreement to give any of the foregoing and any conditional sale and including
      any voting agreement or proxy.

     

      “Loss(es)”
      has the meaning set forth in Section 10.1.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

      “Material
      Adverse Change” means a material adverse change in the business, assets,
      condition (financial or otherwise), liabilities, and results of operations
      or
      prospects of the Business individually or as a whole; provided,
      however,
      without
      prejudicing whether any other matter qualifies as a Material Adverse Change,
      any
      matter involving a loss or payment in excess of $200,000 shall constitute a
      Material Adverse Change, per se. 

     

      “Material
      Adverse Effect” means a material adverse effect on the business, assets,
      condition (financial or otherwise), liabilities, results of operations or
      prospects of the Business individually or as a whole; provided, however,
      without
      prejudicing whether any other matter qualifies as a Material Adverse Effect,
      any
      matter involving a loss or payment in excess of $200,000 shall constitute a
      Material Adverse Effect, per se.

     

      “Members”
      means each of the holders of membership interests of Buyer's Edge.

     

      “Merger”
      has the meaning set forth in Section 2.3(a).

     

      “Merger
      Consideration” means the aggregate of the SN Merger Consideration and the ZS
      Merger Consideration.

     

      “Minimum
      Required EBITDA” means the cumulative EBITDA of the Companies plus Buyer's Edge,
      taken as a whole, for the period of October 1, 2005 through the Closing
      Date.

     

      “Net
      Profit” means, with respect to the Surviving Corporations, on a combined basis
      and after eliminating all intercompany transactions between them, and in each
      case determined pursuant to GAAP on a consolidated basis consistent with
      Parent's practice, revenues minus, without duplication, (i) all operating
      expenses, (ii) interest expense, fees and other charges on all borrowings,
      advances and intercompany balances, (iii) salaries, bonuses, amounts payable
      or
      to be contributed under all employee plans and other compensation and benefits,
      including commissions, finder's fees, referral fees and other incentive payments
      paid to employees and consultants, (iv) rent and other occupancy expenses and
      general administrative costs, (v) depreciation and amortization, (vi) Taxes
      (other than Taxes payable with respect to the net income of the Business whether
      federal, state or local, and domestic or foreign), (vii) charges for any
      services performed by Parent or any of its Affiliates, but only to the extent
      consented to by the Representative, (viii) any write-offs, writedowns, reserves
      and adjustments and (ix) minus all minority interests; provided,
      that in
      making such determinations the proceeds from any increases in the cash surrender
      value of, any life insurance policy under which the Surviving Corporations,
      or
      any subsidiary thereof, is the named beneficiary or otherwise entitled to
      recovery, shall be included as income, and the premium expense related to any
      such life insurance policy shall not be treated as an expense; provided,
      further,
      that
      the amount of earnings for the relevant period shall only be from the sale
      of
      electronic products and other goods through the Websites and telephone orders,
      payments for advertising received by the Surviving Corporations, and, in the
      case of SN Merger Sub, Skynet's retail store, amounts paid for any services
      related to the foregoing, including for coverage for repairs or warranties,
      special handling charges, restocking fees, supplier rebates, spiffs and co-op
      and marketing funds from suppliers, net of all factoring charges and
      commissions, other rebates, discounts, refunds, credits, cancellations and
      similar items and shall not include: any amounts until the cash with respect
      thereto is received, or, in the case of checks or money orders, until such
      amounts have cleared (provided such cash is collected within, or within 30
      days
      after, the termination of, the applicable earnings period); reserves released
      by
      banks or credit card companies; commissions, fees or similar payments made
      by
      banks or credit card companies, whether for signing up customers or otherwise;
      cancellation fees; any sales until the expiration date for the return period
      has
      passed and no notice of return had been given (provided once such return period
      has passed without notice of return then the sale will be counted as of the
      date
      of the sale, rather than the date of the expiration of the return period);
      and
      sales tax and any other pass through items and shall be after subtracting all
      costs and expenses paid or payable by the Companies with respect to the
      transactions contemplated by this Agreement; it being understood that no
      accounts receivable as of the Closing Date (including the payment thereof)
      are
      taken into account in calculating Net Profit. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

      “Orders”
      means any decree, order, judgment, writ, award, injunction, rule or consent
      of
      or by an Authority.

     

      “Outside
      Closing Date” has the meaning set forth in Section 12.1. 

     

      “Parent
      Class C Common Stock” means the Class C Common Stock, $.0001 par value per
      share, of Parent.

     

      “Parent
      Consents” means the consents, waivers and amendments to be obtained by Parent
      and its Affiliates with respect to the execution, delivery and performance
      by
      Parent and its Affiliates of this Agreement and all related matters between
      Parent and its Affiliates and the Shareholders.

     

      “Parent
      Financial Statements” has the meaning set forth in Section 4.8.

     

      “Permits”
      has the meaning set forth in Section 3.20.

     

      “Person”
      means an individual, a corporation, a partnership, a limited liability company,
      an association, a trust or other entity or organization, including a government,
      domestic or foreign, or political subdivision thereof, the Companies or an
      agency or instrumentality thereof.

     

      “Purchaser
      Indemnitees” has the meaning set forth in Section 10.1.

     

      “Publicly
      Traded” has the meaning set forth in Section 6.6(f).

     

      “Real
      Property” means, collectively, all real properties and interests therein
      (including the right to use), together with all buildings, fixtures, trade
      fixtures, plant and other improvements located thereon or attached thereto;
      all
      rights arising out of use thereof (including air, water, oil and mineral
      rights); and all subleases, franchises, licenses, permits, easements and
      rights-of-way which are appurtenant thereto.

     

      “Real
      Property Leases” means the leases with respect to each Company's office, retail
      and warehouse space at 481/485 Kings Highway, Brooklyn, New York 11223, 1530
      MacDonald Avenue, Brooklyn, New York and 1907 Highway 35, Oakhurst, New Jersey
      07750, together with all fixtures and improvements erected on the premises
      leased thereby. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

      “Receiving
      Persons” has the meaning set forth in Section 6.6(f)(ii).

     

      “Representative”
      means Benzaken, as appointed pursuant to Section 13.13., by the Shareholders
      as
      their true and lawful agent and attorney-in-fact.

     

      “Restrictive
      Covenants” has the meaning set forth in Section 6.7.

     

      “Restrictive
      Covenants Agreements” has the meaning set forth in Section 8.1(k).

     

      “Rights
      Shares” has the meaning set forth in Section 6.6(f)(ii).

     

      “SEC”
      means the Securities and Exchange Commission.

     

      “Securities
      Act” means the Securities Act of 1933, as amended.

     

      “Shares”
      means the issued and outstanding shares of capital stock of the
      Companies.

     

      “Shareholder”
      and “Shareholders” have the respective meanings set forth in the
      Preamble.

     

      “Shareholder
      Indemnitees” has the meaning set forth in Section 10.2.

     

      “Skynet
      Common Stock” has the meaning set forth in Section 2.5(a).

     

      “Skynet
      Share” means seventy-five percent (75%). 

     

      “SN
      Merger” has the meaning set forth in Section 2.3(a).

     

      “SN
      Merger Consideration” has the meaning set forth in Section
      2.4(a)(i).

     

      “Stock
      Certificate” has the meaning set forth in Section 2.3(a).

     

      “Surviving
      Corporation” has the meaning set forth in Section 2.3(a).

     

      “Tangible
      Personal Property” shall mean all tangible assets owned by either Company,
      including inventories, machinery, equipment, trucks, automobiles, furniture,
      supplies, spare parts, computers, hardware, tools, stores and other tangible
      personal property or interest therein (including the right to use), other than
      the Books and Records.

     

      “Tax(es)”
      means any federal, state, local or foreign tax, charge, fee, levy, deficiency,
      or other assessment of any kind or nature imposed by any governmental authority
      (including without limitation any income (net or gross), alternative minimum,
      gross receipts, profits, sales, use, ad valorem, franchise, license,
      withholding, employment, social security, workers compensation, unemployment
      compensation, transfer, excise, import, real property, personal property,
      intangible property, occupancy, recording, minimum, environmental or estimated
      tax), including any liability therefor as a transferee (including without
      limitation under Section 6901 of the Code or similar provision of applicable
      law), as a result of Treasury Regulation Section 1.1502-6 or similar provision
      of applicable law or as a result of any Tax sharing indemnification or similar
      agreement, together with any interest, penalty and additions to tax imposed
      with
      respect thereto.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

      “Tax
      Return” means any return, declaration, information return, claim for refund or
      credit, report or any similar statement, and any amendment thereto, including
      any attached schedule and supporting information filed or required to be filed
      with any governmental authority in connection with the determination,
      assessment, collection or payment of a Tax or the administration of any law,
      rule or regulation relating to any Tax.

     

      “Third
      Party Claim” has the meaning set forth in Section 10.3.

     

      “UCC”
      shall mean the Uniform Commercial Code of the State of New York, or any
      corresponding or succeeding provisions of Laws of the State of New
      York,
      or any
      corresponding or succeeding provisions of Laws, in each case as the same may
      have been and hereafter may be adopted, supplemented, modified, amended,
      restated or replaced from time to time.

     

      “Underlying
      Parent Stock” means the Common Stock, $.0001 par value per share, of Parent
      issued or issuable upon conversion of Parent Class C Common Stock.

     

      “Website(s)”
      shall mean all of the internet domain names for the Companies set forth on
      Schedule 3.7.

     

      “ZS
      Merger” has the meaning set forth in Section 2.3(a).

     

      “ZS
      Merger Consideration” has the meaning set forth in Section
      2.4(b)(i).

     

      “Zylonet
      Common Stock” has the meaning set forth in Section 2.5(b).

     

      “Zylonet
      Share” means twenty-five percent (25%).

     

    ARTICLE
      II


     

    THE
      CLOSINGS

     

    2.1. Effective
      Time of the Mergers.
      Subject
      to the provisions of this Agreement, as early as practicable on the Closing
      Date
      and assuming that all conditions precedent to the obligations of each of the
      Parties to comply with the provisions of this Section 2.1 have been met, and
      immediately following delivery of the documents referred to in Article VIII,
      Parent shall (i) cause the SN Certificate of Merger in the form attached hereto
      as Exhibit
      2.1-A
      to be
      submitted to the New York Secretary of State in accordance with the provisions
      of Article 9 of the New York Business Corporation Law and to the Delaware
      Secretary of State in accordance with the provisions of Section 252 of the
      GCL,
      and (ii) cause the ZN Certificate of Merger in the form attached hereto as
      Exhibit
      2.1-B
      to be
      submitted to the New Jersey Secretary of State in accordance with the provisions
      of Section 14A of the New Jersey Business Corporation Act and to the Delaware
      Secretary of State in accordance with Section 252 of the GCL, and the Mergers
      shall become effective (the “Effective Time”) upon the last to occur of such
      filings. For accounting purposes the Parties agree to treat the transactions
      as
      effective as of 12:01 a.m. on __________, 2006. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    2.2. Closings 
      The
      closings of the transactions contemplated by this Agreement (the “Closings”)
      shall take place at the offices of Parent in New Jersey, commencing at 10:00
      a.m. local time on the day following the date on which all the conditions set
      forth in Article VIII have been satisfied or waived (other than conditions
      with
      respect to actions the respective Parties will take at the Closings itself)
      or
      such other date as the Parties may mutually determine and on which the Closings
      actually occur (the “Closing Date”); provided,
      however
      that the
      Closings shall not take place subsequent to the Outside Closing
      Date.

     

    2.3. Effects
      of the Mergers. 

     

    (a) At
      the
      Effective Time, (i) the separate existence of the Companies will cease and
      Skynet will be merged with and into SN Merger Sub with SN Merger Sub being
      the
      survivor (the “SN Merger”) and Zylonet will be merged with and into ZS Merger
      Sub with ZS Merger Sub being the survivor (the “ZS Merger”) (the Merger Subs and
      the Companies are sometimes referred to herein as the “Constituent
      Corporations”; with respect to periods after the Effective Time, each Merger Sub
      is sometimes referred to herein as the “Surviving Corporation”; and each such
      merger is referred to individually herein as the “Merger” and collectively as
      the “Mergers”); (ii) the Certificate of Incorporation of each Merger Sub in
      effect immediately prior to the Effective Time shall be the Certificate of
      Incorporation of that Surviving Corporation, provided, however, that the name
      of
      the Surviving Corporation in the SN Merger shall be changed to SN Commerce
      Corp.
      upon the filings of the SN Certificate of Merger and the name of the Surviving
      Corporation in the ZS Merger shall be changed to ZS Commerce Corp. upon the
      filings of the ZS Certificate of Merger; and (iii) the By-laws of each Merger
      Sub as in effect immediately prior to the Effective Time shall be the By-laws
      of
      the applicable Surviving Corporation, except that they shall each automatically
      be amended to reflect said new name of the Surviving Corporation. 

     

    (b) At
      and
      after the Effective Time, title to all property owned by the applicable
      Constituent Corporations shall vest in the applicable Surviving Corporation
      without reversion or impairment, and the applicable Surviving Corporation shall
      automatically have all of the liabilities of the applicable Constituent
      Corporations

     

    (i) Immediately
      after the Effective Time, the members of the Board of Directors of each
      Surviving Corporation shall be the same as immediately prior to the Effective
      Time; provided,
      that
      immediately after the Effective Time, Benzaken shall be appointed to the Board
      of Directors of each Surviving Corporation. 

     

    (c) Immediately
      after the Effective Time, the Board of Directors of each Surviving Corporation
      shall name the following persons as officers of each Surviving Corporation,
      provided however, subject only to the Employment Agreements, neither Parent
      nor
      either Surviving Corporation is under any obligation to maintain any person
      in
      any such position:

     

    (i) Benzaken
      - President and Chief Operating Officer;

     

    (ii) Such
      other persons as the Board of Directors of the Merger Subs or the Surviving
      Corporations shall designate.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (d) For
      federal income tax purposes it is intended that each Merger qualify separately
      as a reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(D)
      of the Code and that this Agreement constitutes with respect to each Merger
      a
      separate plan of reorganization for such purposes. The Parties acknowledge
      and
      agree that the fair market value of a share of the Parent Class C Common Stock
      as of the date hereof and the Closing Date is $3.50 and shall report it as
      such
      for all purposes with respect to the transactions contemplated hereby, including
      for tax purposes. Each of the parties shall treat each Merger consistently
      with
      the foregoing, including filing the information and maintaining the records
      required by Treasury Regulations § 1.368-3, and shall not take any position
      inconsistent therewith.

     

    2.4. Effect
      on Capital Stock. 

     

    (a) As
      of the
      Effective Time, by virtue of the SN Merger and without any action on the part
      of
      the holder of any shares of Skynet Common Stock or capital stock of SN Merger
      Sub: 

     

    (i) Capital
      Stock of Skynet.
      Each
      issued and outstanding share of Skynet Common Stock shall be converted into
      the
      right to receive (i) the Initial Consideration, and (ii) the Contingent Payment,
      if applicable, as shall be determined pursuant to Section 2.5(a) (the “SN Merger
      Consideration”). All such Skynet Common Stock shall be cancelled, and each
      holder of a certificate representing any such Skynet Common Stock shall
      thereafter cease to have any rights with respect to such Skynet Common Stock
      except the right to receive the SN Merger Consideration pursuant to the terms
      hereof. Any shares of Skynet Common Stock held as treasury shares shall be
      canceled and not be converted into the right to receive any
      consideration.

     

    (ii) Capital
      Stock of SN Merger Sub.
      Each
      issued and outstanding share of the capital stock of SN Merger Sub shall remain
      outstanding.

     

    (b) As
      of the
      Effective Time, by virtue of the ZS Merger and without any action on the part
      of
      the holder of any shares of Zylonet Common Stock or capital stock of ZS Merger
      Sub: 

     

    (i) Capital
      Stock of Zylonet.
      Each
      issued and outstanding share of Zylonet Common Stock shall be converted into
      the
      right to receive (i) the Initial Consideration, and (ii) the Contingent Payment,
      if applicable, as shall be determined pursuant to Section 2.5(b) (the “ZS Merger
      Consideration”). All Zylonet Common Stock shall be cancelled, and each holder of
      a certificate representing any Zylonet Common Stock shall thereafter cease
      to
      have any rights with respect to such Zylonet Common Stock except the right
      to
      receive the ZS Merger Consideration pursuant to the terms hereof. Any shares
      of
      Zylonet Common Stock held as treasury shares shall be canceled and not be
      converted into the right to receive any consideration.

     

    (ii) Capital
      Stock of ZS Merger Sub.
      Each
      issued and outstanding share of the capital stock of ZS Merger Sub shall remain
      outstanding.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    2.5. Computation
      of Merger Consideration.

     

    (a) Conversion
      of Skynet Common Stock.
      At the
      Effective Time, each share of the common stock of Skynet, no par value (the
      “Skynet Common Stock”), outstanding immediately before the Effective Time, by
      virtue of the SN Merger and without any further action on the part of the
      holders thereof, shall be converted into the right to receive:

     

    (i) An
      amount
      in cash equal to the Skynet Share multiplied by $2,000,000 and such product
      divided by the number of shares of Skynet Common Stock outstanding immediately
      before the Effective Time;

     

    (ii) A
      number
      of shares of Parent Class C Common Stock equal to the Skynet Share multiplied
      by
      2,285,712 and such product divided by the number of shares of Skynet Common
      Stock outstanding immediately before the Effective Time; and

     

    (iii) Such
      portion of both of the cash and Parent Class C Common Stock constituting the
      Contingent Payment, when and if payable, in accordance with Section 2.5(c)
      as
      equals in each case such amount of cash and such number of shares of Parent
      Class C Common Stock multiplied by the Skynet Share and each such products
      divided by the number of shares of Skynet Common Stock outstanding immediately
      before the Effective Time.

     

    (b) Conversion
      of Zylonet Common Stock.
      At the
      Effective Time, each share of the common stock of Zylonet, no par value (the
      “Zylonet Common Stock”), outstanding immediately before the Effective Time, by
      virtue of the ZS Merger and without any further action on the part of the
      holders thereof, shall be converted into the right to receive:

     

    (i) An
      amount
      in cash equal to the Zylonet Share multiplied by $2,000,000 and such product
      divided by the number of shares of Zylonet Common Stock outstanding immediately
      before the Effective Time;

     

    (ii) A
      number
      of shares of Parent Class C Common Stock equal to the Zylonet Share multiplied
      by 2,285,712 and such product divided by the number of shares of Zylonet Common
      Stock outstanding immediately before the Effective Time; and

     

    (iii) Such
      portion of both of the cash and Parent Class C Common Stock constituting the
      Contingent Payment, when and if payable, in accordance with Section 2.5(c)
      as
      equals in each case such amount of cash and such number of shares of Parent
      Class C Common Stock multiplied by the Zylonet Share and each such products
      divided by the number of shares of Zylonet Common Stock outstanding immediately
      before the Effective Time.

     

    (c) Contingent
      Payment.
      

     

    (i) Subject
      to the remaining provisions of this Section 2.5, if the Surviving Corporations
      achieve aggregate Net Profits: 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (A) of
      exactly $1,500,000 for the twelve-month period beginning on the first day of
      the
      month immediately following the Closing Date (except if the Closing Date is
      the
      first day of the month, in which case, the Closing Date), the Shareholders
      shall
      be entitled to receive in the aggregate with respect to the shares of Skynet
      Common Stock and Zylonet Common Stock held immediately prior to the Effective
      Time: (1) $1,000,000 in additional cash plus (2) an additional 285,714 shares
      of
      Parent Class C Common Stock, such amount to be allocated between the two Mergers
      and payable per share of Skynet Common Stock and Zylonet Common Stock as set
      forth in Sections 2.5(a)(iii) and 2.5(b)(iii), respectively; or

     

    (B) greater
      than $1,500,000 but less than $2,400,000 for the twelve-month period beginning
      on the first day of the month immediately following the Closing Date (except
      if
      the Closing Date is the first day of the month, in which case the Closing Date),
      the Shareholders shall be entitled to receive in the aggregate with respect
      to
      the shares of Skynet Common Stock and Zylonet Common Stock held immediately
      prior to the Effective Time: (1) (x) $1,000,000, plus (y) $1,000,000 multiplied
      by the quotient of (I) such aggregate Net Profits less $1,500,000 divided by
      (II) $900,000 plus (2) (x) an additional 285,714 shares of Parent Class C Common
      Stock, plus (y) such number of shares of Parent Class C Common Stock as equals
      285,714 multiplied by the quotient of (I) such aggregate Net Profits less
      $1,500,000 divided by (II) $900,000, such amount to be allocated between the
      two
      Mergers and payable per share of Skynet Common Stock and Zylonet Common Stock
      as
      set forth in Sections 2.5(a)(iii) and 2.5(b)(iii), respectively; or

     

    (C) of
      at
      least $2,400,000 for the twelve-month period beginning with the first day of
      the
      month immediately following the Closing Date (except if the Closing Date is
      the
      first day of the month, in which case the Closing Date), the Shareholders shall
      be entitled to receive in the aggregate with respect to the shares of Skynet
      Common Stock and Zylonet Common Stock held immediately prior to the Effective
      Time: (1) $2,000,000 in additional cash plus (2) an additional 571,428 shares
      of
      Parent Class C Common Stock, such amount to be allocated between the two Mergers
      and payable per share of Skynet Common Stock and Zylonet Common Stock as set
      forth in Sections 2.5(a)(iii) and 2.5(b)(iii), respectively;
      provided,
      that,
      if the Surviving Corporations achieve aggregate Net Profits of less than
      $1,500,000 for the twelve-month period beginning on the first day of the month
      immediately following the Closing Date, the Shareholders shall not be entitled
      to receive any further payments as part of the Merger
      Consideration;

     

    (ii) The
      payment described in this Section 2.5(c) is referred to herein as the
“Contingent Payment.” The period for which performance for the Contingent
      Payment is made is referred to as the “Contingent Payment Period”. The
      Contingent Payment shall be paid by April 15, 2007.

     

    (d) All
      payments due to each Shareholder hereunder for the cash portion of the Merger
      Consideration, shall be payable in United States Dollars and shall be delivered
      by wire transfer of immediately available funds to an account of such
      Shareholder in New York City as shall have been designated in writing by such
      Shareholder to Parent at least two Business Days prior to the scheduled payment
      date therefor. The stock portion of the Merger Consideration shall be evidenced
      by certificates registered in the names of the Shareholders and dated the
      issuance date. No interest shall accrue on or be payable with respect to the
      Contingent Payment. All Contingent Payments are made subject to confirmation
      based on Parent's subsequent review of the financials for the applicable payment
      period. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (e) No
      Fractional Shares.
      No
      certificates or scrip representing fractional shares of Parent Class C Common
      Stock will be issued, and such fractional share interests will not entitle
      the
      owner thereof to vote or to any rights of a stockholder of Parent. Any
      fractional shares will be rounded to the nearest whole share.

     

    (f) Parent
      Class C Common Stock Transfer Restrictions; Registration.
      Any
      Parent Class C Common Stock distributed as Merger Consideration shall be subject
      to the restrictions contained in Sections 3.30(v) and (w).

     

    (g) All
      cash
      payments as part of the Merger Consideration will be rounded to the nearest
      whole dollar. 

     

    (h)
      (i) In
      the
      event that Parent waives its conditions to Closing set forth in Section 8.2(o)
      and (p) herein, then, notwithstanding such waiver, to the extent that as of
      the
      Closing the Companies and Buyer's Edge, taken as a whole, have Indebtedness
      or
      the Companies' and Buyer's Edges' aggregate Adjusted Tangible Personal Property,
      taken as a whole, do not exceed their aggregate liabilities by at least the
      Minimum Required EBITDA, the Shareholders jointly and severally shall pay to
      Parent within five (5) Business Days of the notification of the calculation
      an
      aggregate amount in cash equal to such Indebtedness or the shortfall against
      the
      Minimum Required EBITDA; provided,
      however,
      Parent,
      may at its option, subject to Section 2.3(h)(ii), reduce the amount of the
      Merger Consideration by the amount equal to such Indebtedness and/or such
      shortfall (such reduction to be applied first to the Initial Payment and then
      to
      the Contingent Payment and, in each case, first to the cash portion hereof
      and
      in proportion between the SN Merger Consideration and the ZS Merger
      Consideration in proportion to the Skynet Share and the Zylonet
      Share).

     

    (ii) The
      initial determination of whether any payment or withholding is due under Section
      2.3(h) or (i) shall be made by Parent in good faith and, subject to Section
      2.6,
      absent manifest error, shall be binding and conclusive on all parties hereto.
      

     

    (i) Holdback.
      Notwithstanding anything to the contrary and subject to the conditions set
      forth
      below and in any event subject to Article X, Parent shall hold in escrow 100,000
      shares of Parent Class C Common Stock (together with any dividends or other
      distributions with respect thereto, the “Holdback Amount”) of the Merger
      Consideration (allocated among the Shareholders on a pro rata basis based upon
      their percentage interests in the Companies) and shall issue but not deliver
      the
      same to the Shareholders at Closing. The Shareholders shall deliver at Closing
      duly endorsed stock powers to Parent for such Holdback Amount. For the purposes
      of determining the release and payment, if any, of any portion of the Holdback
      Amount to the Shareholders the following shall apply:

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (i) Fifty
      percent (50%) of the Holdback Amount not retained to satisfy any Companies'
      or
      any Shareholders' obligations pursuant to Section 10.1 hereof shall be delivered
      to the Shareholders on January 2, 2008 unless prior to such time a Purchaser
      Indemnitee has delivered an Indemnification Notice pursuant to Section 10.3
      below.

     

    (ii) Any
      remaining balance of the Holdback Amount shall be delivered to the Shareholders
      on January 2, 2009 unless prior to such time a Purchaser Indemnitee has
      delivered an Indemnification Notice pursuant to Section 10.3.

     

    (iii) In
      the
      event any Holdback Amount remains in escrow after January 2, 2009 due to the
      delivery of an Indemnification Notice prior to such time, any such remaining
      balance of the Holdback Amount, less any shares retained to satisfy any
      Companies' or any Shareholders' obligations pursuant to Section 10.1 hereof,
      shall be delivered to the Shareholders upon the final resolution and
      satisfaction of any such Losses (as such term is defined in Section
      10.1).

     

    2.6. Procedure
      to Establish Net Profits, Indebtedness, Adjusted Tangible Personal Property
      and
      Minimum Required EBITDA.  

     

    (a) Within
      90
      days after the end of the Contingent Payment Period, Parent will notify the
      Representative of the amount of Net Profits for such period, confirmed by the
      regular independent public accountants of Parent, as calculated in accordance
      with this Agreement. The Representative shall have the right, at its sole
      expense, to cause the relevant portions of the books and records of the
      Surviving Corporations for such fiscal period to be reviewed by one independent
      certified public accounting firm of its choosing to verify or dispute the Net
      Profits amount set forth in the Parent notice. The Representative must dispute
      the Net Profits calculation within fifteen (15) days of receiving such
      calculation from Parent. If such calculation is not disputed within such period,
      the Representative will be deemed to have accepted the calculation. If by the
      120th
      day
      after the end of such fiscal period the accountants for Parent and for the
      Representative are unable to agree upon a Net Profits calculation, the
      accountants for Parent and the Representative shall provide their calculation
      of
      Net Profits to a third-party accountant mutually agreed upon by the accountants
      for Parent and the Representative who shall make a determination as to the
      amount of Net Profits, which determination shall be final and binding on all
      parties. The expenses for such accountant shall be paid for by the party whose
      calculation of Net Profits was most different from the calculation of such
      third-party accountants, as determined by such third-party accountant in its
      reasonable discretion.

     

    (b) With
      respect to Net Profits, if any Contingent Payment is received by the
      Shareholders, but Parent's accountants determine, based on a review of the
      Surviving Corporation's books and records, that the Shareholders were not
      entitled to have received such payment, Parent shall give notice to the
      Representative of such determination by Parent's accountants, which will include
      the related calculations on which such determination was based and a demand
      for
      the return of the Contingent Payment. The Representative shall have the right,
      at its sole expense, to cause the relevant portions of the books and records
      of
      Surviving Corporations for such fiscal period to be reviewed by one independent
      certified public accounting firm of its choosing to verify or dispute whether
      or
      not the Shareholders were entitled to receive the Contingent Payment. The
      Representative must dispute the Net Profits calculation within fifteen (15)
      Business Days of receiving such calculation from Parent. If such calculation
      is
      not disputed within such period, the Representative will be deemed to have
      accepted the calculation as of the end of such period. If by the 30th
      day
      after the Representative has received notice of the determination by Parent's
      accountants, the accountants for Parent and for the Representative are unable
      to
      agree upon the correct calculation, the accountants for Parent and the
      Representative shall provide their calculation of Net Profits to a third-party
      accountant mutually agreed upon by the accountants for Parent and the
      Representative, who shall make a determination as to the amount of Net Profits,
      which determination shall be final and binding on all parties. The expenses
      for
      such accountant shall be paid for by the party whose calculation of Net Profits
      was most different from the calculation of such third-party accountants, as
      determined by such third-party accountant in its reasonable discretion. The
      Shareholders shall repay and return the Contingent Payment to Parent in the
      form
      in which it was received within ten (10) Business Days of the date that the
      Representative accepted the calculation of the Surviving Corporations'
      accountants or the date on which it has been finally determined that the
      Shareholders were not entitled to the Contingent Payment. Each of the
      Shareholders and the Representative will be jointly and severally liable for
      any
      repayment to be made pursuant to this Section 2.6(b).

     

    
      
        
        

      

      
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    (c) Any
      adjustments to the Merger Consideration in connection with Section 2.3(h) shall
      adhere to the procedures set forth in Section 2.6 (a) and (b) for the purposes
      of determining Indebtedness, Adjusted Tangible Personal Property and Minimum
      Required EBITDA. In accordance with Section 2.3(h), Parent will notify the
      Representative of the amount of Indebtedness and/or shortfall of Adjusted
      Tangible Personal Property by which the Merger Consideration has been reduced,
      confirmed by the regular independent public accountants of Parent, as calculated
      in accordance with this Agreement. The Representative shall have the right,
      at
      its sole expense, to cause the relevant portions of the books and records of
      the
      Surviving Corporations for the relevant fiscal period to be reviewed by one
      independent certified public accounting firm of its choosing to verify or
      dispute the Indebtedness and/or Adjusted Tangible Personal Property and/or
      Minimum Required EBITDA amounts set forth in the Parent notice. The
      Representative must dispute the Indebtedness and/or Adjusted Tangible Personal
      Property and/or Minimum Required EBITDA calculation within fifteen (15) days
      of
      receiving such calculation from Parent. If such calculation is not disputed
      within such period, the Representative will be deemed to have accepted the
      calculation. If by the 90th
      day
      after Closing the accountants for Parent and for the Representative are unable
      to agree upon a Indebtedness and/or Adjusted Tangible Personal Property and/or
      Minimum Required EBITDA calculation, the accountants for Parent and the
      Representative shall provide their calculation of Indebtedness and/or Adjusted
      Tangible Personal Property and/or Minimum Required EBITDA to a third-party
      accountant mutually agreed upon by the accountants for Parent and the
      Representative who shall make a determination as to the amount of Indebtedness
      and/or Adjusted Tangible Personal Property and/or Minimum Required EBITDA,
      which
      determination shall be final and binding on all parties. The expenses for such
      accountant shall be paid for by the party whose calculation of Indebtedness
      and/or Tangible Personal Property and/or Minimum Required EBITDA was most
      different from the calculation of such third-party accountants, as determined
      by
      such third-party accountant in its reasonable discretion. To the extent the
      downward adjustment of Merger Consideration, due to such
      Indebtedness and/or the shortfall against the Minimum Required
      EBITDA,
      has been
      deemed to exceed the determination of the accountant as set forth in this
      Section 2.6(c), Parent shall pay to Shareholders an amount equal to such excess
      by wire transfer of immediately available funds as soon as commercially
      practicable and the Merger Consideration shall be adjusted accordingly to
      reflect such determination of the accountant. In connection with the
      calculations set forth in this Section 2.6, the Members shall make available,
      or
      shall cause Buyer's Edge to make available, the Books and Records (as such
      term
      applies to Buyer's Edge) of Buyer's Edge for the purposes of calculating
      Indebtedness, Adjusted Tangible Personal Property and/or Minimum Required
      EBITDA.

     

    
      
        
        

      

      
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    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES OF

    THE
      COMPANIES AND THE SHAREHOLDERS

     

    The
      Companies and the Shareholders, jointly and severally, hereby represent and
      warrant to Parent and Merger Subs that:

     

    3.1. Corporate
      Existence and Power.
      Each of
      Skynet and Zylonet is a corporation duly organized, validly existing and in
      good
      standing under and by virtue of the Laws of the State of New York and New
      Jersey, respectively, and has all power and authority, corporate and otherwise,
      and all governmental licenses, franchises, permits, authorizations, consents
      and
      approvals required to own and operate its properties and assets and to carry
      on
      its business as now conducted and as proposed to be conducted. None of the
      Companies is qualified to do business as a foreign corporation in any
      jurisdiction, except as set forth on Schedule 3.1, and there is no jurisdiction
      in which the character of the property owned or leased by any Company or the
      nature of its activities make qualification of such Company in any such
      jurisdiction necessary and in which such Company is not so qualified. The only
      office, warehouse or business location of Skynet is located at 481/485 Kings
      Highway, Brooklyn, New York 11223 and 1530 MacDonald Avenue, Brooklyn, New
      York;
      and the only office or business location of Zylonet is located at 1907 Highway
      35, Oakhurst, New Jersey 07755 (collectively, the “Office”). Neither of the
      Companies has taken any action, adopted any plan, or made any agreement in
      respect of any merger, consolidation, sale of all or substantially all of its
      respective assets, reorganization, recapitalization, dissolution or
      liquidation. 

     

    3.2. Corporate
      Authorization. 

     

    (a) The
      execution, delivery and performance by each of the Companies of this Agreement
      and each of the other Additional Agreements to which such Company is named
      as a
      party and the consummation by each of the Companies of the transactions
      contemplated hereby and thereby are within the corporate powers of each of
      the
      Companies and have been duly authorized by all necessary action on the part
      of
      each Company, including, without limitation, the unanimous approval of the
      Shareholders. This Agreement constitutes, and, upon their execution and
      delivery, each of the Additional Agreements will constitute, a valid and legally
      binding agreement of each Company, enforceable against each Company in
      accordance with their respective terms.

     

    (b) Each
      Shareholder has full legal capacity, power and authority to execute and deliver
      this Agreement and the Additional Agreements to which such Shareholder is named
      as a party, to perform such Shareholder's obligations hereunder and thereunder
      and to consummate the transactions contemplated hereby and thereby. This
      Agreement and the Additional Agreements to which each Shareholder is named
      as a
      party have been, or at Closing will be, duly executed and delivered by each
      Shareholder and are, or upon their execution and delivery will be, valid and
      legally binding obligations of each Shareholder, enforceable against each
      Shareholder in accordance with their respective terms.

     

    
      
        
        

      

      
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    3.3. Charter
      Documents; Legality.
      Each
      Company has previously delivered to Parent true and complete copies of its
      Articles of Incorporation and By-laws, minute books and stock books (the
“Charter Documents”), as in effect or constituted on the date hereof. The
      execution, delivery, and performance by each Company and each Shareholder of
      this Agreement and any Additional Agreement to which such Company or such
      Shareholder is to be a party has not violated and will not violate, and the
      consummation by such Company or the Shareholders of the transactions
      contemplated hereby or thereby will not violate, any of the Charter Documents
      or
      any Law. 

     

    3.4. Capitalization
      and Ownership of the Companies.
      Schedule
      3.4 sets forth, with respect to each Company, (i) such Company's authorized
      capital stock, (ii) the number of shares of such Company's stock that are
      outstanding, (iii) each shareholder of such Company's stock and the number
      of
      shares of such stock owned by such shareholder, and (iv) each security
      convertible into or exercisable or exchangeable for such Company's stock, the
      number of shares of stock such security is convertible into, the exercise or
      conversion price of such security and the holder of such security. No person
      other than the Shareholders owns any securities of any of the Companies. None
      of
      the Companies' Charter
      Documents
      authorizes a class of preferred stock having preference over any other class
      of
      stock. Each Shareholder owns the Shares set forth in Schedule 3.4, free and
      clear of any Lien. There is no Contract (other than this Agreement) that
      requires or under any circumstance would require (a) any Company to issue,
      or
      grant any right to acquire, any capital stock of such Company, or any security
      or instrument exercisable or exchangeable for or convertible into, the capital
      stock or membership interest of any Company or to merge, consolidate, dissolve,
      liquidate, restructure, or recapitalize any Company or (b) any holder of the
      capital stock of any Company to transfer or grant any rights with respect to
      any
      capital stock of such Company. The issuance of all the outstanding capital
      stock
      of each Company has been duly authorized, and all such capital stock is validly
      issued, fully paid and nonassessable.

     

    3.5. Subsidiaries.
      None
      of
      the Companies owns, and since their formation none of the Companies has owned,
      directly or indirectly, securities or other ownership interests in any other
      entity, other than in the case of Skynet, securities which are and have been
      held in Skynet's account with U.S. Securities International Corp. and one share
      of common stock in Dynamic Marketing, Inc. None of the Companies is a party
      to
      any agreement relating to the formation of any joint venture, association or
      other entity.

     

    3.6. Affiliates.
      Other
      than the Shareholders, none of the Companies is controlled by any Person and
      none of the Companies is in control of any other Person. Except as set forth
      in
      Schedule 3.6, none of the Shareholders (x) engages in any business, except
      through the Companies or Buyer's Edge, or is an employee of or provides any
      service for compensation to, any other business concern or (y) owns any equity
      security of any business concern, except for publicly traded securities.
      Schedule 3.6 lists each Contract, arrangement, or understanding to which at
      least one of the Companies and any Shareholder or any Affiliate of any
      Shareholder is a party. Except as disclosed in Schedule 3.6, none of the
      Shareholders or any Affiliate of the Shareholders (i) own, directly or
      indirectly, in whole or in part, any tangible or intangible property (including
      Intellectual Property Rights) that any Company uses or the use of which is
      necessary for the conduct of any of the Companies' business, or (ii) have
      engaged in any transaction with any of the Companies.

     

    
      
        
        

      

      
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    3.7. Assumed
      Names.
      Schedule
      3.7 is a complete and correct list of all assumed or “doing business as” names
      currently or formerly used by each of the Companies, indicating which respective
      Company uses or used such name, including names on any Websites other than
      the
      name “LizMadison.com,” which name Skynet has agreed to cease using. No Company
      has used any name other than the names listed on Schedule 3.7 to conduct its
      business. The Companies have filed appropriate “doing business as” certificates
      in all applicable jurisdictions.

     

    3.8. Governmental
      Authorization.
      None
      of
      the execution, delivery or performance by any Company or any Shareholder of
      this
      Agreement or any Additional Agreement requires any consent, approval, license
      or
      other action by or in respect of, or registration, declaration or filing with,
      any Authority other than the filing of the certificates of merger.

     

    3.9. Consents.
      The
      Contracts listed on Schedule 3.9 are the only agreements, commitments,
      arrangements, contracts or other instruments binding upon any Company or any
      of
      their respective properties or any Shareholder requiring a consent, approval,
      authorization, order or other action of or filing with any Person as a result
      of
      the execution, delivery and performance of this Agreement or any of the
      Additional Agreements or the Asset Purchase Agreement or the consummation of
      the
      transactions contemplated hereby or thereby (each of the foregoing, a “Company
      Consent”).
      The
      Company's have heretofore delivered to Parent, true, correct and complete copies
      of each Contract requiring a Company Consent.

     

    3.10. Financial
      Statements. 

     

    (a) Attached
      hereto as Schedule 3.10 are an unaudited balance sheet of each of the Companies
      as of September 30, 2005 and the unaudited balance sheets of the Companies
      as of
      December 31, 2005 and December 31, 2004 and of Skynet as of December 31, 2003,
      and statements of operations and retained earnings and cash flow (only for
      period ended December 31, 2005) of each of the Companies for the nine months
      ended September 30, 2005 and the years ended December 31, 2005 and December
      31,
      2004 and of Skynet as of December 31, 2003 (collectively, the “Financial
      Statements”). The balance sheets contained in the Financial Statements as of the
      nine months ended September 30, 2005 are referred to herein as the “Interim
      Balance Sheets”. The Financial Statements (i) were prepared from the books and
      records of each Company, as applicable; (ii) were prepared in accordance
      with GAAP consistently applied, subject in the case of the September 30, 2005
      financial statements to normal year end adjustments; (iii) fairly and accurately
      present each Company's financial condition and the results of its operations
      as
      of their respective dates and for the periods then ended; (iv) contain and
      reflect all necessary adjustments and accruals for a fair presentation of each
      Company's financial condition as of their dates; and (v) contain and reflect
      adequate provisions for all reasonably anticipated liabilities for all material
      income, property, sales, payroll or other Taxes applicable to each Company
      with
      respect to the periods then ended. Notwithstanding Schedule 3.10, the profits
      of
      the Companies are accurate when the profits of the Companies over the periods
      covered by all of the Financial Statements are aggregated. Each Company has
      heretofore delivered to Parent complete and accurate copies of all “management
      letters” received by it from such Company's accountants and all responses during
      the last three years by lawyers engaged by any Company to inquiries from such
      Company's accountant or any predecessor accountants.

     

    
      
        
        

      

      
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    (b) Schedule
      3.10(b) sets forth for each of the Companies the first nine months of 2005,
      for
      calendar year 2005 and for calendar year 2004 the amount of revenues derived
      from sales of products and services from the Websites (on a per Website basis),
      advertising revenues from the Websites (on a per Website basis) and in the
      case
      of Skynet, revenues from the retail store.

     

    (c) Except
      as
      specifically disclosed, reflected or fully reserved against on the Interim
      Balance Sheets and for liabilities and obligations of a similar nature and
      in
      similar amounts incurred in the ordinary course of business since the date
      of
      the Interim Balance Sheets, there are no liabilities, debts or obligations
      of
      any nature (whether accrued, absolute, contingent, liquidated or unliquidated,
      unasserted or otherwise) relating to any Company. All debts and liabilities,
      fixed or contingent, which should be included under GAAP on an accrual basis
      on
      the Interim Balance Sheets are included therein.

     

    (d) The
      Interim Balance Sheet of each Company accurately reflects the outstanding
      Indebtedness of each such Company as of the date thereof. Except as set forth
      on
      Schedule 3.10, none of the Companies has any Indebtedness.

     

    (e) All
      accounts, books and ledgers of each Company have been properly and accurately
      kept and completed in all material respects, and there are no material
      inaccuracies or discrepancies of any kind contained or reflected therein. None
      of the Companies has any of its records, systems controls, data or information
      recorded, stored, maintained, operated or otherwise wholly or partly dependent
      on or held by any means (including any mechanical, electronic or photographic
      process, whether computerized or not) which (including all means of access
      thereto and therefrom) is not under the exclusive ownership (excluding licensed
      software programs) and direct control of the Companies and which is not located
      at the Office. 

     

    (f) Attached
      hereto as Schedule 3.10(f) is a true, correct and complete schedule setting
      forth the amounts paid by each of the Companies for direct-response advertising
      for each of the periods covered by the Financial Statements.

     

    (g) All
      financial projections delivered by or on behalf of the Companies or the
      Shareholders to Parent were prepared in good faith using assumptions that the
      Shareholders believe to be reasonable and neither either of the Companies nor
      any Shareholder is
      aware
      of the existence of any fact or occurrence of any circumstance that is
      reasonably likely to have an adverse impact on said projections.

     

    
      
        
        

      

      
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    3.11. Accounts
      Receivable.
      Schedule
      3.11 sets forth as of a date within three (3) days of the date hereof all
      accounts, notes and other receivables, whether or not accrued, and whether
      or
      not billed, of each Company, in accordance with GAAP (“Accounts Receivable”).
      Except as set forth in Schedule 3.11, all Accounts Receivable represent bona
      fide sales of inventory of each Company in the ordinary course of their
      respective businesses through means of the Websites and, in the case of Skynet,
      of the retail storefront and are fully collectible, net of any reserves shown
      on
      the Interim Balance Sheets. At the Closing, each Company shall provide Parent
      with an updated Schedule 3.11 as of a date within five days of the
      Closing.

     

    3.12. Books
      and Records.

     

    (a) Each
      of
      the Company's Books and Records accurately and fairly, in reasonable detail,
      reflect such Company's transactions and dispositions of assets. Each Company
      maintains a system of internal accounting controls sufficient to provide
      reasonable assurance that:

     

    (i) transactions
      are executed in accordance with management's authorization;

     

    (ii) access
      to
      assets is permitted only in accordance with management's authorization;
      and

     

    (iii) recorded
      assets are compared with existing assets at reasonable intervals, and
      appropriate action is taken with respect to any differences.

     

    (b) Each
      of
      the Companies has heretofore made all of such Company's Books and Records
      available to Parent for its inspection and has heretofore delivered to Parent
      complete and accurate copies of documents referred to in the Schedules or Parent
      otherwise has requested. All Contracts, documents, and other papers or copies
      thereof delivered to Parent by or on behalf of the Companies in connection
      with
      this Agreement and the transactions contemplated herein are accurate, complete,
      and authentic.

     

    (c) Schedule
      3.12 is a complete and correct list of all savings, checking, brokerage or
      other
      accounts pursuant to which any of the Companies has cash or securities on
      deposit. Schedule 3.12 indicates which such Company owns each such account
      and
      the signatories therefor. 

     

    3.13. Absence
      of Certain Changes. 

     

    (a) Except
      as
      set forth in Schedule 3.13, since September 30, 2005, each of the Companies
      has
      conducted its business in the ordinary course consistent with past practices,
      and there has not been:

     

    (i) any
      Material Adverse Change or any event, occurrence, development or state of
      circumstances or facts which could reasonably be expected to result individually
      or in the aggregate in a Material Adverse Change or on the Companies' ability
      to
      consummate the transactions contemplated herein or upon the value to Parent
      or
      either Merger Sub of the transactions contemplated hereby;

     

    
      
        
        

      

      
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    (ii) any
      transaction, contract, agreement or other instrument entered into, or commitment
      made, by any Company relating to such Company's business or any relinquishment
      by any Company of any Contract or other right, in either case other than
      transactions and commitments in the ordinary course of business consistent
      in
      all respects, including kind and amount, with past practices and those
      contemplated by this Agreement;

     

    (iii) any
      bonus, salary or other compensation paid or agreed to be paid to any employee
      except in accordance with Schedule 3.13;

     

    (b) Except
      as
      set forth in Schedule 3.13, since September 30, 2005, through and including
      the
      date hereof, none of the Companies has taken any action nor has had any event
      occur which would have violated any covenant of the Companies set forth in
      Article V hereof if such action had been taken or such event had occurred
      between the date hereof and the Closing Date.

     

    3.14. Real
      Property.

     

    (a) None
      of
      the Companies owns any Real Property. Each of the Companies has delivered to
      Parent true, correct, and complete copies of each lease for Real Property to
      which each such Company is a party, and all amendments thereto. Each such lease,
      together with all amendments, is listed in Schedule 3.14 and is valid and
      enforceable by such Company with respect to the other party thereto. None of
      the
      Companies has breached or violated and none are in default under any lease
      or
      any local zoning ordinance, and no notice from any Person has been received
      by
      any Company or served upon any Company of Shareholder claiming any violation
      of
      any lease or any local zoning ordinance.

     

    (b) The
      Companies have not experienced any material interruption in the delivery of
      adequate quantities of any utilities (including, without limitation,
      electricity, natural gas, potable water, water for cooling or similar purposes
      and fuel oil) or other public services (including, without limitation, sanitary
      and industrial sewer service) required by each Company in the operation of
      its
      respective business.

     

    3.15. Tangible
      Personal Property. 

     

    (a) Each
      piece of Tangible Personal Property has no defects, is in good operating
      condition and repair and functions in accordance with its intended use (ordinary
      wear and tear excepted), has been properly maintained, and is suitable for
      its
      present uses. Schedule 3.15 sets forth a complete and correct list of the
      Tangible Personal Property owned by each Company, setting forth a description
      of
      such property and its location, as of a date within five days of the date of
      this Agreement.

     

    (b) Each
      Company has, and upon consummation of the transactions contemplated hereby
      the
      Surviving Corporations will have, good, valid and marketable title in and to,
      each piece of Tangible Personal Property listed on Schedule 3.15 hereto, free
      and clear of all Liens, except as set forth on Schedule 3.15(b).

     

    
      
        
        

      

      
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    (c) Except
      as
      indicated on Schedule 3.15, all Tangible Personal Property is located at the
      offices, retail property or warehouses located at 481/485 Kings Highway,
      Brooklyn, New York, and 1530 MacDonald Avenue, Brooklyn, New York, and, in
      the
      case of Tangible Personal Property owned by Zylonet, 1907 Highway 35, Oakhurst,
      New Jersey. 

     

    3.16. Intellectual
      Property. 

     

    (a) Schedule
      3.16 sets forth a true and complete list of all Intellectual Property Rights,
      specifying as to each, as applicable: (i) the nature of such Intellectual
      Property Right; (ii) the owner of such Intellectual Property Right; (iii) the
      jurisdictions by or in which such Intellectual Property Right has been issued
      or
      registered or in which an application for such issuance or registration has
      been
      filed; and (iv) all licenses, sublicenses and other agreements pursuant to
      which
      any Person (including the Companies) is authorized to use such Intellectual
      Property Right.

     

    (b) Except
      as
      set forth on Schedule 3.16, within the past three (3) years (or prior thereto
      if
      the same is still pending or subject to appeal or reinstatement), neither of
      the
      Companies has been sued or charged in writing with or been a defendant in any
      claim, suit, action or proceeding that involves a claim of infringement of
      any
      Intellectual Property Rights, and none of the Companies has any knowledge of
      any
      other claim of infringement by any Company, and no knowledge of any continuing
      infringement by any other Person of any Intellectual Property
      Rights.

     

    (c) The
      current use by the Companies of the Intellectual Property Rights does not
      infringe, and the use by Surviving Corporations, Parent or any of its Affiliates
      of the Intellectual Property Rights after the Closing will not infringe, upon
      the rights of any other Person.

     

    (d) Except
      as
      set forth on Schedule 3.16, all employees, agents, consultants or contractors
      (including any Shareholders) who have contributed to or participated in the
      creation or development of any copyrightable, patentable or trade secret
      material on behalf of any of the Companies or any predecessor in interest
      thereto either: (i) is a party to a “work-for-hire” agreement under which the
      respective Company is deemed to be the original owner/author of all property
      rights therein; or (ii) has executed an assignment or an agreement to assign
      in
      favor of such Company (or such predecessor in interest, as applicable) all
      right, title and interest in such material. All of the Companies’ Intellectual
      Property Rights are created on a “work-for-hire” basis and owned by the
      Companies.

     

    3.17. Inventory.

     

    (a) Schedule
      3.17(a) contains a complete and correct list of the entire inventory of each
      Company as of no earlier than two (2) days prior to the signing of this
      Agreement. Except as set forth on Schedule 3.17(a), sales in the ordinary course
      of business, the inventories of each Company consist of items of quality and
      quantity usable and salable in the ordinary course of business of such Company
      at an aggregate value at least equal to the value at which such inventories
      are
      reflected in the Interim Balance Sheets as at the date of such financial
      statements. The method of valuing such inventories in such Interim Balance
      Sheets is consistent with past practice and in conformity with GAAP,
      consistently applied. The value of inventories known to be obsolete, slow moving
      or known to be below standard quality has been written down on the books of
      the
      respective Company to estimated realizable market value or reserves estimated
      to
      be sufficient therefor have been established on the Interim Balance Sheets.
      The
      amounts at which the inventories are carried on the Interim Balance Sheets
      reflect the inventory valuation policy of each Company of stating inventory
      at
      the lower of cost (FIFO method) or estimated realizable market value in
      accordance with GAAP, consistently applied. At the Closing the Companies shall
      deliver an updated Schedule 3.17(a) as of a date no earlier than five (5) days
      prior to the Closing.

     

    
      
        
        

      

      
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    (b) Schedule
      3.17(b) lists every model or version of every product currently in inventory
      or
      sold by each Company since January 1, 2005. Except as disclosed on Schedule
      3.17(b), no Company is a party to any Contract prohibiting or giving any third
      party the right to prohibit such Company or any Affiliate thereof from selling
      any product, in any geographical area or otherwise. Each distribution, sales
      representative, or like Contract is listed on Schedule 3.17(b). No Company
      has
      exported any product in violation of any United States Law requiring an export
      license respecting export of such product.

     

    (c) To
      the
      knowledge of each Company, the products listed on Schedules 3.17(a) and (b)
      perform materially free of bugs, viruses or other malicious code, programming
      errors, or manufacturing or design defects and otherwise in accordance with
      the
      specification of such product, end-user documentation or other information
      on
      which customers could reasonably be expected to rely.

     

    3.18. Suppliers
      and Business Relationships.

     

    (a) Schedule
      3.18(a) is an accurate and complete and current list of each of Skynet's ten
      largest suppliers (in terms of sales volume) for each year, setting forth the
      amount of business done with each during such year, since January 1, 2003,
      setting forth the amount of business done with each during such year, since
      January 1, 2003. Except as disclosed in Schedule 3.18(a), no single supplier,
      either retail or resale, is material to Skynet and none are Affiliates of
      Skynet. Zylonet's sole supplier was Skynet until approximately 2006. The
      relationships of Skynet with its customers, distributors, sales representatives,
      and suppliers are good commercial working relationships; no supplier listed
      on
      Schedule 3.18(a) has terminated, changed, or threatened to terminate, the
      amount, rate, or nature of the business it conducts with, or the services or
      supplies provided to, Skynet or prices at which such business is conducted;
      and
      to the knowledge of each Company and each Shareholder, the execution, delivery,
      or performance of this Agreement, or the consummation of the transactions
      contemplated hereby will not affect adversely to the Parent or the Surviving
      Corporations or the amount, rate, or nature of the business conducted with
      any
      Person listed on Schedule 3.18(a) or the Parent's or the Surviving Corporation
      relationship with any such Person. 

     

    (b) Skynet
      is
      unaware of any impending changes in the rates at which materials or services
      are
      charged to it by any Person identified on Schedule 3.18(a). Schedule 3.18(b)
      sets forth a complete and correct description of Skynet's refund and return
      policies with each of its respective ten largest retail and resale suppliers,
      as
      set forth in Section 3.18(a)(i) and (ii), and Zylonet's refund and return
      policies with Skynet.

     

    
      
        
        

      

      
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    (c) Except
      as
      listed on Schedule 3.18(c), the Companies do not outsource any of their
      respective operations. 

     

    (d) Schedule
      3.18(d) is an accurate and complete and current list of each Company's ten
      largest customers (in terms of dollar amounts of sale) for each year and for
      the
      nine-month period ended September 30, 2005, setting forth the amount of business
      done with each Company during such year or period since January 1, 2002, in
      each
      case indicating whether the customer is a wholesale or a retail
      customer.

     

    3.19. Litigation.
      Except
      as
      set forth on Schedule 3.19, there is no Action (or any basis therefor) pending
      against, or to the best knowledge of the Companies or the Shareholders,
      threatened against or affecting, any of the Companies, any of their respective
      officers or directors, any Shareholder, the business of any Company, or any
      Contract before any court or arbitrator or any governmental body, agency or
      official or which in any manner challenges or seeks to prevent, enjoin, alter
      or
      delay the transactions contemplated hereby. There are no outstanding judgments
      against any Company or any Shareholder. No Company is now, nor have they been
      in
      the past five years, subject to any proceeding with the Federal Trade Commission
      or the Equal Employment Opportunity Commission or any comparable body of any
      state or political subdivision.

     

    3.20. Contracts.

     

    (a) Each
      Contract to which any of the Companies is a party is a valid and binding
      agreement, and is in full force and effect, and none of the Companies nor,
      to
      the best knowledge of the Companies or the Shareholders, any other party thereto
      is in breach or default (whether with or without the passage of time or the
      giving of notice or both) under the terms of any such Contract. None of the
      Companies has assigned, delegated, or otherwise transferred any of its rights
      or
      obligations with respect to any Contracts, or granted any power of attorney
      with
      respect thereto. Each applicable Company has given a true and correct fully
      executed copy of each material Contract to Parent. 

     

    (b) Schedule
      3.20 lists each material Contract of each Company, including, but not limited
      to:

     

    (i) any
      Contract pursuant to which any Company is required to pay, has paid or is
      entitled to receive or has received an amount in excess of $10,000 during the
      current fiscal year or any one of the two preceding fiscal years (other than
      purchase orders for Inventory entered into in the ordinary course of business
      (excluding however any such purchase orders which are open for purchases in
      excess of $50,000);

     

    (ii) all
      employment contracts and sales representatives contracts;

     

    (iii) all
      material sales, agency, factoring, commission and distribution contracts to
      which any Company is a party;

     

    (iv) all
      joint
      venture, strategic alliance, limited liability company and partnership
      agreements to which any Company is a party; 

     

    
      
        
        

      

      
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    (v) all
      significant documents relating to any acquisitions or dispositions of assets
      by
      any Company (other than of dispositions of Inventory in the ordinary course
      of
      business);

     

    (vi) all
      material licensing agreements, including agreements licensing Intellectual
      Property Rights, other than “shrink wrap” licenses; 

     

    (vii) all
      secrecy, confidentiality and nondisclosure agreements restricting the conduct
      of
      any Company;

     

    (viii) all
      Contracts relating to patents, trademarks, service marks, trade names, brands,
      copyrights, trade secrets and other Intellectual Property Rights of any
      Company;

     

    (ix) all
      guarantees, with the terms and conditions and privacy policies and other
      provisions of the Websites indemnification arrangements and other hold harmless
      arrangements made or provided by any Company;

     

    (x) all
      website hosting contracts or agreements; 

     

    (xi) all
      Contracts or agreements with or pertaining to any Company to which any
      Shareholder or any Affiliate of any Shareholder is a party; 

     

    (xii) all
      agreements relating to real property, including any real property lease,
      sublease, or space sharing, license or occupancy agreement, whether the Company
      is granted or granting rights thereunder to occupy or use any premises;


     

    (xiii) all
      material agreements relating to Tangible Personal Property; and

     

    (xiv) all
      agreements relating to outstanding Indebtedness.

     

    (c) Neither
      of the Companies is subject to any Contract which prohibits, limits or restricts
      any use by any of the Companies of any information regarding their customers,
      including limiting the solicitation of or other communication by any of the
      Companies with their customers or providing any information regarding their
      customers to any third party. The Companies have acted in compliance in all
      material respects with all terms and conditions and privacy policies published
      on each Website (collectively, “Website Rules”), including with respect to their
      use of information regarding customers. Except as set forth in Schedule 3.20(c),
      the disclosure to the Surviving Corporations and Parent, and the use by them,
      of
      customer identities and information regarding them and communications with
      them
      by the Surviving Corporations and Parent, including offers to download Parent
      toolbars, will not violate any Contract or any Website Rules.

     

    (d) The
      Companies are in compliance with all covenants, including all financial
      covenants, in all notes, indentures, bonds and other instruments or agreements
      evidencing any Indebtedness.

     

    
      
        
        

      

      
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    3.21. Licenses
      and Permits.
      Schedule
      3.21 is a complete and correct list of each material license, franchise, permit,
      order or approval or other similar authorization affecting, or relating in
      any
      way to, the business of any of the Companies, together with the name of the
      government agency or entity issuing the same (the “Permits”). Such Permits are
      valid and in full force and effect and, assuming the related Company Consents,
      if any, have been obtained prior to the Closing Date, are transferable by the
      Companies, and none of the Permits will, assuming the related Company Consents
      have been obtained or waived prior to the Closing Date, be terminated or
      impaired or become terminable as a result of the transactions contemplated
      hereby. Each Company has all Permits necessary to operate its respective
      business.

     

    3.22. Compliance
      with Laws.
      None
      of
      the Companies is in violation of, or have violated, and to the best knowledge
      of
      the Companies and the Shareholders, are neither under investigation with respect
      to nor have been threatened to be charged with or given notice of, any violation
      or alleged violation of, any Law or Order, nor is there any basis for any such
      charge.

     

    3.23. Pre-payments.
      No
      Company has received any payments with respect to any services to be rendered
      or
      goods to be provided after the Closing.

     

    3.24. Employees.
      Schedule
      3.24 sets forth a true and complete list of the names, titles, annual salaries
      or wage rates and other compensation, vacation and fringe benefits, claims
      under
      benefit plans, resident alien status (if applicable), residence addresses,
      social security numbers, relationship to any Shareholder and office location
      of
      all employees of each Company, indicating part-time and full-time employment
      and
      all changes in salaries and wage rates per employee since January 1, 2004.
      None
      of the Companies or the Shareholders has promised any employee, consultant
      or
      agent of any Company that he or she will be employed by or receive any
      particular benefits from the Parent or the Surviving Corporations on or after
      the Closing. Schedule 3.24 sets forth a true and complete list of the names,
      addresses and titles of the directors and officers of each Company.

     

    3.25. Compliance
      with Labor Laws and Agreements.
      Each
      Company has complied in all material respects with all applicable Laws and
      Orders relating to employment or labor. To each Company's knowledge, no such
      Law
      or Order requires Parent or the Surviving Corporations to give any notice,
      make
      any filing, receive any approval, or take any other action to, with, or from
      or
      with respect to any Authority in connection with the transactions contemplated
      hereby. There is no legal prohibition with respect to the permanent residence
      of
      any employee of any of the Companies in the United States or his or her
      permanent employment by any Company or Parent or the Surviving Corporations.
      No
      present or former employee, officer or director of any Company has, or will
      have
      at the Closing Date, any claim against Surviving Corporation for any matter
      including, without limitation, for wages, salary, vacation, severance, or sick
      pay except for the same incurred in the ordinary course of business for the
      last
      payroll period prior to the Closing Date. There is no:

     

    (a) unfair
      labor practice complaint against any of the Companies pending before the
      National Labor Relations Board or any state or local agency; 

     

    
      
        
        

      

      
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    (b) pending
      labor strike or other material labor trouble affecting any of the
      Companies;

     

    (c) material
      labor grievance pending against any of the Companies;

     

    (d) pending
      representation question respecting the employees of any Company; or

     

    (e) pending
      arbitration proceeding arising out of or under any collective bargaining
      agreement to which any Company is a party.

     

    In
      addition, to each Company's and each Shareholders' knowledge: (i) none of the
      matters specified in clauses (a) through (e) above is threatened against any
      Company; (ii) no union organizing activities have taken place with respect
      to
      any Company; (iii) no basis exists for which a claim may be made under any
      collective bargaining agreement to which any Company is a party; and (iv) each
      of the Shareholders is in good health.

     

    3.26. Pension
      and Benefit Plans.
      All
      accrued obligations of each Company applicable to its employees, whether arising
      by operation of Law, by contract, by past custom or otherwise, for payments
      by
      any Company to trusts or other funds or to any governmental agency, with respect
      to unemployment compensation benefits, social security benefits or any other
      benefits for its employees with respect to the employment of said employees
      through the date hereof have been paid or adequate accruals therefor have been
      made on the Financial Statements. All reasonably anticipated obligations of
      the
      Companies with respect to such employees (except for those related to wages
      during the pay period immediately prior to the Closing Date and arising in
      the
      ordinary course of business), whether arising by operation of Law, by contract,
      by past custom, or otherwise, for salaries, vacation and holiday pay, sick
      pay,
      bonuses and other forms of compensation payable to such employees in respect
      of
      the services rendered by any of them prior to the date hereof have been or
      will
      be paid by such Company prior to the Closing Date.

     

    3.27. Employment
      Matters.
      Schedule
      3.27 sets forth a true and complete list of every employment agreement,
      commission agreement, employee group or executive medical, life, or disability
      insurance plan, and each incentive, bonus, profit sharing, retirement, deferred
      compensation, equity, phantom equity, option, equity purchase, equity
      appreciation right or severance plan of each Company now in effect or under
      which such Company has or might have any obligation, or any understanding
      between the Companies and any employee concerning the terms of such employee's
      employment that does not apply to such Company's employees generally
      (collectively, “Labor Agreements”). None of the Companies has any employee
      benefit plans within the meaning of Section 3(3) of ERISA. Each Company has
      delivered to Parent true and complete copies of each such Labor Agreement and,
      where applicable, the most recent Form 5500 filed for the plan. 

     

    
      
        
        

      

      
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    3.28. Tax
      Matters.
      From
      its incorporation through and until September 30, 2005, Skynet was properly
      taxable as a subchapter S corporation for federal and New York State income
      Tax
      purposes. Since October 1, 2005, and at all times since then, Skynet is and
      has
      been properly taxable as a “C” corporation for federal, New York State and New
      York City income Tax purposes. Since its incorporation, and at all times since
      then, Zylonet is and has been properly taxable as a “C” corporation for federal
      and New Jersey State and local income Tax purposes. Within
      the times and in the manner prescribed by Law, each Company has filed all
      required Tax Returns, which accurately and completely reflected each respective
      Company's Tax liability for the respective periods covered thereby, has paid
      or
      provided for all Taxes shown thereon to be due and owing by it and has paid
      or
      provided for all deficiencies or other assessments of Taxes, interest or
      penalties owed by it; no Tax Authority has asserted any claim for the assessment
      of any additional Taxes of any nature with respect to any periods covered by
      any
      such Tax Returns; and, except as set forth on Schedule 3.28, all Taxes required
      to be withheld or collected by each Company have been duly withheld or collected
      and, to the extent required, have been properly reported and paid to the proper
      taxing Authority or properly segregated or deposited as required by Law. Each
      Tax Return filed by each Company fully and accurately reflects its liability
      for
      Taxes for such year or period and accurately sets forth all items (to the extent
      required to be included or reflected in such returns) relevant to its future
      liabilities for Taxes, including the Tax basis of its properties and assets.
      No
      audit of any Tax Return of any Company is in progress or, to the knowledge
      of
      any Company or any Shareholder, threatened. None of the Companies has waived
      or
      extended any applicable statute of limitations relating to the assessment or
      collection of any Taxes. No issue has been raised with any Company by any Tax
      Authority that is currently pending in connection with any Tax Return. No
      material issue has been raised in any examination by any Tax Authority with
      respect to any Company which, by application of similar principles, reasonably
      could be expected to result in a proposed deficiency for any other period not
      so
      examined. There are no unresolved issues or unpaid deficiencies relating to
      any
      such examination. Each Company has delivered to Parent true and correct copies
      of all of such respective Company's federal, state and local income Tax Returns
      for all periods from and after January 1, 2001. As
      a
      result of the Mergers, each Merger Sub will acquire at least 90% of the FMV
      of
      the net assets and at least 70% of the FMV of the gross assets held by the
      applicable Company immediately prior to the Mergers. For purposes of the
      immediately preceding sentence, amounts paid by either Company to dissenters,
      amounts paid by either Company to shareholders who receive cash or other
      property, Company assets used to pay its reorganization expenses, and all
      redemptions and distributions (except for regular, normal dividends) made by
      either Company immediately preceding the Mergers, will be included as assets
      of
      that Company immediately prior to the Mergers. The liabilities of such Company
      assumed by the applicable Merger Sub and the liabilities to which the
      transferred assets of such Company are subject were incurred by such Company
      in
      the ordinary course of business. The FMV of the assets of each Company
      transferred to a Merger Sub in the Mergers will equal or exceed the sum of
      the
      liabilities assumed by that Merger Sub plus the amount of liabilities, if any,
      to which the transferred assets are subject.

     

    3.29. Finders’
      Fees.
      There
      is
      no investment banker, broker, finder or other intermediary that has been
      retained by or is authorized to act on behalf of any Company, any Shareholder
      or
      any of their respective Affiliates who might be entitled to any fee or
      commission from either Surviving Corporation, Parent or any of its Affiliates
      upon consummation of the transactions contemplated by this
      Agreement.

     

    
      
        
        

      

      
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    3.30. Investment
      Representations. 

     

    (a) Each
      Shareholder recognizes that an investment in Parent involves a high degree
      of
      risk for many reasons, including, without limitation, that (i) an investment
      in
      the Parent Class C Common Stock is highly speculative and only investors who
      can
      afford the loss of their entire investment should consider purchasing the Parent
      Class C Common Stock; (ii) there may be no public market for the Underlying
      Parent Stock and an investor may not be able to liquidate its investment for
      the
      foreseeable future; (iii) Parent is an early stage company with limited
      operating history upon which to base its likelihood for success; (iv)
      transferability of the Parent Class C Common Stock is extremely limited; and
      (v)
      the Company's business plan involves conducting business in the Peoples Republic
      of China, which involves substantial risks. Each Shareholder acknowledges that
      Parent makes no representation that the effective price per share being paid
      by
      each Shareholder pursuant to this Agreement represents the fair market value
      for
      the Shares. 

     

    (b) Each
      Shareholder is an “accredited investor” as such term is defined in Rule 501 of
      Regulation D (“Reg. D”) promulgated under the Act by virtue of the fact that
      each Shareholder is a natural person whose individual net worth or joint net
      worth with that person's spouse exceeds $1,000,000; and or is a natural person
      who had an individual income in excess of $200,000 in each of the two most
      recent years or joint income with that person's spouse is in excess of $300,000
      in each of those years and has a reasonable expectation of reaching the same
      income in the current year. Each Shareholder acknowledges that Parent has the
      right to require evidence of Shareholder's status as an accredited investor,
      if
      necessary.

     

    (c) Each
      Shareholder acknowledges that it has prior investment experience, including
      investments in non-listed and non-registered securities, or has employed the
      services of an investment advisory, attorney or accountant to evaluate the
      merits and risks of such an investment on its behalf, and each Shareholder
      represents that it understands the highly speculative nature of an investment
      in
      Parent Class C Common Stock which may result in the loss of the total amount
      of
      such investment.

     

    (d) Each
      Shareholder has adequate means of providing for such Shareholder's current
      needs
      and possible personal contingencies, and each Shareholder has no need, and
      anticipates no need in the foreseeable future, for liquidity in such
      Shareholder's investment in the Parent Class C Common Stock. Each Shareholder
      is
      able to bear the economic risks of this investment and, consequently, without
      limiting the generality of the foregoing, each Shareholder is able to hold
      the
      Parent Class C Common Stock for an indefinite period of time and has a
      sufficient net worth to sustain a loss of the entire investment in the event
      such loss should occur.

     

    (e) No
      Shareholder has made an overall commitment to investments which are not readily
      marketable that are disproportionate to such Shareholder's net worth, and such
      Shareholder's investment in the Parent Class C Common Stock will not cause
      such
      overall commitment to become excessive. 

     

    (f) Except
      as
      otherwise set forth in Article IV, Parent has not and is not making any
      representations or warranties to Shareholders or providing any advice or
      information to Shareholders at all. Each Shareholder acknowledges that it has
      retained its own professional advisors to evaluate the tax and other
      consequences of an investment in the Parent Class C Common Stock and Underlying
      Parent Stock.

     

    
      
        
        

      

      
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    (g) Each
      Shareholder acknowledges that this offering of Parent Class C Common Stock
      has
      not been reviewed by the SEC because this is intended to be a non-public
      offering pursuant to Section 4(2) of the Act and Rule 506 under Regulation
      D of
      the Act. Each Shareholder acknowledges that it is not acquiring the Parent
      Class
      C Common Stock as a result of any general solicitation or advertising. The
      Parent Class C Common Stock and Underlying Parent Stock will be received by
      each
      Shareholder for such Shareholder's own account, for investment and not for
      distribution or resale to others. 

     

    (h) Each
      Shareholder understands that there is no market for the Parent Class C Common
      Stock. Each Shareholder understands that even if a public market ultimately
      develops in the United States for the Underlying Parent Stock, Rule 144 (the
      “Rule”) promulgated under the Act requires, among other conditions, a one year
      holding period prior to the resale (in limited amounts) of securities acquired
      in a non public offering without having to satisfy the registration requirements
      under the Act. Each Shareholder understands that Parent makes no representation
      or warranty regarding its fulfillment in the future of any reporting
      requirements under the Securities Exchange Act of 1934, as amended, or its
      dissemination to the public of any current financial or other information
      concerning Parent, as is required by the Rule as one of the conditions of its
      availability. 

     

    (i) Each
      Shareholder understands that Parent may need to raise capital in the near term
      through private financings in order to develop its business as proposed, which
      may include the sale of equity securities. The issuance of these equity
      securities could result in dilution to each Shareholder. Each Shareholder
      understands that if Parent is unable to raise capital when needed, Parent may
      not be able to develop its business as planned and its inability to raise
      capital in the future could adversely affect its ability to
      operate.

     

    (j) Each
      Shareholder understands that Armand Rousso is the co-founder and a consultant
      providing key services to Parent and that Parent's success is highly dependent
      upon retaining his services, as well as it being able to recruit and retain
      the
      services of qualified executive officers and management to manage its day-to-day
      business operations and to establish and maintain relationships with any future
      customers. Each Shareholder understands that Parent's success will also depend
      upon its ability to recruit and retain qualified technical personnel experienced
      in, among other things, website hosting and related services and network
      security. Competition is strong for the types of personnel Parent requires
      to
      operate its business as proposed and each Shareholder understands that there
      are
      no assurances that Parent will be able to hire, motivate and retain such
      persons.

     

    (k) Each
      Shareholder recognizes that Parent will have to continue to develop proprietary
      information and other intellectual property in order to develop and operate
      its
      business and there are no assurances that such intellectual property will be
      developed in a timely manner, if at all. Parent may be unable to adequately
      protect its proprietary rights and other intellectual property and unauthorized
      parties may misappropriate or infringe on the trade secrets, copyrights,
      trademarks, service marks and similar proprietary rights of Parent. Parent may
      have to resort to litigation to protect its intellectual property rights, to
      protect trade secrets or to determine the validity and scope of the proprietary
      rights of others. Any litigation, regardless of its success, would be costly
      and
      require significant time and attention of management and technical personnel.
      Each Shareholder recognizes that any such litigation could force Parent to:
      refrain from selling, incorporating or using products that incorporate any
      challenged intellectual property; pay damages; enter into licensing or royalty
      agreements that may contain undesirable terms; or redesign products or services
      that eliminate infringing or potentially infringing technology.

     

    
      
        
        

      

      
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    (l) Each
      Shareholder recognizes that Parent may also be the subject of litigation brought
      by third parties claiming that Parent is violating their intellectual property.
      These third parties may litigate to protect their intellectual property rights,
      to protect trade secrets or to determine the validity and scope of their
      proprietary rights. Defending against such litigation, regardless of its
      success, would be costly and require significant time and attention of
      management and technical personnel and could force Parent to: refrain from
      selling, incorporating or using products that incorporate any challenged
      intellectual property; pay damages; enter into licensing or royalty agreements
      that may contain undesirable terms; or redesign products or services that
      eliminate infringing or potentially infringing technology.

     

    (m) Each
      Shareholder understands and acknowledges that the Parent's business will also
      depend upon its ability to protect its computer and software systems and data
      centers against damage from fire, power loss, hacker attacks, worms, trojan
      horses, viruses and other similar events. Each Shareholder understands and
      acknowledges that there can be no assurance that Parent will be successful
      in
      protecting such systems. 

     

    (n) Each
      Shareholder recognizes that the Parent's business will be highly dependent
      on
      its computer equipment and software systems and Parent will need to develop
      and
      maintain technological capabilities that enable it to meet customer demands.
      Each Shareholder understands and acknowledges that there can be no assurance
      that Parent can successfully undertake such endeavors. 

     

    (o) Each
      Shareholder understands that Parent does business in China, including pursuant
      to its contracts with China Daily Information d/b/a Chinadaily.com.cn, a Chinese
      corporation (“Chinadaily.com”). Each Shareholder understand that in doing
      business in China, Parent faces substantial risks, including: significant
      political and economic uncertainties, including changes in laws and regulations,
      or their interpretation and changes in government officials responsible for
      administering such matters; the imposition of confiscatory taxation; language
      barriers and other difficulties in staffing and managing foreign operations;
      legal uncertainties or unanticipated changes regarding regulatory requirements;
      the nationalization or other expropriation of private enterprises; restrictions
      on currency conversion and repatriation; devaluations of currency; uncertainties
      of laws and enforcement relating to the protection of intellectual property;
      potentially uncertain or adverse tax consequences; and the overall economic
      conditions in China.

     

    (p) Each
      Shareholder understands that there is a risk that the government of China and
      any agency thereof may, with or without cause, prohibit, restrict or block
      access to the Parent's search engine throughout China. Each Shareholder
      understand that if the government of China or any agency thereof took such
      actions, there may be limited or no legal remedies available to Parent. Each
      Shareholder further understand that if access to Parent's search engine is
      in
      any way prohibited, restricted or blocked throughout China, even for a limited
      period of time, Parent's business as proposed would be materially adversely
      affected.

     

    
      
        
        

      

      
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    (q) Each
      Shareholder understands that if Parent does business in China and other foreign
      countries as proposed, Parent could face foreign currency risks. Each
      Shareholder understand that to the extent future revenue of Parent is
      denominated in foreign currencies, it would be subject to increased risks
      relating to foreign currency exchange rate fluctuations that could have a
      material adverse effect on Parent's business and operations.

     

    (r) Foreign
      companies may experience a lack of remedies and impartiality under the Chinese
      legal system. China has a civil law system based on written statutes in which
      judicial decisions have little precedence value. The Chinese government has
      enacted some laws and regulations dealing with matters such as corporate
      organization and governance, foreign investment, commerce, taxation and trade.
      However, their experience in implementing, interpreting and enforcing these
      laws
      and regulations is limited, and Parent's ability to enforce commercial claims
      or
      to resolve commercial disputes is unpredictable. These matters may be subject
      to
      the exercise of considerable discretion by agencies of the Chinese government,
      and forces unrelated to the legal merits of a particular matter or dispute
      may
      influence their determination. As such, each Shareholder understands that Parent
      may not be able to satisfactorily redress any grievances it may have against
      another party in China or which another party may have against it.

     

    (s) Each
      Shareholder has been advised of the following. In The
      United States of America v. Marc Armand Rousso, etc,
      in the
      U.S. District Court, in New Jersey (the “Court”), CR. No. 99-512 Mr. Rousso
      entered into a plea agreement in 1999 whereby, inter
      alia,
      Mr.
      Rousso pleaded guilty to (A) one felony count of violating 15 U.S.C. §§ 78j(b)
      and 78ff(a) and 17 C.F.R. § 240.10b in connection with securities, and (B) one
      felony count involving the transportation, transmission and transfer of monetary
      instruments and funds to conceal proceeds of the aforesaid activities contrary
      to 18 U.S.C. § 1956(a)(2)(B)(i), in violation of 18 U.S.C. § 1956(h). The
      provisions of any Court sentencing could preclude Mr. Rousso from rendering
      services to Parent. At the same time, Mr. Rousso was convicted in France of,
      inter
      alia,
      stock
      fraud, and as part of the proceeding Mr. Rousso was credited with time served
      and was fined 120,000 euros. The case is titled The
      Government v. Rousso and Laroze,
      Case
      No. 9334769086. 

     

    (t) Although
      Parent has launched its search engine website, substantial upgrades and
      improvements to it are necessary in order for the website to perform according
      to Parent's standards and for Parent's search engine website to be successful
      and there is no assurance that any of the foregoing can or will be attained.
      Each Shareholder also understands that the Parent's business plan involves
      the
      possibility of making additional acquisitions, but that there is no certainty
      that Parent will be successful in doing so.

     

    (u) Parent's
      business plan as envisioned is heavily dependent on the Parent's contract with
      Chinadaily.com, under which, among other things, Chinadaily.com is to endeavor
      to use its best efforts to deliver and update all or a majority of the data
      regarding China in its website. There is no guarantee that Chinadaily.com,
      respectively, will be able to effectively perform under its contract, if at
      all.
      In the event that Chinadaily.com fails to perform effectively under such
      contract, Parent's business as proposed will be materially adversely
      affected.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (v) Each
      Shareholder understands and consents to the placement of a legend on any
      certificate or other document evidencing Parent Class C Common Stock and
      Underlying Parent Stock stating that such Parent Class C Common Stock and
      Underlying Parent Stock has not been registered under the Act and setting forth
      or referring to the restrictions on transferability and sale thereof. Each
      certificate evidencing the Shares shall bear the legends set forth below, or
      legends substantially equivalent thereto, together with any other legends that
      may be required by federal or state securities laws at the time of the issuance
      of the Parent Class C Common Stock and Underlying Parent Stock:

     

    THE
      SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR
      OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL (I) REGISTERED
      UNDER THE ACT OR (II) (A) THE ISSUER OF THE SHARES (THE “ISSUER”) HAS RECEIVED
      AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT
      SUCH
      OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE
      ACT
      AND (B) THE CONSENT OF THE ISSUER IN ACCORDANCE WITH THE AGREEMENT AND PLANS
      OF
      MERGERS REFERRED TO BELOW.

     

    THE
      SHARES REPRESENTED HEREBY ARE SUBJECT TO “DRAG ALONG” PROVISIONS AND OTHER
      RESTRICTIONS PURSUANT TO THAT CERTAIN AGREEMENT AND PLANS OF MERGERS BETWEEN,
      AMONG OTHERS, THE ISSUER AND THE ORIGINAL HOLDER. A COPY OF SAID AGREEMENT
      IS
      AVAILABLE FROM THE COMPANY UPON REQUEST

     

    (w) Each
      Shareholder consents that Parent may permit the transfer of the Parent Class
      C
      Common Stock and the Underlying Parent Stock out of its name only (i) after
      the
      Contingent Payment Period (ii) when its request for transfer is accompanied
      by
      an opinion of counsel reasonably satisfactory to the Company that neither the
      sale nor the proposed transfer results in a violation of the Act or any
      applicable foreign securities or U.S. state “blue sky” laws (collectively
“Securities Laws”) and (iii) to a transferee acceptable to Parent, so long as
      the Underlying Parent Stock is not Publicly Traded. 

     

    3.31. Software.

     

    (a) Schedule
      3.31(a) contains a true, correct, complete and accurate list of each Company's
      owned software (“Software”), except for “shrink wrap” software. Except as set
      forth on Schedule 3.31(a), the listed Company is the sole and exclusive owner
      of
      such Software.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (b) All
      software used or held for use by the Companies that is not owned by the
      Companies (the “Third Party Software”) (including any commonly available “shrink
      wrap” Software copyrighted by third parties) is used pursuant to an agreement or
      license and each such agreement or license is valid and enforceable and in
      full
      force and effect and neither the Companies nor, to the knowledge of the
      Companies, any licensor is in material default under or in breach of any such
      license or agreement. Schedule 3.31(b) lists all of the material Third Party
      Software of the Companies.

     

    (c) The
      Software and the Third Party Software and each Company's rights therein are
      sufficient and adequate to conduct the business of each Company to the full
      extent the business of each Company is conducted as of the date hereof and
      as
      such business will be conducted as of the Closing. Consummation of the
      transactions contemplated by this Agreement will not result in an impairment
      of
      the rights of any Company to any of the Software, or to any Third Party
      Software. Consummation of the transactions contemplated by this Agreement will
      not result in any increase of any license fees with respect to any of the Third
      Party Software. All Software and any Third Party Software that is incorporated
      into the Software perform in accordance with the documentation and other written
      material used in connection with the Software and Third Party Software, is
      in
      machine readable form and contains all current revisions of such Software and
      Third Party Software. The Software and, to the knowledge of each Company, the
      Third Party Software, is free of material defects in operations. The Software
      and, to the knowledge of each Company, the Third Party Software, contains no
      disabling devices.

     

    (d) The
      source code for all Software will compile into object code or otherwise be
      capable of performing the functions described in the documentation pertaining
      to
      the Software in all material respects. All source code and other documentation
      concerning the Software is free of any defect which would prevent it from
      compiling or performing in all material respects.

     

    3.32. Business
      Operations; Servers.

     

    (a) Schedule
      3.32(a) is a complete and correct list of the methods of payment (including
      specific types of credit cards accepted and whether or not personal checks,
      bank
      checks or money orders are accepted) that each of the Companies accepts for
      sales of merchandise from their respective Websites (and in the case of Skynet
      from its retail storefront) and from advertising. Schedule 3.32(a) also
      indicates the average amount of time taken for the applicable Company to receive
      payment on any form of payment and the likelihood of such Company not receiving
      payment based on the form of payment.

     

    (b) The
      Companies each own all of their servers and other computer equipment (other
      than
      webservers) necessary to operate their respective businesses as conducted as
      of
      the date hereof and as such businesses will be conducted by such Company as
      of
      the Closing.

     

    (c) The
      amounts payable and paid by the Companies each month to DataPipe and Devix
      for
      various hosting and bandwidth services provided to the Companies has been $500
      and $950 per month, respectively. Consummation of the transactions contemplated
      by this Agreement will not result in any increase in fees or any change with
      respect to such services.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (d) Schedule
      3.32(d) is a complete and correct list of the websites owned and maintained
      by
      each Company and indicates which such Company operates each website. Except
      as
      indicated on Schedule 3.32(d), all websites are in good working
      order.

     

    (e) Except
      as
      set forth on Schedule 3.32(e), since November 7, 2005, none of the Companies
      has
      declared or paid any dividends or made any distribution or bonus payment to
      any
      Shareholder or employee of any of the Companies except that notwithstanding
      the
      foregoing, but subject to the other provisions of this Agreement, the Companies
      may so payout in the aggregate an amount not in excess of all accrued but
      previously undistributed profits for periods ended prior to October 1,
      2005.

     

    3.33. Powers
      of Attorney and Suretyships.
      Neither
      Company has any general or special powers of attorney outstanding (whether
      as
      grantor or grantee thereof) or any obligation or liability (whether actual,
      accrued, accruing, contingent, or otherwise) as guarantor, surety, co-signer,
      endorser, co-maker, indemnitor or otherwise in respect of the obligation of
      any
      Person.

     

    3.34. Other
      Information.
       Neither
      this Agreement nor any of the documents or other information made available
      to
      Parent or its Affiliates, attorneys, accountants, agents or representatives
      pursuant hereto or in connection with Parent's due diligence review of the
      business of each Company or the transactions contemplated by this Agreement
      contains or will contain any untrue statement of a material fact or omits or
      will omit to state a material fact necessary in order to make the statements
      contained therein not misleading. To the best knowledge of each Company and
      each
      Shareholder each Company has provided Parent with all material information
      regarding the Business.

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES OF PARENT

     

    Parent
      represents and warrants to each Company and each Shareholder as
      follows:

     

    4.1. Due
      Incorporation.
      Parent
      is a corporation duly organized, validly existing and as of Closing will be
      in
      good standing under the Laws of the State of Delaware. Merger Subs are
      corporations duly organized, validly existing and in good standing under the
      Laws of the State of Delaware. Parent has all requisite power and authority,
      corporate and otherwise, and all governmental licenses, franchises, permits,
      authorizations, consents and approvals required to own, lease, and operate
      its
      assets, properties and businesses and to carry on its business as now conducted
      on the date hereof. Merger Subs have not conducted any business to date and
      has
      only engaged in certain activities relating to its organization. Parent has
      not
      adopted any plan, or made any agreement in respect of any merger, consolidation,
      sale of all or substantially all of its assets, reorganization,
      recapitalization, dissolution or liquidation.

     

    4.2. Corporate
      Authorization.
      The
      execution, delivery and performance by Parent and Merger Subs of this Agreement
      and each of the other Additional Agreements to which it is a party and the
      consummation by Parent and Merger Subs of the transactions contemplated hereby
      and thereby are within the corporate powers of Parent and Merger Subs and have
      been duly authorized by all necessary corporate action on the part of Parent
      and
      Merger Subs. This Agreement constitutes, and upon their execution and delivery,
      each of the Additional Agreements will constitute, the valid and legally binding
      agreement of Parent or Merger Subs, as applicable, enforceable against each
      in
      accordance with their respective terms.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    4.3. Governmental
      Authorization.
      None of
      the execution, delivery or performance by Parent or Merger Subs of this
      Agreement or any Additional Agreement requires any consent, approval, license
      or
      other action by or in respect of, or registration, declaration or filing with,
      any Authority by Parent or Merger Subs, except for the filing of the certificate
      of amendment by the Parent to create the Parent Class C Common Stock, the
      respective certificates of merger and Form D with the SEC.

     

    4.4. No
      Violation.
      Neither
      the execution and delivery of this Agreement or any Additional Agreement to
      be
      executed by Parent or Merger Subs hereunder nor the consummation of the
      transactions contemplated herein and therein will (a) violate any provision
      of
      Parent's or Merger Subs' Certificate of Incorporation, By-laws or other charter
      documents; or (b) violate any Laws or Orders to which either Parent or Merger
      Subs or their property is subject.

     

    4.5. Charter
      Documents.
      Parent
      and Merger Subs have previously delivered to the Companies and Shareholders
      true
      and complete copies of its respective Articles of Incorporation and By-laws,
      as
      in effect or constituted on the date hereof

     

    4.6. Consents.
      There
      are no agreements, commitments, arrangements, contracts or other instruments
      binding upon Parent or Merger Subs or any of their properties requiring a
      consent, approval, authorization, order or other action of or filing with any
      Person as a result of the execution, delivery and performance of this Agreement
      or any of the Additional Agreements or the consummation of the transactions
      contemplated hereby or thereby.

     

    4.7. Capitalization
      of Parent and Merger Subs.
      Schedule 4.7 sets forth, with respect to Parent, (i) the Parent’s authorized
      capital stock, (ii) the number of shares of Parent’s common stock that is
      outstanding, (iii) each security convertible into or exercisable or exchangeable
      for Parent’s common stock, the number of shares of common stock such security is
      convertible into, and the exercise or conversion price of such security. The
      issuance of all the outstanding capital stock of Parent has been duly
      authorized, and all such capital stock is validly issued, fully paid and
      nonassessable.

     

    4.8. Financial
      Statements.
      

     

    (a) Attached
      hereto as Schedule 4.8 is an unaudited consolidated balance sheet of Parent
      as
      of December 31, 2005 and the audited balance sheet of Parent as of December
      31,
      2004, and statements of operations and retained earnings and cash flow
      statements of Parent for the years ended December 31, 2004 and December 31,
      2005
      (collectively, the “Parent Financial Statements”). The balance sheet contained
      in the Parent Financial Statements as of the twelve months ended December 31,
      2005 is referred to herein as the “Interim Parent Balance Sheet”. The Parent
      Financial Statements (i) were prepared from the books and records of Parent;
      (ii) were prepared in accordance with GAAP consistently applied; (iii)
      fairly and accurately present Parent's financial condition and the results
      of
      its operations as of their respective dates and for the periods then ended;
      (iv)
      contain and reflect all necessary adjustments and accruals for a fair
      presentation of Parent's financial condition as of their dates; and (v) contain
      and reflect adequate provisions for all reasonably anticipated liabilities
      for
      all material income, property, sales, payroll or other Taxes applicable to
      Parent with respect to the periods then ended.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (b) Except
      as
      specifically disclosed, reflected or fully reserved against on the Interim
      Parent Balance Sheet and for liabilities and obligations of a similar nature
      and
      in similar amounts incurred in the ordinary course of business since the date
      of
      the Interim Parent Balance Sheet, there are no liabilities, debts or obligations
      of any nature (whether accrued, absolute, contingent, liquidated or
      unliquidated, unasserted or otherwise) relating to Parent. All debts and
      liabilities, fixed or contingent, which should be included under GAAP on an
      accrual basis on the Interim Balance Sheets are included therein.

     

    4.9. Litigation.
      There
      is no action, suit, investigation, hearing or proceeding (or any basis therefor)
      pending against, or to the best knowledge of Parent, threatened against or
      affecting, Parent, any of its officers or directors, or the business of Parent,
      before any court or arbitrator or any governmental body, agency or official
      which if adversely determined against Parent, has or could reasonably be
      expected to have a material adverse effect on the business, assets, condition
      (financial or otherwise), liabilities, results or operations or prospects of
      Parent, or which in any manner challenges or seeks to prevent, enjoin, alter
      or
      delay the transactions contemplated hereby. There are no outstanding judgments
      against Parent.

     

    4.10. Issuance
      of Parent Class C Common Stock.
      The
      Parent Class C Common Stock, when issued in accordance with this Agreement,
      will
      be duly authorized and validly issued, fully paid and
      nonassessable.

     

    4.11. Finders’
      Fees.
      There
      is no investment banker, broker, finder or other intermediary which has been
      retained by or is authorized to act on behalf of Parent or Merger Subs or any
      of
      their Affiliates who might be entitled to any fee or commission from the
      Companies or the Shareholders or any of their respective Affiliates upon
      consummation of the transactions contemplated by this Agreement.

     

    4.12. Other
      Information.
      Neither
      this Agreement nor any of the documents or other information made available
      to
      Shareholders or their Affiliates, attorneys, accountants, agents or
      representatives pursuant hereto or in connection with the Companies' and the
      Shareholders' due diligence review of the business of Parent, Merger Subs or
      the
      transactions contemplated by this Agreement contains or will contain any untrue
      statement of a material fact or omits or will omit to state a material fact
      necessary in order to make the statements contained therein not
      misleading.

     

    ARTICLE
      V

     

    COVENANTS
      OF THE COMPANIES AND THE SHAREHOLDERS PENDING CLOSING

     

    Each
      Company and the Shareholders jointly and severally covenant and agree
      that:

     

    5.1. Conduct
      of the Business.
      From the
      date hereof through the Effective Time, Shareholders shall cause each Company
      to, and each Company shall, conduct the Business only in the ordinary course
      (including the payment of accounts payable and the collection of accounts
      receivable), consistent with past practices, and shall not enter into any
      material transactions without the prior written consent of Parent, and shall
      use
      their respective best efforts to preserve intact each Company's business
      relationships with employees, advertisers, suppliers, customers and other third
      parties.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    Without
      limiting the generality of the foregoing, from the date hereof until the
      Effective Time, without Parent's prior written consent, none of the Companies
      shall:

     

    (a) amend,
      waive any provision of, terminate prior to its scheduled expiration date, or
      otherwise compromise in any way, any Contract (including contracts described
      in
      clause (b) below), or any other right or asset of such respective
      Company;

     

    (b) enter
      into any contract, agreement, lease, license or commitment, which (i) is with
      respect to real property, (ii) extends for a term of one year or more or (iii)
      obligates the payment of more than $200,000 (individually or in the
      aggregate);

     

    (c) make
      any
      capital expenditures in excess of $50,000 (individually or in the aggregate);
      

     

    (d) sell,
      lease, license or otherwise dispose of any assets or assets covered by any
      Contract except (i) pursuant to existing contracts or commitments disclosed
      herein and (ii) sales of inventory in the ordinary course consistent with past
      practice; 

     

    (e) accept
      returns of products sold from Inventory except in the ordinary course,
      consistent with past practice; 

     

    (f) pay,
      declare or promise to pay any dividends or other distributions with respect
      to
      its capital stock, or pay, declare or promise to pay any other payments to
      any
      Shareholder (other than payments of salary accrued in said period at the current
      salary rate set forth in Schedule 3.24) or any Affiliate of such Company;
provided,
      however,
      that,
      notwithstanding
      the forgoing and subject to the other provisions of this Agreement, but without
      duplication, the Companies may so payout in the aggregate an amount not in
      excess of all accrued but previously undistributed profits for periods ended
      prior to October 1, 2005;

     

    (g) authorize
      any salary increase of more than 10% for any employee making an annual salary
      of
      greater than $50,000 or in excess of $5,000 in the aggregate on an annual basis
      or change the bonus or profit sharing policies of such Company;

     

    (h) obtain
      or
      suffer to exist any Indebtedness in excess of $25,000 in the aggregate;


     

    (i) suffer
      or
      incur any Lien on any asset of such Company except for Liens existing as of
      the
      date hereof as set forth on Schedule 3.15(b);

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    (j) suffer
      any damage, destruction or loss of property related to any assets of such
      Company, whether or not covered by insurance;

     

    (k) delay,
      accelerate or cancel any receivables or Indebtedness owed to such Company or
      write-off or make further reserves against the same;

     

    (l) merge
      or
      consolidate with or acquire any other Person or be acquired by any other
      Person;

     

    (m) suffer
      any insurance policy protecting the assets of such Company to lapse;


     

    (n) make
      any
      change in its accounting principles or methods or write down the value of any
      inventory or assets;

     

    (o) change
      the place of business of such Company;

     

    (p) extend
      any loans other than travel or other expense advances to employees in the
      ordinary course of business not to exceed $2,000 individually or $7,500 in
      the
      aggregate; 

     

    (q) issue,
      redeem or repurchase any shares of their respective capital stock or membership
      interests;

     

    (r) effect
      or
      agree to any material changes in shipping practices, terms or
      rates;

     

    (s) reduce
      the prices of products sold from Inventory for customers except in the ordinary
      course of business;

     

    (t) effect
      or
      agree to any change in any practices or terms, including payment terms, with
      respect to customers or suppliers;

     

    (u) hire
      any
      employees, consultants or advisors;

     

    (v) make
      or
      rescind any election related to Taxes, file any amended income Tax Return or
      make any changes in its methods of Tax accounting; or

     

    (w) agree
      to
      do any of the foregoing.

     

    None
      of
      the Companies nor the Shareholders shall cause such Company to, (i) take or
      agree to take any action that might make any representation or warranty of
      such
      Company or any Shareholder hereunder inaccurate in any respect at, or as of
      any
      time prior to, the Closing Date or (ii) omit to take, or agree to omit to take,
      any action necessary to prevent any such representation or warranty from being
      inaccurate in any respect at any such time.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    5.2. Access
      to Information. 

     

    (a) From
      the
      date hereof until and including the Closing Date, each Company shall, and each
      Shareholder shall cause each respective Company to, (a) continue to give Parent,
      its counsel and other representatives full access to the offices, properties,
      books and records of each respective Company, (b) furnish to Parent, its counsel
      and other representatives such information relating to the Business as such
      Persons may request and (c) cause the employees, counsel, accountants and
      representatives of each respective Company to cooperate with Parent in its
      investigation of the Business; provided
      that
      no
      investigation pursuant to this Section 5.2 (or any investigation prior to
      the date hereof) shall affect any representation or warranty given by any of
      the
      Companies or the Shareholders;

     

    (b) Each
      Company and the Shareholders shall arrange for representatives of Parent to
      meet
      with or speak to the representatives of the three (3) largest suppliers of
      each
      Company.

     

    5.3. Notices
      of Certain Events.
      Each
      Company and each Shareholder shall promptly notify Parent of:

     

    (i) any
      notice or other communication from any Person alleging or raising the
      possibility that the consent of such Person is or may be required in connection
      with the transactions contemplated by this Agreement or that the transactions
      contemplated by this Agreement might give rise to any claims or causes of action
      or other rights by or on behalf of such Person or result in the loss of any
      rights or privileges of such Company to any such Person or any Lien or any
      of
      the Shares;

     

    (ii) any
      notice or other communication from any Authority in connection with the
      transactions contemplated by this Agreement; 

     

    (iii) any
      actions, suits, claims, investigations or proceedings commenced or threatened
      against, relating to or involving or otherwise affecting any Shareholder, the
      Shares, any Company or the Business or that relate to the consummation of the
      transactions contemplated by this Agreement; and

     

    (iv) the
      occurrence of any fact or circumstance which might make any representation
      made
      hereunder by any Company and/or any Shareholder false in any respect or result
      in the omission or the failure to state a material fact.

     

    ARTICLE
      VI

     

    COVENANTS
      OF THE COMPANIES AND THE SHAREHOLDERS

     

    The
      Companies and the Shareholders jointly and severally covenant and agree
      that:

     

    6.1. Confidentiality.
      Except
      as otherwise required by law, on and after the Closing, no Shareholder shall,
      without the prior written consent of Parent, or a person authorized thereby,
      disclose to any other Person or use (whether for the account of any Shareholder
      or any other party) any confidential information or proprietary work product
      of
      Parent, any Surviving Corporation or the Companies or any client of Parent,
      any
      Surviving Corporation or the Companies. In the event any Shareholder believes
      that it is required to disclose any such confidential information pursuant
      to
      applicable Laws, such Shareholder shall give timely written notice to Parent
      so
      that Parent may have an opportunity to obtain a protective order or other
      appropriate relief. All Shareholders shall cooperate fully in any such action
      by
      Parent.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    6.2. Conduct
      of the Business.
      From the
      Closing Date until the end of the Contingent Period, the Shareholders shall
      cause the respective Surviving Corporations to, and each Surviving Corporation
      shall, conduct the Business only in the ordinary course (including the payment
      of accounts payable and the collection of accounts receivable), consistent
      with
      past practices of the Companies, and shall not enter into any material
      transactions without the prior written consent of Parent or the approval of
      the
      board of directors of such respective Surviving Corporation, and shall use
      their
      respective best efforts to preserve intact the respective Surviving
      Corporations' business relationships with employees, advertisers, suppliers,
      customers and other third parties. Without limiting the generality of the
      foregoing, from the Closing Date through the end of the Contingent Payment
      Period, without Parent's prior written consent, or the approval of the board of
      directors of such Surviving Corporation, the Surviving Corporation shall
      not:

     

    (a) enter
      into any contract, agreement, lease, license or commitment which is outside
      the
      ordinary course of business or, even if the ordinary course of business,
      involving payments in excess of $10,000 or having a term in excess of three
      months or involving any real property;

     

    (b) make
      any
      capital expenditures;

     

    (c) sell,
      lease, license or otherwise dispose of any of its assets, except sales of
      Inventory in the ordinary course consistent with past practice;

     

    (d) accept
      returns of products sold from Inventory except in the ordinary course,
      consistent with past practice; 

     

    (e) obtain
      or
      suffer to exist any loan or other Indebtedness; 

     

    (f) suffer
      or
      incur any Lien on any of its assets;

     

    (g) merge
      or
      consolidate with or acquire any other Person or be acquired by any other
      Person;

     

    (h) issue,
      redeem or repurchase any shares of their respective capital stock;

     

    (i) effect
      or
      agree to any material changes in shipping practices, terms or
      rates;

     

    (j) reduce
      the prices of products sold from Inventory for customers except in the ordinary
      course of business; or

     

    (k) agree
      to
      do any of the foregoing.

     

    
      
        
        

      

      
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    6.3. Exclusivity.
      So long
      as this Agreement is in effect, neither of the Companies nor any Shareholder
      nor
      anyone acting on their behalf shall, directly or indirectly, (i) encourage,
      solicit, initiate or participate in discussions or negotiations with, or provide
      any information to or cooperate in any manner with any Person, other than Parent
      or its Affiliates (collectively “Excluded Persons”), or an officer, partner,
      employee or other representative of an Excluded Person, concerning the sale
      of
      all or any part of the business of any of the Companies or the capital stock
      or
      other securities of any of the Companies, whether such transaction takes the
      form of a sale of stock or assets, merger, consolidation or otherwise or any
      joint venture or partnership, or (ii) otherwise solicit, initiate or encourage
      the submission of any proposal contemplating the sale of all or any part of
      the
      business of any of the Companies or the capital stock or other securities of
      any
      Company, whether such transaction takes the form of a sale of stock or assets,
      merger, consolidation or otherwise or any joint venture or partnership or
      (iii) consummate any such transaction or accept any offer or agree to
      engage in any such transaction. The Companies or Shareholders shall promptly
      (within 24 hours) communicate to Parent the terms of any proposal, contract
      or
      sale which it may receive in respect of any of the foregoing and respond to
      any
      such communication in a manner reasonably acceptable to Parent. The Notice
      of
      the Companies or the Shareholders under this Section 6.3 will include the
      identity of the person making such proposal or offer, copies (if written) or
      a
      written description of the terms (if oral) thereof and any other such
      information with respect thereto as Parent may reasonably request.

     

    6.4. Reporting
      and Compliance With Law.
      From
      the date hereof through the Closing Date, each Company shall duly and timely
      file all respective Tax Returns required to be filed with Authorities, pay
      any
      and all Taxes required by any Authority and duly observe and conform, in all
      material respects, to all applicable Laws and Orders. 

     

    6.5. Injunctive
      Relief.
      If
      either Company or any Shareholder breaches, or threatens to commit a breach
      of,
      any of the covenants set forth in Section 6.1, Section 6.3, or Section 13.4
      (the
“Restrictive Covenants”), Parent shall have the following rights and remedies,
      which shall be in addition to, and not in lieu of, any other rights and remedies
      available to Parent by agreement (including those set forth in Section 11.1
      hereof), under law or in equity:

     

    (a) The
      right
      and remedy to have the Restrictive Covenants specifically enforced by any court
      having equity jurisdiction, all without the need to post a bond or any other
      security or to prove any amount of actual damage or that money damages would
      not
      provide an adequate remedy, it being acknowledged and agreed that any such
      breach or threatened breach will cause irreparable injury to Parent and that
      monetary damages will not provide adequate remedy to Parent; and

     

    (b) The
      right
      and remedy to require the Companies and each Shareholder, jointly and severally,
      (i) to account for and pay over to Parent all compensation, profits, monies,
      accruals, increments or other benefits derived or received by the Companies,
      any
      Shareholder or any associated party as the result of any such breach; and (ii)
      to indemnify Parent against any other losses, damages (including special and
      consequential damages), costs and expenses, including actual attorneys fees
      and
      court costs, which may be incurred by it and which result from or arise out
      of
      any such breach or threatened breach. 

     

    
      
        
        

      

      
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    6.6. Covenants
      with respect to Parent Class C Common Stock.

     

    (a) If
      the
      holders in the aggregate of more than 50% of the outstanding shares of the
      Underlying Parent Stock, as one class (“Selling Shareholders”), propose to sell,
      assign, mortgage, transfer, pledge, hypothecate or otherwise dispose of all,
      but
      not less than all, of their respective shares to a third party in one or a
      series of related transactions which is approved by a majority of the Parent's
      Board of Directors, then the Selling Shareholders may, at their option, require
      each Shareholder or any transferee (the “Holder”) to sell all of such Holder's
      capital stock of Parent in such transfer to the third party on the same terms
      and conditions, and for the same consideration, as the Selling Shareholders.
      The
      Holder shall take such necessary or desirable actions in connection with the
      consummation of such transaction as reasonably requested by Parent or the
      Selling Shareholders.

     

    (b) From
      the
      Closing Date to the end of the Contingent Payment Period, the Shareholders
      may
      not transfer any shares of the Parent Class C Common Stock or the Underlying
      Parent Stock except (i) in accordance with Section 6.6(a) and with the consent
      of Parent, (ii) for estate-planning purposes of such Person to (A) a trust
      under which the distribution of the shares of Parent Class C Common Stock or
      the
      Underlying Parent Stock may be made only to beneficiaries who is such Person,
      his or her spouse, his or her parents, members of his or her immediate family
      or
      his or her lineal descendants, and provided that such trust may never make
      a
      distribution to anyone other than such persons, (B) a charitable remainder
      trust, the income from which will be paid to such Person during his or her
      life,
      (C) a corporation, the stockholders of which are only such Person, his or
      her spouse, his or her parents, members of his or her immediate family or his
      or
      her lineal descendants and whose stockholders will at all times remain such
      persons or (D) a partnership or limited liability company, the partners or
      members of which are only such Person, his or her spouse, his or her parents,
      members of his or her immediate family or his or her lineal descendants and
      whose partners or members will at all times remain such persons, and
      (iii) in case of his or her death, by will or by the laws of intestate
      succession, to his or her executors, administrators, testamentary trustees,
      legatees or beneficiaries, unless any class of Parent's common stock is Publicly
      Traded in which case the Shareholders may transfer their shares of Parent Class
      C Common Stock or the Underlying Parent Stock on the later of (x) the end of
      the
      Contingent Payment Period, and (y) six months after shares of the Parent Class
      C
      Common Stock or the Underlying Parent Stock first becomes Publicly
      Traded.

     

    (c) Each
      Holder agrees that in connection with an underwritten public offering of capital
      stock of Parent, upon the request of Parent or the principal underwriter
      managing such public offering, the Parent Class C Common Stock and any
      Underlying Parent Stock (and any shares received directly or indirectly with
      respect thereto) may not be sold, offered for sale or similar financial effect
      or otherwise disposed of without the prior written consent of Parent or such
      underwriter, as the case may be, for a period not exceeding six months after
      the
      effectiveness of the registration statement filed in connection with such
      offering, but only to the extent that Parent's directors, executive officers
      and/or their immediate family are similarly bound. Each Holder agrees to sign
      such further documents as Parent may reasonably request to give this subsection
      (c) effect. The lock-up agreement established pursuant to this subsection (c)
      shall have perpetual duration.

     

    
      
        
        

      

      
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    (d) Each
      Shareholder understands and agrees that if he should breach his Restrictive
      Covenant Agreement or his Employment Agreement, as the case may be, or be
      dismissed for “cause”, as such term is defined in his Employment Agreement
      (each, a “Repurchase Event”), then Parent shall have the right (but not the
      obligation) to repurchase all of such Shareholder's Parent Class C Common Stock
      and any outstanding Underlying Parent Stock (and any shares received directly
      or
      indirectly with respect thereto), for a period of one hundred and eighty (180)
      days, at its fair market value as such is determined on the date of the
      respective Repurchase Event.

     

    (e) Each
      Shareholder understands that due to the fact that Parent Class C Common Stock
      and the Underlying Parent Stock cannot be readily purchased or sold in the
      open
      market, and for other reasons, the Parent and/or its existing shareholders
      may
      be irreparably damaged in the event that Sections 6.6(a) through (d) are not
      specifically enforced. Consequently, in the event of a breach or threatened
      breach of the terms, covenants and/or conditions of Sections 6.6(a) through
      (d),
      Parent is, in addition to all other remedies, entitled to a temporary or
      permanent injunction, without showing any actual damage or posting a bond,
      and/or a decree for specific performance, in accordance with the provisions
      hereof.

     

    (f) Termination
      of Restrictions and Registration Rights

     

    (i) The
      restrictions and rights provided for in Section 6.6(a), shall terminate in
      the
      event that the Parent Class C Common Stock or the Underlying Parent Stock
      becomes Publicly Traded. As used herein, common stock is “Publicly Traded” if
      stock of that class is (i) listed or admitted to unlisted trading privileges
      on
      a national securities exchange, the NASDAQ National Market or the NASDAQ
      Smallcap Market, the Hong Kong Exchange, the Hong Kong GEM, the London Stock
      Exchange, the London Stock Exchange Alternative Investors Market (AIM) or any
      other recognized foreign stock exchange or (ii) if sales or bid and offer
      quotations are reported for that class of stock in the automated quotation
      system operated by the National Association of Securities Dealers,
      Inc.

     

    (ii) In
      the
      event that, prior to the earlier of the second anniversary of the date of this
      Agreement or the date the Underlying Parent Stock is Publicly Traded or the
      Initial Public Offering of Parent, Parent grants registration rights to any
      Person (the “Receiving Persons”), the Shareholders will, with respect to the
      shares (the “Rights Shares”) of Underlying Parent Stock issuable upon the
      conversion of the Parent Class C Common Stock distributed to them pursuant
      to
      this Agreement, receive “piggyback”
      registration rights on the same terms and conditions as the “piggyback”
registration rights granted to the Receiving Persons.

     

    (iii) Any
      registration rights granted pursuant to Section 6.6(f)(ii) will be subject
      to
      usual and customary cutbacks and limitations, including that the Parent will
      not
      be required to register any shares as to which the resale provisions of Rule
      144
      under the Act as well as all applicable Laws and rules of any exchange or
      automated quotation system on which the Underlying Parent Stock trades or may
      be
      listed. 

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    (iv) The
      Shareholders may only be granted, and may only exercise, registration rights
      one
      time pursuant to the provisions of Section 6.6(f)(ii).

     

    (v) The
      number of Rights Shares pursuant to which registration rights under Section
      6.6(f)(ii) may be granted for each Shareholder shall be limited to the number
      of
      Rights Shares equal to (X) the number of Rights Shares issuable upon conversion
      of all of the shares of Parent Class C Common Stock distributed to the
      Shareholder pursuant to this Agreement multiplied by (Y) the quotient of (i)
      the
      number of shares of capital stock of Parent with registration rights issued
      to
      the Receiving Person divided by (ii) the total number of shares of capital
      stock
      of Parent outstanding on a fully diluted basis.

     

    ARTICLE
      VII

     

    COVENANTS
      OF ALL PARTIES HERETO

     

    The
      parties hereto covenant and agree that:

     

    7.1. Best
      Efforts; Further Assurances.
      Subject
      to the terms and conditions of this Agreement, each Party shall use its best
      efforts to take, or cause to be taken, all actions and to do, or cause to be
      done, all things necessary or desirable under applicable Laws, and in the case
      of the Companies and each Shareholder as reasonably requested by Parent, to
      consummate and implement expeditiously the transactions contemplated by this
      Agreement. The parties hereto shall execute and deliver such other documents,
      certificates, agreements and other writings and take such other actions as
      may
      be necessary or desirable in order to consummate or implement expeditiously
      the
      transactions contemplated by this Agreement.

     

    7.2. Confidentiality
      of Transaction.
      Any
      information (except publicly available or freely usable material obtained from
      another source) respecting any party or its Affiliates will be kept in strict
      confidence by all other Parties to this Agreement and their agents. Except
      as
      required by Law, neither the Companies, any Shareholder nor any of their
      respective Affiliates, directors, officers, employees or agents will disclose
      the terms of the transactions contemplated hereunder at any time, currently,
      or
      on or after the Closing, regardless of whether the Closing takes place, except
      as necessary to their attorneys, accountants and professional advisors, in
      which
      instance such persons and any employees or agents of the Companies shall be
      advised of the confidential nature of the terms of the transaction and shall
      themselves be required by the Companies to keep such information confidential.
      Except as required by Law, each Party shall retain all information obtained
      from
      the other and their lawyers on a confidential basis except as necessary to
      their
      attorneys, accountants and professional advisors, in which instance such persons
      and any employees or agents of such Party shall be advised of the confidential
      nature of the terms of the transaction and shall themselves be required by
      such
      party to keep such information confidential.

     

    7.3. Best
      Efforts to Obtain Consents.
      The
      Companies and each Shareholder hereby agree to use their best efforts to obtain
      each respective Company Consent as promptly as practicable
      hereafter.

     

    
      
        
        

      

      
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    7.4. Tax
      Matters.

     

    (a) The
      Shareholders shall prepare or cause to be prepared and, subject to Parent's
      review and approval, file or cause to be filed on a timely basis all Tax Returns
      with respect to each Company for taxable periods ending on or prior to the
      Closing Date. The Shareholders shall prepare or cause to be prepared such Tax
      Returns on a basis consistent with the similar Tax Returns for the immediately
      preceding periods and shall not make, amend, revoke or terminate any election
      or
      change any tax accounting method, practice or procedure without Parent's
      consent, except that Skynet has revoked its “subchapter S” status for federal
      and New York State income Tax purposes as of October 1, 2005. Shareholder shall
      give a copy of each such Tax Return to Parent prior to filing and shall not
      file
      the same without Parent's reasonable approval. The Shareholders shall timely
      pay
      the Taxes shown to be due and owing by the Companies on such Tax
      Returns.

     

    (b) Parent
      shall include the Surviving Corporations or cause the Surviving Corporations
      to
      be included in its consolidated federal income Tax Return for the period that
      includes the day after the Closing Date.

     

    (c) Subject
      to Section 7.4(a), Parent shall duly and timely file or cause to be filed all
      Tax Returns required to be filed by the Surviving Corporations after the Closing
      Date and shall pay or cause the Surviving Corporations to pay all Taxes required
      to be paid with respect to periods commencing after the Closing
      Date.

     

    7.5. Management
      of the Surviving Companies.
      The
      following provisions shall govern the operations of each Surviving Corporation
      during the period commencing on the Closing Date through the Contingent Payment
      Period.

     

    (a) Parent
      and the Shareholders agree that during the Contingent Payment Period, the
      Surviving Corporations together, will operate and be managed as a separate
      subsidiary from Parent and its other Affiliates, reporting to and subject to
      the
      authority of Parent.

     

    (b) Management.

     

    (i) The
      operations of each Surviving Corporation shall be conducted to: (i) comply
      on a
      timely basis with the financial reporting and budgeting procedures of Parent
      as
      from time to time in effect, which procedures require the approval of annual
      profit and capital expenditure plans; (ii) operate within any Parent policies
      as
      from time to time in effect, and (iii) operate generally within the parameters
      of the then current profit plan and capital expenditure budget of such Surviving
      Corporation as proposed by Benzaken and approved by Parent; provided, however,
      that if the parties are unable to agree upon the same in good faith, then Parent
      has the right to establish the same. 

     

    (ii) Subject
      to the provisions of clause (a) above and provisions of the Employment Agreement
      that Benzaken is executing and delivering on the date hereof, during the
      Contingent Payment Period, Benzaken, shall have primary responsibility and
      authority for the day-to-day operations of the Surviving Corporations and,
      together with Parent, the long-term planning of such Surviving Corporations.
      Subject to the foregoing, Benzaken shall be responsible for: (i) personnel
      selection and termination, and (ii) establishment of compensation levels for
      Surviving Corporation employees (excluding employees whose compensation is
      governed by an employment contract and any Affiliate of Benzaken), provided
      that
      all increases in compensation for any fiscal year shall be made only in
      accordance with the current budget of such Surviving Corporation as proposed
      by
      Benzaken and approved by Parent.

     

    
      
        
        

      

      
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    (c) Restricted
      Activities.
      During
      the Contingent Payment Period, Parent agrees that it will not cause either
      Surviving Corporation to take or acquiesce in such Surviving Corporation taking
      any of the following actions without the prior written consent of the
      Representative:

     

    (i) any
      sale,
      lease or disposition of all or a substantial portion of the assets or Business
      of such Surviving Corporation; 

     

    (ii) entering
      into any line of business not related to the Business of such Surviving
      Corporation;

     

    (iii) any
      acquisition by such Surviving Corporation of the stock, assets or business
      of
      another Person;

     

    (iv) the
      merger, consolidation or amalgamation of such Surviving Corporation with and
      into another Person or of another Person with and into such Surviving
      Corporation; or

     

    (v) the
      adoption or amendment of any profit sharing or other employee benefit plan
      except for such amendments as may be required by law.

     

    7.6. Changes
      in Management.
      The
      Parties hereto understand and agree that under the terms of the Employment
      Agreements by certain of the Shareholders, such Shareholder may be terminated
      with or without Cause (as defined therein). Accordingly, each of the parties
      hereto agrees that if (a) the employment of one or more of the Shareholders
      terminates during the Contingent Payment Period regardless of the reason
      therefor, (b) or there are changes in the composition of the Board of Directors
      of the Surviving Corporations, no Party to this Agreement shall have the right
      (x) to make a claim that Parent or such Surviving Corporation is in breach
      of
      this Agreement as a result of any such action, or (y) to make a claim against
      Parent or any of its Affiliates that as a result of any such action the Merger
      Consideration has been adversely affected. 

     

    ARTICLE
      VIII

     

    CONDITIONS
      TO CLOSING

     

    8.1. Condition
      to the Obligations of Parent, Merger Subs and the
      Companies.
      The
      obligations of Parent, Merger Subs and Companies to consummate the Closing
      are
      subject to the satisfaction of all the following conditions: 

     

    (a) No
      provision of any applicable Law or Order shall prohibit or impose any condition
      on the consummation of the Closing or limit in any material way Parent's right
      to control or operate the Surviving Corporations or any material portion of
      the
      Businesses.

     

    (b) There
      shall not be pending or threatened any proceeding by a third-party to enjoin
      or
      otherwise restrict the consummation of the Closing.

     

    
      
        
        

      

      
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    8.2. Conditions
      to Obligations of Parent and Merger Subs.
      The
      obligation of Parent and Merger Subs to consummate the Closing is subject to
      the
      satisfaction, or the waiver at Parent's and Merger Subs' sole and absolute
      discretion, of all the following further conditions:

     

    (a) (i)
      Each
      of the Companies and Shareholders shall have duly performed in all material
      respects all of their respective obligations hereunder required to be performed
      by them at or prior to the Closing Date, (ii) the representations and warranties
      of each Company and Shareholders contained in this Agreement, the Additional
      Agreements and in any certificate or other writing delivered by the respective
      Company or any Shareholder pursuant hereto, disregarding all qualifications
      and
      exceptions contained therein relating to materiality or Material Adverse Effect,
      shall be true and correct at and as of the Closing Date, as if made at and
      as of
      such date with only such exceptions as could not in the aggregate reasonably
      be
      expected to have a Material Adverse Effect, (iii) there shall have been no
      event, change or occurrence which individually or together with any other event,
      change or occurrence, could reasonably be expected to have a Material Adverse
      Change or a Material Adverse Effect, regardless of whether it involved a known
      risk, and (iv) Parent and Merger Subs shall have received a certificate signed
      by the President and Chief Financial Officer of each Company and all respective
      Shareholders to the effect set forth in clauses (i), (ii) and (iii) of this
      Section 8.2(a).

     

    (b) No
      court,
      arbitrator or governmental body, agency or official shall have issued any Order,
      or have pending before it a proceeding for the issuance of any thereof, and
      there shall not be any provision of any applicable Law, statute, rule or
      regulation, restraining or prohibiting the consummation of the Closing or the
      effective operation or enjoyment by Parent or the Surviving Corporations of
      the
      Business after the Closing Date.

     

    (c) Shareholders
      shall have delivered to Parent certificates representing the
      Shares.

     

    (d) Parent
      shall have received all documents it may request relating to the existence
      of
      the Companies and the authority of each Company to enter into and perform its
      respective obligations under this Agreement, all in form and substance
      reasonably satisfactory to Parent and its legal counsel, including (i) a copy
      of
      the certificate of incorporation of each respective Company certified as of
      a
      recent date by the Secretary of State of its jurisdiction of organization,
      (ii)
      copies of such Company's bylaws as effective on the date hereof; (iii) copies
      of
      resolutions duly adopted by the Board of Directors of each Company and by the
      unanimous vote or consent of each Company's shareholders authorizing this
      Agreement and the Additional Agreements and the transaction contemplated hereby
      and thereby, (iv) a certificate of the Secretary of each Company certifying
      each
      of the foregoing and as to signatures of the officer(s) authorized to execute
      this Agreement and any certificate or document to be delivered pursuant hereto,
      together with evidence of the incumbency of such Secretary, and (v) a recent
      good standing certificate regarding each respective Company from the office
      of
      the Secretary of State of the State of New York or State of New Jersey, as
      the
      case may be, and each other jurisdiction in which such Company is qualified
      to
      do business. 

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    (e) Parent
      shall be fully satisfied, in its sole discretion which shall be exercised in
      good faith, with the results of its and its representatives' review of each
      Company and the Business (including any review of the assets, financial
      condition, and prospects of the Business); provided,
      that no
      such review shall affect any representation or warranty of the Companies or
      any
      Shareholder given hereunder or in any instrument related to the transactions
      contemplated hereby.

     

    (f) Each
      of
      Buyer's Edge and the Members shall have duly performed all of their respective
      obligations under the Asset Purchase Agreement to be performed by them at or
      prior to the Closing Date thereunder and Parent shall be fully satisfied, in
      its
      sole discretion which shall be exercised in good faith, that all such conditions
      with respect to the Closing as defined thereunder shall have been fulfilled
      and
      satisfied.

     

    (g) Certificates
      representing all of the issued and outstanding shares of the Skynet Common
      Stock
      and the Zylonet Common Stock shall be presented at the Closing for cancellation,
      together with the original stock ledgers and minute books of the
      Companies.

     

    (h) Parent
      or
      either Merger Sub shall have reasonably determined that, after Parent or either
      Merger Sub has had the opportunity to meet or speak to representatives of the
      largest suppliers of each of the Companies pursuant to Section 5.2, all such
      suppliers will provide the Surviving Corporations terms for the purchase of
      products as favorable to the Surviving Corporations as the terms provided to
      each of the Companies.

     

    (i) Each
      Merger Sub will have entered into an agreement, in form and substance
      satisfactory to it, with one or more banks and/or credit card companies,
      pursuant to which, from and after the Closing, said banks and/or credit card
      companies will process said Surviving Corporation's credit card arrangements
      for
      the Business or a letter (in form and substance satisfactory to each Merger
      Sub)
      from each existing bank or credit card company that said Merger Sub may continue
      to process credit card arrangements pursuant to the agreements of the Companies
      with respect thereto until such time as said Merger Sub enters into its own
      agreements with such banks and/or credit card companies.

     

    (j) Parent
      shall have received all Company Consents (including any required consents of
      the
      landlords under the Real Property Leases), in form and substance reasonably
      satisfactory to Parent, and no such Company Consent shall have been
      revoked.

     

    (k) Each
      of
      the Companies shall have delivered to Parent documents satisfactory to Parent
      to
      evidence the release of all Liens on any portion of the assets of the respective
      Company and the filing of appropriate UCC-3 Termination Statements, other than
      on behalf of Samsung respect with to its inventory of goods and merchandise
      and
      any proceeds thereof (including accounts receivable, promissory notes,
      installment contracts, contract rights, chattel papers and instruments arising
      therefrom).

     

    (l) Each
      of
      Benzaken, Albert Esses and Rafael Chemtob shall have entered into and delivered
      to Parent an employment agreement with the Companies substantially in the form
      attached hereto as Exhibits
      A-1,
      A-2,
      A-3,
      respectively (collectively, the “Employment Agreements”), and the same shall be
      in full force and effect.

     

    
      
        
        

      

      
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    (m) Each
      of
      the Shareholders shall have entered into and delivered to Parent a restrictive
      covenant agreements with the Companies substantially in the form attached hereto
      as Exhibits
      A-4,
      respectively (collectively, the “Restrictive Covenant Agreements”), and the same
      shall be in full force and effect.

     

    (n) Parent
      shall have received an affidavit of Shareholders of non-foreign status in the
      form required by Section 1445 of the Code and the regulations
      thereunder.

     

    (o) Neither
      the Companies nor Buyer's Edge shall have any Indebtedness, other than
      Indebtedness of Buyer’s Edge to Skynet.

     

    (p) The
      aggregate Adjusted Tangible Personal Property of the Companies and Buyer's
      Edge
      shall exceed their aggregate liabilities by at least the amount of the Minimum
      Required EBITDA.

     

    (q) Each
      officer and director of the Companies shall have tendered their resignation
      from
      such positions.

     

    8.3. Conditions
      to Obligations of the Companies.
      The
      obligation of the Companies to consummate the Closing is subject to the
      satisfaction, or the waiver at the Companies discretion, of all the following
      further conditions:

     

    (a) (i)
      Parent and each Merger Sub shall have performed in all material respects all
      of
      their respective obligations hereunder required to be performed by it at or
      prior to the Closing Date, (ii) the representations and warranties of Parent
      contained in this Agreement, the Additional Agreements and in any certificate
      or
      other writing delivered by Parent or Merger Sub pursuant hereto, disregarding
      all qualifications and expectations contained therein relating to materiality,
      shall be true and correct in all material respects at and as of the Closing
      Date, as if made at and as of such date, (iii) there shall have been no event,
      change or occurrence which individually or together with any other event, change
      or occurrence, could reasonably be expected to have a material adverse effect,
      regardless of whether it involved a known risk, on the business, assets,
      condition (financial or otherwise), liabilities, result of operations of
      prospects of the Parent or any Merger Sub, and (iv) each Shareholder shall
      have
      received a certificate signed by an authorized officer of Parent and Merger
      Sub
      to the foregoing effect.

     

    (b) The
      Companies shall have received (i) a copy of the certificate of incorporation
      of
      the Parent and each Merger Sub, (ii) copies of the bylaws of each of Parent
      and
      each Merger Sub as effective on the date hereof; (iii) copies of resolutions
      duly adopted by the Board of Directors of Parent and Merger Sub and by the
      unanimous vote or consent of Merger Sub's shareholders authorizing this
      Agreement and the Additional Agreements and the transaction contemplated hereby
      and thereby, (iv) a certificate of the Secretary or Assistant Secretary of
      Parent and each Merger Sub certifying each of the foregoing and as to signatures
      of the officer(s) authorized to execute this Agreement and any certificate
      or
      document to be delivered pursuant hereto, together with evidence of the
      incumbency of such Secretary or Assistant Secretary, and (v) a recent good
      standing certificate regarding Parent and each Merger Sub from the office of
      the
      Secretary of State of its respective jurisdiction of organization and each
      other
      jurisdiction in which each Company is qualified to do business.

     

    
      
        
        

      

      
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    (c) The
      Companies shall have delivered to each of the Shareholders a duly executed
      copy
      of their respective Employment Agreements.

     

    (d) Parent
      shall have made a demand loan to the Companies in the amount equal to the lesser
      of (i) all accrued but previously undistributed profits of the Companies (as
      mutually agreed to by the Companies and Parent), and (ii)
      [$________].

     

    (e) The
      transactions contemplated in the Asset Purchase Agreement shall have been
      consummated simultaneous with the Closing.

     

    ARTICLE
      IX

     

    RELIANCE
      ON REPRESENTATIONS AND WARRANTIES

     

    9.1. Reliance
      on Representations and Warranties of each Company and the
      Shareholders.
      Notwithstanding any right of Parent to fully investigate the affairs of each
      Company and notwithstanding any knowledge of facts determined or determinable
      by
      Parent pursuant to such investigation or right of investigation, Parent shall
      have the right to rely fully upon the representations, warranties, covenants
      and
      agreements of each Company and the Shareholders contained in this
      Agreement.

     

    9.2. Reliance
      on Representations and Warranties of Parent.
      Each
      Company and the Shareholders shall have the right to rely fully on Parent's
      representations, warranties, covenants and agreements herein, notwithstanding
      any investigation by the Companies or the Shareholders and notwithstanding
      any
      knowledge of facts determined or determinable by the Companies or the
      Shareholders pursuant to such investigation or right of
      investigation.

     

    
      
        
        

      

      
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    ARTICLE
      X

     

    INDEMNIFICATION

     

    10.1. Indemnification
      of Parent, Merger Subs and Surviving Corporations.

     

    (a) Prior
      to
      the Closing Date, each Company and each Shareholder, and subsequent to the
      Closing Date each Shareholder, hereby jointly and severally agrees to indemnify
      and hold harmless Parent, the Merger Subs and Surviving Corporations and their
      Affiliates (including, after the Closing, Buyer's Edge) and each of their
      respective directors, officers, employees, shareholders, attorneys and agents
      and permitted assignees (collectively, the “Purchaser Indemnitees,” provided,
      however,
      the
      term “Purchaser Indemnitees” shall not include any of the Shareholders
      regardless of their capacity), against and in respect of any and all loss,
      payments, demand, penalty, liability, judgment, damage, diminution in value,
      claim or out-of-pocket costs and expenses (including actual costs of
      investigation and attorneys' fees and other costs and expenses) (all of the
      foregoing collectively, “Losses”) incurred or sustained by any Purchaser
      Indemnitee as a result of (i) any breach, inaccuracy or nonfulfillment or
      the alleged breach, inaccuracy or nonfulfillment of any of the representations,
      warranties and covenants of any of the Companies or any of the Shareholders
      contained herein or in the Additional Agreements (but not the Employment
      Agreements) or any certificate or other writing delivered pursuant hereto or
      of
      Buyer's Edge or of the Members (ii) the failure to pay any claims by any third
      parties (including breach of contract claims, violations of warranties,
      trademark infringement, for “spamming”, privacy violations, torts or consumer
      complaints) with respect to the business of the Companies or Buyer's Edge for
      any period prior to the Closing Date, (iii) the violation of any Laws by any
      of
      the Companies or Buyer's Edge prior to the respective Closing, or (iv) the
      failure to pay any Taxes incurred prior to the Closing to any Tax Authority
      or
      to file any Tax Return with any Tax Authority; provided,
      that
      Losses in connection with Sections 10.1(ii), (iii) and (iv) shall be deemed
      to
      include any amounts payable after the Closing pursuant to or otherwise in
      connection with any of the matters listed on Schedule 3.19. The total payments
      made by the Companies and the Shareholders to the Purchaser Indemnitees with
      respect to Losses shall not exceed the sum of Merger Consideration plus the
      Purchase Price of the transactions contemplated under the Asset Purchase
      Agreement (the “Maximum Indemnification”); provided,
      however,
      that no
      Purchaser Indemnitee shall be entitled to indemnification pursuant to this
      Section 10.1 unless and until the aggregate amount of Losses to all Purchaser
      Indemnitees equals at least $50,000, at which time, subject to the foregoing
      cap
      on the maximum amount payable, the Purchaser Indemnitees shall be entitled
      to
      indemnification for the total amount of such Losses. Any indemnification
      obligation of the Shareholders or the Companies under this Article X shall
      be
      first applied against the Holdback Amount, if any, at $3.50 per shares.
      Notwithstanding anything set forth in this Section 10.1, any Loss incurred
      by
      any Purchaser Indemnitee: (i) arising out of any Company's or any Shareholder's
      breach of or failure to perform any covenant or obligation to be performed
      by
      any Company or any Shareholder at, or any Shareholder after, the Closing,
      including the failure to pay any Taxes, (ii) pursuant to or otherwise in
      connection with any of the matters listed on Schedule 3.19, or (iii) in
      connection with the Holdback Amount, shall not be subject to or applied against
      the minimum amount of Losses or the cap set forth in the previous sentence.
      Notwithstanding anything set forth in this Section 10.1, no Shareholder shall
      be
      liable for a Loss in connection with any other Shareholder's breach of any
      of
      the terms and conditions set forth under Article VII or any Additional
      Agreements.

     

    
      
        
        

      

      
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    (b) Notwithstanding
      anything to the contrary, any amounts paid to a third party by Parent from
      the
      Holdback Amount shall not be considered a Loss for the purposes of Section
      10.1;
provided,
      further,
      that
      any amounts paid to the Shareholders from the Holdback Amounts, under the terms
      of Section 2.3(i), shall be eligible for the repayment by Shareholders to the
      Purchaser Indemnitee in connection with a Loss for the purposes of Section
      10.1.

     

    10.2. Indemnification
      of Shareholders.
      Parent
      and each Merger Sub hereby agrees to indemnify and hold harmless Shareholders
      (the “Shareholder Indemnitees”) against and in respect of any Losses incurred or
      sustained by Shareholder Indemnitees as a result of any breach, inaccuracy
      or
      nonfulfillment or the alleged breach, inaccuracy or nonfulfillment of any of
      the
      representations, warranties and covenants of Parent or either Merger Sub
      contained herein or any certificate or other writing delivered pursuant hereto.
      The total payments made by Parent and each Merger Sub to Shareholder Indemnitees
      with respect to Losses shall not exceed the Merger Consideration; provided,
      however,
      Shareholder Indemnitees shall not be entitled to indemnification pursuant to
      this Section 10.2 unless and until the aggregate amount of Losses to Shareholder
      Indemnitees equals at least $50,000, at which time, subject to the foregoing
      cap
      on the maximum amount payable, the Shareholder Indemnitees shall be entitled
      to
      indemnification for the total amount of such Losses. Notwithstanding anything
      set forth in this Section 10.2, any Loss incurred by any Shareholders arising
      out of Parent's or either Merger Subs' breach or failure to perform any covenant
      or obligation to be performed by Parent or either Merger Sub at or after the
      Closing Date, shall not be subject to or applied against the minimum amount
      of
      Losses or the cap set forth in the previous sentence.

     

    10.3. Procedure.
      The
      following shall apply with respect to all claims by either a Purchaser
      Indemnitee or a Shareholder Indemnitee (together, “Indemnified Party”) for
      indemnification:

     

    (a) An
      Indemnified Party shall give the Representative or Parent, or Merger Subs,
      as
      applicable (either, “Indemnifying Parties”), prompt notice (an “Indemnification
      Notice”) of any third-party claim, investigation, action, suit, hearing or
      proceeding with respect to which such Indemnified Party seeks indemnification
      pursuant to Section 10.1 or 10.2 (a “Third-Party Claim”), which shall
      describe in reasonable detail the loss, liability or damage that has been or
      may
      be suffered by the Indemnified Party. The failure to give the Indemnification
      Notice shall not impair any of the rights or benefits of such Indemnified Party
      under Section 10.1 or 10.2, except to the extent such failure materially and
      adversely affects the ability of the Indemnifying Parties to defend such claim
      or increases the amount of such liability.

     

    
      
        
        

      

      
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    (b) In
      the
      case of any Third-Party Claims as to which indemnification is sought by any
      Indemnified Party, such Indemnified Party shall be entitled, at the sole expense
      and liability of the Indemnifying Parties, to exercise full control of the
      defense, compromise or settlement of any Third-Party Claim unless the
      Indemnifying Parties, within a reasonable time after the giving of an
      Indemnification Notice by the Indemnified Party (but in any event within 20
      days
      thereafter), shall (i) deliver a written confirmation to such Indemnified Party
      that the indemnification provisions of Section 10.1 or 10.2 are applicable
      to
      such claim, investigation, action, suit, hearing or proceeding and the
      Indemnifying Parties will indemnify such Indemnified Party in respect of such
      claim, investigation, action or proceeding pursuant to the terms of Section
      10.1
      or 10.2 and, notwithstanding anything to the contrary, shall do so without
      asserting any challenge, defense, limitation on the Indemnifying Parties
      liability for Losses, counterclaim or offset, (ii) notify such Indemnified
      Party
      in writing of the intention of the Indemnifying Parties to assume the defense
      thereof, and (iii) retain legal counsel reasonably satisfactory to such
      Indemnified Party to conduct the defense of such Third-Party Claim.

     

    (c) If
      the
      Indemnifying Parties assume the defense of any such Third-Party Claim then
      the
      Indemnified Party shall cooperate with the Indemnifying Parties in any manner
      reasonably requested in connection with the defense, compromise or settlement
      thereof. If the Indemnifying Parties so assume the defense of any such
      Third-Party Claim the Indemnified Party shall have the right to employ separate
      counsel and to participate in (but not control) the defense, compromise, or
      settlement thereof, but the fees and expenses of such counsel employed by the
      Indemnified Party shall be at the expense of such Indemnified Party unless
      (i)
      the Indemnifying Parties have agreed to pay such fees and expenses, or (ii)
      the
      named parties to any such Third-Party Claim (including any impleaded parties)
      include an Indemnified Party and an Indemnifying Party and such Indemnified
      Party shall have been advised by its counsel that there may be a conflict of
      interest between such Indemnified Party and the Indemnifying Parties in the
      conduct of the defense thereof, and in any such case the reasonable fees and
      expenses of such separate counsel shall be borne by the Indemnifying
      Parties.

     

    (d) If
      the
      Indemnifying Parties elect to direct the defense of any Third-Party Claim,
      the
      Indemnified Party shall not pay, or permit to be paid, any part of any claim
      or
      demand arising from such asserted liability unless the Indemnifying Parties
      withdraw from or fail to vigorously prosecute the defense of such asserted
      liability, or unless a judgment is entered against the Indemnified Party for
      such liability. If the Indemnifying Parties do not elect to defend, or if,
      after
      commencing or undertaking any such defense, the Indemnifying Parties fail to
      prosecute or withdraw such defense, the Indemnified Party shall have the right
      to undertake the defense or settlement thereof, at the Indemnifying Parties'
      expense. Notwithstanding anything to the contrary, the Indemnifying Parties
      shall not be entitled to control, but may participate in, and the Indemnified
      Party (at the expense of the Indemnifying Parties) shall be entitled to have
      sole control over, the defense or settlement of (x) that part of any Third
      Party
      Claim (i) that seeks a temporary restraining order, a preliminary or permanent
      injunction or specific performance against the Indemnified Party, or (ii) to
      the
      extent such Third Party Claim involves criminal allegations against the
      Indemnified Party or (y) the entire Third Party Claim if such Third Party Claim
      could impose liability on the part of the Indemnified Party in an amount which
      is greater than the amount as to which the Indemnified Party is entitled to
      indemnification under this Agreement. In the event the Indemnified Party retains
      control of the Third Party Claim, the Indemnified Party will not settle the
      subject claim without the prior written consent of the Indemnifying Party,
      which
      consent will not be unreasonably withheld or delayed.

     

    
      
        
        

      

      
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    (e) If
      the
      Indemnified Party assumes the defense of any such Third-Party Claim pursuant
      to
      Section 10.1 or 10.2 and proposes to settle the same prior to a final judgment
      thereon or to forgo appeal with respect thereto, then the Indemnified Party
      shall give the Indemnifying Parties prompt written notice thereof and the
      Indemnifying Parties shall have the right to participate in the settlement,
      assume or reassume the defense thereof or prosecute such appeal, in each case
      at
      the Indemnifying Parties' expense. The Indemnifying Parties shall not, without
      the prior written consent of such Indemnified Party settle or compromise or
      consent to entry of any judgment with respect to any such Third-Party Claim
      (i)
      in which any relief other than the payment of money damages is or may be sought
      against such Indemnified Party or (ii) which does not include as an
      unconditional term thereof the giving by the claimant, person conducting such
      investigation or initiating such hearing, plaintiff or petitioner to such
      Indemnified Party of a release from all liability with respect to such
      Third-Party Claim and all other claims or causes of action (known or unknown)
      arising or which might arise out of the same facts.

     

    10.4. Periodic
      Payments.
      Any
      indemnification required by Section 10.1 or 10.2 for costs, disbursements or
      expenses of any Indemnified Party in connection with investigating, preparing
      to
      defend or defending any claim, action, suit, hearing, proceeding or
      investigation shall be made by periodic payments by the Indemnifying Parties
      to
      each Indemnified Party during the course of the investigation or defense, as
      and
      when bills are received or costs, disbursements or expenses are
      incurred.

     

    10.5. Right
      of Set Off.
      In the
      event that Parent or any Surviving Corporation is entitled to any
      indemnification pursuant to this Article, Parent or such Surviving Corporation
      shall be entitled to set off any amounts owed to (x) the Shareholders pursuant
      to Sections 2.3 and/or (y) the Members pursuant to Section 2.6(c) under the
      Asset Purchase Agreement against the amount of such indemnification. In the
      event of such a set-off, the set-off will first be allocated to: (i) any cash
      to
      which Shareholders are otherwise entitled pursuant to this Agreement and then
      to
      (ii) the shares of Parent Class C Common Stock to which Shareholders are
      otherwise entitled pursuant to this Agreement at $3.50 per share. Any such
      set-off will be treated as an adjustment to the Merger
      Consideration.

     

    10.6. Payment
      of Indemnification by Shareholders.
      In the
      event that Parent or any Surviving Corporation is entitled to any
      indemnification pursuant to this Article and Parent or such Surviving
      Corporation are unable to set off such indemnification pursuant to Section
      10.5,
      the Shareholders shall pay the amount of the indemnification (subject to the
      limitation set forth in Section 10.1) first from any available amounts under
      Section 2.5(i) (the Holdback Amount), and then in cash up to the amount of
      cash
      received by the Shareholders as part of the Merger Consideration, and then
      in
      shares of Parent Class C Common Stock at $3.50 per share. Any payments by
      Shareholders to a Purchaser Indemnitee will be treated as an adjustment to
      the
      Merger Consideration.

     

    
      
        
        

      

      
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    10.7. Insurance.
      Any
      indemnification payments hereunder shall take into account any insurance
      proceeds or other third party reimbursement actually received.

     

    10.8. Survival
      of Indemnification Rights.
      Except
      for the representations and warranties in (i) Sections 3.1, 3.2, 3.4, 3.9
      and 3.10, which shall survive until the sixth anniversary of the Closing Date
      and (ii) Sections 3.22, 3.26, 3.28 and 3.29, which shall survive until the
      expiration of the statue of limitations with respect thereto, the
      representations and warranties of each Company, Shareholders and Parent shall
      survive until the fourth anniversary of the Closing Date. The indemnification
      to
      which any Indemnified Party is entitled from the Indemnifying Parties pursuant
      to Section 10.1 or 10.2 for Losses shall be effective so long as it is asserted
      prior to (x) the sixth anniversary of the Closing Date, in the case of Section
      10.8(i); (y) the expiration of the applicable statute of limitations, in the
      case of Section 10.8(ii) and the breach or the alleged breach of any covenant
      or
      agreement of each Company or any Indemnifying Party; and (z) the fourth
      anniversary of the Closing Date, in the case of all other representations and
      warranties of each Company, Shareholders and Parent hereunder. The obligations
      of the Companies (but not of the Shareholders) in Articles V and VI shall
      terminate upon the Closing.

     

    ARTICLE
      XI

     

    DISPUTE
      RESOLUTION

     

    11.1. Arbitration.

     

    (a) The
      Parties shall promptly submit any dispute, claim, or controversy arising out
      of
      or relating to this Agreement, or any Additional Agreement (including with
      respect to the meaning, effect, validity, termination, interpretation,
      performance, or enforcement of this Agreement or any Additional Agreement)
      or
      any alleged breach thereof (including any action in tort, contract, equity,
      or
      otherwise), to binding arbitration before one arbitrator (“Arbitrator”). The
      Parties agree that binding arbitration shall be the sole means of resolving
      any
      dispute, claim, or controversy arising out of or relating to this Agreement
      or
      any Additional Agreement (including with respect to the meaning, effect,
      validity, termination, interpretation, performance or enforcement of this
      Agreement or any Additional Agreement) or any alleged breach thereof (including
      any claim in tort, contract, equity, or otherwise).

     

    
      
        
        

      

      
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    (b) If
      the
      Parties cannot agree upon the Arbitrator, the Arbitrator shall be selected
      by
      the New York City chapter head of the American Arbitration Association upon
      the
      request of either side. The Arbitrator shall be selected within 30 days of
      request.

     

    (c) The
      laws
      of the State of New York shall apply to any arbitration hereunder. In any
      arbitration hereunder, this Agreement and any agreement contemplated hereby
      shall be governed by the laws of the State of New York applicable to a contract
      negotiated, signed, and wholly to be performed in the State of New York, which
      laws the Arbitrator shall apply in rendering his decision. The Arbitrator shall
      issue a written decision, setting forth findings of fact and conclusions of
      law,
      within sixty (60) days after he shall have been selected. The Arbitrator shall
      have no authority to award punitive or other exemplary damages.

     

    (d) The
      arbitration shall be held in New York City, New York in accordance with and
      under the then-current provisions of the rules of the American Arbitration
      Association, except as otherwise provided herein.

     

    (e) On
      application to the Arbitrator, any party shall have rights to discovery to
      the
      same extent as would be provided under the Federal Rules of Civil Procedure,
      and
      the Federal Rules of Evidence shall apply to any arbitration under this
      Agreement; provided, however, that the Arbitrator shall limit any discovery
      or
      evidence such that his decision shall be rendered within the period referred
      to
      in Section 11.1(c).

     

    (f) The
      Arbitrator may, at his discretion and at the expense of the Party who will
      bear
      the cost of the arbitration, employ experts to assist him in his determinations.
      

     

    (g) The
      costs
      of the arbitration proceeding and any proceeding in court to confirm any
      arbitration award or to obtain relief as provided in Section 6.5, as applicable
      (including actual attorneys' fees and costs), shall be borne by the unsuccessful
      party and shall be awarded as part of the Arbitrator's decision, unless the
      Arbitrator shall otherwise allocate such costs, for the reasons set forth,
      in
      such decision. The determination of the Arbitrator shall be final and binding
      upon the Parties and not subject to appeal.

     

    (h) Any
      judgment upon any award rendered by the Arbitrator may be entered in and
      enforced by any court of competent jurisdiction. The parties expressly consent
      to the exclusive jurisdiction of the courts (Federal and state) in New York
      City, New York to enforce any award of the Arbitrator or to render any
      provisional, temporary, or injunctive relief in connection with or in aid of
      the
      Arbitration. The Parties expressly consent to the personal and subject matter
      jurisdiction of the Arbitrator to arbitrate any and all matters to be submitted
      to arbitration hereunder. None of the Parties hereto shall challenge any
      arbitration hereunder on the grounds that any party necessary to such
      arbitration (including the Parties hereto) shall have been absent from such
      arbitration for any reason, including that such Party shall have been the
      subject of any bankruptcy, reorganization, or insolvency
      proceeding.

     

    (i) The
      Parties shall indemnify the Arbitrator and any experts employed by the
      Arbitrator and hold them harmless from and against any claim or demand arising
      out of any arbitration under this Agreement or any agreement contemplated
      hereby, unless resulting from the willful misconduct of the person
      indemnified.

     

    
      
        
        

      

      
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    (j) This
      arbitration clause shall survive the termination of this Agreement and any
      agreement contemplated hereby.

     

    11.2. Waiver
      of Jury Trial; Exemplary Damages.
      ALL
      PARTIES HEREBY WAIVE THEIR RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE
      ARISING UNDER THIS AGREEMENT OR ANY ADDITIONAL AGREEMENT. No Party shall be
      awarded punitive or other exemplary damages respecting any dispute arising
      under
      this Agreement or any Additional Agreement. 

     

    11.3. Attorneys’
      Fees.
      The
      unsuccessful Party to any court or other proceeding arising out of this
      Agreement that is not resolved by arbitration under Section 11.1 shall pay
      to
      the prevailing party all attorneys' fees and costs actually incurred by the
      prevailing party, in addition to any other relief to which it may be entitled.
      As used in this Section 11.3 and elsewhere in this Agreement, “actual
      attorneys' fees” or “attorneys' fees actually incurred” means the full and
      actual cost of any legal services actually performed in connection with the
      matter for which such fees are sought, calculated on the basis of the usual
      fees
      charged by the attorneys performing such services, and shall not be limited
      to
“reasonable attorneys' fees” as that term may be defined in statutory or
      decisional authority.

     

    ARTICLE
      XII

     

    TERMINATION

     

    12.1. Termination
      Without Default.
      In the
      event that the Closing of the transactions contemplated hereunder has not
      occurred by March 31, 2006 (the “Outside Closing Date”) and no material breach
      of this Agreement by the party seeking to terminate this Agreement shall have
      occurred or have been made (as provided in Section 12.2 hereof) Parent and
      Merger Subs or any four Shareholders, acting together, shall have the right,
      at
      its sole option, to terminate this Agreement without liability to the other
      side. Such right may be exercised by Parent and Merger Subs, on the one hand,
      or
      any four Shareholders on the other, as the case may be, giving written notice
      to
      the other at any time after the Outside Closing Date.

     

    12.2. Termination
      Upon Default.

     

    (a) Parent
      and Merger Subs may terminate this Agreement by giving notice to any of the
      Companies or any of the Shareholders on or prior to the Closing, without
      prejudice to any rights or obligations Parent and Merger Subs may have, if
      any
      of the Companies or any Shareholder shall have materially breached any
      representation or warranty or breached any agreement or covenant contained
      herein or in any Additional Agreement to be performed prior to Closing and
      such
      breach shall not be cured within the earlier of the Scheduled Closing Date
      and
      five (5) days following receipt by the Companies or Shareholders of a notice
      describing in reasonable detail the nature of such breach. 

     

    (b) The
      Representative may terminate this Agreement by giving prior written notice
      to
      Parent, without prejudice to any rights or obligations any Shareholder or the
      Companies may have, if Parent or Merger Subs shall have materially breached
      any
      of its covenants, agreements, representations, and warranties contained herein
      to be performed prior to Closing and such breach shall not be cured within
      the
      earlier of the Scheduled Closing Date and five (5) days following receipt by
      Parent of a notice describing in reasonable detail the nature of such
      breach.

     

    
      
        
        

      

      
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    12.3. Survival.
      The
      provisions of Sections 7.2 and 10.4 shall survive any termination hereof
      pursuant to Article XII. 

     

    ARTICLE
      XIII

     

    MISCELLANEOUS

     

    13.1. Notices.
      All
      notices, requests, demands and other communications to any party hereunder
      shall
      be in writing and shall be given to such party at its address or telecopier
      number set forth below, or such other address or telecopier number as such
      party
      may hereinafter specify by notice to each other party hereto:

     

    if
      to
      Parent and Merger Subs (prior to the Closing) or Parent and Surviving
      Corporations (after the Closing), to:

     

    c/o
      Accoona Corp.

    101
      Hudson Street

    Jersey
      City, New Jersey 07302

    Attn:
      President 

    Telecopy:
      201-557-9377

     

    with
      a
      copy to:

     

    Loeb
      & Loeb LLP

    345
      Park
      Avenue

    New
      York,
      New York 10154

    Attention:
      Andrew M. Ross, Esq.

    Telecopy:
      (212) 407-4990

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

    if
      to any
      Company or any Shareholder (prior to the Closing):

    


    c/o
      Skynet

    481/485
      Kings Highway

    Brooklyn,
      NY 11223

    Attention:
      Allen Benzaken

    Telecopy:
      (718) 234-9345

     

    with
      a
      copy to:

     

    Silverman
      Sclar Shin & Byrne PLLC

    381
      Park
      Avenue South

    New
      York,
      New York 10016

    Attention:
      John Shin, Esq. 

    Telecopy:
      (212) 779-8858

    


    


    Each
      such
      notice, request or other communication shall be effective (i) if given by
      telecopy, when such telecopy is transmitted to the telecopy number specified
      herein and the appropriate answer back is received or, (ii) if given by
      certified mail, 72 hours after such communication is deposited in the mails
      with
      first class postage prepaid, properly addressed or, (iii) if given by any other
      means, when delivered at the address specified herein.

     

    13.2. Amendments;
      No Waivers. 

     

    (a) Any
      provision of this Agreement may be amended or waived if, and only if, such
      amendment or waiver is in writing and signed, in the case of an amendment,
      by
      each party hereto (or in the case of the Shareholder, the Representative),
      or in
      the case of a waiver, by the party against whom the waiver is to be
      effective.

     

    (b) No
      failure or delay by any party hereto in exercising any right, power or privilege
      hereunder shall operate as a waiver thereof nor shall any single or partial
      exercise thereof preclude any other or further exercise thereof or the exercise
      of any other right, power or privilege. The rights and remedies herein provided
      shall be cumulative and not exclusive of any rights or remedies provided by
      law.

     

    13.3. Ambiguities.
      The
      parties acknowledge that each party and its counsel has materially participated
      in the drafting of this Agreement and consequently the rule of contract
      interpretation that, and ambiguities if any in, the writing be construed against
      the drafter, shall not apply.

     

    13.4. Publicity.
      Except
      as required by law, the parties agree that neither they nor their agents shall
      issue any press release or make any other public disclosure concerning the
      transactions contemplated hereunder without the prior approval of the other
      party hereto.

     

    13.5. Expenses.
      All
      costs and expenses incurred in connection with this Agreement and the
      transactions contemplated hereby shall be paid by the party incurring such
      cost
      or expense.

     

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

     

    13.6. Successors
      and Assigns.
      The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns; provided,
      that
      (i) neither the Companies nor any Shareholder may assign, delegate or
      otherwise transfer any of its rights or obligations under this Agreement without
      the prior written consent of Parent; and (ii) in the event Parent assigns
      its rights and obligations under this Agreement to an Affiliate, Parent shall
      continue to remain liable for its obligations hereunder.

     

    13.7. Governing
      Law.
      This
      Agreement has been entered into in the State of New Jersey. Notwithstanding
      the
      foregoing, this Agreement shall be construed in accordance with and governed
      by
      the laws of the State of New York, without giving effect to the conflict of
      laws
      principles thereof.

     

    13.8. Counterparts;
      Effectiveness.
      This
      Agreement may be signed in any number of counterparts, each of which shall
      be an
      original and all of which shall be deemed to be one and the same instrument,
      with the same effect as if the signatures thereto and hereto were upon the
      same
      instrument.

     

    13.9. Entire
      Agreement.
      This
      Agreement constitutes the entire agreement among the parties with respect to
      the
      subject matter hereof and supersedes all prior agreements, understandings and
      negotiations, both written and oral, among the parties with respect to the
      subject matter of this Agreement. No representation, inducement, promise,
      understanding, condition or warranty not set forth herein has been made or
      relied upon by any party hereto. Neither this Agreement nor any provision hereof
      is intended to confer upon any Person other than the parties hereto any rights
      or remedies hereunder other than Indemnified Parties as set forth in Section
      10.1 and 10.2 hereof, which shall be a third party beneficiary
      hereof.

     

    13.10. Severability.
      If
      any
      one or more provisions of this Agreement shall, for any reasons, be held to
      be
      invalid, illegal or unenforceable in any respect, such invalidity, illegality
      or
      unenforceability shall not affect any other provision of this Agreement, but
      this Agreement shall be construed as if such invalid, illegal or unenforceable
      provision had never been contained herein.

     

    13.11. Captions.
      The
      captions herein are included for convenience of reference only and shall be
      ignored in the construction or interpretation hereof.

     

    13.12. Construction.

     

    (a) All
      references in this Agreement to “including” shall be deemed to mean “including,
      without limitation”.

     

    (b) For
      the
      avoidance of any doubt, all references in this Agreement to “the knowledge or
      best knowledge of the Companies” or similar terms shall be deemed to include the
      knowledge or best knowledge of any Shareholder.

     

    (c) Where
      the
      context or construction requires, all words applied in the plural shall be
      deemed to have been used in the singular, and vice versa; the masculine shall
      include the feminine and neuter, and vice versa; and the present tense shall
      include the past and future tense, and vice versa.

     

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

     

    13.13. Shareholders’
      Representative.

     

    (a) Each
      Shareholder hereby appoints Benzaken, as such Shareholder's representative
      to
      act as Representative for all purposes of this Agreement and the transactions
      contemplated hereby, with the right, in such capacity, in his discretion, to
      do
      any and all things and to execute any and all documents in such Shareholder's
      place and stead, in any way which such Shareholder could do if personally
      present, in connection with this Agreement and the transactions contemplated
      thereby, including the authority on behalf of such Shareholder, without giving
      notice to such Shareholder, to take any of the following actions:

     

    (i) to
      accept
      on such Shareholder's behalf any amount payable to such Shareholder under this
      Agreement;

     

    (ii) to
      deliver such Shareholder's certificates representing Shares;

     

    (iii) to
      negotiate and otherwise deal with Parent, in all respects;

     

    (iv) to
      accept
      and give service of process and all other notices and other communications
      relating to this Agreement;

     

    (v) to
      settle
      any dispute relating to the terms of this Agreement;

     

    (vi) to
      execute any instrument or document that the Representative may determine is
      necessary or desirable in the exercise of his authority under this Agreement
      and
      power-of-attorney; and

     

    (vii) to
      act in
      connection with all matters relating to this Agreement and the transactions
      contemplated thereby, including the power to employ auditors, attorneys and
      other Persons in connection therewith.

     

    (b) Each
      Shareholder further agrees, as follows:

     

    (i) such
      Shareholder recognizes the inherent conflict of interest of Benzaken as the
      Representative and as a continuing employee of the Companies and waives any
      claims with respect thereto;

     

    (ii) the
      Representative (A) shall not incur any personal liability for acting in such
      capacity if in doing so he acts upon advice of counsel or otherwise acts in
      good
      faith, (B) shall not incur any personal liability for acting in such capacity
      in
      the absence of his willful misconduct, (C) may act upon any instrument or
      signature believed by him to be genuine and may assume that any Person
      purporting to give any notice or instruction under this Agreement or under
      any
      other related agreement or document believed by him to be authorized has been
      authorized to do so (D) shall not be responsible for the investment of any
      payments received from Parent for the benefit of the Shareholders, and (E)
      shall
      be promptly reimbursed by the Shareholders, pro rata in proportion to their
      ownership of Shares immediately prior to the Closing, for out-of-pocket expenses
      incurred by him in his capacity of Representative, and such expenses shall
      first
      be satisfied from any Initial Payment or Contingent Payment paid by Parent
      and
      received by the Representative for the benefit of the Shareholders, prior to
      distribution of such payments to the Shareholders; and

     

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    (c) If
      Benzaken is unable to serve or resigns as the Representative, the Shareholders
      may appoint from among their ranks a substitute Representative to replace
      Benzaken which individual shall have all the powers and authority granted to
      Benzaken by this Section 13.13. Purchaser shall accept such substitute
      Representative without objection; provided,
      however,
      that
      Benzaken shall continue to serve as the Representative until such substitute
      Representative has been appointed by the Shareholders.

     

    (d) At
      and
      after Closing, Purchaser shall be entitled to deal exclusively with the
      Representative on all matters relating to this Agreement and the transactions
      contemplated hereby involving the Shareholders, or any of them, and shall be
      entitled to rely conclusively (without further evidence of any kind whatsoever)
      on any statements made by the Representative or documents executed or purported
      to be executed on behalf of any Shareholder by the Representative, and on any
      other action taken or purported to be taken on behalf of any Shareholder by
      the
      Representative including, without limitation, the appropriate communication
      or
      delivery to the Shareholders.

     

      

     

    [END
      OF PAGE]

     

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, Parent, Merger Subs and the Companies have caused this
      Agreement to be duly executed by their respective authorized officers and the
      Shareholders and the Representative have executed this Agreement as of the
      day
      and year first above written.

     

    
      	 	 	 
	 	Accoona
              Corp.
	 
 	 
 	 
 
	 	By:  	/s/ Stuart
              Kauder
	 	
              
Stuart
              Kauder

              Chief
                Executive Officer

            


    

     

    
      	 	 	 
	 	SN
              Acquisition
              Corp.
	 
 	 
 	 
 
	 	By:  	/s/ Stuart
              Kauder
	 	
              
Stuart
              Kauder

	 	Title 


    

     

     

      	 	 	 
	 	ZS
              Acquisition
              Corp.
	 
 	 
 	 
 
	 	By:  	/s/ Stuart
              Kauder
	 	
              
Stuart
              Kauder

	 	Title 


    

     

    
      	 	 	 
	 	Skynet
              Communications Corp.
	 
 	 
 	 
 
	 	By:  	/s/ Allen
              Benzaken
	 	
              
Allen
              Benzaken
President
	 	Title 


    

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	Zylonet
              Systems
              Inc.
	 
 	 
 	 
 
	 	By:  	/s/ Allen
              Benzaken
	 	
              
Allen
              Benzaken
President
	 	Title 


    

     

    
      	 	 	 
	 	Shareholders:
	 
 	 
 	 
 
	 	      	/s/ Allen
              Benzaken
	 	
              
Allen
              Benzaken


    

     

    
      	 	 	 
	 	      
              	/s/ Raymnod
              Benzaken
	 	
              
Raymond
              Benzaken


    

     

    
      	 	 	 
	 	      	/s/ Jack
              Benzaken
	 	
              
Jack
              Benzaken


    

     

    
      	 	 	 
	 	    	/s/ Albert
              Esses
	 	
              
Albert
              Esses


    

     

    
      	 	 	 
	 	    	/s/ Charles
              Cytryn
	 	
              
Charles
              Cytryn


    

     

    
      	 	 	 
	 	Representative:
	 
 	 
 	 
 
	 	   	/s/ Allen
              Benzaken
	 	
              
Allen
              Benzaken


    

     

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

     

    Schedule
      I 

     

    

      
        	 	 	
                Skynet

              	 	 
	 	 	 	 	 
	
                Shareholders

              	 	
                Number
                  of Shares

              	 	
                %
                  of Merger Consideration

              
	
                Allen
                  Benzaken

              	 	
                50

              	 	
                25%

              
	
                Raymond
                  Benzaken

              	 	
                50

              	 	
                25%

              
	
                Jack
                  Benzaken

              	 	
                50

              	 	
                25%

              
	
                Albert
                  Esses

              	 	
                25

              	 	
                12.5%

              
	
                Charles
                  Cytryn

              	 	
                25

              	 	
                12.5%

              
	 	 	 	 	 
	 	 	
                Zylonet

              	 	 
	 	 	 	 	 
	
                Shareholders

              	 	
                Number
                  of Shares

              	 	
                %
                  of Merger Consideration

              
	
                Allen
                  Benzaken

              	 	
                50

              	 	
                25%

              
	
                Raymond
                  Benzaken

              	 	
                50

              	 	
                25%

              
	
                Jack
                  Benzaken

              	 	
                50

              	 	
                25%

              
	
                Albert
                  Esses

              	 	
                25

              	 	
                12.5%

              
	
                Charles
                  Cytryn

              	 	
                25

              	 	
                12.5%

              


      
  

     

    
      
        
        

      

      
        66