================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC. 20549


                                   FORM 10-QSB

|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.

                  For the Quarterly Period Ended June 30, 2001

                         Commission file number 0-25435

                        CROSS MEDIA MARKETING CORPORATION
        (Exact name of small business issuer as specified in its charter)

             Delaware                                      13-4042921
     (State of Incorporation)                        (IRS. Employer ID No.)

                          461 Fifth Avenue, 19th Floor
                            New York, New York 10017
                    (Address of Principal Executive Offices)

                                 (212) 457-1200
                (Registrant's Telephone No. including area code)



      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

              YES    X                               NO
                  -------                              --------


      The number of shares outstanding of each of the Registrant's classes of
common equity, as of August 13, 2001, is as follows:

          Class of Securities                    Shares Outstanding
          -------------------                    ------------------
     Common Stock, $.001 par value                   36,726,007



   Transitional Small Business Disclosure Format (check one): Yes       No X
                                                                 ----     ----





<PAGE>



                        CROSS MEDIA MARKETING CORPORATION

                                   FORM 10-QSB

                                  June 30, 2001

                                 C O N T E N T S
<TABLE>
<CAPTION>


PART I.     FINANCIAL INFORMATION                                                                      PAGE
<S>                                                                                                     <C>
Item 1.           Financial Statements

Consolidated Balance Sheet June 30, 2001 (unaudited) ....................................................F-1

Consolidated Statements of Operations (unaudited) for the three months and six
months ended June 30, 2001 and June 30, 2000 ............................................................F-2

Consolidated Statements of Stockholders' Equity (unaudited) for
the six months ended June 30, 2001 ......................................................................F-4

Consolidated Statements of Cash Flows (unaudited) for the six months ended June
30, 2001 and June 30, 2000 ..............................................................................F-5

Notes to Consolidated Financial Statements...............................................................F-6

Item 2.     Management's Discussion and Analysis or Plan of Operation......................................1


PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings.............................................................................11

Item 2.     Change in Securities and Use of Proceeds......................................................11

Item 3.     Defaults Upon Senior Securities...............................................................12

Item 4.     Submission of Matters to a Vote of Security Holders...........................................12

Item 5.     Other Information.............................................................................13

Item 6.     Exhibits and Reports on Form 8-K..............................................................13
</TABLE>

SIGNATURES


<PAGE>



Item 1. Condensed Consolidated Financial Statements


        Cross Media Marketing Corporation and Subsidiaries
               Condensed Consolidated Balance Sheet
                            (unaudited)
                           June 30, 2001
<TABLE>
<CAPTION>
<S>                                                                       <C>
Assets:
Current assets
       Cash and cash equivalents                                           $  1,807,736
       Accounts receivable, net of
         reserve of $26,048,074                                              30,702,673
       Other receivables                                                      4,925,944
       Prepaid expenses                                                         742,081
       Deferred expenses                                                      1,147,395
                                                                           ------------
               Total current assets                                          39,325,829
                                                                           ------------
       Property and equipment, net                                            2,146,022
       Deferred financing costs                                                 712,933
       Goodwill                                                               7,943,438
       Other assets                                                           1,537,411
                                                                           ------------
                                                                           $ 51,665,633
                                                                           ============
Liabilities and Stockholders' Equity:

Liabilities
      Revolving credit facility                                            $ 14,579,524
      Accounts payable and accrued expenses                                   5,929,786
      Amounts due to publishers                                               8,861,248
      Deferred revenue                                                        2,372,438
                                                                           ------------
           Total liabilities                                                 31,742,996
                                                                           ------------

      Stockholders' equity:
      Convertible preferred stock, $5,062,500
      liquidation value; authorized
        10,000,000 shares; 50,625 outstanding                                 3,303,951
      Common stock, par value $.001 per share;
        authorized 100,000,000
        shares; 36,726,007 issued and outstanding                                36,726
      Additional paid in capital                                             70,729,048
      Treasury stock, 600,000 shares                                           (600,000)
      Note receivable - common stock                                           (697,500)
      Accumulated deficit                                                   (52,849,588)
                                                                           ------------
        Total stockholders' equity                                           19,922,637
                                                                           ------------
                                                                           $ 51,665,633
                                                                           ============
</TABLE>

      The accompanying notes are an integral part of this statement.

                                      F-1

<PAGE>



               Cross Media Marketing Corporation and Subsidiaries
                 Condensed Consolidated Statements of Operations
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                           For the Three Months Ended
                                                                                    June 30,
                                                                           2001                    2000
                                                                        ------------           ------------
<S>                                                                     <C>                    <C>
Revenues, net                                                           $ 23,600,684           $ 15,804,906

Direct costs and expenses
            Commission expense                                            11,282,790              7,760,803
            Other direct costs                                             6,228,740              2,903,319
                                                                        ------------           ------------
                                                                          17,511,530             10,664,122

            Gross profit                                                   6,089,154              5,140,784

            General and administrative expenses                            2,720,083              1,713,013
            Consulting expenses                                              244,159                734,637
            Amortization of goodwill                                         248,997                145,396
                                                                        ------------           ------------
            Total expenses                                                 3,213,239              2,593,046
                                                                        ------------           ------------

Income from operations                                                     2,875,915              2,547,738

Interest expense                                                             493,654                760,704
                                                                        ------------           ------------

Income before income taxes                                                 2,382,261              1,787,034

Provision for income taxes                                                   476,451                291,952
                                                                        ------------           ------------

Net income (loss)                                                          1,905,810              1,495,082

Preferred dividends                                                          127,392             11,424,533
                                                                        ------------           ------------

Net income (loss) to common stockholders                                $  1,778,418           $ (9,929,451)
                                                                        ============           ============

Income (loss) per share applicable to common stockholders

          Basic                                                               $ 0.05                 $(0.40)
                                                                        ============           ============
          Diluted                                                             $ 0.04                 $(0.40)
                                                                        ============           ============

Weighted - average shares of common stock outstanding

          Basic                                                           35,562,211             24,742,721
                                                                        ============           ============
          Diluted                                                         43,715,430             24,742,721
                                                                        ============           ============
</TABLE>

         The accompanying notes are an integral part of this statement.

                                      F-2

<PAGE>



               Cross Media Marketing Corporation and Subsidiaries
                 Condensed Consolidated Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                            For the Six Months Ended
                                                                                      June 30,
                                                                            2001                     2000
                                                                       ------------            ------------
<S>                                                                    <C>                     <C>
Revenues, net                                                          $ 43,278,242            $ 27,086,194

Direct costs and expenses
            Commission expense                                           20,863,740              14,012,350
            Other direct costs                                           11,432,436               4,778,715
                                                                       ------------            ------------
                                                                         32,296,176              18,791,065

            Gross profit                                                 10,982,066               8,295,129

            General and administrative expenses                           5,490,687               3,064,271
            Consulting expenses                                             528,863               2,293,016
            Amortization of goodwill                                        475,565                 242,327
                                                                       ------------            ------------
            Total expenses                                                6,495,115               5,599,614
                                                                       ------------            ------------
Income from operations                                                    4,486,951               2,695,515

Interest expense                                                            951,743               2,869,341
                                                                       ------------            ------------

Income (loss) before income taxes                                         3,535,208                (173,826)

Provision for income taxes                                                  708,588                 291,952
                                                                       ------------            ------------

Net income (loss)                                                         2,826,620                (465,778)

Preferred dividends                                                       1,258,045              31,866,460
                                                                       ------------            ------------

Net income (loss) to common stockholders                               $  1,568,575            $(32,332,238)
                                                                       ============            ============

Income (loss) per share applicable to common stockholders

          Basic                                                               $0.05                  $(1.58)
                                                                       ============            ============
          Diluted                                                             $0.04                  $(1.58)
                                                                       ============            ============

Weighted - average shares of common stock outstanding

          Basic                                                          34,193,350              20,430,093
                                                                       ============            ============
          Diluted                                                        36,479,744              20,430,093
                                                                       ============            ============
</TABLE>

         The accompanying notes are an integral part of this statement.

                                      F-3

<PAGE>



               Cross Media Marketing Corporation and Subsidiaries
            Condensed Consolidated Statement of Stockholders' Equity
                     For the Six Months Ended June 30, 2001
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                             Common Stock
                                                                             ------------
                                                                                                       Additional
                                                    Preferred          Number of                       Paid-in
                                                      Stock             Shares          Amount         Capital
                                                    -----------------------------------------------------------------
<S>                                                 <C>              <C>           <C>             <C>
Balance at January 1, 2001                          $  3,303,951     29,604,519    $     29,605    $ 63,221,911

Sales of common stock                                                 2,437,552           2,438       2,435,562

Common stock issued for consulting services                              26,500              26          41,049

Warrants issued primarily for consulting services                                                       164,080

Common stock issued in connection with
  preferred stock conversion                                          4,612,650           4,612       4,841,278

Contractual dividends                                                                                    25,213

Exercise of stock options                                                44,786              45             (45)

Put-right settlement

Net income for the six months ended
  June 30, 2001

                                                    -----------------------------------------------------------------
Balance at June 30, 2001                            $  3,303,951     36,726,007         $36,726    $ 70,729,048
                                                    =================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                             Treasury Stock
                                                             --------------
                                                       Number of                    Note            Accumulated
                                                       Shares         Amount     Receivable           Deficit         Total
                                                    ----------------------------------------------------------------------------
<S>                                                   <C>            <C>        <C>                <C>             <C>

Balance at January 1, 2001                                                         $ (2,497,500)    $(54,418,163)   $  9,639,804

Sales of common stock                                                                                                  2,438,000

Common stock issued for consulting services                                                                               41,075

Warrants issued primarily for consulting services                                                                        164,080

Common stock issued in connection with
  preferred stock conversion                                                                            (899,640)      3,946,250

Contractual dividends                                                                                   (358,405)       (333,192)

Exercise of stock options

Put-right settlement                                    600,000    $(600,000)         1,800,000                        1,200,000

Net income for the six months ended
  June 30, 2001                                                                                        2,826,620       2,826,620
                                                    ----------------------------------------------------------------------------
Balance at June 30, 2001                                600,000    $(600,000)      $   (697,500)    $(52,849,588)   $ 19,922,637
                                                    ============================================================================
</TABLE>



         The accompanying notes are an integral part of this statement.

                                      F-4

<PAGE>



               Cross Media Marketing Corporation and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                            For the Six Months Ended
                                                                                                  June 30,
                                                                                            2001                 2000
                                                                                       ------------        ------------
<S>                                                                                    <C>                 <C>
 Cash flows from operating activities:
    Net income (loss)                                                                  $  2,826,620        $   (465,778)
    Adjustments to reconcile results of operations to net cash provided by
      operating activities:
          Value of common stock and common stock purchase warrants issued for
              services                                                                      205,156           1,942,794
          Non cash interest expense                                                              --           1,887,467
          Depreciation and amortization                                                     895,249             498,806

    Net change in asset and liability accounts, net of business acquired:
          Accounts receivable                                                            (6,607,665)         (3,377,102)
          Prepaid expenses                                                                 (102,721)            524,551
          Other                                                                            (813,214)          2,327,554
          Accounts payable and other accrued expenses                                     1,454,124          (1,792,793)
                                                                                       ------------        ------------
    Net cash provided by (used in) operating activities                                  (2,142,451)          1,545,499
                                                                                       ------------        ------------

Cash flows from investing activities:
    Purchase of equipment                                                                (1,477,020)           (125,785)
    Acquisition of DSI, net of cash acquired                                                     --         (23,535,190)
                                                                                       ------------        ------------
    Net cash used in investing activities                                                (1,477,020)        (23,660,975)
                                                                                       ------------        ------------

Cash flows from financing activities:
    Proceeds from sales of preferred stock                                                       --          11,301,750
    Proceeds from sales of common stock                                                   2,438,000                  --
    Payments received on note receivable                                                         --               2,500
    Proceeds from acquisition bridge notes                                                       --           1,350,000
    Repayment of bridge note                                                                     --            (800,000)
    Redemption of preferred stock                                                        (2,100,000)           (535,000)
    Net funds drawn on Revolving Credit Agreement                                         3,353,191          13,188,944
    Preferred dividends paid                                                               (205,801)            (59,644)
    Accrued closing costs                                                                  (250,000)                 --
    Deferred financing costs                                                               (135,000)           (190,000)
                                                                                       ------------        ------------
    Net cash provided by financing activities                                             3,100,390          24,258,550
                                                                                       ------------        ------------

Net increase (decrease) in cash and cash equivalents                                       (519,081)          2,143,074

    Cash and cash equivalents at beginning of period                                      2,326,817             337,615
                                                                                       ------------        ------------
    Cash and cash equivalents at end of period                                         $  1,807,736        $  2,480,689
                                                                                       ============        ============


Supplemental disclosure of cash flow information:

     Income taxes paid during the period                                                         --        $    265,000
                                                                                       ============        ============
     Interest paid during the period                                                   $    708,662        $    815,984
                                                                                       ============        ============

Supplemental disclosure of non-cash financing activities

     Non-cash proceeds from reduction of notes receivable (Note C)                     $  1,800,000                  --
                                                                                       ============        ============
</TABLE>

            The accompanying notes are an integral part of this statement.

                                      F-5

<PAGE>



              Cross Media Marketing Corporation and Subsidiaries

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 2001
                                   (Unaudited)


NOTE A - ORGANIZATION

      We were incorporated in Delaware on May 9, 1997 under the name of Brack
Industries Inc. We changed our name to Symposium Corporation in December 1998
and subsequently changed our name to Cross Media Marketing Corporation in
December 2000. Our principal business strategy is to integrate well established
direct marketing skills with a variety of new technologies, including e-mail
marketing, web-based systems and interactive voice response, ultimately
resulting in a multi-faceted marketing platform for the sale of products and
services.

      In November 1999, we formed Media Outsourcing, Inc. ("MOS"), a
wholly-owned subsidiary, to acquire the assets of Direct Sales International,
LP. We completed this acquisition in January 2000 (see Note C).


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Basis of Presentation: The accompanying unaudited financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and the
instructions to Form 10-QSB and do not include all the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, all
adjustments consisting of normal recurring accruals, considered necessary for a
fair presentation of the results for the interim period have been included.
Operating results for the three months and six months ended June 30, 2001 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2001. The accompanying condensed consolidated financial
statements and the information included under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations" should
be read in conjunction with our consolidated financial statements and related
notes for the year ended December 31, 2000 as filed with our Form 10-KSB/A.

      Revenues: Revenues derived from originating magazine subscriptions are
recognized by us when we receive the first installment payment for subscriptions
purchased. The customer can cancel the subscription within ten days of the
order. Amounts collected from customers prior to the expiration of the
cancellation period are recorded as deferred revenues. Magazine subscription
revenues are recorded net of cancellation, collection reserves, and payments
made to publishers for fulfillment costs. Such cancellation and collection
reserves are based upon our historical cancellation and collection experience.

      Revenues also include commissions earned from publishers in connection
with originating paid subscriptions for certain publications. Commissions are
also earned from outside parties for securing memberships in a discount-buying
club and sales of long-distance telephone services. Commission income is
recognized when the related subscriptions or memberships are obtained. In the
year ended December 31, 2000, two independent call centers accounted for
approximately 35% of our magazine subscription revenues. These call centers
could terminate their relationships with us, which could have a material adverse
effect on our business.

      Commission Expense: Commission expense is recognized by us when we receive
the first installment payment for subscriptions purchased. Amounts paid to
brokers prior to the expiration of the cancellation period are recorded as
deferred expenses.

      Reclassification: Certain amounts in the 2000 financial statements have
been reclassified to conform to the 2001 classifications, and certain other
amounts have been combined and reclassified.

      Use of estimates in the Preparation of Financial Statements: The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.


                                      F-6

<PAGE>



NOTE C- ACQUISITION OF DIRECT SALES INTERNATIONAL, LP ("DSI ACQUISITION")

      On January 28, 2000, through our wholly-owned subsidiary MOS, we acquired
substantially all of the assets and assumed certain liabilities of Direct Sales
International, LP ("DSI"), a Georgia limited partnership, for approximately
$27.6 million, including closing costs of approximately $1.1 million and an
agreement to provide approximately $1.5 million of funding to AmeriNet, Inc.
("AmeriNet"). The transaction was accounted for as a purchase business
combination. We also granted to Richard Prochnow, the seller of DSI
("Prochnow"), and to RLP Holdings, L.P. the right, which has an intrinsic value
of $1.2 million, to sell up to 600,000 shares of our Common Stock back to us at
a fixed price.

      On May 10, 2001, we entered into an agreement with Prochnow and RLP
Holdings, L.P. pursuant to which Mr. Prochnow exercised the right we granted to
him on January 28, 2000 to sell 600,000 shares of common stock to us for $3.00
per share.  We paid the $1.8 million  purchase price to Mr. Prochnow by reducing
the  outstanding  principal  balance on a note issued by Mr. Prochnow to us from
$2.5 million to $0.7 million.  This note was  originally  secured by a pledge of
1.9 million shares of common stock.  We also agreed with Mr. Prochnow to release
1.4 million shares from the pledge,  leaving 532,000 shares to secure  remaining
principal amount of the note.

      The acquisition was financed by borrowing $16 million ($15.8 million of
proceeds, net of fees) under a revolving credit facility entered into
contemporaneous with consummating the acquisition and the remainder was funded
with proceeds received from sales of common stock and common stock purchase
warrants, Series A, B and C convertible preferred stock and certain acquisition
bridge loans that the company repaid during the year ended December 31, 2000.

      The following table provides an analysis of the purchase price of the DSI
acquisition. The excess of the purchase price over the book value of the net
assets acquired, which has been allocated to goodwill, is as follows:

      Cash consideration paid to the seller            $25,000,000
      Commitment to fund AmeriNet, Inc.                  1,500,000
      Seller's stock put right                           1,200,000
      Transaction expenses                               1,114,317
                                                       -----------

      Total purchase cost                               28,814,317

      Fair value of net assets acquired                 21,798,469
                                                       -----------

      Purchase price in excess of fair value
         of net assets acquired allocated to goodwill  $ 7,015,848
                                                       ===========

   Goodwill is currently being amortized on a straight-line basis over a
ten-year period. Subsequent to June 30, 2001, the Financial Accounting Standards
Board approved Statements of Financial Accounting Standards No. 141 "Business
Combinations" and No. 142 "Goodwill and other Intangible Assets". We will
evaluate goodwill amortization under these standards. See Note J for an
explanation of the effect on our financial statements going forward.

   The following pro forma information illustrates, as restated, the estimated
effects of the DSI Acquisition as if such transaction was consummated on January
1, 2000:

                                                          For the six months
                                                            ended June 30,
                                                                  2000
                                                                 -----
                                                          (in thousands except
                                                             per share data)

      Total revenues              As reported                     $29,452
                                  Pro forma                        35,094

      Loss from                   As reported                     $ (466)
       continuing operations      Pro forma                          (69)

      Basic and diluted           As reported                     $(1.55)
        loss per share            Pro forma                        (0.07)

                                       F-7

<PAGE>



NOTE D: REVOLVING CREDIT FACILITY

      On January 28, 2000, we and MOS entered into a three-year revolving credit
facility (as amended, the "Coast Facility") with Coast Business Credit ("Coast")
providing for borrowings of up to $20.0 million subject to certain availability
limitations stipulated in the agreement. All borrowings under this facility are
repayable with interest at the prime rate plus 2% per annum but not less than
9%. Cross Media Marketing and MOS are also required to maintain certain minimum
earnings ratios and levels of net worth as defined in the agreement and MOS was
restricted from making distributions to Cross Media Marketing in excess of $1.8
million annually plus any amounts necessary for tax obligations attributable to
MOS's operations. All of MOS's assets are pledged as collateral for this
obligation. As of June 30, 2001 MOS had an outstanding balance on the Coast
Facility of approximately $14.6 million compared to total availability of $18.0
million resulting in $3.4 million of funds available to MOS at June 30, 2001.

      In connection with the execution and delivery of the Coast Facility, the
Company initially granted Coast 300,000 five-year common stock purchase warrants
at an exercise price of $3.53 per share (110% of the closing price of the common
stock on the closing date). As a result of the anti-dilution provisions, the
exercise price has been reduced to $2.19 per share and the number of shares has
been increased to 484,669 as of June 30, 2001. Accordingly, we recorded a
non-cash interest charge of approximately $14,647 and $20,491, respectively,
during the three months and six months ended June 30, 2001. Our non-cash
interest charge in connection with the anti-dilution adjustments was
approximately $280,000 as of June 30, 2001.

      MOS incurred fees and expenses in connection with this facility of
approximately $1.1 million, which are being amortized over three years.

      In May 2001, we agreed with Coast to amend the Coast Facility as follows:
(i) Coast waived the requirement that we maintain a minimum Tangible Net Worth
through March 31, 2001; (ii) Coast waived any violation of the limitation on
distributions by MOS to Cross Media Marketing with respect to a $1.0 million
distribution in February 2001; (iii) we agreed to maintain a minimum Senior
Debt to EBITDA ratio of no greater than 1.5 to 1.0; and (iv) we agreed to
maintain other covenants. Management expects to be fully in compliance with the
provisions of this agreement going forward.


NOTE E - CONVERTIBLE PREFERRED STOCK

Series A Convertible Preferred Stock ("New Series A Shares")

      On June 9, 2000, we issued 30,375 shares of New Series A Shares and a
five-year warrant to purchase 225,000 shares of Common Stock at an initial
exercise price of $1.4850 (subject to certain anti-dilution and similar
adjustments). The aggregate purchase price for the New Series A Shares and the
warrant was $2.25 million. We also granted the purchaser of the New Series A
Shares an option, exercisable in the purchaser's sole discretion during the
sixty day period following June 9, 2000, to purchase up to an additional
$2,025,000 face amount of New Series A Shares and a warrant to purchase an
additional 150,000 shares of Common Stock for the same purchase price. The
purchaser exercised its option, and we issued and sold to the purchaser an
additional 20,250 New Series A Shares and the additional warrant on August 1,
2000 for an aggregate purchase price of $1.5 million. The face amount and
liquidation value of the New Series A Shares is $5,062,500.

      Dividends accrue on the New Series A Shares at an annual rate of 10% of
the face amount, payable semi-annually in cash and/or Common Stock at our option
under certain conditions. We have reserved 407,320 shares of common stock in
payment of dividends accrued on the New Series A Shares as of June 30, 2001.
Such shares are issuable to the holder of the Series A Shares at any time, upon
request. The New Series A Shares are redeemable, at our option under certain
conditions, at a redemption price of 100% of face value plus any accrued and
unpaid dividends.

      The New Series A Shares are convertible at a conversion price equal to the
lesser of: (i) $1.93 (110% of the closing bid price of the Common Stock on the
date of the issuance, subject to adjustments); or (ii) 91% of the average of the
three lowest, non-consecutive closing bid prices for the Common Stock in the ten
trading days preceding the date of the holder's conversion notice to us (the
"Conversion Notice"). The conversion price and the exercise price of the
warrants are subject to downward adjustment to equal the lowest price at which
shares of the Common Stock or securities convertible into, or exchangeable or
exercisable for, shares of Common Stock are issued while the New Series A Shares
and warrants remain outstanding (if such price is lower than the then effective
conversion or exercise price), subject to certain exceptions. These exceptions
include: (i) the issuance of shares of Common Stock upon conversion or exercise
of presently outstanding options, warrants or convertible securities in
accordance with the terms of such options, warrants or convertible securities as
in effect upon the initial issuance date of the New Series A Shares (but subject
to certain anti-dilution adjustments).


                                       F-8
<PAGE>


      By letter agreement dated December 28, 2000, the holder of all the
outstanding New Series A Shares agreed not to convert the New Series A Shares
prior to June 9, 2001 if, on the date of such proposed conversion, the
then-current market price of our Common Stock is less than $1.50 per share (the
"Conversion Floor"). On and after June 9, 2001 there will be no Conversion
Floor. The holders agreed that they would not redeem the New Series A Shares
prior to June 9, 2001. The conversion provisions of the New Series A Shares and
warrants create a substantial risk of dilution to the holders of our Common
Stock.

      On July 18, 2001, we entered into agreements with the holder of all 50,625
of the outstanding shares of our New Series Shares. See Note K for further
description of this agreement.

NOTE F - MANDATORILY REDEEMABLE PREFERRED STOCK

Series C Mandatorily Redeemable Convertible Preferred Stock ("Series C
Preferred")

      On January 28, 2000, in a private placement, we issued 52,892 Series C
Preferred shares resulting in proceeds to us totaling approximately $5.0
million. The Series C Preferred was initially convertible into shares of Common
Stock at a conversion ratio of $2.00 per share and was entitled to a 10%
cumulative dividend. In connection with the initial issuance and sale of the
Series C Preferred in January 2000 (the "Series C Shares"), we also issued
1,763,067 shares of Common Stock to the holders of the Series C Shares and
reduced the exercise price of the 2,000,000 Common Stock purchase warrants
previously issued to a holder of Series C Shares and an affiliate of such holder
from $3.50 per share to $1.00 per share.

      The Series C Shares were originally mandatorily redeemable on the earlier
of July 26, 2000 or upon the consummation of a financing transaction resulting
in gross proceeds of at least $10.0 million. On April 24, 2000, the holders of
the Series C Shares agreed to extend the mandatory redemption date of the Series
C Shares from July 26, 2000 to December 26, 2000 (the "Mandatory Redemption
Date") in exchange for 2,247,067 shares of our Common Stock and a reduction in
the effective conversion ratio from $2.00 per share to $1.00 per share. The
value of the shares of Common Stock issued and change in the effective
conversion ratio was reflected during the second quarter of 2000 as an
additional deemed dividend in the amount of $8,560,417.

      On June 14, 2000, we issued an additional 7,500 shares of Series C
Preferred (the "New Series C Shares") and 250,000 shares of Common Stock,
resulting in proceeds of $750,000. We also agreed to reduce the exercise price
of 2,000,000 Common Stock purchase warrants held by the purchaser of the New
Series C Shares and an affiliate of such purchaser from $1.00 to $0.50 per
share. We also paid a fee in connection with the issuance of the New Series C
Shares of 562.5 shares of Series C Preferred, five-year warrants to purchase
100,000 shares of Common Stock at a price of $1.88 per share and 18,750 shares
of Common Stock.

      On July 18, 2000, the holders of the Series C Shares and the New Series C
Shares agreed to waive the requirement that our failure to redeem the Series C
Preferred on or before the Mandatory Redemption Date would trigger a reduction
in the conversion ratio of the Series C Preferred from $1.00 to $0.25 per share.
In consideration for this waiver, we agreed to issue to such holders an
aggregate of 1,523,750 shares of Common Stock, pro rata in accordance with their
percentage holdings of the Series C Shares and New Series C Shares, and to issue
as a fee in connection with such waiver, an additional 1,500 shares of Series C
Preferred and 50,000 shares of Common Stock. The value of the shares was
reflected during the third quarter of 2000 as an additional deemed dividend in
the amount of $3,026,028.

      On December 19, 2000, the holders of the Series C Shares and the New
Series C Shares agreed to extend the Mandatory Redemption Date of the Series C
Preferred from December 26, 2000 to January 26, 2001. On January 25, 2001, the
holders agreed to further extend the redemption date from January 26, 2001 to
February 15, 2001. On February 15, 2001, we redeemed an aggregate of 22,992
Series C Shares and New Series C Shares for an aggregate redemption price of
$2,299,200 plus accrued and unpaid dividends of $122,300. The holders
converted all of the remaining Series C Shares and New Series C Shares into
3,946,250 shares of Common Stock (at an effective conversion ratio of $1.00 per
share). In consideration of the agreement of the holders to convert the Series C
Shares and New Series C Shares (which would otherwise have been mandatorily
redeemable by us in full on February 15, 2001), we agreed to issue to the
holders, pro rata in accordance with the number of shares converted by each of
them, an aggregate of 666,400 additional shares of Common Stock. The value of
the shares of Common Stock issued was reflected in the first quarter of 2001 as
an additional deemed dividend in the amount of $899,640. We agreed to pay a fee
of $100,000 to one of the Series C holders in connection with their services
relating to the negotiation of these agreements. There is a note payable of
$199,200 related to the redemption of the preferred stock.

      The redemption of the Series C Shares and the New Series C Shares was
funded in part through the issuance and sale by us, in private placements, of an
aggregate of 1,500,000 shares of Common Stock at a price of $1.00 per share.

                                       F-9


<PAGE>



NOTE G - NET INCOME (LOSS) PER SHARE

      Net income (loss) per share is presented under Statement of
Financial Accounting Standards No. 128 ("SFAS No. 128"), "Earnings Per Share."
In accordance with SFAS No. 128, basic and diluted net loss per share has been
computed using the weighted-average number of shares of common stock outstanding
during the period.


NOTE H - INCOME TAXES

      We have Federal and State net operating loss carryforwards of
approximately $7.0 million available to offset future taxable income, if any,
through December 2020. The utilization of the net operating losses is subject to
a substantial limitation due to the "change of ownership" provisions under
Section 382 of the Internal Revenue Code and similar State provisions. Such
limitation may result in the expiration of the net operating losses before their
utilization. A valuation allowance has been established to reserve for the
deferred tax assets arising from the net operating losses and other temporary
differences since there is no assurance that their benefit will be realized in
the future. For the three months and six months ended June 30, 2001 we recorded
a $0.5 million and $0.7 million tax provision based on an estimate of our
effective income tax rate projected for the year ending December 31, 2001.


NOTE I - COMMON STOCK

      At June 30, 2001, we were authorized to issue 100,000,000 shares of Common
Stock, $.001 par value and 10,000,000 shares of preferred stock, $.001 par
value. As of June 30, 2001 there were 36,726,007 shares of Common Stock and
50,625 New Series A Shares issued and outstanding. If the holders of all
outstanding options and Common Stock purchase warrants and the holders of the
New Series A Shares converted them into Common Stock as of June 30, 2001, we
would be required to issue approximately 22,778,671 additional shares of Common
Stock.

      During the six months ended June 30, 2001, we received proceeds of
$2,438,000 from the sale of 2,437,552 shares of our common stock.


NOTE J - EFFECT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


      In June 2001, the Financial Accounting Standards Board approved the
issuance of Statements of Financial Accounting Standards No. 141 "Business
Combinations" and No. 142, "Goodwill and Other Intangible Assets". The new
standards require that all business combinations initiated after June 30, 2001
must be accounted for under the purchase method. In addition, all intangible
assets acquired that are obtained through contractual or legal right, or are
capable of being separately sold, transferred, licensed, rented or exchanged
shall be recognized as an asset apart from goodwill. Goodwill and intangibles
with indefinite lives will no longer be subject to amortization, but will be
subject to at least an annual assessment for impairment by applying a fair value
based test.

      We will continue to amortize goodwill existing at June 30, 2001 under its
current method until December 31, 2001. Thereafter, annual and quarterly
goodwill amortization of approximately $1.0 million and $0.3 million,
respectively, will no longer be recognized. The Company will perform a
transitional fair value based impairment test at March 31, 2002 and if the fair
value is less than the recorded value at January 1, 2002, we will record an
impairment loss in the March 31, 2002 quarter as a cumulative effect of a change
in accounting principle.


NOTE K - SUBSEQUENT EVENTS

      On July 19, 2001, we executed a definitive agreement to acquire
LifeMinders, Inc., an online direct marketer. The merger, is subject to the
approval of both companies' stockholders. We will pay a total combined cash and
stock consideration of $68.1 million for all outstanding equity interests in
LifeMinders, including stock options,

                                      F-10

<PAGE>



subject to a reduction of $1.75 million if and to the extent that LifeMinders'
net cash and cash equivalents are less than $50 million at August 31, 2001.

      On July 18, 2001, we entered into agreements with the holder of all 50,625
outstanding shares of our Series A Convertible Preferred Stock. These agreements
provide that the following will occur simultaneously with, and conditional upon,
the consummation of the LifeMinders acquisition: (i) we will redeem 25,312.5
Series A Shares for a cash payment of $2,531,250 or $100 per share, provided
that the holder may elect to convert these shares into shares of our common
stock at a conversion price of $1.48 per share prior to the closing of the
LifeMinders' acquisition, in which event the holder would receive 1,710,304
shares of common stock and would convert the remaining 25,312.2 Series A Shares
at a conversion price of $1.48 per share, or 1,710,304 shares of common stock;
(ii) in consideration of the agreement to convert at least half of the Series A
Shares, we will make a payment to the holder in the amount of $968,750 in either
(a) cash, (b) cash and common stock, or (c) wholly in common stock; and (iii)
we will issue warrants to purchase 250,000 shares of our common stock
with an exercise price of $1.9845, which will replace the 375,000 warrants
issued in connection with the Series A Shares and which will have the same
anti-dilution provisions. If the definitive merger agreement with LifeMinders is
terminated or if the acquisition of LifeMinders is not completed by June 18,
2002, the holder may elect to exchange the Series A Shares for a new series of
convertible preferred stock with a conversion price of $1.48 per share, subject
to certain provisions, or to exchange the Series A Shares for a new series of
convertible preferred stock with the same terms and provisions as the existing
Series A Shares, except for revisions.


Forward-Looking Statements

      The statements contained in this Quarterly Report on Form 10-QSB that are
not historical are forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including statements regarding the
expectations, beliefs, intentions or strategies regarding the future. We intend
that all forward-looking statements be subject to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements reflect our views as of the date they are made with respect to future
events and financial performance, but are subject to many risks and
uncertainties, which could cause our actual results to differ materially from
any future results expressed or implied by such forward-looking statements.
Examples of such risks and uncertainties include, but are not limited to:
obtaining sufficient financing to pursue our business strategy, including the
expansion of our business through acquisitions of other companies; and the
changing market conditions and the other risks detailed in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Certain Trends and Uncertainties" in this Quarterly Report on Form
10-QSB and elsewhere herein. We do not undertake to update any forward-looking
statements.


                                      F-11

<PAGE>



                        CROSS MEDIA MARKETING CORPORATION
                           Quarter Ended June 30, 2001

PART I.     FINANCIAL INFORMATION

Item 2.     Management's Discussion and Analysis or Plan of Operation

      The following discussion and analysis should be read together with the
Condensed Consolidated Financial Statements of Cross Media Marketing Corporation
(the "Company" or "Cross Media Marketing") and the notes to the Condensed
Consolidated Financial Statements included elsewhere in this Form 10-QSB.

      This discussion summarizes the significant factors affecting the
consolidated operating results, financial condition and liquidity and cash flows
of Cross Media Marketing Corporation for the three months and six months ended
June 30, 2001 and 2000.

Introduction

      We were incorporated in Delaware on May 9, 1997 under the name Brack
Industries Inc. We changed our name to Symposium Corporation in December 1998
and subsequently changed our name to Cross Media Marketing Corporation in
December 2000. Our principal business strategy is to integrate well established
direct marketing skills with a variety of new technologies, including e-mail
marketing, web-based systems and interactive voice response, ultimately
resulting in a multi-faceted marketing platform for the sale of products and
services.

      On January 28, 2000 Cross Media Marketing, through its wholly-owned
subsidiary Media Outsourcing, Inc. ("MOS"), acquired substantially all the
assets and assumed certain liabilities of DSI, a magazine subscription agency
based in Atlanta, Georgia which works on behalf of US magazine publishers to
generate new magazine subscriptions. The purchase price paid by Cross Media
Marketing to acquire the net assets of DSI was approximately $27.6 million
including: (i) $25.0 million in cash paid to the Seller, (ii) an agreement to
loan $1.5 million to AmeriNet, Inc. ("AmeriNet") a company in which Richard
Prochnow, DSI's former owner and seller of DSI, holds a majority interest and
(iii) approximately $1.1 million in closing costs and fees incurred in
connection with the acquisition. Cross Media Marketing financed the cash portion
of the purchase price by borrowing $16.0 million under a credit facility
provided by Coast Business Credit, resulting in net proceeds of $15.8 million
net of fees, and by using proceeds totaling approximately $9.2 million from the
issuance of common stock, warrants for the purchase of common stock, convertible
preferred stock and convertible debentures.

      On November 30, 2000, we acquired WeFusion.com, Inc. ("WeFusion"), an
application service provider which has developed a database architecture that
will enable us to develop sophisticated customer profiles. We paid approximately
$2.5 million to acquire WeFusion, including $0.6 million in cash and
approximately $1.9 million in Cross Media common stock and warrants to purchase
common stock.

Results of Operations

Results of Operations for the three months ended June 30, 2001 and June 30,
2000

      Revenues: During the three months ended June 30, 2001, revenues were $23.6
million, a 49% increase from revenues of $15.8 million for the three months
ended June 30, 2000. Revenues increased as a result of higher sales of magazine
contracts, increased revenue from sales of memberships, higher publisher bonus
revenues, revenues from the sales of long distance telephone service and other
revenues. For the three months ended June 30, 2001, revenues were derived
primarily from the sales of magazines contracts at MOS totaling approximately
$18.2 million, commission revenues from sales of memberships in a third party
discount-buying club of $1.6 million, publisher bonus revenues of $1.3 million,
commissions on sales of discount long distance telephone service of $0.5 million
and other revenues of $2.0 million.

      Commission Expense: Commission Expense increased 45% to $11.3 million
during the three months period ended June 30, 2001 from $7.8 million in the same
period of 2000 as a result of higher sales.

      Other Direct Costs: For the three months ended June 30, 2001, we recorded
$6.2 million of other direct costs related to sales of magazine contracts and
other revenues, a $3.3 million increase from the $2.9 million of costs recorded
in the three months ended June 30, 2001. The increase consists largely of $2.0
million of direct recurring payroll, rent and other costs related to the
expansion of our operations.


                                       1

<PAGE>



      General and Administrative Expenses: General and administrative expenses
increased $1.0 million to $2.7 million for the three months ended June 30, 2001
from $1.7 million for the same period in 2000. The increase is primarily related
to an increase in administrative personnel at MOS, professional services
rendered during the quarter and other operational expenses incurred.

      Consulting Expenses: Consulting expenses decreased by $0.5 million to
$0.2 million for the three months ended June 30, 2001 from $0.7 million for
the three months ended June 30, 2000. Consulting expenses were significantly
higher during the three months ended June 30, 2000 due to the acquisition of DSI
in calendar year 2000.

      Amortization of Goodwill: During the three months ended June 30, 2001, we
amortized $0.2 million of the $7.0 million of goodwill recorded in connection
with the DSI Acquisition on January 28, 2000 and $0.1 million of goodwill
recorded in connection with the acquisition WeFusion on November 30, 2000.
During the three-month period ended June 30, 2000, we amortized $0.1 million
relating to the DSI Acquisition.

      Interest Expense: Interest Expense for the three months ended June 30,
2001 was $0.5 million, a decrease of $0.3 million from $0.8 million for the
three months ended June 30, 2000. The decrease is primarily related to the one
time non-cash interest expense recorded in the three-month period ended June 30,
2000 representing the fair value of shares and warrants issued in connection
with the initial issuance and subsequent conversion of the DSI acquisition
bridge financing.

      Income Taxes: For the three months ended June 30, 2001, we recorded a $0.5
million tax provision based on an estimate of our effective tax rate projected
for the year ending December 31, 2001. We may adjust the assumptions of our
projected earnings used to calculate such rate. We had Federal and State net
operating loss carryforwards of approximately $7.0 million available to offset
future taxable income, if any, through December 2020. Our ability to use these
net operating losses may be substantially limited because of the "change of
ownership" provisions under Section 382 of the Internal Revenue Code and similar
State provisions. As a result of these limitations, some or all of our net
operating losses may expire before we can use them. We have established a
valuation allowance to reserve for the deferred tax assets arising from the net
operating losses and other temporary differences, since we cannot be sure that
we will benefit from them in the future.

      Preferred Dividends: For the three months ended June 30, 2001, we recorded
$0.1 million of contractual dividends compared to $11.4 million of dividends for
the same period in the prior year. The decrease is primarily attributable to
$11.2 million of non-cash deemed dividends and contractual dividends of
approximately $0.2 million recorded in connection with the Series B and C
preferred stock issued to complete the DSI Acquisition on January 28, 2000.

      Net Income (loss) applicable to common stockholders and Net Income (loss)
applicable to common stockholders per share: During the three months ended June
30, 2001, net income applicable to common stockholders' was $1.8 million, or
basic earnings per share of $0.05, compared to a net loss applicable to common
stockholders' of $9.9 million, or $(0.40) per share, for the three months ended
June 30, 2000.

Results of Operations for the six months ended June 30, 2001 and June 30, 2000

      Revenues: During the six months ended June 30, 2001, revenues were $43.3
million, a 60% increase from revenues of $27.1 million for the six months ended
June 30, 2000. Revenues increased as a result of higher sales of magazine
contracts, increased revenue from sales of memberships, higher publisher bonus
revenues, revenues from the sales of long distance telephone service and other
revenues . For the six months ended June 30, 2001, revenues were derived
primarily from the sales of magazines contracts at MOS totaling approximately
$33.9 million, commission revenues from sales of memberships in a third party
discount-buying club of $2.5 million, publisher bonus revenues of $2.7 million,
commissions on sales of discount long distance telephone service of $1.0 million
and other revenues of approximately $3.2 million.

      Commission Expense: Commission Expense increased 49% to $20.9 million
during the six months ended June 30, 2001 from $14.0 million in the same period
of 2000 as a result of higher sales.

      Other Direct Costs: For the six months ended June 30, 2001, we recorded
$11.4 million of other direct costs related to sales of magazine contracts and
other revenues, a $6.6 million increase from the $4.8 million of costs recorded
in the six months ended June 30, 2001. The increase consists largely of $3.0
million of direct recurring payroll, rent and other costs related to the
expansion of our operations.

      General and Administrative Expenses: General and administrative expenses
increased $2.5 million to $5.5 million for the six months ended June 30, 2001
from $3.0 million for the same period in 2000. This increase primarily reflects
an increase in administrative personnel at MOS, professional fees and
operational expenses of the Company.

                                       2


<PAGE>



      Consulting Expenses: Consulting expenses decreased by $1.8 million to $0.5
million for the six months ended June 30, 2001 from $2.3 million for the six
months ended June 30, 2000. Consulting expenses were significantly higher for
the six months ended June 30, 2000 due to the acquisition of DSI in calendar
year 2000.

      Amortization of Goodwill: During the six months ended June 30, 2001, we
amortized $0.3 million of the $7.0 million of goodwill recorded in connection
with the DSI Acquisition on January 28, 2000 and $0.2 million of goodwill
recorded in connection with the acquisition WeFusion on November 30, 2000.
During the six-month period June 30, 2000, we amortized $0.2 million relating to
the DSI Acquisition.

      Interest Expense: Interest Expense for the six months ended June 30, 2001
was $1.0 million, a decrease of $1.9 million from $2.9 million for the six
months ended June 30, 2000. The decrease is primarily related to the one time
non-cash interest expense of $1.9 million recorded in the six-month period ended
June 30, 2000 representing the fair value of shares and warrants issued in
connection with the initial issuance and subsequent conversion of the DSI
acquisition bridge financing.

      Income Taxes: For the six months ended June 30, 2001, we recorded a $0.7
million tax provision based on an estimate of our effective tax rate projected
for the year ended December 31, 2001. We may adjust the assumptions of our
projected earnings used to calculate such rate. We had Federal and State net
operating loss carryforwards of approximately $7.0 million available to offset
future taxable income, if any, through December 2020. Our ability to use these
net operating losses may be substantially limited because of the "change of
ownership" provisions under Section 382 of the Internal Revenue Code and similar
State provisions. As a result of these limitations, some or all of our net
operating losses may expire before we can use them. We have established a
valuation allowance to reserve for the deferred tax assets arising from the net
operating losses and other temporary differences, since we cannot be sure that
we will benefit from them in the future.

      Preferred Dividends: For the six months ended June 30, 2001, we recorded
$1.3 million of dividends including $0.9 million of non-cash deemed dividends
and approximately $0.4 million of contractual dividends. On February 15, 2001,
we redeemed 22,992 Series C Shares and New Series C Shares. The remaining 39,363
Series C Shares and New Series C Shares were converted into 3,946,250 shares of
common stock. In consideration of the agreement of the holders to convert the
Series C Shares and New Series C Shares, we agreed to issue to the holders a
total of 666,400 additional shares of common stock, pro rata in accordance with
the number of shares each holder converted. The non-cash deemed dividend of $0.9
million represents the fair value of the additional shares issued. For the six
months ended June 30, 2000, we recorded $31.9 million of dividends including
$31.6 million of non-cash deemed dividends in connection with the Series A, B
and C preferred stock we issued to complete the DSI Acquisition.

      Net Income (loss) applicable to common stockholders and Net Income (loss)
applicable to common stockholders per share: During the six months ended June
30, 2001, net income applicable to common stockholders was $1.6 million or
basic earnings per share of $0.05 compared to a net loss applicable to
common stockholders of $32.3 million or $(1.58) per share for the six months
ended June 30, 2000.

Financial Condition and Liquidity

      At June 30, 2001, we had cash on hand of $1.8 million. For the three
months ended June 30, 2001 we used $2.1 million in operating activities and $1.5
million in investing activities, and generated $3.1 million from financing
activities. Through the operations of MOS, we generate cash flow from the sale
and collection of consumer receivables, commissions earned from publishers in
connection with originating paid subscriptions for certain publications, and
commissions earned on the sale of third party discount buying club memberships.
MOS uses these funds as well as funds available under its revolving credit
facility to fund its working capital needs.

      Under the Coast Facility as amended in May 2001 (as discussed below), MOS
is generally permitted to make distributions to Cross Media Marketing of up to
$400,000 per month, plus any amounts necessary for Cross Media Marketing to
satisfy tax obligations attributable to MOS's operations. We believe that the
cash flow from operations at MOS, and the amount available for borrowing under
the revolving credit facility, is currently sufficient to meet our day-to-day
operating requirements. However, MOS's cash flow would not be sufficient to
complete any additional acquisitions in furtherance of our overall strategy.
Consequently, we may be required to raise additional financing to fund any
future acquisitions.

      During the quarter ended March 31, 2000, we financed the cash portion of
the purchase price of the DSI Acquisition by borrowing $16.0 million under a
credit facility provided by Coast Business Credit (described below) and by using
proceeds totaling approximately $9.2 million from the issuance of common stock,
warrants to purchase common stock, convertible preferred stock and convertible
debt. As of December 31, 2000, all of the convertible debt issued in connection
with the DSI Acquisition had either been converted into common stock or paid and
all of the convertible preferred stock issued in connection with the DSI
Acquisition other than the Series C Convertible Preferred Stock had either been
converted into common stock or redeemed. As described below, on


                                       3
<PAGE>



February 15, 2001, we redeemed  22,992 shares of Series C Convertible  Preferred
Stock and the  holders  converted  the  remaining  shares  into shares of common
stock.

Coast Business Credit- Financing Facility

      In connection with the DSI Acquisition, Coast Business Credit ("Coast")
provided a credit facility (the "Coast Facility") used to fund the DSI
Acquisition and working capital needs of MOS. The Coast Facility has a three
year term, and provides a maximum credit line of $20.0 million subject to
certain availability limitations. As a result of these limitations, the amount
available for borrowing under the Coast Facility at the time of the DSI
Acquisition was $16.0 million, which MOS drew down in its entirety to finance
the DSI Acquisition. We pay interest under the Coast Facility at an annual rate
equal to the higher of (i) the prime rate plus 200 basis points, and (ii) 9.0%.
The Coast Facility requires Cross Media Marketing and MOS to comply with
specified financial covenants.

      When the Coast Facility was established, we issued to Coast a five-year
warrant to purchase our common stock. As of December 31, 2000, Coast was
entitled to purchase 443,884 shares of common stock under this warrant at an
exercise price of $2.39 per share. As a result of anti-dilution adjustments, the
number of shares Coast was entitled to purchase under the warrant as of June 30,
2001 increased to 484,669 and the exercise price of the warrant was reduced to
$2.19 per share. We recorded a non-cash interest charge of approximately $20,491
for the six-month period ended June 30, 2001 as a result of these adjustments.

      Coast extended the facility to us subject to the condition that we raise
additional equity capital of not less than $3 million by February 28, 2000,
which was subsequently extended to March 31, 2000. On March 30, 2000 the Coast
Facility was amended as follows: (i) the covenant requiring us to raise
additional cash equity of $3.0 million was eliminated; (ii) the parties reduced
the consolidated net worth (defined as stockholder equity and subordinated debt)
covenant to $9.0 million from $12.0 million at March 31, 2000; and (iii) a new
covenant was added requiring that we maintain excess borrowing availability of
$750,000.

      As of June 30, 2001 the outstanding loan balance under the Coast
Facility was approximately $14.6 million and the total amount available for
borrowing was $18.0 million. Therefore, MOS was entitled to borrow an additional
$3.4 million under the Coast Facility as of June 30, 2001. In May 2001, we
agreed with Coast to amend the Coast Facility as follows: (i) Coast waived the
requirement that we maintain a minimum Tangible Net Worth through March 31,
2001; (ii) Coast waived any violation of the limitation on distributions by MOS
to Cross Media Marketing with respect to a $1.0 million distribution in February
2001; (iii) we agreed to maintain a minimum Senior Debt to EBITDA ratio of no
greater than 1.5 to 1.0; and (iv) we agreed to maintain other covenants.
Management expects to be fully in compliance with the provisions of this
agreement going forward.

Series A Convertible Preferred Stock ("New Series A Shares" or "Series A
Shares")

            On July 18, 2001, we entered into agreements with the holder of all
50,625 outstanding shares of our Series A Convertible Preferred Stock. These
agreements provide that the following will occur simultaneously with, and
conditional upon, the consummation of the LifeMinders acquisition: (i) we will
redeem 25,312.5 Series A Shares for a cash payment of $2,531,250 or $100 per
share, provided that the holder may elect to convert these shares into shares of
our common stock at a conversion price of $1.48 per share prior to the closing
of the LifeMinders' acquisition, in which event the holder would receive
1,710,304 shares of common stock and would convert the remaining 25,312.2 Series
A Shares at a conversion price of $1.48 per share, or 1,710,304 shares of common
stock; (ii) in consideration of the agreement to convert at least half of the
Series A Shares, we will make a payment to the holder in the amount of $968,750
in either (a) cash, (b) cash and common stock, or (c) wholly in common stock;
and (iii) we will issue warrants to purchase 250,000 shares of our common stock
with an exercise price of $1,9845, which will replace the 375,000 warrants
issued in connection with the Series A Shares and which will have the same
anti-dilution provisions. If the definitive merger agreement with LifeMinders is
not completed by June 18, 2002, the holder may elect to exchange the Series A
Shares for a new series of convertible preferred stock with a conversion price
of $1.48 per share, subject to certain provisions, or to exchange the Series A
Shares for a new series of convertible preferred stock with the same terms and
provisions as the existing Series A Shares, except for revisions.


                                        4

<PAGE>



Series C Mandatorily Redeemable Convertible Preferred Stock ("Series C
Preferred")

            On February 15, 2001, we redeemed 22,992 Series C Shares and New
Series C Shares for an aggregate redemption price of $2,299,200 including
accrued and unpaid dividends of $122,300. The holders converted all of the
remaining Series C Shares and New Series C Shares into 3,946,250 shares of
common stock (at an effective conversion ratio of $1.00 per share). In
consideration of the agreement of the holders to convert the Series C Shares and
New Series C Shares (which would otherwise have been mandatorily redeemable by
the Company in full on February 15, 2001), we agreed to issue to the holders
666,400 additional shares of common stock, pro rata in accordance with the
number of shares they converted. The value of the shares of common stock we
issued was reflected in the first quarter of 2001 as an additional deemed


                                       5

<PAGE>



dividend in the amount of $899,640. We also agreed to pay a fee of $100,000 to
one of the Series C holders in connection with its services relating to the
negotiation of these agreements. There is a note payable of $199,200 related to
the redemption of the Series C Preferred Stock.

      We obtained a portion of the funds required to redeem the Series C Shares
and the New Series C Shares by selling 1,500,000 shares of common stock, in
private placements, at a price of $1.00 per share.

Certain Trends and Uncertainties

Business Risks

We have a limited operating history.

      We developed our present business strategy in 1999, completed our first
acquisition in January 2000 and opened our first company-owned call center and
undertook our first e-mail campaign in the last quarter of 2000. Therefore, we
have a limited history of operations under our present business strategy upon
which the likelihood of our success can be evaluated. The implementation of a
new business strategy frequently involves risks, expenses and uncertainties that
may adversely affect our business, results of operations, financial condition
and prospects.


We have a history of losses, primarily as a result of non-cash charges and
interest expense, and may incur future losses.

      Our net losses available to common stockholders for the year ended
December 31, 2000 were $44.6 million, or $1.84 per share. Our net losses for
fiscal 2000 resulted primarily from dividends on our preferred stock of $39.6
million, including non-cash dividends of $38.7 million. Non-cash dividends
represent the accretion of the difference between the carrying value and the
mandatory redemption amounts of preferred stock that resulted from allocation a
portion of the proceeds to common stock, common stock purchase warrants and the
beneficial conversion features of the shares.

      Although we did realize net income available to common stockholders for
the three months and six months ended June 30, 2001 of $1,778,418 and
$1,568,575, or $0.04 and $0.04 per diluted share, respectively, we can give you
no assurance that we will not experience additional net losses in the future. If
our net revenues grow more slowly than we anticipate, or if our operating
expenses exceed our expectations, our business, results of operations, fiscal
condition and prospects would be materially and adversely affected.

We may need additional financing to implement its strategy and expand our
business.

      We may need additional debt or equity financing to pursue our strategy of
expanding our business through the acquisition of companies whose businesses are
strategically appropriate for us or for our operations. Although Media
Outsourcing, our principal subsidiary, has in the past generated positive cash
flow, our credit facility limits the amount of distributions Media Outsourcing
can make to us. Any financing that we need may not be available at all and, if
available, may not be available on terms that are acceptable to us. The failure
to obtain financing on a timely basis, or on economically favorable terms, could
prevent us from continuing its strategy or from responding to changing business
or economic conditions, and could cause us to experience difficulty in
withstanding adverse operating results or competing effectively.

      If we raise additional funds by issuing equity securities, our
stockholders may experience dilution of their ownership interest. Moreover, we
could issue preferred stock that has rights senior to those of our common stock.
If we raise funds by issuing debt securities, these securities would have
rights, preferences and privileges senior to holders of common stock and lenders
may place limitations on our operations.

We are subject to restrictive credit facility covenants which could harm our
financial status and have a negative impact on our stock price.

      In January 2000, we entered into an agreement with Coast Business Credit
to provide a credit facility to finance the acquisition of our magazine
subscription teleservicing business and the ongoing working capital needs of
Media Outsourcing. We have guaranteed Media Outsourcing's obligations under the
Coast credit facility, and all of Media Outsourcing's assets are pledged to
Coast to secure its obligations under the Coast Facility.


                                       6
<PAGE>



      Under the agreement with Coast, we are required, among other things, to
maintain a consolidated net worth of not less than $9.0 million and excess
borrowing availability of $750,000. If we cannot satisfy these or other
covenants under the Coast Facility, Cross Media will be required to seek a
waiver or amendment from Coast. In May 2001, Coast waived the requirement that
we maintain a minimum tangible net worth through March 31, 2001 and waived any
violation of the limitation on distributions by Media Outsourcing to us with
respect to a $1,000,000 distribution in February 2001. Although we expect to be
in compliance with the provisions of the Coast Facility agreement going forward,
if we should require waivers or amendments to the agreement, there can be no
assurance that Coast will agree. If we default in performing our obligations to
Coast, Coast would be entitled to accelerate the maturity of outstanding
indebtedness under the credit facility, $14.6 million as of June 30, 2001, and
to enforce its security interest in Media Outsourcing's assets.

If we are unable to collect our receivables in a timely manner, our cash flow
from operations will be negatively impacted.

      We are subject to the risks associated with selling products on credit,
including delays in collection or uncollectibility of accounts receivable. If we
experience significant delays in collection or uncollectibility of accounts
receivable, our liquidity and working capital position could suffer.

If subscription cancellation reserves are not adequate, we could be required to
increase our reserves, which will result in a reduction of revenues.

      We extend credit to subscribers who purchase multi-magazine subscription
packages. We have established a reserve to cover subscription cancellations
based upon its past history with magazine subscription orders. In the past, we
has had to increase the reserves on its 20 pay contracts. If our subscription
cancellation reserves are inadequate, we will be required to increase reserves,
which will reduce revenues and could otherwise materially adversely affect our
results of operations.

The nature of our business makes us susceptible to an economic slowdown.

      Our business may be adversely affected by periods of economic slowdown,
inflation or recession, which may be accompanied by a decrease in the
availability of consumer credit. Any material decline in the availability of
consumer credit may result in a decrease in consumer demand to make credit card
purchases, which could adversely affect the demand for our products and
services.


                                       7

<PAGE>



Future growth could place significant strain on our resources, and we may be
unable to manage future growth.

      Growth in our operations could place a significant strain on our
operational systems and employee resources. As a result, we may have to
implement new operational and financial systems, procedures and controls. In
order to manage and accommodate our planned growth, if it occurs, we will need
to continue to improve and adapt our financial planning, accounting systems,
information systems and management structures. We will also need to expand,
train, retain and manage our employee base. If we are unable to manage our
growth effectively, its financial condition and results of operations could be
materially adversely affected.

If we acquire or make strategic investments in other businesses or acquires or
licenses technology and other assets, we may have difficulty integrating these
businesses, technologies and assets or generating an acceptable return on our
investments.

      We may acquire or enter into strategic relationships with other businesses
and acquire or license technology and other assets. We cannot assure you that
acquisition or licensing opportunities will be available on terms acceptable to
us or at all. Any future acquisitions and strategic relationships will involve
risks, including:

     o    inability to raise the required capital;

     o    difficulty  in  assimilating  the  acquired  assets,   operations  and
          personnel;

     o    disruption of ongoing business;

     o    distraction of management from other responsibilities; and

     o    lack of the necessary experience to enter new markets.

      We may not successfully overcome problems encountered in connection with
potential acquisitions or licensing arrangements. In addition, acquisitions or
strategic relationships could materially impair our operating results, causing
us to incur additional debt or requiring us to amortize acquisition expenses and
acquired assets.

The loss of our largest call centers would likely result in a reduction of
revenues and otherwise adversely affect operating results.

      In the year ended December 31, 2000, two independent call centers
accounted for approximately 35% of our magazine subscription revenues. These
call centers do not have any commitment to generate sales for us and could
therefore terminate their relationships with us without notice, which could have
a material adverse effect on our business.

Government regulation could add significant additional costs to our business and
impose restrictions on our marketing practices which could interfere with our
operations and have a significant adverse effect on our revenues.

      Laws and regulations applicable to direct marketing, telemarketing,
Internet marketing, consumer protection and membership club services are
becoming more prevalent. Each of the 50 states and the Federal government has
laws regulating telemarketing, sweepstakes promotions, promotional incentives
and advertising to consumers, which vary from state to state. While we review
our telemarketing scripts and advertising copy to ensure that they comply with
applicable laws, there is no guarantee that Federal or state authorities will
not find that our marketing efforts do not comply with these laws. In addition,
it is likely that additional Federal and/or state regulations regarding
telemarketing, sweepstakes, e-mail marketing and other marketing practices
engaged in by us will be enacted. If enacted, these regulations could have an
adverse effect on revenues and result in additional expenses to us and could
require us to refrain from engaging in specific activities or modify its
business practices.

      The Federal Trade Commission is currently in the process of reviewing the
provisions of the Telemarketing Sales Rule and Negative Option Rule to determine
if any changes to the rule should be made. If the Federal Trade Commission
determines that changes to the rule are necessary, changes could have a
significant adverse effect on our business.

      In 1999, Congress enacted the Deceptive Mail Prevention and Enforcement
Act, which imposes various restrictions on the offering of sweepstakes through
the mail. Additional sweepstakes legislation has been enacted or is pending in
various states. This additional regulation could have an adverse impact on our
marketing activities.

      Federal and state authorities have also been investigating various
companies' use of marketing practices, such as the use of personal information,
magazine subscription agents' sweepstakes practices and the marketing of
membership club services through the


                                       8
<PAGE>



use of inbound and outbound telemarketing campaigns.  These investigations could
result in additional rules, regulations or industry standards,  which could have
an  adverse  impact  on our  marketing  practices.  At  least  two of the  state
investigations have directly involved Memberworks, whose club memberships we are
marketing.  To the extent we derive  revenue from the sale of memberships in the
Memberworks  club,  there is a risk that we could be subject to investigation as
well, which could have an adverse impact on us.

Extensive  government  regulation  and  legal  uncertainties  related  to  doing
business on the  Internet  could limit our sales or add  significant  additional
costs to our business.

      Laws and regulations directly applicable to Internet communications,
commerce, marketing and data protection are becoming more prevalent. If any of
these laws hinder the growth of Internet use generally or decreases the
acceptance of the Internet as a medium of communications, commerce and
marketing, our business and prospects may suffer materially. The United States
Congress has enacted Internet laws regarding children's privacy, copyrights and
taxation. Other laws and regulations may be adopted covering issues such as user
privacy, marketing activities, pricing, content, taxation and quality of
products and services. The governments of some states and foreign countries have
begun to regulate our transactions and levy sales or other taxes relating to its
activities and will likely continue to do so. The laws governing the Internet
remain largely unsettled, even in areas where legislation has been enacted. It
may take years to determine whether and how existing laws such as those
governing intellectual property, privacy, libel and taxation apply to the
Internet and Internet advertising and marketing services. In addition, the
growth and development of the market for Internet commerce may prompt calls for
more stringent consumer protection laws, both in the United States and abroad,
that may impose additional burdens on companies conducting business over the
Internet.

      Laws and regulations governing the transmission of unsolicited email
marketing messages are being considered in many jurisdictions. Legislation of
that type has recently been adopted by numerous states, and similar legislation
is pending in several states and in Congress. These laws could have an adverse
impact on our Internet marketing activities. The Telecommunications Act of 1996
prohibits some types of information and content from being transmitted over the
Internet. The prohibition's scope and the liability associated with a
Telecommunications Act violation are currently unsettled. In addition, although
substantial portions of the Communications Decency Act were held to be
unconstitutional, we cannot be certain that similar legislation will not be
enacted and upheld in the future.

Changes in laws relating to consumer privacy and potentially heightened scrutiny
of our services could harm our business.

      There has been increasing public debate about the collection, distribution
and use of information about consumers. Although this debate has primarily
focused on information collected through the Internet, many of the issues apply
to data gathered through other media. We interact with consumers through our
various direct marketing efforts, both online and offline. As a consequence of
government regulation or evolving standards of consumer privacy protection, we
may be required to make changes to our marketing media and platforms in ways
that could diminish the effectiveness of its marketing efforts, which could harm
our business. Recently Congress passed the Gramm-Leach-Bliley Act, which
restricts the transfer of personal information, including credit card
information, by financial institutions. The Federal Trade Commission is also
considering regulations under that Act. This could restrict our ability to
acquire personal information from financial institutions and thus adversely
affect our direct marketing activities.

We have not met our obligation to register a substantial number of shares of our
common stock and could have liability as a result.

      We have granted holders of a substantial number of shares of our common
stock, including shares issuable upon the exercise or conversion of options,
warrants and other equity rights, the right to have their shares included in one
or more registration statements that we were required to file. We have not yet
filed a registration statement covering such shares and may have liability as a
result of our failure to timely file such registration statement, although we do
intend to file one or more registration statements in the near future to
register these shares.

Market Related Risks

The substantial number of options and warrants to purchase our common stock
could result in dilution to our stockholders.

      As of June 30, 2001, there were 36,726,007 issued and outstanding shares
of our common stock. If the holders of all outstanding options and common stock
purchase warrants exercised those options and warrants, and the holders of all
outstanding convertible securities converted them into common stock, we would be
required to issue approximately 27.7 million additional shares of common stock,
based on current exercise and conversion prices. The conversion price of our
Series A Convertible Preferred Stock (the "Series A Shares") is subject to
adjustment in a manner that could result in substantial dilution to other
holders of the Company's equity securities. The Series A Shares are convertible
into common stock at a floating rate based on the average of the three lowest


                                       9
<PAGE>



non-consecutive closing bid prices of the common stock during the ten trading
days prior to the date on which the conversion price is determined, subject to
certain adjustments (although we have agreed with the holder of the Series A
Shares that the minimum conversion price will be $1.50 per share). Therefore,
the lower the price of our common stock is at the time of conversion, the more
shares of common stock the holder of the Series A Shares will receive upon
conversion

The substantial number of shares of our common stock eligible for future sale
could cause our stock price to decline.

      The market price of the common stock could decline as a result of future
sales of substantial amounts of the common stock, or the perception that such
sales could occur. Furthermore, certain shareholders have the right to require
us to register for re-sale their shares of common stock, or shares of common
stock into or for which their convertible securities, options or warrants are
convertible or exercisable, which may facilitate the sale of these shares in the
public market. Approximately 36 million shares of outstanding common stock and
shares of common stock into or for which outstanding options, warrants and
convertible securities are exercisable or convertible are entitled to these
"registration rights" or have been registered for re-sale by the holders
pursuant to registration rights. We intend to file one or more registration
statements in the near future to register these shares of our common stock.

Other Risks Relating to Cross Media

Because ownership of Cross Media is concentrated, a small number of stockholders
exert significant influence over Cross Media.

      Our five largest stockholders beneficially owned approximately 58% of
Cross Media's issued and outstanding common stock as of August 1, 2001, and
following the acquisition of LifeMinders these stockholders will continue to own
a controlling interest in Cross Media common stock. As a result, these
stockholders have the ability to exert significant influence over our business,
including the election of directors and the approval of any other action
requiring the approval of stockholders. This concentration of share ownership
may:

     o    delay or prevent a change of control of Cross Media;

     o    impede a merger, consolidation, takeover or other business combination
          involving Cross Media; or

     o    discourage  a  potential  acquirer  from  making  a  tender  offer  or
          otherwise attempting to obtain control of Cross Media.

Provisions of our corporate charter documents and Delaware law could delay or
prevent a change of control.

      Our amended and restated certificate of incorporation authorizes the board
of directors to issue up to 10,000,000 shares of preferred stock. The preferred
stock may be issued in one or more series, the terms of which may be determined
at the time of issuance by our board of directors, without further action by
stockholders, and may include, among other things, voting rights (including the
right to vote as a series on particular matters), preferences as to dividends
and liquidation, conversion and redemption rights, and sinking fund provisions.
There is one series of preferred stock currently outstanding which has a
preference over the common stock if Cross Media is liquidated. This series of
preferred stock will be converted to common stock or redeemed simultaneously
with the completion of the merger. In addition, specific rights granted to
future holders of preferred stock could be used to restrict our ability to merge
with, or sell our assets to, a third party. The ability of our board of
directors to issue preferred stock could discourage, delay, or prevent a
takeover of Cross Media, thereby preserving control by the current stockholders.

      As a Delaware corporation, we are subject to the General Corporation Law
of the State of Delaware, including Section 203, an anti-takeover law enacted in
1988. In general, Section 203 restricts the ability of a public Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder. Subject to exceptions, an
interested stockholder is a person who, together with affiliates and associates,
owns, or within three years did own, 15% or more of a corporation's voting
stock. As a result of the application of Section 203, potential acquirers may be
discouraged from attempting to acquire Cross Media, thereby possibly depriving
its stockholders of acquisition opportunities to sell or otherwise dispose of
its stock at above-market prices typical of acquisitions.


                                       10
<PAGE>



                        CROSS MEDIA MARKETING CORPORATION

                           Quarter Ended June 30, 2001

PART II.    Other Information

Item 1.      Legal Proceedings

      No significant changes have occurred with respect to legal proceedings as
disclosed in Part I, Item 3, of the Company's 2000 Annual Report on Form 10-KSB.

Item 2.      Changes in Securities and Use of Proceeds

Recent Issuances of Unregistered Securities to Professionals

      On April 6, 2001, we issued five-year warrants to purchase 20,000 shares
of common stock to Richard Geist for consulting services rendered to the
Company. The issuance of these securities was made in reliance on Section 4 (2)
of the Securities Act as a transaction not involving any public offering,
because: (1) Mr. Geist represented that he was an accredited investor and was
acquiring the securities for investment purposes; and (2) we did not engage in
any general advertisement or general solicitation in connection with the
issuance of the securities.

      On April 16, 2001, we issued five-year warrants to purchase 50,000 shares
of common stock to East Coast Magazine Sales for consulting services rendered to
the Company. The issuance of these securities was made in reliance on Section 4
(2) of the Securities Act as a transaction not involving any public offering,
because: (1) East Coast Magazine Sales represented that it was an accredited
investor and was acquiring the securities for investment purposes; and (2) we
did not engage in any general advertisement or general solicitation in
connection with the issuance of the securities.

    On April 16, 2001, we issued five-year warrants to purchase 50,000 shares of
common stock to Emanuel/Addington Living Trust for consulting services rendered
to the Company. The issuance of these securities was made in reliance on Section
4 (2) of the Securities Act as a transaction not involving any public offering,
because: (1) Emanuel/Addington Living Trust represented that it was an
accredited investor and was acquiring the securities for investment purposes;
and (2) we did not engage in any general advertisement or general solicitation
in connection with the issuance of the securities.

      On April 16, 2001, we issued five-year warrants to purchase 17,000 shares
of common stock to Lexington Ventures, Inc. for consulting services rendered to
the Company. The issuance of these securities was made in reliance on Section 4
(2) of the Securities Act as a transaction not involving any public offering,
because: (1) Lexington Ventures, Inc. represented that it was an accredited
investor and was acquiring the securities for investment purposes; and (2) we
did not engage in any general advertisement or general solicitation in
connection with the issuance of the securities.

      On April 19, 2001, we issued five-year warrants to purchase 75,000 shares
of common stock to Harry Joe Brown for [consulting services] rendered to the
Company. The issuance of these securities was made in reliance on Section 4 (2)
of the Securities Act as a transaction not involving any public offering,
because: (1) Mr. Brown represented that he was an accredited investor and was
acquiring the securities for investment purposes; and (2) we did not engage in
any general advertisement or general solicitation in connection with the
issuance of the securities.

      On April 23, 2001, we issued five-year warrants to purchase 15,000 shares
of common stock to Robert Rein for consulting services rendered to the Company.
The issuance of these securities was made in reliance on Section 4 (2) of the
Securities Act as a transaction not involving any public offering, because: (1)
Mr. Rein represented that he was an accredited investor and was acquiring the
securities for investment purposes; and (2) we did not engage in any general
advertisement or general solicitation in connection with the issuance of the
securities.

      On June 1, 2001, we issued five-year warrants to purchase 50,000 shares of
common stock to Capital Research, Ltd. for consulting services rendered to the
Company. The issuance of these securities was made in reliance on Section 4 (2)
of the Securities Act as a transaction not involving any public offering,
because: (1) Capital Research, Ltd. represented that it was an accredited
investor and was acquiring the securities for investment purposes; and (2) we
did not engage in any general advertisement or general solicitation in
connection with the issuance of the securities.

      On June 15, 2001, we issued two-year warrants to purchase 30,000 shares of
common stock to Koyah Leverage Partners, L.P. as consideration for a delay in
the filing of a registration statement covering 600,000 of common stock held by
Koyah. The issuance


                                       11
<PAGE>



of these  securities was made in reliance on Section 4 (2) of the Securities Act
as a transaction not involving any public offering,  because: (1) Koyah Leverage
Partners,  L.P. represented that it was an accredited investor and was acquiring
the securities for investment purposes; and (2) we did not engage in any general
advertisement  or general  solicitation  in connection  with the issuance of the
securities.

      On June 18, 2001, we issued five-year warrants to purchase 75,000 shares
of common stock to Harry Joe Brown as a sales commission in connection with the
sale of additional shares of common stock. The issuance of these securities was
made in reliance on Section 4 (2) of the Securities Act as a transaction not
involving any public offering, because: (1) Mr. Brown represented that he was an
accredited investor and was acquiring the securities for investment purposes;
and (2) we did not engage in any general advertisement or general solicitation
in connection with the issuance of the securities.

      On June 21, 2001, we issued five-year warrants to purchase 25,000 shares
of common stock to Xulu Group, Inc. as a sales commission in connection with the
sale of additional shares of common stock. The issuance of these securities was
made in reliance on Section 4 (2) of the Securities Act as a transaction not
involving any public offering, because: (1) Xulu Group, Inc. represented that it
was an accredited investor and was acquiring the securities for investment
purposes; and (2) we did not engage in any general advertisement or general
solicitation in connection with the issuance of the securities.

Other Recent Sales of Unregistered Securities

      On June 18, 2001, we issued and sold 600,000 shares of common stock to
Bushnell Corporation at $1.09 per share. The issuance and sale of these
securities was made in reliance on Section 4 (2) of the Securities Act as a
transaction not involving any public offering, because: (1) Bushnell Corporation
represented that it was an accredited investor and was acquiring the securities
for investment purposes; and (2) we did not engage in any general advertisement
or general solicitation in connection with the issuance of the securities.

      On June 21, 2001, we issued and sold 210,970 shares of common stock to
Katz Family Limited Partnership Corporation at $1.185 per share. The issuance
and sale of these securities was made in reliance on Section 4 (2) of the
Securities Act as a transaction not involving any public offering, because: (1)
Katz Family Limited Partnership represented that it was an accredited investor
and was acquiring the securities for investment purposes; and (2) we did not
engage in any general advertisement or general solicitation in connection with
the issuance of the securities.

      On June 21, 2001, we issued and sold 63,291 shares of common stock to
Peter Clark at $1.185 per share. The issuance and sale of these securities was
made in reliance on Section 4 (2) of the Securities Act as a transaction not
involving any public offering, because: (1) Mr. Clark represented that he was an
accredited investor and was acquiring the securities for investment purposes;
and (2) we did not engage in any general advertisement or general solicitation
in connection with the issuance of the securities.

      On June 21, 2001, we issued and sold 63,291 shares of common stock to Ken
Lambert at $1.185 per share. The issuance and sale of these securities was made
in reliance on Section 4 (2) of the Securities Act as a transaction not
involving any public offering, because: (1) Mr. Lambert represented that he was
an accredited investor and was acquiring the securities for investment purposes;
and (2) we did not engage in any general advertisement or general solicitation
in connection with the issuance of the securities.

Item 3.      Defaults Upon Senior Securities

             None.

Item 4.      Submission of Matters to a Vote of Stockholders

      The Annual Meeting of Stockholders of the Company was held on June 6, 2001
to elect five directors of the Company and to approve the adoption of an
amendment to the Company's 1998 Stock Option Plan to increase the number of
shares of the Company's Common Stock available for awards thereunder by
1,500,000. Both matters put before the stockholders passed as follows

<TABLE>
<CAPTION>

        Director Nominees/ Other Matters       For    Withheld  Against   Abstain
        --------------------------------       ---    --------  -------   -------
<S>                                         <C>       <C>       <C>       <C>
     Ronald Altbach                         23,426,216    2,000      --        --
     Richard Kaufman                        23,423,216    5,000      --        --
     Richard Cohen                          23,426,216    2,000      --        --
     Bruce Dorskind                         23,426,216    2,000      --        --
     Ken Lambert                            23,426,216    2,000      --        --

     Adopt Amendment 1997 Incentive
     Compensation Plan                      23,403,910      --    23,839       500
</TABLE>

                                       12
<PAGE>



Item 5.     Other Information

            None.

Item 6.     Exhibits and Reports on Form 8-K

      (a)      Exhibits

      10.1  Employment Agreement between the Company and Andrew Nelson, dated
            as of November 21, 2000*

      10.2  Employment Agreement between the Company and Chester Borgida,
            dated as of May 7, 2001*

      10.3  Letter Agreement, dated May 1, 2001, between the Company and the
            holder of the outstanding shares of Series A Convertible Preferred
            Stock*

      10.4  Limited Waiver Agreement, dated as of May 16, 2001, between
            Coast Business Credit and Media Outsourcing, Inc.*

      10.5  Letter Agreement, dated June 8, 2001, between the Company and the
            holder of the outstanding shares of Series A Convertible Preferred
            Stock, incorporated by reference to our Current Report on Form 8-K,
            filed on June 15, 2001.

      10.6  Limited Liability Company Agreement, dated June 8,
            2001, by and between Media Outsourcing, Inc. and JWE Holdings,
            Inc.*

      10.7  Services Agreement, dated July 1, 2001, by and between TBC
            Telemarketing, Inc. d/b/a TBC Consulting Group and Media
            Outsourcing, Inc.*

      10.8  Letter Agreement, dated July 18, 2001, between the Company and the
            holder of the outstanding shares of Series A Convertible Preferred
            Stock, incorporated by reference to our Current Report on Form 8-K,
            filed on July 25, 2001.

      10.9  Agreement, dated July 18, 2001, between the Company and the holder
            of the outstanding shares of Series A Convertible Preferred Stock,
            incorporated by reference to our Current Report on Form 8-K, filed
            on July 25, 2001.

      *  Filed herewith

      (b)      Reports on Form 8-K

      We filed the following Current Report on Form 8-K during the fiscal
quarter ended June 30, 2001:

      (i)   On June 15, 2001, we filed a Current Report on Form 8-K regarding an
            amendment to a letter agreement between the Company and the holder
            of all of the outstanding shares of our Series A Convertible
            Preferred Stock.


                                       13


<PAGE>



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


                      CROSS MEDIA MARKETING CORPORATION
                      (Registrant)




                      By:       /s/ Chet Borgida
                              ------------------------------------------
                      Name:   Chet Borgida
                      Title:  Executive Vice President and Chief
                              Financial Officer
                              (principal financial and accounting
                              officer)


Dated:       August 14, 2001

                                       14

<PAGE>



                                                                    Exhibit 10.1

                              SYMPOSIUM CORPORATION

                              EMPLOYMENT AGREEMENT


      This Employment Agreement (this "Agreement") is made and entered into as
of November 21, 2000, by and between SYMPOSIUM CORPORATION, a Delaware
corporation (the "Company"), and ANDREW NELSON ("Employee").

1.    Definitions

      "Board" shall mean the Board of Directors of the Company.

      "Company Group" shall mean the Company and each Person that the Company
directly or indirectly Controls or that Controls the Company.

      "Control" shall mean, with respect to any Person, (i) the beneficial
ownership of more than 50% of the outstanding voting securities of such Person
or (ii) the power, directly or indirectly, by proxy, voting trust or otherwise,
to elect a majority of the outstanding directors, trustees or other managing
persons of such Person.

      "Date of Termination" shall mean the effective date of the termination of
Employee's employment pursuant to Section 4 herein.

      "Disability" with respect to Employee, shall mean that, for physical or
mental reasons, Employee is unable to perform the essential functions of
Employee's duties under this Agreement for 90 days during any six month period.
Employee agrees to submit to a reasonable number of examinations by a medical
doctor reasonably acceptable to Employee advising the Company as to whether
Employee shall have suffered a disability and be unable to return to work for 90
days. Employee hereby authorizes the disclosure and release to the Company and
its agents and representatives medical records relating to the issue of
Employee's Disability. If Employer is not legally competent, Employee's legal
guardian or duly authorized attorney-in-fact will act in Employee's stead for
the purposes of submitting Employee to the examinations, and providing the
authorization of disclosure of Employee's ability or inability to return to
work.

      "Employment Date" shall mean October 2, 2000 or, if later, then the date
on which Employee commences employment with the Company.



<PAGE>



      "For Cause" shall mean, in the context of a basis for termination of
Employee's employment with the Company, that:

     (a) Employee breaches any material obligation, duty or agreement under this
Agreement,  which  breach is not cured or  corrected  within 20 days of  written
notice thereof from the Company  (except for breaches of Sections 2.3, 7 or 8 of
this  Agreement,  which  cannot be cured and for which the Company need not give
any opportunity to cure); or

     (b) Employee  commits any act of fraud,  embezzlement,  breach of fiduciary
duty or trust against any member of the Company Group; or

     (c)  Employee  is  indicted  for,  convicted  of, or pleads  guilty or nolo
contendere with respect to, theft, fraud, a crime involving moral turpitude,  or
a felony under federal or state law; or

     (d) Employee  commits any act of personal  conduct that, in the  reasonable
opinion  of the  Board,  gives  rise to any  member  of the  Company  Group of a
material  risk of liability  under  federal or state law for  discrimination  or
sexual or other forms of harassment or other similar  liabilities  to employees;
or

     (e) Employee  commits  continued  and repeated  substantive  violations  of
specific written  directions of the Board, the Company's Chief Executive Officer
or any other  superior  officer of Employee's,  which  directions are consistent
with this Agreement.

      "Person" shall mean an individual, partnership, corporation, trust,
estate, association, limited liability company, governmental authority or other
entity.

      "Severance Period" shall mean the period during which Employee is
receiving severance compensation under Section 5 herein.

2. Engagement and Responsibilities

     2.1  Upon  the  terms  and  subject  to the  conditions  set  forth in this
Agreement,  the  Company  hereby  employs  Employee  as its  Vice  President  --
Marketing, and Employee accepts such employment.  Employee shall report directly
to the  Company's  President or Chief  Executive  Officer,  as determined by the
Company  from time to time.  Employee  shall  also serve from time to time as an
officer and employee of such  subsidiaries  or  affiliates of the Company as the
Board, Chief Executive Officer or President of the Company may from time to time
request.

     2.2 Employee agrees to devote all of Employee's  business time,  energy and
efforts to the business of the Company and will use Employee's  best efforts and
abilities faithfully and diligently to promote the Company's business interests.
Employee's  duties  and  responsibilities  shall be as set  forth on  Exhibit  A
attached hereto.  In addition,  Employee's duties shall include those duties and
services  (consistent with the duties and  responsibilities set forth on Exhibit
A) for the  Company  and its  affiliates  as the  Board or the  Company's  Chief
Executive  Officer  or  President  shall  from time to time  reasonably  direct;
provided,  however,  that,  to the extent that such  activities do not interfere
with the performance by Employee of his duties and  responsibilities  under this
Agreement,  Employee  may:  (i) serve on the board of  directors of a reasonable
number of other  corporations,  trade associations or charitable  organizations;
(ii) engage in charitable  activities or community affairs;  or (iii) manage his
personal investments and affairs.

     2.3 After  Company gives  Employee  notice of  termination  under Section 4
herein and during any period Employee is receiving severance  compensation under
Section 5 herein,  Company may  instruct  Employee to stop  performing  services
hereunder or may require  Employee to perform such  administrative,  training or
other functions as Company may reasonably  regard as necessary or appropriate to
facilitate transition and minimize the adverse impact to Company Group.



<PAGE>



3.    Compensation and Benefits

      For so long as Employee shall be employed by the Company, Employee shall
receive the following compensation and benefits:

     3.1 Salary.  The Company  shall pay  Employee a salary at an annual rate of
$200,000,  increasing  to $225,000 on January 1, 2001 and to $250,000 on January
1,  2002.  Thereafter,  the Board may,  but shall not be  obligated  to,  adjust
Employee's salary from time to time. The salary shall be payable in installments
in the same  manner and at the same times the  Company  pays  salaries  to other
executive  officers of the Company,  but in no event less  frequently than equal
monthly  installments.  The  salary  shall  be  pro-rated  for any year in which
Employee has been employed hereunder for fewer than twelve months.

     3.2  Performance  Bonus.  For each  calendar  year  during the Term of this
Agreement,  commencing in calendar year 2001,  Employee  shall be entitled to an
annual  performance  bonus of not less than $100,000  (the "Minimum  Performance
Bonus") and not more than 100% of Employee's  base salary for such calendar year
(the "Performance Bonus") based upon Employee's performance during each year, as
measured by mutually  established  goals and criteria.  The Minimum  Performance
Bonus will be payable in equal  quarterly  installments  on the fifteenth day of
the month next  following the close of each fiscal  quarter.  The balance of the
Performance   Bonus,  if  any,  will  be  payable,   depending  upon  the  goals
established,  either  quarterly  or, in any event,  not later than January 31 of
each year (with respect to any unpaid balance of the  Performance  Bonus for the
preceding year), commencing January 31, 2002.

     3.3  Additional  Bonus.  In the  event  that  the  Company  enters  into an
agreement  (the "Hot Socket  Agreement")  with Hot Socket or E-Revenue  Partners
("Hot Socket"), the Company will enter into an additional bonus arrangement (the
"Additional  Bonus") with Employee,  based upon mutually  established  goals and
criteria,  to enable  Employee to  participate  in the success of the  Company's
relationship with Hot Socket.

     3.4 Expense Reimbursement. Employee shall be entitled to reimbursement from
the Company for the reasonable  out-of-pocket  costs and expenses which Employee
incurs in connection with the  performance of Employee's  duties and obligations
under this  Agreement in a manner  consistent  with the Company's  practices and
policies therefor.

     3.5 Employee  Benefit  Plans.  Employee shall be entitled to participate in
any and all  pension,  profit-sharing,  savings,  and  group  life,  disability,
medical,  dental,  and other  insurance and group benefit plans that the Company
makes available to its executive officers generally;  provided, however that the
Company shall have no obligation  to establish,  make  available or maintain any
such plan. In addition,  subject to satisfactory  medical approval,  the Company
agrees to, at its sole expense,  pay all premiums with respect to a split dollar
life insurance policy in the amount of $1,000,000 in which the employee shall be
named the  insured and the  proceeds  of which will be payable to a  beneficiary
named by Employee.  Upon termination of the Employee's  employment,  the Company
agrees to transfer to the Employee, at Employee's option, any then-existing life
insurance  policies in which the Employee is the named insured for consideration
equal to the interpolated  terminal reserve value of such policies. In the event
that the  Employee  does not  exercise  his  right to  purchase  such  insurance
policies, such insurance policies shall be cancelled by the Company.

     3.6  Vacation.  Commencing  with  calendar  year  2001,  Employee  shall be
entitled to paid  vacation  which  accrues at a rate of three weeks per calendar
year.  Vacation shall accrue in accordance with the Company's  standard vacation
accrual policy.

     3.7  Automobile  Allowance.  The Company shall  reimburse  Employee for his
monthly  automobile lease or purchase payments and other expenses  incidental to
the operation, insurance, maintenance and parking of such automobile, subject to
a  maximum  reimbursement  of  $1,000  per  month  and  to his  presentation  of
appropriate  vouchers and  documentation in accordance with the Company's normal
policies for expense and business use verification.



<PAGE>



     3.8  Disability.  In the event of any  Disability,  Employee's  salary  and
benefits shall continue until  termination of his  employment,  provided that if
Employee  shall  receive  payments  as a result  of such  Disability  under  any
disability  plan  maintained by the Company or from any government  agency,  the
Company  shall be entitled to deduct the amount of such  payments  received from
base salary paid or payable to Employee during the period of such Disability.

     3.9 Withholding.  The Company may deduct from any  compensation  payable to
Employee  (including  payments made  pursuant to Section 5 of this  Agreement in
connection with or following  termination of employment) amounts it believes are
required  to be  withheld  under  federal  and state law,  including  applicable
federal,  state and/or local income tax withholding,  old-age and survivors' and
other social security  payments,  state disability and other insurance  premiums
and payments.

     3.10 Signing Bonus.  At such time following the Employment Date as Employee
shall designate,  Company will pay Employee a $50,000 signing bonus.  Such bonus
shall be deemed to be fully  earned as of the  Employment  Date.  Employee  will
relocate  his  residence  to New York,  New York or its  immediate  vicinity  in
connection with his acceptance of employment by the Company.

     3.11 Relocation Expenses. The Company shall pay, or reimburse Employee for,
expenses reasonably incurred by Employee in connection with such relocation upon
submission of documentation in a form reasonably acceptable to the Company up to
a maximum of $25,000 and will pay, or reimburse  Employee for,  commutation  and
living expenses (other than non-business related meals) incurred by Employee, in
each case for a period not to exceed eight months from and after the  Employment
Date and preceding the date of such relocation.

     3.12  Liability  as  Employee or  Officer.  Employee  shall be named in any
directors and officers liability  insurance policy that the Company may maintain
from time to time;  provided,  however that the Company shall have no obligation
to  establish,  make  available or maintain any such policy.  The Company  shall
indemnify Employee for any and all claims,  liabilities,  or expenses arising in
connection  with his  performance of his duties as an employee or officer of the
Company under this Agreement to the fullest extent  allowable  under the By-Laws
of the Company and  applicable  state or federal law,  except to the extent such
claims,  liabilities  or  expenses  result  from the bad  faith  or  intentional
misconduct of Employee.



4.    Term of Employment

      Employee's term of employment pursuant to this Agreement shall commence as
of the date hereof and shall terminate upon the earliest to occur of the
following (the "Date of Termination"):

     4.1 the second anniversary of the Employment Date (the "Second  Anniversary
Date");

     4.2 the death of Employee (effective on the date of death);

     4.3 Company's  delivery to Employee of written notice of termination by the
Company if Employee shall suffer a Disability (effective on the ninetieth (90th)
day of Disability);

     4.4 Company's  delivery to Employee of written notice of termination by the
Company For Cause (effective on delivery of such notice);

     4.5  Company's  delivery  to  Employee  of at least  thirty (30) days prior
written  notice of  termination  by the Company not For Cause  (effective on the
thirtieth (30th) day after such notice is given); or

     4.6 At the option of Employee,  the filing by the Company of any proceeding
seeking to adjudicate the Company as bankrupt or insolvent.



<PAGE>



5.    Severance Compensation

     5.1 If  Employee's  employment  is  terminated  by the Company  pursuant to
Section 4.5 prior to the Second  Anniversary  Date, the Company shall: (a) until
the earlier to occur of the Second  Anniversary Date or six months from the Date
of Termination (such earlier date, the "Severance  Termination Date"),  continue
to (i) pay to Employee  salary at the rate in effect on the Date of Termination;
and (ii) pay for Employee's (and his immediate  family's)  participation  in all
the Company's medical,  life,  dental,  disability and similar plans in which he
was  participating to the extent permitted by such plan; and (b) pay to Employee
a  pro-rated  share  (through  the  Severance  Termination  Date) of any Minimum
Performance  Bonus and, if  applicable,  Additional  Bonus which would have been
earned  by  Employee  pursuant  to  Section  3.2 or 3.3,  respectively,  of this
Agreement  had  Employee  been  employed  the  entire  year in which the Date of
Termination occurs. Notwithstanding the foregoing, the Company may terminate any
payments  pursuant  to this  Section  5.1 upon any  breach  by  Employee  of any
provision of Section 7 of this Agreement.

     5.2 If Employee's employment is terminated for any reason other than by the
Company not For Cause prior to the Second  Anniversary  Date,  the Company shall
pay to Employee (or Employee's  estate or beneficiary,  as the case may be), any
unpaid salary through the Date of Termination  and, if termination  was pursuant
to  Sections  4.2 or 4.3,  the Company  shall pay to Employee a pro-rated  share
(through  the date of  termination)  of any  Minimum  Performance  Bonus and, if
applicable,  Additional Bonus which would have been earned by Employee  pursuant
to  Section  3.2 or 3.3,  respectively,  of this  Agreement  had  Employee  been
employed the entire year in which the Date of Termination occurs. Employee shall
not be entitled to any Bonus (other than as set forth in the preceding sentence)
for the year in which the Date of  Termination  occurs.  All rights and benefits
which  Employee  or his estate may have under  employee  benefit  plans in which
Employee shall be participating  at the Date of Termination  shall be determined
in accordance with such plans.

     5.3  Employee  acknowledges  that the  Company  has the right to  terminate
Employee's  employment  at any time and that  such  termination  shall  not be a
breach of this Agreement or any other express or implied  agreement  between the
Company and Employee.  Accordingly,  in the event of such termination,  Employee
shall be entitled only to those benefits  specifically  provided in this Section
5, and shall not have any other rights to any  compensation  or damages from the
Company for breach of contract.

     5.4 Employee  acknowledges  that in the event of  termination of Employee's
employment for any reason, Employee (nor Employee's estate, heirs, beneficiaries
or others claiming  through  Employee) shall not be entitled to any severance or
other  compensation  from the Company  except as  specifically  provided in this
Section 5. Without  limiting on the  generality of the  foregoing,  this Section
supersedes any plan or policy of the Company which provides for severance to its
officers or employees,  and Employee shall not be entitled to any benefits under
any such plan or policy.

6.    Options

     6.1 Employee will be granted  options (the  "Options") to purchase  125,000
shares of Company's  Common  Stock under  Company's  1998 Stock Option Plan,  as
amended (the "Plan").  The Options will vest  quarterly over a three year period
(8.33%  per  quarter)  beginning  three  months  after the date  hereof  and the
exercise  price under the Options  will be the  closing  price of the  Company's
Common Stock on the American Stock Exchange ("AMEX") on the date hereof.

     6.2 In  addition,  in the event that the  Company  enters into a Hot Socket
Agreement,  Employee will be granted  options to purchase an  additional  75,000
shares under the Plan (the "Additional  Options").  The Additional  Options will
vest  quarterly  over a three year period  (8.33% per quarter)  beginning  three
months  after  the date on which a Hot  Socket  Agreement  is  executed  and the
exercise  price  of the  Additional  Options  will be the  closing  price of the
Company's Common Stock on the AMEX on such date.

     6.3 A Summary of the Plan is attached as Exhibit B hereto.


<PAGE>



7.    Restrictive Covenants.

     7.1 Certain Definitions.  In addition to the other definitions set forth in
this  Agreement,  for purposes of this Section 7, the following terms shall have
the following meanings:

            "Competitive Activity" means any activity which competes with any
substantial aspect or part of the business of any member of the Company Group in
the Restricted Area, whether as a proprietor, partner, shareholder, owner,
member, employer, employee, independent contractor, venturer or otherwise.
            "Competitor" means any Person, other than a member of the Company
Group, which at any time during the Restriction Period engages in any
Competitive Activity.

            "Confidential Information" means all information of or relating to
the Company Group, its business or practice, which is not generally known or
available to the public (whether or not in written or tangible form) including,
without limitation, customer lists, supplier lists, processes, know-how, trade
secrets, pricing policies and other confidential business information.

            "Confidential Materials" means any and all documents, records,
reports, lists, notes, plans, materials, programs, software, disks, diskettes,
recordings, manuals, correspondence, memoranda, magnetic media or any other
tangible media (including, without limitation, copies or reproductions of any of
the foregoing) in which any Confidential Information may be contained.

            "Employer" means the Company and each other member of the Company
Group to which Employee provides services.

            "Personnel" means any and all employees, contractors, agents,
consultants or other Persons rendering services to a member of the Company
Group, for compensation in any form.

            "Restricted Area" means the United States, Canada, and their
respective territories and possessions, except that the Restricted Area shall be
worldwide with respect to any Competitive Activity involving the Internet, the
World Wide Web, telemarketing, telephony or other electronic or similar media.

            "Restriction Period" means the period of time (subject to extension
pursuant to Section 7.6 below), commencing on the Employment Date and expiring
at the end of the Severance Period, except that if Employee's employment is
terminated For Cause or voluntarily by Employee, the period of time (subject to
extension pursuant to Section 7.6 below) shall expire at the end of the number
of days which is the same as the number of days between the Employment Date and
such termination up to a maximum of two (2) years after such termination.

     7.2 Confidentiality.


            (a)   Confidential Information.  Subject to Section 7.2(c):


                  (1)   Duty  to  Maintain  Confidentiality.   Employee  shall
maintain in strict  confidence  and duly  safeguard to the best of his ability
any and all Confidential Information.

                  (2) Covenant Not to Disclose, Use or Exploit. Employee shall
not, directly or indirectly, disclose, divulge or otherwise communicate to
anyone or use or otherwise exploit for the benefit of anyone, other than
Employer, any Confidential Information.

                  (3) Confidential Materials. All Confidential Information and
Confidential Materials are and shall remain the exclusive property of the
Company Group and no Confidential Materials may be copied or otherwise
reproduced, removed from the premises of Employer or entrusted to any Person
(other than Employer or the Personnel entitled to such materials) without prior
written permission from Employer.




<PAGE>



            (b) Survival of Covenants. Notwithstanding anything herein to the
contrary, the covenants set forth in this Section 7.2 shall survive the
termination of this Agreement and any other agreement among any or all of the
parties hereto (regardless of the reason for such termination), unless
terminated by a written instrument that expressly terminates by specific
reference the covenants set forth in this Section 7.2.

            (c) Permitted Activities. If Employee receives a request or demand
for Confidential Information (whether pursuant to a discovery request, subpoena
or otherwise), Employee shall immediately give Employer written notice thereof
and shall exert his best efforts to resist disclosure, including, without
limitation, by fully cooperating and assisting Employer in whatever efforts it
may make to resist or limit disclosure or to obtain a protective order or other
appropriate remedy to limit or prohibit further disclosure or use of such
Confidential Information. If Employee complies with the preceding sentence but
nonetheless becomes legally compelled to disclose Confidential Information,
Employee shall disclose only that portion of the Confidential Information that
he is legally compelled to disclose.



<PAGE>



     7.3 Covenant Not to Compete.  During the Restriction Period, Employee shall
not, directly or indirectly,  whether as a sole  practitioner,  owner,  partner,
shareholder,  investor, employee,  employer,  venturer,  independent contractor,
consultant  or other  participant,  (i) own,  manage,  invest in or acquire  any
economic  stake or interest in any Person  involved in a  Competitive  Activity,
(ii) derive economic benefit from or with respect to any Competitive Activity or
(iii)  otherwise  engage  or  participate  in  any  manner   whatsoever  in  any
Competitive  Activity;  provided,  however,  this Section 7.3 shall not restrict
Employee from owning less than 2% of the debt or equity  securities  issued by a
corporation  or other entity or from having any other  passive  investment  that
creates  no  conflict  of loyalty or  interest  with any duty owed to  Employer.
Employee shall be deemed to have derived  economic  benefit in violation of this
Section 7.3 if, among other things,  any of his compensation or income is in any
way related to any Competitive Activity conducted by any Person. Further, during
the  Restriction  Period  Employee  shall not  directly or  indirectly  advance,
cooperate  in or help or aid any  Competitor  in the conduct of any  Competitive
Activity.

     7.4 Covenant Not to  Interfere.  During the  Restriction  Period,  Employee
shall not,  directly or  indirectly,  recruit,  solicit or  otherwise  induce or
influence  any  Personnel  of  Employer  to  discontinue,  reduce the extent of,
discourage the development of or otherwise harm such Personnel's relationship or
commitment to Employer. Conduct prohibited under this Section 7.4 shall include,
without limitation, employing, seeking to employ or causing, aiding, inducing or
influencing a Competitor to employ or seek to employ any Personnel of Employer.

     7.5 Equitable Relief. Each of the parties  acknowledges that the provisions
and  restrictions  of  this  Section  7 are  reasonable  and  necessary  for the
protection of the legitimate interests of the Company Group. Each of the parties
further  acknowledges that the provisions and restrictions of this Section 7 are
unique and that any breach or  threatened  breach of any of such  provisions  or
restrictions  will provide the Company Group with no adequate remedy at law, and
the result will be irreparable harm to the Company Group. Therefore, the parties
hereto  agree  that upon a breach or  threatened  breach  of the  provisions  or
restrictions of this Section 7, the Company Group shall be entitled, in addition
to any other rights and remedies  which may be available to it, to institute and
maintain  proceedings  at law or in  equity,  to recover  damages,  to obtain an
equitable  accounting of all earnings,  profits or other benefits resulting from
such  breach or  threatened  breach  and to  obtain  specific  performance  or a
temporary and permanent injunction.

     7.6 Full Restriction Period. If Employee violates any restrictive  covenant
contained  herein  and a member  of the  Company  Group  institutes  action  for
equitable  relief,  such member,  as a result of the time  involved in obtaining
such  relief,  shall not be  deprived  of the  benefit  of the full  Restriction
Period. Accordingly, the Restriction Period shall be deemed to have the duration
specified  in Section 7.1,  computed  from and  commencing  on the date on which
relief is granted by a final order from which there is no appeal,  but  reduced,
if  applicable,  by the length of time between the date the  Restriction  Period
commenced  and the date of the first  violation of any  restrictive  covenant by
Employee.  Prior to obtaining any injunctive relief hereunder, the parties agree
that the non-breaching party shall be required to post an injunction surety bond
with the court in an amount to be determined by such court to be reasonable.

     7.7 Equitable  Accounting.  Each member of the Company Group shall have the
right  to  demand  and  receive   equitable   accounting  with  respect  to  any
consideration  received by Employee in connection  with  activities in breach of
the restrictive covenants herein, and shall be entitled to payment from Employee
of such consideration on demand.

     7.8 Prior Breaches.  Neither the expiration of the  Restriction  Period nor
the  termination  of the status of any Customer or Personnel as such (whether or
not due to a breach  hereof by  Employee)  shall  preclude,  limit or  otherwise
affect the rights and remedies of a member of the Company Group against Employee
based upon any breach hereof during the Restriction Period or before such status
of Customer or Personnel terminated.

     7.9 Noncircumvention of Covenants.  Employee  acknowledges and agrees that,
for purposes of this Agreement, an action shall be considered to have been taken
by  Employee  "indirectly"  if taken by or through  (a) any member of his family
(whether a close or distant  relation by blood,  marriage or adoption),  (b) any
Person owned or controlled,  solely or with others,  directly or "indirectly" by
Employee



<PAGE>



or a member  of his  family,  (c) any  Person of which he is an owner,
partner, employer,  employee, trustee,  independent contractor or agent, (d) any
employees, partners, owners or independent contractors of any such Person or (e)
any other one or more representatives or intermediaries,  it being the intention
of the parties that  Employee  shall not directly or indirectly  circumvent  any
restrictive covenant contained herein or the intent thereof.

     7.10 Notice of Restrictions.  During the Restriction Period, Employee shall
notify each  prospective  employer,  partner or co-venturer of the  restrictions
contained in this  Agreement.  Employer is hereby  authorized  to contact any of
such Persons for the purpose of providing notice of such restrictions.

     7.11  Reduction of  Restrictions  by Court Action.  Each of the  provisions
hereof including,  without limitation, the periods of time, geographic areas and
types and  scopes of duties  of,  and  restrictions  on the  activities  of, the
parties hereto specified herein are and are intended to be divisible, and if any
portion thereof (including any sentence,  clause or word) shall be held contrary
to law or invalid or unenforceable in any respect in any jurisdiction,  or as to
one or more periods of time,  areas or business  activities or any part thereof,
the  remaining  provisions  shall not be affected but shall remain in full force
and effect,  and any such invalid or  unenforceable  provision  shall be deemed,
without further action on the part of any party hereto or other Person, modified
and  amended  to the  minimum  extent  necessary  to render  the same  valid and
enforceable in such jurisdiction.

     7.12 Fairness of  Restrictions.  Employee  acknowledges and agrees that (a)
compliance with the restrictive covenants set forth herein would not prevent him
from earning a living that involves his training and skills without  relocating,
but only from engaging in unfair competition with,  misappropriating a corporate
opportunity  of, or  otherwise  unfairly  harming the Company  Group and (b) the
restrictive  covenants  set forth herein are intended to provide a minimum level
of  protection  necessary  to protect the  legitimate  interests  of the Company
Group. In addition,  the parties  acknowledge that nothing herein is intended to
or shall, limit, replace or otherwise affect any other rights or remedies at law
or in equity for protection against unfair competition with, misappropriation of
corporate   opportunities   of,   disclosure  of  confidential  and  proprietary
information  of, or defamation of the Company  Group,  or for  protection of any
other rights or interest of the Company Group.

     7.13 Surrender of Records and Property.  Upon termination of his employment
with Company,  Executive shall promptly deliver to Company all records, manuals,
books, blank forms, documents,  letters, memoranda,  notes, notebooks,  reports,
data, tables, calculations and copies thereof, which are the property of Company
or which relate in any way to the business, products, practices or techniques of
Company, and all other property,  trade secrets and confidential  information of
Company, including,  without limitation, all documents which in whole or in part
contain any trade secrets or confidential  information of Company,  which in any
of these cases are in his possession or under his control.

8.    Assignment.

      Except as expressly provided below, this Agreement shall not be
assignable, in whole or in part, by either party without the prior written
consent of the other party. Company may, without the prior written consent of
Employee, assign its rights and obligations under this Agreement to (i) any
member of the Company Group or (ii) any other Person with or into which Company
may merge or consolidate, or to which Company may sell or transfer all or
substantially all of its assets, provided, however, that such assignment may be
made without Employee's prior written consent only if (a) such assignment has a
valid business purpose and is not for the purpose of avoiding Company's
obligations hereunder or Employee's realization of the benefits of this
Agreement and (b) the assignee expressly assumes in writing all obligations and
liabilities hereunder. This Agreement shall be binding upon and inure to the
benefit of Company and its respective successors and permitted assigns. This
Agreement and all rights of Employee hereunder shall inure to the benefit of and
be enforceable by his heirs, personal or legal representatives and
beneficiaries.

9.    Employment Following Second Anniversary Date.



<PAGE>



      If Employee's employment continues following the Second Anniversary Date:
(a) such employment shall be "at will," and may be terminated either by the
Employee upon 30 days written notice to the Company or by the Company at any
time; and (b) except as otherwise provided in writing, all of the provisions of
this Agreement shall be applicable to such continued employment, except (i)
Employee's compensation shall consist only of salary at the rate in effect at
Second Anniversary Date, (ii) Employee shall not be entitled to any bonus
compensation except for the Performance Bonus and, if applicable, the Additional
Bonus; and (ii) the provisions of Section 4 shall be superseded to the extent
discussed in this Section 9.

10.   Miscellaneous

     10.1  Notices.  All  notices,  requests,  demands and other  communications
(collectively,  "Notices") given pursuant to this Agreement shall be in writing,
and shall be delivered by personal service,  courier,  facsimile transmission or
by United State first class,  registered  or  certified  mail,  addressed to the
following addresses:

            If to the Company, to:

            Symposium Corporation
            410 Park Avenue
            Suite 830
            New York, New York 10022
            Attn: President

            If to Employee, to:

            Employee's address as set forth
            on the books and records of the Company


            Any Notice, other than a Notice sent by registered or certified
mail, shall be effective when received; a Notice sent by registered or certified
mail, postage prepaid return receipt requested, shall be effective on the
earlier of when received or the third day following receipt requested, shall be
effective on the earlier of when received or the third day following deposit in
the United States mails. Any party may from time to time change its address for
further Notices hereunder by giving notice to the other party in the manner
prescribed in this Section.

     10.2  Entire  Agreement.  This  Agreement  contains  the  sole  and  entire
agreement and  understanding  of the parties with respect to the entire  subject
matter  of this  Agreement,  and any and all  prior  discussions,  negotiations,
commitments  and  understandings,  whether  oral or  otherwise,  related  to the
subject  matter of this  Agreement are hereby merged  herein.  The express terms
hereof shall control and supersede any course of conduct  and/or custom or usage
of the  profession  inconsistent  with any of the  terms  hereof.  Neither  this
Agreement nor any provision  herein may be, amended,  waived or modified orally,
but only by an agreement in writing signed by the party against whom enforcement
of any amendment,  waiver or modification  is sought.  Neither a beneficiary nor
potential  beneficiary  of  Employee  nor any other  person  or  entity  with an
expectation  of value  hereunder  shall  have any rights  under  this  Agreement
(except as  specifically  provided in  Sections  3.5 and 5.1  hereof),  and this
Agreement or any provision herein may be waived, modified,  amended, extended or
discharged  without the  knowledge or consent of any other person or entity.  No
representations,  oral or  otherwise,  express  or  implied,  other  than  those
contained  in  this  Agreement  have  been  relied  upon  by any  party  to this
Agreement.

     10.3  Severability.  In the event  that any  provision  or  portion of this
Agreement shall be determined to be invalid or unenforceable  for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby  and  shall  remain  in full  force and  effect  to the  fullest  extent
permitted by law.



<PAGE>



     10.4 Governing Law; Venue. This Agreement has been made and entered into in
the State of New York and shall be considered in accordance with the laws of the
State of New York without  regard to principles of conflict of laws. The parties
irrevocably  consent to the jurisdiction of the New York state or federal courts
located in New York,  New York in any action or proceeding  pursuant  hereto and
agree to service of process in accordance with Section 10.1 herein.

     10.5  Captions.  The various  captions of this  Agreement are for reference
only and shall not be  considered  or  referred  to in  resolving  questions  of
interpretation of this Agreement.

     10.6  Counterparts.  This  Agreement  may  be  executed  in any  number  of
counterparts,  each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

     10.7 Attorneys'  Fees. If any action or proceeding is brought to enforce or
interpret  any  provision  of this  Agreement,  the  prevailing  party  shall be
entitled  to  recover  as an element  of its  costs,  and not its  damages,  its
reasonable  attorneys'  fees,  costs and expenses.  The prevailing  party is the
party who is entitled to recover its costs in the action or proceeding.  A party
not  entitle to recover its costs may not recover  attorneys'  fees.  No sum for
attorneys'  fees shall be counted in  calculating  the amount of a judgment  for
purposes  of  determining  whether a party is  entitled  to recover its costs or
attorneys' fees.

     10.8  Representations  and Warranties of Employee.  Employee represents and
warrants to Company that, as of the date hereof and  throughout the term of this
Agreement  Employee is not and will not in any way  whatsoever be  contractually
restricted or prohibited  from entering into this  Agreement and  performing the
services  and  obligations  required  herein and  Employee's  execution  of this
Agreement and his performance of the services and obligations required herein do
not and will not  constitute a default or an event that,  with or without notice
or  lapse of time or  both,  would be a  default,  breach  or  violation  of any
agreement,  contract,  instrument  or  arrangement  to which he is a party or by
which he is bound.

     10.9 No Waiver.  No term or condition of this Agreement  shall be deemed to
have been waived,  nor shall there be any estoppel to enforce any  provisions of
this  Agreement,  except by a statement in writing  signed by the party  against
whom  enforcement of the waiver or estoppel is sought.  Any written waiver shall
not be deemed a continuing waiver unless specifically stated, shall operate only
as to the specific term or condition waived and shall not constitute a waiver of
such  term  or  condition  for  the  future  or as to any act  other  than  that
specifically waived.

     10.10 Number of Days. In computing the number of days for purposes  hereof,
all days shall be counted,  including  Saturdays,  Sundays and holidays  (unless
only business days are specified);  provided,  however, that if the final day of
any time period falls on a Saturday, Sunday or holiday, then the final day shall
be deemed to be the following day which is not a Saturday, Sunday or holiday.

     10.11 Binding Effect.  This Agreement and all terms hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective  heirs,
successors,  personal  and estate  representatives,  administrators  and, to the
extent permitted hereby, assigns. The parties recognize that this Agreement is a
personal service contract,  and,  therefore,  Employee may not assign any of her
rights or obligations hereunder.

     10.12  Cumulative  Rights and  Remedies.  All of the rights and remedies of
Company are separate and cumulative and in addition to, not exclusive or in lieu
of, any other rights and remedies  available at law, in equity,  under any other
agreement  between  or  among  any or all of the  parties  hereto  or  otherwise
(including, without limitation,  corporate opportunities doctrine and other laws
and  principles  for  protection   against   defamation,   unfair   competition,
interference  with contractual or business  relationships  and for protection of
confidential  and proprietary  information).  Any and all rights and remedies of
Company may be exercised one or more times, and no such exercise shall be deemed
to be a waiver,  exhaustion or relinquishment of the same or any other rights or
remedies.



<PAGE>



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



                                    SYMPOSIUM CORPORATION


                                    By:
                                       ---------------------------


                                    --------------------------------
                                    ANDREW NELSON





<PAGE>



                                    EXHIBIT A



(1)  Coordination of MOS, NSI and Symposium marketing activities.

(2)  Management of relationships with Hot Socket or E-Revenue Partners to create
     magazine and club revenues through joint marketing activities.

(3)  Development,  coordination  and  monitoring  corporate  marketing  strategy
     including the preparation of projections, marketing plans and timetables.



<PAGE>



                                    EXHIBIT B

                  Symposium Employee Stock Option Plan



Eligibility

      Any person who is a director, officer, employee or consultant of the
Company, or any of its subsidiaries (a "Participant"), is eligible to be
considered for the grant of awards under the Option Plan.

Consideration

      The Common Stock underlying an award may be issued for any lawful
consideration as determined by the Administrator, including, without limitation,
a cash payment, services rendered, or the cancellation of indebtedness. An award
may provide for a purchase price of the Common Stock at a value less than the
fair market value of the Common Stock on the date of grant. In addition, an
award may permit the recipient to pay the purchase price of the Common Stock or
to pay such recipient's tax withholding obligation with respect to such
issuance, in whole or in part, by delivering previously owned shares of capital
stock of the Company or other property, or by reducing the number of shares of
Common Stock otherwise issuable pursuant to such award.

Termination of Awards

      All options granted under the Option Plan expire ten years from the date
of grant, or such shorter period as is determined by the Administrator. No
option is exercisable by any person after such expiration. If an option expires,
terminates or is canceled, the shares of Common Stock not purchased thereunder
shall again be available for issuance under the Option Plan.

Amendment and Termination of the Option Plan

      The Administrator may amend the Option Plan at any time, may suspend it
from time to time or may terminate it without approval of the shareholders;
provided, however, that shareholder approval is required for any amendment which
materially increases the number of shares for which awards may be granted,
materially modifies the requirements of eligibility, or materially increases the
benefits which may accrue to recipients of awards under the Option Plan.
However, no such action by the Board of Directors or shareholders may
unilaterally alter or impair any award previously granted under the Option Plan
without the consent of the recipient of the award. In any event, the Option Plan
shall terminate on December 31, 2007 unless sooner terminated by action of the
Board of Directors.

Federal Income Tax Consequences for Stock Options

      The following is a general discussion of the principal tax considerations
for both "incentive stock options" within the meaning of Section 422 of the Code
("Incentive Stock Options") and non-statutory stock options ("Non-statutory
Stock Options"), and is based upon the tax laws and regulations of the United
States existing as of the date hereof, all of which are subject to modification
at any time. The Option Plan does not constitute a qualified retirement plan
under Section 401(a) of the Code (which generally covers trusts forming part of
a stock bonus, pension or profit-sharing plan funded by the employer and/or
employee contributions which are designed to provide retirement benefits to
participants under certain circumstances) and is not subject to the Employee
Retirement Income Security Act of 1974 (the pension reform law which regulates
most types of privately funded pension, profit sharing and other employee
benefit plans).

Consequences to Employees:  Incentive Stock Options



<PAGE>



      No income is recognized for federal income tax purposes by an optionee at
the time an Incentive Stock Option is granted, and, except as discussed below,
no income is recognized by an optionee upon his or her exercise of an Incentive
Stock Option.

      If the optionee makes no disposition of the Common Stock received upon
exercise within two years from the date such option was granted or one year from
the date such option is exercised, the optionee will recognize mid-term or
long-term capital gain or loss when he or she disposes of his or her Common
Stock depending on the length of the holding period. Such gain or loss generally
will be measured by the difference between the exercise price of the option and
the amount received for the Common Stock at the time of disposition.

      If the optionee disposes of the Common Stock acquired upon exercise of an
Incentive Stock Option within two years after being granted the option or within
one year after acquiring the Common Stock, any amount realized from such
disqualifying disposition will be taxable as ordinary income in the year of
disposition to the extent that (i) the lesser of (a) the fair market value of
the shares on the date the Incentive Stock Option was exercised or (b) the fair
market value at the time of such disposition exceeds (ii) the Incentive Stock
Option exercise price. Any amount realized upon disposition in excess of the
fair market value of the shares on the date of exercise will be treated as
long-term, mid-term or short-term capital gain, depending upon the length of
time the shares have been held.

      The use of stock acquired through exercise of an Incentive Stock Option to
exercise an Incentive Stock Option will constitute a disqualifying disposition
if the applicable holding period requirement has not been satisfied.

      For alternative minimum tax purposes, the excess of the fair market value
of the stock as of the date of exercise over the exercise price of the Incentive
Stock Option is included in computing that year's alternative minimum taxable
income. However, if the shares are disposed of in the same year, the maximum
alternative minimum taxable income with respect to those shares is the gain on
disposition. There is no alternative minimum taxable income from a disqualifying
disposition in subsequent years.

Consequences to Employees:  Non-Statutory Stock Options

      No income is recognized by a holder of Non-statutory Stock Options at the
time Non-statutory Stock Options are granted under the Option Plan. In general,
at the time shares of Common Stock are issued to a holder pursuant to exercise
of Non-statutory Stock Options, the holder will recognize ordinary income equal
to the excess of the fair market value of the shares on the date of exercise
over the exercise price.

      A holder will recognize gain or loss on the subsequent sale of Common
Stock acquired upon exercise of Non-statutory Stock Options in an amount equal
to the difference between the selling price and the tax basis of the Common
Stock, which will include the price paid plus the amount included in the
holder's income by reason of the exercise of the Non-statutory Stock Options.
Provided the shares of Common Stock are held as a capital asset, any gain or
loss resulting from a subsequent sale will be short-term, mid-term or long-term
capital gain or loss depending upon the length of time the shares have been
held.

Consequences to the Company:  Incentive Stock Options

      The Company will not be allowed a deduction for federal income tax
purposes at the time of the grant or exercise of an Incentive Stock Option.
There are also no federal income tax consequences to the Company as a result of
the disposition of Common Stock acquired upon exercise of an Incentive Stock
Option if the disposition is not a disqualifying disposition. At the time of a
disqualifying disposition by an optionee, the Company will be entitled to a
deduction for the amount received by the optionee to the extent that such amount
is taxable to the optionee as ordinary income.



<PAGE>
Consequences to the Company:  Non-Statutory Stock Options

      Generally, the Company will be entitled to a deduction for federal income
tax purposes in the year and in the same amount as the optionee is considered to
have realized ordinary income in connection with the exercise of Non-statutory
Stock Options.



<PAGE>



                                                                    Exhibit 10.2

                              EMPLOYMENT AGREEMENT


      EMPLOYMENT AGREEMENT dated May 7, 2001 by and between Cross Media
Marketing Corporation, a Delaware corporation ("Employer") and Chester J.
Borgida ("Executive").

I.    BACKGROUND

      Employer desires to employ Executive on the terms and subject to the
conditions set forth in this Agreement, and Executive desires to be employed by
Employer on such terms and subject to such conditions.

      NOW, THEREFORE, in consideration of the premises, the respective covenants
and commitments of the parties hereto set forth in this Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

      1.    Definitions.  As used in this Agreement, the following
capitalized terms shall have the meanings respectively assigned to them
below, which meanings shall be applicable equally to the singular and plural
forms of the terms so defined.

      "Board of Directors" shall mean the then current members of the Board of
Directors of Employer.

      "Business Day" shall mean any day during which Employer is open for
business in New York City, other than any Saturday, Sunday or legal holiday.

      "Cause" means failure to cure within a reasonable period of time any
willful misconduct or gross negligence in the performance by Executive of his
duties under this Agreement which results in material injury to Employer, or the
commission of any willful act which is materially inimical to the business or
interests of the Employer. No act or failure to act on Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the best
interests of the Employer. Executive shall not be deemed to have been terminated
for Cause unless and until there shall have been delivered to him a notice of
intent to terminate providing a reasonable period to cure together with a copy
of a resolution, duly adopted by the Board of Directors at a meeting called and
held for that purpose (after reasonable notice to Executive of the meeting and
the particulars of the grounds for termination and an opportunity for him,
together with his counsel, to be heard before the Board of Directors), finding
that, in the good faith opinion of the Board of Directors based upon clear and
convincing evidence, Executive was guilty of conduct constituting Cause for
termination and specifying the particulars thereof in detail. Executive's
attendance or non-attendance at any such meeting of the Board of Directors shall
in no way prejudice Executive's rights hereunder or to submit such decision to
judicial review.

      "Change of Control" shall be deemed to have occurred if as the result of
any cash tender or exchange offer, merger or other business combination, sale of
assets, sale of stock or other ownership interests, or contested election, or
any combination of the foregoing transactions ("Transaction"), either (i) all or
any substantial part of the assets or business of Employer and its Subsidiaries
is transferred to any Person that is not a Subsidiary of Employer or (ii) the
individuals who were directors of Employer before the Transaction shall cease to
constitute a majority of the Board of Directors.

      "Code" means the Internal Revenue Code of 1986, as amended, and any
successor thereto.

      "Commencement Date" means June 4, 2001.


<PAGE>



      "Expenses" shall mean all expenses to be paid by Employer on behalf of
Executive or for which Executive is entitled to be reimbursed under Section 5
herein (including without limitation Sections 5.4 and 5.6).

      "Options" shall mean stock options to purchase shares of Employer's common
stock.

      "Person" means an individual, corporation, partnership, estate, limited
liability company, association, cooperative, joint venture, trust,
unincorporated organization, or a government or any agency, branch or political
subdivision thereof.

      "Subsidiary" or "Subsidiaries" means any Person, 50% or more of the
outstanding voting power of which shall at the time be owned by Employer or by
one or more Subsidiaries, or any other Person, 50% or more of the equity of
which shall at the time be owned by Employer or by one or more Subsidiaries.

      "Term" means the period from the Commencement Date through December 31,
2003.

      "Year" means Year 2001, 2002 or 2003.

      "Year 2001" means the seven months ending December 31, 2001.

      "Year 2002" means the twelve months ending December 31, 2002.

      "Year 2003" means the twelve months ending December 31, 2003.

      2.    Employment.  Employer offers and Executive accepts employment and
agrees to perform services for Employer for the period and upon the other
terms and subject to the conditions set forth in this Agreement.

      3. Employment Term. Unless terminated at an earlier date in accordance
with Section 8 below, the initial term of Executive's employment hereunder shall
commence on the Commencement Date and shall continue until December 31, 2003. If
Employer chooses not to extend this Agreement beyond December 31, 2003, Employer
shall pay Executive a severance payment of $325,000, to be paid in 12 equal
monthly installments beginning on January 1, 2004.

      4.    Position and Duties; Representations and Warranties.

            4.1 Service With Employer. Executive shall be Employer's Senior Vice
President and Chief Financial Officer. During the term of this Agreement,
Executive agrees to perform all duties consistent with such position and to
report to the President of Employer. Executive shall have the powers, duties and
responsibilities consistent with his position, including without limitation
those set forth on Exhibit A hereto. If Executive is elected to serve as a
director of Employer or of one or more subsidiaries of Employer, Executive shall
serve in such capacities but shall not be entitled to any additional
compensation for such service.

            4.2 Performance of Duties. Executive agrees to serve Employer
faithfully and to the best of his ability and to devote his full time, attention
and best efforts to the business and affairs of Employer during the term of this
Agreement. Executive hereby confirms that he is under no contractual commitments
inconsistent with his obligations set forth in this Agreement, and that during
the term of this Agreement, he will not render or perform services for any other
Person which are inconsistent with the provisions of this Agreement.

            4.3 Representations and Warranties of Executive. Executive
represents and warrants to Employer that, as of the date hereof and throughout
the term of this Agreement:



<PAGE>



            (a) Executive is not and will not in any way whatsoever be
      contractually restricted or prohibited from entering into this Agreement
      and performing the services and obligations herein contained; and

            (b) Executive's execution of this Agreement and his performance of
      the services and obligations herein contained, do not and will not
      constitute a default or an event that, with or without notice or lapse of
      time or both, would be a default, breach or violation of any agreement,
      contract, instrument or arrangement to which Executive is a party or by
      which Executive is bound.

            4.4 Representations and Warranties of Employer. Employer represents
and warrants to Executive that, as of the date hereof and throughout the term of
this Agreement:

            (a) It is not and will not in any way whatsoever be contractually
      restricted or prohibited from entering into this Agreement and performing
      its obligations herein contained; and

            (b) Its execution of this Agreement, and its performance of its
      obligations herein contained, do not and will not constitute a default or
      an event that, with or without notice or lapse of time or both, would be a
      default, breach or violation of any agreement, contract, instrument or
      arrangement to which it is a party or by which it is bound.

                  4.5 Location. Executive shall be based at Employer's principal
executive offices, which offices shall never be more than 50 miles from New York
City, New York.

      5.    Compensation and Benefits.

     5.1 Base  Salary.  Executive  shall be  entitled  to a minimum  annual base
salary  ("Salary")  of (i) $280,000  during Year 2001 and (ii)  $300,000  during
Years 2002 and 2003.  The Salary  shall be paid in  accordance  with  Employer's
normal payment schedule for executive  employees.  The Salary shall be pro-rated
for any Year which is less than twelve months.

     5.2 Bonuses.  (a) On or after the Commencement  Date when Executive reports
for work  hereunder,  Executive shall be entitled to receive a bonus of $37,500,
to be paid as designated by Executive.

     (b) In each Year  Executive  shall be  entitled to  quarterly  bonuses of a
minimum of $18,750 and a maximum of $75,000. The actual amounts of the quarterly
bonuses in Year 2001  (which will only be payable  with  respect to the last two
fiscal  quarters of such Year) will be based upon the Employer' s EBITDA results
and applicable  bonus amounts for each quarter as set forth on Exhibit B hereto,
and in  Years  2002  and  2003  will be  based  upon  Employer's  achieving  the
applicable  quarterly  performance goals set by the Board of Directors from time
to time during each of such Years. All minimum  quarterly  bonuses shall be paid
on the last day of each  fiscal  quarter  during  each  Year and any  additional
quarterly  bonuses  shall be paid by Employer to Executive  quarterly in arrears
within five (5) days after  Employer's  filing of the SEC Form 10Q quarterly and
SEC Form 10K annual periodic reports for each of such Years.

     (c)  Executive may be entitled to an annual bonus for each Year as follows:
Executive's  annual  bonus for Year 2001  shall be a minimum of  $12,500,  to be
increased to $25,000 if Employer's  consolidated revenues during its year ending
December 31, 2001 are at least $100 million;  Executive's annual bonus for Years
2002  and 2003  shall  be up to  $50,000,  the  actual  amount  to  depend  upon
Employer's  achieving the annual performance goals set by the Board of Directors
from time to time during each of such Years.  All annual bonuses will be paid by
Employer to Executive  within five (5) days after the  Employer's  filing of its
SEC 10-K annual report required to be filed for each of such Years.

     5.3 Other  Benefits.  Executive  shall have the right to participate in all
Employer benefit plans which may be in effect for executive  employees from time
to time, including, without limitation, group health and dental insurance, group
life insurance,  disability insurance, and retirement,



<PAGE>



401(K)  profit  sharing  and  pension  plans in  accordance  with the  terms and
conditions  thereof.  If  Employer  does  not  have  and  maintain  a  long-term
disability  insurance program  satisfactory to Executive,  Employer shall pay or
reimburse Executive for the annual premiums (not to exceed $5,000 per Year) on a
disability income insurance policy owned by and covering Executive.

     5.4 Expenses.  Employer shall pay or reimburse Executive for all reasonable
and necessary out-of-pocket expenses incurred by Executive in the performance of
his duties  under this  Agreement,  subject to the  presentment  by Executive of
appropriate  vouchers in accordance with Employer's  normal policies for expense
verification.

     5.5 Vacation. Executive shall be entitled to three weeks vacation each Year
during the term of this  Agreement  beginning with Year 2002. Any vacation taken
by  Executive  shall  be  taken  at such  time as is  reasonably  convenient  in
relationship  to the needs of the business of Employer.  Vacation time shall not
accrue beyond the Year in question;  provided,  however,  that any vacation time
not taken  during any Year due to  constraints  imposed by  Employer's  business
requirements shall accrue beyond the Year in question.

     5.6  Automobile.  Executive  shall  be  reimbursed  for 80% of his  monthly
automobile  lease or purchase  payments  and other  expenses  incidental  to the
operation of such automobile,  subject to a maximum  reimbursement of $1,500 per
month  (which  maximum  amount  will  increase  by 5% on each  May 1  after  the
Commencement   Date)  and  to  his  presentment  of  appropriate   vouchers  and
documentation  in accordance  with  Employer's  normal  policies for expense and
business use verification.

     5.7 Life Insurance.  Employer shall provide  Executive with additional term
life insurance  coverage of $1,000,000,  provided  Executive can pass a standard
physical.  Such  coverage  shall be provided by the same insurer as provides the
coverage  under  Employer's  group  life  insurance  plan,  or  another  carrier
acceptable to Executive.

     5.8  Stock  Options.  On the  Commencement  Date,  Employer  will  grant to
Executive the stock options described in Exhibit C hereto.

      6.    Restrictive Covenants.

     6.1 Certain  Definitions.  For  purposes of this  Section 6, the  following
terms shall have the following meanings:

      "Competitive Activity" means any activity conducted in the Restricted Area
which competes with any substantial aspect or part of Employer's business,
whether as a proprietor, partner, shareholder, owner, member, employer,
employee, independent contractor, venturer or otherwise.

      "Competitor" means any Person, other than Employer, which at any time
during the Restriction Period engages in any Competitive Activity.

      "Confidential Information" means all information of or relating to
Employer, its business or practice, which is not generally known or available to
the public (whether or not in written or tangible form) including, without
limitation, customer lists, supplier lists, processes, know-how, trade secrets,
pricing policies and other confidential business information.

      "Confidential Materials" means any and all documents, records, reports,
lists, notes, plans, materials, programs, software, disks, diskettes,
recordings, manuals, correspondence, memoranda, magnetic media or any other
tangible media (including, without limitation, copies or reproductions of any of
the foregoing) in which any Confidential Information may be contained.

      "Employer" means Employer and its Subsidiaries, whether now or in the
future.



<PAGE>



      "Person" means an individual, proprietorship, partnership, joint venture,
corporation, limited liability company, association, trust, estate,
unincorporated organization, a government or any branch, subdivision, department
or agency thereof, or any other entity.

      "Personnel" means any and all employees, contractors, agents, vendors,
suppliers, consultants or other Persons rendering or providing goods or services
to Employer for compensation in any form, whether employed by or independent of
Employer.

      "Restricted Area" means the United States, Canada, and their respective
territories and possessions, except that the Restricted Area shall be worldwide
with respect to any Competitive Activity involving the Internet, the World Wide
Web, telemarketing, telephony or other electronic or similar media.

      "Restriction Period" means the period of time, commencing on the date
hereof and expiring two (2) years after the termination of Employee's employment
with Employer pursuant to this Agreement, voluntarily or involuntarily, for any
reason whatsoever, subject to extension pursuant to Section 6.6 below.

     6.2 Confidentiality.

     (a) Confidential Information. Subject to Section 6.2(c):


             (1) Duty to Maintain  Confidentiality.  Employee  shall  maintain
in strict  confidence  and duly safeguard to the best of his ability any and all
Confidential Information.

             (2) Covenant Not to Disclose, Use or Exploit.  Employee shall not,
directly or indirectly,  disclose, divulge or otherwise communicate to anyone or
use or otherwise  exploit for the benefit of anyone,  other than  Employer,  any
Confidential Information.

             (3) Confidential Materials.  All Confidential  Information and
Confidential  Materials are and shall remain the exclusive  property of Employer
and no  Confidential  Materials may be copied or otherwise  reproduced,  removed
from the premises of Employer or entrusted to any Person (other than Employer or
the Personnel  entitled to such materials) without prior written permission from
Employer.

            (b) Survival of Covenants. Notwithstanding anything herein to the
contrary, the covenants set forth in this Section 6.2 shall survive the
termination of this Agreement and any other agreement among any or all of the
parties hereto (regardless of the reason for such termination), unless
terminated by a written instrument that expressly terminates by specific
reference the covenants set forth in this Section 6.2.

            (c) Permitted Activities. If Employee receives a request or demand
for Confidential Information (whether pursuant to a discovery request, subpoena
or otherwise), Employee shall immediately give Employer written notice thereof
and shall exert his best efforts to resist disclosure, including, without
limitation, by fully cooperating and assisting Employer in whatever efforts it
may make to resist or limit disclosure or to obtain a protective order or other
appropriate remedy to limit or prohibit further disclosure or use of such
Confidential Information. If Employee complies with the preceding sentence but
nonetheless becomes legally compelled to disclose Confidential Information,
Employee shall disclose only that portion of the Confidential Information that
he is legally compelled to disclose.

            6.3 Covenant not to Compete. During the Restriction Period, Employee
shall not, directly or indirectly, whether as a sole practitioner, owner,
partner, shareholder, investor, employee, employer, venturer, independent
contractor, consultant or other participant, (i) own, manage, invest in or
acquire any economic stake or interest in any Person involved in a Competitive
Activity, (ii) derive economic benefit from or with respect to any Competitive
Activity or (iii) otherwise engage or participate in any manner whatsoever in
any Competitive Activity; provided, however, this Section 6.3 shall not restrict
Employee from owning less than 2% of the publicly traded debt or equity
securities issued by a corporation or other entity or from having any other
passive investment that creates no conflict of loyalty or interest with any duty
owed to Employer. Employee shall be deemed to have derived economic benefit in



<PAGE>



violation of this Section 6.3 if, among other things, any of his compensation or
income is in any way related to any Competitive Activity conducted by any
Person. Further, during the Restriction Period Employee shall not directly or
indirectly advance, cooperate in or help or aid any Competitor in the conduct of
any Competitive Activity.

     6.4 Covenant not to  Interfere.  During the  Restriction  Period,  Employee
shall not,  directly or  indirectly,  recruit,  solicit or  otherwise  induce or
influence  any  Personnel  of  Employer  to  discontinue,  reduce the extent of,
discourage the development of or otherwise harm such Personnel's relationship or
commitment to Employer. Conduct prohibited under this Section 6.4 shall include,
without limitation, employing, seeking to employ or causing, aiding, inducing or
influencing a Competitor to employ or seek to employ any Personnel of Employer.

     6.5 Equitable Relief. Each of the parties  acknowledges that the provisions
and  restrictions  of  this  Section  6 are  reasonable  and  necessary  for the
protection of the legitimate interests of Employer.  Each of the parties further
acknowledges  that the provisions and  restrictions of this Section 6 are unique
and  that  any  breach  or  threatened  breach  of any  of  such  provisions  or
restrictions  will  provide  Employer  with no adequate  remedy at law,  and the
result will be irreparable harm to Employer. Therefore, the parties hereto agree
that upon a breach or threatened  breach of the  provisions or  restrictions  of
this Section 6, Employer shall be entitled,  in addition to any other rights and
remedies which may be available to it, to institute and maintain  proceedings at
law or in equity, to recover damages,  to obtain an equitable  accounting of all
earnings,  profits or other  benefits  resulting  from such breach or threatened
breach  and  to  obtain  specific  performance  or  a  temporary  and  permanent
injunction.

     6.6 Full Restriction Period. If Employee violates any restrictive  covenant
contained herein and Employer institutes action for equitable relief,  Employer,
as a result of the time involved in obtaining such relief, shall not be deprived
of the benefit of the full  Restriction  Period.  Accordingly,  the  Restriction
Period shall be deemed to have the duration  specified in Section 6.1,  computed
from and commencing on the date on which relief is granted by a final order from
which there is no appeal,  but  reduced,  if  applicable,  by the length of time
between  the date the  Restriction  Period  commenced  and the date of the first
violation of any restrictive covenant by Employee.

     6.7  Equitable  Accounting.  Employer  shall  have the right to demand  and
receive  equitable  accounting  with  respect to any  consideration  received by
Employee in connection with  activities in breach of the  restrictive  covenants
herein,  and  Employer  shall be  entitled  to  payment  from  Employee  of such
consideration on demand.

     6.8 Prior Breaches.  Neither the expiration of the  Restriction  Period nor
the  termination  of the status of any Customer or Personnel as such (whether or
not due to a breach  hereof by  Employee)  shall  preclude,  limit or  otherwise
affect the rights and  remedies  of  Employer  against  Employee  based upon any
breach hereof during the Restriction Period or before such status of Customer or
Personnel terminated.

     6.9 Noncircumvention of Covenants.  Employee  acknowledges and agrees that,
for purposes of this Agreement, an action shall be considered to have been taken
by  Employee  "indirectly"  if taken by or through  (a) any member of his family
(whether a close or distant  relation by blood,  marriage or adoption),  (b) any
Person owned or controlled,  solely or with others,  directly or "indirectly" by
Employee  or a member  of his  family,  (c) any  Person of which he is an owner,
partner, employer,  employee, trustee,  independent contractor or agent, (d) any
employees, partners, owners or independent contractors of any such Person or (e)
any other one or more representatives or intermediaries,  it being the intention
of the parties that  Employee  shall not directly or indirectly  circumvent  any
restrictive covenant contained herein or the intent thereof.

     6.10 Notice of Restrictions.  During the Restriction Period, Employee shall
notify each  prospective  employer,  partner or co-venturer of the  restrictions
contained in this  Agreement.  Employer is hereby  authorized  to contact any of
such Persons for the purpose of providing notice of such restrictions.



<PAGE>


            6.11 Reduction of Restrictions by Court Action. Each of the
provisions hereof including, without limitation, the periods of time, geographic
areas and types and scopes of duties of, and restrictions on the activities of,
the parties hereto specified herein are and are intended to be divisible, and if
any portion thereof (including any sentence, clause or word) shall be held
contrary to law or invalid or unenforceable in any respect in any jurisdiction,
or as to one or more periods of time, areas or business activities or any part
thereof, the remaining provisions shall not be affected but shall remain in full
force and effect, and any such invalid or unenforceable provision shall be
deemed, without further action on the part of any party hereto or other Person,
modified and amended to the minimum extent necessary to render the same valid
and enforceable in such jurisdiction.

            6.12 Fairness of Restrictions. Employee acknowledges and agrees that
(a) compliance with the restrictive covenants set forth herein would not prevent
him from earning a living that involves his training and skills without
relocating, but only from engaging in unfair competition with, misappropriating
a corporate opportunity of, or otherwise unfairly harming Employer and (b) the
restrictive covenants set forth herein are intended to provide a minimum level
of protection necessary to protect the legitimate interests of Employer. In
addition, the parties acknowledge that nothing herein is intended to or shall,
limit, replace or otherwise affect any other rights or remedies at law or in
equity for protection against unfair competition with, misappropriation of
corporate opportunities of, disclosure of confidential and proprietary
information of, or defamation of Employer, or for protection of any other rights
or interest of Employer.

      7.    Indemnification.

            7.1   Generally.

            (a) Employer shall indemnify and hold harmless Executive to the
fullest extent lawful from and against, and Executive shall have no liability to
the Employer or its owners, parents, creditors (past, present or future) or
security holders for, any and all Losses, Expenses and Claims related to or
arising out of an Indemnifiable Event, except that no indemnification shall be
made in respect of any Claims, Losses or Expenses arising out of an otherwise
Indemnifiable Event as to which Executive's actions or conduct shall have
finally been adjudicated to constitute gross negligence or willful misconduct.
The terms "Expenses", "Claims", "Losses" and "Indemnifiable Event" shall have
the meanings given them in Section 7.7 below.

            (b) Employer shall not settle any pending or threatened Claim
related to or arising out of an Indemnifiable Event (whether or not Executive is
a party to such Claim) unless such settlement includes a provision
unconditionally releasing Executive from and holding Executive harmless from and
against any and all Losses and Expenses in respect of all Claims by any Person
related to or arising out of such Indemnifiable Event.

            (c) Employer shall promptly advance to Executive all Expenses as
they are incurred by Executive in connection with investigating, preparing or
defending, or providing evidence in, any pending or threatened Claim in respect
of which indemnification may be sought hereunder (whether or not Executive is a
party to such Claim) or in enforcing this Agreement. If Executive makes a claim
hereunder for payment (or advancement) of Expenses, such Expenses shall be paid
(or advanced) promptly even if Employer reserves the right to obtain a refund
thereof to the extent that such Expenses were incurred in connection with a
Loss, Expense or Claim as to which there is a final judicial determination that
Executive is not entitled to indemnification pursuant to this Agreement.

            7.2 Indemnification for Additional Expenses. Employer shall
indemnify Executive against and reimburse for and advance to Executive any and
all Expenses that are incurred by Executive in connection with any Claim
asserted against or action brought by Executive for (a) indemnification of
Expenses by Employer under this Agreement or any other agreement or provision of
Employer's Certificate of Incorporation or By-laws now or hereafter in effect
relating to Claims for Indemnifiable Events or (b) recovery under any directors'
and officers' liability insurance policies.


<PAGE>

            7.3 Partial Indemnity. If Executive is entitled to indemnification
for a portion (but not all) of the Expenses and Losses relating to a Claim,
Employer shall indemnify Executive for such portion. To the extent Executive has
been successful (in whole or in part) on the merits or otherwise in defense of
any Claim relating to an Indemnifiable Event or in defense of any issue or
matter therein, Executive shall be indemnified against all Expenses incurred in
connection therewith.

            7.4 No Presumption. The termination of any Claim by judgment, order,
settlement, conviction or upon a plea of nolo contendere, or its equivalent,
shall not, of itself, create a presumption that Executive is not entitled to
indemnification hereunder.

            7.5 Non-exclusivity. The rights of Executive hereunder shall be in
addition to any and all other rights Executive may have under Employer's By-laws
or Certificate of Incorporation, any vote by Employer's shareholders or
disinterested directors, or applicable law. Subject to the provisions of Section
7.1(a) hereof, to the extent that a change in applicable law permits or provides
greater indemnification than is afforded under Employer's By-laws or Certificate
of Incorporation and this Agreement, Executive shall enjoy by this Agreement the
greater benefits so afforded by that change.

            7.6 Liability Insurance. If and to the extent that Employer from
time to time maintains an insurance policy or policies providing directors' and
officers' liability insurance (a "D&O Policy"), Executive shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum
extent of the coverage available under such policy or policies for any officer
or director of Employer. If Employer fails or is unable to obtain or maintain a
D&O Policy providing at least $5 Million of aggregate coverage, Executive shall
have the right to terminate his employment hereunder, and the provisions of
Section 8.2(d) (and not 8.2(b)) shall apply to such termination.

            7.7         Defined Terms.

            (a) "Claims": any threatened, asserted, pending or completed action
(including shareholder actions), suit or proceeding, whether civil, criminal,
administrative or investigative, or any inquiry or investigation (including
discovery), whether conducted by Employer or any other Person, that might lead
or is threatened to lead to the institution of any such action, suit or
proceeding.

            (b) "Expenses": all costs, expenses (including attorneys', advisors'
and expert witnesses' fees and expenses) and obligations paid or incurred in
connection with investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or participate in
any Claim.

            (c) "Indemnifiable Event": any omission, event or occurrence related
to or in any way connected with or arising out of the fact that Executive is or
was a director, officer, employee, agent or fiduciary of Employer, or is or was
serving at the request of Employer as a director, officer, employee, trustee,
agent or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, or by reason of anything done or not
done by Executive in any such capacity. For purposes of this Agreement, Employer
agrees that Executive's service on behalf of or with respect to any parent,
subsidiary or affiliate of Employer shall be deemed to be at the request of
Employer.

            (d)  "Losses":  any  judgments,  liabilities,  debts,  excise taxes,
fines, penalties and amounts paid or required to be paid in settlement.

      8.    Termination.

            8.1 Bases for Termination. The employment relationship created under
this Agreement between Employer and Executive shall terminate prior to the
expiration of the initial term of this Agreement or any extension thereof only
upon the occurrence of any one of the following events (provided, however, that
the giving of notice provided for below shall not create a presumption that the
event has in fact occurred):


<PAGE>

            (a)   The death of Executive;

            (b) Executive shall become Permanently Disabled (for purposes of
this subsection (b), "Permanently Disabled" shall have the meaning as set forth
in Section 8.5 hereof);

            (c)   Immediately upon delivery to Executive by Employer of
written notice of termination for Cause;

            (d) Thirty (30) days after delivery to Employer by Executive of
written notice of Executive's voluntary and unilateral termination of this
Agreement;

            (e) Immediately upon delivery to Employer by Executive of written
notice of termination for breach of this Agreement by Employer, which notice
shall specify such alleged breach and may be given (i) 20 days after Employer
has failed to make any payment to Executive hereunder when due, provided the
payment has not been made within such 20 day period, (ii) after Employer has
failed to perform or has otherwise breached any non-monetary provision of this
Agreement, which failure or breach is not capable of being cured within 30 days
or (iii) after Employer has failed to perform or otherwise breached any
nonmonetary provision of this Agreement, which failure or breach is capable of
being cured within 30 days and which failure or breach has not been cured within
30 days after notice of such failure or breach is given by Executive to
Employer. Employer's breach of this Agreement shall include (but shall not be
limited to) the following: (i) Employer's attempted assignment to Executive of
any duties inconsistent with his status of Senior Vice President and Chief
Financial Officer of Employer or attempted adverse alteration in the nature or
status of Executive's responsibilities from those in effect upon commencement of
his employment hereunder; (ii) Employer's attempted reduction in Executive's
Salary or Bonus; (iii) the relocation of Employer's principal executive offices
to a location more than 50 miles from the location of such offices upon
commencement of his employment hereunder; (iv) Employer's requiring Executive to
be based anywhere other than Employer's principal executive offices; (v) the
failure by Employer to continue in effect any compensation plan in which
Executive is participating which is material to Executive's total compensation;
(vi) the failure by Employer to continue to provide Executive with benefits
substantially identical to those provided to Executive under this Agreement; or
(vii) the failure by Employer to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement; or

            (f)  Immediately  upon  delivery to Employer by Executive of written
notice of termination after the occurrence of a Change of Control.

            (g)  Immediately  upon  delivery to Executive by Employer of written
notice of termination without Cause.

Notwithstanding any termination of employment, Executive, in consideration of
his employment hereunder to the date of such termination and the payment by
Employer of the compensation payable hereunder, agrees to remain bound by the
provisions of Sections 6 and 8.3 hereof for the periods (except that if
termination is pursuant to clauses (e) or (g) above, the periods under Sections
6.3 and 6.4 shall be limited to the remainder of the Term), geographic area and
scope specified therein, and Employer, in consideration of its receipt of
Executive's services hereunder to the date of such termination, agrees to remain
bound by the provisions of Section 8.2 hereof.


<PAGE>

            8.2    Effect of Termination.

            (a) If Executive's employment is terminated pursuant to clauses (a)
or (b) of Section 8.1 hereof, Executive shall be entitled to receive his Salary
pro-rated through the effective date of such termination (which shall be the
date of death or the date Executive becomes Permanently Disabled), which
pro-rated Salary shall be paid to Executive within 15 days of such effective
date, and any Bonus payable for the Year during which such termination occurred
pro-rated through the effective date of such termination, which pro-rated Bonus
shall be paid on the next scheduled bonus payment date. Executive shall also be
entitled to reimbursement for all Expenses incurred by Executive prior to such
effective date, to the extent that such expenses have not been previously
reimbursed by Employer, which Expenses shall be paid to Executive within 15 days
after Executive submits to Employer appropriate documentation as required
hereunder.

            (b) If Executive's employment is terminated pursuant to clauses (c)
or (d) of Section 8.1 hereof, Executive shall be entitled to receive his Salary
pro-rated through the effective date of such termination, which pro-rated Salary
shall be paid to Executive within 15 days of such effective date. Executive
shall also be entitled to reimbursement for Expenses incurred by Executive prior
to such effective date, to the extent that such expenses have not been
previously reimbursed by Employer), which Expenses shall be paid to Executive
within 15 days after Executive submits to Employer appropriate documentation as
required hereunder.

            (c) If Executive's employment is terminated pursuant to clauses (e)
or (g) of Section 8.1 hereof, (i) Employer shall (x) continue to pay to
Executive his Salary in effect as of the date immediately prior to the effective
date of such termination, and shall continue to provide all payments and
benefits contemplated by Section 5 hereof for the remainder of the Term, and (y)
reimburse Executive for all Expenses incurred prior to such effective date, to
the extent that such Expenses have not been previously reimbursed by Employer,
which Expenses shall be paid to Executive within 15 days after Executive submits
to Employer appropriate documentation as required hereunder, (ii) all unvested
Options shall immediately become fully vested and exercisable and (iii)
Executive shall be entitled to receive all guaranteed Bonuses payable for the
remaining Years, and (iv) Executive shall have all other rights and remedies
available to him at law or in equity arising out of Employer's breach.

            (d) If Executive's employment is terminated pursuant to clause (f)
of Section 8.1 hereof, (i) Employer shall pay to Executive all payments required
under clause (a) of this Section 8.2, (ii) Employer shall also pay to Executive,
within 30 days of such termination, a severance payment of $200,000 and (iii)
all unvested Options shall immediately become fully vested and exercisable.

            8.3 Surrender of Records and Property. Upon termination of his
employment with Employer, Executive shall promptly deliver to Employer all
records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations and copies thereof, which are the
property of Employer or which relate in any way to the business, products,
practices or techniques of Employer, and all other property, trade secrets and
confidential information of Employer, including, without limitation, all
documents which in whole or in part contain any trade secrets or confidential
information of Employer, which in any of these cases are in his possession or
under his control.

            8.4 No Mitigation. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Executive as a result of employment by another employer, or otherwise.

            8.5 Permanently Disabled. For purposes of Section 8.1(b) hereof,
Executive shall be "Permanently Disabled" when Executive is unable to continue
his normal duties of employment, by reason of a medically determined physical or
mental impairment, for a continuous period of nineteen (19) consecutive weeks or
for any twenty-six (26) weeks within a fifty-two (52) week period (or such
longer


<PAGE>

period, not to exceed thirty-eight (38) weeks, if Executive's, disability
insurance policy requires a benefit waiting period longer than such six month
period).

      9.   Miscellaneous.

            9.1 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF DELAWARE AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SAID STATE APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WITHIN SAID STATE.

            9.2 Entire Agreement. This Agreement (together with the exhibits
attached hereto, which hereby are incorporated by reference) contains the entire
agreement of the parties hereto relating to the employment of Executive by
Employer and the other matters discussed herein and supersedes all prior
agreements and understandings with respect to such subject matter, and the
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement which are not set forth herein.

            9.3 Withholding Taxes. Employer may withhold from any compensation
or other benefits payable under this Agreement all federal, state, city or other
taxes as shall be required pursuant to any law or governmental regulation or
ruling.

            9.4 Supplements and Amendments. This Agreement may be supplemented
or amended only upon the written consent of each of the parties hereto.

            9.5 Assignment. Except as expressly provided below, this Agreement
shall not be assignable, in whole or in part, by either party without the prior
written consent of the other party. Employer may, without the prior written
consent of Executive, assign its rights and obligations under this Agreement to
any other corporation, firm or other business entity with or into which Employer
may merge or consolidate, or to which Employer may sell or transfer all or
substantially all of its assets, or of which 50% or more of the equity
investment and of the voting control is owned, directly or indirectly, by, or is
under common ownership with, Employer; provided, however, that such assignment
may be made without Executive's prior written consent only if (a) such
assignment has a valid business purpose and is not for the purpose of avoiding
Employer's obligations hereunder or Executive's realization of the benefits of
this Agreement and (b) the assignee expressly assumes in writing all obligations
and liabilities to Executive hereunder. Employer will cause any purchaser of all
or substantially all of the assets of Employer, by agreement in form and
substance reasonably satisfactory to Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that Employer
would be required to perform it if no such purchase had taken place. This
Agreement shall be binding upon and inure to the benefit of Employer and their
respective successors and permitted assigns. This Agreement and all rights of
Executive hereunder shall inure to the benefit of and be enforceable by
Executive's heirs, personal or legal representatives and beneficiaries. If this
Agreement is terminated pursuant to clause (a) of Section 8.1 hereof, all
amounts payable pursuant to clause (a) of Section 8.2 hereof shall be paid to
Executive's designated beneficiaries or, if no such beneficiaries have been
designated, to Executive's estate.

            9.6 No Waiver. No term or condition of this Agreement shall be
deemed to have been waived, nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.

            9.7 Severability. The provisions of this Agreement are severable,
and if any one or more provisions may be determined to be judicially
unenforceable and/or invalid by a court of competent jurisdiction, in whole or
in part, the remaining provisions shall nevertheless be binding, enforceable and
in full force and effect.


<PAGE>

            9.8 Titles and Headings. The titles and headings of the various
Sections of this Agreement are intended solely for convenience of reference and
not intended for any purpose whatsoever to explain, modify or place any
construction upon any of the provisions hereof.

            9.9 Attorneys' Fees. In the event that any party hereto brings suit
against the other party, based upon or arising out of a breach or violation of
this Agreement, each party hereto agrees that the party who is successful on the
merits, upon final adjudication from which no further appeal can be taken or is
taken within the time allowed by law, shall be entitled to recover his or its
reasonable attorneys, fees and expenses from the party which is not successful.

            9.10 Injunctive Relief. Executive agrees that it would be difficult
to compensate Employer fully for damages for any violation of the provisions of
Sections 6 and 8.3 hereof. Accordingly, Executive specifically agrees that
Employer shall be entitled to temporary and permanent injunctive relief to
enforce such provisions of this Agreement. This provision with respect to
injunctive relief shall not, however, diminish the right of Employer to claim
and recover damages in addition to injunctive relief.

            9.11 Notices. For the purpose of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when hand delivered (which shall include
personal delivery and delivery by courier, messenger or overnight delivery
service) or mailed by certified mail, return receipt requested, postage prepaid,
addressed as follows:

                  If to Executive:  Mr. Chester J. Borgida
                                    P.O. Box 216
                                    Sagaponack, NY  11962

                  If to Employer:   Cross Media Marketing Corporation
                                    461 Fifth Avenue - 19th Floor
                                    New York City, NY  10017

                                    Attn: Richard Kaufman, President

or to such other address of which either party gives notice to the other party
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

            9.12 Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.



                              CROSS MEDIA MARKETING CORPORATION


                              By:_________________________________


WITNESS:


__________________                ________________________________
                                        CHESTER J. BORGIDA



<PAGE>


                                    EXHIBIT A


(1)   Preparation of all financial reports to the Board of Directors, Employer's
      shareholders, the public and the Securities and Exchange Commission.

(2)   Management of all of the financial aspects of Employer's business,
      including financial management of all Subsidiaries (including Media
      Outsourcing, Inc.)

(3)   Development, coordination and monitoring of corporate projections and
      budgets.

(4)   Management of Employer's relationships with lenders, banks and the
      American Stock Exchange, and other financial relationships.

<PAGE>

                               EXHIBIT B

                  ------------------------------------
                      Quarterly      Quarterly Bonus
                    EBITDA (,000)
                  ------------------------------------
                  0 to 1,999          $18,750(1)

                  2,000 to 2,999       25,000

                  3,000 to 5,999       34,000

                  Over 6,000           43,750
                  ------------------------------------


             (1)        Guaranteed

             (2)        EBITDA calculation to be done on a consolidated basis
                        and to exclude any charges associated with (i) changes
                        to Employer's capital structure, (ii) bonuses payable to
                        Executive and to Employer's Chairman and its President,
                        or (iii) dividends paid or payable to preferred or
                        common shareholders.

<PAGE>

                                    EXHIBIT C


      On the Commencement Date, Executive will be granted Options to purchase
400,000 shares of Employer's common stock at a price equal to the closing price
of such shares (AMEX-XMM) on the date hereof. The Options will vest quarterly
over a three year period.