ex101.htm


    ASSET
PURCHASE AGREEMENT

    


    THIS
ASSET PURCHASE AGREEMENT (the “Agreement”) is
entered on September 30, 2008 (the “Effective Date”)
between (i) AudioStocks, Inc., a Delaware corporation (the “Seller”), and (ii)
DAO Information Systems, LLC, a Delaware limited liability company (the “Parent”) and its
wholly owned subsidiary, DAO Information Systems, Inc., a Delaware corporation
(the “Subsidiary” and
collectively with the Parent, the “Buyer”); and (iii)
Luis J. Leung, an individual. The Seller and the Buyer may hereinafter be
referred to individually as a “Party” or
collectively as the “Parties.”

    


    RECITALS

    


    WHEREAS,
Seller desires to sell certain of Seller's assets and properties, including all
rights and interests associated therewith to Buyer; and

    


    WHEREAS,
Buyer desires to purchase from Seller, upon the terms and conditions set forth
herein, such assets, properties, rights and interests and, in connection
therewith, Buyer will assume certain liabilities of Seller.

    


    AGREEMENT

    


    NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and for good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed as follows:

    


    


    ARTICLE
I

     

    DEFINITIONS

    


    1.1           Certain Definitions.
In addition to other terms defined throughout this Agreement, the following
terms have the following meanings when used herein:

    


    (a)
"Assets" shall
include the following assets, properties, rights and interests of
Seller:

    


    (i)           the
existing licensing rights and interests of the Seller associated with the
Seller’s Audiostocks.com business division (the “AudioStocks
Business”) which shall include the trade names “AudioStocks” and
“AudioNews;” the rights to the domain name www.Audiostocks.com; the AudioStocks
logo; and the Audiostocks.com software program including all related files,
documentation, manuals, code and other materials, whether in whole or in part,
including any and all modifications, derivative works, and copies of the
foregoing, regardless of the form or media in or on which they may exist (the
“Seller Intellectual
Property”);

    


     (ii)           all
rights, interest and claims to all accounts receivable related to the
AudioStocks Business as set forth in Schedule A
(collectively the “Accounts
Receivable”);

    


    (iii)           all
future Net Sales Proceeds1 from the eventual sale of all
shares of stock held by the Seller as set forth in Schedule B
(collectively the “Seller Securities”);
and

    


    (iv)           all
of the intangible rights and property of Seller related to the AudioStocks
Business, including going concern value, goodwill, websites, URL listings and
e-mail addresses; and

    


    (v)           all
data and records ("Records") related to
the AudioStocks Business, including client and customer lists and records,
referral sources, research and development reports and records, referral
sources, research and development reports and records, production reports and
records, service and warranty records, equipment logs, operating guides and
manuals, financial and accounting records, creative materials, advertising
materials, promotional materials, studies, reports, correspondence and other
similar documents and records;

    


    (b)           "Assumed Liabilities"
means all liabilities whatsoever relating to the AudioStocks business to be
assumed by Buyer, including those known and unknown, disclosed and undisclosed,
contingent, and including, but not limited to, the specific liabilities of
Seller set forth in Schedule
C.

    


    (c)           "Consent" means any
notice to or consent, approval, authorization, order, filing, registration or
qualification of or with any court, governmental body or third
party.

    


    (d)           "Business Day" means
any day other than (a) Saturday or Sunday or (b) any other day on which banks in
California are permitted or required to be closed.

    


    (e)           "Governmental Body"
means any:

    


    (i)           nation,
state, county, city, town, borough, village, district or other
jurisdiction;

    


    (ii)           federal,
state, local, municipal, foreign or other government;

    


    (iii)           governmental
or quasi-governmental authority of any nature (including any agency, branch,
department, board, commission, court, tribunal or other entity exercising
governmental or quasi-governmental powers);

    


    (iv)           multinational
organization or body;

    


    (v)           body
exercising, or entitled or purporting to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power; or

    


    (vi)           official
of any of the foregoing.

    


    (f)           "Legal Requirement"
means any federal, state, local, municipal, foreign, international,
multinational or other constitution, law, ordinance, principle of common law,
code, regulation, statute or treaty.

    


    (g)           "Person" means an
individual, partnership, corporation, business trust, limited liability company,
limited liability partnership, joint stock company, trust, unincorporated
association, joint venture or other entity or a Governmental Body.

    


    


    ARTICLE
II

     

    PURCHASE
AND SALE

    


    2.1           Purchase. Upon the
terms and subject to the conditions set forth herein, on the Closing Date (as
defined herein), Buyer shall purchase from Seller the Assets, and Seller shall
sell and convey the Assets to Buyer.

    


    2.2           Transfer of Assets.
Upon the terms and subject to the conditions set forth herein, Seller shall, on
the Closing Date, sell and transfer to Buyer all right, title and interest of
Seller in and to the Assets. Seller shall execute and deliver all additional
transfer documents required in order to convey title to all of the Assets. The terms and conditions of the transfer of Assets related to
the eventual sale of the Seller Securities and receipt of the Accounts
Receivable following the Closing Date shall be governed by Section 6.1
herein.

    


    2.3           Consideration; Assumption of
Liabilities. In consideration for the transfer of the Assets, upon the
terms and subject to the conditions set forth herein, Buyer shall, on the
Closing Date, assume all Assumed Liabilities. Buyer shall execute and deliver
all additional documents required in order to effectuate such assumption of
Assumed Liabilities. The terms and conditions of the payment
of the Assumed Liabilities following the Closing Date shall be governed by
Section 6.1 herein.

    


    


    ARTICLE
III

     

    CLOSING

    


    3.1           Closing. On the terms
and subject to the conditions set forth in this Agreement, the closing of the
transactions contemplated herein (the "Closing") shall take
place after the Effective Date and as soon as practicable following the
satisfaction of all conditions set forth herein (the "Closing
Date").

    


    


    ARTICLE
IV

     

    REPRESENTATIONS
AND WARRANTIES OF SELLER

    


    Seller
represents and warrants on the date hereof and on the Closing Date that the
following representations and warrants are true and correct:

    


    4.1           Organization.  Seller
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite power and authority to own
or lease the properties used in its business and to carry on such business as
presently conducted.

    


    4.2           Authorization. This
Agreement has been duly authorized, executed and delivered by Seller, and this
Agreement is the legal, valid and binding obligation of Seller, enforceable
against it in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization and other laws affecting the enforcement of
creditors' rights generally and by principles of equity.

    


    4.3           Intellectual
Property.  The Seller Intellectual Property constitutes
substantially all of the intellectual property used in or necessary to conduct
the AudioStocks Business as conducted prior to the Closing. Buyer expressly
acknowledges that they have been noticed that Seller does not own the rights to
the Seller Intellectual Property, but rather licenses such rights from certain
third parties (the “Third Party
Licensors”) pursuant to a licensing agreement (the “Licensing
Agreement”). Upon Closing, the Seller and the Third Party Licensors shall
deliver to the Buyer an acknowledgment and consent amendment to the Licensing
Agreement (the “Licensing Agreement,”
a copy of which has been attached hereto as Exhibit A)
authorizing and approving of the transfer of licensing rights to the Seller
Intellectual Property pursuant to the terms of the Licensing Agreement. The
Licensing Rights to the Seller Intellectual Property shall be transferred to the
Buyer and shall continue under the same terms of the original Licensing
Agreement.

    


    4.4           Brokers. No broker,
investment banker or other Person is entitled to any broker's, finder's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Seller.

    


    


    ARTICLE
V

     

    REPRESENTATIONS
AND WARRANTIES OF BUYER

    


    Buyer
represents and warrants to Seller on the date hereof and on the Closing Date
that the following representations and warranties are true and
correct:

    


    5.1           Organization; Qualification;
Subsidiaries.   Parent is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to enter into this Agreement.
Subsidiary is a newly formed Delaware corporation that has never conducted
business.

    


    5.2           Authorization. This
Agreement has been duly authorized, executed and delivered by Buyer, and this
Agreement is the legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with their respective terms, except to the extent
that enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization and other laws affecting the enforcement of
creditors' rights generally and by principles of equity.

     

    5.3           No Conflict or Violation;
Default. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate, conflict with
or result in a breach of or constitute a default under (a) or result in the
termination or the acceleration of, or the creation in any Person of any right
(whether or not with notice or lapse of time or both) to declare a default,
accelerate, terminate, modify or cancel any indenture, contract, lease,
sublease, loan agreement, note or other obligation or liability (each, a "Buyer Contract") to
which Buyer is a party or by which it is bound, (b) any provision of the
certificate of incorporation or bylaws Buyer, (c) any judgment, order, decree,
rule or regulation of any Governmental Body to which Buyer’s business is subject
or (d) any applicable laws or regulations. There is no (with or without the
lapse of time or the giving of notice or both) violation or default or, to the
knowledge of Buyer, threatened violation or default of or under any Buyer
Contract.

    


    5.4           Compliance with
Laws.  Buyer’s business has at all times been conducted and is
currently in compliance with all applicable laws, regulations, rules ordinances,
bylaws, orders and determinations of any Governmental Body, including those
related to the environment or health and safety, and whether existing on or
prior to the date hereof or subsequently amended, enacted or
promulgated.

    


    5.5           Consents.  No
Consent is required to be made or obtained by Buyer in connection with the
execution and delivery of this Agreement or the consummation by Buyer of the
transactions contemplated herein.

    


    5.6           Litigation. There is
no claim, action, suit, proceeding, or investigation pending or, to the
knowledge of Buyer threatened against Buyer or its directors, officers, agents
or employees (in their capacity as such) relating to Buyer’s business, its
assets or any properties or rights of Buyer’s business or that is reasonably
likely to adversely affect the transactions contemplated hereby. There are no
orders, writs, injunctions or decrees currently in force against Buyer or its
directors, officers, agents or employees (in their capacity as such) with
respect to the conduct of Buyer’s business.

    


    5.7           Brokers. There is no
investment banker, broker, finder, financial advisor or other person which has
been retained by or is authorized to act on behalf of Buyer who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.

    


    


    ARTICLE
VI

     

    ADDITIONAL
AGREEMENTS

    


    6.1           Payment of Assumed
Liabilities.  Following the Closing and assumption of Assumed
Liabilities, Buyer hereby covenants and agrees as follows:

    


    (a)           
Payment of Assumed
Liabilities from Future Buyer Revenues.   Subsequent to
Closing, Buyer’s future gross revenues from all business and financing
operations (the “Future Revenues”)
shall be allocated directly towards the payment of the Assumed Liabilities. The
priority of payment of each individual liability of the Assumed Liabilities from
the Future Revenues shall be payable to according to the priority schedule
listed in Schedule
C. Buyer shall provide Seller with an accounting of all Future Revenues
on a quarterly basis beginning December 31, 2008 or at anytime upon demand by
Seller. In the event the Buyer does not deliver any portion of the Future
Revenues in accordance with the terms herein, Seller shall have the exclusive
right to retain from the Accounts Receivable amount due to the Buyer as
described in Section 6.1(b) below, the dollar amount of such Future Revenues
that should have been applied to the Assumed Liabilities from such Future
Revenues.

    


    (b)           Payment of Assumed
Liabilities from Accounts Receivable.   Due to the
difficulties associated with the valid transfer of the Accounts Receivable from
the Seller to the Buyer, the Parties hereby agree that such Accounts Receivable
shall remain in the Seller’s name as nominee for the benefit of the Buyer.
Following the eventual and final receipt, if any, of the Accounts Receivable,
the Seller shall deliver 100% of funds from such Accounts Receivable directly
towards the payment of the Assumed Liabilities. The priority of payment of each
individual liability of the Assumed Liabilities from the receipt of the Accounts
Receivable, if any, shall be payable to according to the priority schedule
listed in Schedule
C.

    


    (c)           Payment of Assumed
Liabilities from Seller Securities.   Due to the
difficulties associated with the valid transfer of the Seller Securities from
the Seller to the Buyer, the Parties hereby agree that such Seller Securities
shall remain in the Seller’s name as nominee for the benefit of the Buyer.
Following the eventual and final sale of the Seller Securities and receipt of
the Net Sales Proceeds (“Net Sales Proceeds”
shall equal the gross proceeds received from the sale of the Seller Securities,
less reasonable brokerage commissions and related fees, including reasonable
legal and accounting fees.thereunder) if any, the Seller shall deliver
100% of the Net Sales Proceeds from the sale of such securities directly towards
the payment of the Assumed Liabilities. The priority of payment of each
individual liability of the Assumed Liabilities from the Net Sales Proceeds from
the sale of the Seller Securities, if any, shall be payable to according to the
priority schedule listed in Schedule
C.

    


    (d)           Reversion of
Assets.  In the event the Assumed Liabilities are not
completely satisfied within thirty six (36) months following the Closing Date
from funds pursuant to Section 6.1 (a) thru (c) herein, or in the event of a
breach of any section or term of this Agreement by the Buyer the Assets shall
automatically revert back to the Seller (an “Asset Reversion”);
provided, however, in
the event of an Asset Reversion, as compensation for the use of the Assets for
the period following the Closing and prior to an Asset Reversion, the Purchaser
shall remain liable for the payment of all Assumed Liabilities and any and all
Assumed Liabilities due and payable to any officer, director or employee of the
Buyer shall automatically be forgiven.

     

    
      “Net Sales Proceeds”
shall equal the gross proceeds received from the sale of the Seller Securities,
less reasonable brokerage commissions and related fees, including reasonable
legal and accounting fees.



    


    6.2           Reasonable Best
Efforts.

    


    (a)           Upon
the terms and subject to the conditions set forth in this Agreement, each of the
Parties hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other Parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
sale of the Assets to Buyer and the other transactions contemplated by this
Agreement, including: (i) obtaining all necessary actions or nonactions,
waivers, consents and approvals from all Governmental Bodies and the making of
all necessary registrations and filings (including filings with Governmental
Bodies) and taking all reasonable steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by, any
Governmental Body; (ii) obtaining all necessary Consents; (iii) defending any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Body vacated or reversed; and (iv)
executing and delivering any additional instruments necessary to consummate the
transactions contemplated by this Agreement. No Party shall consent to any
voluntary delay of the consummation of the sale of the Assets at the behest of
any Governmental Body without the consent of the other Parties to this
Agreement, which consent shall not be unreasonably withheld.

    


    (b)           Each
Party hereto shall use its reasonable best efforts not to take any action, or
enter into any transaction, which would cause any of its representations or
warranties contained in this Agreement to be untrue in any material respect or
result in a material breach of any covenant made by it in this Agreement or
which could reasonably be expected to impede, interfere with, prevent or delay
in any material respect, the sale of the Assets.

    


    6.3           Public Announcements.
Neither Buyer nor Seller shall issue any press release with respect to the
transactions contemplated by this Agreement or otherwise issue any written
public statements with respect to such transactions without prior consultation
with the other Party, except as may be required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange or the rules of the NASDAQ national market ("NASDAQ").

    


    6.4           Employees and Employee
Benefits.

    


    (a)           Information on Active
Employees. For the purpose of this Agreement, the term "Active Employees"
shall mean all employees employed on the Closing Date by Seller for its
AudioStocks Business who are employed exclusively in Seller's AudioStocks
Business as currently conducted, including employees on temporary leave of
absence, including family medical leave, military leave, temporary disability or
sick leave, but excluding employees on long-term disability leave.

    


    (b)           Employment of Active
Employees by Buyer.

    


    (i)           Buyer
is not obligated to hire any Active Employee but may interview all Active
Employees for employment purposes. Buyer will provide Seller with a list of
Active Employees to whom Buyer has made an offer of employment that has been
accepted to be effective on the Closing Date (the "Hired Active
Employees"). Subject to Legal Requirements, Buyer will have reasonable
access to the Seller's office and personnel records (including performance
appraisals, disciplinary actions, grievances and medical records) of Seller for
the purpose of preparing for and conducting employment interviews with all
Active Employees and will conduct the interviews as expeditiously as possible
prior to the Closing Date. Access will be provided by Seller upon reasonable
prior notice during normal business hours. Effective immediately before the
Closing, Seller will terminate the employment of all of its Hired Active
Employees.

    


    (ii)           It
is understood and agreed that (A) Buyer's expressed intention to extend offers
of employment as set forth in this Section 6.4 shall not constitute any
commitment, Contract or understanding (expressed or implied) of any obligation
on the part of Buyer to a post-Closing employment relationship of any fixed term
or duration or upon any terms or conditions other than those that Buyer may
establish pursuant to individual offers of employment, and (B) employment
offered by Buyer is "at will" and may be terminated by Buyer or by an employee
at any time for any reason (subject to any written commitments to the contrary
made by Buyer or an employee and Legal Requirements). Nothing in this Agreement
shall be deemed to prevent or restrict in any way the right of Buyer to
terminate, reassign, promote or demote any of the Hired Active Employees after
the Closing or to change adversely or favorably the title, powers, duties,
responsibilities, functions, locations, salaries, other compensation or terms or
conditions of employment of such employees.

    


    6.5           Retention Records and
Access. After the Effective Date, Buyer shall retain for a period of ten
(10 years, those Records of Seller delivered to Buyer. Buyer also shall provide
Seller and its representatives reasonable access thereto, during normal business
hours and on at least three days' prior written notice, to enable them to
prepare financial statements. After the Effective Date, Seller shall provide
Buyer and its representatives reasonable access to Records, during normal
business hours and on at least three days' prior written notice, for any
reasonable business purpose specified by Buyer in such notice.

    


    


    ARTICLE
VII

     

    TERMINATION,
AMENDMENT AND WAIVER

    


    7.1           Termination. Subject
to Section 7.2 herein, this Agreement may be terminated at any time prior to the
Closing:

    


    (a)           by
mutual written consent of Buyer and Seller;

    


    (b)           by
Seller if the Buyer shall have failed to comply in any material respect with any
of its covenants or agreements contained in this Agreement; or

    


    (c)           by
Seller if any court or other Governmental Body having jurisdiction over a Party
hereto shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the consummation of
the sale of the Assets and such order, decree, ruling or other action shall have
become final and nonappealable;

    


    7.2           Waiver. At any time
prior to the Closing, the Parties hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other Parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein which may legally be
waived. Any agreement on the part of a Party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such Party.

    


    


    ARTICLE
VIII

     

    INDEMNIFICATION

    


    8.1           Indemnification by
Buyer. The Buyer agrees to indemnify the Seller and hold harmless against
any losses, claims, damages or liabilities incurred by the Seller, in connection
with, or relating in any manner, directly or indirectly, to the Seller in
connection with this Agreement, unless it is determined by a court of competent
jurisdiction that such losses, claims, damages or liabilities arose out of the
Seller’s gross negligence, willful misconduct, dishonesty or fraud.
Additionally, the Buyer agrees to reimburse the Seller immediately for any and
all expenses, including, without limitation, attorney fees, incurred by the
Seller in connection with investigating, preparing to defend or defending, or
otherwise being involved in, any lawsuits, claims or other proceedings arising
out of or in connection with or relating in any manner, directly or indirectly,
from the Agreement (as defendant, nonparty, or in any other capacity other than
as a plaintiff, including, without limitation, as a party in an interpleader
action). The Buyer further agrees that the indemnification and reimbursement
commitments set forth in this section shall extend to any controlling person,
strategic alliance, partner, member, shareholder, director, officer, employee,
agent or subcontractor of the Seller and their heirs, legal representatives,
successors and assigns. The provisions set forth in this section shall remain in
full force and effect for 120 months thereafter, at which time all such claims
shall terminate except such claims notice of which has been given to Seller
prior to the expiration of such period.

    


    


    ARTICLE
IX

     

    MISCELLANEOUS

    


    9.1           Expenses. Seller and
Buyer shall each pay all costs and expenses incurred by it on its behalf, in
connection with this Agreement and the transactions contemplated hereby,
including fees and expenses of their financial consultants, accountants and
legal counsel.

    


    9.2           Notices. All notices,
requests, demands and other communications given hereunder shall be in writing
and delivered personally or by overnight courier to the Parties at the following
addresses or sent by telecopier or telex, with confirmation received, to the
telecopy specified below:

    


    
      	
              If to Seller:

               

              AudioStocks,
      Inc.

              2038
      Corte del Nogal, Suite 110

              Carlsbad,
      California 92011

              Fax-
      760-804-8845

            	
              If to Parent or Subsidiary:

               

              DAO
      Information Systems, LLC

              15818
      SweetRose Place

              Houston,
      Texas  77095

              Fax-
      832-202-2474

            


    

    


    All
notices shall be deemed delivered when actually received if delivered personally
or by overnight courier, sent by telecopier or telex (promptly confirmed in
writing), addressed as set forth above. Each of the Parties shall hereafter
notify the other in accordance with this section of any change of address or
telecopy number to which notice is required to be mailed.

    


    9.3           Necessary
Acts.  Each Party to this Agreement agrees to perform any
further acts and execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.

    


    9.4           Counterparts. This
Agreement may be executed simultaneously in one or more counterparts, and by
different Parties hereto in separate counterparts, each of which when executed
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.

    


    9.5           Entire Agreement;
Modifications; Waiver.  This Agreement constitutes the entire
agreement between the Parties pertaining to the subject matter contained in it.
This Agreement supersedes all prior and contemporaneous agreements,
representations, and understandings of the Parties.  No supplement,
modification, or amendment of this Agreement shall be binding unless executed in
writing by all the Parties.  No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.  No waiver shall be binding unless executed in writing by the
Party making the waiver.

    


    9.6           Headings. The
headings contained in this Agreement and in the Schedules and Exhibits hereto
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

    


    9.7           Assignment. This
Agreement shall be binding upon the respective successors and assigns of the
Parties hereto. This Agreement may not be assigned by any Party hereto without
the prior written consent of the Seller.

    


    9.8           Governing
Law.  The subject matter of this Agreement shall be governed by
and construed in accordance with the laws of the State of California (without
reference to its choice of law principles) as applied to residents of the State
of California relating to contracts executed in and to be performed solely
within the State of California, and to the exclusion of the law of any other
forum, without regard to the jurisdiction in which any action or special
proceeding may be instituted.  EACH PARTY HERETO AGREES TO SUBMIT TO
THE PERSONAL JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED
IN NORTH COUNTY OF SAN DIEGO, CALIFORNIA FOR RESOLUTION OF ALL DISPUTES ARISING
OUT OF, IN CONNECTION WITH, OR BY REASON OF THE INTERPRETATION, CONSTRUCTION,
AND ENFORCEMENT OF THIS AGREEMENT, AND HEREBY WAIVES THE CLAIM OR DEFENSE
THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT FORUM. AS A MATERIAL
INDUCEMENT FOR THIS AGREEMENT, EACH PARTY SPECIFICALLY WAIVES THE RIGHT TO TRIAL
BY JURY OF ANY ISSUES SO TRIABLE.

    


    9.9           Attorneys’
Fees.  Should any Party hereto employ an attorney for the
purpose of enforcing or constituting this Agreement, or any judgment based on
this Agreement, in any legal proceeding whatsoever, including insolvency,
bankruptcy, arbitration, declaratory relief or other litigation, the prevailing
party shall be entitled to receive from the other Party or Parties thereto
reimbursement for all reasonable attorneys’ fees and all reasonable costs,
including but not limited to service of process, filing fees, court and court
reporter costs, investigative costs, expert witness fees, and the cost of any
bonds, whether taxable or not, and that such reimbursement shall be included in
any judgment or final order issued in that proceeding.

    


    9.10           Specific
Performance.  The Parties hereby acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached.  It is accordingly agreed that the Parties shall
have the right to demand specific performance of the terms, and each of them, of
this Agreement.

    


    9.11           Severability. If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any Party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties hereto shall negotiate in good faith to modify
this Agreement so as to affect the original intent of the Parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.

    


    9.12           Conflicts of
Interest.  The Parties shall exercise their best efforts to
make the other party aware of any conflicts of interest that exist, including
any conflicts of interest related to any other business or entity that a Party
beneficially owns or controls. Such conflicts of interest known as of the
Effective Date herein have been disclosed in Exhibit B.
Disclosure, acknowledgment and waiver of future discovered or created conflicts
of interest may be made in writing or through oral communication.

    


    9.13           Joint Drafting and Exclusive
Agreement.  This Agreement is the only Agreement executed by
and between the Parties related to the subject matter described
herein.  There are no additional oral agreements or other
understandings related to the subject matter described herein.  This
Agreement shall be deemed to have been drafted jointly by the Parties hereto,
and no inference or interpretation against any one Party shall be made solely by
virtue of such Party allegedly having been the draftsperson of this
Agreement.  The Parties have each conducted sufficient and appropriate
due diligence with respect to the facts and circumstances surrounding and
related to this Agreement.  The Parties expressly disclaim all
reliance upon, and prospectively waive any fraud, misrepresentation, negligence
or other claim based on information supplied by the other Party, in any way
relating to the subject matter of this Agreement.

    


    9.14           Acknowledgments and
Assent.  The Parties acknowledge that they have been given at
least ten (10) days to consider this Agreement and that they were advised to
consult with an independent attorney prior to signing this Agreement and that
they have in fact consulted with counsel of their own choosing prior to
executing this Agreement.  The Parties may revoke this Agreement for a
period of three (3) calendar days after signing this Agreement, and the
Agreement shall not be effective or enforceable until the expiration of this
three (3) day revocation period.  The Parties agree that they have
read this Agreement and understand the content herein, and freely and
voluntarily assent to all of the terms herein.  A facsimile copy of
this Agreement shall have the same legal effect as an original of the
same.

    


    9.15           Incorporation of Exhibits
and Schedules. The Exhibits and Schedules hereto are incorporated into
this Agreement and shall be deemed a part hereof as if set forth herein in full.
References herein to "this Agreement" and the words "herein," "hereof" and words
of similar import refer to this Agreement (including its Exhibits and Schedules)
as an entirety. In the event of any conflict between the provisions of this
Agreement and any such Exhibit or Schedule, the provisions of this Agreement
shall control.

    
 

    IN
WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement as
of the day and year first above written.

    


    
      	
              SELLER:

               

              AudioStocks,
      Inc.

               

              /s/ Luis J. Leung

               

              ____________________________

              By:
      Luis J. Leung

              Its:
      President

            	
              PARENT:

               

              DAO
      Information Systems, LLC

               

              /s/ Luis J. Leung

               

              ____________________________

              By:
      Luis J. Leung

              Its:
      Managing Member

               

            
	 
      	
              SUBSIDIARY:

               

              DAO
      Information Systems, Inc.

               

              /s/ Luis J. Leung

               

              ____________________________

              By:
      Luis J. Leung

              Its:
      President

               

            
	 
      	
              Luis
      J. Leung

               

              /s/ Luis J. Leung

               

              ____________________________

              By:
      Luis J. Leung

              An
      individual

            


    

    


    


    


    


    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    


    


    


    
 

    


    SCHEDULES

    


    SCHEDULE
A

    


    Cash
Accounts Receivable

    


    
      	
              Accounts
      Receivable

            	
              Amount
      Due

            	
              Receivable
      Description

            
	 
      	 
      	 
      
	
              China
      Broadband, Inc

               

            	
              $11,000.00

            	
              Service
      Contract

            
	
              International
      Coastal Biofuels, Inc

               

            	
              5,000.00

            	
              Service
      Contract

            
	
              Physicians
      Adult Daycare, Inc

               

            	
              2,120.00

            	
              Press
      Releases

            


    

    


    


    


    


    


    


    


    


     

     

     

     

    
 

    


    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    
 

    


    


    SCHEDULE
B

    


    Seller
Securities

    


    


    
      	
              Issuer

            	
              Symbol

            	
              Number
      of Shares

            
	 
      	 
      	 
      
	
              Mezey
      Howarth Racing Stables, Inc.

            	
              MZYH

            	
              5,000

            
	
              American
      Scientific Resources, Inc.

            	
              ASFX

            	
              200,000

            
	
              Biogold
      Fuels Corporation

            	
              BIFC

            	
              58,750

            
	
              Stimulated
      Environment Concepts, Inc.

            	
              SMEV

            	
              2,500,000

            
	
              Davi
      Skin, Inc.

            	
              DAVN

            	
              304,500

            
	
              XXIS
      Corporation

            	
              XXIS

            	
              200,000

            
	
              XXIS
      Corporation

            	
              XXIS

            	
              200,000

            
	
              Physicians
      Adult Daycare, Inc.

            	
              PHYA

            	
              2,500,000

            
	
              Physicians
      Adult Daycare, Inc.

            	
              PHYA

            	
              1,000,000

            
	
              Sparrowtech
      Resources, Inc.

            	
              SPMC

            	
              750,000

            
	
              Lantis
      Laser, Inc.

            	
              LLSR

            	
              19,000

            
	
              Smart
      SMS Corporation

            	
              STMC

            	
              19,000

            
	
              North
      American Energy Group Corporation

            	
              NNYR

            	
              95,000

            
	
              B2Digital,
      Inc.

            	
              BTDG

            	
              5,475

            
	
              Prime
      Companies, Inc.

            	
              PRMC

            	
              11,400

            
	
              Luvoo
      International, Inc.

            	
              LUVT

            	
              350,000

            
	
              JC
      Data Solutions, Inc.

            	
              JCDS

            	
              342,000

            


    

    


    


    


    


    


    


    


    


    


    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
 

    SCHEDULE
C

    


    Assumed
Liabilities

    


    The below
chart represents the Assumed Liabilities assumed by the Seller in connection
with the Agreement as of the Effective Date. All payments to be made and
applicable to the Assumed Liabilities pursuant to Section 6.1 (the “Assumed Liability
Payments”) herein shall be payable to the individuals or entities below
as follows:

    


    Class 1
Assumed Liability Payments- All Assumed Liability Payments shall
initially be made to the Class 1 individuals or entities based upon the priority
of listing from top to bottom in the chart below. For example, if the initial
Assumed Liability Payment totaled $42,000, the first $27,461.25 would be paid
directly to Chisholm, Bierwolf & Nilson, LLC, the next
$18,504.67  would be paid to Luis J. Leung,  and the
remaining $114.08 would be used to pay down a portion of the $81,963.37 owed to
Black Forest International, LLC.

    


    Class 2
Assumed Liability Payments- Following the payment of all Class 1 Assumed
Liabilities, all Assumed Liability Payments shall next be made to the Class 2
individuals or entities on a pro rata basis based upon the chart below. For
example, if the Assumed Liability Payment due and owing to the Class 2
individuals or entities totaled $100,000, $91,781.33 would be paid directly to
BCGU, LLC and $8,218.66 would be paid directly to Luis J. Leung.

    


    Class 3
Assumed Liability Payments- Following the payment of all Class 2 Assumed
Liabilities, all Assumed Liability Payments shall next be made to the Class 3
individuals or entities on a pro rata basis based upon the chart
below.

    


    The
priority of any Assumed Liability Payment may be amended upon written consent by
both Parties.

    


    
      	
              Class

            	
              Debtor/Vendor

            	
              Amount
      Owed (US $)

            	
              Debt
      Description

            
	 
      	 
      	 
      	 
      
	
              Class
      1

            	
              Chisholm,
      Bierwolf & Nilson, LLC

               

            	
              $27,461.25

            	
              Audit

               

            
	
              Luis
      J. Leung

               

            	
              18,504.67

            	
              Credit
      Advances

               

            
	
              Black
      Forest International, LLC

               

            	
              81,963.37

            	
              Notes
      Payable

            
	
              Class
      2

            	
              BCGU,
      LLC

               

            	
              242,894.34

            	
              Licensing
      Fees related to contracts

               

            
	
              Luis
      J. Leung

               

            	
              21,750.25

            	
              Officer
      Bonus related to contracts

            
	 
      	 
      	 
      	 
      
	
              Class
      3

            	
              The
      Company Corporation

            	
              225.00

            	
              Corporate
      Maintenance

               

            
	
              Ronald
      Garner

               

            	
              3,750.00

            	
              Accrued
      Compensation

               

            
	
              Paychex,
      Inc

               

            	
              279.14

            	
              Payroll
      Service

               

            
	
              American
      Express

               

            	
              2,866.39

            	
              Credit
      Card

               

            
	
              Business
      Wire, Inc.

               

            	
              6,005.00

            	
              Press

               

            
	
              Doty
      Scott Enterprises, Inc.

               

            	
              2,500

            	
              Bookkeeping

               

            
	
              IKON
      Financial Services, Inc.

               

            	
              662.19

            	
              Office
      Support

               

            
	
              Marketwire,
      Inc.

               

            	
              140.00

            	
              Press

               

            
	
              Quotemedia,
      Inc.

               

            	
              1,100

            	
              Technology
      Support

               

            
	
              Softmart,
      Inc.

               

            	
              249.00

            	
              Office
      Support

               

            


    

    


    


    


    


    


    
 

    


    


    


    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    


    


    


    


    


    


    


    


    EXHIBIT
A

    


    Licensing
Agreement

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    


    


    


    


    EXHIBIT
B

    


    Conflicts
of Interest

    


    As of the
Effective Date, the following possible conflicts of interests exist in
relationship to the Agreement:

    


    
      	
              1.  

            	
              Luis J.
      Leung.

            


    

    


    Mr. Leung
is currently President, Secretary, Treasurer and sole Director of AudioStocks,
Inc. In addition, Mr. Leung is currently the Managing Director of DAO
Information Systems, LLC and President, Secretary, Treasurer and sole Director
of DAO Information Systems, Inc.

    


    Mr. Leung
has provided certain IT and technology related advisory services to the Third
Party Licensors. Mr. Leung has received no compensation for such
services.