Document:

ex101to8k06113_08252008.htm

    Exhibit 10.1

     

    
      AGREEMENT

       

      BY AND
AMONG

       

      NEW
CENTURY EQUITY HOLDINGS CORP.,

       

      WILHELMINA
ACQUISITION CORP.,

       

      WILHELMINA
INTERNATIONAL, LTD.,

       

      THE OTHER
WILHELMINA TRANSFERRED COMPANIES (AS DEFINED HEREIN)

       

      AND

       

      THE
SELLERS SET FORTH ON SCHEDULE A HERETO

       

      Dated:  August
25, 2008

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        Table of
Contents

        

        Page

         

      

      
        	
                ARTICLE
      1

              	
                CERTAIN
      DEFINITIONS

              	
                2

              
	 
      	
                1.

              	
                Defined
      Terms

              	
                2

              
	 
      	 
      	 
      
	
                ARTICLE
      2

              	
                THE
      TRANSACTION

              	
                19

              
	 
      	
                2.1

              	
                Closing

              	
                19

              
	 
      	
                2.2

              	
                The
      Merger.

              	
                19

              
	 
      	
                2.3

              	
                Transaction
      Consideration.

              	
                21

              
	 
      	
                2.4

              	
                No
      Fractional Shares

              	
                22

              
	 
      	
                2.5

              	
                Payment
      for Shares in the Merger

              	
                22

              
	 
      	
                2.6

              	
                Core
      Adjustment.

              	
                23

              
	 
      	
                2.7

              	
                Seller
      Restricted Shares

              	
                25

              
	 
      	
                2.8

              	
                Earn-Out
      Payments; Off-Set

              	
                25

              
	 
      	
                2.9

              	
                Resolution
      of Calculation Objections.

              	
                28

              
	 
      	
                2.10

              	
                Krassner
      Note

              	
                28

              
	 
      	
                2.11

              	
                Purchaser
      Sub

              	
                28

              
	 
      	
                2.12

              	
                Controlled
      Vehicles; Set Offs

              	
                28

              
	 
      	
                2.13

              	
                Election

              	
                29

              
	 
      	
                2.14

              	
                Aggregate
      Purchase Consideration Allocation.

              	
                29

              
	 
      	
                2.15

              	
                Patterson
      Payment

              	
                29

              
	 
      	
                2.16

              	
                Designated
      Matter Repurchase

              	
                30

              
	 
      	 
      	 
      
	
                ARTICLE
      3

              	
                REPRESENTATIONS
      AND WARRANTIES OF WILHELMINA TRANSFERRED COMPANIES AND CONTROL
      SELLERS

              	
                30

              
	 
      	
                3.1

              	
                Organization

              	
                30

              
	 
      	
                3.2

              	
                Legal
      Authority; Binding Effect

              	
                31

              
	 
      	
                3.3

              	
                Capitalization.

              	
                31

              
	 
      	
                3.4

              	
                Subsidiaries

              	
                32

              
	 
      	
                3.5

              	
                Conflict
      with other Instruments; Absence of Restrictions

              	
                32

              
	 
      	
                3.6

              	
                Government
      and Third Party Approvals

              	
                33

              
	 
      	
                3.7

              	
                Title
      to Properties; Adequacy of Properties

              	
                33

              
	 
      	
                3.8

              	
                Real
      Property; Personal Property

              	
                33

              
	 
      	
                3.9

              	
                Financial
      Statements.

              	
                34

              
	 
      	
                3.10

              	
                Absence
      of Undisclosed Liabilities

              	
                35

              
	 
      	
                3.11

              	
                Accounts
      Receivable

              	
                35

              
	 
      	
                3.12

              	
                Compliance
      with Law; Permits and Approvals.

              	
                35

              
	 
      	
                3.13

              	
                Legal
      Proceedings

              	
                36

              
	 
      	
                3.14

              	
                Absence
      of Changes

              	
                36

              
	 
      	
                3.15

              	
                Contracts,
      Leases, Etc.

              	
                37

              
	 
      	
                3.16

              	
                Customers/Client
      Accounts/Models.

              	
                40

              
	 
      	
                3.17

              	
                Insurance

              	
                41

              
	 
      	
                3.18

              	
                Intellectual
      Property.

              	
                41

              
	 
      	
                3.19

              	
                Transactions
      with Affiliates

              	
                42

              

      

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	 
      	
                3.20

              	
                Employee
      and Labor Matters.

              	
                43

              
	 
      	
                3.21

              	
                Employee
      Benefit Plans.

              	
                44

              
	 
      	
                3.22

              	
                Environmental
      Laws

              	
                45

              
	 
      	
                3.23

              	
                Taxes
      and Tax Returns

              	
                46

              
	 
      	
                3.24

              	
                Proxy
      Statement

              	
                48

              
	 
      	
                3.25

              	
                Corporate
      Records, Controls

              	
                48

              
	 
      	
                3.26

              	
                Brokers

              	
                48

              
	 
      	
                3.27

              	
                Bank
      Accounts; Powers of Attorney

              	
                48

              
	 
      	
                3.28

              	
                Statements
      and Other Documents Not Misleading

              	
                48

              
	 
      	
                3.29

              	
                No
      Knowledge of Breaches

              	
                49

              
	 
      	 
      	 
      
	
                ARTICLE
      4

              	
                REPRESENTATIONS
      AND WARRANTIES OF THE SELLERS

              	
                49

              
	 
      	
                4.1

              	
                Organization

              	
                49

              
	 
      	
                4.2

              	
                Legal
      Authority; Binding Effect

              	
                49

              
	 
      	
                4.3

              	
                No
      Conflicts, Consents

              	
                49

              
	 
      	
                4.4

              	
                Title
      to Shares and Units

              	
                50

              
	 
      	
                4.5

              	
                Agreements

              	
                50

              
	 
      	
                4.6

              	
                Legal
      Proceedings

              	
                50

              
	 
      	
                4.7

              	
                Purchase
      Entirely for Own Account

              	
                50

              
	 
      	
                4.8

              	
                Seller
      Address, Access to Information, Experience, Etc.

              	
                50

              
	 
      	
                4.9

              	
                Restricted
      Securities

              	
                51

              
	 
      	
                4.10

              	
                No
      Knowledge of Breaches

              	
                51

              
	 
      	 
      	 
      
	
                ARTICLE
      5

              	
                REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASER

              	
                51

              
	 
      	
                5.1

              	
                Organization

              	
                52

              
	 
      	
                5.2

              	
                Legal
      Authority; Binding Effect

              	
                52

              
	 
      	
                5.3

              	
                Conflict
      with other Instruments; Absence of Restrictions

              	
                52

              
	 
      	
                5.4

              	
                Capitalization.

              	
                53

              
	 
      	
                5.5

              	
                SEC
      Filings/Financial Statements.

              	
                53

              
	 
      	
                5.6

              	
                Compliance
      with Law

              	
                54

              
	 
      	
                5.7

              	
                Legal
      Proceedings

              	
                54

              
	 
      	
                5.8

              	
                Purchase
      Entirely for Own Account

              	
                54

              
	 
      	
                5.9

              	
                Access
      to Information, Experience, Etc.

              	
                55

              
	 
      	
                5.10

              	
                Absence
      of Changes

              	
                55

              
	 
      	
                5.11

              	
                Proxy
      Statement

              	
                55

              
	 
      	
                5.12

              	
                Rights
      Plan

              	
                55

              
	 
      	
                5.13

              	
                Board
      Recommendation

              	
                55

              
	 
      	
                5.14

              	
                Brokers
      or Finders

              	
                56

              
	 
      	
                5.15

              	
                Financial
      Ability to Complete the Contemplated Transactions

              	
                56

              
	 
      	
                5.16

              	
                Acquisition
      for Investment

              	
                56

              
	 
      	
                5.17

              	
                Absence
      of Undisclosed Liabilities

              	
                56

              
	 
      	
                5.18

              	
                Statements
      and Other Documents Not Misleading

              	
                56

              
	 
      	
                5.19

              	
                No
      Knowledge of Breaches

              	
                56

              

      

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
      6

              	
                CERTAIN
      PRE-CLOSING COVENANTS AND OTHER MATTERS

              	
                56

              
	 
      	
                6.1

              	
                Restriction
      on Certain Discussions and Actions

              	
                56

              
	 
      	
                6.2

              	
                Conduct
      of Business of the Wilhelmina Transferred Companies

              	
                57

              
	 
      	
                6.3

              	
                Conduct
      of Business of Purchaser

              	
                60

              
	 
      	
                6.4

              	
                Notice
      of Certain Events

              	
                62

              
	 
      	
                6.5

              	
                Additional
      Financial Statements

              	
                62

              
	 
      	
                6.6

              	
                Cooperation;
      Access to Books and Records

              	
                62

              
	 
      	
                6.7

              	
                Commercially
      Reasonable Efforts.

              	
                63

              
	 
      	
                6.8

              	
                Proxy
      Statement.

              	
                63

              
	 
      	
                6.9

              	
                Stockholder
      Meeting

              	
                64

              
	 
      	
                6.10

              	
                Purchaser
      Financing

              	
                65

              
	 
      	
                6.11

              	
                Closing
      Settlement

              	
                65

              
	 
      	
                6.12

              	
                Patterson
      Issuance

              	
                66

              
	 
      	
                6.13

              	
                Designated
      Matter Proceedings

              	
                66

              
	 
      	 
      	 
      
	
                ARTICLE
      7

              	
                CONDITIONS
      PRECEDENT TO THE CLOSING

              	
                67

              
	 
      	
                7.1

              	
                Obligations
      of Both Parties

              	
                67

              
	 
      	
                7.2

              	
                Obligation
      of the Wilhelmina Transferred Companies and the Sellers to
      Close

              	
                67

              
	 
      	
                7.3

              	
                Obligation
      of the Purchaser and Merger Sub to Close

              	
                69

              
	 
      	 
      	 
      
	
                ARTICLE
      8

              	
                CLOSING;
      EXPENSES; SUBSEQUENT DOCUMENTATION

              	
                71

              
	 
      	
                8.1

              	
                Closing

              	
                71

              
	 
      	
                8.2

              	
                Deliveries
      at Closing

              	
                71

              
	 
      	
                8.3

              	
                Expenses

              	
                74

              
	 
      	
                8.4

              	
                Subsequent
      Documentation

              	
                74

              
	 
      	 
      	 
      
	
                ARTICLE
      9

              	
                CONFIDENTIALITY
      AND COVENANT NOT TO COMPETE

              	
                74

              
	 
      	
                9.1

              	
                Confidentiality.

              	
                74

              
	 
      	
                9.2

              	
                Covenant
      Not To Compete

              	
                75

              
	 
      	
                9.3

              	
                Specific
      Enforcement; Extension of Period.

              	
                76

              
	 
      	
                9.4

              	
                Disclosure

              	
                77

              
	 
      	
                9.5

              	
                Interpretation

              	
                77

              
	 
      	
                9.6

              	
                Acknowledgment

              	
                77

              
	 
      	 
      	 
      
	
                ARTICLE
      10

              	
                SURVIVAL
      AND INDEMNIFICATION

              	
                77

              
	 
      	
                10.1

              	
                Survival.

              	
                77

              
	 
      	
                10.2

              	
                Indemnification
      by Esch and Krassner

              	
                78

              
	 
      	
                10.3

              	
                Indemnification
      by Sellers

              	
                79

              
	 
      	
                10.4

              	
                Limitations
      on Seller Indemnification

              	
                79

              
	 
      	
                10.5

              	
                Indemnification
      by Purchaser

              	
                79

              
	 
      	
                10.6

              	
                Limitations
      on Purchaser Indemnification

              	
                80

              
	 
      	
                10.7

              	
                Claims
      for Indemnification.

              	
                80

              
	 
      	
                10.8

              	
                Treatment
      of Indemnity Payments

              	
                83

              
	 
      	
                10.9

              	
                Calculation
      of Losses

              	
                83

              
	 
      	
                10.10

              	
                Exclusive
      Remedy

              	
                84

              

      

       

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
      11

              	
                TAX
      MATTERS

              	
                84

              
	 
      	
                11.1

              	
                Allocation

              	
                84

              
	 
      	
                11.2

              	
                Tax
      Returns.

              	
                84

              
	 
      	
                11.3

              	
                Transfer
      Taxes

              	
                85

              
	 
      	 
      	 
      
	
                ARTICLE
      12

              	
                POST
      CLOSING COVENANTS

              	
                85

              
	 
      	
                12.1

              	
                Public
      Announcements

              	
                85

              
	 
      	
                12.2

              	
                Assistance
      in Defense

              	
                85

              
	 
      	
                12.3

              	
                Further
      Cooperation.

              	
                86

              
	 
      	
                12.4

              	
                Post
      Closing Reimbursement of Expenses

              	
                86

              
	 
      	
                12.5

              	
                Reorganization

              	
                86

              
	 
      	 
      	 
      
	
                ARTICLE
      13

              	
                TERMINATION

              	
                87

              
	 
      	
                13.1

              	
                Termination

              	
                87

              
	 
      	
                13.2

              	
                Survival

              	
                88

              
	 
      	
                13.3

              	
                Expense
      Reimbursement

              	
                88

              
	 
      	 
      	 
      
	
                ARTICLE
      14

              	
                MISCELLANEOUS

              	
                88

              
	 
      	
                14.1

              	
                Notices

              	
                88

              
	 
      	
                14.2

              	
                No
      Third Party Beneficiaries

              	
                90

              
	 
      	
                14.3

              	
                Schedules
      and Exhibits

              	
                90

              
	 
      	
                14.4

              	
                Entire
      Agreement; Amendment

              	
                90

              
	 
      	
                14.5

              	
                Section
      and Paragraph Titles

              	
                90

              
	 
      	
                14.6

              	
                Binding
      Effect; No Assignment

              	
                90

              
	 
      	
                14.7

              	
                Counterparts

              	
                90

              
	 
      	
                14.8

              	
                Purchaser
      Reliance

              	
                90

              
	 
      	
                14.9

              	
                No
      Reliance on Control Sellers or Wilhelmina Transferred
      Companies

              	
                91

              
	 
      	
                14.10

              	
                Severability

              	
                91

              
	 
      	
                14.11

              	
                Governing
      Law; Consent to Jurisdiction

              	
                91

              
	 
      	
                14.12

              	
                Waiver
      of Jury Trial

              	
                92

              
	 
      	
                14.13

              	
                Waiver

              	
                92

              
	 
      	
                14.14

              	
                Time
      of the Essence

              	
                92

              

      

       

      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

       

      SCHEDULES AND
EXHIBITS

       

      Certain
Schedules

      Schedule
A  –  Sellers

      Schedule
B – Percentages

      

      

      Exhibits

      A  –  Sellers’
Names and Addresses

      B  –  Rights
Plan Amendment

      C  –  Registration
Rights Agreement

      D  –  Escrow
Agreement

       

       

      
        
          
          

        

        
          v

          
            

          

        

        
          
          

        

      

       

      AGREEMENT

       

      THIS
AGREEMENT (the “Agreement”)
is made as of August 25, 2008, by and among (i) New Century Equity Holdings
Corp., a Delaware corporation (“Purchaser”),
(ii) Wilhelmina Acquisition Corp., a New York corporation and wholly owned
subsidiary of the Purchaser (the “Merger
Sub”) (iii) Wilhelmina International, Ltd., a New York corporation
(the “Company”),
(iv) Wilhelmina – Miami, Inc. a Florida corporation (“Wilhelmina
Miami”), (v) Wilhelmina Artist Management LLC, a New York limited
liability company (“WAM”),
Wilhelmina Licensing LLC, a Delaware limited liability company (“Wilhelmina
Licensing”), and Wilhelmina Film & TV Productions LLC, a New York
limited liability company (“Wilhelmina
TV”) (WAM, Wilhelmina Licensing and Wilhelmina TV collectively, the “LLCs” and
together with the Company and Wilhelmina Miami, the “Wilhelmina
Transferred Companies”), (vi) Dieter Esch (“Esch”),
Lorex Investments AG, a Swiss corporation (“Lorex”),
Brad Krassner (“Krassner”),
Krassner Family Investments, L.P. (the “Krassner
L.P.”, and together with Esch, Lorex and Krassner, the “Control
Sellers”), (vii) Sean Patterson (“Patterson”)
and (viii) the shareholders of Wilhelmina Miami set forth on Schedule A
hereto (other than Esch and the Krassner L.P.) (the “Remaining Miami
Sellers”, and together with the Control Sellers and Patterson, the “Sellers”).

       

      WHEREAS,
the Sellers desire to transfer, and Purchaser (through itself and/or one or more
wholly owned subsidiaries of Purchaser (each, a “Purchaser
Sub”)) desires to acquire, the Wilhelmina Transferred Companies, other
than the Company, through the acquisition of interests in such Wilhelmina
Transferred Companies; and

       

      WHEREAS,
the Sellers desire to, and the Purchaser (through a Purchaser Sub), desires to,
cause the Company to merge with a Purchaser Sub such that the Purchaser Sub will
merge with and into the Company, and that such merger qualify as a tax-free
“reorganization;

       

      WHEREAS,
concurrently herewith, the Control Sellers and Newcastle Partners, L.P., are
entering into a certain Mutual Support Agreement with respect to certain matters
relating to the transactions hereunder and certain post closing matters;
and

       

      WHEREAS,
concurrently herewith, the Control Sellers and the Company are entering into a
Registration Rights Agreement, relating to certain registration rights granted
to the Control Sellers in the form attached hereto as Exhibit C (the “Registration
Rights Agreement”) which agreement shall become effective as of the
Closing;

       

      WHEREAS,
concurrently herewith, Purchaser is amending the Rights Agreement, dated as of
July 10, 2006, by and between Purchaser and The Bank of New York Mellon Trust
Company, as rights agent (the “Rights
Agreement”) in the form attached hereto as Exhibit B (the “Rights
Amendment”).

       

      NOW, THEREFORE, IN
CONSIDERATION of the foregoing and the mutual promises, covenants and
agreements contained herein, the parties, intending to be legally bound, hereby
agree as follows:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE 1

      CERTAIN
DEFINITIONS

       

      1.           Defined
Terms.  As used in this Agreement, the following terms
shall have the meanings herein specified, unless the context otherwise
requires:

       

      1.1

       

      (a)           “2007 Audited
Financials” shall have the meaning assigned to it in Section
3.9(a)(iii).

       

      (b)           
“2007 Core
EBITDA” shall mean the Core EBITDA for calendar year 2007.

       

      (c)           “2008 Core
EBITDA” shall mean the Core EBITDA for calendar year 2008.

       

      1.2           “Accounts
Payable” shall mean for purposes of Article 2 all accounts payable and
accrued expenses of the Wilhelmina Transferred Companies (other than Gross
Amounts Due to Models) as of the close of business on the Closing Date
determined in accordance with GAAP; provided that accounts payable shall include
any payables (including but not limited to payables in respect of Taxes,
including foreign withholding Taxes) that Purchaser’s auditor determines, in
connection with Purchaser’s fiscal year 2008 audit, would be required to be
reflected on a balance sheet of the Wilhelmina Transferred Companies as of the
Closing Date.

       

      1.3           “Accounts
Receivable” shall mean for purposes of Article 2 the sum of (a) third
party customer receivables  (net of applicable reserves) contained in
the line item “accounts receivable”, (b) third party customer receivables (net
of applicable reserves) of Wilhelmina Kids & Creative Management LLC
contained in the line item “receivable from affiliate” (it being understood that
this clause (b) shall not contain any intercompany loan or related intercompany
item), (c) the amount of the line item “due from officer”, provided that such
amount is repaid in full to the Company at Closing, (d) prepaid income taxes,
and (e) the amounts of the specific subaccounts within the line item “prepaid
expenses and other current assets” set forth on Schedule 1.3, in each case ((a)
– (e)) of the Wilhelmina Transferred Companies as of the close of business on
the Closing Date determined in accordance with GAAP; provided that (i)
applicable reserves (referred to in clauses (a) and (b)) shall include any
reserves that  Purchaser’s auditor determines, in connection with
Purchaser’s fiscal year 2008 audit, would be required to be reflected on a
balance sheet of the Wilhelmina Transferred Companies as of the Closing Date or
as of any date following the Closing Date through December 31, 2008 and (ii)
accounts receivable shall exclude any accounts receivable written off since the
Closing Date.

       

      1.4           “Accumulated
Funding Deficiency” shall have the meaning assigned to it in
ERISA.

       

      1.5           
“Affiliate”
shall mean:  (i) any Person that directly or indirectly through
one or more intermediaries controls, is controlled by or under common control
with the Person specified; (ii) any director, officer or Subsidiary of the
Person specified; and (iii) any spouse, parent, child, sibling, mother in
law, father in law, son in law, daughter in law, brother in law or sister in law
of the Person specified.  The term “control” (including, with
correlative meaning, the terms “controlled by” and “under common control with”),
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to elect a majority of the board of directors (or other
governing body) or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      1.6           “Agreement”
shall have the meaning set forth in the Preamble.

       

      1.7           “Aggregate
Divisional EBITDA Loss” shall have the meaning assigned to it in Section
2.8(c).

       

      1.8           “Aggregate Merger
Consideration” shall have the meaning assigned to it in Section
2.3(a).

       

      1.9           “Aggregate
Purchase Consideration” shall have the meaning assigned to it in Section
2.3(b).

       

      1.10           “Aggregate
Purchase Price” shall mean the sum of (i) Aggregate Merger
Consideration, (ii) the Aggregate Purchase Consideration and (iii) any
Earnout Payments, subject to the adjustments set forth in this
Agreement.

       

      1.11           “Aggregate
Designated Matter Amount” shall mean the sum of (a) (i) the Designated
Matter Holdback Shares multiplied by (ii) NCEH Book Value Per Share, plus (b) the Designated
Matter Cash Deduction.

       

      1.12           “Average Core
EBITDA” shall have the meaning assigned to it in Section
2.6(b).

       

      1.13           “Approved
Acquisition Targets” shall have the meaning assigned to it in Section
12.4.

       

      1.14           “Auditor’s
Consent” shall have the meaning assigned to it in Section
7.3(j).

       

      1.15           “Auditor’s
Opinion” shall have the meaning assigned to it in Section
7.3(j).

       

      1.16           “Authorized
Capital Approval” shall have the meaning assigned to it in Section
6.9.

       

      1.17           “Bank
Accounts” shall have the meaning assigned to it in Section
3.27.

       

      1.18           “Base
Price” shall have the meaning assigned to it in Section
2.6(b).

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      1.19           “Books and
Records” shall mean all records, documents, lists and files, relating to
the Property or the Business, including, without limitation, executed originals
(or copies of executed originals when executed originals are not available) of
all Tax Returns, Contracts, purchase orders, sales orders, price lists, lists of
accounts, customers, suppliers, employees, contractors, consultants and other
personnel, all product, business and marketing plans, sales and product
brochures and catalogs and other sales literature and materials, historical
sales and commissions data and all books, ledgers, files, financial statements
and other financial and accounting records (and related work papers and
correspondence from accountants), minute books, all records relating to Client
Accounts, deeds, title policies, computer files, programs and retrieved
programs, environmental studies and plans and business records, whether in hard
copy, electronic form or otherwise.

       

      1.20           “Business”
shall mean the business of the Wilhelmina Transferred Companies as conducted as
of the date of this Agreement, including but not limited to (i) the Talent
management and Talent agency booking business, including the scouting,
developing, marketing and booking of models for purposes of advertising
campaigns, editorial, runway or otherwise, (ii) the Model Contest Business,
(iii) the WAM Business, (iv) the film and television production
business (v) product licensing and distribution, and (vi) the
licensing of the “Wilhelmina” name or mark to third parties engaged in the
businesses described in clauses (i), (ii), (iii) (iv) and (v).

       

      1.21           “Business
Day” shall mean any calendar day which is not a Saturday, Sunday or
federal holiday.

       

      1.22           “Cash”
shall mean all of the Company’s and its Subsidiaries’ cash, money, currency or
any credit balances in any demand or deposit account and cash equivalents in any
currency.

       

      1.23           
“Calculation
Objection” shall have the meaning assigned to it in Section
2.9(a).

       

      1.24           “Certificate”
shall have the meaning assigned to it in Section 2.2(i).

       

      1.25           “Certificate of
Merger” shall have the meaning assigned to it in Section
2.2(e).

       

      1.26           “Charter
Approval” shall have the meaning assigned to it in Section
6.9.

       

      1.27           “Change in
Recommendation” shall have the meaning assigned to it in Section
6.9.

       

      1.28           “Claim”
shall mean any written or oral demand, claim, complaint, suit, action, cause of
action, investigation, proceeding or notice by any Person alleging actual or
potential liability for any Loss, or for any Default under any Law, Contract,
License, Permit or Employee Benefit Plan.

       

      1.29           “Claims
Period” shall have the meaning assigned to it in Section
10.1(c).

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      1.30           “Client
Account” shall mean any business account relationship including, without
limitation, any Person who or which is provided any products or services of the
Company, or any of its Subsidiaries, as of the Closing Date.

       

      1.31           “Closing”
shall mean the consummation of the Contemplated Transactions on the Closing Date
pursuant to Section 8.1.

       

      1.32           “Closing
Date” shall have the meaning assigned to it in Section 8.1.

       

      1.33           “Closing
Financials” shall have the meaning assigned to it in Section
7.3(j).

       

      1.34           “Closing Net Asset
Adjustment” shall mean a number (which may be positive or negative) equal
to (a) unrestricted cash and cash equivalents (which shall exclude security
deposits) of the Wilhelmina Transferred Companies as of 11:59 p.m. on the
Closing Date plus (b)
Excess Receivables plus
(c) the Revolver Reduction Amount minus (d) the Minimum
Liquidity Requirement minus (e) the Term Loan
Amount.  For purposes of example only, Schedule 1.33 sets forth what
the Closing Net Asset Adjustment would be based on the Company’s consolidated
balance sheet as of March 31, 2008.

       

      1.35           “COBRA”
shall have the meaning assigned to it in Section 3.21(b).

       

      1.36           “Code”
shall mean the Internal Revenue Code of 1986 and the rules and regulations
promulgated thereunder, as amended and supplemented from time to time, or any
successors thereto.

       

      1.37           “Collateral
Documents” shall mean any documents or Contracts, other than this
Agreement, that relate to the Contemplated Transactions.

       

      1.38           “Company”
shall have the meaning assigned to it in the Preamble.

       

      1.39           “Company
Shares” means the shares of common stock of the Company, par value $.01
per share.

       

      1.40           “Company’s
Knowledge” or “Knowledge of the
Company” shall mean the actual knowledge of any of Esch, Krassner,
Patterson, and Richard Diamond.

       

      1.41           “Computer
Software” shall mean all computer applications software, owned or
licensed, whether for general business usage (e.g., accounting, word processing,
graphics, spreadsheet analysis, etc.) or specific, unique to the business usage
(e.g., booking software) and all computer operating, security or programming
software, owned or licensed.

       

      1.42           “Confidentiality
Agreement” shall mean the Confidentiality Agreement dated November 6,
2007 between Purchaser and the Company.

       

      1.43           “Consents”
shall mean any consent, waiver, approval, authorization, certification or
exemption required from any Person or under any Contract or Law, as
applicable.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      1.44           “Constituent
Corporations” shall have the meaning assigned to it in Section 2.2
(a).

       

      1.45           “Contemplated
Transactions” shall mean all of the transactions which are referred to in
this Agreement.

       

      1.46           “Contracts”
shall mean, with respect to any Person, all contracts, Leases, agreements,
instruments, Licenses, undertakings and other commitments, whether written or
oral to which such Person is, or such Person’s properties, operations, business
or assets are, bound.

       

      1.47           “Control
Sellers” shall have the meaning assigned to it in the introductory
paragraph of this Agreement.

       

      1.48           “Copyrights”
shall mean registered copyrights, copyright applications and unregistered
copyrights, whether arising by common law or statute.

       

      1.49           “Core
Business” means (a) the core model management and model agency booking
business conducted by the Company and divisions Wilhelmina West, Inc., a
California corporation; and L.W. 1. Inc., a California corporation (b) the Model
Contest Business, including WAM’s Model Contest Business, (c) the business
conducted by Wilhelmina Licensing, and (d) the business conducted by Wilhelmina
TV.  The “Core Business” shall exclude all business conducted by
Wilhelmina Miami and WAM other than WAM’s model contest business.

       

      1.50           “Core
Decrease” shall have the meaning assigned to it in Section
2.6(b).

       

      1.51           “Core EBITDA”
shall mean for any period and without duplication, (a) the EBITDA
attributable to the Core Business plus (b) the addbacks set forth on Schedule 1.51
hereto.

       

      1.52           “Core
Increase” shall have the meaning assigned to it in Section
2.6(b).

       

      1.53           “Declassification
Approval” shall have the meaning assigned to it in Section
6.9.

       

      1.54           “Default”
shall mean, with respect to a Contract, Permit, License, Law, Employee Benefit
Plan, Organizational Document or other instrument or agreement, (a) a
violation, breach or default, (b) the occurrence of an event which with the
passage of time or the giving of notice or both would constitute a violation,
breach or default, or (c) the occurrence of an event that (with or without
the passage of time or the giving of notice or both) would give rise to a right
of damages, specific performance, termination, renegotiation or acceleration
(including the acceleration of payment), in all such cases unless being
contested in good faith through appropriate procedures.

       

      1.55           “Designated Matter
Cash Deduction” shall mean the lesser of (i) $95,000 or (ii) the amount,
if any, agreed to by the Wilhelmina Transferred Companies prior to the Closing
in settlement of the matter set forth on Schedule 10.2(d) under the heading
“Program Amounts” thereon.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      1.56           “Designated Matter
Legal Fees” shall mean all legal, accounting and other advisory fees and
expenses incurred (whether at the direction of the Control Sellers or otherwise)
in connection with the pursuit of settlement of the matter set forth on Schedule
10.2(d) under the heading “Program Amounts”.

       

      1.57           “Designated Matter
Post-Closing Amount” shall equal (a) the amount, if any, agreed to by the
Wilhelmina Transferred Companies following the Closing in settlement of the
matter set forth on Schedule 10.2(d) under the heading “Program Amounts” thereon
plus (b) any other
Losses or Claims covered by Section 10.2(d).

       

      1.58           “Designated Matter
Holdback Shares” shall mean a number of shares of Purchaser Stock equal
to (x) $100,000 divided
by (y) the greater of NCEH Book Value Per Share or the Market Value on
the Closing Date.

       

      1.59           Designated
Matter Repurchase Share
Amount” shall mean (x) the excess, if any, of the Designated Matter Post
Closing Amount over the Designated Matter Cash Deduction divided by (y) the greater of
NCEH Book Value Per Share or the Market Value on the Closing Date; provided that
the Designated Matter Repurchase Share Amount shall in no event exceed the
Designated Matter Holdback Shares.

       

      1.60           “Designated Matter
True-Up” shall mean the excess, if any, of the Designated Matter Cash
Deduction over the Designated Matter Post Closing Amount; provided that if a
settlement with respect to the matter set forth under the heading “Program
Amounts” has not been agreed to by the time of completion of Purchaser’s fiscal
year 2008 audit, then the Designated Matter True-Up shall be $0.

       

      1.61           “Earn-Out
Payments” shall have the meaning assigned to it in Section
2.8.

       

      1.62           “EBITDA”
shall mean, with respect to a particular entity, business unit, division or a
collection thereof, for any period and without duplication, the sum of
(a) net income (or loss) for such period, plus (b) interest expense
for such period, plus (c) federal, state and local taxes for such period,
plus (d) depreciation expenses for such period, plus (e) amortization
expenses for such period, in each case as determined on a GAAP
basis.  For the purposes of Article 2, the calculation of EBITDA shall
not include (i) expenses incurred in connection with the evaluation,
negotiation and completion of the Contemplated Transactions as set forth on
Schedule 1.62 or (ii) those incremental expenses incurred as a consequence
of Purchaser’s status as a public company, which includes, but is not limited to
audit costs greater than the average of the Wilhelmina Transferred Companies’
2006 and 2007 audit costs (including, but not limited to, costs related to
compliance with the Sarbanes-Oxley Act and the design and implementation of
disclosure controls and procedures and internal controls over financial
reporting; provided that the calculation of 2007 audit
costs shall in any event exclude those incremental audit expenses
incurred solely as a result of the preparation of such audit in
connection with the Contemplated Transactions, such as the LW1 goodwill
impairment analysis), the costs and expenses related to the Purchaser’s filings
with the SEC and the costs and expenses of the salary of the chief executive
officer and chief financial officer (assuming the individuals filling such roles
are not employees of any of the Wilhelmina Transferred Companies  as
of the Closing Date).

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      1.63           “Effective
Time” has the meaning assigned to it in Section 2.2(f).

       

      1.64           “Employee Benefit
Plan” shall mean any “employee benefit plan” (within the meaning of
Section 3(3) of ERISA) and any material pension, retirement, profit sharing,
deferred compensation, bonus, incentive, performance, stock option, phantom
stock, stock purchase, restricted stock, premium conversion, medical,
hospitalization, vision, dental or other health, life, disability, severance, or
termination program, arrangement, agreement or policy, which any of the
Wilhelmina Transferred Companies sponsors, maintains, contributes to, is
obligated to contribute to, is a party to or is otherwise bound by, or with
respect to which any of the Wilhelmina Transferred Companies could have any
material Liability.

       

      1.65           “Employees”
shall mean each of the employees of any of the Wilhelmina Transferred Companies
or any of their Subsidiaries at any time prior to Closing, including employees
who are on paid leave of absence, military leave or disability
leave.

       

      1.66           “Employment
Agreement” shall have the meaning assigned to it in Section
3.15(a)(ii).

       

      1.67           “Encumbrances”
shall mean, with respect to any asset, any security interests, liens,
encumbrances, pledges, mortgages, charges, claims, conditional or installment
sales Contracts, title retention Contracts, transferability restrictions and
other claims or burdens of any nature whatsoever attached to or adversely
affecting such asset.  For the purposes of clarity, an Encumbrance
does not include any requirement, duty or obligation imposed upon any party
pursuant to the securities laws of any jurisdiction.

       

      1.68           “Environmental
Laws” shall mean all Laws relating to pollution or protection of the
environment (including, without limitation, ambient air, surface water,
groundwater, land, or surface or subsurface strata) including, without
limitation, Laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, petroleum, or industrial, toxic
or hazardous substances or wastes into the environment and Laws relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of any of the foregoing including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601 et seq. (“CERCLA”), the Resource Conservation and Recovery Act, 42 U.S.C.
§ 6901 et seq., and the rules and regulations promulgated under any of the
foregoing, all as amended and supplemented from time to time, and together with
any successors thereto.

       

      1.69           “Equipment”
shall mean all of the subject entity’s furniture, fixtures, machinery,
equipment, motor vehicles, office equipment, computers, tools and replacement
parts, wherever located.

       

      1.70           “ERISA”
shall mean the Employee Retirement Income Security Act of 1974 and the rules and
regulations promulgated thereunder, as amended and supplemented from time to
time, or any successors thereto.

       

      1.71           “ERISA
Affiliate” shall mean any Person that is included with any of the
Wilhelmina Transferred Companies in a controlled group or affiliated service
group under Sections 414(b), (c), (m) or (o) of the Code.

       

      
        
          
          

        

        
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      1.72           “Escrow”
shall have the meaning assigned to it in Section 2.7.

       

      1.73           “Escrow
Agreement” shall mean that Escrow Agreement entered into between the
Control Sellers and Purchaser at the Closing, a form of which agreement is
attached hereto as Exhibit D.

       

      1.74           “Excess Divisional
Loss” shall have the meaning assigned to it in Section
2.8(e).

       

      1.75           “Excess
Receivables” shall mean a number (which may be positive or negative)
equal to (a) Accounts Receivable minus (b) Accounts Payable minus (c) Gross
Amounts Due to Models.

       

      1.76           “Exchange
Agent” shall have the meaning assigned to it in Section
2.5(a).

       

      1.77           “Financial
Statements” shall have the meaning assigned to it in Section
3.9(b).

       

      1.78           “Financing”
shall have the meaning assigned to it in Section 6.10.

       

      1.79           “GAAP”
shall mean generally accepted accounting principles in the United States,
applied on a basis consistent with past practices and preceding years and
throughout the periods involved, except as subsequently restated.

       

      1.80           “Governmental
Consent” shall mean any and all licenses, franchises, permits, easements,
rights, consents, Orders, approvals, variances, waivers, filings and other
authorizations with, of or from any Governmental Entity, that are
(a) necessary to consummate the Contemplated Transactions in the manner
contemplated hereby, or (b) otherwise relating to (i) any Contract or
other instrument with any Governmental Entity and to which the subject Person,
its Subsidiaries or any of its stockholders or other equity holders (as the case
may be) is a party (or by which any of their respective properties or assets is
bound or affected), or (ii) any Permit, including the transfer of any such
Contract, Permit or other instrument in accordance with the terms.

       

      1.81           “Governmental
Entity” shall mean any court, tribunal, arbitrator, authority, agency,
commission, official or other instrumentality of the government of the United
States or of any foreign country, any state or any political subdivision of any
such government (whether state, provincial, county, city, municipal or
otherwise).

       

      1.82           “Gross Amounts Due
to Models” shall mean the gross amounts due to models (as a reflected as
a line item on a balance sheet of the Wilhelmina Transferred Companies subject
to the next sentence).  For the avoidance of doubt, the Gross Amounts
Due to Models is a gross number and shall exclude any advances to models (which
is used to arrive a net due to models).

       

      1.83           “Hazardous
Materials” shall mean all explosive or regulated radioactive materials or
substances, hazardous or toxic substances, reactive, corrosive, carcinogenic,
flammable or hazardous pollutant or other substance, hazardous wastes or
chemicals, petroleum or petroleum distillates, natural gas or synthetic gas,
asbestos or asbestos containing materials and all other materials or chemicals
regulated pursuant to any Environmental Laws, including any “hazardous
substance” or “hazardous waste” as defined in Environmental
Laws,  materials listed in 49 C.F.R. §172.101, materials defined as
hazardous pursuant to § 101(14) of CERCLA special nuclear or by product
material, as defined by the Atomic Energy Act of 1954, 42 U.S.C.A. §3011 et
seq. and the rules and
regulations promulgated thereunder.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      1.84           “Indebtedness”
shall mean debt created, issued, incurred or assumed for money borrowed or for
the deferred purchase price of property purchased.

       

      1.85           “Initial
Enterprise Proceeds” shall mean $30,000,000.

       

      1.86           “Intellectual
Property” shall mean, collectively, (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all Patents, (b) all registered and unregistered
Trademarks, trade dress, logos, trade names, fictitious names, brand names,
brand marks, domain names and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all Copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all
trade secrets and confidential business information (including ideas, research
and development, know how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (e) all Computer Software (including, but
not limited to data, source codes, object codes, specifications and related
documentation), (f) all other proprietary rights, and (g) all copies
and tangible embodiments thereof (in whatever form or medium).

       

      1.87           “IRS” means
the United States Internal Revenue Service.

       

      1.88           “June 2008
Financials” shall have the meaning assigned to it in Section
3.9(c).

       

      1.89           “Knowledge”
and all variations thereof (other than the “Company’s Knowledge,” “to the
Knowledge of the Company,” “Purchaser’s Knowledge” or “to the Knowledge of the
Purchaser” variations) shall mean with respect to any representation, warranty
or statement of any party in this Agreement that is qualified by such party’s
“knowledge,” the actual knowledge of such party or, in the case of an entity,
the actual knowledge of the Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, inside General Counsel, Controller or directors (or
persons performing equivalent functions) of such entity.

       

      1.90           “Krassner
Note” means the Promissory Note dated June 3, 1999 in the principal
amount of $6,000,000 issued by the Company to the Krassner L.P.

       

      1.91           “Law” shall
mean, with respect to any Person, any applicable law, statute, treaty,
ordinance, rule, regulation, Order, pronouncement having the effect of law, or
other requirement of any Governmental Entity, including, without limitation, the
Foreign Corrupt Practices Act of 1977, and those covering safety, health,
transportation, bribery, record keeping, zoning, employment, tax, anti
discrimination, antitrust, wage and hour and price and wage control matters, to
which, in each of the foregoing cases, such Person is, or any of such Person’s
properties, operations, business or assets are, bound or
subject.  “Laws” shall include Environmental Laws.

       

      
        
          
          

        

        
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      1.92           “Lease”
shall mean any lease, agreement (whether verbal or written) or tenancy for
property or assets, together with all subleases, amendments, extensions,
addenda, assignments, waivers and all other rights of use and/or occupancy, and
Contracts and documents relating to any of the foregoing.

       

      1.93           “Leased Real
Property” shall mean the Real Property leased by any of the Wilhelmina
Transferred Companies or any of their Subsidiaries.

       

      1.94           “Leasehold
Improvements” and “Fixtures”
shall mean all of the leasehold improvements, fixtures and appurtenances owned
by the Company or any of its Subsidiaries and attached to the Leased Real
Property.

       

      1.95           “Legal
Proceeding” shall mean any Claim or any legal, administrative or other
similar proceeding by or before any Governmental Entity or arbitration or
alternative dispute resolution panel.

       

      1.96           “Liabilities”
shall mean, without limitation, any direct or indirect Indebtedness, guaranty,
endorsement, Claim, loss, damage, deficiency, cost, expense, obligation or
responsibility, fixed or unfixed, known or unknown, asserted or unasserted,
choate or inchoate, liquidated or unliquidated, secured or
unsecured.

       

      1.97           “Licenses”
shall mean, with respect to any Person, all licenses, permits, authorizations,
approvals, registrations, franchises, rights, variances (including zoning
variances), easements, rights of way, and similar consents or certificates
granted or issued by any other Person, other than a Governmental Entity,
relating to the business of the subject Person.

       

      1.98           “LLC
Agreements” shall mean the operating agreement for each of the
LLCs.

       

      1.99           “LLCs”
shall have the meaning set forth in the Preamble.

       

      1.100         “Losses”
shall mean, with respect to any event or circumstance, any and all Liabilities,
Encumbrances, penalties, fines, settlements, and causes of action, including,
without limitation, any diminution in value of any real or personal property and
reasonable attorneys’, experts’ and accountants’ fees, expenses and
disbursements and court costs in connection with any of the foregoing incurred
by a Person in connection with such event or circumstance.  The term
Losses does not include (i) a diminution of value of real or personal
property due to the operation of market conditions, (ii) the change in the
fair market value of any securities, (iii) lost profits or lost
opportunities as such relate to third party claims, unless any of the foregoing
are included in any final and nonappealable judicially determined damage amount
or (iv) amounts in respect of specific indemnifiable items that were included in
the calculation of, and resulted in a dollar-for-dollar reduction in favor of
the Purchaser in, the amount of the Closing Net Asset Adjustment; provided that
amounts not included in the Closing Net Asset Adjustment but that relate to
items or accounts included or taken into account in such calculation, may be
Losses.

       

      
        
          
          

        

        
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      1.101                      “March 2008
Financials” shall have the meaning assigned to it in Section
3.9(c).

       

      1.102                      “Market
Value” of Purchaser Stock shall mean the trailing 30 trading day average
closing price of shares of common stock of Purchaser (which shall include the
reference date, if the U.S. financial markets have closed) on the market on
which such security is listed.  If shares of Purchaser common stock
are not listed on a stock exchange, but are quoted on the OTC Bulletin Board or
on the Pink Sheets, the Market Value of such security shall be the average of
the mean of the closing bid and asked prices per share of such security for the
30 trading days preceding such date.

       

      1.103                      “Material Adverse
Effect” or “Material Adverse
Change” shall mean any effect, change, circumstance, development or event
(each a “Change” and collectively, “Changes”) that, individually or in the
aggregate, is or would reasonably be expected to be materially adverse to or in
respect of the condition (financial or otherwise), business, operations, results
of operations, affairs, assets, liabilities, Licenses, Permits, rights or
prospects (whether contractual or otherwise) of a specified Person or Persons
when taken as a whole; provided that  Changes resulting from any of
the following shall not be taken into account when determining whether a
“Material Adverse Effect” has occurred or would reasonably be expected to occur:
(A) general economic, political, financial or securities market conditions
and (B) general conditions to the industry in which the specified Person or
Persons operate, provided that, in either case ((A) or (B)) such Changes do not
disproportionately affect the specified Person or Persons.

       

      1.104                      “Material
Contract” shall have the meaning assigned to it in Section
3.15(a).

       

      1.105                      “Maximum Share
Offset” shall mean a number of shares of Purchaser Stock equal to (i)
(a) $4,500,000 divided by (b) the NCEH Book Value Per Share and
(ii) after completion of Purchaser’s fiscal year 2008 audit and the full
satisfaction of any required Core Decrease or Core Increase pursuant to Section
2.6 hereof (by way of a cash payment or the repurchase of Seller Restricted
Shares, in either case actually effected in accordance therewith),
(a) $1,000,000 divided by (b) the greater of (1) NCEH Book Value Per Share
and (2) the Market Value of Purchaser Stock as of the applicable
date.

       

      1.106                      “Miami
Earnout” shall have the meaning assigned to it in Section
2.8(b).

       

      1.107                      “Miami
Shares” shall mean the shares of common stock, par value .01 per share,
of Wilhelmina Miami.

       

      1.108                      “Minimum
Liquidity Requirement” means a number equal to (a) $1 million minus (b)
unrestricted cash and cash equivalents (which shall exclude security deposits)
of the Wilhelmina Transferred Companies as of the close of business on the
Closing Date minus (c) the Revolver Reduction Amount; provided that, if the
foregoing calculation yields a negative number, the “Minimum Liquidity
Requirement” shall be $0.

       

      
        
          
          

        

        
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      1.109                      “Model Contest
Business” shall mean the annual model search competitions carried out by
the Wilhelmina Transferred Companies, including particularly WAM, in conjunction
with certain third parties, including magazine publishers.

       

      1.110                      “Name Change
Approval” shall have the meaning assigned to it in Section
6.9.

       

      1.111                      "NCEH Book Value
Per Share" shall
mean (a) net book value per Purchaser Share as of the month end prior to
the date of this Agreement (which the parties agree is $0.247) minus (b) an amount equal to
(x) Ratable Purchaser Transaction Expenses divided by (y) the number of
shares of Purchaser Stock outstanding as of the date of the
Agreement.  For purposes of the foregoing, (i) “Ratable
Purchaser Transaction Expenses” means (x) Purchaser’s Transaction
Expenses incurred as of the date that is five Business Days prior to the Closing
(which expenses shall be determined by Purchaser based on invoices received to
date, plus a reasonable estimate by Purchaser in good faith of any noninvoiced
amounts as of such date) multiplied by (y) the Pro
Forma Seller Percentage; and (ii) “Pro Forma Seller Percentage” means the sum of
the “Pro Forma” percentages applicable to “Dieter Esch and Affiliates” and “Brad
Krassner and Affiliates” set forth on Schedule 5.4.

       

      1.112                      “New Employment
Agreement” shall have the meaning assigned to it in Section
8.2(c)(ii).

       

      1.113                      “NYBCL”
shall have the meaning assigned to it in Section 2.2(e).

       

      1.114                      “Objection
Notice” shall have the meaning assigned to it in Section
2.9(a).

       

      1.115                      “Old Employment
Agreements” shall have the meaning assigned to it in Section
3.20(b).

       

      1.116                      “Order”
shall mean any judgment, order, writ, decree, injunction, award, ruling or other
determination whatsoever of any Governmental Entity or any other entity or body
(including, without limitation, any arbitration or similar panel) whose finding,
ruling or holding is legally binding or is enforceable as a matter of right (in
any case, whether preliminary or final).

       

      1.117                      “Organizational
Documents” shall mean the articles or certificate of incorporation,
bylaws, certificate of organization, operating agreement, certificate of
partnership, partnership agreement or other governing or constituent documents
of a Person.

       

      1.118                      “Patents”
shall mean all letters patent and pending applications for patents of the United
States and all countries foreign thereto, including regional patents,
certificates of invention and utility models, rights of license or otherwise to
or under letters patent, certificates of intention and utility models which have
been opened for public inspection and all reissues, divisions, continuations and
extensions thereof.

       

      1.119                      “Permits”
shall mean all licenses, permits, certificates of authority, authorizations,
approvals, registrations, franchises, rights, variances (including zoning
variances), Orders, qualifications and similar rights or approvals granted or
issued by any Governmental Entity relating to the Property or the Business of
the Company or any Subsidiary.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      1.120                      “Person”
shall mean any natural person, corporation, general partnership, limited
partnership, limited liability company, proprietorship, joint venture, trust,
estate, association, union, entity, or other form of business organization or
any Governmental Entity whatsoever.

       

      1.121                      “Prepaid
Items” shall mean all of the Company’s prepaid expenses, including but
not limited to advances and deposits.

       

      1.122                      “Prohibited
Transaction” shall mean any transaction prohibited by Section 406 of
ERISA or “prohibited transaction” under Section 4975(c) of the Code with respect
to any Employee Benefit Plan, except for transactions which are exempt under
Section 408 of ERISA or Section 4975 of the Code.

       

      1.123                      “Property”
shall have the meaning assigned to it in Section 3.7.

       

      1.124                      “Proprietary
Information” shall mean any and all of the following matter and
information: trade secrets, ideas, techniques, processes, operation methods, new
product or service developments, product or service plans or improvements,
customer and client lists, Talent lists, financial information or statements,
sales or marketing information, plans or strategies, Talent information or new
Talent acquisition plans, personnel information or new personnel acquisition
plans, details of any Contracts, pricing and fee policies, projections and other
similar information that the Wilhelmina Transferred Companies or their
Subsidiaries own, use or  will use, and/or which is useful in
Business.   “Proprietary information'' shall not include
information that (a) was or becomes generally available to the public other than
as a result of a disclosure by a Seller, or the Affiliates, counsel, accountants
and other representatives of any Seller, or (b) was or becomes available to a
Seller on a non-confidential basis from a source other than the Purchaser or its
advisors, provided that such source was not known by such Seller to be bound by
any agreement with the Purchaser or any of its Affiliates to keep such
information confidential, or otherwise prohibited from transmitting the
information to you by a contractual, legal or fiduciary obligation.

       

      1.125                      “Proxy
Statement” shall have the meaning assigned to it in Section
6.8(a).

       

      1.126                      “Purchaser”
shall have the meaning assigned to it in the Preamble.

       

      1.127                      “Purchaser
Group” shall have the meaning assigned to it in Section
10.2.

       

      1.128                      “Purchaser Issued
Shares” shall have the meaning assigned to it in Section
5.4(c).

       

      1.129                      “Purchaser SEC
Reports” shall have the meaning assigned to it in Section
5.5(a).

       

      1.130                      “Purchasers
Knowledge” or “Knowledge of
Purchaser” (or similar formulation) shall mean the actual knowledge of
any officer of Purchaser.

       

      
        
          
          

        

        
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      1.131                      “Purchaser
Stock” or “Purchaser
Shares” shall mean the shares of common stock of Purchaser, par value
$.01 per share.

       

      1.132                      “Purchaser Value
Loss” shall have the meaning assigned to it in Section
10.6(c).

       

      1.133                      “Real
Property” shall mean any real estate or interest therein, together with
all buildings, improvements, fixtures, easements, options to acquire real estate
or interest therein, rights to unpaid insurance proceeds in respect of Losses to
real estate, rights to unpaid condemnation awards and all other rights in or
appurtenant thereto.

       

      1.134                      “Real Property
Leases” shall have the meaning assigned to it in Section
3.8.

       

      1.135                      “Registration
Rights Agreement” shall have the meaning assigned to it in the
Recitals.

       

      1.136                      “Reportable
Event” shall have the meaning assigned to it in ERISA.

       

      1.137                      “Representation
Business” shall have the meaning assigned to it in Section
9.2(c).

       

      1.138                      “Representative”
shall have the meaning assigned to it in Section 14.8.

       

      1.139                      “Required
Consents” shall mean any Consent required from any Person or under any
Contract or Law, as applicable, including all Governmental Consents and Required
Third Party Consents listed on Schedule 3.6 attached
hereto.

       

      1.140                      “Required Third
Party Consents” shall have the meaning assigned to it in Section
6.7(b).

       

      1.141                      “Requisite
Stockholder Vote” shall mean the affirmative vote of at least 66 2/3% of
the votes entitled to be cast by the holders of the outstanding shares of
Purchaser Stock.

       

      1.142                      “Restricted
Area” shall have the meaning assigned to it in Section
9.2(a).

       

      1.143                      “Restricted
Business” shall have the meaning assigned to it in Section
9.2(a).

       

      1.144                      “Restricted
Patterson Shares” shall have the meaning assigned to it in Section
6.12.

       

      1.145                      “Restricted
Period” shall mean the period commencing on the Closing Date and ending
on the date which is six and one-half (6 1⁄2) years from the Closing
Date.

       

      1.146                      “Restricted
Sellers” shall have the meaning assigned to it in Section
9.2.

       

      
        
          
          

        

        
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      1.147                      “Restricted Share
Amount” shall have the meaning assigned to it in Section
2.7.

       

      1.148                      “Revolver
Reduction Amount” shall mean a number (which may be positive or negative)
equal to (a) $1.5 million minus (b) all outstanding principal amounts and
accrued interest owing to Signature Bank under the Company’s revolving line of
credit as of the close of business on the Closing Date.

       

      1.149                      “Rights
Agreement” shall have the meaning assigned to it in the
Recitals.

       

      1.150                      “SEC” shall
have the meaning assigned to it in Section 5.5(a).

       

      1.151                      “Securities”
shall mean all units of membership interests, shares of capital stock,
partnership interests, options, warrants, notes, bonds or other equity or debt
securities which have been offered or sold by the subject entity.

       

      1.152                      “Securities
Act” shall mean the Securities Act of 1933, or any successors thereto,
and the rules and regulations promulgated thereunder, as amended and
supplemented from time to time.

       

      1.153                      “Seller
Basket” shall
have the meaning assigned to it in Section 10.4(a).

       

      1.154                      “Seller
Group” shall have
the meaning assigned to it in Section 10.5.

       

      1.155                      “Seller
Restricted Shares” shall have the meaning assigned to it in Section
2.7.

       

      1.156                      “Sellers”
shall have the meaning assigned to it in the Preamble.

       

      1.157                      “Signature Bank
Security Interests” shall have the meaning assigned to it in Section
7.3(i).

       

      1.158                      “Stockholder
Approvals” shall have the meaning assigned to it in Section
6.9.

       

      1.159                      “Stockholder
Meeting” shall have the meaning assigned to it in Section
6.9.

       

      1.160                      “Subsidiary”
shall mean any entity with respect to which a specified Person (or a Subsidiary
thereof) directly or indirectly owns 50% or more of the voting stock, units, or
membership interests, or otherwise has the power to vote or direct the voting of
sufficient Securities to elect at least half of the entity directors or
managers, as the case may be.

       

      1.161                      “Surviving
Corporation” shall have the meaning assigned to it in Section
2.2(a).

       

      1.162                      “Talent”
shall mean any model, entertainer, artist, athlete or other “talent” or
celebrity.

       

      
        
          
          

        

        
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      1.163                      “Talent
Agreement” shall have the meaning assigned to it in Section
3.15(a)(iii).

       

      1.164                      “Talent Business”
shall have the meaning assigned to it in Section 9.2(c).

       

      1.165                      “Tax
Returns” shall mean all returns, reports, Claims for refunds or other
information filed with any Governmental Entity in connection with Taxes
(including, without limitation, information returns and declarations of
estimated tax).

       

      1.166                      “Taxes”
shall mean (i) all taxes, charges, fees, levies or other assessments including,
without limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, payroll, employment, social security,
unemployment, excise, estimated, stamp, occupancy, occupation, property or other
similar taxes, including any interest or penalties thereon, and additions to tax
or additional amounts imposed by any federal, state, local or foreign
Governmental Entity, domestic or foreign (a “Taxing
Authority”) and (ii) all Liability for the payment of any taxes,
interest, penalty, addition to tax or like additional amount resulting from the
application of Treasury Regulation § 1.1502-6 or comparable Law.

       

      1.167                      “Term Loan
Amount” shall mean the amount of all outstanding principal and accrued
interest under the Company’s term loan owing to Signature Bank and any other
borrowings of the Wilhelmina Transferred Companies (other than any amounts under
or in connection with: (a) the Company’s revolver with Signature Bank (b) the
Krassner Note and (c) intercompany debt between or among the Wilhelmina
Transferred Companies and their wholly owned subsidiaries) as of the close of
business on the Closing Date.

       

      1.168                      “Terminated
Agreements” shall have the meaning assigned to it in Section
7.3(h).

       

      1.169                      “Third
Party” shall mean any Person other than any Seller, Wilhelmina
Transferred Company, and any Subsidiary thereof, or an Affiliate of any of the
foregoing.

       

      1.170                      “Total Divisional
Loss” shall have the meaning assigned to it in Section
2.8(e).

       

      1.171                      “Trademarks”
shall mean registered trademarks, registered service marks, trademark and
service mark applications, and unregistered trademarks and service
marks.

       

      1.172                      “Transaction
Expense Payment” shall have the meaning assigned to it in Section
13.3.

       

      1.173                      “Transaction
Expenses” shall mean the legal, accounting, financial advisory and
consulting fees and other fees and expenses incurred by any party hereto in
connection with the negotiation and closing of the Contemplated Transactions,
including any letter of intent, this Agreement, any Collateral Documents, any
document or filing in connection with the SEC approval process (including the
Proxy Statement), the Stockholders Meeting, any Third Party Consent or
otherwise.  Transaction Expenses shall exclude any Designated Matter
Legal Fees.

       

      
        
          
          

        

        
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      1.174                      “Unaudited Monthly
Statements” shall have the meaning assigned to it in Section
6.5.

       

      1.175                      “WAM” shall
have meaning set forth in the Preamble.

       

      1.176                      “WAM
Business” means the artist or talent management business, including but
not limited to celebrity or talent endorsements, sponsorships, appearances,
licensing and product lines, and campaigns (but excluding in all cases the core
model management booking business).

       

      1.177                      “WAM
Earnout” shall have the meaning assigned to it in Section
2.8(a).

       

      1.178                      “WAM
EBITDA” means, for any period and without duplication, (a) the
EBITDA of WAM related to the WAM Business, plus (b) the addbacks and, minus
(c) the deductions set forth on Schedule 1.178
hereto.  For avoidance of doubt, WAM EBITDA is intended to include
solely EBITDA from the WAM Business and shall in all cases exclude any Core
EBITDA, such as the Model Contest Business.

       

      1.179                      “WAM Units”
shall mean the units or membership interests of WAM.

       

      1.180                      “Wilhelmina Equity
Interests” shall mean the Wilhelmina Shares and the Wilhelmina
Units.

       

      1.181                      “Wilhelmina
Expense Amount” shall mean a number (which number may be positive or
negative) equal to (i) $35,000, minus (ii) the Transaction Expenses
incurred by or otherwise to be paid by the Wilhelmina Transferred Companies or
their Subsidiaries, that remain unpaid prior to Closing.

       

      1.182                      “Wilhelmina
Licensing” shall have the meaning set forth in the Preamble.

       

      1.183                      “Wilhelmina
Licensing Units” shall mean the units or membership interests of
Wilhelmina Licensing.

       

      1.184                      “Wilhelmina
Miami” shall have meaning set forth in the Preamble.

       

      1.185                      “Wilhelmina Miami
EBITDA” means, for any period and without duplication, (a) the
EBITDA of Wilhelmina Miami, plus (b) the addbacks and minus (c) the
deductions, in each case as set forth on Schedule 1.185 hereto.  For
avoidance of doubt, Wilhelmina Miami EBITDA excludes all EBITDA (including any
Core EBITDA) not directly generated by Wilhelmina Miami.

       

      1.186                      “Wilhelmina
Models” shall mean Wilhelmina Models, Inc., a New York
corporation.

       

      1.187                      “Wilhelmina
Shares” shall mean, collectively, the Company Shares and the Miami
Shares.

       

      
        
          
          

        

        
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      1.188                      “Wilhelmina
Subsidiaries” means Wilhelmina Models Inc., a New York corporation;
Wilhelmina West, Inc.; L.W. 1. Inc.; and Wilhelmina Kids & Creative
Management LLC, a Delaware corporation.

       

      1.189                      “Wilhelmina
Transferred Companies” shall have meaning set forth in the
Preamble.

       

      1.190                      “Wilhelmina
TV” shall have the meaning set forth in the Preamble.

       

      1.191                      “Wilhelmina TV
Units” shall mean the units or membership interests of Wilhelmina
TV.

       

      1.192                      “Wilhelmina
Units” shall mean, collectively, the WAM Units, Wilhelmina Licensing
Units and Wilhelmina TV Units.

       

      ARTICLE 2

      THE
TRANSACTION

       

      2.1           Closing.  On and subject to the terms and
conditions of this Agreement, at the Closing: (i) the Merger Sub will merge
with and into the Company (the “Merger”)
in accordance with Sections 2.2 through 2.5, and (ii) each Seller shall
sell, assign, convey and deliver to Purchaser (or Purchaser Sub, as applicable),
and Purchaser shall (or shall cause Purchaser Sub, as applicable, to) acquire
from each such Seller, good and marketable title to all outstanding Wilhelmina
Equity Interests (other than the Company Shares which shall be transferred by
merger pursuant to clause (i)) held by such Seller, free and clear of all
Encumbrances, in accordance with Sections 2.5, 2.6 and 2.8.  Schedule
2.1(a) sets forth a list of the Wilhelmina Equity Interests held by each Seller
and transferred to Purchaser hereunder.

       

      2.2           The
Merger.

       

      (a)           At
the Effective Time, (i) the separate existence of Merger Sub will cease and
Merger Sub will be merged with and into the Company (Merger Sub and the Company
are sometimes referred to herein as the “Constituent
Corporations”; with respect to periods after the Effective Time, the
Company is sometimes referred to herein as the “Surviving
Corporation”); (ii) the Certificate of Incorporation of Merger Sub
in effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation; and (iii) the By-laws of Merger
Sub as in effect immediately prior to the Effective Time shall be the By-laws of
the Surviving Corporation.

       

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

       

      (c)           Immediately
after the Effective Time, Purchaser shall elect those individuals set forth on
Schedule 2.2(c) to the Board of Directors of the Surviving Corporation (which
persons will constitute the entire Board of Directors of the Surviving
Corporation).  Neither Purchaser nor the Surviving Corporation is
under any obligation to maintain any person in any such position.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      (d)           Immediately
after the Effective Time, Purchaser shall cause the Board of Directors of the
Surviving Corporation to name the persons set forth on Schedule 2.2(d) as
officers of the Surviving Corporation in the positions indicated, provided
however, that neither Purchaser nor the Surviving Corporation is under any
obligation to maintain any person in any such position, except to the extent
provided in the Mutual Support Agreement.

       

      (e)           On
the Closing Date, the Company and Merger Sub will cause the Certificate of
Merger (the “Certificate of
Merger”) to be executed and filed with the New York Secretary of State as
provided in the New York Business Corporation Law (the “NYBCL”)
and shall make all other filings or recordings required under the NYBCL in order
to effect the Merger.

       

      (f)           The
Merger shall become effective on the day and time of the filing of the
Certificate of Merger with the New York Secretary of State, or at such other
date or time as the Parties may agree.  The date and time of such
effectiveness is herein sometimes referred to as the “Effective
Time”.

       

      (g)           As
of the Effective Time, by virtue of the Merger and without any action on the
part of the holders of any Company Shares or the holders of capital stock of
Merger Sub:

       

      (i)           Each
issued and outstanding Company Share shall be automatically converted into the
right to receive a pro-rata portion of the Aggregate Merger Consideration as
defined in Section 2.3 upon surrender, in the manner provided in Section 2.5
hereof, of the certificate that formally evidenced such Company
Share.  All such Company Shares, when so converted, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such Company Shares
shall cease to have any rights with respect thereto, except the right to receive
a portion of the Aggregate Merger Consideration therefor upon the surrender of
such certificate in accordance with Section 2.5.  Any Company Shares
held as treasury shares by the Company shall automatically be cancelled and
retired and shall cease to exist, and shall not be converted into the right to
receive any consideration.

       

      (ii)           Each
issued and outstanding share of the capital stock of Merger Sub shall
automatically, and without any action on the part of the holder thereof, be
converted into one validly issued, fully paid and non-assessable share of common
stock of the Surviving Corporation.

       

      (h)           As
soon as practicable after the Effective Time, each holder of Company Shares
prior to the Effective Time will surrender the certificates representing the
Company Shares pursuant to Section 2.5.  Upon the surrender of all the
Company Shares owned by a stockholder, such Person shall promptly receive from
Purchaser the portion of the Aggregate Merger Consideration which such Person is
entitled to receive pursuant to Section 2.5.

       

      
        
          
          

        

        
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      (i)           In
the event any certificate or certificates which immediately prior to the
Effective Time represented outstanding Company Shares (the “Certificates”)
shall have been lost, stolen or destroyed, upon the making of an affidavit of
fact by the Person claiming such Certificate(s) to be lost, stolen or destroyed
and, if required by Purchaser, the posting by such person of a bond in such sum
as Exchange Agent may reasonably direct as indemnity against any claim that may
be made against any party hereto or the Surviving Corporation with respect to
such Certificate(s), the Exchange Agent will disburse the Merger Consideration
pursuant to Section 2.5 payable in respect of the Company Shares represented by
such lost, stolen or destroyed Certificate(s).

       

      (j)           At
the Effective Time, the stock transfer books of the Company shall be closed, and
thereafter there shall be no further registration of transfers of the Company
Shares on the records of the Company.  From and after the Effective
Time, the holders of Certificates evidencing ownership of the Company Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Company Shares, except as otherwise provided for
herein or by applicable law.  If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be cancelled and exchanged as provided in this Article 2.

       

      (k)           The
Merger is intended to constitute a reorganization within the meaning of Sections
368(a)(1)(A) and 368(a)(2)(E) of the Code.  Each party shall treat the
Merger consistent with such characterization, including complying with the
reporting and record keeping requirements of Treasury Regulation Section
1.368-3.

       

      (l)           The
Merger shall have all further effects as specified in the applicable provisions
of the NYBCL.

       

      2.3           Transaction
Consideration.

       

      (a)           The
aggregate merger consideration shall be $15,000,000 of shares of Purchaser Stock
calculated based on NCEH Book Value Per Share of newly issued shares of
Purchaser Stock (the “Aggregate Merger
Consideration”), subject to the provisions of Section 2.7 (Seller
Restricted Shares) and as adjusted pursuant to the provisions of this Article
2.  Schedule 2.3 sets forth the portion of the Aggregate Merger
Consideration that will be distributable to each applicable Seller at Closing
and the portion of the Aggregate Merger Consideration that will be placed into
Escrow pursuant to Section 2.7.

       

      (b)           Subject
to Section 2.15, the aggregate consideration (the “Aggregate
Purchase Consideration”) payable by Purchaser in respect of the purchase
of all outstanding Wilhelmina Equity Interests (other than the Company Shares or
the Miami Shares) shall be (i) $9,000,000 minus (ii) the Designated Matter Cash
Deduction, in cash allocated as set forth on Schedule 2.3, as adjusted pursuant
to the provisions of this Article 2 and reduced by any applicable withholding
Tax; plus, as part of the consideration for the WAM Units, the WAM Earnout and
as consideration for the Miami Shares, the Miami Earnout.

       

      
        
          
          

        

        
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      2.4           No
Fractional Shares.  Notwithstanding any other provision of
this Agreement, no fraction of a share of Purchaser Stock will be issued by
virtue of the Merger, but in lieu thereof each holder of shares of Company
Shares who would otherwise be entitled to receive a fraction of a share of
Purchaser Stock (after aggregating all fractional shares of Purchaser Stock that
otherwise would be received by such holder) shall, upon surrender of such
holder’s Company Certificate(s) receive from Purchaser one share of the
Purchaser Stock (after taking into account all shares of Company Shares owned by
such holder at the Effective Time).

       

      2.5           Payment
for Shares in the Merger.  The manner of making payment for
Company Shares in the Merger shall be as follows:

       

      (a)           On
or prior to the Closing Date, Purchaser shall make available to Securities
Transfer Corporation (the “Exchange
Agent”) for the benefit of the holders of Company Shares, a sufficient
number of shares of Purchaser Stock required to effect the delivery of the
Aggregate Merger Consideration.

       

      (b)           Promptly
after the Effective Time, the Exchange Agent shall mail to each holder of record
(as of the Effective Time) of a Certificate or Certificates (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Company Certificates shall pass, only upon proper delivery
of the Company Certificates to the Exchange Agent) and (ii) instructions
for use in effecting the surrender of the Company Certificates in exchange for
certificates representing shares of Purchaser Stock pursuant to Section 2.2, and
any dividends or other distributions pursuant to this Section
2.5.  Upon surrender of Company Certificates for cancellation to the
Exchange Agent or to such other agent or agents as may be appointed by
Purchaser, together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, the holders of such
Company Certificates shall be entitled, at the Effective Time, to receive in
exchange therefore, certificates representing the number of whole shares of
Purchaser Stock into which their shares of Company Shares were converted
pursuant to Section 2.2, a share of Purchaser Stock in lieu of fractional shares
which such holders have the right to receive pursuant to Section 2.2 and any
dividends or other distributions payable pursuant to Section 2.5(c), and the
Company Certificates so surrendered shall forthwith be canceled. Until so
surrendered, outstanding Company Certificates will be deemed, from and after the
Effective Time, to evidence only the ownership of the number of whole shares of
Purchaser Stock into which such shares of Company Shares shall have been so
converted (including any voting, notice or other rights associated with the
ownership of such shares of Purchaser Stock under the Certificate of
Incorporation or Bylaws of Purchaser or under New York Law) and the right to
receive one share of Purchaser Stock in lieu of the issuance of any fractional
shares in accordance with Section 2.2 and any dividends or other distributions
payable pursuant to Section 2.5(c).

       

      (c)           No
dividends or other distributions that are declared after the Effective Time on
Purchaser Stock and payable to the holders of record thereof after the Effective
Time will be paid to persons entitled by reason of the Merger to receive
Purchaser Stock until such persons surrender their Company Certificates as
provided above.  Upon such surrender, there shall be paid to the
person in whose name the Purchaser Stock are issued any dividends or other
distributions having a record date after the Effective Time and payable with
respect to such Purchaser Stock between the Effective Time and the time of such
surrender.  After such surrender, there shall be paid to the person in
whose name the Purchaser Stock are issued any dividends or other distributions
on such Purchaser Stock which shall have a record date after the Effective
Time.  In no event shall the persons entitled to receive such
dividends or other distributions be entitled to receive interest on such
dividends or other distributions.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      (d)           If
any certificate representing Purchaser Stock is to be issued in a name other
than that in which the Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the Certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
and that the person requesting such exchange shall pay to the Exchange Agent any
transfer or other taxes required by reason of the issuance of certificates for
such Purchaser Stock in a name other than that of the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable.

       

      (e)           Notwithstanding
the foregoing, neither the Exchange Agent nor any of the Parties shall be liable
to a holder of Company Shares for any Purchaser Stock or dividends thereon
delivered to a public official pursuant to applicable escheat
law.  The Exchange Agent shall not be entitled to vote or exercise any
rights of ownership with respect to the Purchaser Stock held by it from time to
time hereunder, except that it shall receive and hold all dividends or other
distributions paid or distributed with respect to such Purchaser Stock for the
account of the persons entitled thereto.

       

      (f)           Subject
to applicable law, any portion of the Aggregate Merger Consideration which
remains unclaimed by the former stockholders of the Company for one (1) year
after the Effective Time shall be delivered to Purchaser, upon demand of
Purchaser, and any former stockholder of the Company shall thereafter look only
to Purchaser for payment of their applicable claim for their Company
Shares.

       

      (g)           No
transfers of Company Shares shall be made on the stock transfer books of the
Company after the close of business on the day immediately prior to the date of
the Effective Time.

       

      2.6           Core
Adjustment.

       

      (a)           As
soon as reasonably practicable but not later than thirty (30) days following
completion of Purchaser’s fiscal year 2008 audit, the Purchaser shall inform the
Control Sellers of its good faith calculation, based on the books and records of
the Company, of the Core Increase or the Core Decrease, as
applicable.  For a period of thirty (30) days after the date that the
Purchaser informs the Control Sellers of its calculations, the Purchaser will
provide the Control Sellers with full reasonable access to the Company’s Books
and Records, personnel and accountants during normal business hours and upon
reasonable notice.  In the event that the Purchaser receives an
objection notice relating to such calculations from the Control Sellers within
such thirty (30) day period, the dispute as to the calculation will be resolved
pursuant to Section 2.9 of this Agreement.

       

      
        
          
          

        

        
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      (b)           The
Aggregate Purchase Price shall be adjusted either (i) upwards, in the
amount of the Core Increase or (ii) downwards, in the amount of the Core
Decrease.  The “Core
Increase” shall mean, if the Base Price is higher than the Initial
Enterprise Proceeds, the excess of (a) the Base Price over (b) Initial
Enterprise Proceeds.  The “Core
Decrease” shall mean, if the Base Price is lower than the Initial
Enterprise Proceeds, the excess of (c) the Initial Enterprise Proceeds over
(d) the Base Price.  The “Base
Price” means a number equal to (i) the product of (x) 7.5 times (y)
Average Core EBITDA, plus (ii) Closing Net Asset Adjustment plus (iii) the
Wilhelmina Expense Amount plus (iv) the Designated Matter True-Up (if
applicable).  “Average Core
EBITDA” means the average of audited 2007 Core EBITDA and audited 2008
Core EBITDA.  In the event that a Core Increase is required, Purchaser
shall pay the Control Sellers in cash in immediately available funds (subject to
the last sentence of this Section 2.6(b)), pro-rata for their equity ownership
in the Company prior to Closing, the amount of such Core Increase within the
later of (A) 30 calendar days following Purchaser’s delivery of the
calculation of such Core Increase pursuant to Section 2.6(a) or (B) 10
(ten) days following the resolution, in accordance with Section 2.9 of this
Agreement, of any objection raised in compliance with Section 2.6(a)
above.  In the event that a Core Decrease is required, Esch and
Krassner shall each pay (or cause to be paid by Lorex and the Krassner L.P.,
respectively) the Purchaser in cash in immediately available funds, 50% of the
amount of such Core Decrease within the later of (A) 30 calendar days
following Purchaser’s delivery of the calculation of such Core Decrease pursuant
to Section 2.6(a) or (B) 10 (ten) days following the resolution, in
accordance with Section 2.9 of this Agreement, of any objection raised in
compliance with Section 2.6(a) above), not to exceed $2,250,000 in each case
($4,500,000 in the aggregate); provided that if either Esch or Krassner fails to
timely make (or caused to be made) its required cash payment pursuant to the
foregoing (or if either otherwise elects), Purchaser shall have the right to
promptly repurchase for $.0001 (one one-hundredths of one penny) per share such
number of Seller Restricted Shares equal to (x) 50% (with respect to each of
Esch and Krassner, for a total of 100% in the case of default and/or election by
both) of the amount of the Core Decrease divided by (y) the lesser of (1) the
Market Value of Purchaser Stock as of the date of repurchase and (2) the NCEH
Book Value Per Share; provided that in no event shall Purchaser be permitted to
purchase an amount of shares greater than the Maximum Share Offset pursuant to
the foregoing.  Notwithstanding the foregoing, if (i) the Base Price
is less than $25,500,000 and (ii) the sum of
(A) Closing Net Asset Adjustment plus (B) Wilhelmina
Expense Amount yields a negative number, Purchaser shall be permitted to offset
against payments pursuant to Section 2.8 an amount equal to the lesser of (a)
$25,500,000 minus the
Base Price or (b) absolute value of the sum of (A) the Closing Net Asset
Adjustment plus
(B) the Wilhelmina Expense Amount.  In the event of any
adjustments pursuant to this Section 2.6, the Parties hereto agree to use good
faith efforts to reach agreement on the allocation of any such adjustments
between the Aggregate Merger Consideration and the Aggregate Purchase
Consideration; provided, however, that in the event that a Core Increase is
required, any additional consideration that is allocable by virtue of this
provision to Aggregate Merger Consideration shall be paid in Purchaser Stock
(valued at Market Value as of the date of required payment) to the extent the
payment of such additional consideration would cause more than 20 percent of the
Aggregate Merger Consideration (based on the fair market value of the capital
stock and other consideration that would otherwise constitute Aggregate Merger
Consideration (i.e.,
without giving effect to the proviso)) to be paid in other than voting stock of
the Purchaser in violation of Section 368(a)(2)(E)(ii) of the Code; provided,
further that the Purchaser shall not be deemed in breach of this Section 2.6(b)
in the event that the parties hereto have not resolved the appropriate
allocation of any adjustments prior to the time of required payment by the
Purchaser pursuant to the fifth sentence of this Section 2.6(b).

       

      
        
          
          

        

        
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      2.7           Seller
Restricted Shares.  Concurrently with the Closing, a number
of shares issuable as part of the Aggregate Merger Consideration and equal to
(i) the Maximum Share Offset plus (ii) Designated Matter Holdback Shares (such
total, the “Restricted Share
Amount”) shall be deposited in escrow (the “Escrow”)
to be held in accordance with the Escrow Agreement (collectively, the “Seller
Restricted Shares”).  Olshan Grundman Frome Rosenzweig &
Wolosky LLP shall serve as escrow agent for the Escrow.  Seller
Restricted Shares shall be subject to repurchase by Purchaser pursuant to the
provisions of the Escrow Agreement, as further described in Sections 2.6, 2.8,
2.16 and 10.7.  For the avoidance of doubt, the Seller Restricted
Shares constitute a portion of the shares issuable to the Sellers at Closing
pursuant to the Merger.

       

      2.8           Earn-Out
Payments; Off-Set.  The purchase price payable by Purchaser for
WAM and Wilhelmina Miami, as applicable, shall be the right of the applicable
Sellers to receive the following cash payments (collectively, the “Earn-Out
Payments”) that may become deliverable or payable to the Sellers as
follows:

       

      (a)           WAM
Earnout

       

      (i)           As
soon as reasonably practicable but not later than thirty (30) days following the
third anniversary of the Closing Date, the Purchaser shall inform the Control
Sellers of its good faith calculation, based on the books and records of WAM, of
the WAM Earnout.  For a period of twenty (20) days after the date that
the Purchaser informs the Control Sellers of its calculations, the Purchaser
will provide the Control Sellers with full reasonable access to WAM’s Books and
Records, personnel and accountants during normal business hours and upon
reasonable notice.  In the event that the Purchaser receives an
objection notice relating to such calculations from the Control Sellers within
such twenty (20) day period, the dispute as to the calculation will be resolved
pursuant to Section 2.9 of this Agreement.

       

      (ii)           Subject
to the provisions of Section 2.8(c) and the resolution of any objection raised
in compliance with Section 2.8(a)(i) above, Purchaser shall pay to the Control
Sellers, pro rata in accordance with their pre-closing ownership of WAM, an
amount (if positive) in cash in immediately available funds equal to
(a) five (5) multiplied by (b) the three year average of audited WAM
EBITDA for the twelve month periods beginning on the Closing Date, the first
anniversary of the Closing and the second anniversary of the Closing Date,
respectively; provided that aggregate payments (determined prior to any
adjustment pursuant to Section 2.8(c)) under this Section 2.8(a)(ii) shall not
exceed $10,000,000; and provided further that revenue associated with any cash
included in the calculation of the Closing Net Asset Adjustment under Section
2.6 shall be excluded from WAM EBITDA for purposes of the foregoing
calculation.  The Earn-Out Payment described under this Section
2.8(a), subject to Section 2.8(c), is referred to as the “WAM
Earnout”.  Any positive WAM Earnout payment owed by Purchaser
shall be paid by Purchaser within the later of (A) 30 calendar days
following Purchaser’s delivery of the calculation of the WAM Earnout pursuant to
Section 2.8(a)(i) or (B) 10 (ten) days following the resolution, in
accordance with Section 2.9 of this Agreement, of any objection raised in
compliance with Section 2.8(a)(i) above.

       

      
        
          
          

        

        
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      (b)           Miami
Earnout

       

      (i)           As
soon as reasonably practicable but not later than thirty (30) days following the
third anniversary of the Closing Date, the Purchaser shall inform the Control
Sellers of its good faith calculation, based on the books and records of
Wilhelmina Miami, of the Miami Earnout.  For a period of twenty (20)
days after the date that the Purchaser informs the Control Sellers of its
calculations, the Purchaser will provide the Control Sellers with full
reasonable access to Wilhelmina Miami’s Books and Records, personnel and
accountants during normal business hours and upon reasonable
notice.  In the event that the Purchaser receives an objection notice
relating to such calculations from the Control Sellers within such twenty (20)
day period, the dispute as to the calculation will be resolved pursuant to
Section 2.9 of this Agreement.

       

      (ii)           Subject
to the provisions of Section 2.8(c) and the resolution of any objection raised
in compliance with Section 2.8(b)(i) above, Purchaser shall pay to the Control
Sellers and the Remaining Miami Sellers, pro rata for their pre-closing
ownership of Wilhelmina Miami, an amount (if positive) in cash in immediately
available funds equal to (a) 7.5 multiplied by (b) the three year
average of audited Wilhelmina Miami EBITDA for the twelve months periods
beginning on the Closing Date, the first anniversary of the Closing and the
second anniversary of the Closing Date, respectively; provided that revenue
associated with any cash included in the calculation of the Closing Net Asset
Adjustment under Section 2.6 shall be excluded from Wilhelmina Miami EBITDA for
purposes of the foregoing calculation . The Earn-Out Payment described under
this Section 2.8(b), subject to Section 2.8(c), is referred to as the “Miami
Earnout”.  Any positive Miami Earnout payment owed by Purchaser
shall be paid by Purchaser within the later of (A) 30 calendar days
following Purchaser’s delivery of the calculation of the Miami Earnout pursuant
to Section 2.8(b)(i) or (B) 10 (ten) days following the resolution, in
accordance with Section 2.9 of this Agreement, of any objection raised in
compliance with Section 2.8(b)(i) above.

       

      (c)           Notwithstanding
anything to the contrary, Purchaser shall have the right, prior to making any
payment under Section 2.8(a) or 2.8(b), and in addition to any other set off
rights specifically provided for in this Agreement, to reduce the amount of any
payments otherwise owing pursuant to either Section 2.8(a) or Section 2.8(b) by
(a) the absolute value of any Aggregate Divisional EBITDA Loss and (b) if
pursuant to Section 2.5 (i) the Base Price was less than $25,500,000 and (ii) the sum
of  (A) Closing Net Asset Adjustment plus (B) the Wilhelmina
Expense Amount yields a negative number, an amount equal to the lesser of
(A) $25,500,000 minus the Base Price or
(B) the absolute value of the sum of (A) Closing Net Asset Adjustment
plus
(B) Wilhelmina Expense Amount.  An “Aggregate
Divisional EBITDA Loss” shall mean (a) an aggregate WAM EBITDA loss
for the twelve months periods beginning on the Closing Date, the first
anniversary of the Closing and the second anniversary of the Closing Date,
respectively, if any, and/or (b) an aggregate Wilhelmina Miami EBITDA loss
for the twelve months periods beginning on the Closing Date, the first
anniversary of the Closing and the second anniversary of the Closing Date,
respectively, if any (it being understood that an aggregate loss in each case
shall be determined by summing EBITDA, including negative EBITDA, for all three
periods).

       

      
        
          
          

        

        
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      (d)           After
giving effect to any reduction(s) of Earnout Payments pursuant to Section
2.8(c), Purchaser shall pay any positive WAM Earnout and/or the Miami Earnout to
the applicable Sellers, pro rata for their pre-closing ownership interests in
WAM and Wilhelmina Miami, respectively, within the later of (A) 30 calendar
days following Purchaser’s delivery of the calculations with respect to the WAM
Earnout pursuant to Section 2.8(a)(i) and the Miami Earnout pursuant to Section
2.8(b)(i) (whichever is delivered later) or (B) 10 (ten) days following the
resolution, in accordance with Section 2.9 of this Agreement, of all objections
raised in compliance with Section 2.8(a)(i) or Section 2.8(b)(i)
above.

       

      (e)           In
the event that either (i) Aggregate Divisional EBITDA Losses exist for both
WAM and Wilhelmina Miami (the sum of such Aggregate Divisional EBITDA Losses,
the “Total
Divisional Loss”) or (ii) the amount an Aggregate Divisional EBITDA
Loss exceeds the amount of any Earnout Payment (prior to any adjustment made
under Section 2.8(c))  (an “Excess
Divisional Loss”), then Purchaser shall have the right to promptly
repurchase for $.0001 (one one-hundredths of one penny) per share a number of
Seller Restricted Shares (valued at the greater of (i) the prevailing Market
Value as of the date of repurchase and (ii) NCEH Book Value Per Share)
equal to the Total Divisional Loss or the Excess Divisional Loss, as applicable;
provided that in no event shall Purchaser be permitted to repurchase shares
hereunder having a value greater than the lesser of (a) $1,000,000 and, if
a repurchase of Seller Restricted Shares by Purchaser occurred pursuant to
Section 2.6 hereof, (b) the value (measured at the greater of (1) the
Market Value of Purchaser Stock as of the date of such repurchase and (2) NCEH
Book Value Per Share) of the number of Seller Restricted Shares that were
required to remain in escrow following such repurchase pursuant to Section 2.6
in respect of any Core Decrease.  Any such repurchase shall be
effected on 50/50 proportionate basis between shares issued to Lorex and shares
issued to Krassner L.P.  Each of Lorex or the Krassner L.P. shall have
the right to cover their respective 1⁄2 portions of any Total Divisional loss or
Excess Divisional Loss by a cash payment to Purchaser made within the time
period required by Section 2.8 above (in which case Purchaser shall not
repurchase Seller Restricted Shares pursuant to the foregoing).

       

      (f)           The
Earnout Payments may be payable in whole or in part in Purchaser Shares (valued
at then prevailing Market Value), at the election of the Control Sellers, provided (a) that
within fifteen (15) days after the date that the Purchaser informs the Control
Sellers of its calculation of the WAM Earnout, the Control Sellers deliver to
Purchaser a notice electing the whole or partial payment of the Earnout Payment
in Purchaser Shares and (b) Purchaser consents thereto in writing at the time of
such payment.  In the event that the Control Sellers fail to deliver
such notice, then the Earnout Payments shall be payable in cash or Purchaser
Shares, or any combination of cash and Purchaser Shares, at the sole discretion
of Purchaser.

       

      (g)           Earnout
Payments shall be considered an adjustment to the Aggregate Purchase
Price.  The net amount, if any, payable with respect to the WAM
Earnout shall be allocable to the WAM Units, and the net amount, if any, payable
with respect to the Miami Earnout shall be allocable to the Miami
Shares.

       

      
        
          
          

        

        
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      2.9           Resolution
of Calculation Objections.

       

      (a)           Any
objection notice delivered in connection with the matters set forth in Sections
2.6 and 2.8 shall be in writing (an “Objection
Notice”) and set forth any alleged inaccuracies or miscalculations (the
“Calculation
Objection”) no later than 5:00 p.m., New York City time on the fifteenth
(15th) day
after receipt of such calculations from Purchaser.  If the Control
Sellers do not deliver an Objection Notice to Purchaser by such date and time,
the Control Sellers shall be deemed to have accepted such calculations as
prepared by Purchaser.

       

      (b)           Following
the Purchaser’s receipt of any Objection Notice, the Purchaser and the Control
Sellers shall negotiate in good faith to resolve such dispute.  In the
event that the Control Sellers and the Purchaser fail to agree on any of the
Control Sellers’s objections set forth in the Objection Notice within ten (10)
days after the Purchaser receives the Objection Notice, the Control Sellers and
the Purchaser agree that RSM McGladrey, independent public accountants, shall,
within the thirty (30) day period immediately following referral of any
calculation to RSM McGladrey, make the final determination of such calculation
in accordance with the terms of this Agreement.  The Purchaser and the
Control Sellers each shall provide RSM McGladrey with their respective
determinations of such calculation and such supporting documentation and
information as RSM McGladrey may request.  RSM McGladrey shall make an
independent determination of the calculation that, assuming compliance with the
previous clause, shall be final and binding on the Sellers and the Purchaser if
RSM McGladrey’s determination shall be a number that is between or equal to one
of the numbers proposed by the Purchaser to the Control Sellers and the Control
Sellers in the objection notice.  If RSM McGladrey’s determination of
any calculation is not between the calculations of the Purchaser and the Control
Sellers, then the calculation determined by the party that was closer to that of
RSM McGladrey shall be final and binding.  The Control Sellers and the
Purchaser shall each pay one-half (1⁄2) of the fees, costs and expenses of RSM
McGladrey in connection with the foregoing.

       

      2.10           Krassner
Note.  At the Closing, the outstanding principal amount
(which the parties agree is $6,000,000), plus any accrued but unpaid interest,
under the Krassner Note shall be paid in its entirety to the Krassner L.P. by
Purchaser, or by Merger Sub (or the Surviving Corporation with funds contributed
by Purchaser) on behalf of Purchaser, and the Krassner Note shall be forthwith
cancelled and be no longer of any force and effect.

       

      2.11           Purchaser
Sub.  Purchaser shall have the right to consummate any
purchase of Wilhelmina Equity Interests hereunder through a newly formed
subsidiary entity or entities of Purchaser.  Purchaser shall inform
the Control Sellers within 5 Business Days prior to the Closing of its intention
with respect to which entity shall make the applicable acquisitions of equity
interests hereunder.  For avoidance of doubt, unless the context
indicates otherwise, Purchaser alone shall have the right to determine which
Purchaser entity is applicable in the event of references under this Agreement
to “Purchaser or Purchaser Sub” or a similar formulation.

       

      2.12           Controlled
Vehicles; Set Offs.  For the avoidance of doubt, Purchaser
shall be permitted to adjust amounts owed to any Affiliate of Esch or Krassner
(e.g., owed to Lorex (controlled by Esch) or to the Krassner L.P. (controlled by
Krassner), respectively) with amounts owed or payable by Esch or Krassner under
this Agreement, and vice versa.  No Control Seller shall assert that
the ownership or transfer of any Wilhelmina entity by such Control Seller’s
affiliate (e.g., by Lorex and the Krassner L.P., respectively, in the case of
Esch and Krassner, respectively, and vice versa), rather than such Control
Seller, precludes Purchaser from setting off against, or otherwise adjusting
amounts owed to such Affiliate under this Agreement.

       

      
        
          
          

        

        
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      2.13           Election.  The Control Sellers may elect to
direct the payment of shares of Purchaser Stock otherwise payable to them as
part of the consideration under this Agreement to qualified Persons who make the
representations set forth in Section 4.7, Section 4.8 and Section 4.9 of this
Agreement.

       

      2.14           Aggregate
Purchase Consideration Allocation.

       

      (a)           After
a thorough analysis of the assets of each LLC and arm’s length negotiations, the
parties agree that the Aggregate Purchase Consideration with respect to such LLC
(including any contingent portion of the Aggregate Purchase Consideration) and
the liabilities of such LLC immediately before the Closing, to the extent not
required to be treated as interest under Section 1274 of the Code, shall be
allocated among the assets of such LLC as follows:

       

      (i)           to
each asset of the LLC (other than Section 197 intangibles, within the meaning of
Section 197 of the Code), there shall be allocated an amount equal to the book
value of such asset net of the book value of any contra account with respect
thereto, in each case determined in accordance with GAAP as reflected on the
LLC’s books and records immediately prior to the Closing, and

       

      (ii)           the
balance, including all contingent payments with respect to such LLC (except to
the extent required to be treated as interest) shall be allocated to Section 197
intangibles within the meaning of Section 197 of the Code, including
goodwill.

       

      (b)           No
portion of such amount shall be allocated to the covenants contained in Article
9.

       

      (c)           Each
of the parties (i) shall be bound by the allocations described in this
Section 2.14 for all purposes, including determining any Taxes, (ii) shall
prepare and file all Tax Returns to be filed in a manner consistent with such
allocations, and (iii) shall not take (or permit any affiliate to take any
position inconsistent with such allocations in any Tax Return, any proceeding
before a Governmental Authority or otherwise.  In the event the
allocation is disputed by a Governmental Authority, the party receiving notice
of such dispute shall promptly notify and consult with the other parties
concerning the resolution of such dispute, and shall keep the other parties
apprised of the status of such dispute and the resolution thereof.

       

      2.15           Patterson
Payment.  Notwithstanding anything to the contrary, an
amount in cash (i) equal to one-half of the Patterson Payment Amount and (ii)
otherwise payable to Control Sellers as cash consideration under Section 2.3(b)
at Closing, shall be directed and paid to Patterson to satisfy, together with
the issuance of Purchaser Shares (including Restricted Patterson Shares) under
Section 6.12 hereof, the Company’s obligations in respect of any change in
control or related payment under Patterson’s Old Employment
Agreement.  The "Patterson Payment Amount" shall mean the amount (if
any) jointly determined by the Control Sellers and Purchaser to be owed at
Closing to Patterson in respect of any change in control or related payment
under Patterson's Old Employment Agreement in connection with the transactions
contemplated by this Agreement.  The total foregoing cash payment
shall be an adjustment to the Aggregate Purchase Price.

       

      
        
          
          

        

        
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      2.16           Designated
Matter Repurchase.   If, as a result of the settlement
with respect to the matter set forth on Schedule 10.2(d) under the heading
“Program Amounts”, the Designated Matter Post Closing Amount exceeds the
Designated Matter Cash Deduction, then Purchaser shall have the right to
promptly repurchase for $.0001 (one one-hundredths of one penny) per share a
number of Designated Matter Holdback Shares having a value equal to the
Designated Matter Repurchase Share Amount.  Any repurchase of
Designated Matter Holdback Shares pursuant to this Section 2.16 shall occur no
later than 90 days following the later of (i) final settlement with respect to
the matter set forth on Schedule 10.2(d) under the heading “Program Amounts” and
(ii) full satisfaction of any required Core Decrease or Core Increase pursuant
to Section 2.6 hereof.  In no event shall Purchaser repurchase any
Designated Matter Holdback Shares other than pursuant to this Section 2.16;
provided that Designated Matter Holdback Shares shall not be Purchaser’s sole
remedy with respect to the indemnification amounts covered by Section
10.2(d).

       

      ARTICLE 3

      REPRESENTATIONS
AND WARRANTIES OF WILHELMINA TRANSFERRED COMPANIES AND CONTROL
SELLERS

       

      Each of
the Wilhelmina Transferred Companies and Control Sellers severally in accordance
with the percentages set forth on Schedule B hereby make the following
representations and warranties to the Purchaser and Merger Sub as of the date
hereof and as of the Closing Date, except that to the extent that a
representation or warranty relates to a particular Control Seller, such
representation or warranty, as it relates to such Control Seller, shall be
deemed to have been made by such Control Seller severally and not
jointly:

       

      3.1           Organization.  Each of the Wilhelmina
Transferred Companies and their Subsidiaries is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization.  Each of the
Wilhelmina Transferred Companies and their Subsidiaries is duly authorized or
admitted to conduct business and, where applicable, is in good standing under
the laws of each jurisdiction where such authorization or admission is required,
except where the failure to do so would not have a Material Adverse
Effect.  All of such jurisdictions are listed on Schedule
3.1(a).  Each of the Wilhelmina Transferred Companies and their
Subsidiaries has the power and authority to own its property and to carry on its
business as presently conducted or as presently contemplated by such
entity.  Correct and complete copies of the operating or limited
liability company agreement, Certificate or Articles of Organization (as
applicable), or Certificate or Articles of Incorporation (as applicable) and
Bylaws of each of the Wilhelmina Transferred Companies and their Subsidiaries
(as applicable), as amended through the Closing Date, have been delivered to the
Purchaser.  None of the Wilhelmina Transferred Companies is in
violation of any term of its respective Operating Agreement, Certificate or
Articles of Organization (as applicable), or Certificate or Articles of
Incorporation (as applicable) or Bylaws (as applicable), as amended to the
Closing Date, or any Contract, Order, or Law applicable to it.  True
and complete listings of the managers, members, officers and directors (as
applicable) of each of the Wilhelmina Transferred Companies their Subsidiaries
are set forth on Schedule
3.1(b).

       

      
        
          
          

        

        
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      3.2           Legal
Authority; Binding Effect.  Each of the Wilhelmina
Transferred Companies has the power and authority (corporate or otherwise, as
applicable) to execute and deliver this Agreement, each of the Collateral
Documents which it has executed and delivered and to consummate the Contemplated
Transactions.  The execution, delivery and performance by the
Wilhelmina Transferred Companies of this Agreement and each of the Collateral
Documents to which it has executed and delivered, and the consummation by each
of them of the Contemplated Transactions have been duly authorized by all
necessary action (corporate or otherwise, as applicable) on the part of the
Wilhelmina Transferred Companies.  This Agreement and each of the
Collateral Documents which any of the Wilhelmina Transferred Companies has
executed and delivered have been duly executed and delivered by such Wilhelmina
Transferred Company and constitute legal, valid and binding obligations of such
Wilhelmina Transferred Company, enforceable against it in accordance with their
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, moratorium or similar Laws affecting the rights of creditors’
generally and general equity principles (regardless of whether enforceability is
considered in a proceeding at law or in equity).

       

      3.3           Capitalization.

       

      (a)           The
number of authorized and outstanding Wilhelmina Shares (with respect to the
Company and Wilhelmina Miami) and Wilhelmina Units (with respect to each of the
LLCs) is accurately set forth on Schedule 3.3(a)
hereof.  No Wilhelmina Shares or Wilhelmina Units or other equity
interests of the Wilhelmina Transferred Companies are held in treasury or
otherwise reserved for issuance.  Except as disclosed on Schedule 3.3(a), the
Wilhelmina Transferred Companies have not issued any shares of capital stock,
membership interests or other equity interests, there are no outstanding
warrants, options or other rights, commitments, agreements or understandings to
purchase or acquire any shares of capital stock, membership interests or other
equity interests or securities of the Wilhelmina Transferred Companies, there
are no outstanding debt securities of the Wilhelmina Transferred Companies
convertible into shares of capital stock, membership interests or otherwise
containing equity interests or securities and there are no outstanding or
authorized unit appreciation, phantom unit, profit participation or similar
rights with respect to the Wilhelmina Transferred Companies.

       

      (b)           The
Company Shares and the other Wilhelmina Equity Interests set forth on Schedule 3.3(a) have
been validly issued and are fully paid and non-assessable and are not otherwise
subject to any Encumbrances, except for those that are contained in the LLC
Agreements and the Signature Bank Security Interests.  None of the
Company Shares or the other Wilhelmina Equity Interests have been issued in
violation of any applicable preemptive or similar right.  There are no
preemptive rights with respect to the issuance or sale of shares of capital
stock, membership interests or other equity interests or securities by the
Wilhelmina Transferred Companies that have not otherwise been waived or
terminated.  All securities of the Wilhelmina Transferred Companies
were issued in compliance with all Laws and, at the time of sale, were exempt
from registration pursuant to the registration provisions of the Securities Act
and applicable national or state securities laws, and no such Securities were
registered under any such act or Laws.  There are no restrictions on
the transfer of any membership interests or other equity securities in the
Wilhelmina Transferred Companies or any of their Subsidiaries, other than those
arising from federal and state securities Laws and under the relevant operating
agreements (which restrictions relating to the operating agreements, if any,
have been waived in respect of the Contemplated Transactions).  There
are no voting trusts or other similar agreements or understandings to which any
Wilhelmina Transferred Company is a party with respect to the voting or
ownership of membership interests or other equity securities of the Wilhelmina
Transferred Companies or any of their Subsidiaries.

       

      
        
          
          

        

        
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      3.4           Subsidiaries.  A true and complete list of all
Subsidiaries of the Wilhelmina Transferred Companies, indicating the authorized
and outstanding equity securities thereof, is set forth in Schedule
3.4.  The organizational documents of the Subsidiaries of the
Wilhelmina Transferred Companies), as amended through the Closing Date, have
been delivered to Purchaser.  Other than as listed on Schedule 3.4, no
Wilhelmina Transferred Company has any direct or indirect investments in, and no
Wilhelmina Transferred Company is a party to any agreement, commitment or
understanding requiring any Wilhelmina Transferred Company to purchase or
acquire any interest in, the equity of any Person, or debt securities
convertible into such securities or otherwise containing equity
provisions.  Except as set forth on Schedule 3.4, the
Wilhelmina Transferred Companies own, directly or indirectly, 100% of the
outstanding shares of capital stock or membership interests (as the case may be)
of each of their Subsidiaries and each such share of capital stock or unit or
membership interest has been duly authorized and is validly issued, fully paid
and non-assessable and is not otherwise subject to any Encumbrances, and none of
such shares of capital stock or units or membership interests has been issued in
violation of any applicable preemptive or similar right.

       

      3.5           Conflict
with other Instruments; Absence of Restrictions.  The
execution, delivery and performance of this Agreement and each of the Collateral
Documents, and the consummation of the Contemplated Transactions, by the
Wilhelmina Transferred Companies or the Control Sellers do not and will
not:  (i) result in a Default of or under (A) any of the
terms of the Organizational Documents of the Wilhelmina Transferred Companies or
any of their Subsidiaries, (B) assuming the receipt of all Governmental
Consents listed on Schedule 3.6, any
Law, Permit or Order applicable to or binding upon the Company, any of its
Subsidiaries or any of the Sellers, or (C) assuming the receipt of all
Required Consents listed on Schedule 3.6, any
Material Contracts, Permits or Licenses to which the Wilhelmina Transferred
Companies or any of their Subsidiaries is a party or by which any of them are
bound; (ii) result in the creation or imposition of any Encumbrance upon
any of the equity interests of the Wilhelmina Transferred Companies or any of
their Subsidiaries or upon any of the assets or properties of the Wilhelmina
Transferred Companies or any of their Subsidiaries; or (iii) assuming the
receipt of all Required Consents listed on Schedule 3.6,
(A) result in the termination, amendment or modification of, or give any
party the right to terminate, amend, modify, abandon, or refuse to perform any
Material Contract, License or Permit to which the Wilhelmina Transferred
Companies or any of their Subsidiaries is a party or by which any of them, or
any of their properties or assets, are bound, or (B) result in the
acceleration or modification of, or give any party the right to accelerate or
modify, the time within which, or the terms under which, any duties or
obligations are to be performed, or any rights or benefits are to be received
under any Material Contract, License or Permit to which the Wilhelmina
Transferred Companies or any of their Subsidiaries is a party or by which any of
them, or any of their  properties or assets, is bound, except that the
Krassner Note will be paid at Closing.

       

      
        
          
          

        

        
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      3.6           Government
and Third Party Approvals.  Except as listed on Schedule 3.6, no
Governmental Consent or Consent of any Person (including any party to any
Contract any the Wilhelmina Transferred Company or any of their Subsidiaries) is
required for (i) the execution, delivery and performance by the Wilhelmina
Transferred Companies or any of their Subsidiaries of this Agreement or any of
the Collateral Documents to which any of them is a party, (ii) the
consummation of the Contemplated Transactions by the Wilhelmina Transferred
Companies, any of their Subsidiaries or any of the Sellers, or (iii) the
continued enforceability of any Material Contract after giving effect to the
consummation of the Contemplated Transactions.

       

      3.7           Title to
Properties; Adequacy of Properties.  Except as set forth on
Schedule 3.7,
each of the Wilhelmina Transferred Companies and their Subsidiaries has good,
valid and marketable title to, or, in the case of leased properties and assets,
valid leasehold interests in, all of its tangible and intangible properties and
assets, real, personal and mixed, used or held for use in the Business (the
“Property”),
free and clear of any and all Encumbrances.  The Property includes,
but is not limited to, all of the Wilhelmina Transferred Companies’ and their
Subsidiaries’ Accounts Receivable, Cash, Equipment, Intellectual Property,
Leased Real Property, Leasehold Improvements and Fixtures, Prepaid Items,
personal property leased by the Wilhelmina Transferred Companies, causes of
action, contract rights, going concern value, and goodwill.  The
tangible personal property included in such Property (including Equipment) is in
good working order, reasonable wear and tear excepted, and fit for its intended
use.  Except as set forth on Schedules 3.7 and
3.8, no Property (other than the Leased Real Property) is held under any
Lease or Encumbrance.  No Property is located other than in the
possession and control of the Wilhelmina Transferred Companies or their
Subsidiaries at their respective places of business.  The Property,
taken as a whole, is adequate to conduct the Business as now conducted or as
presently contemplated by the Wilhelmina Transferred Companies or the Sellers to
be conducted.  All of the Property is properly reflected in the
balance sheets contained in the Financial Statements.

       

      3.8           Real
Property; Personal Property.  No Wilhelmina Transferred
Company nor any of their Subsidiaries owns any Real Property or is a party to
any option, agreement or other document pursuant to which such Wilhelmina
Transferred Company or such Subsidiary has the right or obligation to purchase
or acquire title to or any interest in any Real Property.  Schedule 3.8 hereof
sets forth a true and complete list of each Lease for Real Property executed by
or binding upon the Wilhelmina Transferred Companies and their Subsidiaries, as
lessor or lessee, sublessor or sublessee, landlord or tenant, or assignor or
assignee (the “Real Property
Leases”), and a true and complete description of all Leased Real
Property.  Each of the Real Property Leases and all leases of personal
property to which the Wilhelmina Transferred Companies or any of their
Subsidiaries is a party (the “Personal Property Leases”) is legal, valid and
binding and in full force and effect without any material Default thereof by any
Wilhelmina Transferred Company or any Subsidiary thereof or, to the Knowledge of
the Company or any Control Seller, any other party thereto and each of the Real
Property Leases and Personal Property Leases affords the Wilhelmina Transferred
Companies or their Subsidiaries (whichever is a party thereto) peaceful and
undisturbed possession of the Leased Real Property or Leased Personal Property,
as the case may be, which is the subject matter of the applicable Real Property
Lease or Personal Property Lease, subject to the terms and conditions of the
Real Property Lease or Personal Property Lease, as the case may
be.  The Leased Real Property constitutes the only Real Property
leased by the Wilhelmina Transferred Companies or their Subsidiaries or
otherwise used by the Wilhelmina Transferred Companies or their Subsidiaries in
connection with the operation of their Business as currently conducted and as
presently proposed to be conducted.  Except for the occupancy and use
of the Leased Real Property by the Wilhelmina Transferred Companies or their
Subsidiaries, there are no leases, tenancies, licenses or other rights of
occupancy or use for any portion of the Leased Real Property, and, except as set
forth on Schedule
3.8, no Person or entity other than the Wilhelmina Transferred Companies
or their Subsidiaries occupies or uses any portion of the Leased Real
Property.  True and complete copies of the Real Property Leases have
been delivered to the Purchaser.

       

      
        
          
          

        

        
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      3.9           Financial
Statements.

       

      (a)           Schedule 3.9 contains
the following financial information concerning the Wilhelmina Transferred
Companies and their Subsidiaries:

       

      (i)           the
audited consolidated financial statements of the Wilhelmina Transferred
Companies and their Subsidiaries for the fiscal year ended December 31, 2005
(including the December 31, 2005 balance sheet and a statement of income and
retained earnings for the year then ended);

       

      (ii)           the
audited consolidated financial statements of the Wilhelmina Transferred
Companies and their Subsidiaries for the fiscal year ended December 31, 2006
(including the December 31, 2006 balance sheet and a statement of income and
retained earnings for the year then ended); and

       

      (iii)           
the audited consolidated financial statements of the Wilhelmina Transferred
Companies and their Subsidiaries for the fiscal year ended December 31, 2007
(including the December 31, 2007 balance sheet and a statement of income and
retained earnings for the year then ended) (the “2007 Audited
Financials”).

       

      (b)           The
financial statements contained in Schedule 3.9,
together with all Unaudited Monthly Statements and 2007 Audited Financials, are
collectively referred to as the “Financial
Statements”.

       

      (c)           The
Financial Statements set forth in Section 3.9(a) were prepared in accordance
with GAAP and fairly present, in all material respects, the financial condition,
the results of the operations and, where applicable, the cash flows and changes
of financial position of the Wilhelmina Transferred Companies and their
Subsidiaries as at the respective dates thereof and for the periods reported
therein, subject in the case of the March 2008 Financials, the June 2008
Financials and the Unaudited Monthly Statements to normal year end
adjustments.  The financial statements for the fiscal quarter ended
March 31, 2008 (including the March 31, 2008 balance sheet and a statement of
income and retained earnings for the quarter then ended) (the “March 2008
Financials”) and the fiscal quarter ended June 30, 2008 (including the
June 30, 2008 balance sheet and a statement of income and retained earnings for
the quarter then ended) (the “June 2008
Financials”), when delivered, will be prepared in accordance with GAAP
and will fairly present, in all material respects, the financial condition, the
results of the operations and, where applicable, the cash flows and changes of
financial position of the Wilhelmina Transferred Companies and their
Subsidiaries as at the respective dates thereof and for the periods reported
therein, subject to normal year-end adjustments.  The Financial
Statements, the March 2008 Financials, and the June 2008 Financials when
delivered, have been prepared from, and are in accordance with, the books and
records of the Wilhelmina Transferred Companies.

       

      
        
          
          

        

        
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      3.10           Absence
of Undisclosed Liabilities.  Neither the Wilhelmina
Transferred Companies nor any of their Subsidiaries has any material Liabilities
which are not properly disclosed, reflected or reserved against on the Financial
Statements or which are not otherwise set forth on Schedule 3.10(a)
attached hereto.  Neither the Company nor any of its Subsidiaries has
any Liabilities which have been incurred since December 31, 2007, other than
those Liabilities set forth on Schedule 3.10(b)
attached hereto or Liabilities incurred in the ordinary course of business that
are not material.

       

      3.11           Accounts
Receivable.  All of the accounts receivable of the
Wilhelmina Transferred Companies have arisen, and as of the Closing Date will
have arisen, solely in a bona fide transaction in the ordinary course of
business of the Wilhelmina Transferred Companies or their
Subsidiaries.  Except as set forth on Schedule 3.11 or
reserved for as allowance for doubtful accounts on the Financial Statements,
each of the accounts receivable constitutes, and as of the Closing Date will
constitute, a valid claim in the full amount thereof against the debtor charged
therewith on the books of the Wilhelmina Transferred Companies and is
enforceable, and as of the Closing Date will be enforceable, in accordance with
its terms, subject in all cases to reserves indicated on the Financial
Statements.  The amounts charged to clients or customers of the
Wilhelmina Transferred Companies in the creation of any accounts receivable are
consistent, and as of the Closing Date will be consistent, with those stated on
such client Contracts or arrangements (whether oral or written), as may exist
and as such may be modified or amended.  No account debtor has, or
will have as of the Closing Date, any valid set off, deduction or defense with
respect thereto, and no account debtor has asserted to the Company such set off,
deduction or defense.

       

      3.12           Compliance
with Law; Permits and Approvals.

       

      (a)           The
Wilhelmina Transferred Companies and their Subsidiaries are, and since January
1, 2005 have been, in compliance in all material respects with the Laws or
Orders to which any of the Wilhelmina Transferred Companies or their
Subsidiaries or the Business is subject.  Except as set forth on Schedule 3.12(a)(i),
no Wilhelmina Transferred Company or Control Seller has received, nor does the
Company or any Control Seller have Knowledge of the issuance of, any notice from
any Governmental Entity, citizens group, employee, model, client or other Third
Party of any such violation or alleged violation of any applicable Laws or
Orders by any of them or of any investigation with respect to any such violation
or non-compliance, in each case since January 1, 2005.  To the
Knowledge of the Company or any Control Seller, there is no investigation
relating to the Wilhelmina Transferred Companies or their Subsidiaries or the
Business (or the Control Sellers in respect of the Business) that is in
progress, threatened or contemplated by any Governmental Entity.  The
Wilhelmina Transferred Companies and their Subsidiaries have operated in full
compliance with the terms of the settlement set forth under Schedule 3.12(a)(ii)
since such settlement became effective.

       

      
        
          
          

        

        
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      (b)           Schedule 3.12(b)
contains a true and correct description of all Licenses and Permits issued in
favor of the Wilhelmina Transferred Companies and their Subsidiaries, all of
which are in full force and effect, and the Business is currently being operated
in compliance with the terms of each of the foregoing in all material
respects.  None of the Wilhelmina Transferred Companies or their
Subsidiaries have failed to obtain any License or Permit (including all talent
agency licenses) necessary to the ownership of the Company’s or its
Subsidiaries’ assets or the operation of the Business and, except as described
on Schedule
3.12(b) or such renewals as are required in the ordinary course of
business consistent with the terms of such License or Permit, none of the
Wilhelmina Transferred Companies or their Subsidiaries will be required, as a
result of the Closing, to file, apply for or obtain any License or Permit in
order to operate the Business in the same manner as currently operated on the
date of this Agreement.  Neither the Wilhelmina Transferred Companies
nor any of their Subsidiaries has taken any action or failed to take any action
which could reasonably be expected to result in or enable, with or without
notice or lapse of time or both, the revocation or termination of any of such
Licenses or Permits or the imposition of any restrictions thereon.  No
Legal Proceeding is pending or, to the Knowledge of the Company or any Control
Seller, threatened to revoke, refuse to renew or modify any of the Licenses or
Permits.

       

      3.13           Legal
Proceedings.  Except as set forth on Schedule 3.13, there
is no Legal Proceeding pending against or, to the Knowledge of the Company or
any Control Seller, threatened against or affecting, the Wilhelmina Transferred
Companies or any of their Subsidiaries (or any of the Control Sellers relating
the Business).  Schedule 3.13
indicates the extent to which such pending Legal Proceedings are covered by
insurance, together with the amount claimed, if any.  Except as set
forth on Schedule
3.13, there is no Order outstanding against the Wilhelmina Transferred
Companies or any of their Subsidiaries.

       

      3.14           Absence
of Changes.  (a) Except as set forth on Schedule 3.14(a),
since December 31, 2007, (i) there has been no event or condition which had
(or is reasonably likely to result in) a Material Adverse Effect on the
Wilhelmina Transferred Companies or their Subsidiaries, (ii) the Wilhelmina
Transferred Companies and their Subsidiaries have in all material respects
conducted the Business in the ordinary course consistent with past practices
(except entering into this Agreement) and have not taken any action which, if
taken after the date hereof, would constitute a violation of Section 6.2 of this
Agreement, and (iii) there has been no incurrence or discharge of any
material Liabilities, except in the ordinary course of business.

       

      (b)           Since
December 31, 2007, there has been no distribution or transfer of cash or assets
(whether by dividend, loan, compensation related payment or otherwise) by or
from any Wilhelmina Transferred Company to the Control Sellers, other than the
regular payments of consulting fees (and/or regular interest on the Krassner
Note) or in the ordinary course of business consistent with prior practice as
set forth on Schedule 3.14(b), or as otherwise contemplated by this
Agreement.

       

      (c)           Except
as set forth on Schedule 3.14(c), since September 30, 2007, there has been no
modification in the cash management practices of any Wilhelmina Transferred
Companies, including but not limited to (i) any acceleration of the
collection of Accounts Receivable and/or (ii) delay in the payment of any
accounts payable or similar obligations, and all vendors, employees and models
have been paid on a basis consistent with past practice in all material
respects.

       

      
        
          
          

        

        
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      3.15           Contracts, Leases, Etc.

       

      (a)           
Schedule
3.15(a) attached hereto sets forth a true and complete list of all
Contracts to which any of the Wilhelmina Transferred Companies or their
Subsidiaries is currently a party, or by which any of their respective Property
is currently bound, that fall into one or more of the following categories
(together with the Contracts set forth on Schedule 3.15(b), each, a “Material
Contract”):

       

      (i)           
except for the LLC Agreements and the Krassner Note, any Contract or commitment
with any current or former member, manager, stockholder, director, or officer of
the Company or any of the other Wilhelmina Transferred Companies, or any of
their Affiliates;

       

      (ii)           
employment Contract or severance Contract (each, an “Employment
Agreement”) with any Employee;

       

      (iii)           Contract
with any Talent representing the top 20 highest grossing such Contracts for
2007  (“Talent
Agreement”);

       

      (iv)           Contract
(other than any Contract, including any “ticket”, entered into by models and
third persons with respect to one-time jobs) with any third party pursuant to
which any Wilhelmina Transferred Company earns fees, royalties or other amount
representing the top 10 highest grossing such Contracts for 2007;

       

      (v)         
  Contract, commitment or arrangement with any labor union or other
representative of Employees;

       

      (vi)           Contract
or commitment related to the Intellectual Property of the Company, including all
license or franchise agreements covering the “Wilhelmina” name or
mark;

       

      (vii)          Contract
or commitment for the performance of services by a Third Party which involves in
any one case Twenty Five Thousand Dollars ($25,000) and is not cancelable on
thirty (30) days notice or less without penalty;

       

      (viii)         agreement
or commitment to perform services which obligates any Wilhelmina Transferred
Company or a Subsidiary thereof to perform services which involves in any one
case Twenty Five Thousand Dollars ($25,000) and which is not cancelable on
thirty (30) days notice or less without penalty;

       

      (ix)           Lease
under which any Wilhelmina Transferred Company or any Subsidiary is either
lessor or lessee of personal property requiring annual Lease payments (including
rent and any other charges) in excess of Twenty Five Thousand Dollars
($25,000);

       

      
        
          
          

        

        
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      (x)           Lease
under which any Wilhelmina Transferred Company or any Subsidiary thereof is the
lessor of real property;

       

      (xi)           note,
debenture, mortgage, pledge, charge, security agreement, bond, conditional sale
agreement, equipment trust agreement, letter of credit agreement, loan agreement
or other Contract or commitment for borrowing or lending of money (including,
without limitation, loans to or from any current or former managers, officers,
directors, Sellers, stockholders or members of the Wilhelmina Transferred
Companies, or any Affiliate of any of the foregoing), agreement or arrangements
for a line of credit or guarantee, pledge or undertaking of the Indebtedness of
any other Person, which involves in any one case Twenty Five Thousand Dollars
($25,000);

       

      (xii)           Contract
or series of related Contracts for any capital expenditure in excess of Twenty
Five Thousand Dollars ($25,000);

       

      (xiii)         Contract
limiting or restraining it from engaging or competing in any lines of business
with any Person or in any geographic area;

       

      (xiv)         Contract
involving either (i) the purchase or sale of (A) membership interests,
capital stock, partnership interests or other equity interests or
(B) substantially all or a material portion of the assets of a Person, or
(ii) a merger, consolidation or joint venture with another
Person;

       

      (xv)          Settlement
agreements relating to Claims previously filed against the Wilhelmina
Transferred Companies or their Subsidiaries;

       

      (xvi)         agreement
with any Governmental Entity;

       

      (xvii)        power
of attorney granted by the Company or any of its Subsidiaries in favor of any
Person;

       

      (xviii)       any
other Contract or series of related Contracts requiring payments or other
consideration by or from the Wilhelmina Transferred Companies in excess of
Twenty Five Thousand Dollars ($25,000) during the remainder of its
term;

       

      (xix)          except
for the LLC Agreements, Contracts imposing any Encumbrances on any of the
Wilhelmina Shares or the Wilhelmina Units or the Property; or

       

      (xx)           other
material Contracts not made in the ordinary course of business.

       

      (b)          
 Schedule 3.15(b) sets forth each Contract (other than any Contract,
including any “ticket”, entered into by models and third parties with respect to
one time jobs) between any Talent and any third party pursuant to which any
Wilhelmina Transferred Company earns fees, royalties or other amounts and which
agreement is in effect.

       

      
        
          
          

        

        
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      (c)           Each
Material Contract is valid and enforceable (except as such enforceability may be
limited by and be subject to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law
(including, without limitation, concepts of notice and materiality), and by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors’ and
debtors’ rights generally (including, without limitation, any state or federal
law in respect of fraudulent transfers)) in accordance with its terms
against the Wilhelmina Transferred Companies and their Subsidiaries party
thereto and, to the Knowledge of the Company and any Control Seller, the Third
Parties party thereto are in compliance with the provisions thereof; neither the
Wilhelmina Transferred Companies nor any of their Subsidiaries party thereto
nor, to the Knowledge of the Company and any Control Seller, any of the Third
Parties party thereto, is in Default in the performance, observance or
fulfillment of any obligation, covenant or condition contained therein; and, no
event has occurred which with or without the giving of notice or lapse of time,
or both, would constitute a Default thereunder by the Wilhelmina Transferred
Companies or any of their Subsidiaries, any Control Seller or, to the Knowledge
of the Company and any Control Seller, any other party.

       

      (d)           Except
as set forth on Schedule 3.15(d), the
execution, delivery and performance of this Agreement and the Collateral
Documents and the consummation of the Contemplated Transactions will not
(i) result in or give to any Person any right of termination, non renewal,
cancellation, withdrawal, acceleration or modification in or with respect to any
Material Contract, (ii) result in or give to any Person any additional
rights or entitlement to increased, additional, accelerated or guaranteed
payments under any Material Contract or (iii) result in the creation or
imposition of any Liability upon the Wilhelmina Transferred Companies or any of
their Subsidiaries or any Encumbrances upon any of the Property under the terms
of any Material Contract.

       

      (e)           Except
as expressly listed under the leading “3.15(a)(xiii)” on Schedule 3.15(a),
none of the terms or provisions of any Material Contract include a restriction
on the ability of the Wilhelmina Transferred Companies or their Subsidiaries to
compete with any Person or to compete in any geographic area.

       

      (f)           No
party to any Material Contract (i) has provided any notice to the
Wilhelmina Transferred Companies or any of their Subsidiaries or any of the
Control Sellers of its intent to terminate, or withdraw its participation in,
any such Material Contract or (ii) to the Knowledge of the Company and any
Control Seller, has threatened to terminate, or withdraw from participation in,
any such Material Contract.

       

      (g)           Except
as set forth on Schedule 3.6, no
Consent of any Third Party to any Material Contract is required in connection
with the consummation of the Contemplated Transactions.

       

      (h)           The
Company has delivered to Purchaser a true, correct and complete copy of each
written Material Contract.

       

      
        
          
          

        

        
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      (i)           Except
as set forth on Schedule 3.15(i), no
Talent Agreement or related Contract shall terminate, or is otherwise terminable
upon the termination of representation, or any such other relationship, with a
Wilhelmina Transferred Company (or subsidiary thereof) booking agent, talent
manager, or other person specified in such agreement.

       

      3.16           Customers/Client Accounts/Models.

       

      (a)           Schedule 3.16(a)
attached hereto sets forth a true and complete list of the names of those
clients or customers which accounted for the twenty (20) largest gross billings
of the Wilhelmina Transferred Companies and their Subsidiaries, on a
consolidated basis, as determined from the books and records of the Wilhelmina
Transferred Companies utilized to prepare the 2007 Audited
Financials.  There has been no actual termination or cancellation of
the business relationship of the Wilhelmina Transferred Companies and their
Subsidiaries with any client or group of clients listed on Schedule 3.16(a)
attached hereto.  Except where such change, modification or alteration
would not have a material Adverse Effect on the results of operations of the
Wilhelmina Transferred Companies and their Subsidiaries, to the Knowledge of the
Company or any Control Seller, there is no present or impending change,
modification or alteration in the relationship of the Wilhelmina Transferred
Companies and their Subsidiaries with any client or group of clients listed on
Schedule
3.16(a) attached hereto, including any Knowledge of the Company or any
Control Seller of an intent not to renew or Knowledge of any of them of facts
and circumstances, other than general economic conditions, that would reasonably
cause any specific client or group of clients to fail to renew the existing
relationship with the Wilhelmina Transferred Companies and their
Subsidiaries.

       

      (b)           Schedule 3.16(b)
attached hereto sets forth a true and complete list of the names of the models
which accounted for the twenty (20) largest gross billings (each of men and
women) of the Wilhelmina Transferred Companies and their Subsidiaries, on a
consolidated basis, as determined from the books and records of the Wilhelmina
Transferred Companies utilized to prepare the income statement contained in the
2007 Audited Financials.  Except as indicated on Schedule 3.16(b), all
of such models indicated on Schedule 3.16(b) are under contract with the
Wilhelmina Transferred Companies (and subject to customary provisions consistent
with past practice with respect to such contracts), and there has been no actual
termination or cancellation of the business relationship of the Wilhelmina
Transferred Companies and their Subsidiaries with any model listed on Schedule 3.16(b)
attached hereto.  Except where such change, modification or alteration
would not have a Material Adverse Effect on the results of operations of the
Wilhelmina Transferred Companies and their Subsidiaries, to the Knowledge of the
Company or any Control Seller, there is no present or impending change,
modification or alteration in the relationship of the Wilhelmina Transferred
Companies and their Subsidiaries with any model listed on Schedule 3.16(b)
attached hereto, including any Knowledge of an intent not to renew or Knowledge
of facts and circumstances, other than general economic conditions, that would
reasonably cause any specific model or group of models to fail to renew the
existing relationship with the Wilhelmina Transferred Companies and their
Subsidiaries.

       

      (c)           There
has been no cancellation or termination or material amendment or modification
by, or the receipt of any notice of intent or desire to cancel, terminate, amend
or modify from, any supplier or vendor that was material to the Wilhelmina
Transferred Companies and their Subsidiaries in 2007.

       

      
        
          
          

        

        
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      3.17           Insurance.  The Wilhelmina Transferred
Companies and their Subsidiaries have maintained in effect since January 1,
2005, and presently has in effect, all errors and omissions insurance policies,
and all other insurance policies, required by Law or reasonably appropriate in
connection with the operation of the their Business as presently
conducted.  Schedule 3.17 lists
each existing insurance policy (including, without limitation, policies
providing property, casualty, liability, errors and omissions, and workers
compensation coverage) to which the Wilhelmina Transferred Companies or their
Subsidiaries is a party or is the named insured.  With respect to each
such insurance policy set forth on Schedule 3.17 (unless
otherwise specified):  (a) each errors and omissions policy and
each other policy, is legal, valid, binding, enforceable (except as such
enforceability may be limited by and be subject to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law (including, without limitation, concepts of notice and
materiality), and by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors’ and debtors’ rights generally (including, without limitation, any
state or federal law in respect of fraudulent transfers)) in accordance
with its terms, and in full force and effect in all respects and all premiums
due thereunder have been paid and no notice of cancellation or termination has
been received by the Wilhelmina Transferred Companies or any Subsidiary with
respect to such policies, (b) to the Company’s Knowledge, no other party to
the policy is in material breach or Default (including with respect to the
payment of premiums or the giving of notices), and to the Company’s Knowledge,
no event has occurred which would permit termination, modification, or
acceleration, under the policy; and (c) no other party to the policy has
repudiated any provision thereof.  Each of the Wilhelmina Transferred
Companies and their Subsidiaries shall use its commercially reasonable efforts
to keep or cause such insurance or comparable insurance to be kept in effect
through the Closing Date.

       

      3.18           Intellectual
Property.

       

      (a)           Set
forth on Schedule
3.18(a) is a true and complete list of all registered and unregistered
Intellectual Property of the Wilhelmina Transferred Companies and their
Subsidiaries used in, necessary for, or related to the Business of the
Wilhelmina Transferred Companies or any of their Subsidiaries (with a brief
description of each, including, where relevant, the owner, the applicable
jurisdiction, the registration number, application number or issuance number,
and the date of application, issuance and/or filing) as it is currently
conducted.

       

      (b)           To
the Knowledge of the Company or any Control Seller, no person or entity is
infringing upon, diluting, or otherwise violating any of the rights of the
Wilhelmina Transferred Companies and their Subsidiaries to the Intellectual
Property.  To the Knowledge of the Company or any Control Seller, the
operation of the Business does not infringe, dilute, or otherwise violate the
Intellectual Property rights of any Third Party and neither the Wilhelmina
Transferred Companies nor any of their Subsidiaries has received notice of
infringement upon, misappropriation of or conflict with any asserted right of
any Third Party (including, without limitation, any employee or former employee
of the Wilhelmina Transferred Companies or any of their Subsidiaries) under any
Intellectual Property.  No Wilhelmina Transferred Company has received
notice that any Third Party has exercised or intends to exercise any rights to
indemnification granted by the Wilhelmina Transferred Companies or any of their
Subsidiaries against infringement of Intellectual Property rights.

       

      
        
          
          

        

        
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      (c)           No
Claim is pending or, to the Knowledge of the Company or any Control Seller,
threatened, and no Wilhelmina Transferred Company nor any of Subsidiary thereof
has received written notice to the effect that: (i) the business conducted
by any Wilhelmina Transferred Company or Subsidiary thereof infringes upon,
misappropriates or conflicts with the asserted rights of any other Person under
any Intellectual Property; or (ii) any Wilhelmina Transferred Company’s or
any such Subsidiary’s interest in any Intellectual Property owned or licensed by
any Wilhelmina Transferred Company or any Subsidiary, or which any Wilhelmina
Transferred Company or any such Subsidiary otherwise has the right to use, is
invalid or unenforceable.

       

      (d)           Except
as set forth on Schedule 3.15(a)
under the heading “3.15 (a)(vi)”, there are no licenses, sublicenses, consents
or other agreements (whether written or otherwise) pertaining to any
Intellectual Property (a) by which any Wilhelmina Transferred Companies or
any of their Subsidiaries licenses or otherwise authorizes a Third Party to use
such Intellectual Property or (b) by which a Third Party licenses or
otherwise authorizes the Wilhelmina Transferred Companies or any of their
Subsidiaries to use its Intellectual Property.

       

      (e)           Except
as provided on Schedule 3.18(e), the Wilhelmina Transferred Companies and their
Subsidiaries have taken commercially reasonable steps to maintain and protect,
including through registration when appropriate, the Intellectual Property owned
by the Company or any of their Subsidiaries so as not to materially or adversely
affect the validity or enforceability thereof.  The Wilhelmina
Transferred Companies and their Subsidiaries have diligently taken commercially
reasonable action necessary to enforce their Intellectual Property
rights.

       

      3.19           Transactions
with Affiliates.  No member, manager, stockholder, officer,
or key employee of the Wilhelmina Transferred Companies or any Affiliate
(including any family member) of any of the foregoing has during the past two
(2) years: (a) received or earned, or (b) had an ownership interest
(whether direct or indirect) in any business, corporate or otherwise, which has
or had any business arrangement or relationship of any kind under which it has
received or earned, payments from the Wilhelmina Transferred Companies or their
Subsidiaries in excess of Twenty-Five Thousand Dollars ($25,000) (except for
ordinary payroll compensation for employees) in any year, except as described in
Schedule 3.19
attached hereto.  There are no Contracts between any Wilhelmina
Transferred Company or any Subsidiary thereof and any current or former member,
manager, stockholder, officer, or employee of the Company or any Affiliate
(including any family member) of any such Person except for an LLC’s Operating
Agreement, Employment Agreements, and those Contracts identified on Schedule 3.19 hereto,
a true and complete copy of each of which (including all amendments) has been
delivered to Purchaser.  Except as set forth on Schedule 3.19 and the
Krassner Note, no Wilhelmina Transferred Company nor any Subsidiary thereof is
indebted to any Seller or his or her Affiliate, and Schedule 3.19
contains a complete list of all amounts owed to any Wilhelmina Transferred
Company or any Subsidiary thereof by any Seller or his or her
Affiliate.  All transactions required to be listed on Schedule 3.19
attached hereto have been recorded in the Books and Records of the Wilhelmina
Transferred Companies, as applicable, at the full value, as if they were
rendered in arm’s-length transactions.

       

      
        
          
          

        

        
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      3.20           Employee
and Labor Matters.

       

      (a)           Schedule 3.20(a) sets
forth a complete and accurate list showing all Employees of the Wilhelmina
Transferred Companies and each of their Subsidiaries, listing all Contracts with
such Employees and the rate of compensation (and the portions thereof
attributable to salary, bonus and other compensation, respectively) of each of
such Persons for fiscal year 2007 and as of the date hereof.  Since
December 31, 2007, there have been no increases in the compensation payable or
any special bonuses to any manager, officer, director, or Employee, except
ordinary salary, bonus and other compensation increases implemented on a basis
consistent with past practices (which have been notified to Purchaser prior to
execution of this Agreement).

       

      (b)           On
and following the Closing Date, the Wilhelmina Transferred Companies will have
no liability for any change of control payment or similar payment or benefit
(including but not limited to any obligations to pay cash or issue equity) to
any employee of the Company under the Old Employment Agreements as a result of
the execution of this Agreement or the consummation of the Contemplated
Transactions, except as set forth in Section 6.12.  The “Old Employment
Agreements” shall mean (i) that certain Employment Agreement by and
among the Company, WAM, Wilhelmina Models, and Sean Patterson, dated August 1,
2003, (ii) that certain Employment Agreement by and among the Company, WAM,
Wilhelmina Models, and Adam Schneider, dated September 13, 2006, (iii) that
certain Employment Agreement by and among the Company and Mia Lolordo, dated
February 8, 2007 and (iv) any other employment or similar agreement with an
employee or affiliate of the Wilhelmina Transferred Companies entered into prior
to the Closing Date (other than the New Employment Agreement).  On the
Closing Date, the Company will have no Liability in connection with any deferred
compensation program.

       

      (c)           Each
of the Wilhelmina Transferred Companies and their Subsidiaries has complied and
is in compliance in all material respects with all Laws which relate to wages,
hours, discrimination in employment and collective bargaining and no Wilhelmina
Transferred Company nor any Subsidiary thereof is liable for any arrears of
wages, Taxes or penalties for failure to comply, in all material respects, with
any of the foregoing.  Except as set forth in Schedule 3.20(c),
none of the Control Sellers or the Wilhelmina Transferred Companies have
received any notice of a Claim or Legal Proceeding against any Wilhelmina
Transferred Company or Subsidiary thereof (whether under federal, state or local
Law, under any employment Contract, or otherwise) brought or, to the Knowledge
of the Company or any Control Seller, threatened by any Employee on account of
or for: (i) overtime pay, other than overtime pay for work done during the
current payroll period; (ii) wages or salary for any period other than the
current payroll period; (iii) any amount of vacation pay or pay in lieu of
vacation time, other than vacation time or pay in lieu thereof earned in or in
respect of the current fiscal year; (iv) any violation of any Law relating
to minimum wages or maximum hours of work or (v)  relating to
discrimination or occupational safety in employment or employment practices
(including the Occupational Safety and Health Act of 1970, as amended, the Fair
Labor Standards Act, as amended, Title VII of the Civil Rights Act of 1964, as
amended, or the Age Discrimination in Employment Act of 1967, as
amended).

       

      
        
          
          

        

        
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      (d)           Neither
the Wilhelmina Transferred Companies nor any of their Subsidiaries is or has
ever been bound by or subject to (and none of its respective assets or Property
is or has ever been bound by or subject to) any arrangement with any labor
organization.  No Employees of the Wilhelmina Transferred Companies or
their Subsidiaries are represented by any labor organization or covered by any
collective bargaining agreement.  To the Knowledge of the Company or
any Control Seller, no campaign to establish such representation is or has ever
been in progress and there is no pending or, to the Knowledge of the Company or
any Control Seller, threatened labor dispute involving the Wilhelmina
Transferred Companies or their Subsidiaries and any group of their
Employees.

       

      3.21           Employee
Benefit Plans.

       

      (a)           Schedule 3.21 sets
forth a complete and accurate list of each Employee Benefit
Plan.  With respect to each Employee Benefit Plan, the Wilhelmina
Transferred Companies have delivered or caused to be delivered to the Purchaser
true and complete copies of, as applicable (i) the plan document,
amendments, trust agreement and any other material document governing such
Employee Benefit Plan, (ii) the most recent financial statement;
(iii) the current summary plan description required by ERISA, (iv) the
three most recent Form 5500 annual reports, (v) the most recent IRS
determination letter, (vi) substantially all documents comprising all
insurance contracts, annuity contracts, investment management or advisory
agreements, administration contracts, service provider agreements, fidelity
bonds and fiduciary liability policies currently in effect, and (vii) all
material correspondence with any Governmental Entity.

       

      (b)           Except
as set forth on Schedule 3.21, none of the Wilhelmina Transferred Companies nor
any ERISA Affiliate sponsors, maintains or contributes to, or has any material
Liability with respect to: (A) a plan subject to Title IV of ERISA
(including, without limitation, a “multiemployer plan” (within the meaning of
Section 4001(a)(3) of ERISA)); (B) a “multiple employer plan” (within the
meaning of Section 413 of the Code); (C) a “multiple employer welfare
arrangement” (within the meaning of Section 3(40) of ERISA); or
(D) post-employment medical or death benefits, except as required under
Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code (“COBRA”).

       

      (c)           Substantially
all contributions to and payments from the Employee Benefit Plans have been
timely made.  All such contributions which are currently deductible by
the Wilhelmina Transferred Companies for federal income tax purposes have been
fully deducted by the applicable Wilhelmina Transferred Company for such
purposes.  Such deductions, to the Knowledge of the Wilhelmina
Transferred Companies, have not been challenged or disallowed by any
Governmental Entity and none of the Wilhelmnia Transferred Companies nor any
Control Seller has reason to believe that such deductions are not properly
allowable.

       

      
        
          
          

        

        
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      (d)           All
the Employee Benefit Plans conform in all material respects to, and are being
administered and operated in material compliance with their respective terms,
the requirements of ERISA, the Code and all other applicable Laws.

       

      (e)           Except
as set forth on Schedule 3.21, each Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code and exempt from tax under Section
501(a) of the Code has received a favorable determination letter from the
Internal Revenue Service and no event has occurred since the date of such
determination letter that is reasonably likely to affect adversely such
qualification or exemption.

       

      (f)           Except
as set forth on Schedule 3.21, the execution of and performance of the
Contemplated Transactions will not (either alone or upon the occurrence of any
additional or subsequent events) result in: (1) any payment to or acceleration,
vesting or increase in the rights of any current or former Employee or other
service provider of the Wilhelmina Transferred Companies or their Subsidiaries,
or (2) any “excess parachute payment” (as defined in Section 280G of the Code)
to any current or former Employee or other service provider of the Wilhelmina
Transferred Companies or their Subsidiaries.

       

      (g)           There
are no pending or, to the Knowledge of any of the Wilhelmina Transferred
Companies or any Control Seller, threatened material Claims by or on behalf of
any Employee Benefit Plan, or by or on behalf of any individual participants or
beneficiaries of any Employee Benefit Plan, alleging any violation of ERISA or
any other applicable Laws or regulations, or claiming payments (other than
benefit claims made and expected to be approved in the ordinary course of the
operation of such Employee Benefit Plans).  No Employee Benefit Plan
is the subject of any pending or, to the Knowledge of any of the Wilhelmina
Transferred Companies or any Control Seller, threatened investigation or audit
by the IRS, the U.S. Department of Labor, the Pension Benefit Guaranty
Corporation or any other Governmental Entity.

       

      (h)           Solely
to the extent that such action or inaction could result in any liability to a
Wilhelmina Transferred Company, no individual who would otherwise have satisfied
the criteria for eligibility in an Employee Benefit Plan did not participate in,
or was denied the opportunity to participate in, an Employee Benefit Plan solely
on account of his/her misclassification as an independent contractor or
consultant or 1099 recipient(or words having similar import as any of the
foregoing) or leased employee. For the avoidance of doubt, for the purposes of
the preceding sentence, to the extent an Employee Benefit Plan contains
“Microsoft” type language intended to address such misclassifications, an
individual shall not be deemed to have satisfied the criteria for eligibility in
an Employee Benefit Plan.

       

      (i)           Each
Employee Benefit Plan that is “nonqualified deferred compensation plan” (within
the meaning of Section 409A of the Code) has been operated in accordance with a
good faith reasonable interpretation of the applicable requirements
thereof.

       

      3.22           Environmental Laws.  The Company, its
Subsidiaries and the operation of the Business is and has been in compliance
with all applicable Environmental Laws in all material
respects.  There have occurred no, and there are no, events,
conditions, circumstances, activities, practices, incidents, or actions on the
part of, or caused by, the Wilhelmina Transferred Companies, any of their
Subsidiaries or any of the Control Sellers (or, to the Knowledge of the Company
or any Control Seller, caused by a Third Party) that may give rise to any common
law or statutory Liability, or otherwise form the basis of any Claim, Legal
Proceeding, Order or action involving or relating to the Business, based upon or
related to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutants, contaminants,
chemicals, petroleum, or industrial, toxic or Hazardous Materials.

       

      
        
          
          

        

        
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      3.23           Taxes
and Tax Returns.  Except as set forth on Schedule
3.23:

       

      (a)           Since
December 31, 2004, each of the Wilhelmina Transferred Companies and their
Subsidiaries, including any predecessors thereof, has duly and timely filed all
Tax Returns required to be filed by it on or before the Closing Date (taking
into account extensions) with any Governmental Entity.  Each such Tax
Return was true, accurate and complete in all material respects (or as
subsequently amended, whether or not pursuant to an audit).  Each of
the Wilhelmina Transferred Companies and their Subsidiaries, including any
predecessors thereof, has timely paid in full all material Taxes for the period
covered by each such Tax Return, whether or not shown as due on such Tax Return,
subject to the amounts disclosed on Schedule 3.23 with respect to Taxes not
shown as due on a Tax Return (which amounts are being contested in good faith
and for which adequate reserves have been established).  All Taxes not
yet due and payable have been withheld or reserved for and, to the extent that
they relate to periods on or prior to the Closing Date are, or will be,
reflected as a Liability on the balance sheets contained in the Unaudited
Monthly Statements.  The LLCs have never elected to be taxed as other
than a partnership for federal or state income tax purposes.

       

      (b)           Each
of the Wilhelmina Transferred Companies and their Subsidiaries has complied in
all material respects with all Laws relating to the payment and withholding of
Taxes and information reporting and back up withholding (including, without
limitation, withholding of Taxes pursuant to Sections 1441 and 1442 of the Code,
or similar provisions under any foreign Laws) and has, within the time and in
the manner prescribed by Law, withheld from employee wages and paid over, in a
timely manner, to the proper Taxing Authorities  all amounts required
to be so withheld and paid over under applicable Law.

       

      (c)           No
material deficiency for any Taxes has been asserted or assessed against the
Wilhelmina Transferred Companies or their Subsidiaries that has not been
resolved and paid in full or fully reserved for in each case, as reserved for
and identified on the Financial Statements.  None of the Wilhelmina
Transferred Companies nor any of their Subsidiaries has received any notices in
writing from the IRS or any other Taxing Authority of any proposed examination
or of any proposed change in reported information relating to the Taxes of
Wilhelmina Transferred Companies or any of their Subsidiaries.  No
Legal Proceeding or audit or similar foreign proceedings is pending with regard
to any of the Taxes or Tax Returns of the Wilhelmina Transferred Companies or
their Subsidiaries.  No Wilhelmina Transferred Company or Subsidiary
thereof has received notice in writing of any claim by a Governmental Entity in
a jurisdiction where such Wilhelmina Transferred Company or Subsidiary does not
file Returns that it is or may be subject to taxation by any Governmental
Entity.

       

      
        
          
          

        

        
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      (d)           The
Wilhelmina Transferred Companies and their Subsidiaries have delivered or made
available to the Purchaser copies of all federal, state, local and foreign
income or franchise Tax Returns filed by the Wilhelmina Transferred Companies or
any of their Subsidiaries, as well as examination reports and statements of
deficiencies assessed against or agreed to by the Wilhelmina Transferred
Companies or their Subsidiaries, for all years in which the statute of
limitations remains open for a Taxing Authority to assess any Taxes and all
supporting work papers for the above referenced Tax Returns.

       

      (e)           There
are no outstanding waivers, agreements or comparable consents given by the
Wilhelmina Transferred Companies or any of their respective Subsidiaries
regarding the application of the statute of limitations for assessment or
collection with respect to any Taxes or Tax Returns relating to the Company or
its Subsidiaries nor is any request for any such waiver, agreement, or consent
pending.

       

      (f)           None
of the Wilhelmina Transferred Companies or their Subsidiaries (A) is a
party to or bound by any tax allocation or sharing agreement (B) is or has
been a member of an affiliated group filing a consolidated federal income Tax
Return (other than with another Wilhelmina Transferred Companies or a
Subsidiary) or (C) has any Liability for the Taxes of any Person (other
than any of the Wilhelmina Transferred Companies or any of their Subsidiaries)
under Reg. §1.1502-6 (or any similar provision of state, local, or foreign Law),
as a transferee or successor, by contract, or otherwise.  None of the
Wilhelmina Transferred Companies or their Subsidiaries is a party to any joint
venture, partnership or other arrangement that is treated as a partnership for
federal income tax purposes (except for the LLCs).

       

      (g)           None
of the Wilhelmina Transferred Companies or their Subsidiaries has a permanent
establishment located in any tax jurisdiction other than the United States or is
liable for the payment of Taxes levied by any jurisdiction located outside the
United States.  None of the Wilhelmina Transferred Companies or their
Subsidiaries is a “foreign person” within the meaning of Section 1445 of the
Code.

       

      (h)           None
of the Wilhelmina Transferred Companies or their Subsidiaries is a party to any
agreement, contract, arrangement, or plan that has resulted or would result,
separately or in the aggregate, in the payment of any “excess parachute payment”
within the meaning of Section 280G (or any corresponding provision of state,
local, or foreign Tax law).

       

      (i)           None
of the Wilhelmina Transferred Companies or their Subsidiaries has constituted
either a “distributing corporation” or a “controlled corporation” (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
qualifying for tax free treatment under Section 355 of the Code.

       

      (j)           None
of the Wilhelmina Transferred Companies or their Subsidiaries will be required
to include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of any:  (i) intercompany transactions or excess loss
accounts described in Treasury regulations under Section 1502 of the Code (or
any similar provision of state, local, or foreign Law), (ii) installment
sale or open transaction disposition made on or prior to the Closing Date, or
(iii) prepaid amount received on or prior to the Closing Date.

       

      
        
          
          

        

        
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      (k)           No
Wilhelmina Transferred Company or any Subsidiary thereof is a “United States
real property holding company” within the meaning of Section 897 of the
Code.  No transaction contemplated by this Agreement shall be subject
to the withholding requirements set forth in Sections 1445 or 1446 of the
Code.

       

      3.24           Proxy
Statement.  None of the information supplied in writing or
to be supplied in writing by the Wilhelmina Transferred Companies or the Control
Sellers for inclusion or incorporation by reference in the Proxy Statement and
any amendments thereof and supplements thereto will at the time of the mailing
of the Proxy Statement to the shareholders of Purchaser and at the time of the
Shareholder Meeting contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading or will, at the time of the Shareholder Meeting, omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Shareholder
Meeting which shall have become false or misleading in any material
respect.  Only information supplied or to be supplied by the
Wilhelmina Transferred Companies in writing shall be considered to have been
supplied for inclusion in the Proxy Statement.

       

      3.25           Corporate
Records, Controls.  The Books and Records of the Wilhelmina
Transferred Companies and their Subsidiaries fairly and accurately record and
reflect all transactions material to the operations of the Wilhelmina
Transferred Companies and their Subsidiaries and the Business and have been
maintained in accordance with sound business practices.

       

      3.26           Brokers.  Except as set forth on Schedule 3.26
(any of which listed items shall be borne out of pocket at Closing solely by the
Sellers), no broker, investment banker, financial advisor or other Person, is
entitled to any broker’s, finder’s, financial advisor’s or other similar fee or
commission in connection with the Contemplated Transactions based upon
arrangements made by or on behalf of the Company, any of its Subsidiaries, any
of the Sellers, or any Person acting on their behalf.

       

      3.27           Bank
Accounts; Powers of Attorney.  Schedule 3.27 lists
the names of (a) each bank, trust company and stock or other broker with
which any Wilhelmina Transferred Company or Subsidiary thereof has an account,
credit line or safe deposit box or vault, or otherwise maintains relations (the
“Bank
Accounts”), and (b) all Persons authorized to draw on, or to have
access to, each of the Bank Accounts, and (c) all Persons authorized by
proxies, powers of attorney or other like instruments to act on behalf of any
Wilhelmina Transferred Company or any Subsidiary thereof in any matter
concerning their Property or the Business.

       

      3.28           Statements
and Other Documents Not Misleading.  Neither this
Agreement, including all Schedules and Exhibits, nor any other Collateral
Document or other written instrument heretofore or hereafter furnished by the
Wilhelmina Transferred Companies, their Subsidiaries or the Control Sellers to
Purchaser in connection with the Contemplated Transactions contains or will
contain any untrue statement of any material fact or omits or will omit to state
any material fact required to be stated in order to make such statement,
document or other instrument not misleading.

       

      
        
          
          

        

        
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      3.29           No
Knowledge of Breaches.  Neither the Control Sellers nor the
Wilhelmina Transferred Companies and their Subsidiaries currently has actual
Knowledge of any facts or circumstances that would serve as the basis for a
Claim by the Sellers or Wilhelmina Transferred Companies and their Subsidiaries
against the Purchaser based upon a (i) breach of any of the representations
and warranties of the Purchaser contained in this Agreement, or (ii) breach
of any of the covenants to be performed by the Purchaser at or prior to
Closing.

       

      ARTICLE 4

      REPRESENTATIONS
AND WARRANTIES OF THE SELLERS

       

      Each
Seller, severally and not jointly, hereby makes the following representations
and warranties to the Purchaser and Merger Sub with respect to such Seller as of
the date hereof and of the Closing Date (provided that Esch shall only be deemed
to make the representations as to both Esch and Lorex and Krassner shall only be
deemed to make the representations as to both Krassner and the Krassner
L.P.):

       

      4.1           Organization.  Such Seller (if not a natural
person) is a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.

       

      4.2           Legal
Authority; Binding Effect.  Such Seller has the full right,
power, authority and capacity to enter into and perform this Agreement and each
of the Collateral Documents to which such Seller is a party, and to consummate
the Contemplated Transactions.  The execution, delivery and
performance by such Seller of this Agreement and each of the Collateral
Documents to which it is a party, and the consummation by such Seller of the
Contemplated Transactions have been duly authorized by all necessary action
(corporate or otherwise, as applicable) on the part of such
Seller.  This Agreement and each of the Collateral Documents to which
such Seller is a party have been duly executed and delivered by each such
Seller, and constitute legal, valid and binding obligations of such Seller,
enforceable against such Seller in accordance with their terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
similar Laws affecting the rights of creditors generally and general equity
principles (regardless of whether enforceability is considered in a proceeding
at law or in equity).

       

      4.3           No
Conflicts, Consents.  The execution, delivery and
performance of this Agreement and each of the Collateral Documents, and the
consummation of the Contemplated Transactions, by such Seller do not and will
not:  (i) result in a Default of or under (A) any of the
terms of the Organizational Documents of such Seller (if not a natural person),
(B) any Law, Permit or Order applicable to or binding upon such Seller, or
(C) result in the creation or imposition of any Encumbrance upon any of the
equity interests of the Wilhelmina Transferred Companies held by such Seller. No
Governmental Consent or Consent of any Person that has not been acquired is
required for (i) the execution, delivery and performance by such Seller of
this Agreement or any of the Collateral Documents to which any of them is a
party, or (ii) the consummation of the Contemplated Transactions by such
Seller.

       

      
        
          
          

        

        
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      4.4           Title to
Shares and Units.  Such Seller has good and valid title to the
Wilhelmina Equity Interests and Company Shares reflected as owned by such Seller
on Schedule A, free and clear of all Encumbrances (except such Encumbrances as
may be imposed by the LLC Agreements and the Signature Bank Security
Interests).  At the Closing, such Seller will transfer to Purchaser
the entire right, title and interest in and to his respective Wilhelmina Equity
Interests, as applicable, free and clear of all Encumbrances.  Such
Seller owns of record and beneficially equity interests in the Wilhelmina
Transferred Companies as set forth on Schedule A attached hereto.

       

      4.5           Agreements.  Except as set forth on Schedule
4.5, such Seller has no understanding or agreement with any Wilhelmina
Transferred Company or Subsidiary respecting equity interests or other
securities of any Wilhelmina Transferred Company or Subsidiary thereof that have
not been released on or prior to the date hereof.  Such Seller has not
entered into or granted any outstanding warrants, options, commitments,
agreements or understandings to or with any Person (except for the Contemplated
Transactions) to sell, transfer or otherwise dispose of any securities (equity
or debt) in the Wilhelmina Transferred Companies, including, without limitation,
the Wilhelmina Shares or Wilhelmina Units.  Such Seller is not a party
to any voting trust or other similar agreement or understanding with respect to
the voting or ownership of equity securities of the Wilhelmina Transferred
Companies.

       

      4.6           Legal
Proceedings.  Except as set forth on Schedule 4.6, there
are no Legal Proceedings or Orders pending against or, to Knowledge of such
Seller, threatened against or affecting such Seller that (i) would impair
the ability of such Seller to perform its obligations under this Agreement or
any of the Collateral Documents, (ii) seeks to prevent the consummation of
any of the Contemplated Transactions, (iii) questions the validity of this
Agreement or any of the Collateral Documents, (iv) affect transferability
of Wilhelmina Shares or Wilhelmina Units or (v) would reasonably be
expected, individually or in the aggregate, to (a) have a Material Adverse
Effect on the Wilhelmina Transferred Companies, any of their Subsidiaries or the
Business or (b) impair the ability of the such Seller, or the Wilhelmina
Transferred Companies or any of their Subsidiaries to perform its obligations
under this Agreement or any of the Collateral Documents. There is no Order
outstanding against such Seller that relates to or affects the Wilhelmina Shares
or the Wilhelmina Units or this Agreement or the Contemplated
Transactions.

       

      4.7           Purchase
Entirely for Own Account.  Subject to any election pursuant
to Section 2.13, the Purchaser Stock to be received by or at the direction of
the Sellers pursuant to the terms hereof will be acquired for investment for
each such Sellers’ own accounts, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof.  No Seller has any
present intention of selling, granting any participation in, or otherwise
distributing the Purchaser Stock acquired by such Seller.  No Seller
has any contract, undertaking, agreement or arrangement with any Person to sell
or transfer, or grant any participation to such Person or to any Third Party,
with respect to any Purchaser Stock to be acquired by the Seller.

       

      4.8           Seller
Address, Access to Information, Experience, Etc.

       

      (a)           The
address set forth on the signature pages of this Agreement is such Seller’s true
and correct business, residence or domicile address.  The Seller has
received and read and is familiar with this Agreement.  The Seller has
had an opportunity to ask questions of and receive answers from representatives
of the Purchaser concerning the terms and conditions of this
transaction.  The Seller has reviewed the representations and
warranties in Article 3 and has no Knowledge of any inaccuracy in such
statements.

       

      
        
          
          

        

        
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      (b)           The
Seller has substantial experience in evaluating non-liquid investments such as
the Purchaser Stock and is capable of evaluating the merits and risks of an
investment in the Purchaser.  The Seller is an “accredited investor”
as that term is defined in Rule 501(c) of Regulation D promulgated under the
Securities Act.

       

      (c)           The
Seller has had an opportunity to ask questions of and receive answers from
representatives of the Purchaser concerning the terms and conditions of this
transaction.

       

      (d)           The
Seller has been furnished access to the business records of the Purchaser and
such additional information and documents as such Seller has requested and has
been afforded an opportunity to ask questions of, and receive answers from,
representatives of the Purchaser concerning the terms and conditions of this
Agreement, the acquisition of the Purchaser Stock, the business, operations,
market potential, capitalization, financial condition and prospects of the
Purchaser, and all other matters deemed relevant to such Seller.

       

      (e)           The
Seller acknowledges that it has had an opportunity to evaluate all information
regarding the Purchaser as it has deemed necessary or desirable in connection
with the Contemplated Transactions, has independently evaluated the Contemplated
Transactions and has reached its own decision to enter into this
Agreement.

       

      4.9           Restricted
Securities.  The Seller understands that the Purchaser
Stock to be acquired by such Seller have not been registered under the
Securities Act or the laws of any state and may not be sold or transferred, or
otherwise disposed of, without registration under the Securities Act and
applicable state securities laws, or pursuant to an exemption
therefrom.  In the absence of an effective registration statement
covering the Purchaser Stock to be acquired by the Seller, the Seller will sell
or transfer, or otherwise dispose of, the Purchaser Stock to be acquired by the
Seller only in a manner consistent with its representations and agreements set
forth herein, the terms and conditions set forth in the Collateral Documents and
any applicable Federal and state securities laws.

       

      4.10           No
Knowledge of Breaches.  No Seller currently has actual
Knowledge of any facts or circumstances that would serve as the basis for a
Claim by the Sellers or Wilhelmina Transferred Companies and their Subsidiaries
against the Purchaser based upon a (i) breach of any of the representations
and warranties of the Purchaser contained in this Agreement, or (ii) breach
of any of the covenants to be performed by the Purchaser at or prior to
Closing.

       

      ARTICLE 5

      REPRESENTATIONS
AND WARRANTIES

      OF THE
PURCHASER

       

      The
Purchaser and Merger Sub hereby represent and warrant to the Sellers and the
Company as follows:

       

      
        
          
          

        

        
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      5.1           Organization.  The Purchaser (i) is a
Delaware corporation duly organized, validly existing and in good standing under
the laws of the state of its organization, (ii) has the power and authority
to own and operate its properties and assets and to transact its business as
currently conducted and (iii) is duly qualified and authorized to do
business and is in good standing in all jurisdictions where the failure to be
duly qualified, authorized and in good standing would reasonably be expected to
have a Material Adverse Effect on Purchaser.  The Merger Sub
(i) is a New York corporation duly organized on August 14, 2008, and is
validly existing and in good standing under the laws of the state of its
organization, (ii) has the power and authority to own and operate its
properties and assets and to transact its business as currently conducted and
(iii) is duly qualified and authorized to do business and is in good
standing in all jurisdictions where the failure to be duly qualified, authorized
and in good standing would reasonably be expected to have a Material Adverse
Effect on Purchaser.

       

      5.2           Legal
Authority; Binding Effect.  The Purchaser and the Merger
Sub have the corporate power and authority to enter into and perform this
Agreement, each of the Collateral Documents to which each is a party, and to
consummate the Contemplated Transactions.  The execution, delivery and
performance by the Purchaser of this Agreement and each of the Collateral
Documents to which each is a party, and the consummation by each of them of the
Contemplated Transactions, have been duly authorized by all necessary corporate
action on the part of Purchaser or Merger Sub, as applicable.  This
Agreement and each of the Collateral Documents to which the Purchaser or Merger
Sub is a party have been duly executed and delivered by the Purchaser and/or
Merger Sub, as applicable and constitute legal, valid and binding obligations of
the Purchaser and Merger Sub, enforceable against the Purchaser or Merger Sub in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium or similar Laws affecting the
rights of creditors’ generally and general equity principles (regardless of
whether enforceability is considered a proceeding at law or in
equity).

       

      5.3           Conflict
with other Instruments; Absence of Restrictions.  The
execution, delivery and performance of this Agreement and each of the Collateral
Documents, and the consummation of the Contemplated Transactions, by the
Purchaser do not and will not:  (i) assuming receipt of the
Charter Approval, result in a Default of or under (A) any of the terms of
the Purchaser’s or Merger Sub’s Organizational Documents, (B) any Law,
Permit or Order applicable to or binding upon the Purchaser, Merger Sub or any
of their respective Subsidiaries, or (C) any Material Contracts, Permits or
Licenses to which Purchaser or Merger Sub is a party or is bound;
(ii) result in the creation or imposition of any Encumbrance upon any of
the assets or properties of the Purchaser or Merger Sub; or (iii)
(A) result in the termination, amendment or modification of, or give any
party the right to terminate, amend, modify, abandon, or refuse to perform any
Material Contract, License or Permit to which Purchaser or Merger Sub is a party
or by which it, or any of their properties or assets, are bound, or
(B) result in the acceleration or modification of, or give any party the
right to accelerate or modify, the time within which, or the terms under which,
any duties or obligations are to be performed, or any rights or benefits are to
be received under any Material Contract, License or Permit to which Purchaser or
Merger Sub is a party or by which it, or any of its properties or assets, is
bound.

       

      
        
          
          

        

        
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      5.4           Capitalization.

       

      (a)           The
authorized capital stock of Purchaser consists of (i) 75,000,000 shares
common stock and (ii) 10,000,000 shares of preferred stock (with giving
effect to any increase in authorized capital pursuant to the Authorized Capital
Approval).  As of the date hereof, 53,883,872 shares of common stock
are outstanding and (iii) stock options exercisable for 240,000 shares of
Common Stock outstanding.  Except as described in this Section 5.4,
there are no shares of capital stock, membership interests or other equity
interests of Purchaser, outstanding warrants, options or other rights,
commitments, agreements or understandings to purchase or acquire any shares of
capital stock, membership interests or other equity interests or securities of
Purchaser, there are no outstanding debt securities of Purchaser convertible
into shares of capital stock, membership interests or otherwise containing
equity interests or securities and there are no outstanding or authorized unit
appreciation, phantom unit, profit participation or similar rights with respect
to Purchaser. Outstanding Purchaser Shares were issued or sold in compliance
with all applicable Laws and are validly issued, fully paid and
non-assessable.  Schedule 5.4 provides a pro-forma capitalization
chart for Purchaser Shares at the Closing, assuming no changes in capitalization
or NCEH Book Value per Share between the date hereof and the
Closing.

       

      (b)           The
authorized capital stock of Merger Sub consists of 1,000 shares common
stock.  As of the date hereof, 100 shares of common stock are
outstanding.  Except as described in this Section 5.4, there are no
shares of capital stock, membership interests or other equity interests of
Merger Sub, outstanding warrants, options or other rights, commitments,
agreements or understandings to purchase or acquire any shares of capital stock,
membership interests or other equity interests or securities of Merger Sub,
there are no outstanding debt securities of Merger Sub convertible into shares
of capital stock, membership interests or otherwise containing equity interests
or securities and there are no outstanding or authorized unit appreciation,
phantom unit, profit participation or similar rights with respect to Merger Sub.
Outstanding shares of Merger Sub were issued or sold in compliance with all
applicable Laws and are validly issued, fully paid and
non-assessable.

       

      (c)           Purchaser
Shares to be issued under this Agreement (the “Purchaser Issued
Shares”), when issued, will be issued or sold in compliance with all
applicable Laws and will be validly issued, fully paid and non-assessable and
not issued in violation of any preemptive or similar right.  There are
no preemptive rights with respect to the issuance or sale of the Purchaser
Issued Shares that have not otherwise been waived or terminated.

       

      5.5           SEC
Filings/Financial Statements.

       

      (a)           Purchaser
has filed with (or furnished to) the Securities and Exchange Commission (“SEC”) all
forms, documents, certifications, registration statements and reports required
to be filed (or furnished) by it with the SEC since January 1, 2005 (as amended
to date, the “Purchaser SEC
Reports”).  As of their respective dates, or, if amended, as of
the date of the last such amendment, the Purchaser SEC Reports filed with the
SEC complied as to form in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the applicable rules
and regulations promulgated there under.  None of the Purchaser SEC
Reports filed with the SEC at the time they were filed or, if amended, as of the
date of the last such amendment, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

       

      
        
          
          

        

        
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      (b)           Each
of the financial statements contained in the Purchaser SEC Reports were prepared
in accordance with GAAP and fairly present the financial condition, the results
of the operations and, where applicable, the cash flows and changes of financial
position of the Company and its Subsidiaries as at the respective dates thereof
and for the periods reported therein, subject in the case of interim statements
to normal year end adjustments.  The financial statements contained in
the Purchaser SEC Reports have been prepared from, and are in accordance with,
the books and records of the Purchaser.

       

      5.6           Compliance
with Law.  Purchaser and Merger Sub are, and since January
1, 2005 have been, in compliance in all material respects with the Laws or
Orders to which Purchaser is subject.  Except as set forth on Schedule
5.6, Purchaser has not received, nor does it have Knowledge of the issuance of,
any notice from any Governmental Entity, citizens group, employee, client or
other Third Party of any violation or alleged violation of any applicable Laws
or Orders by any of them or of any investigation with respect to any such
violation or non-compliance, in each case since January 1,
2005.  Purchaser has no Knowledge of any investigation relating to
Purchaser that is in progress, threatened or contemplated by any Governmental
Entity.

       

      5.7           Legal
Proceedings.  There is no Legal Proceeding or Order pending
against or, to the Knowledge of Purchaser or Merger Sub, threatened against or
affecting, the Purchaser or Merger Sub, except those that would reasonably be
expected, individually or in the aggregate, to (i) have a Material Adverse
Effect on Purchaser or Merger Sub (giving effect to the Contemplated
Transactions and the acquisition of the Wilhelmina Transferred Companies) or
(ii) materially adversely impair or restrict the ability of Purchaser or
Merger Sub to perform its obligations under this Agreement or any of the
Collateral Documents.  Except as set forth on Schedule 5.7, there
is no Order outstanding against Purchaser or Merger Sub that (i) could
reasonably be expected, individually or in the aggregate, to materially
adversely impair or restrict the ability of Purchaser or Merger Sub to perform
its obligations under this Agreement or any of the Collateral
Documents.

       

      5.8           Purchase
Entirely for Own Account.  The securities in the Wilhelmina
Transferred Companies to be received by the Purchaser pursuant to the terms
hereof will be acquired for investment for Purchaser’s own account, not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof.  The Purchaser has no present intention of selling, granting
any participation in, or otherwise distributing such securities.  The
Purchaser has no contract, undertaking, agreement or arrangement with any Person
to sell or transfer, or grant any participation to such Person or to any Third
Party, with respect to any securities to be acquired by the
Purchaser.

       

      
        
          
          

        

        
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      5.9           Access to
Information, Experience, Etc.

       

      (a)           The
Purchaser has received and read and is familiar with this
Agreement.  The Purchaser has had an opportunity to ask questions of
and receive answers from representatives of the Company concerning the terms and
conditions of the Contemplated Transactions.  The Purchaser has
substantial experience in evaluating non-liquid investments such as the
securities of the Wilhelmina Transferred Companies and is capable of evaluating
the merits and risks of an investment in the Wilhelmina Transferred
Companies.  The Purchaser is an “accredited investor” as that term is
defined in Rule 501(c) of Regulation D promulgated under the Securities
Act.

       

      (b)           The
Purchaser has been furnished access to the business records of the Wilhelmina
Transferred Companies and such additional information and documents as the
Purchaser has requested and has been afforded an opportunity to ask questions
of, and receive answers from, representatives of the Wilhelmina Transferred
Companies concerning the terms and conditions of this Agreement, the acquisition
of the securities of the Wilhelmina Transferred Companies, the business,
operations, market potential, capitalization, financial condition and prospects
of the Wilhelmina Transferred Companies and all other matters deemed relevant to
such Seller.

       

      (c)           The
Purchaser acknowledges that it has had an opportunity to evaluate all
information regarding the Wilhelmina Transferred Companies as it has deemed
necessary or desirable in connection with the Contemplated Transactions, has
independently evaluated the Contemplated Transactions and has reached its own
decision to enter into this Agreement.

       

      5.10           Absence
of Changes.  Except as set forth on Schedule 5.10, since
December 31, 2007, there has been no event or condition which had (or is
reasonably likely to result in) a Material Adverse Effect on the
Purchaser.

       

      5.11           Proxy
Statement.  None of the information supplied or to be
supplied by Purchaser or Merger Sub for inclusion in the Proxy Statement (and
any amendments thereof and supplements thereto) will at the time of the mailing
of the Proxy Statement to the shareholders of Purchaser and at the time of the
Shareholder Meeting contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

       

      5.12           Rights
Plan.  The Rights Amendment has been duly authorized,
executed and delivered by the Purchaser and is valid and enforceable in
accordance with its terms.

       

      5.13           Board
Recommendation.  As of the date of this Agreement, the Board of
Directors of Purchaser and the Board of Directors of the Merger Sub, at a
meeting duly called and held, has approved the Contemplated Transactions and the
Board of Directors of the Purchaser has resolved to recommend that the
stockholders of Purchaser vote in favor of the Stockholder
Approvals.

       

      
        
          
          

        

        
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      5.14           Brokers or
Finders.  Except as set forth on Schedule 5.14, the
Purchaser has not engaged the services of any broker or finder with respect to
the Contemplated Transactions.

       

      5.15           Financial Ability to
Complete the Contemplated Transactions.  At the Closing, the
Purchaser will have the financial ability to complete the Contemplated
Transactions.

       

      5.16           Acquisition for
Investment.  Purchaser (or Merger Sub) is acquiring the
Wilhelmina Shares and Wilhelmina Units solely for its own account and not with a
view to any distribution of other disposition of such securities in violation of
the Securities Act.

       

      5.17           Absence of Undisclosed
Liabilities.  Neither the Purchaser nor the Merger Sub has any
material Liabilities which are not properly disclosed, reflected or reserved
against in the Purchaser SEC Reports or which are not otherwise set forth on
Schedule 5.17
attached hereto.  Neither the Purchaser nor the Merger Sub has any
Liabilities which has been incurred since December 31, 2007, other than those
Liabilities set forth on Schedule 5.17
attached hereto or Liabilities incurred in the ordinary course of business that
are not material.

       

      5.18           Statements and Other
Documents Not Misleading.  Neither this Agreement, including
all Schedules and Exhibits, nor any other Collateral Document or other written
instrument heretofore or hereafter furnished by the Purchaser or the Merger Sub
or their respective Subsidiaries to the Company in connection with the
Contemplated Transactions contains or will contain any untrue statement of any
material fact or omits or will omit to state any material fact required to be
stated in order to make such statement, document or other instrument not
misleading.

       

      5.19           No Knowledge of
Breaches.  Neither Purchaser nor Merger Sub currently has
actual Knowledge of any facts or circumstances that would serve as the basis for
a Claim by the Purchaser or Merger Sub against the Wilhelmina Transferred
Companies or the Sellers based upon a (i) breach of any of the
representations and warranties of the Wilhelmina Transferred Companies or the
Sellers contained in this Agreement, or (ii) breach of any of the covenants
to be performed by the Wilhelmina Transferred Companies or the Sellers at or
prior to Closing.  Purchaser or Merger Sub shall not be deemed to have
actual Knowledge of facts or circumstances merely because such facts or
circumstances were disclosed in or discernable from due diligence materials,
written or otherwise, provided or made available by the Wilhelmina Transferred
Companies or the Sellers, but not otherwise disclosed in this
Agreement.

       

      
        
          
          

        

        
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      ARTICLE
6

       

      CERTAIN
PRE-CLOSING COVENANTS AND OTHER MATTERS

       

      6.1           Restriction on Certain
Discussions and Actions.  Until the Closing Date or earlier
termination of this Agreement in accordance with its terms, each of the Sellers
and the Wilhelmina Transferred Companies will refrain, and will cause their
respective Affiliates, managers, members, officers, directors, stockholders,
employees, attorneys, accountants and other agents and representatives to
refrain, from taking any action, directly or indirectly,
to  (i) solicit, encourage, initiate or participate in any way in
discussions or negotiations with, or furnish any information with respect to the
Wilhelmina Transferred Companies or any of their Subsidiaries to any Person
(other than the Purchaser and its representatives) in connection with any
possible or proposed sale of the Wilhelmina Transferred Companies, the sale of a
substantial portion of the assets, merger or other business combination
involving the Wilhelmina Transferred Companies or any of their Subsidiaries, or
the acquisition of an equity interest in the Wilhelmina Transferred Companies or
any of their Subsidiaries, or any similar transaction involving the Wilhelmina
Transferred Companies or any of their Subsidiaries, or any other transaction
(including any recapitalization, refinancing or reorganization or any
extraordinary licensing transaction involving the “Wilhelmina” name) which could
reasonably be expected to impair the consummation of the Contemplated
Transactions, or (ii) except as required by law after not less than five
(5) days notice to Purchaser, disclose to any Third Party any non-published
information concerning the Wilhelmina Transferred Companies, any of their
Subsidiaries, its Property or the Business.  Each Seller shall
promptly notify Purchaser if such Seller receives any such proposal or offer or
any inquiry or contact with respect thereto.  No Seller will, prior to
the termination of this Agreement, directly or indirectly, (i) sell,
transfer, pledge, encumber, assign or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the sale,
transfer, pledge, encumbrance, assignment or other disposition of, any of his
equity interests in the Wilhelmina Transferred Companies, or (ii) grant any
proxies, deposit any such equity interests into a voting trust or enter into a
voting agreement with respect to any such equity interests.

       

      6.2           Conduct of Business of the
Wilhelmina Transferred Companies.  During the period from the
date of this Agreement to the Closing Date or the earlier termination of this
Agreement in accordance with its terms, each of the Control Sellers and the
Wilhelmina Transferred Companies agrees (i) to cause the Business of the
Wilhelmina Transferred Companies and their Subsidiaries to be conducted in the
ordinary course consistent with past practices, (ii) to use its
commercially reasonable efforts to (A) preserve the business organizations
of each of the Wilhelmina Transferred Companies and each of their Subsidiaries
intact, (B) keep available to the Wilhelmina Transferred Companies the
services of each employee and model having an employment or contractor
relationship with the Wilhelmina Transferred Companies, (C) preserve the
goodwill of the clients, customers and others having business relations with any
of the Wilhelmina Transferred Companies or their Subsidiaries and
(D) maintain the legal existence of the Wilhelmina Transferred Companies
and their Subsidiaries and (iii) the Wilhelmina Transferred Companies and
their Subsidiaries will not, without the prior written consent of the Purchaser,
other than (A) in connection with the negotiation and completion of the
Contemplated Transactions or (B) as required by contract or by
Law:

       

      (a)           issue,
transfer, sell, encumber or pledge any Wilhelmina Shares or Wilhelmina Units,
membership interests, shares of capital stock or other securities (including but
not limited to securities convertible into or exchangeable for, or options or
rights to acquire, Wilhelmina Shares or Wilhelmina Units or other securities) of
the Wilhelmina Transferred Companies or any of their Subsidiaries;

       

      (b)           split,
combine or reclassify any Wilhelmina Shares, Wilhelmina Units, membership
interests, shares of capital stock or other securities of the Wilhelmina
Transferred Companies or any of their Subsidiaries;

       

      
        
          
          

        

        
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      (c)           pay
any dividends or make distributions, whether in cash, stock or property, to any
equity holder or other owner or any other Person, or redeem, purchase or
otherwise acquire any Wilhelmina Shares, Wilhelmina Units, membership interests,
shares of capital stock or other securities of the Wilhelmina Transferred
Companies or any of their Subsidiaries, other than the regular payments of
consulting fees (and/or regular interest on the Krassner Note) in the ordinary
course of business consistent with prior practice and as set forth on Schedule
3.14(b);

       

      (d)           amend
any Organizational Documents;

       

      (e)           except
as set forth on Schedule 6.2(e), acquire (i) by merging or consolidating
with, or by purchasing a substantial equity interests in or a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, joint venture, association or other business
organization or division thereof, or (ii) any assets that are material,
individually or in the aggregate, to the Wilhelmina Transferred Companies or any
of their Subsidiaries; or enter into any  binding commitment or
agreement (written or otherwise) to take any of the foregoing actions with
respect to those items set forth on Schedule 6.2(e);

       

      (f)           sell,
lease, license or otherwise dispose or, or incur, suffer or permit to exist any
Encumbrances (other than Permitted Encumbrances) on any material assets,
properties or rights of the Wilhelmina Transferred Companies, other than
(i) pursuant to Material Contracts in existence as of the date hereof (and
which have been disclosed to Purchaser) and (ii) license agreements
described in the exceptions set forth in clause 6.2(g);

       

      (g)           permit
the use of the “Wilhelmina” name or mark by any other Person, other than
pursuant to license agreements (i) in place as of the date hereof (which
agreements have been delivered to the Purchaser) or  (ii) with
the modeling agencies set forth on Schedule 6.2(g) on terms consistent with
license agreements described in clause (i); or enter into any  binding
commitment or agreement (written or otherwise) to take any of the foregoing
actions with respect to those items set forth on Schedule 6.2(g);

       

      (h)           make
any capital expenditures in excess of $50,000 individually or in the aggregate
following the date of this Agreement;

       

      (i)           except
as set forth on Schedule 6.2(i), (i) enter into any new business line or
business area, (ii) relocate any of their facilities; or
(iii) terminate, discontinue, close or dispose of any facility or business
operation; or enter into any  binding commitment or agreement (written
or otherwise) to take any of the foregoing actions with respect to those items
set forth on Schedule 6.2(i);

       

      (j)           (i)
incur any new Indebtedness for borrowed money, including but not limited to (x)
guaranteeing any Indebtedness of another Person or (y) issuing or selling any
debt securities or warrants or other rights to acquire any debt securities of
the Wilhelmina Transferred Companies or any of their Subsidiaries, or
(ii) make any loans, advances or capital contributions to, or investments
in, any other Person; provided that the Company
shall maintain and may utilize its existing bank line of credit with Signature
Bank in the ordinary course of business in a manner consistent with past
practice and in amounts such that there is no greater than $2,500,000 (inclusive
of any term loan and revolver) under such bank line outstanding  at
any one time;

       

      
        
          
          

        

        
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      (k)           enter
into, amend or voluntarily terminate any Material Contract to which any
Wilhelmina Transferred Company is a party, except that the Company may
(i) enter into Material Contracts in the ordinary course of business
consistent with past practice provided that such Contracts are terminable on 60
days notice without cost or penalty (provided that any license agreements shall
also be subject to clause (g) above) and (ii)  make technical or
immaterial amendments to Material Contracts in the ordinary course of business
consistent with past practice; provided that this clause (k) shall in all
respects be subject to the following clause (1) and any other applicable
restriction set forth in this Section 6.2;

       

      (l)           agree
to any non-compete restriction or similar prohibition on the Business or future
business of the Wilhelmina Transferred Companies or their
subsidiaries;

       

      (m)           enter
into or amend (i) any employment agreements or any other type of employment
arrangement, which in either case provides (A) compensation greater than
$100,000 per annum, (B) equity compensation of any kind (whether upfront or
contingent), (C) guaranteed compensation of any amount for a period longer
than six months, (D) any bonus or similar compensation based on a
percentage of profits or EBITDA, or (E) change of control or severance
compensation or (ii) any severance or change of control agreements or
arrangements or deferred compensation agreements or arrangements;

       

      (n)           (i)
enter into any new, or amend or otherwise alter any existing, Employee Benefit
Plan; (ii) adopt, amend, terminate or change an interpretation of any
Employee Benefit Plan or the participation or coverage under any Employee
Benefit Plan, (iii) accelerate the payment or vesting of any material
benefits or amounts payable under any Employee Benefit Plan, (iv) cause,
suffer or permit the termination of any Employee Benefit Plan, (v) permit
any Prohibited Transaction involving any Employee Benefit Plan or fail to pay to
any Employee Benefit Plan contribution which they are obligated to pay under the
terms of such Employee Benefit Plan, whether or not such failure to pay would
result in an Accumulated Funding Deficiency, or (vi) allow or suffer to
exist any occurrence of a Reportable Event or any other event or condition,
which presents a material risk of termination of any Employee Benefit
Plan;

       

      (o)           implement
or effect any lay off, early retirement program, severance program or other
program concerning the termination of employment of employees or contractors of
the Wilhelmina Transferred Companies or their Subsidiaries;

       

      (p)           (i)
remove any fixtures, Equipment or personal property from any of the Leased Real
Property except in the ordinary course of business consistent with past
practice; (ii) sell, discount, factor or otherwise dispose of any Accounts
Receivable (except by collection in the ordinary course of business); or
(iii) cancel or compromise any Indebtedness or Claim except in the ordinary
course of business consistent with past practice, or waive or release any rights
of material value;

       

      
        
          
          

        

        
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      (q)           settle
or compromise any legal proceeding or enter into any consent decree, injunction
or similar restraint or form of equitable relief in settlement of any
proceeding;

       

      (r)           change
any accounting principle, practice or method;

       

      (s)           (i)
fail to pay when due all Taxes lawfully levied or assessed against the
Wilhelmina Transferred Companies or any of their Subsidiaries before any penalty
or interest accrues on any unpaid portion thereof and file all Tax Returns when
due (including applicable extensions); or, with respect to payroll or
withholding Taxes, fail to make any such payments or deposits as such payments
or deposits when due by Law; and (ii) make or change any Tax elections or
settle any audit or examination relating to Taxes, except those being contested
in good faith by appropriate proceedings;

       

      (t)           fail
to use reasonable commercial efforts to maintain in full force and effect
insurance coverage of the types and in the amounts set forth in Schedule 3.17
attached hereto;

       

      (u)           modify
its cash management practices, including but not limited to
(i) accelerating the collection of Accounts Receivable and/or
(ii) delaying payment of accounts payable or similar obligations; provided
that it is understood and agreed that the Wilhelmina Transferred Companies shall
pay on a timely basis consistent with past practice all amounts due to vendors,
employees and models (except those being contested in good faith);
and

       

      (v)           take,
suffer or permit any action, or omit to take any action, that would render
untrue any of the representations or warranties set forth in Article 3 of this
Agreement; and

       

      (w)           enter
into any commitment or agreement to take any of the actions described in clauses
(a) through (v) of this Section 6.2.

       

      6.3           Conduct of Business of
Purchaser.  During the period from the date of this Agreement
to the Closing Date or the earlier termination of this Agreement in accordance
with its terms, Purchaser will not agree or commit to take, any action that
would reasonably be expected to prevent or materially delay the consummation of
the Contemplated Transactions; provided that that the failure of Purchaser to
give any consent or waiver under this Agreement (where such consent or waiver of
such party is or would be required) shall not be construed as any such action in
violation of this Section 6.3.  In addition, during the period from
the date of this Agreement to the Closing Date or the earlier termination of
this Agreement in accordance with its terms, the Purchaser shall not, without
the prior written consent of the Company and the Control Sellers, other than
(i) as contemplated by this Agreement, (ii) in connection with the
evaluation, negotiation and completion of the Contemplated Transactions or
(ii) as required by contract or by Law:

       

      (a)           issue,
transfer, sell, encumber or pledge any Purchaser Shares, shares of capital stock
or other securities (including but not limited to securities convertible into or
exchangeable for, or options or rights to acquire, Purchaser Shares ) of the
Purchaser or any of its Subsidiaries, other than in respect of any equity
financing raised in connection with the consummation of the Contemplated
Transactions (which equity financing shall not be priced more favorably to the
financing source than NCEH Book Value Per Share without the consent of the
Control Sellers);

       

      
        
          
          

        

        
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      (b)           split,
combine or reclassify any Purchaser Shares or shares of capital stock or other
securities of the Purchaser or any of its Subsidiaries;

       

      (c)           pay
any dividends or make distributions, whether in cash, stock or property, to any
equity holder or other owner or any other Person, or redeem, purchase or
otherwise acquire any Purchaser Share, shares of capital stock or other
securities of the Purchaser or any of its Subsidiaries;

       

      (d)           amend
any Organizational Documents;

       

      (e)           acquire  (i) by
merging or consolidating with, or by purchasing a substantial equity interests
in or a substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, joint venture, association or other
business organization or division thereof, or (ii) any assets in an amount
greater than $50,000, individually or in the aggregate, to the
Purchaser;

       

      (f)           make
any capital expenditures in excess of $50,000 individually or in the aggregate
following the date of this Agreement;

       

      (g)           (i) incur
any new Indebtedness for borrowed money, including but not limited to (x)
guaranteeing any Indebtedness of another Person or (y) issuing or selling any
debt securities or warrants or other rights to acquire any debt securities of
the Wilhelmina Transferred Companies or any of their Subsidiaries, or
(ii) make any loans, advances or capital contributions to, or investments
in, any other Person; provided that the Company may
incur Indebtedness in connection with the consummation of the Contemplated
Transactions;

       

      (h)           Pay
to any person for services rendered an amount in excess of $50,000, other than
reasonable compensation on market terms to employees of Purchaser;

       

      (i)           (i) fail
to pay when due all Taxes lawfully levied or assessed against the Purchaser or
Merger Sub or any of their respective Subsidiaries before any penalty or
interest accrues on any unpaid portion thereof and file all Tax Returns when due
(including applicable extensions); or, with respect to payroll or withholding
Taxes, fail to make any such payments or deposits as such payments or deposits
when due by Law; and (ii) make or change any Tax elections or settle any
audit or examination relating to Taxes, except those being contested in good
faith by appropriate proceedings;

       

      (j)           settle
or compromise any material legal proceeding or enter into any consent decree,
injunction or similar restraint or form of equitable relief in settlement of any
proceeding that would reasonably impact the conduct of the Wilhelmina
Transferred Companies following the Closing;

       

      
        
          
          

        

        
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      (k)           take,
suffer or permit any action, or omit to take any action, that would render
untrue any of the representations or warranties set forth in Article 5 of this
Agreement; and

       

      (l)           enter
into any commitment or agreement to take any of the actions described in clauses
(a) through (k) of this Section 6.3.

       

      6.4           Notice of Certain
Events.  The Wilhelmina Transferred Companies and the Control
Sellers, on the one hand, and the Purchaser, on the other hand, covenant and
agree to provide each other with prompt notice to each other of (i) any
event, fact or circumstance which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on the Wilhelmina
Transferred Companies or their Subsidiaries (taken as a whole) or Purchaser, as
the case may be, (ii)  any representation or warranty made by any of them
contained in this Agreement which has become untrue or inaccurate,
(iii) the failure by any of them to comply with or satisfy any covenant,
agreement or condition to be complied with or satisfied under this Agreement,
within the time frame set forth in this Agreement or (iv) (A) the
commencement of, any known threat to commence, and of any developments or
changes in any pending or threatened Legal Proceedings or (B) the
assertion, commencement or threat of any Claim of the type and nature which
would be required to be disclosed on Schedule 3.13, Schedule 4.6 or Schedule
5.7; provided, however, that such notification shall not excuse or otherwise
affect the representations, warranties, covenants or agreements of the parties,
or the conditions to the obligations of the parties, under this
Agreement.

       

      6.5           Additional Financial
Statements.  The Company and the Control Sellers agree to
deliver to the Purchaser monthly consolidated unaudited financial statements of
the Wilhelmina Transferred Companies and their Subsidiaries consisting of an
income statement (the “Unaudited
Monthly Statements”) for each calendar month following the date hereof
within 15 days after the end of each such month; provided, however, if the
Closing shall occur prior to the required delivery date as set forth in this
Section 6.5 applicable to particular Unaudited Monthly Statements, then the
obligation to deliver such financial statements shall terminate at the
Closing.  The Company and the Control Sellers agree to deliver the
March 2008 Financials and the June 2008 Financials to the Purchaser not later
than September 15, 2008.

       

      6.6           Cooperation; Access to Books
and Records.  Each of the Sellers, the Wilhelmina Transferred
Companies and their Subsidiaries will use reasonable commercial efforts to
cooperate with the Purchaser and Merger Sub in connection with the Contemplated
Transactions and, until the Closing Date or earlier termination of this
Agreement in accordance with its terms, shall afford to the Purchaser and the
Merger Sub, its agents, attorneys, accountants, financing sources (whether debt
or equity) and other authorized representatives, including engineers, financial
advisers, current and prospective lenders and debt underwriters, reasonable
access to all of the properties, assets, financial information, operations,
books, records, files, correspondence, computer output, data, files, log books,
technical and operating manuals and other materials of the Wilhelmina
Transferred Companies and their Subsidiaries (including those in the possession
or control or their accountants, attorneys and any other Third Party), as the
case may be, for the purpose of permitting the Purchaser to make such
investigation and examination of the Business, assets, properties and Books and
Records of the Wilhelmina Transferred Companies 

       

      
        
          
          

        

        
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      and their
Subsidiaries as are reasonably necessary or appropriate.  Any such
investigation, access and examination shall be conducted during regular business
hours and upon mutually agreed upon times and will be conducted in a manner that
will not materially disrupt the operation of the Business.  Each of
the Sellers and the Wilhelmina Transferred Companies will cause his and its
counsel, accountants and representatives and each of the managers, directors,
officers, employees or contractors or the Wilhelmina Transferred Companies and
their Subsidiaries, and shall use their commercially reasonable efforts to cause
the models and other Talent of the Wilhelmina Transferred Companies and their
Subsidiaries, to reasonably cooperate with the employees and representatives of
the Purchaser in connection with such investigation, access and
examination.  The parties shall cooperate prior to Closing to make
appropriate “cleanup” corrections to documents, agreement and state filings of
the Wilhelmina Transferred Companies as reasonably determined advisable by
Purchaser’s counsel.

       

      6.7           Commercially Reasonable
Efforts.

       

      (a)           Upon
the terms and subject to the conditions set forth in this Agreement, the parties
shall use their commercially reasonable efforts to take, or cause to be taken,
all commercially reasonable 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 Closing, and the other Contemplated Transactions,
including (a) obtaining all Governmental Consents, (b) defending any
Legal Proceeding or Claims challenging this Agreement or the consummation of any
of the Contemplated Transactions, including, if the circumstances warrant,
seeking to have any stay or temporary restraining Order vacated or reversed, and
(c) the execution and delivery of any additional documents, agreements and
instruments necessary to consummate the Contemplated Transactions by, and to
fully carry out the purposes of, this Agreement.

       

      (b)           At
Purchaser’s request, the Control Sellers and the Wilhelmina Transferred
Companies shall use commercially reasonable efforts to obtain all third party
consents reasonably determined by Purchaser to be required under Contracts of
the Wilhelmina Transferred Companies including those listed on Schedule 3.6 (the
“Required
Third Party Consents”); provided that, in no event, shall the Control
Sellers or the Wilhelmina Transferred Companies, without Purchaser’s consent,
pay or agree to pay any amount of money, or relinquish any economic right or
amend any Contracts in a manner adverse to the Wilhelmina Transferred Companies
in connection with obtaining the Required Third Party Consent.

       

      6.8           Proxy
Statement.

       

      (a)           As
promptly as practicable following the execution and delivery of this Agreement,
Purchaser shall prepare or cause to be prepared and filed with the SEC a proxy
statement (together with any amendments thereof or supplements thereto, the
“Proxy
Statement”) in connection with the Stockholder Meeting.  The
Company and the Control Sellers shall cooperate with Purchaser in the
preparation of the Proxy Statement and any amendments and supplements thereto,
including providing, and causing their Affiliates to provide, such information
(including but not limited to all required financial information, whether
audited or unaudited, with respect to the Wilhelmina Transferred Companies and
their Subsidiaries) as may be required or appropriate in connection with the
preparation and mailing of the Proxy Statement and any amendments and
supplements thereto, including any such information required in connection with
approvals and matters described in Section 6.9.

       

      
        
          
          

        

        
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      (b)           Purchaser
shall promptly (i) notify Control Sellers of the receipt of any comments
from the SEC with respect to the Proxy Statement and of any request by the SEC
for amendments of, or supplements to, the Proxy Statement, and (ii) provide
the Control Sellers with copies of all correspondence with the SEC with respect
to the Proxy Statement.  Purchaser shall use its commercially
reasonable efforts to resolve all comments from the SEC with respect to the
Proxy Statement as promptly as practicable.  Purchaser, on the one
hand, and the Control Sellers and the Wilhelmina Transferred Companies, on the
other hand, shall notify each other as promptly as practicable upon becoming
aware of any event or circumstance which should be described in an amendment of,
or supplement to, the Proxy Statement so that the Proxy Statement would not
include any misstatement of material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, and as promptly as practicable thereafter,
Purchaser shall file an appropriate amendment or supplement describing such
information with the SEC and, to the extent required by applicable Law or the
SEC, and disseminate such amendment or supplement to its
stockholders.

       

      6.9           Stockholder
Meeting.  Purchaser shall duly call, give notice of, convene
and hold a meeting of its stockholders (the “Stockholder
Meeting”) following clearance of the Proxy Statement by the SEC, in
compliance with applicable Law, for the purpose of obtaining (1) stockholder
approval of the Contemplated Transactions under Section XII of Purchaser’s
Certificate of Incorporation (the “Charter
Approval”), (2) stockholder approval of a change of the corporate name of
Purchaser to “Wilhelmina International, Inc.”  (or such other name as
mutually agreed between Purchaser and the Control Sellers following the date
hereof)  (the “Name Change
Approval”), provided that any such change in name shall be effected only
if the Closing occurs; (3) stockholder approval of an increase in the authorized
common stock of the Purchaser to an amount to fully accommodate the Contemplated
Transactions and any additional amount reasonably determined by Purchaser (the
“Authorized
Capital Approval”), (4) stockholder approval of the declassification of
Purchaser’s Board of Directors and reconstitution of such Board of Directors to
initially include the individuals set forth on Schedule 6.9(a)
hereof (the “Declassification
Approval”) and (5) the other amendments to Purchaser’s Certificate of
Incorporation as set forth on Schedule 6.9(b)
hereof ((1)-(5) collectively, the “Stockholder
Approvals”); provided that, in Purchaser’s discretion, Purchaser may
elect to seek the Stockholder Approvals, and any other approval reasonably
determined by Purchaser to be required in connection with the Contemplated
Transactions (including in respect of the Financing), at Purchaser’s annual
meeting of stockholders and concurrently with the annual election of directors
to Purchaser’s board of directors at such meeting; provided further that, so
long at the SEC clears the Proxy Statement, Purchaser shall use commercially
reasonable efforts to hold the Stockholder Meeting (which may be Purchaser’s
annual meeting, in Purchaser’s discretion) within forty-five (45) days of such
clearance. Purchaser shall, subject to applicable law and the last sentence of
this Section 6.9, use commercially reasonable efforts to solicit proxies in
favor of the Stockholder Approvals and obtain the required votes therefore
(including, with respect to the Charter Approval, the Requisite Stockholder
Vote).  Purchaser’s Board of Directors shall declare advisable and
recommend in favor of the Stockholder Approvals (which recommendation shall be
contained in the Proxy Statement); provided that Purchaser’s Board of Directors
may withdraw, modify or change such recommendation in favor of the Stockholder
Approvals (a “Change in
Recommendation”) if it has determined, based on the advice of outside
counsel, that the failure to effect such Change in Recommendation is reasonably
likely to result in a breach of the fiduciary duties of Purchaser’s Board of
Directors under applicable Law; provided further that, in the event that the
Purchaser’s Board of Directors effects a Change in Recommendation, Purchaser
shall have no obligation under the second sentence of this Section
6.9.

       

      
        
          
          

        

        
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      6.10           Purchaser
Financing.  From the date of this Agreement until the Closing,
the Control Sellers shall, and shall cause their Affiliates to, provide
reasonable cooperation to Purchaser and its Affiliates in connection with the
arrangement of financing (which may include debt or equity financing, but in any
case for not more than $5 million in the aggregate) necessary for Purchaser to
complete the Contemplated Transactions (the “Financing”),
including (i) permitting direct contact, upon Purchaser’s request, between
prospective lenders and appropriate officers and employees of the Wilhelmina
Transferred Companies, (ii) preparing and providing all financial
information reasonably requested by prospective financing sources,
(iii) seeking, and making arrangements reasonably satisfactory to Purchaser
and its financing sources with respect to, lien releases, applicable consents,
landlord estoppel certificates, pay off letters and similar customary items and
(iv) using its commercially reasonable efforts to cause appropriate
officers and employees of the Wilhelmina Transferred Companies (A) to be
available, on a customary basis and at mutually agreed times and places, to meet
with prospective lenders and investors in presentations, meetings, road shows
and due diligence sessions,  (B)  to assist with the preparation
of disclosure documents in connection therewith and (C) to execute and
deliver agreements, instruments and certificates of officers of Wilhelmina
Transferred Companies to the extent reasonably necessary to facilitate the
Financing, and to use commercially reasonable efforts to cause legal counsel and
accountants to render legal opinions and comfort letters to the extent
reasonably necessary in connection with the Financing and not otherwise
reasonably available from the legal counsel and/or accountants of Purchaser (or
are not reasonably acceptable to Purchaser’s financing sources); provided that
none of the Wilhelmina Transferred Companies or any of their Subsidiaries shall
be required to pay any commitment or other similar fee or incur any liability or
obligation in connection with the Financing prior to the Closing (other than any
such fee or other obligation contingent on the Closing).  Purchaser
shall promptly, upon request of the Control Sellers, reimburse the Wilhelmina
Transferred Companies for all reasonable out-of-pocket costs, including fees
charged by legal counsel and accountants incurred by the Wilhelmina Transferred
Companies or any of the Subsidiaries in connection with its cooperation with
arranging the Financing.  Notwithstanding anything to the contrary,
the terms of the Financing (including but not limited to the amount of any
equity or debt financing raised at or prior to Closing and the pricing thereof),
and the sources thereof, shall be determined by Purchaser in its sole
discretion; provided that no equity or instruments convertible, exercisable or
exchangeable for equity shall be on terms more favorable to the financing source
than the NCEH Book Value Per Share; provided further that the consent of Control
Sellers (which may be withheld in their sole discretion) shall be required in
the event that personal guarantees, stock pledges or other security or similar
commitments are required of the Control Sellers in connection with such
financing.

       

      6.11           Closing
Settlement.  At least two (2) Business Days prior to the
Closing, all intercompany and affiliate balances then outstanding between any
Wilhelmina Transferred Company, on the one hand, and any other Wilhelmina
Transferred Company or any Seller, on the other hand, shall be settled by the
applicable parties thereto in accordance with their terms and theretofore
extinguished, and no such intercompany or affiliate balances shall arise between
such time and the Closing.  In the event that the Sellers or the
Wilhelmina Transferred Companies or their Subsidiaries take any action outside
the ordinary course of business on the Closing Date at or after the Closing
which affects any item in the calculations pursuant to Article 2 except as
expressly contemplated by this Agreement, such calculations shall be
appropriately adjusted to exclude the effect of any such actions.  The
Krassner Note shall be repaid at Closing pursuant to Section 2.10.

       

      
        
          
          

        

        
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      6.12           Patterson
Issuance.   If the Closing occurs, Purchaser shall issue
to Patterson at or promptly following the Closing (i) shares of Purchaser Stock
equal to four-twelfths of the Patterson Payment Amount and (ii) shares of
Restricted Patterson Shares equal to two-twelfths of the Patterson Payment
Amount (in each case based on a per share value equal to NCEH Book Value Per
Share); provided that, in its discretion, Purchaser may elect to pay, in lieu of
a portion of shares of Purchaser Stock under clause (i), up to three-twelfths of
the Patterson Payment Amount solely in cash (in other words, assuming Purchaser
made the full election, Purchaser could pay to Patterson (i) three-twelfths of
the Patterson Payment Amount in cash, (ii) one-twelfth of the Patterson Payment
Amount in unrestricted shares of Purchaser Stock and (iii) two-twelfths of the
Patterson Payment Amount in Restricted Patterson Shares ((ii) and (iii) based on
a per share value equal to NCEH Book Value Per Share).  “Restricted
Patterson Shares” shall mean shares of Purchaser Stock to be held in
escrow by the Escrow Agent pending determination and resolution of the
applicable adjustment calculations under Section 2.6.  In the event
that a Core Decrease applies, Purchaser shall have the right to promptly
repurchase, for $.0001 (one one-hundredths of one penny) per share, a number of
Restricted Patterson Shares such that the aggregate payment to Patterson of
Purchaser Stock hereunder (based on NCEH Book Value Per Share), together with
the cash payment to Patterson at Closing as set forth in Section 2.15 (and any
cash payment elected to be made by Purchaser hereunder), is consistent with the
calculations set forth in Section 5(b) of Patterson’s Old Employment Agreement
as determined in good faith by the Board of Directors of
Purchaser.  The issuance of Purchaser Stock (including Restricted
Patterson Shares, subject to their repurchase), together with the cash payment
at Closing as set forth in Section 2.15 (and any cash payment elected to be made
by Purchaser hereunder), shall be in full satisfaction of any obligations of the
Wilhelmina Transferred Companies to Patterson with respect to any change of
control or related payment under Patterson’s Old Employment
Agreement.

       

      6.13           Designated Matter
Proceedings.   Esch and Krassner shall, together with
their counsel, but subject to consultation with Purchaser and Purchaser’s
counsel, direct and control the settlement process with New York State, provided that (i) in
the course of consultation with Purchaser and Purchaser’s counsel, Purchaser and
Purchaser’s counsel shall be kept fully informed on a current basis as to all
developments and steps (including with regard to related Legal Proceedings) in
connection with the matter set forth on Schedule 10.2(d) and shall have the
opportunity to participate in any Legal Proceedings and material discussions
(including conference calls) with New York State (or any other applicable
Governmental Entity) regarding such matter and (ii) any settlement with respect
to the matter set forth on Schedule 10.2(d):

       

      
        (a)           reflects
a final settlement with respect to the matter set forth on Schedule
10.2(d);

      

       

      
        
          
          

        

        
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        (b)           does not
include any equitable remedy or delayed payment or any restriction or obligation
on the business of the Wilhelmina Transferred Companies other than the
applicable one-time payment; and

         

        
          (c)           relates
solely to the matter set forth on Schedule
10.2(d).

        

      

       

      Esch and
Krassner agree to take the action set forth on Schedule 10.2(d) under the
heading “New York Process”.

       

      ARTICLE
7

      CONDITIONS
PRECEDENT TO THE CLOSING

       

      7.1           Obligations of Both
Parties.  The obligations of all parties to consummate the
Contemplated Transactions on the Closing Date shall be subject to the
satisfaction of the following conditions on or prior to the Closing
Date:

       

      (a)           There
shall not be any Law or Order enacted, entered, promulgated, enforced or issued
by any Governmental Authority or other legal restraint preventing, prohibiting
or rendering illegal the consummation of the Contemplated
Transactions.

       

      (b)           The
Charter Approval and the Authorized Capital Approval shall have been received in
accordance with applicable Law.

       

      (c)           There
shall not be any Legal Proceedings or Order seeking to restrain or to invalidate
the Contemplated Transactions or otherwise questioning the validity of this
Agreement or any of the Collateral Documents, which, if resolved unfavorably to
the Wilhelmina Transferred Companies or their Subsidiaries, the Sellers or
Purchaser, could reasonably be expected to result in a Material Adverse Effect
on the Wilhelmina Transferred Companies or any of their Subsidiaries or, the
Purchaser (giving effect to the consummation of the Contemplated
Transactions).

       

      7.2           Obligation of the Wilhelmina
Transferred Companies and the Sellers to Close.  The
obligations of the Wilhelmina Transferred Companies and the Sellers to
consummate the Contemplated Transactions on the Closing Date shall be subject to
the satisfaction (or written waiver by the Control Sellers, which waiver shall
be effective as to all Wilhelmina Transferred Companies and Sellers) of the
following conditions on or prior to the Closing Date:

       

      (a)           Representations and
Warranties.  The representations and warranties contained in
Article 5 of this Agreement (disregarding all qualifications and exceptions
contained therein regarding materiality or a Material Adverse Effect) shall be
true and correct as of the date of this Agreement and as of the Closing Date as
though made on and as of such date, except for changes contemplated by this
Agreement unless any such representation or warranty is made only as of a
specific date, in which event such representation or warranty shall be true and
correct only as of such specific date), provided that this condition shall be
deemed to be satisfied unless all such failures of the representations and
warranties to be true and correct, would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  The
representations and warranties of the Purchaser, set forth in Sections 5.1
(Organization), 5.2 (Legal Authority; Binding Effect), 5.4 (Capitalization), 5.5
(SEC Filings/Financial Statements), 5.10 (Absence of Changes), 5.14 (Brokers or
Finders) and 5.19 (No Knowledge of Brokers), shall be true and correct in all
respects as of the Closing Date, as though such representations were made on and
as of such date (except for any of such representations and warranties which is
made only as of a specific date, in which event such representation or warranty
shall be true and correct only as of such specific date). The Company and
Sellers shall have received a certificate signed by an executive officer of
Purchaser certifying as to the fulfillment of the condition set forth in this
Section 7.2(a).

       

      
        
          
          

        

        
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      (b)           Covenants.  The
Purchaser shall have performed and complied in all material respects with each
and every covenant, agreement and condition required by this Agreement to be
performed or satisfied by the Purchaser at or prior to the Closing
Date.  The Company and Sellers shall have received a certificate
signed by an executive officer of Purchaser certifying as to the fulfillment of
the condition set forth in this Section 7.2(b).

       

      (c)           Secretary
Certificate.  The Purchaser shall have delivered to the Company
and Sellers a certificate or certificates dated as of the Closing Date and
signed on its behalf by its Secretary or other duly authorized person to the
effect that:  (i) (A) its Organizational Documents attached to
the certificate are true and complete and are in full force in the form
attached, and (B) the resolutions of the Board of Directors of Purchaser
authorizing the actions taken in connection with the Contemplated Transactions
were duly adopted at a duly convened meeting thereof, at which a quorum was
present and acting throughout, or by written consent, remain in full force and
effect, and have not been amended, rescinded or modified; (ii) the officers
or other individuals executing this Agreement and each of the Collateral
Documents to which the Purchaser is a party are incumbent officers or otherwise
duly authorized to execute such agreements and documents on behalf of the
Purchaser and the specimen signatures on such certificate are their genuine
signatures; and (iii) the Purchaser is in good standing in the State of
Delaware.  The certificate referred to above in clause
(iii) shall attach a good standing or validly subsisting certificate with
respect to the Purchaser certified by the Secretary of State of the State of
Delaware, dated as of a date not more than 15 days prior to the Closing
Date.  Such certificate or certificates shall be in customary form and
substance.

       

      (d)           Legal
Proceedings.  No Legal Proceedings or Orders shall be pending
or threatened against the Purchaser, any of its Subsidiaries, at law or in
equity, before any Governmental Entity, which, if resolved unfavorably to the
Purchaser or its Subsidiaries, could reasonably be expected to result in a
Material Adverse Effect in the Purchaser or any of its Subsidiaries or, the
Sellers (giving effect to the consummation of the Contemplated
Transactions).  The Purchaser shall have executed and delivered to the
Sellers a certificate to the effect that no Purchaser or any of its Subsidiaries
has any Knowledge that any Legal Proceeding or Order specified in Section 7.1(c)
is pending or threatened.

       

      (e)           No Material Adverse
Effect.  Since the date of this Agreement, there has not been
any event, change, effect, development or circumstance that, individually or in
the aggregate, has had or would reasonably by expected to have a Material
Adverse Effect with respect to the Purchaser, and no event has occurred or
circumstances exist that may result in such Material Adverse
Effect.

       

      
        
          
          

        

        
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      (f)           Aggregate Merger
Consideration.  The shares of Purchaser Stock issuable as the
Aggregate Merger Consideration in accordance with Section 2.3 shall have been
duly authorized;

       

      (g)           Deliverables.  Delivery
of the items specified in Section 8.2(a) in accordance with the terms
thereof.

       

      7.3           Obligation of the Purchaser
and Merger Sub to Close.  The obligations of the Purchaser and
Merger Sub to consummate the Contemplated Transactions on the Closing Date shall
be subject to the satisfaction (or written waiver by the Purchaser) of the
following conditions on or prior to the Closing Date:

       

      (a)           Representations and
Warranties.  Except as set forth in the next sentence, the
representations and warranties contained in Article 3 and 4 of this Agreement
(disregarding all qualifications and exceptions contained therein regarding
materiality or a Material Adverse Effect) shall be true and correct as of the
date of this Agreement and as of the Closing Date as though made on and as of
such date, except for changes contemplated by this Agreement unless any such
representation or warranty is made only as of a specific date, in which event
such representation or warranty shall be true and correct only as of such
specific date), provided that this condition shall be deemed to be satisfied
unless all such failures of the representations and warranties to be true and
correct, would, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.  The representations and warranties of the
Company, the Control Sellers and the Sellers, as the case may be, set forth in
Sections 3.1 (Organization), 3.2 (Legal Authority; Binding Effect), 3.3
(Capitalization), 3.4 (Subsidiaries), 3.14 (Absence of Changes), 3.26 (Brokers),
4.1(Organization), 4.2 (Legal Authority; Binding Effect), 4.4 (Title to Shares
and Units) shall be true and correct in all respects as of the Closing Date, as
though such representations were made on and as of such date (except for any of
such representations and warranties which is made only as of a specific date, in
which event such representation or warranty shall be true and correct only as of
such specific date). The Purchaser shall have received a certificate signed by
the Control Sellers and an executive officer of each Wilhelmina Transferred
Company certifying as to the fulfillment of the condition set forth in this
Section 7.3(a).

       

      (b)           Covenants.  The
Sellers and the Wilhelmina Transferred Companies shall have each performed and
complied in all respects with each and every covenant, agreement and condition
required by this Agreement to be performed or satisfied by the Sellers and the
Wilhelmina Transferred Companies, respectively.  Purchaser shall have
received a certificate signed by the Control Sellers and an executive officer of
the Wilhelmina Transferred Companies certifying as to the fulfillment of the
condition set forth in this Section 7.3(b).

       

      (c)           Secretary
Certificate.  The Wilhelmina Transferred Companies shall each
have delivered to the Purchaser a certificate or certificates dated as of the
Closing Date and signed by their respective corporate Secretary or other duly
authorized person to the effect that:  (i) (A) its Organizational
Documents are true and complete and are in full force and effect in the form
attached, and (B) the resolutions of the Board of Directors (or equivalent
body) of the entity authorizing the actions taken in connection with the
Contemplated Transactions, were duly adopted at a duly convened meeting thereof,
at which a quorum was present and acting throughout, or by written consent,
remain in full force and effect, and have not been amended, rescinded or
modified; (ii) the officers or other individuals executing this Agreement
and each of the Collateral Documents on behalf of any entity is a party are
incumbent officers or otherwise duly authorized to execute such agreements and
documents on behalf of such entity and the specimen signatures on such
certificate are their genuine signatures; and (iii) the Wilhelmina
Transferred Companies and their Subsidiaries are in good standing in their
respective states of incorporation or organization, as the case may be, in their
respective states of qualification.  The certificates referred to
above in clause (iii) shall attach a good standing certificate certified by
the relevant Secretary of State of the state of incorporation or organization or
state qualification, as the case may be, dated as of a date not more than 15
days prior to the Closing Date.  Such certificate or certificates
shall be in customary form and substance.

       

      
        
          
          

        

        
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      (d)           Consents and
Estoppel.  The Required Third Party Consents set forth on Schedule 7.3(d) shall
have been obtained.

       

      (e)           Legal
Proceedings.  No Legal Proceedings or Orders shall be pending
or threatened against the Wilhelmina Transferred Companies, any of their
Subsidiaries or any of the Sellers, at law or in equity, before any Governmental
Entity, which, if resolved unfavorably to the Wilhelmina Transferred Companies
or their Subsidiaries or the Sellers, could reasonably be expected to result in
a Material Adverse Effect in the Wilhelmina Transferred Companies or any of
their Subsidiaries or, the Purchaser (giving effect to the consummation of the
Contemplated Transactions). The Control Sellers shall have executed and
delivered to the Purchaser a certificate to the effect that no Wilhelmina
Transferred Companies or any of their Subsidiaries have any Knowledge that any
Legal Proceeding or Order specified in Section 7.1(c) is pending or
threatened.

       

      (f)           No Material Adverse
Effect.  Since the date of this Agreement, there has not been
any event, change, effect, development or circumstance that, individually or in
the aggregate, has had or would reasonably by expected to have a Material
Adverse Effect with respect to the Wilhelmina Transferred Companies or the
Business, and no event has occurred or circumstances exist that may result in
such Material Adverse Effect.

       

      (g)           Regulatory
Approvals.  All authorizations, approvals and permits, if any,
of any Governmental Entity or regulatory body of the United States or of any
state that are required to be obtained on or prior to the Closing in connection
with the Contemplated Transactions shall have been duly obtained and shall be
effective as of the Closing.

       

      (h)           Termination of Certain
Agreements.  The agreements listed on Schedule 7.3(h) (the
“Terminated
Agreements”) shall have been terminated in all respects pursuant to
instructions reasonably satisfactory to Purchaser and without any obligation or
liability hereunder on the part of any Wilhelmina Transferred Companies or
Subsidiary thereof.

       

      (i)           Release of Signature Bank
Security Interests.  Any and all security interests in, or
Encumbrances affecting, the Wilhelmina Equity Interests and the Company Shares
in connection with that certain Loan Agreement, dated December 21, 2005, between
Signature Bank and the Company, as amended or supplemented, (the “Signature Bank
Security Interests”) shall have been terminated and released to the
satisfaction of the Purchaser without liability to any of Purchaser, Merger Sub,
the Surviving Corporation, the Wilhelmina Transferred Companies or their
Subsidiaries.

       

      
        
          
          

        

        
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      (j)           Financials.  The
Wilhelmina Transferred Companies and their Subsidiaries shall have completed and
provided to Purchaser such audited financial statements and subsequent interim
reviewed financial statements, which shall conform to GAAP, that Purchaser is
required to file with the SEC under any and all U.S. securities laws, rules or
regulations in such form as is satisfactory in all respects to Purchaser in its
reasonable discretion (the “Closing
Financials”).  The Closing Financials
shall be in the form, and include the opinion of Weiser LLP, the independent
certified public accountant of the Wilhelmina Transferred Companies and their
Subsidiaries (the “Auditor’s
Opinion”), necessary to meet the standards required by the SEC, and
Weiser LLP shall have provided its consent to Purchaser (the “Auditors
Consent”) to the use of the Closing Financials
in the Purchaser’s 8-K and other registration filings with the SEC as requested
by Purchaser.  Further, Weiser LLP shall have made all of
its work papers and other supporting documents it utilized in providing the
Auditor’s Opinion available for review by the Purchaser’s independent certified
public accountants.

       

      (k)           Designated Matter
Proceedings.  The condition on Schedule 10.2(d) under the
heading “Matter Proceedings” shall have been satisfied.

       

      (l)           Wilhelmina Miami
Shareholders.  All the shareholders of Wilhelmina Miami
representing 100% of the issued and outstanding capital stock of Wilhelmina
Miami shall have executed this Agreement or a joinder agreement joining them as
parties to this Agreement.

       

      (m)           Deliverables.  Delivery
of the items specified in Section 8.2(c) and (d) in accordance with the
terms thereof.

       

      (n)           Additional
Conditions.  The Sellers (as applicable) shall have satisfied
the conditions set forth on Schedule 7.3(n)
hereto.

       

      ARTICLE
8

       

      CLOSING;
EXPENSES; SUBSEQUENT DOCUMENTATION

       

      8.1           Closing.  Closing
of the Contemplated Transactions (the “Closing”)
shall (subject to satisfaction or waiver of the conditions set forth in Article
7) take place at 10:00 a.m. local time, no later than the fifth (5th) Business
Day following the satisfaction or waiver of the conditions set forth in Article
7 (other than those involving the delivery of documents, agreements or
instruments at the Closing) (the “Closing
Date”), at the New York offices of Olshan Grundman Frome Rosenzweig &
Wolosky LLP, or such other place (or electronically) as is mutually agreed by
the parties hereto.  All actions taken at Closing shall be deemed to
have occurred simultaneously, and shall be effective as of the close of business
on the Closing Date.

       

      8.2           Deliveries at
Closing.  At the Closing:

       

      (a)           The
Purchaser will deliver:

       

      
        
          
          

        

        
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      (i)           to
the Sellers, cash in an aggregate amount equal to the amount payable at Closing
pursuant to Article 2 of this Agreement by wire transfer to account(s)
designated by the applicable Seller at least three (3) Business Days prior to
Closing or by certified or bank check;

       

      (ii)           to
the Sellers a written legal opinion of Olshan Grundman Frome Rosenzweig &
Wolosky LLP, counsel for the Purchaser and the Merger Sub, with respect to the
matters set forth in Sections 5.1 (Organization), 5.2 (Legal Authority; Binding
Effect), 5.3 (Conflict with other Instruments; Absence of
Restrictions);

       

      (iii)           the
Registration Rights Agreement;

       

      (iv)           into
Escrow pursuant to the Escrow Agreement, a stock certificate representing an
amount of shares of Purchaser Stock equal to the Restricted Share
Amount;

       

      (v)           irrevocable
instruction letter from Purchaser to the Exchange Agent to issue the Purchaser
Certificates pursuant to Section 2.5;

       

      (vi)           to
the Company and the Sellers, the certificates required to be delivered pursuant
to Sections 7.2(a), 7.2(b) and 7.2(c); and

       

      (vii)           all
other agreements, certificates, consents, approvals and documentary evidence
required to be delivered pursuant to the Purchaser’s obligations
hereunder.

       

      (b)           The
Certificate of Merger shall have been filed with the New York Secretary of
State.

       

      (c)           The
Wilhelmina Transferred Companies and Control Sellers (as applicable) will
deliver:

       

      (i)           Assuming
the concurrent repayment of the Krassner Note pursuant to Section 2.10, to the
Purchaser, evidence of the acceptance by the Krassner L.P. of the Company Shares
(which shares shall be transferred to Purchaser (or Purchaser Sub, as
applicable) at Closing) as full and complete payoff of the Krassner Note, and
the termination and release by the Krassner L.P. of any and all Claims with
respect to the Krassner Note, all in such form as the Purchaser may reasonably
request;

       

      (ii)           to
the Purchaser, the employment agreement executed by Sean Patterson, the Company
and Purchaser (the “New Employment
Agreement”) which agreement shall, among other things, provide a full
release of any and all Claims of such employee arising under such employee’s Old
Employment Agreement with the respective Wilhelmina Transferred Company or any
of the Subsidiaries thereof;

       

      (iii)           to
the Purchaser, a written legal opinion of Loeb & Loeb LLP counsel for the
Company, with respect to the matters set forth in Sections 3.1 (Organization),
3.2 (Legal Authority; Binding Effect), 3.3 (Capitalization); 3.4 (Subsidiaries);
3.5 (Conflict with other Instruments; Absence of Restrictions).

       

      
        
          
          

        

        
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      (iv)          to
the Purchaser, certificates required to be delivered pursuant to Sections
7.3(a), 7.3(b) and 7.3(c);

       

      (v)           to
the Purchaser, evidence satisfactory to Purchaser that the Terminated Agreements
have been terminated;

       

      (vi)          to
the Purchaser, evidence satisfactory to Purchaser that the Signature Bank
Security Interests have been released and terminated without liability to any of
Purchaser, Merger Sub, Surviving Corporation, the Wilhelmina Transferred
Companies or their Subsidiaries;

       

      (vii)         to
the Purchaser, the Closing Financials;

       

      (viii)        to
the Purchaser, the Auditor’s Opinion;

       

      (ix)           to
the Purchaser, the Auditor’s Consent; and

       

      (x)            all
other agreements, certificates, consents, approvals and documentary evidence
required to be delivered pursuant to any Wilhelmina Transferred Companies’ or
Seller’s obligations hereunder;

       

      (d)           The
Wilhelmina Transferred Companies and the Sellers (as applicable) will
deliver:

       

      (i)          
 to the Purchaser (or Purchaser Sub, as applicable), stock certificates
representing all of the Company Shares held by any Seller (as set forth on
Schedule 3.3) endorsed for transfer to Purchaser (or Purchaser Sub) or
accompanied by stock powers executed in blank and otherwise satisfactory to
Purchaser for transfer;

       

      (ii)           to
the Purchaser (or Purchaser Sub, as applicable), stock certificates representing
all of the Miami Shares held by any Seller (as set forth on Schedule 3.3)
endorsed for transfer to Purchaser (or Purchaser Sub) or accompanied by stock
powers executed in blank and otherwise satisfactory to Purchaser for
transfer;

       

      (iii)           to
the Purchaser (or Purchaser Sub, as applicable), an assignment conveying to the
Purchaser (or Purchaser Sub) all right, title and interest in and to the
Wilhelmina Units held by any Seller (as set forth on Schedule A) in such form as
the Purchaser may reasonably request to transfer record and beneficial ownership
of such Wilhelmina Units; and

       

      (iv)          all
other agreements, certificates, consents, approvals and documentary evidence
required to be delivered pursuant to any Seller’s obligations
hereunder.

       

      (e)           The
Control Sellers (as applicable) will deliver:

       

      
        
          
          

        

        
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      (i)           to
the Purchaser, a written legal opinion of [__________] counsel to Lorex, with
respect to the matters set forth in Section 4.1 (Organization), 4.2 (Legal
Authority, Binding Effect), 4.3 (No Conflicts, Consents),  and 4.4
(Title to Shares and Units);

       

      (ii)           to
the Purchaser, a written legal opinion of Strassburger McKenna Gutnick &
Gefsky, counsel to the Krassner L.P., with respect with respect to the matters
set forth in Section 4.1 (Organization), 4.2 (Legal Authority, Binding Effect),
4.3 (No Conflicts, Consents) and 4.4 (Title to Shares and Units).

       

      8.3           Expenses.  Each
Wilhelmina Transferred Company shall pay its allocable portion of the
Transaction Expenses incurred by the Sellers and the Wilhelmina Transferred
Companies up to a maximum aggregate amount of $35,000.  Control
Sellers shall assume responsibility for, and pay out of pocket, any Transaction
Expenses with respect to the period up to and including the Closing (other than
any such Transaction Expenses of the Purchaser) billed to any of the Wilhelmina
Transferred Companies on or after the Closing (or billed to any of the Wihelmina
Transferred Companies and not paid prior to Closing) in excess of $275,000 in
the aggregate.  Control Sellers shall receive an appropriate
dollar-for-dollar credit in determining the Wilhelmina Expense Amount (for
purposes of Section 2.6) for any such expenses incurred by the Wilhelmina
Transferred Companies and paid out-of-pocket by Control Sellers after the
Closing pursuant the foregoing.  The Purchaser shall pay all
Transaction Expenses incurred by it.  To the extent any Seller (other
than Esch or Krassner) retains separate counsel or advisors for individual
representation in connection with the Contemplated Transactions, such Seller
shall pay any and all legal fees and other expenses incurred directly by him
related to such representation.  Notwithstanding anything to the
contrary, the Control Sellers shall be responsible for and pay out-of-pocket
(and shall direct attorneys pursuing settlement of the matter set forth on
Schedule 10.2(d) under the heading “Program Amounts” to invoice the Control
Sellers directly with respect to) all Designated Matter Legal Fees.

       

      8.4           Subsequent
Documentation.  The Sellers shall at any time and from time to
time upon the request of the Purchaser, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, all such further assignments,
instruments of sale and transfer and other documents as may be reasonably
required to better evidence, confirm and carry out the intent of this
Agreement.

       

      ARTICLE
9

       

      CONFIDENTIALITY
AND COVENANT NOT TO COMPETE

       

      9.1           Confidentiality.

       

      (a)           Following
the Closing, except in the context of performing activities on behalf of the
Purchaser that are authorized by Purchaser, each Seller shall and shall use
commercially reasonable efforts to cause its Affiliates, counsel, accountants
and other representatives to:  (a) keep all Proprietary
Information confidential and not to disclose or reveal any Proprietary
Information to any Person other than counsel, accountants and other agents and
representatives who need to know the Proprietary Information to prepare tax
returns (or in engage in other matters relating the payment of taxes) and
provide personal financial advisory services and are advised of the confidential
nature of the Proprietary Information; and (b) not to use the Proprietary
Information for any purpose (including but not limited to any purpose that is
any way detrimental to Purchaser or any Wilhelmina Transferred Company) other
than to enforce such party’s rights and remedies under this
Agreement.

       

      
        
          
          

        

        
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      (b)           The
Confidentiality Agreement shall continue in full force and effect until the
Closing.  On the Closing Date, the Confidentiality Agreement shall
terminate.  This Section 9.1(b) shall supersede any contrary provision
of the Confidentiality Agreement.

       

      9.2           Covenant Not To
Compete.  As a material inducement to the Purchaser’s
consummation of the Contemplated Transactions, no Control Seller (the “Restricted
Sellers”) shall, during the Restricted Period, provided that the
Purchaser has not shut down or abandoned the Restricted Business, do any of the
following, directly or indirectly, without the prior written consent of the
Purchaser in its sole and absolute discretion (other than, in such Control
Seller’s capacity as representative of Purchaser or its Subsidiaries, a member
of its Board of Directors (either directly or through a representative) or an
investor therein, such of the following activities that are done for the benefit
of solely Purchaser and its Subsidiaries and as authorized by
Purchaser):

       

      (a)           compete
directly or indirectly in (i) any business conducted as of the Closing Date by
the Wilhelmina Transferred Companies or any of their Subsidiaries and, if such
businesses are subsequently transferred, such businesses if they continue to be
conducted by any successors or assigns or (ii) in any other part or aspect of
the Representation Business ((i) and (ii) collectively, the “Restricted
Business”), within the United States, its territories and possessions and
throughout anywhere else in the world (the “Restricted
Area”);

       

      (b)           have
a direct or indirect interest in (whether as owner, stockholder, lender,
partner, co venturer, director, officer, employee, agent, consultant or
otherwise), any Person that engages in the Restricted Business; provided, that any Control
Seller may own, purely as a passive investor (and without any involvement in the
business of such Person), and not as part of a group with any other Seller, not
equal to or more than four and nine tenths percent (4.9%) of the outstanding
securities of any class of any publicly traded securities of a Person; provided
that all other restrictions set forth in this Section 9.2 shall apply
notwithstanding any passive ownership of securities pursuant to the
foregoing;

       

      (c)           directly
or indirectly solicit, call on, divert, entice, influence, induce or attempt to
do any of the foregoing (in each case for the direct or indirect benefit of a
Restricted Seller or any third party) with respect to (i) customers or
clients or prospective customers or clients (wherever located in the world in
each case) of the Wilhelmina Transferred Companies or any of their Subsidiaries
with respect to goods, products or services that are competitive with those of
the Wilhelmina Transferred Companies or any of their Subsidiaries as of the
Closing Date, (ii) models, to terminate or modify any contract, arrangement
or relationship with the Wilhelmina Transferred Companies or any of their
Subsidiaries, (iii) any other Talent to terminate or modify any contract,
arrangement or relationship with the Wilhelmina Transferred Companies or any of
their Subsidiaries, (iv) any  Employees as of or following the
Closing Date to leave the employ of the Wilhelmina Transferred Companies or
their Subsidiaries, (v) suppliers or vendors or prospective suppliers or
vendors (wherever located) of the Wilhelmina Transferred Companies or any of
their Subsidiaries with respect to materials, resources or services to be used
in connection with goods, products or services that are competitive with those
of the Wilhelmina Transferred Companies or any of their Subsidiaries as of the
Closing Date (which excludes outside professional advisors, such as lawyers,
accountants and investment bankers) or (vi) distributors, consultants,
agents or independent contractors to terminate or modify any contract,
arrangement or relationship with the Wilhelmina Transferred Companies or any of
their Subsidiaries;

       

      
        
          
          

        

        
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      For
purposes of the foregoing, the “Representation
Business” shall mean (i) the business of identifying, seeking, scouting,
arranging, organizing, coordinating, obtaining and/or negotiating professional
and/or marketing opportunities on behalf of Talent (including without limitation
jobs, endorsement deals, sponsorship deals, licensing deals, campaigns,
appearances, speeches, other forms of participation and charitable involvement)
or Talent Businesses, (ii) promoting Talent or Talent Businesses or any of their
respective names or brands, (iii) otherwise managing or representing, or
advising Talent or third parties with respect to, the business and legal affairs
of Talent or Talent Businesses or (iv) identifying, developing and securing
Talent or Talent Businesses for the purposes of being engaged in the activities
described in clauses (i), (ii) or (iii).  A “Talent
Business” shall mean a business (including an event) that is (a)
principally engaged in or focused on the identification, promotion, hosting,
development and/or representation of Talent or (b) which showcases or hosts the
principal professional activities of Talent or performs any such activities in a
business form.

       

      9.3           Specific Enforcement;
Extension of Period.

       

      (a)           The
Restricted Sellers acknowledge that any breach or threatened breach by any
Restricted Seller of any provision of Section 9.1 or 9.2 will cause continuing
and irreparable injury to the Purchaser and its Affiliates for which monetary
damages would not be an adequate remedy.  Accordingly, the Purchaser
shall be entitled to seek injunctive relief from a court of competent
jurisdiction, including specific performance, with respect to any such breach or
threatened breach of Section 9.1 or 9.2.

       

      (b)           No
Restricted Seller shall, in any Legal Proceeding to enforce any provision of
this Article 9, assert the claim or defense that an adequate remedy at law
exists or that injunctive relief is not appropriate under the
circumstances.  The rights and remedies of the Purchaser set forth in
this Section 9.3 are in addition to any other rights or remedies to which the
Purchaser may be entitled, whether existing under this Agreement, at law or in
equity, all of which shall be cumulative.

       

      (c)           The
periods of time set forth in this Article 9 shall not include, and shall be
deemed extended by, any time required for litigation to enforce the relevant
covenant periods, if the Purchaser was successful in such
litigation.  The term “time required for litigation” as used in this
Section 9.3(c) shall mean the period of time from the earlier of (i) any
Restricted Seller’s (as applicable) first alleged breach of the provisions of
Section 9.1 or 9.2, or (ii) service of process upon any Restricted Seller
(as applicable) with respect to a Legal Proceeding instituted by the Purchaser,
in either event through the expiration of all appeals related to such Legal
Proceeding.

       

      
        
          
          

        

        
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      9.4           Disclosure.  The
Restricted Sellers acknowledge that the Purchaser and its Affiliates may provide
a copy of this Article 9 of this Agreement or any portion of this Agreement to
any Person whom the Purchaser or its Affiliates believe in good faith is acting
with, through or on behalf of any of the Restricted Sellers and that may,
directly or indirectly, breach or threaten to breach any of the provisions of
Section 9.1 or 9.2.

       

      9.5           Interpretation.  It
is the desire and intent of the parties that the provisions of this Article 9
shall be enforceable to the fullest extent permissible under Law and public
policy.  Accordingly, if any provision of this Article 9 shall be
determined to be invalid, unenforceable or illegal for any reason, then the
validity and enforceability of all of the remaining provisions of this Article 9
shall not be affected thereby.  If any particular provision of this
Article 9 shall be adjudicated to be invalid or unenforceable, then such
provision shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such amendment to apply only to the
operation of such provision in the particular jurisdiction in which such
adjudication is made; provided that, if any
provision contained in this Article 9 shall be adjudicated to be invalid or
unenforceable because such provision is held to be excessively broad as to
duration, geographic scope, activity or subject, then such provision shall be
deemed amended by limiting and reducing it so as to be valid and enforceable to
the maximum extent compatible with the Laws and public policy of such
jurisdiction, such amendment only to apply with respect to the operation of such
provision in the applicable jurisdiction in which the adjudication is
made.

       

      9.6           Acknowledgment.  Each
Restricted Seller acknowledges that it or he, respectively, has carefully read
and considered the provisions of this Article 9.  Each Restricted
Seller believes that it or he, as the case may be, has received and will receive
sufficient consideration and other benefits to justify the restrictions in this
Article 9.  Each Restricted Seller also acknowledges and understands
that these restrictions are reasonably necessary to protect the interests of
Purchaser and the Wilhelmina Transferred Companies, and that the covenants
contained in this Article 9 were a material inducement to the Purchaser on which
the Purchaser relied in executing this Agreement.  Each of the
Restricted Sellers believes that the provisions of this Article 9 will not
prevent him from conducting businesses that are not competitive with those of
the Wilhelmina Transferred Companies during the term of such restrictions in the
Restricted Area.

       

      ARTICLE
10

      SURVIVAL
AND INDEMNIFICATION

       

      10.1           Survival.

       

      (a)           Representations and
Warranties.  Notwithstanding any investigation made by or on
behalf of the Purchaser prior to or after the Closing Date, the representations
or warranties set forth in this Agreement and any Collateral Document shall
survive the Closing for a period of eighteen (18) months following the Closing
Date; provided that (a) the representations and warranties set forth in
Sections 3.2 (Legal Authority; Binding Effect), 3.3 (Capitalization), 3.4
(Subsidiaries), 3.26 (Brokers), 4.2 (Legal Authority; Binding Effect), 4.4
(Title to Shares and Units), 5.2 (Legal Authority; Binding Effect), 5.4
(Capitalization), and 5.14 (Brokers or Finders) shall survive for the applicable
statute of limitations plus sixty days and (b) the representations and
warranties set forth in Sections 3.20 (Employee and Labor Matters), 3.21
(Employee Benefit Plans), 3.22 (Environmental Laws), and 3.23 (Taxes and Tax
Returns) shall survive for the applicable statute of limitations plus sixty
days.  Following the Closing, all representations and warranties made
by the Company in this Agreement or any Collateral Documents shall be deemed to
have been made solely by the Sellers.

       

      
        
          
          

        

        
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      (b)           Covenants;
Agreements.  Except for those covenants and agreements which by
their terms require performance after the Closing (which covenants and
agreements shall survive in accordance with their respective terms), all
covenants and other agreements of the parties in this Agreement and in the
Collateral Documents shall end at and as of the time of Closing and shall not
survive the Closing.

       

      (c)           Claims Period
Survival.  The period during which a claim for indemnification
may be asserted by an indemnified party (the “Claims
Period”) with respect to the representations or warranties set forth in
this Agreement shall begin on the Closing Date and shall terminate on the date
that is eighteen (18) months after the date of this Agreement; provided, however, that
notwithstanding the foregoing, the Claims Period during which a claim for
indemnification may be asserted with respect to the applicable representations
and warranties set forth in Section 10.1(a) shall
begin as of the date of this Agreement and shall continue until the applicable
survival periods set forth in Section 10.1(a) shall
have terminated.   Notwithstanding the foregoing, if, prior to
the close of business on the last day of the Claims Period, an indemnifying
party shall have been properly notified of a claim for indemnity hereunder and
such claim shall not have been finally resolved or disposed of at such date,
such claim shall continue to survive and shall remain a basis for indemnity
hereunder until such claim is finally resolved or disposed of in accordance with
the terms hereof.

       

      10.2           Indemnification by Esch and
Krassner.  Subject to the terms and conditions of this Article
10, Esch and Krassner, severally up to 50% of the applicable Claim or Loss,
shall indemnify, defend and hold harmless the Purchaser and Merger Sub and their
respective directors, officers, employees, agents, attorneys and shareholders
(collectively, the “Purchaser
Group”) in respect of any and all Claims or Losses incurred by the
Purchaser Group, in connection with any or all of the following:

       

      (a)           Any
breach of any representation or warranty made by any of the Wilhelmina
Transferred Companies or any of the Control Sellers in this Agreement or any
Collateral Document;

       

      (b)           The
breach or non-fulfillment after the date hereof and before the Closing Date of
any covenant, agreement or obligation of any of the Wilhelmina Transferred
Companies (or any of the Control Sellers) contained in this Agreement or any
Collateral Documents, including, without limitation, the covenants set forth in
Article 9 of this Agreement;

       

      (c)           Any
and all Taxes of the Wilhelmina Transferred Companies allocable to periods up to
and including the Closing Date, unless such Taxes were included in the
calculation of the Closing Net Asset Adjustment and then only to the extent of
such amounts included in the Closing Net Asset Adjustment; and

       

      
        
          
          

        

        
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      (d)           The
matter set forth on Schedule 10.2(d) under the heading “Coverage”.

       

      10.3           Indemnification by
Sellers.  Subject to the terms and conditions of this Article
10, each Seller shall indemnify, defend and hold harmless the Purchaser Group in
respect of any and all Claims or Losses incurred by the Purchaser Group, in
connection with any or all of the following:

       

      (a)           Any
breach of any representation or warranty made by such Seller in this Agreement
or any Collateral Document; and

       

      (b)           The
breach or non-fulfillment of any covenant, agreement or obligation of such
Seller contained in this Agreement or any Collateral Documents, including,
without limitation, the covenants set forth in Article 9 of this
Agreement.

       

      10.4           Limitations on Seller
Indemnification.  The indemnification provided for in Sections
10.2 and Section 10.3 shall be subject to the following limitations and
conditions:

       

      (a)           Neither
Esch or Krassner, nor any other Sellers, shall have any obligation to indemnify
or hold harmless any of the Purchaser Group with respect to any Claims or Losses
under Sections 10.2 and 10.3 until the sum of all such Claims and Losses exceeds
Two Hundred Fifty Thousand ($250,000) (the “Seller
Basket”), at which point Esch and Krassner will indemnify and hold
harmless the Purchaser Group in respect of all Claims and Losses in any amount;
provided that breaches of Section 3.14(b), Section 3.14(c), Section 3.20(b) or
Section 3.26 shall not be subject to the Seller Basket; provided further that
Claims or Losses covered under Section 10.2(d) shall not be subject to the
Seller Basket.

       

      (b)           Neither
Esch or Krassner shall in any event be liable to indemnify or hold harmless the
Purchaser Group in an amount greater than Two Million Dollars ($2,000,000) each
in the aggregate; provided that Claims or Losses covered under Section 10.2(d)
shall not be subject to the foregoing cap.

       

      (c)           No
Seller (other than the Control Sellers) shall in any event be liable to
indemnify or hold harmless any of the Purchaser Group in an amount greater than
one-eighth of the aggregate consideration received by such Seller from
Purchaser.

       

      10.5           Indemnification by
Purchaser.  Subject to the terms and conditions of this Article
10, Purchaser shall indemnify, defend and hold harmless the Sellers and their
respective directors, officers, employees, agents, attorneys and shareholders
(collectively, the “Seller
Group”) in respect of any and all Claims and Losses reasonably incurred
by the Seller Group, in connection with any or all of the
following:

       

      (a)           Any
breach of any representation or warranty made by Purchaser or Merger Sub in this
Agreement or any Collateral Document; and

       

      (b)           The
breach or non-fulfillment of any covenant, agreement or obligation of Purchaser
or Merger Sub contained in this Agreement or any Collateral
Documents.

       

      
        
          
          

        

        
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      10.6           Limitations on Purchaser
Indemnification.  The indemnification provided for in Section
10.5 shall be subject to the following limitations and conditions:

       

      (a)           The
Purchaser shall have no obligation to indemnify or hold harmless any Seller with
respect to any Claims or Losses until the sum of all such Claims and Losses
exceeds Two Hundred Fifty Thousand ($250,000), at which point the Purchaser will
indemnify and hold harmless the Seller Group in respect of all Claims and Losses
in any amount; provided that Claims or Losses relating to those certain matters
numbered 2 and 3 on Schedule 5.6 shall not be subject to the foregoing Two
Hundred Fifty Thousand ($250,000) basket threshold.

       

      (b)           The
Purchaser shall in any event not be liable to indemnify or hold harmless the
Seller Group in an amount greater than Four Million Dollars ($4,000,000) in the
aggregate; provided that Claims or Losses relating to those certain matters
numbered 2 and 3 on Schedule 5.6 shall not be subject to the foregoing Four
Million Dollars ($4,000,000) cap threshold.

       

      (c)           Notwithstanding
anything to the contrary, in the event that any Seller has a valid
indemnification claim under Section 10.5(a) of this Agreement for which the
applicable Loss arises from, or relates to, a Loss incurred or sustained by
Purchaser (a “Purchaser Value
Loss”), a Seller shall only be entitled to recover such Seller’s pro rata
share of such Purchaser Value Loss based on its pro rata ownership of Purchaser
following the Closing.

       

      10.7           Claims for
Indemnification.

       

      (a)           (i)
In the event that any Claim shall be asserted by any party hereto in respect of
which payment may be sought under Section 10.1 of this Agreement, the party
seeking indemnification hereunder shall promptly cause written notice of the
institution or assertion of such Claim, detailing with reasonable specificity
the nature and a reasonable estimate of the amount of such damages or of such
Claim that is covered by this indemnity, to be forwarded to the indemnifying
party (and shall permit such indemnifying party to have access to such books and
records as necessary for the indemnifying party to evaluate the Claim and
determine whether it is required to indemnify the indemnified party), who shall
within thirty (30) Business Days of receipt of such written notice, notify the
party asserting such Claim as to whether the indemnifying party accepts, rejects
or needs more time to investigate such indemnification obligation and
(ii) in the event that any Claim shall be asserted by any Third Party in
respect of which payment may be sought under Article 10 of this Agreement, the
indemnified party shall promptly cause written notice of the institution or
assertion of such Claim, detailing with reasonable specificity the nature and a
reasonable estimate of the amount of such damages or of such Claim that is
covered by this indemnity, to be forwarded to the indemnifying
party.  If the indemnifying party agrees that the indemnification
obligations set forth in this Article 10 apply to it with respect to a
particular Third Party Claim (without taking into account the Seller Basket in
Section 10.4(a) or the threshold amount in Section 10.6(a)), the indemnifying
party, at its election and subject to Section 10.7(e) below, shall have the
absolute and exclusive right to defend against, contest (in a forum of its
choice), appeal, negotiate, settle, compromise or otherwise deal with such Claim
(each of such actions for the purposes of this Section 10.7 being referred to as
“defending” a Claim or the “defense” of a Claim), and shall have the right, at
its sole option and expense, to be represented by counsel of its choice, which
must be reasonably satisfactory to the indemnified party, and the indemnified
party agrees to cooperate fully with such defense.  If the
indemnifying party notifies the indemnified party that more time is needed to
investigate, the indemnifying party may proceed under the prior sentence for a
period not to exceed sixty (60) Business Days in total, at which time it must
decide to defend or reject the indemnifications.  During the second
period of thirty (30) Business Days, any out of pocket costs incurred by the
indemnified party prior to a decision to accept the indemnification obligation
and to defend such claim shall be added to the indemnification
obligation.  If the indemnifying party elects to defend such Claim, it
shall within thirty (30) Business Days of the written notice in the first
sentence of this Section 10.7(a) (or sooner, if the nature of the Claim so
requires) notify the indemnified party of its intent to do so.

       

      
        
          
          

        

        
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      If the
indemnifying party elects to defend such Third Party Claim, the indemnified
party may be present at all meetings and Legal Proceedings, at his or its own
expense, but may not participate in the defense of such Claim; provided however,
that the indemnifying party shall not pay for separate counsel for the
indemnified parties, unless (i) the indemnified party is requested by the
indemnifying party to participate in any meeting or Legal Proceeding, or
(ii) in the reasonable written opinion of counsel to the indemnified party,
a conflict or potential conflict exists between the indemnified party and the
indemnifying party that would make separate representation advisable; provided further that
the indemnifying party shall not be required to pay for more than one such
counsel in any single jurisdiction for all indemnified parties in connection
with any Claim.  If the indemnifying party (A) elects not to
defend such Third Party Claim, (B) fails to notify the indemnified party of
its election as herein provided, or (C) contests its obligation to
indemnify the indemnified party for such Losses under this Agreement after the
expiration of any period provided in the prior paragraph to further investigate
a Claim, the indemnified party may defend such Claim.  If the
indemnified party so defends any Third Party Claim and such Third Party Claim is
ultimately determined to be a Claim for which such party was entitled to
indemnification pursuant to this Article 10, then the indemnifying party shall
promptly reimburse the indemnified party for the reasonable expenses of
defending such Claim upon submission of periodic bills.  The parties
hereto agree to cooperate fully with each other in connection with any
Claim.  Each party shall provide the other party, copies of all
notices, correspondence, or other communications received by that party with
respect to the determination of the Claim promptly upon receipt thereof but in
any event within five (5) Business Days of receipt.

       

      (b)           After
any final Order shall have been rendered by a court, arbitration board or
administrative agency of competent jurisdiction and the expiration of the time
in which to appeal therefrom, or a settlement shall have been consummated, or
the indemnified party and the indemnifying party shall have arrived at a
mutually binding Agreement with respect to a Claim hereunder, the indemnified
party shall forward to the indemnifying party notice of any sums due and owing
by the indemnifying party pursuant to this Agreement with respect to such matter
and the indemnifying party shall be required to pay all of the sums so due and
owing to the indemnified party.

       

      (c)           Subject
to clause (i) below of this paragraph (c), in the case of any amount
payable to any indemnified party pursuant to Article 10 hereof, the indemnified
party shall forward to the indemnifying party notice of any sums due and owing
by the indemnifying party pursuant to this Agreement with respect to such matter
and the Claim shall be satisfied as follows:

       

      
        
          
          

        

        
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      (i)           In
the case of any amount payable to the Purchaser Group, the indemnifying party
shall be required to pay all of the sums so due and owing to the Purchaser Group
by wire transfer of immediately available funds within thirty (30) days after
the date of such notice; provided that, following the issuance of an auditor’s
opinion in connection with, and upon completion of, Purchaser’s fiscal year 2008
audit and the full satisfaction of any required Core Decrease or Core Increase
pursuant to Section 2.6 hereof (by way of a cash payment or the repurchase of
Seller Restricted Shares, in either case actually effected in accordance
therewith), at the
election of the applicable indemnifying party (or if the indemnifying party
otherwise defaults on the payment when due, at the election of Purchaser), all
or the relevant portion of an indemnification amount payable to the Purchaser
Group may be satisfied by forfeiture of any remaining Seller Restricted Shares
subject to the provisions of the Escrow Agreement (or by return of any other
Purchaser Stock then held by such indemnifying Party without restriction), which
stock shall be deemed to have a cash value equal to its Market Value as of the
date of forfeiture (or return) as applicable.  In no event shall the
exhaustion of Seller Restricted Shares limit the amount otherwise required to be
paid by an indemnifying party pursuant to this Article 10.

       

      (ii)           In
the case of any amount payable to the Seller Group, the indemnifying party shall
be required to pay all of the sums so due and owing to the Seller Group by wire
transfer of immediately available funds within thirty (30) days after the date
of such notice.

       

      (d)           Notwithstanding
anything to the contrary in this Section 10.7 to the contrary, the failure of
the indemnified party to give reasonably prompt notice of any Claim shall not
release, waive or otherwise affect the indemnifying party’s obligations with
respect thereto except to the extent that the indemnifying party can demonstrate
actual loss and prejudice as a result of such failure.

       

      (e)           Notwithstanding
anything in this Section 10.7, no indemnifying party shall be liable for any
settlement of any Third Party Claim effected without its written consent, which
consent shall not be unreasonably withheld or delayed.  If the
indemnifying party shall have the exclusive authority to defend such Third Party
Claim under this Section 10.7, and the indemnified party nevertheless shall
settle such Third Party Claim without the consent of indemnifying party (not to
be unreasonably withheld or delayed), the indemnifying party shall have no
liability with respect to such settlement.  The indemnifying party
shall not settle any Third Party Claim without the consent of the indemnified
party (which consent shall not be unreasonably withheld or delayed), unless (1)
the settlement involves purely a monetary amount, (2) the settlement fully and
unconditionally releases the indemnified party and (3) the indemnifying party is
obligated to pay 100% of the liability in connection with such Third Party
Claim.  Notwithstanding the foregoing, the indemnifying party shall
not settle any Third Party Claim related to Tax matters without the consent of
the indemnified party (which consent shall not be unreasonably withheld or
delayed).

       

      
        
          
          

        

        
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      (f)           Notwithstanding
anything in this Section 10.7 to the contrary, any Claim for indemnification
pursuant to this Article 10 based on a breach of a representation, warranty or
covenant that survives the Closing for a finite period must be asserted on or
before the date of the expiration of such finite period for such Claim to be
enforceable; provided that, if a good faith estimate of Losses in connection
with such Claim is provided on or before the applicable deadline, the precise
amount of Losses in connection with such Claim may be adjusted following such
deadline.

       

      (g)           After
it is finally determined by a court of competent jurisdiction that an
indemnified party is entitled to indemnification pursuant to this Article 10,
such indemnified party shall have the right to offset any amounts for which it
is entitled to indemnification under this Article 10 as an indemnified party
against any amounts otherwise payable by such indemnified party to indemnifying
party (or his Affiliate) under this Agreement, including under Article
2.  Any offset hereunder shall be in addition to any other offset(s)
permitted under this Agreement.  In the event that a indemnified party
determines to offset any amount pursuant to this Article 10, such indemnified
party shall provide the applicable other indemnify party or parties with a good
faith calculation of the amount of the Losses to be offset at the time the
applicable payment under this Agreement is made.  In the event that
the indemnification Claim to which the offset applies is later resolved in a
manner favorably to the other party (i.e., in an amount less than the amount
that was offset), the offsetting party shall promptly make an appropriate
payment to the applicable party or parties to reflect the difference between the
amount that was offset and the amount at which the applicable indemnification
Claim was resolved.

       

      10.8           Treatment of Indemnity
Payments.  The parties agree to treat any indemnity payment
made pursuant to this Article 10 as an adjustment to the Aggregate Purchase
Price or the Merger Consideration, as applicable.

       

      10.9           Calculation of
Losses.  Subject to the other provisions of this Article
10:

       

      (a)           Insurance.  Purchaser
agrees to use commercially reasonable efforts to pursue an insurance claim that
is available with respect to Losses for a matter for which an indemnification
claim has been asserted, and any insurance proceeds (net of (i) any
increase in premiums payable by the indemnified party directly attributable to
the event giving rise to the claim and (ii) expenses incurred in pursuing
any such insurance recovery) actually received by any indemnified party with
respect to any Losses for a matter for which an indemnification claim has been
asserted shall reduce the amount payable to such indemnified party under the
indemnification provisions of this Article 10 with respect to such
matter.

       

      (b)           Tax
Benefits.  In case any event shall occur that would otherwise
entitle any party to assert a Claim for indemnification hereunder, no Loss shall
be deemed to have been sustained by such party to the extent of any net Tax
benefit actually realized, received or credited by such party with respect
thereto, as determined by Purchaser in good faith; provided that, in calculating
whether a net Tax benefit was actually realized, received or credited, Purchaser
shall assume that all items of deduction other than the applicable Loss for
which an indemnity payment is to be made hereunder shall first be used to
determine the Tax liability of the Purchaser for the Tax year in which the
relevant Loss arises and, if the item of deduction (or portion thereof) with
respect to such Loss is not allowed in such Tax year applying the limitations of
the foregoing provision, then such item of deduction (or any portion thereof)
shall be deemed used in the first succeeding Tax year  following such
year that such item is allowed applying the foregoing ordering rules for such
other Tax years.  In the event the Sellers disagree with any net Tax
benefit determined by Purchaser pursuant to Section 10.9, the Sellers shall
deliver to Purchaser a written notice (a “Dispute Notice”) setting forth such
disagreements within fifteen (15) days after receipt by the Control Sellers from
Purchaser of the determination of such net Tax benefit.  If the
Sellers do not deliver a Dispute Notice to Purchaser by such date, the Sellers
shall be deemed to have accepted Purchaser’s calculation of such net Tax
benefit.  Purchaser and Seller shall endeavor in good faith to resolve
any matters set forth in a Dispute Notice by mutual agreement.  If,
within thirty (30) days after the Sellers deliver a Dispute Notice, the
Purchaser and Sellers are unable to reach a mutually satisfactory resolution of
the matters set froth in a Dispute Notice, then Purchaser and the Sellers each
shall provide RSM McGladrey with their respective determination of the net Tax
benefit and such supporting documentation and information as RSM McGladrey may
request.  RSM McGladrey shall make an independent determination of the
net Tax benefit that, assuming compliance with the previous clause, shall be
final and binding on the Sellers and the Purchaser.  The Sellers and
the Purchaser shall each pay one-half (1/2) of the fees, costs and expenses of
RSM McGladrey in connection with the foregoing.

       

      
        
          
          

        

        
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      10.10         Exclusive
Remedy.  The parties agree that, following Closing, the
provision of this Article 10 shall be the exclusive remedy (other than specific
enforcement or other equitable remedies) for any alleged breach of any provision
of this Agreement or any Collateral Document, absent fraud or intentional
breach.

       

      ARTICLE
11

      TAX
MATTERS

       

      11.1           Allocation.  For
purposes of this Agreement, any Taxes of a Wilhelmina Transferred Company or any
of their Subsidiaries for a period which includes but does not end on the
Closing Date shall be allocated between the portion of the period through and
including the Closing Date and the balance of the period based on an interim
closing of the books as of the close of the Closing Date, provided, however, that any
real property or personal property taxes and any annual exemption amounts shall
be allocated based on the relative number of days in the pre-Closing portion and
the balance of the period.

       

      11.2           Tax
Returns.

       

      (a)           Sellers
shall prepare (or cause to be prepared) and file (or cause to be filed) on a
timely basis any income Tax Returns with respect to an LLC for taxable periods
ending on or prior to the Closing Date.  From and after the Closing,
each LLC shall provide the Sellers (and their representatives) with access to
its Books and Records and personnel to enable the Sellers to prepare such Tax
Returns, and shall take whatever action may be necessary to allow the Sellers to
file such Tax Returns on behalf of the LLC.  Such Tax Returns shall be
prepared on a basis consistent with the prior income Tax Returns prepared for
the LLC.  Copies of such Tax Returns shall be presented promptly to
the Buyer.  In the case of any Tax refund or credit received by or on
behalf of any Wilhelmina Transferred Company with respect to a period ending on
or prior to the Closing Date or with respect to any period which begins before
and ends after the Closing Date (but only with respect to the period ending on
the Closing Date), the Purchaser shall pay an amount equal to such refund or
credit to the Sellers who owned a portion of such Wilhelmina Transferred Company
(on a pro-rata basis) promptly after its receipt as an adjustment to the Merger
Consideration or Aggregate Purchase Price, as applicable.

       

      
        
          
          

        

        
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      (b)           From
and after the Closing, no Wilhelmina Transferred Company or any of its
Subsidiaries may (and the Purchaser shall not permit any Wilhelmina Transferred
Company or any of its Subsidiaries) to file any amended Tax Return, carryback
claim or other adjustment with respect to a Tax period of such Wilhelmina
Transferred Company that ended before the Closing Date, without the prior
written consent of each of the Sellers, which consent shall not be unreasonably
denied.

       

      11.3           Transfer
Taxes.  Any sales, use, transfer or similar Tax imposed with
respect to the Merger or sale of a Wilhelmina Transferred Company (other than
the Company) pursuant to this Agreement shall be borne equally by the Purchaser,
on one hand, and the Sellers, on the other hand.  The Purchaser shall
duly and timely prepare (or cause to be prepared) any Tax Returns that be
required with respect to such Taxes, and shall furnish a copy thereof to the
Sellers for their review and comments at least 10 days prior to the due
date.  The Purchaser and the Sellers shall try to resolve any
differences with respect to such Tax Returns in good faith prior to
filing.  Upon filing any such Tax Return, the Sellers shall pay to the
Purchaser in cash an aggregate amount equal to one-half of the Tax, if any,
shown to be due on such Tax Return as filed.  Promptly after filing,
the Purchaser shall furnish the Sellers with a copy of such Tax Returns as
filed, together with proof of payment of the Taxes shown thereon to be
due.  The Purchaser, on one hand, and the Sellers, on the other hand,
shall each be entitled to one-half of any refund with respect to such Taxes, and
shall each bear one-half of any additional transfer Tax that may be
due.  Any audit, examination, contest or other proceeding with respect
to any such Tax or Tax Return shall be controlled jointly by the Purchaser, on
one hand, and the Sellers, on the other hand.

       

      ARTICLE
12

      POST
CLOSING COVENANTS

       

      12.1           Public
Announcements.  Neither the Purchaser, Merger Sub, the
Wilhelmina Transferred Companies nor any Seller shall issue any public report,
statement, press release or similar item or make any other public disclosure
with respect to the substance of this Agreement prior to the consultation with
and approval of the other parties; provided, however, that the Purchaser
may make a public disclosure if on the advice of Purchaser’s counsel it is
required by Law or the rules of the Securities Exchange Commission or other
regulatory agency to make such disclosure.

       

      12.2           Assistance in
Defense.  In the event that, after the Closing Date, any of the
parties hereof shall require the participation of another party hereto and/or
any officers or employees employed by another party hereto to aid in the
investigation, defense or prosecution of a Legal Proceeding or Claims, and so
long as there exists no conflict of interest between such parties, each of them
shall make themselves and such officers and employees reasonably available to
participate in such investigation, defense or prosecution; provided, that the party
requiring the participation of such other party and/or officers and employees
shall pay all reasonable out of pocket costs, charges and expenses arising from
such participation.

       

      
        
          
          

        

        
          85

          
            

          

        

        
          
          

        

      

       

      12.3           Further
Cooperation.

       

      (a)           From
and after the Closing Date, the Sellers shall execute and deliver such documents
and take such other actions as the Purchaser reasonably request to fully
consummate the Contemplated Transactions and the Purchaser shall execute and
deliver such documents and take such other actions as the Sellers may reasonably
request to fully consummate the Contemplated Transactions.  In
addition, the Sellers shall provide or cause to be provided, and the Purchaser
shall provide or cause to be provided, such written information with respect to
themselves, execute and deliver or cause to be executed and delivered such other
documents, certificates or instruments, and take or cause to be taken such
actions as the Purchaser or the Sellers, as the case may be, or any auditor of
either or the Wilhelmina Transferred Companies reasonably deems necessary or
desirable to complete any audit of the Wilhelmina Transferred Companies’
consolidated financial statements, the Purchaser’s or any Seller’s financial
statements or tax returns or in connection with any Laws applicable thereto,
including federal or state securities laws.

       

      12.4           Post Closing Reimbursement
of Expenses.  Following the Closing, Purchaser shall reimburse
Esch and Krassner for reasonable out of pocket travel and entertainment expenses
incurred by them in connection with the identification and negotiation by them
of Approved Acquisition Targets.  “Approved
Acquisition Targets” shall mean model or talent management companies
which are potential acquisition targets for Purchaser; provided that such
targets, and the active role of Esch and Krassner in connection with pursuing
such targets, are expressly authorized by Purchaser’s Board of Directors and
confirmed in writing (or email) to Esch or Krassner by a member of Purchaser’s
Board or Directors following such authorization.  For this purpose,
subject to the next sentence, the Company’s potential acquisition of the
agencies or other entities set forth on Schedule 12.4 (provided that such
agencies or entities meet the acquisition criteria specifically approved by
Purchaser’s Board of Directors after the Closing) shall initially be considered
Approved Acquisition Targets during 2008 and 2009.  Notwithstanding
the foregoing, Purchaser may, at its election (and in consultation with Esch and
Krassner with respect to any acquisition target introduced by Esch, Krassner or
any of their affiliates, including the entities set forth on Schedule 12.4)
determine that the services of Esch and/or Krassner or their affiliates are not,
or no longer, necessary with respect to the pursuit of any Approved Acquisition
Target, in which case Purchaser shall have no reimbursement obligation with
respect to any subsequently incurred expenses.  Esch and Krassner
shall inform Purchaser prior to any particular “trip”, meeting or related event
regarding any particular Approved Acquisition Target in which they are involved
and provide Purchaser a reasonable estimate of the travel and entertainment
expenses associated therewith.

       

      12.5           Reorganization.  Following
the Merger, none of the Purchaser, the Company, nor any of their Affiliates
shall take any action (or fail to take any action) that could result in the
Merger failing to qualify as a reorganization within the meaning of Section
368(a)(1)(A) of the Code.

       

      
        
          
          

        

        
          86

          
            

          

        

        
          
          

        

      

       

      ARTICLE
13

      TERMINATION

       

      13.1           Termination.  This
Agreement may be terminated prior to the Closing as follows:

       

      (a)           at
the election of the Purchaser, if any of the conditions set forth in Section 7.1
or 7.3 shall become incapable of fulfillment, and shall not have been waived in
writing by Purchaser;

       

      (b)           at
the election of the Control Sellers, if any of the conditions set forth in
Section 7.1 or 7.2 shall become incapable of fulfillment, and shall not have
been waived in writing by Control Sellers;

       

      (c)           at
the election of the Purchaser, if it is not in material breach of its
obligations under this Agreement if any Seller or any of the Wilhelmina
Transferred Companies has breached any material representation, warranty,
covenant or agreement contained in this Agreement (including the Schedules and
Exhibits) such that the conditions set forth in Section 7.3 hereof would not be
satisfied and such breach cannot be or has not been cured by the earlier of
(i) thirty (30) days after written notice thereof to Control Sellers or
(ii) the Closing Date;

       

      (d)           at
the election of the Control Sellers, if they or any Sellers are not in material
breach of its respective obligations under this Agreement and the Purchaser has
breached any material representation, warranty, covenant or agreement contained
in this Agreement (including the Schedules and Exhibits) such that the
conditions set forth in Section 7.2 hereof would not be satisfied and such
breach cannot be or has not been cured by the earlier of (i) thirty (30)
days after written notice thereof to the Purchaser or (ii) the Closing
Date;

       

      (e)           at
the election of the Control Sellers or the Purchaser, if any Order permanently
enjoining, restraining or otherwise prohibiting the Closing is issued and shall
have become final and non-appealable;

       

      (f)           at
the election of Purchaser if the Closing shall not have occurred on or before
(a) December 20, 2008, provided Purchaser does not receive comments from the SEC
with respect to the Proxy Statement, or (b) February 15, 2009 in the event
Purchaser does receive comments from the SEC with respect to the Proxy
Statement; provided
that the right to terminate this Agreement pursuant to this Section 13.1(f)
shall not be available to Purchaser if its actions or failure to act has been a
principal cause of or resulted in the failure of the Closing to occur on or
before such date and such action or failure to act constitutes a breach of this
Agreement;

       

      (g)           at
the election of the Control Sellers if the Closing shall not have occurred on or
before (a) December 20, 2008, provided Purchaser does not receive comments from
the SEC with respect to the Proxy Statement, or (b) February 15, 2009 in the
event Purchaser does receive comments from the SEC with respect to the Proxy
Statement; provided
that the right to terminate this Agreement pursuant to this Section 13.1(g)
shall not be available to the Company and the Control Sellers if their or any of
the Sellers’ actions or failure to act has been a principal cause of or resulted
in the failure of the Closing to occur on or before such date and such action or
failure to act constitutes a breach of this Agreement;

       

      
        
          
          

        

        
          87

          
            

          

        

        
          
          

        

      

       

      (h)           at
the election of the Control Sellers or the Purchaser, if (i) the
Stockholder Meeting (including any adjournments and postponements thereof) shall
have been duly held and completed and the shareholders of Purchaser shall have
voted on the Matters and (ii) the Charter Approval and the Authorized
Capital Approval shall not have been obtained at such meeting;

       

      (i)           at
the election of the Control Sellers, if the Board of Directors of Purchaser
shall have effected a Change in Recommendation in a manner adverse to the
Sellers and the Wilhelmina Transferred Companies; or

       

      (j)           at
any time on or prior to the Closing Date, by mutual written consent of the
Purchaser, on the one hand, and Wilhelmina Transferred Companies and the Control
Sellers, on the other hand.

       

      13.2           Survival.  If
this Agreement is validly terminated pursuant to Section 13.1 and the
Contemplated Transactions are not consummated as described above, this Agreement
shall become null and void and of no further force and effect, and there shall
be no liability of the Purchaser, on the one hand, or the Sellers and the
Wilhelmina Transferred Companies, on the other hand, to the other except
liability arising out of an intentional breach of this Agreement or fraud, in
which case, except as specified in Section 13.3 below, the aggrieved party shall
be entitled to all rights and remedies available at law or in
equity.

       

      13.3           Expense
Reimbursement.  In the event that either Purchaser or the
Control Sellers validly terminates this Agreement pursuant to Section 13.1(h) or
13.1(i), Purchaser shall pay to the Control Sellers such Control Sellers’
Transaction Expenses up to a maximum of $150,000 (the “Transaction
Expense Payment”) within 10 days of the termination of this Agreement
under Sections 13.1(h) or 13.1(i); provided that Control Sellers have
theretofore delivered to Purchaser reasonable documentation supporting the
amount of such payment.  The Transaction Expense Payment shall be the
Sellers’ sole and exclusive remedy in the event of a termination pursuant to
Sections 13.1(h) or 13.1(i), and the Purchaser shall have no further liability
with respect to this Agreement or the transactions contemplated hereby to the
Sellers or the Wilhelmina Transferred Companies (provided that nothing herein
shall release Purchaser from liability for intentional breach or
fraud).

       

      ARTICLE
14

      MISCELLANEOUS

       

      14.1           Notices.  All
notices, documents or other deliverables required to be given, sent or delivered
to any of the parties to this Agreement shall be in writing and shall be deemed
to have been sufficiently given, sent or delivered, subject to the further
provisions of this Article 14, for all purposes when presented personally to
such party or sent by certified or registered mail, return receipt requested,
with proper postage prepaid, or any United States national overnight delivery
service, with proper charges prepaid, set forth above, to such party at its
address set forth below:

       

      
        
          
          

        

        
          88

          
            

          

        

        
          
          

        

      

       

      (a)           If
to the Sellers, to the applicable Seller at the address set forth on Exhibit
A.

       

      with a
copy to:

       

      Loeb
& Loeb LLP

      345 Park
Ave

      New York,
New York 10583

      Telephone:
(212) 407-4937

      Facsimile:
(212) 407-4990

      Attn:
Lloyd L. Rothenberg

       

      and a
copy to:

       

      Strassburger
McKenna Gutnick & Gefsky 

      Four
Gateway Center, Suite 2200

      444
Liberty Avenue

      Pittsburgh,
PA  15222

      Attn: H.
Yale Gutnick

       

      (b)           If
to Purchaser:

       

      New
Century Equity Holdings Corp.

      200
Crescent Court, Suite 1400

      Dallas,
Texas 75201

      Telephone:
(214) 661-7488

      Facsimile:  (214)
661-7475
Attn:  Evan
Stone

       

      with a
copy to:

       

      Olshan
Grundman Frome Rosenzweig & Wolosky LLP

      Park
Avenue Tower

      65 East
55th
Street

      New York,
NY 10022

      Telephone:
(212) 451-2300

      Facsimile:
(212) 451-2222

      Attn:
Steve Wolosky

       

      Such
notice shall be deemed to be received when delivered if delivered personally, or
the next Business Day after the date sent if sent next Business Day service by a
United States national overnight delivery service which requires signatures of
recipients upon delivery and provides tracking service, or three (3) Business
Days after the date mailed by certified or registered mail.  Any
notice of any change in such address shall also be given in the manner set forth
above.  Whenever the giving of notice is required, the giving of such
notice may be waived in writing by the party entitled to receive such
notice.

       

      
        
          
          

        

        
          89

          
            

          

        

        
          
          

        

      

       

      14.2           No Third Party
Beneficiaries.  Except as is otherwise expressly provided in
this Agreement, this Agreement is not intended to, and does not, create any
rights in or confer any benefits upon any Person other than the parties
hereto.

       

      14.3           Schedules and
Exhibits.  All schedules and exhibits attached to this
Agreement are incorporated by reference into this Agreement for all
purposes.  Unless the context otherwise requires, all references
herein to “Schedule” or “Exhibit” are references to the schedules and exhibits
attached to this Agreement.  A disclosure of an item in one Schedule
shall not be a disclosure under any other Schedule, unless so noted specifically
on such Schedule.

       

      14.4           Entire Agreement;
Amendment.  This Agreement, the Collateral Documents and any
other documents, instruments or other writings delivered or to be delivered
pursuant to this Agreement constitute the entire agreement among the parties
with respect to the subject matter of this Agreement and supersede all prior
agreements, understandings, and negotiations, whether written or oral, with
respect to the subject matter of this Agreement.  None of the terms
and provisions contained in this Agreement can be changed without a writing
signed by all parties hereto.  No party has made any representations
or warranties other than those that have been provided in this
Agreement.

       

      14.5           Section and Paragraph
Titles.  The Section and paragraph titles used in this
Agreement are for convenience only and are not intended to define or limit the
contents or substance of any such Section or paragraph.  Unless the
context otherwise requires, all references herein to “Section” or “Article” are
references to the sections and articles of this Agreement.

       

      14.6           Binding Effect; No
Assignment.  This Agreement shall be binding upon and inure to
the benefit of each of the parties to this Agreement and their respective heirs,
personal representatives, and successors and permitted assigns.  No
party hereto shall have the right to assign this Agreement without the prior
written consent of the other parties hereto; provided, however, that Purchaser may
assign its rights and obligations under this Agreement to a wholly-owned
Subsidiary of Purchaser without the consent of the other parties hereto provided
that no such assignment shall relieve Purchaser of its obligations under this
Agreement.

       

      14.7           Counterparts.  This
Agreement may be executed in any number of counterparts, including by means of
facsimile, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute one and the same
instrument.

       

      
        
          
          

        

        
          90

          
            

          

        

        
          
          

        

      

       

      14.8           Purchaser
Reliance.  Each Seller hereby irrevocably constitutes and
appoints each of the Control Sellers, individually, as its Representative (each
a “Representative”)
and as its true and lawful agent and attorneys-in-fact with full power and
authority to act, including full power of substitution, in its name and on its
behalf with respect to all matters arising from or in any way relating to this
Agreement, or the transactions contemplated hereby, to (i) represent, act
for and on behalf of, and bind each of the Sellers in the performance of all of
their obligations arising from or relating to this Agreement and Contemplated
Transactions (including any other agreements incident thereto), including
(A) the execution and delivery of the Escrow Agreement and Registration
Rights Agreement and any certificate or Contract required under this Agreement
to be delivered by the Sellers at the Closing and (B) the making,
negotiation and settlement of Claims of either the Purchaser or the Sellers for
indemnification pursuant to Article 10 of this Agreement; (ii) accept
delivery from the Purchaser of any payments under this Agreement and to
distribute such payments in accordance with the terms of this Agreement;
(iii) give and receive notices and receive service of process under or
pursuant to this Agreement; (iv) represent, act for, and bind each of the
Sellers in the performance of all of their obligations arising from or related
to indemnification in Article 10, including, without limitation, in any
arbitration or litigation in respect thereof; (v) waive any conditions to
the Sellers’ obligation to close, (vii) amend this Agreement pursuant to
Section 14.4 and (viii) perform any and all other duties and acts
contemplated to be performed by the Representative as set forth in this
Agreement and in any of the other Transaction Documents.  This
appointment of agency and this power of attorney is coupled with an interest and
shall be irrevocable and shall not be terminated by any Seller or by operation
of law, whether by the death or incapacity of any Seller that is an individual,
termination of any trust or estate, the dissolution, liquidation or bankruptcy
or any corporation, partnership or other entity or the occurrence of any other
event, and any action taken by the Representative shall be as valid as if such
death, incapacity, termination, dissolution, liquidation, bankruptcy or other
event had not occurred, regardless of whether or not the Representative shall
have received any notice thereof.  Any change in the designation of
such Representative shall not be deemed effective until the actual receipt of
notice by the Purchaser.  The Representative hereby accepts such
appointment.  Purchaser shall be entitled to rely on any election or
determination under this Agreement communicated to Purchaser by either Esch or
Krassner under circumstances in which Esch or Krassner reasonably represents
that the other has approved or consented to such election or
determination.

       

      14.9           No Reliance on Control
Sellers or Wilhelmina Transferred Companies.  The decision of
each Seller to sell securities pursuant to this Agreement has been made by such
Seller independently of the Control Sellers and independently of any
information, materials, statements or opinions as to the terms and conditions of
this Agreement or any Collateral Document that may have been made or given by
the Control Sellers, the Wilhelmina Transferred Companies, any other Seller or
any representative or agent of the foregoing, and neither the Control Sellers,
the Wilhelmina Transferred Companies or any other Sellers shall have any
liability to any other Seller relating to or arising from any such information,
materials, statements or opinions (except as may be expressly provided in a
written agreement, if any) between or among Sellers.

       

      14.10                      Severability.  Any
provision of this Agreement (other than those contained in Article 9 of this
Agreement, in which case, Section 9.5 of this Agreement shall govern with
respect to the invalidity, unenforceability, or illegality of any such
provision) that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or such provision, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

       

      
        
          
          

        

        
          91

          
            

          

        

        
          
          

        

      

       

      14.11                      Governing Law; Consent to
Jurisdiction.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE
OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY OTHER JURISDICTION OTHER THAN THE STATE OF NEW YORK.  EACH
OF THE COMPANY, THE PURCHASER AND THE SELLERS HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE PERSONAL AND SUBJECT MATTER JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE SUPREME COURT OF THE STATE
OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN OVER ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.  EACH OF THE
COMPANY, THE PURCHASER AND THE SELLERS HEREBY IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW (A) ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT; AND (B) ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

       

      14.12                      Waiver of Jury
Trial.  EACH OF THE COMPANY, THE PURCHASER AND THE SELLERS
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.

       

      14.13                      Waiver.  No
provision of this Agreement shall be considered waived unless such waiver is in
writing and signed by the Party that benefits from the enforcement of such
provision.  No waiver of any provision in this Agreement, however,
shall be deemed a waiver of a subsequent breach of such provision or a waiver of
a similar provision.  In addition, a waiver of any breach or a failure
to enforce any term or condition of this Agreement shall not in any way affect,
limit, or waive a Party’s rights under this Agreement at any time to enforce
strict compliance thereafter with every term and condition of this
Agreement.

       

      14.14                      Time of the
Essence.  Time is of the essence in the performance of this
Agreement and all dates and periods specified in this Agreement.

       

      [The
remainder of this page intentionally left blank.]

       

      
        
          
          

        

        
          92

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF, the
Sellers, the Purchaser, and the Company have caused this Agreement to be duly
executed as of the date first written above.

       

      
        	 
      	
                COMPANY:

              
	 
      	 
      
	 
      	
                WILHELMINA
      INTERNATIONAL, LTD.

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Sean Patterson   
	 
      	 
      	
                Name:

              	Sean
      Patterson  
	 
      	 
      	
                Title:

              	President 
      

      

      

      

      
        	 
      	
                WILHELMINA
      – MIAMI, INC.

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Sean Patterson     
	 
      	 
      	
                Name:

              	Sean
      Patterson    
	 
      	 
      	
                Title:

              	President 
      

      

      

      

      
        	 
      	
                WILHELMINA
      ARTIST MANAGEMENT LLC

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Sean Patterson     
	 
      	 
      	
                Name:

              	Sean
      Patterson    
	 
      	 
      	
                Title:

              	President 
      

      

       

      

      
        	 
      	
                WILHELMINA
      LICENSING LLC

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Sean Patterson     
	 
      	 
      	
                Name:

              	Sean
      Patterson    
	 
      	 
      	
                Title:

              	President 
      

      

      

      

      
        	 
      	
                WILHELMINA
      FILM & TV PRODUCTIONS LLC

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Sean Patterson     
	 
      	 
      	
                Name:

              	Sean
      Patterson    
	 
      	 
      	
                Title:

              	President 
      

      

      

       

      
        
          
          

        

        
          93

          
            

          

        

        
          
          

        

      

      
 

      
        	 
      	
                PURCHASER:

              
	 
      	 
      
	 
      	
                NEW
      CENTURY EQUITY HOLDINGS CORP.

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Mark Schwarz
	 
      	 
      	
                Name:

              	Mark
      Schwarz
	 
      	 
      	
                Title:

              	Acting
      Chief Executive Officer

      

      

      

      
        	 
      	
                MERGER
      SUB:

              
	 
      	 
      
	 
      	
                WILHELMINA
      ACQUISITION CORP.

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Evan Stone
	 
      	 
      	
                Name:

              	Evan
      Stone
	 
      	 
      	
                Title:

              	Vice
      President

      

      

      

      CONTROLLING
SELLERS:

       

      
        	 
      	/s/
      Dieter
      Esch
	 
      	
                Name:

              	
                Dieter
      Esch

              

      

      

      

      
        	 
      	
                LOREX
      INVESTMENTS AG

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Peter Marty  
	 
      	 
      	
                Name:

              	Peter
      Marty  
	 
      	 
      	
                Title:

              	Board
      of Directors  

      

      

      

      
        	 
      	/s/
      Brad
      Krassner
	 
      	
                Name:

              	
                Brad
      Krassner

              

      

      

      

      
        	 
      	
                KRASSNER
      FAMILY INVESTMENTS, L.P

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Brad
      Krassner  
	 
      	 
      	
                Name:

              	Brad
      Krassner   
	 
      	 
      	
                Title:

              	General
      Partner  

      

      

       

      
        
          
          

        

        
          94

          
            

          

        

        
          
          

        

      

      
 

      OTHER
SELLERS:

       

      
        	 
      	 
      
	 
      	/s/
      Sean
      Patterson
	 
      	
                Name:

              	
                Sean
      Patterson

              

      

      

      

      
        	 
      	 
	 
      	
                Name:

              	
                Kevin
      Garnett

              
	 
      	 
      
	 
      	
                By:

              	 
	 
      	 
      	
                Dieter
      Esch, his attorney-in-fact

              

      

      

      

      
        	 
      	 
	 
      	
                Name:

              	
                Glenn
      Damota

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Dieter Esch
	 
      	 
      	
                Dieter
      Esch, his attorney-in-fact

              

      

      

      

      
        	 
      	 
	 
      	
                Name:

              	
                Serge
      Massat

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Dieter Esch
	 
      	 
      	
                Dieter
      Esch, his attorney-in-fact

              

      

      

      

      
        	 
      	 
	 
      	
                Name:

              	
                Robert
      Kreusler

              

      

      
        	 
      	 
      
	 
      	
                By:

              	/s/
      Dieter Esch
	 
      	 
      	
                Dieter
      Esch, his attorney-in-fact

              

      

      

      

      
        	 
      	 
	 
      	
                Name:

              	
                Eve
      Gianni

              
	 
      	 
      
	 
      	
                By:

              	 
	 
      	 
      	
                Dieter
      Esch, her attorney-in-fact

              

      

       

      
 

      
        
          
          

        

        
          95

          
            

          

        

        
          
          

        

      

      

      
        	 
      	 
	 
      	
                Name:

              	
                Marlene
      Wallach

              
	 
      	 
      
	 
      	
                By:

              	/s/
      Dieter Esch
	 
      	 
      	
                Dieter
      Esch, her attorney-in-fact

              

      

      

      

      
        	 
      	 
	 
      	
                Name:

              	
                Corey
      Preston

              
	 
      	 
      
	 
      	
                By:

              	/s/ Dieter Esch 
	 
      	 
      	
                Dieter
      Esch, his attorney-in-fact

              

      

      

      
        
          
          

        

        
          96ex102to8k06113_08252008.htm

    Exhibit
10.2

     

    REGISTRATION
RIGHTS AGREEMENT

     

    THIS
REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is entered into as of August 25,
2008, by and among New Century Equity Holdings Corp., a Delaware corporation
(including any successor thereto, the “Company”) and Dieter Esch (“Esch”), Lorex
Investments AG (“Lorex”), Brad Krassner (“Krassner”) and the Krassner Family
Investments, L.P. (the “Krassner L.P.”) (each of Esch, Lorex, Krassner and the
Krassner L.P., a “Selling Shareholder” and, collectively, the “Selling
Shareholders”) and Sean Patterson (“Sean Patterson”).

     

    R E C I T
A L S:

     

    WHEREAS,
concurrently with the execution and delivery of this Agreement, the Selling
Shareholders, together with the Company, Wilhelmina International, Ltd.
(“Wilhelmina International”) and certain entities affiliated with Wilhelmina
International, are entering into an Agreement (the “Purchase Agreement”), which
Purchase Agreement provides, among other things, for the sale of the outstanding
equity interests of certain Wilhelmina International affiliated entities to New
Century;

     

    WHEREAS,
pursuant to the terms of the Purchase Agreement, upon the Closing the Selling
Shareholders will be beneficial owners of shares of common stock, par value $.01
per share, of the Company (the “Common Stock”, and shares of Common Stock issued
to Selling Stockholders under the Purchase Agreement, the “Seller NCEH
Shares”);

     

    WHEREAS,
as a condition to their willingness to enter into the Purchase Agreement, the
Selling Shareholders have required that certain matters be agreed and set forth
herein; and

     

    WHEREAS,
this Agreement shall become effective upon, and only upon, the effectiveness of
the Closing under the Purchase Agreement.

     

    NOW,
THEREFORE, in consideration of the foregoing and of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:

     

    Article
1

    DEFINITIONS

     

    Capitalized
terms used but not defined herein shall have the respective meanings given to
them in the Purchase Agreement.

     

    As used
herein, the following terms shall have the following respective
meanings:

     

    1.1           “Commission”
shall mean the U.S. Securities and Exchange Commission or any other successor
federal agency at the time administering the Securities Act.

     

    1.2           “Common
Stock” shall have the meaning set forth in the Recitals.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.3           “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar
federal statute and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.

     

    1.4           “Holders”
shall mean and include a Selling Shareholder and any Affiliated permitted
transferee thereof who holds Registrable Securities of record.

     

    1.5           “Priority
Securities” shall mean (1) Registrable Securities and (2) shares of Common Stock
or other securities subject to contractual registration rights (other than
pursuant to this Agreement) of stockholders of the Company similar to the rights
of the Selling Shareholders.

     

    1.6           “Register,”
“registered” and “registration” refer to a registration effected by preparing
and filing with the Commission a registration statement in compliance with the
Securities Act, and the declaration or ordering by the Commission of the
effectiveness of such registration statement.

     

    1.7           “Registrable
Securities” means any and all shares of Common Stock (i) that were issued
to  the Selling Shareholders or Patterson in connection with the
Closing and (ii) issued or issuable with respect to the Common Stock referred to
in clause (i) above upon any stock split, stock dividend, recapitalization,
reclassification, exchange, merger or other similar event; provided that
Registrable Securities shall exclude any and all Seller Restricted Shares (as
defined in the Purchase Agreement) until such time as such shares shall have
been released to the relevant Selling Shareholder without restriction pursuant
to the terms of the Escrow Agreement.  The term “Registrable
Securities” shall also exclude in all cases, however, such shares of Common
Stock (i) following their sale by a Holder to the public pursuant to a
registered offering or pursuant to Rule 144 or (ii) sold in a private
transaction in which the Holder’s registration rights under this Agreement are
not assigned.

     

    1.8           “Registration
Expenses” shall mean all reasonable and customary expenses incurred by the
Company in complying with Articles 2, 3 and 5 hereof, including, without
limitation, all registration, qualification and Commission, National Association
of Securities Dealers, Inc., stock exchange and other filing fees, printing
expenses, duplication expenses relating to copies of any registration statement
or prospectus delivered to any Holders, escrow fees, fees and disbursements of
legal counsel for the Company, fees and disbursements of the Company’s
accountants and blue sky fees and expenses.  Registration Expenses
shall be distinct from Selling Expenses.

     

    1.9           “Rule
144” shall mean Rule 144 under the Securities Act or any other successor rule or
regulation then in effect.

     

    1.10           “Securities
Act” shall mean the Securities Act of 1933, as amended, or any successor federal
statute and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.

     

    
      
        
        

      

      
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    1.11           “Selling
Expenses” shall mean all underwriting, selling broker or dealer manager fees,
discounts and selling commissions applicable to the Registrable Securities
registered on behalf of the Holders.

     

    Article
2

    REQUIRED
REGISTRATION

     

    2.1           Request
for Registration.

     

    (a)           At
any time following the one year anniversary of the Closing Date, Esch or
Krassner may make a written request to the Company to file a registration
statement under the Securities Act covering all or part of the Registrable
Securities then held by such Selling Shareholder and his respective
Affiliates.  No later than 30 days following its receipt of such
written request (the “Demand Registration Filing Date”), the Company will
prepare and file with the Commission a registration statement under the
Securities Act covering all of the Registrable Securities requested to be
included therein, and the Company will use its commercially reasonable efforts
to obtain the effectiveness of such registration as soon as practicable as would
permit or facilitate the resale and distribution of all securities requested to
be registered.  If, however, the Company shall furnish to the
requesting Selling Shareholder a certificate signed by the Chief Executive
Officer (or the Chairman of the Board of Directors) of the Company prior to the
Demand Registration Filing Date stating that, in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its shareholders (and/or such applicable transaction) for such
registration statement to be filed by reason of a material pending transaction
(including a financing transaction, whether a primary or resale distribution) or
the Company has determined in good faith, after consultation with outside
counsel, that the filing of a registration request would require the disclosure
of material information which the Company has a bona fide business purpose for
preserving as confidential, then the Company shall have the right to defer such
filing for a period of not more than 90 days after the Demand Registration
Filing Date.  Such registration statement shall contain (unless the
requesting Selling Shareholder hereunder otherwise directs) substantially the
“Plan of Distribution” attached hereto as Annex A.  Subject to the
provisions of Section 2.1(b), the requesting Selling Shareholder may revoke any
registration request made pursuant to this Section 2.1(a) and/or withdraw
securities from an applicable registration.

     

    (b)           Notwithstanding
anything to the contrary:

     

    (i)           a
registration shall be deemed to have been effected (and demand right therefore
exercised pursuant to Section 2.1(a)) if the applicable registration has become
effective, unless it results in a (A) Limited Registration (as defined in
Section 2.2(c)) or (B)  a Failed Registration (as defined
below);

     

    (ii)           
the Company shall be obligated to effect only one (1) registration pursuant to
Section 2.1(a) requested by Krassner and only (1) registration pursuant to
Section 2.1(a) requested by Esch; provided that if any registration is commenced
pursuant to this Section 2.1 and is not consummated due to the revocation of the
initial request by Krassner or Esch, as applicable, at least ten (10) business
days prior to the anticipated effective date of the relevant registration (such
revocation of a registration request not to occur more than one time in the case
of each of Krassner and Esch) (a “Failed Registration”), such Failed
Registration shall not be deemed to constitute a registration under this Section
2.1 and the relevant requesting Selling Shareholder shall retain his one (1)
demand right pursuant to this Section 2.1 (it being understood that, subject to
Section 2.1(b)(i), a demand right shall have been deemed exercised in the event
of any other revocation of registration request under this Section 2.1);
and

     

    
      
        
        

      

      
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    (iii)           without
limiting the provisions of clauses (i) and (ii), the Company shall be obligated
to effect only one (1) registration pursuant to this Section 2.1 (whether
requested by Esch or Krassner) in any nine (9) month period (i.e., the Company
shall have no obligation to file a registration statement at the request of a
Selling Shareholder until nine (9) months have elapsed following the
effectiveness of any prior registration of the Company).

     

    2.2           Underwriting.

     

    (a)           The
resale distribution of the Registrable Securities covered by the registration
statements referred to in Section 2.1 above shall be effected by means of the
method of distribution reasonably selected by the shareholder participants
holding a majority in interest of the Priority Securities that have been
properly elected to be included in the relevant registration (the “Majority in
Interest”).  Subject to the foregoing, the Majority in Interest may
also change the resale distribution method from time to time (subject to
amendment of the registration statement at the expense of the relevant
shareholder participants as required to describe such changes).  If
such distribution is effected by means of an underwriting, the right of any
Holder to registration pursuant to this Article 2 shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided
herein.  Notwithstanding anything to the contrary, no registration
requested pursuant to Section 2.1 shall be effected by means of an underwriting
unless the anticipated gross proceeds from such underwritten transaction exceed
$12,500,000 (twelve million five hundred thousand dollars).

     

    (b)           If
such distribution is effected by means of an underwriting, the Company (together
with Esch and/or Krassner, as applicable, and their respective Affiliates, if
either is proposing to distribute securities held by him or his Affiliates
through such underwriting) shall enter into an underwriting agreement in
customary form with a managing underwriter of regional or national recognized
standing selected for such underwriting by a Majority in Interest and approved
by the Company (such consent not to be unreasonably withheld); provided,
however, that the liability of each Holder thereunder shall in no event exceed
an amount equal to the net proceeds from the offering received by such Holder
and his Affiliates.

     

    (c)           Notwithstanding
any other provision of this Article 2, if the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the Company shall so advise all Holders of Registrable Securities,
and the number of shares of securities to be included in the underwriting shall
be allocated (i) first, among the holders of Priority Securities, pro rata
according to the number of Priority Securities that have been properly elected
to be included in the relevant registration , and (ii) second, in the event that
the number of shares that the managing underwriter believes may be underwritten
has not been reached pursuant to (i), pro rata according to the number of other
securities offered to be included in such underwriting.  Subject to
the foregoing, primary shares may be included in any registration requested
pursuant to Section 2.1.

     

    
      
        
        

      

      
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    (d)           
In the event that, as a result of the “cutback” provisions of Section 2.2(c), a
Selling Shareholder making a “demand” request pursuant to Section 2.1 is unable
to register more than sixty six and two-thirds percent (66 2/3%) of the
Registrable Securities which such Selling Shareholder has properly requested to
be registered pursuant to such demand in accordance with the provisions of this
Agreement (such limited registration, a “Limited Registration”), then the
requesting Holder shall not be deemed to have made such “demand” request and,
notwithstanding the effectiveness of the applicable registration, shall preserve
its one “demand” right for later use for purposes of Section 2.1, subject in all
cases to the provisions of this Agreement.

     

    (e)           For
the avoidance of doubt, Holders holding vested options or restricted shares of
Common Stock (including any Seller Restricted Shares) may not include such
securities in any demand registration under this Article 2 (and shall not
exercise demand rights with respect thereto or request their inclusion effective
as of a later date) until such time as the underlying shares of Common Stock are
held directly and without restriction.

     

    

     

    Article
3

    COMPANY
REGISTRATION

     

    3.1           Notice
of Registration to Selling Shareholders.  If at any time or from time
to time from and after the date hereof and ending on the eighth anniversary of
the date hereof, the Company shall determine to register any of its securities,
either for its own account or the account of any security holder or holders,
other than (i) a registration relating solely to employee benefit plans on Form
S-8 (or any successor form) or relating to a dividend reinvestment plan, stock
option plan or other compensation plan, (ii) a registration on Form S-4 (or any
successor form) or other registration in connection with mergers, acquisitions,
exchange offers or similar transactions, (iii) a registration on any form that
does not permit secondary sales or (iv) a registration relating solely to
a  subscription offering or a rights offering, the Company
will:

     

    (a)           promptly
give to Esch and Krassner written notice thereof; and

     

    (b)           include
in such registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all of the Registrable
Securities specified in a written request, made within 15 days after receipt of
such written notice from the Company described in Section 3.1(a), by Esch
and  Krassner (on their own behalf and on behalf of their respective
Affiliates), but only to the extent that the original issuance or resale
distribution of such Registrable Securities is not already covered by an
effective registration statement under Article 2 above.

     

    
      
        
        

      

      
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    3.2           Underwriting.

     

    (a)           If
the registration of which the Company gives notice is for an offering involving
an underwriting, the Company shall so advise the Selling Shareholders as part of
the written notice given pursuant to Section 3.1(a).  In such event,
the right of the Selling Shareholders to registration pursuant to this Article 3
shall be conditioned upon a Selling Shareholder’s participation in such
underwriting and the inclusion of such Selling Shareholder’s Registrable
Securities in the underwriting to the extent provided herein.  Esch
and Krassner, as applicable, together with any participating Affiliates (and
together with the Company), shall enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting
solely by the Company; provided, however, that the liability of a Selling
Shareholder thereunder shall in no event exceed the lesser of (i) the Selling
Shareholder’s pro-rata portion of the liability based on the Selling
Shareholder’s shares sold in the offering as compared to the total number of
shares sold in the offering, and (ii) an amount equal to the net proceeds from
the offering received by such Selling Shareholder and his
Affiliates.

     

    (b)           Notwithstanding
any other provision of this Article 3, if the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the Company shall so advise the Selling Shareholders, and the
number of shares of Common Stock to be included in such registration shall be
allocated as follows:  (i) first, for the account of the Company, all
shares of Common Stock proposed to be sold by the Company; and (ii) second, for
the account of any Selling Shareholders and any other shareholders of the
Company participating in such registration who have contractual rights to be
included in such registration similar to the rights of the Selling Shareholders,
the number of shares of Common Stock requested to be included in the
registration by such Selling Shareholders and such other shareholders in
proportion, as nearly as practicable, to the respective number of shares that
are proposed to be offered and sold by the Selling Shareholders and such other
shareholders at the time of filing the registration statement; provided that, if
the Company is effecting a registration pursuant to a demand request of a
shareholder other than a Selling Shareholder, clause (i) of this subsection
shall be deemed to cover the shares of Common Stock proposed to be sold by such
other shareholder and clause (ii) of this subsection shall include, on a basis
pari passu with any shareholders who have contractual rights to be included in
such registration similar to the rights of the Selling Shareholders, any shares
proposed to be sold by the Company.   No Registrable Securities
or other shares of Common Stock excluded from the underwriting in this Article 3
by reason of the underwriters’ marketing limitation shall be included in such
registration.

     

    (c)           If
a participating Selling Shareholder disapproves of the terms of any underwriting
under this Article 3, such Selling Shareholder exercising rights pursuant to
this Article 3 may elect to withdraw therefrom by written notice to the Company
and the managing underwriter.  Any securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration; provided that
the Company may determine, at its election, to  increase, on a pro
rata basis for the securities of shareholders then included in the registration
(giving effect to the withdrawal), the number of shares of the other
shareholders participating in the registration.

     

    (d)           The
Company shall have the right to terminate or withdraw any registration initiated
by the Company under this Article 3 prior to the effectiveness of such
registration, whether or not a Selling Shareholder has elected to include
Registrable Securities in such registration; provided that a Selling Shareholder
shall have the right to convert such registration into a demand registration
covered by Section 2.1 hereof.

     

    
      
        
        

      

      
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    (e)           For
the avoidance of doubt, Holders holding vested options or restricted shares of
Common Stock (including any Seller Restricted Shares) may not include such
securities in any piggyback registration under this Article 3 (and shall not
exercise piggyback rights with respect thereto or request their inclusion as of
a later date) until such time as the underlying shares of Common Stock are held
directly and without restriction.

     

    (f)           Patterson
(and Derek Fromm, to the extent he becomes the owner of any Registrable
Securities) shall have “piggyback” rights under this Article 3 commensurate with
(and subject to the same limitations and restrictions) as the rights of the
Selling Shareholders with respect to Registrable Securities held by
Patterson.  Patterson shall be deemed a “Holder” for purposes of
Article 4, 5 and 6 to the extent he participates any registration by virtue of
such rights.

     

    Article
4

    EXPENSES
OF REGISTRATION

     

    All
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Articles 2, 3 and 5 hereof, the
reasonable fees of one counsel for the Holders of Registrable Securities (up to
a maximum of $10,000) in the case of a registration in which a Holder
participates and any other similar out of pocket expenses incurred by any Holder
or Holders pursuant to any applicable underwriting agreement in connection with
a registration hereunder shall, in each case, be borne by the
Company.  All Selling Expenses relating to Registrable Securities
registered on behalf of a Holder shall be borne by such Holder.

     

    Article
5

    REGISTRATION
PROCEDURES

     

    (a)           In
the case of each registration effected by the Company pursuant to this
Agreement, the Company will keep each Holder advised in writing as to the
initiation of each registration and as to the completion thereof.  The
Company agrees to use its commercially reasonable efforts to effect or cause
such registration to permit the sale of the Registrable Securities covered
thereby by the Holders thereof in accordance with the intended method or methods
of distribution thereof described in such registration statement.  In
connection with any registration of any Registrable Securities, the Company
shall:

     

    (i)           prepare
and file with the Commission a registration statement with respect to such
Registrable Securities and use its commercially reasonable efforts to cause such
registration statement to become effective;

     

    (ii)           prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus included therein as may be necessary
to effect and maintain the effectiveness of such registration statement pursuant
to the applicable rules and regulations of the Commission and the instructions
applicable to the form of such registration statement (provided, however, that
the Company shall not be obliged to maintain the effectiveness of such
registration statement longer than through the earlier of (A) six months
following the effective date of such registration statement and (B) such time as
all Registrable Securities registered thereunder have been sold pursuant to such
registration statement), and furnish to the Holders of the Registrable
Securities covered thereby copies of any such supplement or amendment prior to
its use and/or filing with the Commission;

     

    
      
        
        

      

      
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    (iii)           promptly
notify the Holders whose Registrable Securities are to be included in a
registration statement hereunder, the sales or placement agent, if any, therefor
and the managing underwriter of the securities being sold, and confirm such
advice in writing, (A) when such registration statement or the prospectus
included therein or any prospectus amendment or supplement or post-effective
amendment has been filed and, with respect to such registration statement or any
post-effective amendment, when the same has become effective, (B) of the
issuance by the Commission of any stop order suspending the effectiveness of
such registration statement or the initiation of any proceedings for that
purpose, (C) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (D) of any request by the Commission for any amendment or supplement to
a registration statement or related prospectus or related information or (E) if,
at any time when a prospectus is required to be delivered under the Securities
Act, such registration statement or prospectus, or any document incorporated by
reference in any of the foregoing, contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made.  In the case of clause (E),
the Company shall promptly prepare a supplement or amendment to such
registration statement to correct such untrue statement or
omission;

     

    (iv)           use
its commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement or any
post-effective amendment thereto or of any order suspending or preventing the
use of any related prospectus or suspending the qualification of any Registrable
Securities included in such registration statement for sale in any jurisdiction
at the earliest practicable date;

     

    (v)           furnish
to each Holder of Registrable Securities to be included in such registration
statement hereunder, each placement or sales agent, if any, therefor and each
underwriter, if any, thereof, without charge, a conformed copy of such
registration statement and any amendment and supplement thereto (in each case
including all exhibits and documents incorporated by reference) and such number
of copies of the prospectus included in such registration statement (including
each preliminary prospectus, any summary prospectus and any free writing
prospectus), and any amendment or supplement thereto, as such Holder, agent, if
any, and underwriter, if any, may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder, sold by such
agent or underwritten by such underwriter and to permit such Holder, agent and
underwriter to satisfy the prospectus delivery requirements of the Securities
Act;

     

    
      
        
        

      

      
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    (vi)           use
its commercially reasonable efforts to (A) register or qualify the Registrable
Securities to be included in such registration statement under such other
securities laws or blue sky laws of such states of the United States or the
District of Columbia as may be reasonably requested by the Holders of a majority
of such Registrable Securities participating in such registration, each
placement or sales agent, if any, therefor or the managing underwriter, if any,
thereof, (B) keep such registrations or qualifications in effect and comply with
such laws at all times during the period described in Section 5(a)(ii) above,
and (C) take any and all such actions as may be reasonably necessary to enable
such Holder, agent, if any, and underwriter, if any, to consummate the
disposition in such jurisdictions of such Registrable Securities; provided,
however, that in order to fulfill the foregoing obligations under this Section
5(a)(vi), the Company shall not (unless otherwise required to do so in any
jurisdiction) be required to (1) qualify generally to do business as a foreign
company or a broker-dealer, (2) execute a general consent to service of process
or (3) subject itself to taxation;

     

    (vii)           furnish,
at the request of the Holders of a majority of such Registrable Securities
participating in such registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders,
addressed to the underwriters, if any, and to such Holders and (ii) a letter,
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders, addressed to
the underwriters, if any, and, if permitted by applicable accounting standards,
to such Holders; and

     

    (viii)         otherwise
use its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission in connection with any registration
hereunder.

     

    (b)           The
Company may require each Holder of Registrable Securities as to which any
registration is being effected to furnish in writing to the Company such
information regarding such Holder and such Holder’s method of distribution of
such Registrable Securities as the Company may from time to time reasonably
request or as is required to be included in any registration statement filed
pursuant to the terms of this Agreement.  Each such Holder agrees to
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such Holder to the Company or of the
occurrence of any event as a result of which any prospectus relating to such
registration contains an untrue statement of a material fact regarding such
Holder or the distribution of such Registrable Securities or omits to state any
material fact regarding such Holder or the distribution of such Registrable
Securities required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made,
and promptly to furnish to the Company any additional information required to
correct and update any previously furnished information or required so that such
prospectus shall not contain, with respect to such Holder or the distribution of
such Registrable Securities, an untrue statement or a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made.

     

    
      
        
        

      

      
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    (c)           Each
of the Holders shall comply with the provisions of the Securities Act with
respect to disposition of the Registrable Securities to be included in any
registration statement filed by the Company.

     

    (d)           Notwithstanding
anything to the contrary, in connection with any offering of securities of the
Company (including without limitation any offering contemplated by Article 2 or
Article 3 of this Agreement), each Holder agrees that if such shareholder’s
Registrable Securities are included in the applicable registration, it will
consent and agree to comply with any “hold back” restriction relating to shares
of Common Stock or any other securities of the Company then owned by such Holder
(and his controlled Affiliates), that may be reasonably requested by the
underwriter(s) or placement or other selling agent(s) of such offering, not to
exceed one hundred eighty (180) days, provided, however, that such Selling
Shareholder need not enter into any such arrangement unless each of the
Company’s principal officers and its directors and Newcastle Partners, L.P. (and
their controlled Affiliates, if any) enter into agreements that contain
substantially the same “hold back” restrictions and/or agreements (it being
understood that this proviso shall not apply if a board designee of a Selling
Shareholder refuses to enter into such arrangement).  Without
limitation to the foregoing, each Holder shall, upon the request of such
underwriter(s) or agent(s), agree not to effect any public sale or distribution,
including any sale pursuant to Rule 144, of any Registrable Securities, and not
effect any such public sale or distribution of any other equity security of the
Company or of any security convertible into or exchangeable or exercisable for
any equity security of the Company (in each case, other than as part of such
underwritten public offering) during the thirty days prior to, and during the
one hundred eighty (180) day period beginning on, the effective date of such
registration statement.

     

    Article
6

    INDEMNIFICATION

     

    6.1           The
Company will indemnify each Holder, each of its officers, directors, partners
and affiliates, such Holder’s legal counsel and independent accountants, if any,
each person controlling such Holder within the meaning of Section 15 of the
Securities Act, each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act against all
claims, losses, damages, liabilities and expenses (including reasonable attorney
fees)(or actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement or prospectus, or any amendment or
supplement thereto, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state securities laws
applicable to the Company and relating to action or inaction by the Company in
connection with any such registration, qualification or compliance, and will
reimburse each such Holder, each of its officers, directors and partners, such
Holder’s legal counsel and independent accountants, each such underwriter and
each person who controls any such underwriter for any legal and other expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such expense,
claim, loss, damage, liability or action arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by such
Holder expressly for use in such registration statement or prospectus, or any
amendment or supplement thereto.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    6.2           Each
Holder (and Esch and Krassner, as the case may be, on behalf of his affiliated
Holders) will, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being
effected, severally indemnify the Company, each of its directors, officers,
partners and Affiliates, their respective legal counsel and independent
accountants, each underwriter, if any, of the Company’s securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of its officers, directors, partners, legal counsel and
independent accountants, if any, and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages, liabilities and expenses (including reasonable attorney fees) (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement or prospectus, or any amendment or
supplement thereto, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, such Holders, such
directors, officers, partners, legal counsel, independent accountants,
underwriters and control persons for any legal and other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement or
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Holder (or Esch and/or
Krassner on behalf thereof) regarding such Holder and/or such Holder’s method of
distribution expressly for use in such registration statement or prospectus, or
any amendment or supplement thereto; provided, however, that the obligations of
each Holder (and Esch and/or Krassner, as applicable, on behalf thereof)
hereunder shall be limited to an amount equal to the net proceeds to such Holder
and of Registrable Securities sold pursuant to such registration
statement.

     

    6.3           Each
party entitled to indemnification under this Article 6 (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld,
conditioned or delayed).  The Indemnified Party may participate in
such defense at such party’s expense; provided, however, that the Indemnifying
Party shall bear the expense of such defense of the Indemnified Party if
representation of both parties by the same counsel would be inappropriate due to
actual or potential conflicts of interest.  The failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, unless and only to
the extent such failure is materially prejudicial to the ability of the
Indemnifying Party to defend the action.  No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    6.4           If
the indemnification provided for in Section 6.1 or 6.2 is unavailable or
insufficient to hold harmless an Indemnified Party, then each Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Party as a
result of the expenses, claims, losses, damages or liabilities (or actions or
proceedings in respect thereof) referred to in Section 6.1 or 6.2, in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the Holders of Registrable Securities (or Esch and/or Krassner, as
applicable, on behalf of affiliated Holders) on the other hand in connection
with statements or omissions which resulted in such expenses, claims, losses,
damages or liabilities (or actions or proceedings in respect thereof), as well
as any other relevant equitable considerations.  The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Holders of Registrable Securities (or Esch and/or Krassner, as applicable, on
behalf of affiliated Holders) and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission.  The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section 6.4 were to be
determined by pro rata allocation (even if all Holders of Registrable Securities
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the first sentence of this Section 6.4.  The amount paid by an
Indemnified Party as a result of the expenses, claims, losses, damages or
liabilities (or actions or proceedings in respect thereof) referred to in the
first sentence of this Section 6.4 shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any claim, action or proceeding which is the subject
of this Section 6.4.  No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  The obligations of Holders of Registrable
Securities (or Esch and/or Krassner, as applicable, on behalf of affiliated
Holders) to contribute pursuant to this Section 6.4 shall be several in
proportion to the respective amount of Registrable Securities sold by them and
their Affiliates pursuant to a registration statement, and shall be limited to
an amount equal to the net proceeds to each such Holder of Registrable
Securities and his Affiliates sold pursuant to such registration
statement.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    Article
7

    RULE 144
REPORTING

     

    With a
view to making available the benefits of certain rules and regulations of the
Commission that may at any time permit the sale of securities of the Company to
the public without registration, the Company agrees to use its commercially
reasonable efforts to (i) make and keep public information regarding the Company
available, as those terms are understood and defined in Rule 144, at all times
after the date hereof; and (ii) file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act, in each case until the earlier of (A) six months after such
date as all of the Registerable Securities may be resold pursuant to Rule 144 or
any other rule of similar effect or (B) such date as all of the Registerable
Securities shall have been sold by the Holders.

     

    Article
8

    TRANSFER
OF REGISTRATION RIGHTS

     

    The
rights to cause the Company to register Registrable Securities under Sections
2.1 and 2.2 of this Agreement, together with all related rights and obligations,
may be assigned by a Holder to an Affiliate of such Holder; provided, however,
that (A) the right to cause the Company to register Registrable Securities under
Section 2.1 may only be held by one person or entity with respect to the
Registrable Securities owned by him or it, (B) the transferor shall furnish to
the Company written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned prior to such transfer and (C) such transferee shall agree
in writing to be subject to all applicable restrictions set forth in this
Agreement.  In each case, such rights may only be transferred together
with the underlying Registrable Securities in a transfer permitted by the
Securities Act and applicable state securities laws.  Subject to the
foregoing provision, any such permitted transferee or assignee shall be deemed a
Holder hereunder.

     

    Article
9

    MISCELLANEOUS

     

    9.1           Governing
Law; Forum.  The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law.  Each of the parties to this Agreement consents to submit to the
personal jurisdiction of any state or federal court sitting in the State of New
York, in any action or proceeding arising out of or relating to this Agreement,
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court, and agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the
parties to this Agreement agrees not to assert in any action or proceeding
arising out of relating to this Agreement that the venue is improper, and waives
any defense of inconvenient forum to the maintenance of any action or proceeding
so brought and waives any bond, surety or other security that might be required
of any other party with respect thereto.  Each of the parties hereto
waives any right to request a trial by jury in any litigation with respect to
this Agreement and represents that counsel has been consulted specifically as to
this waiver.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    9.2           Effectiveness;
Termination.

     

    (a)           This
Agreement shall become effective upon the Closing of the transactions under the
Purchase Agreement. In no event shall this Agreement be effective, nor shall any
rights or obligations hereunder apply, prior to the Closing.

     

    (b)           This
Agreement and all rights and obligations hereunder (other than Article 6 which
shall survive) shall terminate upon the earlier of (a) eight (8) years following
the date hereof or (b) at such time as the Selling Shareholders and their
Affiliates no longer hold any Seller NCEH Shares.

     

    9.3           Successors
and Assigns.  Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors and assigns of each of the parties hereto and shall inure to the
benefit of and be binding upon each Holder of any Registrable
Securities.

     

    9.4           Entire
Agreement.  This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.

     

    9.5           Notices.
All notices, requests, consents and other communications hereunder shall be made
in writing and shall be deemed given (i) when made if made by hand delivery,
(ii) one business day after being deposited with an overnight courier if made by
courier guaranteeing overnight delivery, (iii) on the date indicated on the
notice of receipt if made by first-class mail, return receipt requested or (iv)
on the date of confirmation of receipt of transmission by facsimile, addressed
as follows:

     

    (a)           if
to the Company, at

     

    New
Century Equity Holdings Corp.

    200
Crescent Court, Suite 1400

    Dallas,
Texas 75230

    Facsimile:
(214) 661-7475

    Attention:  Chief
Financial Officer

    

    with a
copy to:

    

    Olshan
Grundman Frome Rosenzweig & Wolosky LLP

    Park
Avenue Tower

    65 East
55th
Street

    New York,
NY 10022

    Facsimile:  (212)
451-2222

    Attention:  Steve
Wolosky, Esq.

    

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    

    (b)           if
to a Holder, to the address reflected on the records of the Company, or such
other address or addresses as shall have been furnished in writing by such party
to the Company and to the other parties to this Agreement.

     

    9.6           Severability.  The
invalidity, illegality or unenforceability of one or more of the provisions of
this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of this Agreement, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.

     

    9.7           Titles
and Subtitles.  The titles of the articles, sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

     

    9.8           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together constitute one instrument.

     

    9.9           Amendment
and Modification.  This Agreement may be amended, modified or
supplemented in any respect only by written agreement by the Company and Holders
representing at least a majority of the Registrable Securities, voting together
as a single class; provided, that no such amendment shall unfairly discriminate
against a particular Holder relative to the other Holders.  Any action
taken by the Holders, as provided in this Section 9.9, shall bind all
Holders.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the undersigned have hereunto affixed their
signatures.

    

    

    
      	 
      	
              NEW
      CENTURY EQUITY HOLDINGS CORP.

            
	 	 
	 
      	 
      
	 
      	
              By:

            	/s/
      Mark Schwarz
	 
      	 
      	
              Name:

            	Mark
      Schwarz
	 
      	 
      	
              Title:

            	Acting
      Chief Executive Officer
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      

    

    
      	 
      	
              
                /s/
      Dieter Esch

              

            
	 
      	
              Name:

            	
              Dieter
      Esch

            

    

    

    

    
      	 
      	
              LOREX
      INVESTMENTS AG

            
	 	 
	 
      	 
      
	 
      	
              By:

            	/s/
      Peter Marty  
	 
      	 
      	
              Name:

            	Peter
      Marty  
	 
      	 
      	
              Title:

            	Board
      of Directors  
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      

    

    
      	 
      	
              
                /s/
      Brad Krassner

              

            
	 
      	
              Name:

            	
              Brad
      Krassner

            

    

    

    

    
      	 
      	
              KRASSNER
      FAMILY INVESTMENTS, L.P

            
	 	 
	 
      	 
      
	 
      	
              By:

            	

              /s/
      Brad Krassner  

            
	 
      	 
      	
              Name:

            	

              Brad
      Krassner  

            
	 
      	 
      	
              Title:

            	General
      Partner  
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      

    

    
      	 
      	
              
                /s/
      Sean Patterson

              

            
	 
      	
              Name:

            	
              Sean
      Patterson

            

    

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

       

    

    ANNEX
A

     

    PLAN OF
DISTRIBUTION

     

    We are
registering the shares offered by this prospectus on behalf of the selling
shareholders. The selling shareholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling shares of common
stock or interests in shares of common stock received after the date of this
prospectus from a selling shareholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares of common stock or interests in
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions.  These
dispositions may be at fixed prices, at prevailing market prices at the time of
sale, at prices related to the prevailing market price, at varying prices
determined at the time of sale or at negotiated prices.

     

    The
selling shareholders may use any one or more of the following methods when
disposing of shares or interests therein:

     

    
      	
               
      

            	
              ·

            	
              ordinary
      brokerage transactions and transactions in which the broker-dealer
      solicits purchasers;

            

    

     

    
      	
               
      

            	
              ·

            	
              block
      trades in which the broker-dealer will attempt to sell the shares as
      agent, but may position and resell a portion of the block as principal to
      facilitate the transaction;

            

    

     

    
      	
               
      

            	
              ·

            	
              purchases
      by a broker-dealer as principal and resale by the broker-dealer for its
      account;

            

    

     

    
      	
               
      

            	
              ·

            	
              an
      exchange distribution in accordance with the rules of the applicable
      exchange;

            

    

     

    
      	
               
      

            	
              ·

            	
              privately
      negotiated transactions;

            

    

     

    
      	
               
      

            	
              ·

            	
              short
      sales;

            

    

     

    
      	
               
      

            	
              ·

            	
              through
      the writing or settlement of options or other hedging transactions,
      whether through an options exchange or
  otherwise;

            

    

     

    
      	
               
      

            	
              ·

            	
              broker-dealers
      may agree with the selling shareholders to sell a specified number of such
      shares at a stipulated price per
share;

            

    

     

    
      	
               
      

            	
              ·

            	
              a
      combination of any such methods of sale;
and

            

    

     

    
      	
               
      

            	
              ·

            	
              any
      other method permitted pursuant to applicable
  law.

            

    

    

    The
selling shareholders may, from time to time, pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock, from time to time, under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
shareholders to include the pledgee, transferee or other successors in interest
as selling shareholders under this prospectus.  The selling
shareholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this
prospectus.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    In
connection with the sale of our common stock or interests therein, the selling
shareholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume.  The selling
shareholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities.  The
selling shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).

     

    The
aggregate proceeds to the selling shareholders from the sale of the common stock
offered by them will be the purchase price of the common stock less discounts or
commissions, if any.  Each of the selling shareholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents.  We will not receive any of the proceeds from this
offering.

     

    The
selling shareholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.

     

    The
selling shareholders and any broker-dealers that act in connection with the sale
of securities might be deemed to be “underwriters” within the meaning of Section
2(11) of the Securities Act of 1933, and any commissions received by such
broker-dealers and any profit on the resale of the securities sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act of 1933.

     

    To the
extent required, the shares of our common stock to be sold, the names of the
selling shareholders, the respective purchase prices and public offering prices,
the names of any agent, dealer or underwriter, and any applicable commissions or
discounts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this
prospectus.

     

    In order
to comply with the securities laws of some states, if applicable, the common
stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers.  In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    We have
advised the selling shareholders that the anti-manipulation rules of Regulation
M under the Exchange Act may apply to sales of shares in the market and to the
activities of the selling shareholders and their Affiliates.  In
addition, we will make copies of this prospectus (as it may be supplemented or
amended from time to time) available to the selling shareholders for the purpose
of satisfying the prospectus delivery requirements of the Securities Act of
1933.  The selling shareholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities
Act.

     

    We have
agreed to indemnify the Selling shareholders against liabilities, including
liabilities under the Securities Act of 1933 and state securities laws, relating
to the registration of the shares offered by this prospectus.

     

    We have
agreed with the selling shareholders to keep the registration statement that
includes this prospectus effective until the earlier of (1) six months following
the effective date of registration statement and (2) such time as all shares of
common stock covered by this prospectus have been sold.

     

     

     

    
      
        
        

      

      
        -19-

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