Unassociated Document


    


    


    


    


    WEB
      SITE COMPANY FORMATION 

    


    DEVELOPMENT
      AND SERVICES AGREEMENT

    


    THIS
      AGREEMENT (the “Agreement”)
      is entered into as of December 2005 by and between Ocean-7 Development, Inc.,
      a
      New York corporation “OCEAN”)
      and DAG Media, Inc., a New York corporation (“DAGM”).
      Capitalized terms used in this Agreement and not defined herein shall have
      the
      meanings ascribed to such terms in this Agreement..

    


    RECITALS

    


    WHEREAS,
      DAGM is a publicly traded corporation engaged in the business of publishing
      and
      distributing yellow pages classified business telephone directories;
      and

    


    WHEREAS,
      OCEAN
      is a
      privately held publishing/technology corporation engaged in the business of
      providing full-service programming and specializes in web and database
      solutions; and

    


    WHEREAS,
      MARK ALHADEFF
      (“MARK”)
      is
an
      OCEAN
      shareholder and an executive and key professional at OCEAN;
      and


    


    WHEREAS,
      SHERRY DAVIS (“SHERRY”) is a majority shareholder at OCEAN; and

    


    WHEREAS,
      DAGM desires to launch a new subsidiary (“NEWCO”) to focus on an online referral
      service; and 

    


    WHEREAS,
      DAGM desires to cooperate and partner with OCEAN for purpose of forming NEWCO,
      developing its business and launching it business; 

    


    NOW,
      THEREFORE, in consideration of the mutual promises and covenants set forth
      below, and for other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, DAGM
      and
      OCEAN
      intending to be legally bound, hereby agree as follows.


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    1.    
      FORMATION
      OF NEWCO

    


    On
      or
      before December 5, 2005 DAGM will establish NEWCO under the Delaware Corporation
      Law by filing a certificate of incorporation with the Secretary of State of
      Delaware. Immediately after incorporation, DAGM shall hold an organization
      meeting to adopt bylaws, elect directors, elect officers and to transact any
      other business necessary or appropriate under this Agreement. After
      incorporation, NEWCO’s Board of Directors shall issue shares of capital stock to
      DAGM and OCEAN in the percentages described in Paragraph 3.3, in exchange for
      the consideration described in this Agreement; provided that these shares shall
      be deemed fully paid and non assessable upon issuance. The parties hereto agree
      that the form on NEWCO’s certificate of incorporation and bylaws shall be
      determined by DAGM, but in any event, for as long as this Agreement is in effect
      and NEWCO is in existence, NEWCO shall be governed by the following provisions:
      (a) NEWCO’s Board of Directors will be comprised of at least 2 individuals; and
      (b) DAGM, as incorporator or shareholder, agrees to elect MARK as one of the
      directors of NEWCO for as long as NEWCO is in existence and OCEAN is providing
      Services (as defined below) to NEWCO. 

    


    2.    
      SCOPE
      OF SERVICES 

    


    OCEAN
      will provide NEWCO with professional
      services
      as outlined below:

    


    2.1    
      Until
      production release of the web site,, OCEAN shall provide professional services
      including: (i) development; (ii) programming; (iii) specifications; (iv) design
      implementations; (v) testing; and (vi) hosting (as described in Statement of
      Work) resulting in the production availability of NEWCO's referral web service
      (description of which is set forth in Statement of Work) and allowing the
      commercial functionality for end-users to interact with the service and support
      potential high capacity nationwide use, including large numbers of transactions
      and large scale revenues. Support for this high capacity usage will require
      a
      hardware environment to be specified by Ocean. The referral service experience
      by end users will conform to a reasonable industry standard of other offerings
      on the Internet. The services shall be deemed to have satisfied the above
      requirements and be complete, delivered and accepted by NEWCO upon the full
      functionality of the web site according to the specifications set forth in
      Statement of Work and the web site being commercially used and there have been
      200 successfully processed consumer requests. Acceptance as provided under
      this
      Paragraph may not be revoked in whole or in part without the written consent
      of
      OCEAN. 

     

    2.2    
      OCEAN
      will provide
      comprehensive
      support
      and
      maintenance
      services
      and hosting for
      the
      web site (as described in Statement of Work) for
      2
      consecutive months after completion of Services and acceptance by
      NEWCO
      of the
      web site developed under Statement of Work. Except as provided in Paragraph
      8.4,
      OCEAN will provide such support services as part of the Services and at no
      additional charge to NEWCO.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    2.3    
      At
      the
      expiration of the initial 2 month support period, NEWCO will pay for its own
      support and maintenance expenses while MARK will supervise, advise and consult
      NEWCO at no cost for as long as OCEAN has outstanding options that have not
      been
      vested pursuant to section 3.2 below. If services of independent contractors
      are
      needed at the expiration of the 2 month period, MARK will use best efforts
      to
      help NEWCO acquire technical services and support at lowest cost possible.
      In
      the event NEWCO wishes that OCEAN will provide the technical support and
      maintenance at the expiration of the 2 month period, NEWCO will pay OCEAN $1350
      per month. The services provided under this fee will not include implementation
      of new features, enhancements of features, or hosting. If NEWCO wishes that
      OCEAN 7 provide hosting after the expiration of the 2 month period, the
      compensation will be $700 per month (with the non-refundable fee of $8400 for
      the full 12-months payable in 12 equal installments of $700 a month due upon
      invoice at the beginning of each month). This hosting fee is based upon less
      than 10,000 consumer requests per day. In the event that the number of consumer
      requests exceeds 10,000 per day, more robust hosting may be needed and the
      pricing for this hosting will be negotiated separately. All monthly fees quoted
      in this paragraph are valid for a 12-month period beginning at the expiration
      of
      the 2 month period. 

    


    2.4    
      Unless
      otherwise agreed in writing by DAGM, OCEAN shall not utilize any contractors
      to
      perform Services. In the event OCEAN utilizes independent contractors approved
      by DAGM to perform certain portions of the Services, OCEAN shall be responsible
      for the quality of the Services performed by the independent contractors and
      for
      the payment to the independent contractors.

     

    2.5    
      The
      parties agree that, except as provided below, the Services shall be supervised
      and directed by MARK. MARK will be the contact person, unless Mark is prevented,
      by illness, accident, disability, death, or act of god, from doing so, in which
      case OCEAN will appoint another contact person with comparable
      skills.

    


    


    3.    
      COMPENSATION
      AND PAYMENT

    


    DAGM
      shall pay OCEAN the following complete and inclusive compensation for
Services
      performed by OCEAN under this Agreement
      as
      follows:

    


    3.1    
      DAGM
      shall issue OCEAN 60,000 restricted shares of its common stock (“DAGM COMMON
      STOCK”) pursuant to RULE 144 promulgated under the Securities Act of 1933, as
      amended (the “ACT”) and according to the following schedule: (i) 20,000 shares
      upon signing of this Agreement and kick off of the project; (ii) 20,000 shares
      10 days following delivery of an internal 80% functional beta site of the
      referral service; and (iii) 20,000 shares 30 days following production release
      of the web site.

    


    
      
        
        

      

      
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    3.2    
       On
      or
      about the signing of this Agreement, DAGM shall grant to OCEAN an option to
      purchase 75,000 shares of DAGM COMMON STOCK under
      DAGM’s stock option
      plan at an exercise price equal to the
      fair
      market value at date of grant according to the following vesting schedule:
      (i)
      25,000 options will be vested on the first anniversary of this
      Agreement,
      if
      NEWCO is still a solvent entity; (ii) 25,000 options will be vested on the
      second anniversary of this Agreement,
      if
      NEWCO is still a solvent entity; and (iii) 25,000 options will be vested at
      the
      third anniversary of this Agreement,
      if
      NEWCO is still a solvent entity. Notwithstanding to the contrary, the vesting
      will not continue according to the schedule above if DAGM lost its majority
      ownership in NEWCO, unless such change in DAGM majority share position was
      due
      to a sale of DAGM shares in NEWCO in which OCEAN did not have equal right to
      participate in.

    


    3.3    
      OCEAN will
      receive 20% stock ownership in NEWCO and DAGM shall receive 80% stock ownership
      in NEWCO. The final legal structure of NEWCO, its Certificate of Incorporation
      and bylaws will be determined
      by DAGM subject to Section 1 hereof. 

    


    3.4     
      The
      compensation provided under Paragraphs 3.1-3.3 above is for services provided
      under this Agreement excluding: (i) services provided pursuant to Paragraph
      2.3
      above for any services performed at the expiration of the initial 2 months
      support period; and (ii) services performed pursuant to the exceptions under
      Paragraph 8.4 below. 

    


    3.5     
      OCEAN
      and
      DAGM agree that when NEWCO reaches $10M
      in
annual
      gross revenue,
      the
      parties will use their best efforts to take NEWCO to IPO or otherwise spin
      it
      off of DAGM.

    


    3.6     
      If
      OCEAN
      desires
      to sell or transfer its ownership in the NEWCO, in whole or in part,
      OCEAN
      shall
      first notify DAGM in writing of the proposed sale or transfer (including the
      price and proposed transferee). DAGM shall have a right of first refusal for
      90
      days to purchase OCEAN’s
      shares
      at the proposed sale price. If DAGM doesn’t exercise its right of first refusal
      within the period provided, OCEAN
      will
      have additional 90 days to conclude the transfer of shares to the proposed
      transferee at the proposed terms, provided DAGM approves the proposed transferee
      in writing. DAGM will not unreasonably hold such approval.

    


    3.7     
      Upon
      execution of this Agreement and approval by DAGM Board of Director, MARK will
      be
      nominated to the
      DAGM
      Board of Directors. MARK
      and
      Assaf Ran, the CEO of DAGM will be nominated to NEWCO Board of Directors for
      as
      long as OCEAN
      desires
      and
      maintains an ownership interest in NEWCO. DAGM agrees to vote its shares in
      NEWCO such that MARK will be elected to the NEWCO Board of Directors.
      MARK’s
      nomination to the DAGM Board of Directors
      is
      subject to DAGM Bylaws.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3.8    
      To
      the
      extent that DAGM has paid OCEAN for a third party provider's invoices, OCEAN
      shall bear the responsibility to make payment to the third party provider and
      OCEAN shall indemnify and hold harmless DAGM from OCEAN’s failure to do
      so.

    


    3.9    
      OCEAN
      shall be responsible for all costs and expenses incurred by OCEAN and its
      approved contractors in performing the Services.

    


    4.    
      NON-COMPETITION

     

    4.1    
      OCEAN,
      MARK and SHERRY agree that for so long as OCEAN is providing Services to
NEWCO
      hereunder or owns any shares in NEWCO,
      and for
      a period of three
      (3)
      years thereafter it shall not independently, through an affiliate or with a
      third party, directly or indirectly, perform services on its own or for another
      company that are substantially similar to the Services performed for
NEWCO
      hereunder to enable
      itself
      or such other company to
      provide
      an on-line
      referral
      service or
      that
      is competing with any current (as of the date of this Agreement) DAGM
      product.

    


    4.2    
      OCEAN
      acknowledges and agrees that the restrictions set forth in Paragraph 4.1 are
      reasonable in scope and duration and are necessary to protect NEWCO,
      and to enable NEWCO
      to
      receive the anticipated benefits of this Agreement and the arrangements
      contemplated herein. The parties hereto agree that, if any of the length of
      time, restriction,
      the scope or another parameter of the restrictions set forth in Paragraph
      4.1 is deemed to be unlawfully restrictive by a court of competent jurisdiction,
      such provision shall be deemed to be amended and shall be construed by such
      court to have the broadest type, scope and duration permissible under applicable
      law, and if no validating construction is possible, shall be severable from
      the
      rest of this Agreement, and the validity, legality or enforceability of the
      remaining provisions of this Agreement shall not in any way be affected or
      impaired thereby.

    


    5.    
      INDEMNIFICATION/LIMITATION
      OF LIABILITY

    


    5.1    
      Subject
      to the exception in Paragraph 8.5, Each
      party shall indemnify, defend and hold the other, its agents, officers, and
      employees harmless from and against any and all claims, damages, liabilities
      and
      losses, including reasonable attorney and litigation fees arising out of any
      alleged or actual breach of this Agreement or the inaccuracy of any warranty
      or
      representation made by it or any act or omission by it in the performance of
      this Agreement.

    


    5.2    
      As
      a
      condition to the obligations under Paragraphs 5.1, the party seeking
      indemnification under this Agreement shall give the indemnifying party prompt
      written notice of any claim for which it is seeking indemnification and shall
      cooperate with the indemnifying party in the defense of any such claim or
      action.

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    5.3    
      Except
      with respect to the indemnity obligation , neither party shall be liable for
      any
      indirect, incidental, punitive or other consequential damages (including,
      without limitation, lost profits) arising out of or in relation to this
      Agreement.

    


    


    6.    
      CONFIDENTIALITY

    


    6.1    
      OCEAN
      acknowledges that DAGM is a publicly traded corporation and therefore has to
      comply with certain disclosures as required by law. OCEAN further acknowledges
      and agrees that DAGM only will make any public announcement or disclosure
      pertaining to the nature or scope of this venture. In no event shall OCEAN
      make
      any public disclosure or announcement concerning this venture without prior
      written approval by DAGM. 

    


    6.2    
      In
      the
      course of performing this Agreement, OCEAN and DAGM may disclose to each other
      and each other’s respective employees, directors, officers, agents and other
      representatives, including financial advisors, accountants and attorneys, and
      any affiliates of the foregoing (each a “Recipient”),
      confidential or proprietary information, including, but not limited to, the
      business affairs, property, methods of operation, databases, information
      contained in such databases and other records related thereto of a DAGM customer
      or potential customer, information concerning the terms of this Agreement,
      software code (both source and object code), documentation, software
      specifications, other technical, marketing, promotional, financial or other
      business information and information of a competitively sensitive or proprietary
      nature as may be necessary to further the purposes of this Agreement
      (“Confidential
      Information”). All Confidential Information shall remain the sole property of
      the disclosing party, and the Recipient shall have no interest in or rights
      with
      respect thereto, except as expressly set forth in this Agreement. OCEAN and
      DAGM
      each agree, for itself and for its respective Recipients, to maintain all such
      Confidential Information, which in no event will be less than safeguards a
      reasonably prudent business would exercise in similar circumstances, and further
      agree to take all reasonable precautions to prevent any unauthorized disclosure
      of such information. The foregoing restriction on disclosure shall not apply
      with respect to any information which (a)
      the
      Recipient may be required to disclose by any subpoena, court order, decree,
      law
      or regulation applicable to such Recipient; provided, that such Recipient shall
      notify the disclosing party in a timely fashion and shall seek the maximum
      available confidentiality for the disclosed Confidential Information,
(b)
      is or
      becomes generally known or publicly available through no act or failure to
      act
      on the part of the Recipient, (c)
      the
      Recipient reasonably deems such disclosure necessary in connection with
      litigation involving a deliverable or this Agreement; provided, that such party
      shall notify the disclosing party in a timely fashion and shall seek the maximum
      available confidentiality for the disclosed Confidential Information,
(d)
      is
      furnished to others by the disclosing party without restriction on disclosure,
      (e)
      is
      known by the Recipient at the time of receiving such information from the
      disclosing party as evidenced by such Recipient’s records, or (f)
      is
      hereafter furnished to the Recipient by a third party, as a matter of right
      and
      without restriction on disclosure. The Recipient of Confidential Information
      agrees to notify the disclosing party concerning any disclosure permitted under
      this Section prior to making such disclosure so that the disclosing party may
      take appropriate action to protect the confidentiality of such
      information.

    


    
      
        
        

      

      
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    6.3    
      OCEAN
      acknowledges that any information exchanged under this Agreement or information
      that is known to the parties to this Agreement may be privileged and thus may
      not be used trading DAGM’s or NEWCO’s stock or options, or otherwise used to the
      benefit of any party.

    


    7.    
      OWNERSHIP

    


    7.1    
      As
      between NEWCO and OCEAN, NEWCO shall own all right, title, and interest in
      and
      to all deliverables developed by OCEAN as part of the Services or supplied
      by
      DAGM to OCEAN hereunder, including, but not limited to, all trademarks, domain
      names, patents, artwork, ideas, concepts, and other property incorporated
      therein, all preliminary or other copies thereof, all versions of all computer
      generated graphics, HTML and other web text documents, software programs,
      database content, prints, paintings, sketches, etchings, drawings, mechanicals
      or any other work, material or property produced, developed, or fabricated
      for
      delivery under this Agreement (collectively referred to as the “Materials”)
      and to
      all end user information collected by and stored in the applicable Web Site,
      including, without limitation, all reports generated by OCEAN hereunder
      containing such end user information (the "User
      Content").
      Without derogating from the above, if DAGM defaults in its obligation to deliver
      the payment (DAGM stock) in accordance to Section 3.1 above, OCEAN can suspend
      Services without liability.

    


    7.2    
      OCEAN
      hereby irrevocably assigns to NEWCO all its right, title, and interest in and
      to
      the Materials created by OCEAN, its employees and agents as part of the
      Services. OCEAN agrees to execute any documents necessary to perfect the
      transfer of such title. NEWCO’s rights in the Materials shall include the
      worldwide rights and copyrights thereto and all the related rights regardless
      of
      whether they may be “works made for hire” under the United States Copyright
      Revision Act of 1976, as amended. The Materials shall be considered specially
      ordered for NEWCO as a “work for hire”, or, if for any reason held not to be a
      work made for hire, OCEAN’s execution of this Agreement shall act as an
      assignment of copyright.

    


    7.3    
      OCEAN
      shall be responsible for obtaining an assignment from its third party providers
      engaged by OCEAN to perform Services under this Agreement to ensure NEWCO’s
      ownership of third party Materials in accordance with the definition in
      paragraph 8.1 herein. OCEAN shall secure the appropriate releases or assignments
      for all third party Materials OCEAN contained in the Materials, at no additional
      charge to DAGM. 

     

    7.4    
      DAGM
      and
      NEWCO understand and agree that, in the course of developing the Materials,
      OCEAN may use software that is distributed as free software, open source
      software (e.g. Linux, GPL, etc.), or software that requires as a condition
      of
      use that OCEAN make the source code of any derivative works available for
      redistribution at no charge (“Publicly Available Software”). DAGM and NEWCO
      agree that use of such Publicly Available Software shall not violate any terms
      of this Agreement.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    8.    
      WARRANTIES
      AND REPRESENTATIONS

    


    8.1    
      DAGM
      and
      OCEAN each warrant and represent to each other that each has the authority
      to
      enter into this Agreement and to perform all obligations hereunder and that
      the
      person whose signature appears below is duly authorized to enter into this
      Agreement on behalf of the party for whom such person is signing.

    


    8.2    
      EXCEPT
      AND TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 8, THERE ARE
      NO
      OTHER WARRANTIES OF ANY KIND, WHETHER EXPRESSED OR IMPLIED, INCLUDING, BUT
      NOT
      LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
      FITNESS
      FOR A PARTICULAR PURPOSE
      TITLE,
      ACCURACY, INTEGRATION OR COMPATIBILITY.

     

    8.3    
      OCEAN
      warrants to NEWCO that the Services and Materials described in Statement of
      Work
      shall conform to the descriptions set forth therein. OCEAN further represents
      that it will perform the Services in a prompt, professional, and diligent
      manner, and will use commercially reasonable efforts to complete the Services
      in
      accordance with the schedule mutually agreed between the parties..
      

    


    8.4    
      OCEAN
      represents and warrants to NEWCO that for a period of one (1) year after
      delivery of any software created by OCEAN for NEWCO
      as
      Materials under this Agreement such software shall conform in all material
      respects to the specifications agreed upon by the parties for such software.
      In
      the event the
      software fails to perform as warranted, NEWCO shall notify OCEAN of
      the
      error in writing, provide a description of the error, and provide OCEAN with
      access (physical and remote) to the software and the servers on which it
      resides. Subject to the exceptions in Paragraph 8.5 OCEAN shall,
      at its
      own cost and expense, correct all errors
      to
      NEWCO’S
      reasonable satisfaction. An error shall be deemed corrected upon the earlier
      to
      occur of (a) mutual agreement of the parties or (b) change to the software
      which
      brings it into conformance with the specifications. If, during the course of
      evaluating the error, OCEAN determines that the error is due to any act or
      failure to act of NEWCO, beyond the intended use of the Website, or any cause
      listed in Paragraph 8.5, OCEAN will use reasonable efforts to correct the error;
      provided that DAGM shall pay OCEAN for such services at the rate specified
      in
      Paragraph 2.3. 

    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    8.5    
      OCEAN
      shall have no obligation under Paragraphs 5.1 or 8.4 to the extent any claim
      for
      repair, breach of warranty, or infringement is due to (a) any use of the
      Materials in an environment or in conjunction with any product, hardware,
      software or service which does not meet the minimum requirements established
      by
      OCEAN in its written specification documentation; (b) any combination of the
      Materials with hardware or software provided by any person other than OCEAN
      where such infringement or breach would not have occurred but for such
      combination; (c) any software modification to the Materials (but not content
      changes) by NEWCO or by a third party; or (d) any claim that the Materials
      as
      used by NEWCO infringe a business method or process patent of any third party
      

    


    8.6  OCEAN
      warrants to NEWCO that,
      to the
      best of its knowledge, neither the deliverables nor the
      component applications, processes, and designs employed herein
      infringe upon or misappropriate or otherwise violate any patent, copyright,
      trade secret, or any other third-party proprietary right. Notwithstanding the
      preceding, OCEAN makes no warranty of any kind with respect to the business
      process or method to be employed by NEWCO or DAGM in connection with the NEWCO’s
      referral web service or its use of the web site developed by OCEAN under this
      Agreement.

    


    8.7    
      In
      the
      event
      OCEAN
      breaches the warranty in Paragraph 8.6 and NEWCO is enjoined from using any
      Materials
      created by OCEAN for NEWCO
      hereunder, or any portion thereof, by a court of competent jurisdiction due
      to
      OCEAN’s alleged infringement, OCEAN
      must at its own expense, use reasonable efforts to: (a) procure for NEWCO the
      right to continue using the Materials subject to the claim; or (b) replace
      or
      modify the Materials subject to the claim with a functional, non-infringing
      equivalent. If OCEAN is unable to either procure for NEWCO the right to continue
      to use the subject Materials or replace or modify them in 30 days thereof,
      NEWCO
      may
      take any and all reasonable steps necessary to obtain a license or other right
      to use the software or any portion thereof and NEWCO may recover from OCEAN
      the
      reasonable actual out-of-pocket license fee paid by NEWCO to obtain such a
      license. 

    


    8.8    
      OCEAN
      represents and warrants to NEWCO that it will not, by virtue of entering into
      and performing this Agreement and the transactions contemplated hereunder,
      be in
      violation (with or without the passage of time or giving of notice or both)
      of
      any term of its charter or bylaws or any term or provision of any material
      mortgage, indenture, contract, agreement, instrument, law, regulation, rule,
      judgment, order or decree to which it is a party or by which it or its assets
      are bound and that there is no outstanding contract, commitment or agreement
      to
      which OCEAN is a party or legal impediment of any kind known to OCEAN which
      conflicts with this Agreement or might limit, restrict or impair the rights
      granted to NEWCO hereunder.

    


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    8.9    
      OCEAN
      represents and warrants to NEWCO and DAGM that OCEAN is responsible for the
      payment of compensation to its personnel, including all personnel assigned
      to
      the performance of OCEAN’s undertakings herein, federal and state income tax
      withholding, social security taxes and unemployment insurance applicable to
      such
      personnel as employees of OCEAN. OCEAN further represents and warrants to NEWCO
      and DAGM that OCEAN is responsible for all employee benefits, if any, to which
      such personnel may be entitled. OCEAN agrees to defend, indemnify and hold
      harmless DAGM, its officers, directors, employees, agents, representatives
      and
      the administrators of DAGM’ benefit plans, from and against any claims,
      liabilities or expenses relating to such compensation, tax or benefit
      matters.

    


    8.10    
      OCEAN
      represents and warrants to NEWCO that notwithstanding any other workers’
      compensation or insurance policies maintained by DAGM, OCEAN is responsible
      for
      the procurement and maintenance of workers’ compensation coverage sufficient to
      meet the statutory requirements for OCEAN’s personnel who are engaged in the
      performance of OCEAN’s undertakings herein.

     

    9.    
      DELIVERY
      SCHEDULE

    


    9.1    
      OCEAN
      acknowledges that time is of the essence with regard to delivery of the
      Materials. OCEAN agrees to undertake reasonable commercial efforts to deliver
      the Materials according the following timeline:

    


    9.2    
      A
      beta
      delivery of
      the
      software described in the Statement
      of Work with 80% of the functionality described in the specifications complete
      -
      delivery no later than 4 months following the date of this
      Agreement. 

    


    9.3    
      A
      production delivery of the software described in the Statement of Work including
      full
      commercial functionality for end-users to interact with the service as described
      in the specifications - delivery no later than 6 months following the date
      of
      this Agreement.

    


    9.4    
      In
      the
      event OCEAN is delayed in the delivery of any Materials or Services under this
      Agreement as the result of any act or failure to act by DAGM or NEWCO, the
      time
      for Ocean’s performance shall be extended accordingly. 

    


    


    10.    
      MARKETING
      AND CUSTOMER SERVICE

    


    10.1    
      Upon
      production release of the web site,
      DAGM
      will loan NEWCO $500,000
      to be used for marketing, to be spent in NEWCO’s
      sole discretion (“Marketing Expenses”). DAGM
      will
      have the right to draw back its out of pocket Marketing Expenses prior to any
      shareholders dividend distribution. 

    


    10.2    
      Following
      launch
      of
      the fully commercial and functional
      NEWCO’s
      web
      site, DAGM will
      at its
      sole cost and expense provide sales solicitation support and customer service
      support to NEWCO including assisting in the referral service itself until the
      system is fully automated,
      or
      NEWCO is profitable according to GAAP standards, whichever is
      earlier.
      

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    11.    
      INSURANCE

    


    In
      addition to maintaining the statutory Employers Liability and Workers’
      Compensation Insurance, OCEAN shall carry commercial general liability insurance
      in the minimum amount of One Million Dollars ($1,000,000) during the term of
      this Agreement and shall forward an insurance certificate to NEWCO
      evidencing said insurance coverage prior to performing the Services for
NEWCO.
      OCEAN shall cause its insurance carrier to provide NEWCO
      with at
      least thirty (30) days prior notice of cancellation of such insurance. The
      amount of insurance coverage shall not limit in any way OCEAN’s obligations to
      indemnify DAGM pursuant to Section 5.

    


    12.    
      MISCELLANEOUS

    


    12.1    
      Material
      Change.    
      OCEAN
      will notify DAGM promptly of any material change in its corporate structure,
      financial capabilities or any other change that might compromise its ability
      to
      perform its obligations hereunder.

    


    12.2    
      Assignment.    
      This Agreement and the rights and duties hereunder shall not be assignable
      by
      OCEAN or DAGM except upon written consent of the other; provided,
      however,
      that either
      party may assign this Agreement and its rights and duties hereunder without
      the
      consent of the
      other
      to any affiliate
      or to
      any purchaser of all or substantially all of its assets.
      For purposes of this Paragraph,
      an
“affiliate” of is
      any
      company that controls, is controlled by, or is under common control with
      DAGM
      or
      OCEAN, as applicable.
      “Control” is the ability to direct the affairs of a company through the
      ownership of stock, contract or other means.

    


    12.3    
      Notice.    
      Whenever a party hereto desires or is required to give any notice, demand or
      request with respect to this Agreement, such communication shall be effective
      only if it is in writing and delivered by personal service, facsimile
      transmission (with satisfactory evidence of receipt), courier service (with
      satisfactory evidence of delivery) or mailed, certified mail, postage prepaid,
      addressed as follows:

    


    If
      to
      DAGM, to:  
DAG
      Media
      Inc.

    125-10
      Queens Blvd., Suite 14

    Kew
      Gardens, New York11415

    Telephone:
      (718) 520-1000

    Fax:
      (718) 793-2522

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    If
      to
      OCEAN, to:


    OCEAN-7
      Development Inc.

    520
      East
      11th Street

    New
      York,
      NY 10009

    


    Telephone:
      (212) 533-8460

    Fax:
      (212) 5337883

    


    


    Such
      communications shall be effective when they are received by the addressee
      thereof, but if sent by certified mail in the manner set forth above, they
      shall
      be effective two (2) business days after being deposited in the mail or if
      sent
      by courier or facsimile transmission they shall be effective on the day after
      delivery. A party may change its address for such communications by giving
      notice thereof to the other party in conformity with this Paragraph
      14.3.

    


    12.4    
      Entire
      Agreement.
      This
      Agreement and all of its Exhibits
      constitute the entire agreement among DAGM and OCEAN with respect to the subject
      matter of this Agreement, and supersede all prior agreements and understandings
      with respect to the matters covered by this Agreement.

    


    12.5    
      Governing
      Law; Submission to Jurisdiction.
      This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of New York, without giving effect to the provisions thereof
      relating to conflicts of laws, and OCEAN hereby submits to the exclusive
      jurisdiction of any state or federal court in New York, New York for the
      adjudication of matters related to this Agreement.

    


    12.6    
      Remedies.
      The
      rights and remedies of OCEAN and DAGM set forth herein with respect to failure
      of the other to comply with the terms of this Agreement (including, without
      limitation, rights of full termination of this Agreement) are not exclusive,
      the
      exercise thereof shall not constitute an election of remedies and the aggrieved
      party shall in all events be entitled to seek whatever additional remedies
      may
      be available in law or in equity.

    


    12.7    
      Headings.
      The
      headings of this Agreement are for purposes of reference only and shall not
      limit or otherwise affect the meaning hereof.

    


    12.8    
      No
      Waiver; Modifications.
      No
      provision of this Agreement may be waived, amended or otherwise modified, except
      by a written agreement signed by each party hereto. The waiver by a party of
      the
      breach of any provision hereof shall not be construed as a waiver of subsequent
      breaches or as a continuing waiver of such breach.

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    12.9    
      Severability.
      The
      provisions of this Agreement shall be deemed severable and the invalidity or
      unenforceability of any provision shall not affect the validity and
      enforceability of the other provisions hereof. If any provision of this
      Agreement, or the application thereof to any person or entity or any
      circumstance, is invalid or unenforceable, (a) a suitable and equitable
      provision shall be substituted therefor in order to carry out, so far as may
      be
      valid and enforceable, the intent and purpose of such invalid and unenforceable
      provision and (b) the remainder of this Agreement and the application
      of
      such provision to other persons, entities or circumstances shall not be affected
      by such invalidity or enforceability, nor shall such invalidity or
      unenforceability affect the validity or enforceability of such provision, or
      the
      application thereof, in any other jurisdiction, unless invalidity of a certain
      provision affects the entire basis of the bargain for a party.

    


    12.10    
      Binding
      Agreement.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto,
      their successors and permitted assigns.

    


    12.11    
      Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but all of which taken together shall constitute one and the same
      instrument.

    


    12.12    
      Incorporation
      of Exhibits.
      All
      Exhibits attached hereto are incorporated into and made a part of this
      Agreement.

    


    12.13    
      Notice
      of Actions.
      Each
      party hereto shall promptly notify the other parties in writing of any claims,
      demands or actions having any bearing on this Agreement.

    


    12.14    
      Compliance
      with Laws.
      Each
      party agrees to perform its obligations hereunder in accordance with all
      applicable laws, rules and regulations now or hereafter in effect.

    


    12.15    
      Publicity.
      OCEAN
      shall not use the name of DAGM or the applicable Web Site in any publicity
      releases, advertising or other promotional activities without the prior written
      consent of DAGM.

    


    12.16    
      Authority.
      Each
      party represents that it has full power and authority to enter into and perform
      this Agreement, and the person signing this Agreement on behalf of it has been
      properly authorized and empowered to enter into this Agreement. Each party
      further acknowledges that it has read this Agreement, understands it and agrees
      to be bound by it.

    


    12.17    
      Force
      Majeure.
      For the
      period and to the extent that a party hereto is disabled from fulfilling in
      whole or in part its obligations hereunder where such disability arises by
      reason of an act of God, war conditions, revolt, revolution, sabotage,
      government, state or municipal regulations or actions, embargo, fire, strike,
      or
      other labor trouble, or any cause beyond a party’s control, such party shall
      provide prompt notice thereof to the other party and be released from its
      obligations hereunder until the cessation of such disability.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Agreement to be duly executed as of the date
      first set forth above by their duly authorized representatives.

     

     

    
      	
               DAG MEDIA, INC.

               

            	 	 OCEAN-7 DEVELOPMENT,
              INC.
	 By: /s/ Assaf Ran	 	 By:
              /s/ Mark Alhadeff
	 Name: Assaf Ran	 	 Name:
              Mark Alhadeff
	 Title: CEO	 	 Title: President
	 	 	 
	
               MARK ALHADEFF

               

            	 	 SHERRY
              DAVIS
	 /s/ Mark Alhadeff	 	/s/ Sherry Davis
	
               

               

            	 	 
	
               In Witness Thereof:

               

               

            	 	 
	 By: /s/ Mark Hauser	 	 
	 Name: Mark Hauser	 	 
	 Date: 12-05-2005	 	 


    

    
      
 

      
        
          
          

        

        
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