Exhibit
      10.1

     

    MEMBERSHIP
      INTERESTS PURCHASE AGREEMENT

    


    by
      and among

     

    SOUTHPEAK
      INTERACTIVE CORPORATION,

     

    VID
      AGON, LLC 

     

    and

     

    VID
      SUB, LLC

    


    October
      10, 2008


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
      OF
      CONTENTS

     

    
      	
              ARTICLE
                I DEFINITIONS AND INTERPRETATION

            	
              1

            
	 	
              1.1

            	
              Definitions

            	
              1

            
	 	
              1.2

            	
              Other
                Defined Terms

            	
              4

            
	 	
              1.3

            	
              Interpretation

            	
              5

            
	
              ARTICLE
                II PURCHASE AND SALE OF THE MEMBERSHIP INTERESTS

            	
              6

            
	 	
              2.1

            	
              Purchase
                of the Membership Interests from the Member

            	
              6

            
	 	
              2.2

            	
              Purchase
                Price

            	
              6

            
	 	
              2.3

            	
              Payments
                of the Purchase Price

            	
              7

            
	
              ARTICLE
                III THE CLOSING

            	
              7

            
	 	
              3.1

            	
              Closing

            	
              7

            
	 	
              3.2

            	
              Closing
                Deliveries by the Member and the Seller

            	
              7

            
	 	
              3.3

            	
              Closing
                Deliveries by the Buyer

            	
              8

            
	
              ARTICLE
                IV REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE
                MEMBER

            	
              8

            
	 	
              4.1

            	
              Organization
                and Qualification

            	
              8

            
	 	
              4.2

            	
              Subsidiaries

            	
              9

            
	 	
              4.3

            	
              Capitalization

            	
              9

            
	 	
              4.4

            	
              Authority
                Relative to this Agreement

            	
              10

            
	 	
              4.5

            	
              No
                Conflict; Required Filings and Consents.

            	
              10

            
	 	
              4.6

            	
              Compliance

            	
              11

            
	 	
              4.7

            	
              Financial
                Statements

            	
              11

            
	 	
              4.8

            	
              No
                Undisclosed Liabilities

            	
              12

            
	 	
              4.9

            	
              Absence
                of Certain Changes or Events

            	
              13

            
	 	
              4.10

            	
              Contracts

            	
              13

            
	 	
              4.11

            	
              Litigation.

            	
              14

            
	 	
              4.12

            	
              Employee
                Benefit Plans

            	
              15

            
	 	
              4.13

            	
              Employment
                Matters

            	
              15

            
	 	
              4.14

            	
              Restrictions
                on Business Activities

            	
              16

            
	 	
              4.15

            	
              Title
                to Property.

            	
              16

            
	 	
              4.16

            	
              Taxes

            	
              16

            
	 	
              4.17

            	
              Intellectual
                Property

            	
              17

            
	 	
              4.18

            	
              Brokers;
                Third Party Expenses

            	
              18

            
	 	
              4.19

            	
              Investment
                Intent.

            	
              18

            
	
              ARTICLE
                V REPRESENTATIONS AND WARRANTIES OF THE BUYER

            	
              19

            
	 	
              5.1

            	
              Organization
                and Qualification

            	
              19

            
	 	
              5.2

            	
              Capitalization

            	
              19

            
	 	
              5.3

            	
              Valid
                Issuance of the Warrant

            	
              19

            
	 	
              5.4

            	
              Authority
                Relative to this Agreement

            	
              20

            
	 	
              5.5

            	
              No
                Conflict; Required Filings and Consents

            	
              20

            
	 	
              5.6

            	
              Compliance

            	
              20

            
	 	
              5.7

            	
              Reporting
                Company Status

            	
              21

            
	 	
              5.8

            	
              Private
                Placement

            	
              21

            
	 	
              5.9

            	
              No
                Integrated Offering

            	
              21

            
	 	
              5.10

            	
              Board
                Approval

            	
              21

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    
      	
              ARTICLE
                VI ADDITIONAL AGREEMENTS

            	
              21

            
	 	
              6.1

            	
              Non-Competition;
                Non-Solicitation.

            	
              21

            
	 	
              6.2

            	
              Confidentiality

            	
              22

            
	 	
              6.3

            	
              Public
                Disclosure

            	
              23

            
	 	
              6.4

            	
              Consents;
                Cooperation

            	
              23

            
	 	
              6.5

            	
              Legal
                Requirements

            	
              23

            
	 	
              6.6

            	
              Blue
                Sky Laws

            	
              23

            
	 	
              6.7

            	
              Further
                Assurances

            	
              23

            
	
              ARTICLE
                VII INDEMNIFICATION

            	
              23

            
	 	
              7.1

            	
              Indemnification
                of Buyer

            	
              23

            
	 	
              7.2

            	
              Indemnification
                Claims.

            	
              24

            
	 	
              7.3

            	
              Limitations

            	
              25

            
	 	
              7.4

            	
              Termination
                of Indemnification.

            	
              25

            
	 	
              7.5

            	
              No
                Right of Contribution

            	
              25

            
	 	
              7.6

            	
              Mitigation

            	
              26

            
	 	
              7.7

            	
              Anti-Sandbagging

            	
              26

            
	
              ARTICLE
                VIII GENERAL PROVISIONS

            	
              26

            
	 	
              8.1

            	
              Notices

            	
              26

            
	 	
              8.2

            	
              Counterparts

            	
              27

            
	 	
              8.3

            	
              Entire
                Agreement; Nonassignability; Parties in Interest

            	
              27

            
	 	
              8.4

            	
              Severability

            	
              27

            
	 	
              8.5

            	
              Amendment

            	
              27

            
	 	
              8.6

            	
              Governing
                Law

            	
              28

            
	 	
              8.7

            	
              Rules
                of Construction

            	
              28

            
	 	
              8.8

            	
              Tax
                Returns

            	
              28

            


    

     

    EXHIBITS

     

    
      	
              Exhibit A

            	
              Warrant

            
	
              Exhibit B

            	
              Assignment
                of Membership Interests

            


    

     

    SCHEDULES

     

    
      	
              Schedule I

            	
              Company
                Titles

            
	
              Schedule II

            	
              Persons
                responsible for knowledge

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    MEMBERSHIP
      INTEREST PURCHASE AGREEMENT

     

    This
      Membership Interest Purchase Agreement (the “Agreement”)
      is
      made and entered into this 10th day of October, 2008, by and among SouthPeak
      Interactive Corporation, a Delaware corporation (“Buyer”),
      Vid
      Sub, LLC, a Delaware limited liability company, as majority member of the
      Company (as defined below) (the “Member”),
      and
      Vid Agon, LLC, a Delaware limited liability company and sole member of the
      Member (the “Seller”).

     

    WHEREAS,
      the Seller owns all of the outstanding membership interests of the Member (the
      “Membership
      Interests”);

     

    WHEREAS,
      subject to the assignment of the membership interests held by the Seller to
      the
      Member prior to the date hereof (the “Restructuring”),
      the
      Member owns all of the Series A Preferred Units, which constitute a majority
      of
      the membership interests, of Gone Off Deep, LLC, a Delaware limited liability
      company (the “Company”);

     

    WHEREAS,
      the members of the Company and their respective membership interests therein
      are
      set forth in the LLC Agreement, subject to the Restructuring; and

     

    WHEREAS,
      the Buyer desires to acquire the Membership Interests from the Seller, and
      the
      Seller desires to exchange the Membership Interests for the consideration set
      forth below, subject to the terms and conditions of this Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual promises hereinafter set forth and
      other good and valuable consideration, the receipt and adequacy of which is
      hereby acknowledged, the parties hereby agree as follows:

     

    ARTICLE
      I


    DEFINITIONS
      AND INTERPRETATION

     

    1.1 Definitions.
      For
      purposes of this Agreement, the following terms have the respective meanings
      set
      forth below:

     

    “Affiliate”
means,
      with respect to any Person, any other Person that, directly or indirectly
      through one or more intermediaries, controls, or is controlled by, or is under
      common control with, such Person, and the term “control”
      (including the terms “controlled
      by”
and
      “under
      common control with”)
      means
      the possession, directly or indirectly, of the power to direct or cause the
      direction of the management and policies of such Person, whether through
      ownership of voting securities, by contract or otherwise.

     

    “Business”
means
      videogame development, publishing, production and distribution.

     

    “Business
      Entity”
means
      any corporation, partnership, limited liability company, trust or other domestic
      or foreign form of business association or organization.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    


    “Company
      Contracts”
mean
      all contracts, agreements, leases, mortgages, indentures, notes, bonds,
      licenses, permits, franchises, purchase orders, sales orders, and other
      understandings, commitments and obligations (including without limitation
      outstanding offers and proposals) of any kind, whether written or oral, to
      which
      the Company is a party or by or to which any of the properties or assets of
      the
      Company may be bound, subject or affected (including without limitation notes
      or
      other instruments payable to the Company).

     

    “Company
      Products”
means
      all current versions of products or service offerings of the
      Company.

     

    “Company
      Titles”
means
      all the videogame titles set forth on Schedule
      I
      attached
      hereto including the versions of the videogames previously developed or under
      development and any modifications, but not bona fide sequels,
      thereto.

     

    “Existing
      Customer or Developer”
means
      any Person (or an Affiliate thereof) to which the Seller or any Affiliate
      thereof provided products related to the Business, or contracted for or agreed
      to the development or production of products related to the Business, during
      the
      two years immediately preceding the Closing Date.

     

    “GAAP”
mean
      United States generally accepted accounting principles applied on a consistent
      basis throughout the periods involved.

     

    “Governmental
      Entity”
means
      any court, administrative agency, commission, governmental or regulatory
      authority, domestic or foreign.

     

    “Governmental
      Action/Filing”
means
      any franchise, license, certificate of compliance, authorization, consent,
      order, permit, approval, consent or other action of, or any filing, registration
      or qualification with, any federal, foreign, state, provincial, municipal,
      foreign or other governmental, administrative or judicial body, agency or
      authority.

     

    “Independent
      Accountants”
means
      Grant Thornton LLP or an independent accounting firm of national or regional
      reputation which has not performed services for the Buyer, the Seller and the
      Member, or any of their respective Affiliates, during the preceding three year
      period, which is selected by the Buyer and the Seller (or if they cannot agree,
      by the Buyer’s and the Seller’s respective independent accounting
      firms).

     

    “Intellectual
      Property”
means
      any or all of the following and all worldwide common law and statutory rights
      in, arising out of, or associated therewith: (a) patents and applications
      therefor and all reissues, divisions, renewals, extensions, provisionals,
      continuations and continuations-in-part thereof (“Patents”);
      (b) inventions (whether patentable or not), invention disclosures,
      improvements, trade secrets, proprietary information, know how, technology,
      technical data and customer lists, and all documentation relating to any of
      the
      foregoing; (c) copyrights, copyrights registrations and applications
      therefor, and all other rights corresponding thereto throughout the world
      (“Copyrights”);
      (iv) software and software programs; (d) domain names, uniform
      resource locators and other names and locators associated with the Internet
      (e) industrial designs and any registrations and applications therefor;
      (f) trade names, logos, common law trademarks and service marks, trademark
      and service mark registrations and applications therefor (collectively,
“Trademarks”);
      (g) all databases and data collections and all rights therein; (h) all
      moral and economic rights of authors and inventors, however denominated, and
      (i) any similar or equivalent rights to any of the foregoing (as
      applicable).

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    


    “knowledge”
means,
      when referencing the Seller, the Member or the Company, the actual knowledge
      or
      awareness as to a specified fact or event of the Persons named on Schedule
      II.

     

    “Legal
      Requirements”
means
      any federal, state, local, municipal, foreign or other law, statute,
      constitution, principle of common law, resolution, ordinance, code, edict,
      decree, rule, regulation, ruling or requirement issued, enacted, adopted,
      promulgated, implemented or otherwise put into effect by or under the authority
      of any Governmental Entity and all requirements set forth in applicable Company
      Contracts.

     

    “Lien”
means
      any mortgage, pledge, security interest, encumbrance, lien, restriction or
      charge of any kind (including, without limitation, any conditional sale or
      other
      title retention agreement or lease in the nature thereof, any sale with recourse
      against the seller or any affiliate of the seller, or any agreement to give
      any
      security interest).

     

    “LLC
      Agreement”
means
      that certain amended and restated operating agreement of the Company, as
      amended, by and among the parties set forth therein, dated December 13,
      2007.

     

    “Losses”
      means
      any obligations and other liabilities (whether known or unknown, absolute or
      contingent, liquidated or unliquidated, due or to become due, accrued or not
      accrued, asserted or unasserted), losses, claims, damages, deficiencies,
      judgments, assessments, fines, fees, penalties and expenses (including amounts
      paid in settlement, interest, court costs, costs of investigators, fees and
      expenses of attorneys, accountants, financial advisors, consultants and other
      experts, and other expenses of litigation), that may be imposed or otherwise
      incurred or suffered by the specified Person; provided, however, that Losses
      shall not include any punitive, exemplary, indirect, incidental, consequential
      or other special damages, lost profits, damage to goodwill or loss of business
      of the other party.

     

    “Material
      Adverse Effect”
means
      any change, event, violation, inaccuracy, circumstance or effect, individually
      or when aggregated with other changes, events, violations, inaccuracies,
      circumstances or effects, that is materially adverse to the business, assets,
      revenues, financial condition, results of operations or business prospects
      of an
      entity; provided, however, that (a) changes in general industry or economic
      conditions, (b) adverse effects arising from the announcement or consummation
      of
      the transactions contemplated hereby, or (c) changes GAAP that apply generally
      to the industry in which the Company operates, shall not constitute a Material
      Adverse Effect.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    


    “Permitted
      Liens”
means
      (a) liens for current Taxes and other statutory liens and trusts for Taxes
      not yet due and payable or that are being contested in good faith,
      (b) liens incurred in the ordinary course of business, such as carriers’,
      warehousemen’s, landlords’ and mechanics’ liens and other similar liens arising
      in the ordinary course of business, (c) liens on personal property leased
      under operating leases, (d) liens, pledges or deposits incurred or made in
      connection with workmen’s compensation, unemployment insurance and other social
      security benefits, or securing the performance of bids, tenders, leases,
      contracts (other than for the repayment of borrowed money), statutory
      obligations, progress payments, surety and appeal bonds and other obligations
      of
      like nature, in each case incurred in the ordinary course of business,
      (e) pledges of or liens on manufactured products as security for any drafts
      or bills of exchange drawn in connection with the importation of such
      manufactured products in the ordinary course of business, (f) liens under
      Article 2 of the Uniform Commercial Code that are special property interests
      in
      goods identified as goods to which a contract refers, (g) liens under
      Article 9 of the Uniform Commercial Code that are purchase money security
      interests, (h) such liens, imperfections or defects of title, easements,
      rights-of-way and other similar restrictions (if any) that do not materially
      detract from the value or materially interfere with the present or proposed
      use
      of the properties or assets of the party subject thereto or affected thereby,
      and do not otherwise materially adversely affect or impair the business or
      operations of such party, and (i) items set forth on the Disclosure Schedule
      or
      within the dollar threshold limits in any representation in this
      Agreement.

     

    “Person”
means
      any individual, corporation, partnership, firm, joint venture, limited liability
      company, association, joint-stock company, trust, unincorporated organization,
      Governmental Entity or other entity.

     

    “Prospective
      Customer or Developer”
means
      any Person (or its Affiliates) to which the Seller or an Affiliate thereof
      has
      submitted a written or oral proposal for the sale or provision of any products
      or services related to the Business, or the development or production of
      products related to the Business, during the two (2) years immediately preceding
      the Closing Date.

     

    “Subsidiary”
means
      with respect to any Person, any Business Entity of which a majority of
      outstanding voting securities or other voting equity interests, or a majority
      of
      any other interests having the power to direct or cause the direction of the
      management and policies of or otherwise exert control over such Business Entity,
      are owned, directly or indirectly, by such Person.

     

    “SEC”
means
      the Securities and Exchange Commission.

     

    “Tax”
or
      “Taxes”
refers
      to any and all federal, foreign, state, provincial, local and foreign taxes,
      including, without limitation, gross receipts, income, profits, sales, use,
      occupation, value added, ad valorem, transfer, franchise, withholding, payroll,
      recapture, employment, excise and property taxes, assessments, governmental
      charges and duties together with all interest, penalties and additions imposed
      with respect to any such amounts and any obligations under any agreements or
      arrangements with any other Person with respect to any such amounts and
      including any liability of a predecessor entity for any such amounts.


     

    1.2 Other
      Defined Terms.
      For
      purposes of this Agreement, the following terms have the respective meanings
      set
      forth in the section opposite each such term:

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
              TERM

            	 	
              SECTION

            
	
              Agreement

            	 	
              Preamble

            
	
              Annual
                Financial Statements

            	 	
              Section
                4.7(a)

            
	
              Approvals

            	 	
              Section
                4.1(a)

            
	
              Blue
                Sky Laws

            	 	
              Section
                4.5(b)

            
	
              Buyer

            	 	
              Preamble

            
	
              Closing

            	 	
              Section
                2.1

            
	
              Closing
                Date

            	 	
              Section
                3.1

            
	
              Common
                Stock

            	 	
              Section
                5.3

            
	
              Company

            	 	
              Recitals

            
	
              Company
                Intellectual Property

            	 	
              Section
                4.17(a)

            
	
              Confidential
                Information

            	 	
              Section
                6.2

            
	
              Copyrights

            	 	
              Section
                1.1

            
	
              Deductible

            	 	
              Section
                7.1

            
	
              Disclosure
                Schedule

            	 	
              Article
                IV

            
	
              Domestic
                Earn-Out Amount

            	 	
              Section
                2.2(b)

            
	
              Earn-Out
                Amount

            	 	
              Section
                2.2(c)

            
	
              Exchange
                Act

            	 	
              Section
                4.5(b)

            
	
              Financial
                Statements

            	 	
              Section
                4.7(b)

            
	
              Indemnification
                Cap

            	 	
              Section
                7.3(a)

            
	
              Indemnified
                Party

            	 	
              Section
                7.1

            
	
              Interests

            	 	
              Section
                4.3(a)

            
	
              International
                Earn-Out Amount

            	 	
              Section
                2.2(c)

            
	
              Liability

            	 	
              Section
                7.1(e)

            
	
              Material
                Company Contracts

            	 	
              Section
                4.10(a)

            
	
              Member

            	 	
              Preamble

            
	
              Membership
                Interests

            	 	
              Recitals

            
	
              Patents

            	 	
              Section
                1.1

            
	
              PDF

            	 	
              Section
                3.1

            
	
              Personal
                Property

            	 	
              Section
                4.15(b)

            
	
              Plans

            	 	
              Section
                4.12(a)

            
	
              Purchase
                Price

            	 	
              Section
                2.2

            
	
              Restructuring

            	 	
              Recitals

            
	
              Returns

            	 	
              Section
                4.16(a)

            
	
              Securities
                Act

            	 	
              Section
                4.5(b)

            
	
              Seller

            	 	
              Preamble

            
	
              Stub
                Financial Statements

            	 	
              Section
                4.7(b)

            
	
              Trademarks

            	 	
              Section
                1.1

            
	
              Unit
                Agreements

            	 	
              Section
                4.3(a)

            
	
              Warrant

            	 	
              Section
                2.2(a)

            
	 	 	 


    

    1.3 Interpretation.
      In this
      Agreement, unless clear contrary intention appears:

     

    (a) A
      reference herein to days shall mean calendar days unless otherwise specified,
      and any day or deadline or end of a time period hereunder which falls on a
      day
      other than a business day shall be deemed to refer to the first business day
      following such day or deadline or end of the time period, as the case may
      be;

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    


    (b) A
      reference in this Agreement to an article, section, exhibit or schedule shall
      mean an article or section of, or exhibit or schedule attached to, this
      Agreement, as the case may be;

     

    (c) The
      word
“including” shall be deemed to be followed by the words “without limitation”;
      the word “or” is not exclusive and is used in the inclusive sense of “and/or,”
and the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to
      this Agreement as a whole;

     

    (d) A
      reference to document, instrument or agreement shall be deemed to refer as
      well
      to all addenda, exhibits, schedules or amendments thereto; and

     

    (e) All
      words
      used in this Agreement will be construed to be of such gender or number as
      the
      circumstances require.

     

    ARTICLE
      II 

    PURCHASE
      AND SALE OF THE MEMBERSHIP INTERESTS

     

    2.1 Purchase
      of the Membership Interests from the Member.
      Subject
      to and upon the terms and conditions of this Agreement, at the closing of the
      transactions contemplated by this Agreement (the “Closing”),
      the
      Seller shall sell, transfer, convey, assign and deliver to the Buyer, and the
      Buyer shall purchase, acquire and accept from the Seller, all of the Membership
      Interests.

     

    2.2 Purchase
      Price.
      The
      purchase price (the “Purchase
      Price”)
      to be
      paid by the Buyer for the Membership Interests shall be:

     

    (a) a
      warrant
      to purchase up to 700,000 shares of the Buyer’s common stock, substantially in
      the form attached hereto as Exhibit
      A
      (the
“Warrant”);

     

    (b) 7%
      of
      gross revenue reported in the Company’s financial statements, determined in
      accordance with GAAP, attributable to United States sales of the Company Titles
      (the “Domestic
      Earn-Out Amount”);
      and

     

    (c) 7%
      of
      gross revenue reported in the Company’s financial statements, determined in
      accordance with GAAP consistently applied, attributable to international sales
      of the Company Titles net of distribution fees and advances to the extent such
      distribution fees were agreed to prior to the Closing and such advances were
      received prior to the Closing (the “International
      Earn-Out Amount,”
and
      together with the Domestic Earn-Out Amount, the “Earn-Out
      Amount”).

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    


    2.3 Payments
      of the Purchase Price.
      The
      Warrant shall be issued to the Seller at the Closing. Payments
      of the Earn-Out Amount shall be calculated and made quarterly, beginning with
      the quarter ended December 31, 2008, within 60 days of the end of the applicable
      quarter, subject to the provisions of this Section
      2.3
      and
      provided that the payment related to the quarter ended December 31, 2008 may
      be
      made within 150 days of the quarter end. Buyer shall pay Seller
      the
      Earn-Out Amount by electronic wire transfer in immediately available funds
      to an
      account designated in writing by the Seller.
      Buyer
      shall provide the Seller
      with
      a
      notice of the Earn-Out Amount for the applicable quarter, including adequate
      backup documentation, and the proposed Earn-Out Payment, if any, within 30
      days
      after the end of such quarter. If the Seller
      does
      not
      object in writing within 30 days of the date of the notice (such notice of
      objection must contain the basis of the Seller’s
      objection), then the Earnout Amount payable to the applicable quarter, if any,
      shall be deemed agreed upon and shall be paid in accordance with this
Section
      2.3.
      If the
Seller
      provides
      a notice of objection within 15 days, then the Buyer and the Seller
      shall
      endeavor to reach agreement within the 15 day period following the receipt
      by
      the Buyer of any notice of objection. If the parties are unable to reach
      agreement within such 15 day period, then the matter shall be submitted to
      the
      Independent Accountants for determination, which determination shall be final
      and binding on the parties. In connection with the resolution of any such
      dispute, each party shall pay its own fees and expenses, including, without
      limitation, its own legal, accounting and consulting fees and expenses. If
      the
      determination by the Independent Accountants results in an adjustment to an
      Earn-Out Amount more beneficial to the Seller
      in
      an
      amount that exceeds $10,000.00, then the cost and expense of the Independent
      Accounts shall be paid by the Buyer. If the determination by the Independent
      Accounts does not result in an adjustment to the Earn-Out Amount more beneficial
      to the Seller
      by
      an
      amount that exceeds $10,000.00, then the cost and expense of the Independent
      Accounts shall be paid by the Seller.
      For the
      purposes of this Section
      2.3,
      Buyer
      shall, upon reasonable prior written notice, give Seller and its professional
      advisors, at Seller’s sole expense, access during normal business hours to the
      Company’s and the Buyer’s books and records related to the calculation of the
      Earn-Out Amount.

     

    ARTICLE
      III 

    THE
      CLOSING

     

    3.1 Closing.
      The
      Closing shall take place at the offices of Greenberg Traurig, LLP, 1750 Tysons
      Boulevard, Suite 1200, McLean, Virginia 22102 at 10:00 p.m., Eastern Time,
      on
      October 10, 2008 (the “Closing
      Date”).
      The
      documents to be delivered at the Closing (other than certificates evidencing
      the
      Warrant) may, at the election of the parties, be exchanged by facsimile or
      electronic transmission in portable document format (“PDF”),
      provided original executed copies shall be provided promptly following the
      Closing.

     

    3.2 Closing
      Deliveries by the Member and the Seller.
      The
      Member, and the Seller shall deliver to the Buyer at the Closing such documents,
      instruments or certificates as the Buyer may reasonably request, including
      without limitation:

     

    (a) certificates
      of the Secretaries of the Company and the Member attesting to the incumbency
      of
      the Company’s and the Member’s officers, the authenticity of the resolutions
      authorizing the transactions contemplated by this Agreement, and the
      authenticity and continuing validity of the organizational documents delivered
      pursuant to Section
      4.1;

     

    (b) the
      assignment of membership interests substantially in the form attached hereto
      as
Exhibit
      B;

     

    (c) the
      original minute books of the Company and the Member to the extent they
      exist;

     

    
      
         

      

      
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    (d) all
      consents, permissions, approvals, novations, authorizations or waivers, in
      form
      reasonably satisfactory to the Buyer, required to be obtained under this
      Agreement;

     

    (e) a
      resignation, effective as of the Closing, of each Series A Director (as defined
      in the LLC Agreement) and each officer and manager of the Member from each
      such
      position; and

     

    (f) a
      cross
      receipt executed by the Seller for the Warrant.

     

    3.3 Closing
      Deliveries by the Buyer.
      The
      Buyer shall deliver to the Seller at the Closing such documents, instruments
      or
      certificates as the Seller may reasonably request,
      including without limitation a certificate evidencing the Warrant.

     

    ARTICLE
      IV 

    REPRESENTATIONS
      AND WARRANTIES OF THE SELLER AND THE MEMBER 

     

    Except
      as
      set forth in the disclosure schedule delivered by the Seller and the Member
      concurrently with the execution of this Agreement (the “Disclosure
      Schedule”),
      which
      shall identify exceptions by specific section references, each of the Seller
      and
      the Member severally and jointly represent and warrant to the Buyer, as set
      forth below in this Article
      IV.
      Except
      for the representations and warranties in Sections
      4.1,
      4.2,
      4.3
      and
4.4,
      all
      representations and warranties of the Seller and the Member in this Agreement
      shall be limited to Seller’s knowledge.

     

    4.1 Organization
      and Qualification.

     

    (a) The
      Company is a limited liability company, duly organized, validly existing and
      in
      good standing under the laws of the State of Delaware and has the requisite
      limited liability company power and authority to own, lease and operate its
      assets and properties and to carry on its business as it is now being or
      currently planned by the Company to be conducted. The Company is in possession
      of all franchises, grants, authorizations, licenses, permits, easements,
      consents, certificates, approvals and orders (“Approvals”)
      necessary to own, lease and operate the properties it purports to own, operate
      or lease and to carry on its business as it is now being or currently planned
      by
      the Company to be conducted, except where the failure to have such Approvals
      could not, individually or in the aggregate, reasonably be expected to have
      a
      Material Adverse Effect on the Company. Complete and correct copies of the
      certificate of formation and operating agreement of the Company, as amended
      and
      currently in effect, have been heretofore delivered to Buyer or Buyer’s counsel.
      The Company is not in violation of any of the provisions of its certificate
      of
      formation or operating agreement.

     

    (b) The
      Company is duly qualified or licensed to do business as a foreign limited
      liability company and is in good standing in each jurisdiction where the
      character of the properties owned, leased or operated by it or the nature of
      its
      activities makes such qualification or licensing necessary, except for such
      failures to be so duly qualified or licensed and in good standing that could
      not, individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect on the Company. Each jurisdiction in which the Company is so
      qualified or licensed is listed in Schedule
      4.1(b).

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    


    (c) The
      Member is a limited liability company, duly organized, validly existing and
      in
      good standing under the laws of the State of Delaware and has the requisite
      limited liability company power and authority to own, lease and operate its
      assets and properties and to carry on its business as it is now being or
      currently planned by the Member to be conducted. Complete and correct copies
      of
      the certificate of formation and operating agreement of the Member, as amended
      and currently in effect, have been heretofore delivered to Buyer or Buyer’s
      counsel. The Member is not in violation of any of the provisions of its
      certificate of formation or operating agreement.

     

    (d) Except
      for the membership interests it holds in the Company, the Member does not have
      any assets or properties of any kind, does not now conduct and has never
      conducted any business, and has no obligations or liabilities of any nature
      whatsoever except such obligations and liabilities as are imposed under this
      Agreement or under the LLC Agreement.

     

    4.2 Subsidiaries.
      Except
      for Gamecock Media Europe Limited, a company organized under the laws of England
      and Wales and wholly-owned subsidiary of the Company, the Company does not
      directly or indirectly own any equity or similar interest in, or any interest
      convertible or exchangeable or exercisable for, any equity or similar interest
      in, any Subsidiary. The Member is the majority member of the
      Company.

     

    4.3 Capitalization.
      Except
      as set forth in Schedule
      4.3:

     

    (a) The
      capitalization of the Company consists of the Interests (as defined in the
      LLC
      Agreement and subject to the Restructuring) subject to the term of those certain
      management restricted unit purchase agreements and incentive unit agreements
      entered into between the Company and the parties thereto (the “Unit
      Agreements”).
      All
      of the Interests are validly issued, fully paid and nonassessable. All of the
      Interests that are owned by the Member are held free and clear of any Liens
      other than as a result of the LLC Agreement.

     

    (b) The
      capitalization of the Member consists of the Membership Interests, all of which
      are held by the Seller. All of the Membership Interests are validly issued,
      fully paid and nonassessable. All of the Membership Interests are held free
      and
      clear of any Liens and the Seller has all right to sell and transfer its
      Membership Interests as contemplated by this Agreement and upon such sale and
      transfer, such Membership Interests shall be acquired by the Buyer as
      contemplated by Section
      2.1
      of this
      Agreement free and clear of any Liens other than as a result of the LLC
      Agreement.

     

    (c) Except
      as
      set forth in the LLC Agreement and the Unit Agreements, there are no
      subscriptions, options, warrants, equity securities, partnership interests
      or
      similar ownership interests, calls, rights (including preemptive rights),
      commitments or agreements of any character to which the Company or the Member
      is
      a party or by which either the Company or the Member is bound obligating the
      Company or the Member to issue, deliver or sell, or cause to be issued,
      delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
      repurchase, redemption or acquisition of, any of the Company’s Interests or the
      Member’s Membership Interests, as applicable, or similar equity security of the
      Company or the Member or obligating the Company or the Member, as applicable,
      to
      grant, extend, accelerate the vesting of or enter into any such subscription,
      option, warrant, equity security, call, right, commitment or agreement.


     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    


    (d) The
      Interests and the Membership Interests have been issued in compliance with
      all
      applicable securities laws and other applicable laws and
      regulations.

     

    (e) Except
      as
      set forth in the LLC Agreement and the Unit Agreements and as contemplated
      by
      this Agreement, there are no registration rights, and there is no voting trust,
      proxy, rights plan, antitakeover plan or other agreement or understanding to
      which the Company or the Member is a party or by which the Company or the Member
      is bound with respect to any equity security of any class of the Company or
      the
      Member, as applicable.

     

    (f) Except
      as
      set forth in the LLC Agreement and the Unit Agreements, the Interests and the
      Membership Interests are not unvested or are subject to a repurchase option,
      risk of forfeiture or other condition under any applicable agreement with the
      Company or the Member, as applicable.

     

    4.4 Authority
      Relative to this Agreement.

     

    (a) The
      Member and the Seller have all necessary power and authority to execute and
      deliver this Agreement and to perform their respective obligations hereunder
      and
      to consummate the transactions contemplated hereby.

     

    (b) The
      execution and delivery of this Agreement and the consummation by the Member
      and
      the Seller of the transactions contemplated hereby have been duly and validly
      authorized by all necessary limited liability company action on the part of
      the
      Member and the Seller and no other limited liability company proceedings on
      the
      part of the Member or the Seller are necessary to authorize this Agreement
      or to
      consummate the transactions contemplated hereby pursuant to the applicable
      law
      and the terms and conditions of this Agreement.

     

    (c) This
      Agreement has been duly and validly executed and delivered by the Member and
      the
      Seller, and assuming the due authorization, execution and delivery thereof
      by
      the other parties hereto, constitutes the legal and binding obligation of the
      Member and the Seller, enforceable against the Member and the Seller in
      accordance with its terms, except as may be limited by bankruptcy, insolvency,
      reorganization or other similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity.

     

    4.5 No
      Conflict; Required Filings and Consents.

     

    (a) The
      execution and delivery of this Agreement by the Member and the Seller do not,
      and the performance of this Agreement by such Persons shall not,
      (i) conflict with or violate the Member’s or the Seller’s certificate of
      formation, (ii) conflict with or violate any Legal Requirements, (iii)
      result in any breach of or constitute a default (or an event that with notice
      or
      lapse of time or both would become a default) under, or materially impair the
      Company’s rights or, to the Seller’s knowledge, materially alter the rights or
      obligations of any third party under, or, to the Seller’s knowledge, give to
      others any rights of termination, amendment, acceleration or cancellation of,
      or
      result in the creation of a Lien (other than a Permitted Lien) or encumbrance
      on
      any of the properties or assets of the Company pursuant to, any Company
      Contracts, or (iv) except as set forth in Schedule
      4.5(a),
      result
      in the triggering, acceleration or increase of any payment to any Person
      pursuant to any Company Contract, including any “change in control” or similar
      provision of any Company Contract, except, with respect to clauses (ii),
      (iii) or (iv), for any such conflicts, violations, breaches, defaults,
      triggerings, accelerations, increases or other occurrences that would not,
      individually and in the aggregate, have a Material Adverse Effect on the
      Company.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    


    (b) The
      execution and delivery of this Agreement by the Member and the Seller does
      not,
      and the performance of this Agreement by such Persons shall not, require any
      consent, approval, authorization or permit of, or filing with or notification
      to, any Governmental Entity or other third party (including, without limitation,
      lenders and lessors, except (i) for applicable requirements, if any, of the
      Securities Act of 1933, amended (the “Securities
      Act”),
      the
      Securities Exchange Act of 1934, as amended (the “Exchange
      Act”)
      or
      state securities laws (“Blue
      Sky Laws”),
      and
      the rules and regulations thereunder, and appropriate documents received from
      or
      filed with the relevant authorities of other jurisdictions in which the Company
      is licensed or qualified to do business, (ii) the consents, approvals,
      authorizations and permits described in Schedule
      4.5(b)
      hereto,
      and (iii) where the failure to obtain such consents, approvals,
      authorizations or permits, or to make such filings or notifications, would
      not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect on the Company or prevent consummation of the transactions
      contemplated hereby or otherwise prevent the parties hereto from performing
      their obligations under this Agreement.

     

    4.6 Compliance.
      To the
      Seller’s knowledge, the Company has materially complied with and is not in
      violation of any Legal Requirements with respect to the conduct of its business,
      or the ownership or operation of its business, except for failures to comply
      or
      violations which, individually or in the aggregate, have not had and are not
      reasonably likely to have a Material Adverse Effect on the Company. Except
      as
      set forth in Schedule
      4.6,
      to the
      Seller’s knowledge, no written notice of non-compliance with any Legal
      Requirements has been received by the Company. To the Seller’s knowledge, the
      Company is not in violation of any term of any Company Contract, except for
      failures to comply or violations which are described on Schedule
      4.6
      or
      which, individually or in the aggregate, have not had and are not reasonably
      likely to have a Material Adverse Effect on the Company.

     

    4.7 Financial
      Statements.

     

    (a) The
      Seller has provided to the Buyer unaudited financial statements (including
      any
      related notes thereto) for the fiscal years ended September 30, 2007 and 2006
      (the “Annual
      Financial Statements”).
      Except as set forth in Schedule
      4.7(a),
      the
      Annual Financial Statements fairly present in all material respects the
      financial position of the Company at the respective dates thereof and the
      results of its operations and cash flows for the periods indicated, except
      that
      such statements do not contain notes and are subject to normal audit
      adjustments.

     

    (b) The
      Seller has provided to the Buyer a correct and complete copy of the unaudited
      financial statements of the Company for the ten-month period ended July 31,
      2008, (the “Stub
      Financial Statements,”
and
      with the Annual Financial Statement, the “Financial
      Statements”).
      The
      Stub Financial Statements comply as to form in all material respects, and,
      except as set forth in Schedule
      4.7(a),
      are
      consistent with the Annual Financial Statements and fairly present in all
      material respects the financial position of the Company at the date thereof
      and
      the results of its operations and cash flows for the period indicated, except
      that such statements do not contain notes and are subject to normal audit
      adjustments.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    


    (c) The
      books
      of account and other books and records pertaining to the Interests in the
      Company have been maintained in accordance with good business practice, are
      complete and correct in all material respects and there have been no material
      transactions that are required to be set forth therein and which have not been
      so set forth.

     

    (d) The
      accounts receivable of the Company reflected on the balance sheets included
      in
      the Financial Statements, and to the extent they remain outstanding,
      (i) arose from bona fide sales transactions in the ordinary course of
      business and are payable on ordinary trade terms, (ii) are, to the Seller’s
      knowledge, legal, valid and binding obligations of the respective debtors
      enforceable in accordance with their terms, except as such may be limited by
      bankruptcy, insolvency, reorganization, or other similar laws affecting
      creditors’ rights generally, and by general equitable principles, (iii) to
      the Seller’s knowledge, are not subject to any valid set-off or counterclaim
      except to the extent set forth in such balance sheet contained therein,
      (iv) to Seller’s knowledge, are collectible in the ordinary course of
      business consistent with past practice in the aggregate recorded amounts
      thereof, net of bad debt reserves and write-downs and write-offs reflected
      in
      the Financial Statements, and (v) are not the subject of any actions or
      proceedings brought by or on behalf of the Company.

     

    4.8 No
      Undisclosed Liabilities.
      The
      Company has no liabilities (absolute, accrued, contingent or otherwise) of
      a
      nature required to be disclosed on a balance sheet, or in the related notes
      to
      financial statements, that are prepared in accordance with GAAP and that are,
      individually or in the aggregate, material to the business, results of
      operations or financial condition of the Company, except: (a) liabilities
      provided for in or otherwise disclosed in the Financial Statements
      (b) liabilities arising in the ordinary course of the Company’s business
      since July 31, 2008, none of which would have a Material Adverse Effect on
      the
      Company, and (c) liabilities and obligations set forth in the Disclosure
      Schedule or within the dollar threshold exception in any representation to
      the
      Agreement.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    


    4.9 Absence
      of Certain Changes or Events.
      Except
      as set forth in Schedule
      4.9
      hereto,
      since July 31, 2008, there has not been, to the Seller’s knowledge: (a) any
      Material Adverse Effect on the Company, (b) any declaration, setting aside
      or payment of any dividend on, or other distribution (whether in cash, stock
      or
      property) in respect of, any of the Company’s Interests, or any purchase,
      redemption or other acquisition by the Company of any of its Interests or any
      other equity securities of the Company or any options, warrants, calls or rights
      to acquire any of its membership interests or any other equity securities of
      the
      Company, (c) any split, combination or reclassification of any of the
      Company’s equity securities, (d) any granting by the Company of any
      increase in compensation or fringe benefits, except for normal increases of
      cash
      and incentive compensation in the ordinary course of business consistent with
      past practice, or any payment by the Company of any bonus, except for bonuses
      made in the ordinary course of business consistent with past practice, or any
      granting by the Company of any increase in severance or termination pay or
      any
      entry by the Company into any currently effective employment, severance,
      termination or indemnification agreement or any agreement the benefits of which
      are contingent or the terms of which are materially altered upon the occurrence
      of a transaction involving the Company of the nature contemplated hereby,
      (e) entry by the Company into any licensing or other agreement with regard
      to the acquisition or disposition of any Intellectual Property other than
      licenses in the ordinary course of business consistent with past practice or
      any
      amendment or consent with respect to any licensing agreement filed or required
      to be filed by the Company with respect to any Governmental Entity, (f) any
      material change by the Company in its accounting methods, principles or
      practices, (g) any change in the auditors of the Company, (h) any
      revaluation by the Company of any of its assets, including, without limitation,
      writing down the value of capitalized inventory or writing off notes or accounts
      receivable or any sale of assets of the Company other than in the ordinary
      course of business, (i) any attempt to accelerate the collection of any of
      the
      Company’s accounts receivable or defer payment of any of the Company’s
      outstanding accounts payable outside the ordinary course of business consistent
      with past practice, (j) any incurrence, assumption or guarantee of any long-term
      or short-term indebtedness by the Company, (k) any amendment, termination or
      notice given of termination with respect to any Material Company Contract,
      or
      waiver of any of the Company’s rights therein, (l) any payment, declaration,
      accrual or set aside of any dividends or any other distributions, in cash,
      property or otherwise, on the Company’s securities, or purchase, exchange or
      redemption of any of the Company’s securities, or making of any inter-company
      advance, loan or payment between the Company, the Member, the Seller or any
      Affiliate thereof, other than in the ordinary course of business consistent
      with
      past practice, or (m) any agreement, whether written or oral, to do any of
      the
      foregoing.

     

    4.10 Contracts.

     

    (a) Schedule
      4.10
      lists
      the following Company Contracts to which the Company is a party (each such
      Company Contract listed or required to be listed, a “Material
      Company Contract”
and
      collectively, the “Material
      Company Contracts”):

     

    (i) any
      Company Contract (or group of related Company Contracts) for the furnishing
      of
      services to, or the development of products for, the Company which involves
      consideration in excess of $50,000;

     

    (ii) any
      Company Contract concerning confidentiality, non-competition or non-solicitation
      (other than (A) confidentiality agreements with employees of the Company set
      forth in the Company’s standard form of employee confidentiality agreement,
      copies of which have previously been made available to the Buyer or (B)
      Contracts that do not materially deviate from the Company’s standard form
      confidentiality agreement);

     

    (iii) any
      Company
      Contract
      under
      which the consequences of a default or termination would reasonably be expected
      to have a Material Adverse Effect;

     

    (iv) any
      Company Contract (or group of related Company Contracts) for the lease of
      personal property from or to third parties providing for lease payments in
      excess of $50,000 per annum;

     

    (v) any
      Company Contract establishing a partnership or joint venture;

     

    
      
         

      

      
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    (vi) any
      Company Contract (or group of related Company Contracts) under which the Company
      has created, incurred, assumed or guaranteed (or may create, incur, assume
      or
      guarantee) indebtedness (including capitalized lease obligations) involving
      more
      than $25,000 individually or $50,000 in the aggregate or under which it has
      imposed (or may impose) a security interest on any of its assets, tangible
      or
      intangible;

     

    (vii) any
      Company Contract (or group of related Company Contracts) involving the Member
      or
      any of its affiliates;

     

    (viii) any
      Company Contract (or group of related Company Contracts) for the licensing
      or
      distribution of software, products or other personal property or for the
      furnishing or receipt of services (A) which involves more than the sum of
      $50,000 annually, (B) in which the Company has granted marketing or distribution
      rights relating to any products or territory or (C) in which the Company has
      agreed to purchase a minimum quantity of goods or services in excess of $50,000
      annually or has agreed to purchase goods or services exclusively from a certain
      party;

     

    (ix) any
      distributor, sales representative, franchise or similar agreements to which
      the
      Company is a party or by which the Company is bound; and

     

    (x) any
      Company Contract (or group of related Company Contracts) requiring that the
      Company obtain consent, permission, approval, novation, authorization or waiver
      from any person or entity for the consummation of the transactions contemplated
      hereby or any related agreement.

     

    (b) The
      Seller has made available to the Buyer a correct and complete copy of each
      Material Company Contract (as amended to date). Except as set forth in
Schedule
      4.10,
      with
      respect to each Material Company Contract: (i) the Material Company Contract
      is,
      to the Seller’s knowledge, in full force and effect; (ii) to Seller’s knowledge,
      the Material Company Contract is legal, valid, binding and enforceable against
      the Company, except as such enforceability may be limited by (A) applicable
      insolvency, bankruptcy, reorganization, moratorium or other similar laws
      affecting creditors’ rights generally and (B) applicable equitable principles
      (whether considered in a proceeding at law or in equity); and (iii) the Company
      is not, and neither the Company nor the Member has received written notice
      that
      any other party is in breach or default, and to Seller’s knowledge, no event has
      occurred which with notice or lapse of time or both would constitute a breach
      or
      default or permit termination, modification or acceleration, under the Material
      Company Contract.

     

    4.11 Litigation.

     

    (a) Except
      as
      set forth in Schedule
      4.17,
      there
      are no claims, suits, actions or proceedings pending or, to the Seller’s
      knowledge, threatened against the Company or any manager or officer thereof
      before any court, government department, commission, agency, instrumentality
      or
      authority, or any arbitrator.

     

    (b) Except
      as
      set forth in Schedules
      4.6
      and
4.17,
      there
      are no claims, suits, actions or proceedings pending or, to the Seller’s
      knowledge, threatened against the Company, the Member or the Seller before
      any
      court, governmental department, commission, agency, instrumentality or
      authority, or any arbitrator that seeks to restrain or enjoin the consummation
      of the transactions contemplated by this Agreement or which could reasonably
      be
      expected, either singularly or in the aggregate with all such claims, actions
      or
      proceedings, to have a Material Adverse Effect on the Company or have a Material
      Adverse Effect on the ability of the parties hereto to consummate the
      transactions contemplated hereby.

     

    
      
         

      

      
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    4.12 Employee
      Benefit Plans.

     

    (a) Schedule
      4.12(a)
      lists
      all employee compensation, incentive, fringe or benefit plans, programs,
      policies, commitments or other arrangements (whether or not set forth in a
      written document) covering any active or former manager, officer, employee
      or
      consultant of the Company, or any trade or business (whether or not
      incorporated) which is under common control with the Company, with respect
      to
      which the Company has liability (individually, a “Plan”
and,
      collectively, the “Plans”).
      To
      the Seller’s knowledge, all Plans have been maintained and administered in all
      material respects in compliance with their respective terms and with the
      requirements prescribed by any and all statutes, orders, rules and regulations
      which are applicable to such Plans, and all liabilities with respect to the
      Plans have been properly reflected in the Financial Statements and records
      of
      the Company. To the Seller’s knowledge, the Company does not have any plan or
      commitment to establish any new Plan, to modify any Plan (except to the extent
      required by law or to conform any such Plan to the requirements of any
      applicable law, in each case as previously disclosed to the Buyer in writing,
      or
      as required by this Agreement), or to enter into any new Plan.

     

    (b) Except
      as
      set forth in Schedule
      4.12(b),
      to the
      Seller’s knowledge, neither the execution and delivery of this Agreement nor the
      consummation of the transactions contemplated hereby will (i) result in any
      payment (including severance, unemployment compensation, golden parachute,
      bonus
      or otherwise) becoming due to any member, manager, officer or employee of the
      Company under any Plan or otherwise, (ii) materially increase any benefits
      otherwise payable under any Plan, or (iii) result in the acceleration of
      the time of payment or vesting of any such benefits.

     

    4.13 Employment
      Matters.

     

    (a) Schedule
      4.13(a)
      lists
      all employees actively employed by the Company as of the Closing, identifying
      names, material terms of employment (including, where applicable, current
      commission or bonus eligibility), full or part time status, exempt or nonexempt
      status (where applicable), hourly or salaried status, benefits, annual vacation
      entitlement, balance of unused vacation pay (as of July 31, 2008), date of
      hire
      and job title. Schedule
      4.13(a)
      also
      identifies all of the Company’s employees on short-term or long-term disability
      leave, maternity leave, parental leave, family medical leave, military leave,
      extended absence or any other leave or inactive status, the reasons for such
      leave, as well as the dates on which the leave, extended absence or inactive
      status began and is expected to end (if known).

     

    (b) Except
      for the letter dated October 9, 2008 sent from Michael Wilson, Harry Miller
      IV
      and Eric Stults, there are no claims, suits, actions, or proceedings pending
      or,
      to Seller’s knowledge, threatened in writing between the Company or its
      Subsidiaries, on the one hand, and any of their respective employees or former
      employees, on the other hand.

     

    
      
         

      

      
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    4.14 Restrictions
      on Business Activities.
      To the
      Seller’s knowledge, there is no agreement, commitment, judgment, injunction,
      order or decree binding upon the Company or its assets or to which the Company
      is a party which has or could reasonably be expected to have the effect of
      prohibiting or materially impairing any business practice of the Company, any
      acquisition of property by the Company or the conduct of business by the Company
      as currently conducted other than such effects, individually or in the
      aggregate, which have not had and would not reasonably be expected to have
      a
      Material Adverse Effect on the Company. 

     

    4.15 Title
      to Property.

     

    (a) The
      Company and the Member do not own any real property or any options or other
      contracts under which the Company or the Member has a right to acquire any
      interest in real property.

     

    (b) To
      the
      Seller’s knowledge, all leases of real property held by the Company, and all
      personal property and other property and assets of the Company owned, used
      or
      held for use in connection with the business of the Company (the “Personal
      Property”)
      are
      shown or reflected on the balance sheet included in the Financial Statements,
      other than those entered into or acquired on or after July 31, 2008 in the
      ordinary course of business. To the Seller’s knowledge, the Company has good and
      marketable title to the Personal Property owned by it, and all such Personal
      Property is in each case held free and clear of all Liens, except for Permitted
      Liens or Liens disclosed in the Financial Statements, none of which liens or
      encumbrances has or would reasonably be expected to have, individually or in
      the
      aggregate, a Material Adverse Effect on such property or on the present or
      currently contemplated use of such property in the businesses of the Company.
      

     

    4.16 Taxes.
      Except
      as set forth in Schedule
      4.16
      hereto:

     

    (a) The
      Company has timely filed all federal, state, local and foreign returns,
      estimates, information statements and reports relating to Taxes (“Returns”)
      required to be filed by the Company with any Tax authority prior to the date
      hereof, except such Returns which are not material to the Company. All such
      Returns are true, correct and complete in all material respects. The Company
      has
      paid, or accrued such Taxes in reserves reflected in the Financial Statements,
      all Taxes shown to be due and payable by the Company or the Member on such
      Returns.

     

    (b) All
      Taxes
      that the Company and the Member are required by law to withhold or collect
      have
      been duly withheld or collected, and have been timely paid over to the proper
      Tax authorities to the extent due and payable. 

     

    (c) The
      Company and the Member have not been delinquent in the payment of any material
      Tax nor is there any material Tax deficiency outstanding, proposed (to the
      knowledge of the Seller or assessed against the Company or the Member, nor
      has
      the Company or the Member executed any unexpired waiver of any statute of
      limitations on or extending the period for the assessment or collection of
      any
      Tax.

     

    
      
         

      

      
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    (d) To
      the
      Seller’s knowledge, no audit or other examination of any Return of the Company
      or the Member by any Tax authority is presently in progress, nor has the
      Company, the Member or the Seller been notified of any request for such an
      audit
      or other examination.

     

    (e) No
      adjustment relating to any Returns filed by the Company or the Member has been
      proposed in writing, formally or informally, by any Tax authority to the Company
      or any representative thereof.

     

    4.17 Intellectual
      Property.

     

    (a) Schedule
      4.17(a)
      sets
      forth a complete and accurate list of (a) all Intellectual Property registered
      in the name of the Company and used or proposed to be used by the Company,
      all
      applications therefor, and all licenses (as licensee or licensor) (other than
      with respect to off-the shelf and similar commercially available software)
      and
      other agreements relating thereto, and (b) all written agreements relating
      to
      any other Intellectual Property which the Company is licensed or authorized
      by
      others to use or which the Company has licensed or authorized for use by others
      (collectively, the “Company
      Intellectual Property”).

     

    (b) To
      the
      Seller’s knowledge, no Company Intellectual Property or Company Product is
      subject to any material proceeding or outstanding decree, order, judgment,
      contract, license or stipulation restricting in any manner the use, transfer
      or
      licensing thereof by the Company, or which may affect the validity, use or
      enforceability of such Company Intellectual Property or Company Product, which
      in any such case could reasonably be expected to have a Material Adverse Effect
      on the Company.

     

    (c) To
      the
      Seller’s knowledge, the Company owns or has enforceable rights to use all
      Company Intellectual Property required for the conduct of its business as
      presently conducted or to be conducted. Except as disclosed in Schedule
      4.17(c)
      hereto,
      to the Seller’s knowledge, the Company owns and has good and exclusive title to
      each material item of Company Intellectual Property owned by it free and clear
      of any Liens (excluding non-exclusive licenses and related restrictions granted
      by it in the ordinary course of business); and the Company is the exclusive
      owner of all material Trademarks and Copyrights used in connection with the
      operation or conduct of the business of the Company including the sale of any
      products or the provision of any services by the Company.

     

    
      
         

      

      
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    (d) To
      the
      Seller’s knowledge, the operation of the business of the Company as such
      business currently is conducted, including the Company’s use of any product,
      device or process, has not and does not infringe or misappropriate the
      Intellectual Property of any third party or constitute unfair competition or
      trade practices under the laws of any jurisdiction and the Company has not
      received any claims or threats from third parties alleging any such
      infringement, misappropriation or unfair competition or trade practices. Except
      as disclosed in Schedule
      4.17(d),
      to the
      Seller’s knowledge, (i) the Company is the sole and exclusive owner of all
      right, title and interest in and to all of the Intellectual Property, and has
      the exclusive right to use and license the same, free and clear of any claim
      or
      conflict with the Intellectual Property of others; (ii) no royalties,
      honorariums or fees are payable by it to any person by reason of the ownership
      or use of any of the Intellectual Property; (iii) there have been no claims
      made against the Company asserting the invalidity, abuse, misuse, or
      unenforceability of any of the Company Intellectual Property and no grounds
      for
      any such claims exist; (iv) the Company has not made any claim of any
      violation or infringement by others of any of the Company Intellectual Property
      or interests therein and, no grounds for any such claims exist; (v) the
      Company has not received any notice that it is in conflict with or infringing
      upon the asserted intellectual property rights of others in connection with
      the
      Company Intellectual Property, and neither the use of the Company Intellectual
      Property nor the operation of its business is infringing or has infringed upon
      any intellectual property rights of others; (vi) the Company Intellectual
      Property is sufficient and includes all intellectual property rights necessary
      for the Company to lawfully conduct its business as presently being conducted;
      (vii) no interest in the Company Intellectual Property has been assigned,
      transferred, licensed or sublicensed by the Company to any person;
      (viii) to the extent that any item constituting part of the Company
      Intellectual Property has been registered with, filed in or issued by, any
      Governmental Authority, such registrations were duly made and remain in full
      force and effect; (viii)  there has not been any act or failure to act by
      the Company or any of its directors, officers, managers, employees, attorneys
      or
      agents during the prosecution or registration of, or any other proceeding
      relating to, any of the Company Intellectual Property or of any other fact
      which
      could render invalid or unenforceable, or negate the right to issuance of any
      of
      the Intellectual Property; (ix) to the extent any of the Company
      Intellectual Property constitutes proprietary or confidential information,
      the
      Company has adequately safeguarded such information from disclosure; and
      (x) the Company Intellectual Property will remain in full force and effect
      following the Closing without alteration or impairment.

     

    4.18 Brokers;
      Third Party Expenses.
      Neither
      the Member nor the Seller has incurred, directly or indirectly, any liability
      for brokerage, finders’ fees, agent’s commissions or any similar charges in
      connection with this Agreement or any transactions contemplated hereby. No
      membership interests or other equity securities, options, warrants or other
      securities of any of the Company, the Member or the Buyer are payable by the
      Company, the Member or the Seller, or any member thereof, to any third party
      by
      the Company as a result of the transactions contemplated hereby.

     

    4.19 Investment
      Intent.

     

    (a) The
      Seller is acquiring the Warrant hereunder for its own account for investment
      and
      not for distribution, assignment or resale to others.

     

    (b) The
      Seller acknowledges that the issuance of the Warrant has not been registered
      under the Securities Act in reliance upon an exemption therefrom for nonpublic
      offerings

     

    (c) The
      Seller acknowledges that the Warrant may not be sold or otherwise transferred
      unless such sale or other transfer is registered under the Securities Act or
      an
      exemption from registration is available.

     

    (d) The
      Seller represents and warrants that it is an “accredited investor” as that term
      is defined in Rule 501 of Regulation D promulgated under the Securities Act,
      and
      has had access to such financial and other information and has been afforded
      the
      opportunity to ask questions of the Buyer’s representatives and has received
      answers thereto, as deemed necessary in connection with the Seller’s decision to
      accept the Warrant hereunder.

     

    
      
         

      

      
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    ARTICLE
      V


    REPRESENTATIONS
      AND WARRANTIES OF THE BUYER

     

    The
      Buyer
      represents and warrants to the Company, the Member and the Seller as set forth
      below in this Article
      V.

     

    5.1 Organization
      and Qualification.
      The
      Buyer is a corporation duly incorporated, validly existing and in good standing
      under the laws of the State of Delaware and has the requisite corporate power
      and authority to own, lease and operate its assets and properties and to carry
      on its business as it is now being or currently planned by the Buyer to be
      conducted. The Buyer is in possession of all Approvals necessary to own, lease
      and operate the properties it purports to own, operate or lease and to carry
      on
      its business as it is now being or currently planned by the Buyer to be
      conducted, except where the failure to have such Approvals could not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect on the Buyer. The Buyer is not in violation of any of the
      provisions of the Buyer’s certificate of incorporation and bylaws.

     

    5.2 Capitalization.
      The
      Buyer’s periodic reports on Form 10-Q and Form 10-K and current reports on Form
      8-K filed with the SEC accurately reflect its capitalization as of the dates
      indicated in such reports. The issued and outstanding capital stock of the
      Buyer
      (a) has been duly and validly issued; (b) is fully paid and
      nonassessable; and (c) was not issued in violation of any preemptive rights
      or rights of first refusal or first offer.

     

    5.3 Valid
      Issuance of the Warrant.
      The
      Warrant to be issued to the Seller hereunder, when issued, sold and delivered
      in
      accordance with the terms of this Agreement for the consideration expressed
      herein, will be duly and validly issued and fully paid and non-assessable,
      will
      be free of restrictions on transfer other than restrictions on transfer under
      this Agreement and applicable state and federal securities laws, will not be
      subject to any preemptive rights, rights of first refusal, tag-along rights,
      drag-along rights or other similar rights, and will be issued in compliance
      with
      applicable state and federal securities laws. The shares of the Buyer’s common
      stock, par value $.0001 per share (the “Common
      Stock”),
      to be
      issued, sold and delivered upon exercise of the Warrant (the “Warrant
      Shares”),
      in
      accordance with the terms hereof for the consideration expressed herein, will
      be
      duly and validly issued, fully paid and non-assessable, will be free of
      restrictions on transfer other than restrictions on transfer under this
      Agreement and applicable state and federal securities laws, will not be subject
      to any preemptive rights, rights of first refusal, tag-along rights, drag-along
      rights or other similar rights, and will be issued in compliance with applicable
      state and federal securities laws. The Buyer (a) has duly and validly
      authorized and reserved for issuance shares of Common Stock, which is a number
      sufficient for the Warrant Shares and (b) at all times from and after the
      date hereof shall have a sufficient number of shares of Common Stock duly and
      validly authorized and reserved for issuance to satisfy the issuance of the
      Warrant Shares in full. The Warrant and the Warrant Shares are collectively
      referred to herein as the “Securities.”
Upon
      consummation of the transactions contemplated by this Agreement, the Seller
      will
      acquire marketable title to the Warrant free and clear of all
      Liens.

     

    
      
         

      

      
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    5.4 Authority
      Relative to this Agreement.
      The
      Buyer has full corporate power and authority to: (a) execute, deliver and
      perform this Agreement, and each ancillary document that the Buyer has executed
      or delivered or is to execute or deliver pursuant to this Agreement, and
      (b) carry out the Buyer’s obligations hereunder and thereunder and, to
      consummate the transactions contemplated hereby. The execution and delivery
      of
      this Agreement and the consummation by the Buyer of the transactions
      contemplated hereby have been duly and validly authorized by all necessary
      corporate action on the part of the Buyer (including the approval by its boards
      of directors), and no other corporate proceedings on the part of the Buyer
      are
      necessary to authorize this Agreement or to consummate the transactions
      contemplated hereby, other than the approval of the stockholders of the Buyer
      of
      the transactions contemplated hereby. This Agreement has been duly and validly
      executed and delivered by the Buyer and, assuming the due authorization,
      execution and delivery thereof by the other parties hereto, constitutes the
      legal and binding obligation of the Buyer, enforceable against it in accordance
      with its terms, except as may be limited by bankruptcy, insolvency,
      reorganization or other similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity.

     

    5.5 No
      Conflict; Required Filings and Consents.

     

    (a) The
      execution and delivery of this Agreement by the Buyer do not, and the
      performance of this Agreement by the Buyer shall not (i) conflict with or
      violate the Buyer’s certificate or incorporation or bylaws or (ii) conflict with
      or violate any Legal Requirements, except, with respect to clause (ii), for
      any
      such conflicts, violations, breaches, defaults or other occurrences that would
      not, individually and in the aggregate, have a Material Adverse Effect on the
      Buyer.

     

    (b) The
      execution and delivery of this Agreement by the Buyer do not, and the
      performance of its obligations hereunder will not, require any consent,
      approval, authorization or permit of, or filing with or notification to, any
      Governmental Entity, except (i) for applicable requirements, if any, of the
      Securities Act, the Exchange Act, Blue Sky Laws, and the rules and regulations
      thereunder, and appropriate documents with the relevant authorities of other
      jurisdictions in which the Buyer is qualified to do business, and
      (ii) where the failure to obtain such consents, approvals, authorizations
      or permits, or to make such filings or notifications, would not, individually
      or
      in the aggregate, reasonably be expected to have a Material Adverse Effect
      on
      the Buyer, or prevent consummation of the transaction contemplated hereby or
      otherwise prevent the parties hereto from performing their obligations under
      this Agreement. 

     

    5.6 Compliance.
      The
      Buyer has complied with, and is not in violation of, any Legal Requirements
      with
      respect to the conduct of its business, or the ownership or operation of its
      business, except for failures to comply or violations which, individually or
      in
      the aggregate, have not had and are not reasonably likely to have a Material
      Adverse Effect on the Buyer. The business and activities of the Buyer have
      not
      been and are not being conducted in violation of any Legal Requirements. The
      Buyer is not in default or violation of any term, condition or provision of
      its
      certificate of incorporation or bylaws. No written notice of non-compliance
      with
      any Legal Requirements has been received by the Buyer.

     

    
      
         

      

      
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    5.7 Reporting
      Company Status.
      The
      Buyer is subject to the reporting requirements of the Exchange Act and the
      Buyer
      has taken no action designed to, or which to its knowledge is likely to have
      the
      effect of, terminating the registration of the Common Stock under the Exchange
      Act nor has the Buyer received any notification that the SEC is contemplating
      terminating such registration. The Common Stock is traded on the
      Over-the-Counter bulletin board and the Buyer has not received any notice
      regarding, and to the Buyer’s knowledge there is no threat of, the termination
      or discontinuance of the eligibility of the Common Stock for such
      trading.

     

    5.8 Private
      Placement.
      No
      registration under the Securities Act or any applicable Blue Sky law is required
      for the offer and sale of the Securities by the Buyer to the Seller as
      contemplated hereby.

     

    5.9 No
      Integrated Offering.
      Neither
      the Buyer, nor any of its affiliates, nor any person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any security
      or
      solicited any offers to buy any security, under circumstances that would cause
      this offering of the Securities to be integrated with prior offerings by the
      Buyer for purposes of the Securities Act which would require the registration
      of
      any such securities under the Securities Act. 

     

    5.10 Board
      Approval.
      The
      board of directors of the Buyer (including any required committee or subgroup
      of
      the board of directors of the Buyer) has, as of the date of this Agreement,
      unanimously (a) declared the advisability of the transactions contemplated
      hereby and (b) determined that the transactions contemplated hereby are in
      the best interests of the stockholders of the Buyer.

     

    ARTICLE
      VI 

    ADDITIONAL
      AGREEMENTS

     

    6.1 Non-Competition;
      Non-Solicitation.

     

    (a) Beginning
      on the Closing Date and continuing for a three year period thereafter, neither
      the Seller nor any of its Affiliates will (whether directly or indirectly,
      through some Affiliate or some other Person, or in the name or on behalf of
      some
      Affiliate or some other Person, whether acting as an officer, director, ,
      manager, stockholder, owner, partner, member, trustee, beneficiary, employee,
      promoter, consultant, technical adviser, agent, lender or otherwise or as the
      assign of any such Person):

     

    (i) compete
      with Buyer or its Affiliates in, or otherwise engage in, any aspect of the
      Business within the United States or internationally;

     

    (ii) divert
      or
      attempt to divert, solicit or attempt to solicit, interfere with or attempt
      to
      interfere with, take away or attempt to take away, or accept work or activities
      in the Business from any Existing Customer or Developer or Prospective or
      Developer within the United States or internationally; or

     

    (iii) solicit
      for employment, or induce to leave the employ of the Buyer or any Affiliate
      thereof, any Person who is, or within the six months prior thereto was, an
      employee of the Buyer or any Affiliate thereof working in the Business,
      provided, however, that neither the Seller nor its Affiliates shall be
      restricted from soliciting or hiring employees of the Buyer or any Affiliate
      thereof working in the Business by means of general employment solicitations
      that are not specifically targeted at Buyer or its Affiliates.

     

    
      
         

      

      
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    In
      the
      event of a breach by the Seller or any Affiliate thereof of any covenant set
      forth in this Section
      6.1,
      the
      term of such covenant will be extended for the Seller and all of its Affiliates
      by the period of the duration of such breach.

     

    (b) The
      Seller acknowledge that the periods of restriction, the geographical areas
      of
      restriction and the restraints imposed by the provisions of this Section
      6.1
      are fair
      and reasonably required for the protection of the Buyer and the Business. If
      a
      final order declares that any term or provision of this Section
      6.1
      is
      invalid or unenforceable, the parties hereto agree that the Governmental Entity
      making the determination of invalidity or unenforceability will have the power
      to reduce the scope, duration or area of the term or provision, to delete
      specific words or phrases or to replace any invalid or unenforceable term or
      provision with a term or provision that is valid and enforceable and that comes
      closest to expressing the intention of the invalid or unenforceable term or
      provision, and this Agreement will be enforceable against the parties as so
      modified. The Seller agrees that any violation of the covenants contained in
      this Section
      6.1
      will
      cause irreparable damage to the Buyer; therefore, in addition to any other
      remedies the Buyer may have under this Agreement or otherwise, the Buyer will
      be
      entitled to an injunction from any court of competent jurisdiction restraining
      the Seller and its Affiliates from committing or continuing any violation of
      this Section
      6.1,
      without
      the requirement of posting any bond or other indemnity.

     

    6.2 Confidentiality.
      At all
      times from and after the Closing Date, except to the extent necessary to enforce
      the Seller’s right under this Agreement, the Seller will, and will cause its
      Affiliates to, keep secret and retain in the strictest confidence, and not
      disclose or use for the benefit of themselves or others, any information with
      respect to the Business or the Company including the Company Intellectual
      Property and other know-how, trade secrets, operational methods, marketing
      plans
      or strategies, product development techniques, plans or processes of the
      Business, that remains in or comes into its possession in any form after the
      Closing, other than any of the foregoing which are in the public domain (except
      through the conduct of Seller or any of its Affiliates that violates this
Section
      6.2)
      (collectively, “Confidential
      Information”).
      In
      the event the Seller or any of its Affiliates is requested or required (by
      oral
      request or written request for information or documents in any proceeding,
      interrogatory, subpoena, civil investigative demand or similar process) to
      disclose any Confidential Information, then the Seller will, to the extent
      practicable without violating applicable legal requirements, notify the Buyer
      promptly in writing of the request or requirement so that the Buyer may seek
      an
      appropriate protective order or waive compliance with this Section
      6.2.
      If, in
      the absence of a protective order or receipt of a waiver hereunder, the Seller
      or any of its Affiliates is, on the written advice of counsel, compelled by
      law
      to disclose any Confidential Information, then the Seller or such Affiliate
      thereof may disclose such Confidential Information, provided that the Seller
      or
      such Affiliate has, (a) to the extent practicable without violating applicable
      legal requirements, given the notice to the Buyer referenced within and (b)
      cooperates, at the Buyer’s request and expense, with the Buyer’s efforts to
      obtain an order or other assurance that confidential treatment will be accorded
      to such Confidential Information.

     

    
      
         

      

      
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    6.3 Public
      Disclosure Unless
      otherwise permitted by this Agreement, the Buyer and the Seller shall consult
      with each other before issuing any press release or otherwise making any public
      statement or making any other public (or non-confidential) disclosure (whether
      or not in response to an inquiry) regarding the terms of this Agreement and
      the
      transactions contemplated hereby, and neither shall issue any such press release
      or make any such statement or disclosure without the prior approval of the
      other
      (which approval shall not be unreasonably withheld), except as may be required
      by law, in which case the party proposing to issue such press release or make
      such public statement or disclosure shall use its commercially reasonable
      efforts to consult with the other party before issuing such press release or
      making such public statement or disclosure. The Buyer agrees not to refer to
      the
      name of any Affiliate of the Seller in any press release or filing with the
      SEC
      without the prior approval of the Seller (which approval shall not be
      unreasonably withheld if such reference has been required by the
      SEC).

     

    6.4 Consents;
      Cooperation.
      The
      Member and the Seller shall promptly apply for or otherwise seek, and use
      commercially reasonable efforts to obtain, all consents and approvals required
      to be obtained by them for the consummation of the transactions contemplated
      hereby. 

     

    6.5 Legal
      Requirements.
      Each of
      the parties hereto shall take all reasonable actions necessary to comply
      promptly with all legal requirements which may be imposed on them with respect
      to the consummation of the transactions contemplated by this Agreement and
      will
      promptly cooperate with and furnish information to any party hereto necessary
      in
      connection with any such requirements imposed upon such other party in
      connection with the consummation of the transactions contemplated by this
      Agreement and will take all commercially reasonable actions necessary to obtain
      (and will cooperate with the other parties hereto in obtaining) any consent,
      approval, order or authorization of, or any registration, declaration or filing
      with, any Governmental Entity or other person, required to be obtained or made
      in connection with the taking of any action contemplated by this
      Agreement.

     

    6.6 Blue
      Sky Laws.
      The
      Buyer shall comply with the securities and blue sky laws of all jurisdictions
      which are applicable to the issuance of the Warrant to the Member in connection
      with the transactions contemplated hereby.

     

    6.7 Further
      Assurances.
      Each of
      the parties to this Agreement shall use its commercially reasonable efforts
      to
      effectuate the transactions contemplated hereby and to fulfill and cause to
      be
      fulfilled the conditions to closing under this Agreement. Each party hereto,
      at
      the reasonable request of another party hereto, shall execute and deliver such
      other instruments and do and perform such other acts and things as may be
      necessary or desirable for effecting completely the consummation of this
      Agreement and the transactions contemplated hereby.

     

    ARTICLE
      VII 

    INDEMNIFICATION

     

    7.1 Indemnification
      of Buyer.
      The
      Buyer and each of its officers, directors, employees, stockholders and agents
      (each, a “Indemnified
      Party”)
      shall
      be entitled to be indemnified by the Seller, against any and all Losses suffered
      or incurred by such Indemnified Party, arising from, relating to or otherwise
      in
      connection with:

     

    (a) any
      breach of any representation or warranty of the Company, the Member or the
      Seller contained in this Agreement as modified by the exceptions thereto and
      other disclosures included in the Disclosure Schedule or in any other agreement
      or instrument furnished to the Buyer pursuant to this Agreement;

     

    
      
         

      

      
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    (b) any
      breach or failure to perform any covenant or agreement of the Member or the
      Seller contained in this Agreement or any agreement or instrument furnished
      by
      the Company or the Member pursuant to this Agreement;

     

    (c) any
      claim
      by a member of the Company, or by any other Person, seeking to assert the rights
      of a member in respect of the period prior to the Closing based upon: (i)
      ownership or rights to ownership of any membership interests in the Company;
      (ii) any violation or alleged violation of a right of a member of the Company,
      including any preemptive right or right to notice or to vote; or (iii) any
      violation or alleged violation of a right under the operating agreement of
      the
      Company;

     

    (d) any
      legal, accounting, or advisory expenses of the Seller incurred in connection
      with the transaction contemplated by this Agreement; or

     

    (e) any
      Liability of the Company in excess of $8,500,000, provided that for the purpose
      of this Section
      7.1(e)“Liability”
shall
      mean (i) all accounts payable of the Company as of the Closing
      Date and (ii) any claim for damages resulting from a default by the Company
      of
      any Material Company Contract arising before the Closing Date and without regard
      to notice, any applicable cure period or both;

     

    provided,
      however, that the Indemnified Parties shall not be entitled to recover any
      Losses under clauses (a) and (e) above unless the aggregate of all Losses for
      which the Seller would, but for this proviso, be liable exceeds on a cumulative
      basis an amount equal to $100,000 (the “Deductible”),
      at
      which point the Indemnified Parties shall become eligible to recover the
      aggregate of all Losses in excess of the Deductible.

     

    7.2 Indemnification
      Claims.

     

    (a) In
      order
      for an Indemnified Party to be entitled to any indemnification provided for
      under Section
      7.1
      in
      respect of, arising out of or involving a claim by a third party (“Third
      Party Claim”),
      such
      Indemnified Party must notify the Seller in writing of the Third Party Claim
      within 30 days after receipt by such Indemnified Party of notice of the Third
      Party Claim; provided, however, that failure to give such notification shall
      not
      affect the indemnification provided under Section
      7.1
      except
      to the extent the Seller has been actually prejudiced as a result of such
      failure. Thereafter, the Indemnified Party shall deliver to the Seller, within
      10 days after the Indemnified Party’s receipt thereof, copies of all notices and
      documents (including court papers) received by the Indemnified Party relating
      to
      the Third Party Claim. The Seller shall have the right to assume and exclusively
      conduct and control the defense of such Third Party Claim and the Indemnified
      Party shall have the right to observe and receive information regarding the
      defense of such claim. The Seller shall not, without the prior written consent
      of the Indemnified Party (such consent not to be unreasonably delayed, withheld
      or conditioned), settle, compromise or offer to settle or compromise any such
      claim or demand on a basis which would result in the imposition of a consent
      order, injunction or decree that does not include an unconditional release
      of
      the Indemnified Party for any liability arising out of such claim or demand
      or
      any related claim or demand. Notwithstanding the foregoing, with respect to
      Third Party Claims related to Section
      7.1(e),
      the
      Indemnified Party shall conduct and control the defense of such Third Party
      Claim and the Seller shall have the right to participate in the defense of
      such
      claim at its own expense. 

     

    
      
         

      

      
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    (b) In
      order
      for an Indemnified Party to be entitled to any indemnification provided for
      under this Agreement other than in respect of, arising out of or involving
      a
      Third Party Claim, such Indemnified Party shall deliver notice of such claim
      with reasonable promptness after discovery of any such claim to the Seller;
      provided, however, that failure to give such notification shall not affect
      the
      indemnification provided under Section
      7.1
      except
      to the extent the Seller has been actually prejudiced as a result of such
      failure. If the Seller does not notify the Indemnified Party within 30 days
      following its receipt of such notice that the Seller disputes its liability
      to
      the Indemnified Party, such claim specified by the Indemnified Party in such
      notice shall be conclusively deemed a liability of the Seller under Section
      7.1
      and the
      Seller shall pay the amount of the Losses stated in such notice to the
      Indemnified Party in the manner set forth in Section
      7.3
      or, in
      the case of any notice in which the Losses (or any portion thereof) are
      estimated, on such later date when the amount of such Losses (or such portion
      thereof) becomes finally determined.

     

    7.3 Limitations.
      Recourse
      for indemnification for Losses (in excess of the Deductible, if applicable)
      of
      the Buyer and any other Indemnified Party shall be limited to 50% of the
      Purchase Price (the “Indemnification
      Cap”).
      Indemnification for Losses of the Buyer and any other Indemnified Party shall
      be
      recovered exclusively by, and in the order or priority of, (a) offsetting
      against 50% of any payments due the Seller under Sections
      2.2(b) and
      (c)
      hereof,
      (b) cancelling all or a portion of the Warrant (at the value thereof at the
      time
      the Buyer’s or Indemnified Party’s liability for such Losses is financially
      determined and not subject to appeal), and/or (c) recovering from the Buyer
      its
      net proceeds from the disposition of the Warrant or the Warrant Shares, and
      such
      offset, cancellation and/or recovery shall be the sole and exclusive remedy
      of
      the Buyer and any other Indemnified Party for any Losses suffered or incurred
      by
      the Buyer or such Indemnified Party, arising from, relating to or otherwise
      in
      connection with matters set forth in this Agreement; provided, however, that
      such indemnification limitation shall not apply to fraud or criminal acts on
      the
      part of the Seller. The remedies of the Indemnified Parties for fraud in the
      inducement or criminal acts (as determined by a final judgment of a court of
      competent jurisdiction) by the Member or the Seller shall not be subject to
      any
      limitation pursuant to this Agreement.

     

    7.4 Termination
      of Indemnification.

     

    (a) The
      obligations to indemnify and hold harmless an Indemnified Party hereto pursuant
      to this Article
      VII
      shall
      terminate on the six months anniversary of the Closing except with respect
      to
      any Losses as to which the Indemnified Party shall have previously made a claim
      by delivering a notice of such claim to the Seller. 

     

    (b) The
      representations and warranties of the Company, the Member and the Seller shall
      survive the Closing and expire on the six months anniversary of the
      Closing.

     

    7.5 No
      Right of Contribution.
      The
      Seller shall not have any right of contribution against the Company or the
      Member with respect to any breach by the Company or the Member of any of its
      representations, warranties, covenants or agreements.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    


    7.6 Mitigation.
      Each
      party agrees to use reasonable efforts to mitigate any Loss that forms the
      basis
      of a claim hereunder.

     

    7.7 Anti-Sandbagging.
      The
      Buyer shall be deemed to have waived in full any breach of the Member’s and/or
      the Seller’s representations and warranties and any covenants and agreements of
      the Member and/or the Seller to the extent the Buyer is aware of such breach
      as
      of Closing and determines to proceed with the Closing.

     

    ARTICLE
      VIII 

    GENERAL
      PROVISIONS

     

    8.1 Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed given if delivered personally or by commercial delivery service, or
      mailed by registered or certified mail (return receipt requested) or sent via
      facsimile (with confirmation of receipt) to the parties at the following address
      (or at such other address for a party as shall be specified by like
      notice):

     

    (a)         
       if
      to the
      Buyer to:

     

    SouthPeak
      Interactive Corporation

    2900
      Polo
      Parkway

    Midlothian,
      Virginia 23113

    Attn:
      Terry Phillips

     

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

     

    Greenberg
      Traurig, LLP

    1750
      Tysons Boulevard

    Suite
      1200

    McLean,
      Virginia 22102

    Attn: Mark
      Wishner, Esq.

     

    (b)         
       if
      to the
      Member (after the Closing) to:

     

    Vid
      Sub,
      LLC

    c/o
      SouthPeak Interactive Corporation

    2900
      Polo
      Parkway

    Midlothian,
      Virginia 23113

    Attn:
      Terry Phillips

     

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

     

    Greenberg
      Traurig, LLP

    1750
      Tysons Boulevard

    Suite
      1200

    McLean,
      Virginia 22102

    Attn: Mark
      Wishner, Esq.

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    


    (c)         
       if
      to the
      Seller to:

     

    Vid
      Agon,
      LLC

    1000
      Wilson Boulevard

    Arlington,
      Virginia 22209

    Attn:
      Stephen Gibson

     

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

     

    Fulbright
      & Jaworski L.L.P.

    Fulbright
      Tower

    1301
      McKinney

    Suite
      5100

    Houston,
      Texas 77010

    Attn:
      Edward Rhyne, Esq.

     

    8.2 Counterparts.
      This
      Agreement may be executed in one or more counterparts, including by facsimile
      and/or PDF, all of which shall be considered one and the same agreement and
      shall become effective when one or more counterparts have been signed by each
      of
      the parties and delivered to the other parties, it being understood that all
      parties need not sign the same counterpart.

     

    8.3 Entire
      Agreement; Nonassignability; Parties in Interest.
      This
      Agreement and the documents and instruments and other agreements specifically
      referred to herein or delivered pursuant hereto, including the Exhibits and
      the
      Disclosure Schedule (a) constitute the entire agreement among the parties with
      respect to the subject matter hereof and supersede all prior agreements and
      understandings, both written and oral, among the parties with respect to the
      subject matter hereof, except for the Exclusivity Letter, dated October 5,
      2008,
      by and between the Buyer and the Seller; (b) are not intended to confer upon
      any
      other person any rights or remedies hereunder, and (c) shall not be assigned.
      No
      representations, warranties, inducements, promises or agreements, oral or
      written, by or among the parties not contained herein shall be of any force
      of
      effect. 

     

    8.4 Severability.
      If any
      provision of this Agreement, or the application thereof, becomes or is declared
      by a court of competent jurisdiction to be illegal, void or unenforceable,
      the
      remainder of this Agreement will continue in full force and effect and the
      application of such provision to other persons or circumstances will be
      interpreted so as reasonably to effect the intent of the parties hereto. The
      parties further agree to replace such void or unenforceable provision of this
      Agreement with a valid and enforceable provision that will achieve, to the
      extent possible, the economic, business and other purposes of such void or
      unenforceable provision. 

     

    8.5 Amendment.
      The
      parties hereto may cause this Agreement to be amended at any time by execution
      of an instrument in writing signed on behalf of each of the parties
      hereto.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    8.6 Governing
      Law  This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware, without regard to the laws that might otherwise govern under
      applicable principles of conflicts of law. Each of the parties hereto
      irrevocably consents to the exclusive jurisdiction of any state or Federal
      court
      located within the City of Richmond, Virginia in connection with any matter
      based upon or arising out of this Agreement or the matters contemplated herein,
      agrees that process may be served upon them in any manner authorized by the
      laws
      of the Commonwealth of Virginia for such persons and waives and covenants not
      to
      assert or plead any objection which they might otherwise have to such
      jurisdiction and such process.

     

    8.7 Rules
      of Construction.
      The
      parties hereto agree that they have been represented by counsel during the
      negotiation, preparation and execution of this Agreement and, therefore, waive
      the application of any law, regulation, holding or rule of construction
      providing that ambiguities in an agreement or other document will be construed
      against the party drafting such agreement or document.

     

    8.8 Tax
      Returns.
      The
      Seller shall cause to be prepared and filed for all taxable years of the Company
      ending prior to the Closing Date, including the short taxable year ending on
      the
      Closing Date, the Company’s Forms 1065, U.S. Return of Partnership Income,
      including any related Schedules K-1, Partner’s Share of Income, Credits and
      Deductions, etc. After the Closing and in connection with the preparation of
      such Returns, the Buyer shall grant or cause to be granted to the Seller, or
      its
      representatives, access to all of the information, books and records relating
      to
      the Company within the Seller’s or the Company’s possession or control and shall
      furnish the assistance and cooperation of such personnel of the Buyer or the
      Company as may reasonably be requested in connection therewith. Additionally,
      notwithstanding any provision in this Agreement to the contrary, the Seller
      shall (a) serve as the “tax matters partner” within the meaning of Section
      6231(a)(7) of the Code for all taxable years of the Company ending on or prior
      to the Closing Date and shall have all power and authority to take any action
      contemplated by Sections 6221 through 6234 of the Code and (ii) shall have
      the
      right to control any audit or examination by the Internal Revenue Service,
      initiate any claim for refund and contest, resolve and defend against any
      assessment, notice of deficiency, or other adjustment or proposed adjustment
      relating to any and all U.S. federal income Taxes for any taxable period (or
      portion thereof) ending on or prior to the Closing Date.

     

    [Signature
      Page to Follow]

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, this Membership Interest Purchase Agreement has been duly
      executed by the parties as of and on the date first above written.

     

    
      	 	
              BUYER:

            	 
	 	 	 
	 	
              SOUTHPEAK
                INTERACTIVE CORPORATION

            
	 	 	 	 
	 	 	
              By:

            	
              /s/
                Terry Phillips 

            
	 	 	
              Name: Terry
                Phillips 

              Title:
                 Chairman

            
	 	 	 
	 	
              SELLER:  

            
	 	 	 
	 	
              VID
                AGON, LLC 

            
	 	 	 	 
	 	 	
              By:

            	
              /s/
                Stephen P. Gibson

            
	 	 	
              Name: Stephen
                P. Gibson 

              Title: Vice
                President

            
	 	 	 
	 	
              MEMBER:  

            
	 	 	 
	 	
              VID
                SUB, LLC 

            
	 	 	 	 
	 	 	
              By:

            	
              /s/
                Stephen P. Gibson

            
	 	 	
              Name: Stephen
                P. Gibson 

              Title: Vice
                President

            


    

     

    
      
         

      

      
        29