Document:

SOFTWARE
      LICENSE AND DISTRIBUTION AGREEMENT

     

    This
      Software License and Distribution Agreement (this “Agreement”) is entered into
      as of the 15th day of September, 2004 (the “Effective Date”), by and between
      Infinium Labs, Inc., a Delaware corporation with its principal place of business
      at 2033 Main Street, Suite 309, Sarasota, FL 34237 (“Infinium”), and
Eidos
      Inc.,
      a
      California corporation with its principal place of business at 651 Brannan
      Street, San Francisco, CA 94107 (“Licensor”).

     

    
      
        	1.	
                Definitions.

              

      

    

     

    “Converted
      Product” means one instance of an End User either activating a Licensed Product
      that is preloaded on client hardware distributed to such End User as part of
      the
      Service or downloading a Licensed Product from the Service, and then purchasing
      unlimited use of that Licensed Product.

     

    “End
      User” means an individual subscriber to the Service located in the
      Territory.

     

    “Licensed
      Products” means the current and future game titles Licensor licenses hereunder
      to Infinium for redistribution via the Service, detailed in Exhibit
      A
      as
      amended from time to time.

     

    “Licensor
      Deliverables” means the software, information and other materials described on
Exhibit
      B.

     

    “Net
      Receipts” means the gross amounts actually received by Infinium from End Users
      attributable to Converted Products, less the following: credit card processing
      fees, amounts attributable to refunds, rebates, returns, allowances and
      adjustments actually granted to End Users, costs of distributing the Converted
      Products, taxes, duties or other governmental charges on production, sales,
      transportation, delivery, importation or use actually borne by Infinium, and
      an
      amount equal to 10% of such gross amounts as a reserve for bad debt and
      credit-card charge reverses, provided that such reserved amount shall be
      reconciled with actual receipts on a quarterly basis.

     

    “Royalty”
      has the meaning set forth in Section 6, below.

     

    “Service”
      means the Phantom gaming service, including hardware, software and other
      infrastructure, created and maintained by Infinium and described in detail
      in
      Exhibit A, attached hereto.

     

    “Territory”
      shall have the meaning set forth on Exhibit
      C.
      

     

    
      
        	2.	
                Licenses.

              

      

    

     

    2.1  Licensed
      Products.
      Subject
      to the terms and conditions of this Agreement, Licensor hereby grants to
      Infinium the following non-exclusive right and license within the
      Territory:

     

    
      	 	
              (i)

            	
              to
                install, execute and reproduce the Licensed Products on computers
                controlled by Infinium in order to evaluate and analyze the Licensed
                Products to the extent reasonably necessary for Infinium to distribute
                the
                Licensed to End Users via the
                Service;

            

    

     

    
      	 	
              (ii)

            	
              to
                deconstruct the Licensed Products into small packets of information
                that
                facilitate the distribution of the Licensed Products to End Users
                via the
                Service;

            

    

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

    
      	 	
              (iii)

            	
              to
                preload copies of the Licensed Products on client hardware for
                distribution to End Users and to electronically distribute via the
                Service
                copies of the Licensed Products to End
                Users;

            

    

     

    
      	 	
              (iv)

            	
              to
                permit such End Users to use the Licensed Products on a perpetual,
                subscription or time-limited basis, but only in conjunction with
                the
                Service; and

            

    

     

    
      	 	
              (iv)

            	
              to
                cache copies of the Licensed Products on the Service and make a reasonable
                number of copies of the Licensed Products for Infinium’s backup use.
                

            

    

     

    2.2  Marketing
      Materials.
      Subject
      to the terms and conditions of this Agreement, including Licensor’s prior
      approval of all use of reformatted marketing and promotional materials, which
      approval shall not be unreasonably withheld, Licensor hereby grants to Infinium
      the following non-exclusive right and license within the Territory:

     

    
      	 	
              (i)

            	
              to
                reformat and reproduce any marketing or promotional materials contained
                in
                the Licensor Deliverables, including cover art, animated demos, video
                clips, trailers and screen shots of the Licensed Products (the “Marketing
                Materials”) to the extent reasonably necessary for Infinium to engage in
                the marketing activities set forth in Section 5;
                and

            

    

     

    
      	 	
              (ii)

            	
              to
                use, display and distribute the Marketing Materials and the Licensed
                Products as part of the marketing activities set forth in Section
                5.2.

            

    

     

    2.3  End-User
      Agreements.
      Use of
      the Licensed Products by End Users shall be governed by a “click-wrap” license
      agreement between Licensor and the End Users accompanying the Licensed Product,
      which shall be provided to Infinium by Licensor. Infinium shall have the right
      to review and approve any such “click-wrap” license agreement prior to
      Infinium’s distributing the applicable Licensed Product. Use of the Service,
      including the right to download and to access the Licensed Products, shall
      be
      governed by an agreement between the End Users and Infinium. Licensor
      understands and agrees that, if there is a conflict between the terms of the
      click-wrap agreement between Licensor and the End Users and the agreement
      between Infinium and the End Users, the agreement between Infinium and the
      End
      Users shall control, provided that Licensor has been given a reasonable
      opportunity to approve and has approved the relevant click-wrap agreement
      between Infinium and End User.

     

    2.4  Restrictions.
      The
      licenses granted under this Agreement are expressly conditioned on Infinium’s
      compliance with each of the following conditions:

     

    
      	 	
              (i)

            	
              Infinium
                shall have no access to the source code of any of the Licensed Products
                and shall not reverse engineer or decompile the Licensed Products
                in order
                to derive the source code of the Licensed Products;
                and

            

    

     

    
      	 	
              (ii)

            	
              all
                copies of the Licensed Products made by Infinium must retain Licensor’s
                copyright and trademark notices.

            

    

     

    
      
        
          	3.	
                  Licensor’s
                    Obligations.

                

        

      

    

     

    3.1  Licensor
      Deliverables.
      Licensor shall deliver to Infinium the Licensor Deliverables within fifteen
      (15)
      days following the Effective Date. For Licensed Products added to Exhibit
      A
      after
      the Effective Date, Licensor shall deliver to Infinium the Licensor Deliverables
      within fifteen (15) days following Licensor’s release of a completed, tested and
      fully functional master version of a Licensed Product to Licensor’s designated
      manufacturers or distributors for distribution to end users.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    3.2  ESRB
      Ratings.
      Licensor shall, at its own cost and expense, apply for and obtain a rating
      from
      the Entertainment Software Rating Board (“ESRB”) for each of the Licensed
      Products.

     

    3.3  Quality
      Assurance.
      Licensor shall use industry-standard quality assurance methods in the
      development and production of the Licensed Products. Licensor may, at its
      option, test Licensed Products on the Service before they are made available
      to
      End Users. Infinium shall make Service hardware and software available to
      Licensor to facilitate this QA testing as the same is mutually agreed upon
      by
      the parties hereto. In addition, Infinium shall provide Licensor with
      information regarding its desired release schedule for Licensed Products on
      the
      Service.

     

    3.4  Support
      to End Users.
      Licensor shall provide all End Users with the same customer service and
      technical support that Licensor provides to other end users of the Licensed
      Products. Infinium shall provide Licensor with standard FAQs regarding the
      Service.

     

    3.5  Support
      to Infinium.
      Licensor shall, during Licensor’s regular business hours, provide to Infinium
      reasonable technical support via email regarding compatibility and/or
      integration issues with the Licensed Products and the Service.

     

    3.6  Compliance
      with Laws.
      Licensor shall comply with all applicable laws, rules and regulations in
      connection with its performance of its obligations under this
      Agreement.

     

    
      
        
          	4.	
                  Infinium’s
                    Obligations.

                

        

      

    

     

    4.1  Implementation
      of Service.
      Infinium shall, at its own expense, implement and maintain the Service,
      including acquiring and maintaining all hardware, software and other
      infrastructure necessary the make the Service available to End
      Users.

     

    4.2  Support
      to End Users.
      Infinium shall provide all End Users with industry-standard customer service
      and
      technical support with regard to the Service, and shall be responsible for
      billing and collecting all amounts due from End Users for use of the
      Service.

     

    4.3  Security.
      Infinium shall implement and maintain reasonable technical measures, such as
      encryption, to prevent unauthorized access or use of the Service and the
      Licensed Products.

     

    4.4  Reports.
      Within
      thirty (30) days following the end of each calendar month during the term of
      this Agreement, Infinium shall provide to Licensor a written report of the
      number of Converted Products distributed during such month on a
      Licensed-Product-by-Licensed-Product basis. 

     

    4.5  Privacy
      Policy; Certification.
      Infinium shall implement and comply with a privacy policy for the Service,
      and
      shall use reasonable efforts to obtain a certification of such policy from
      ESRB
      or other similar independent organization.

     

    4.6  Compliance
      with Laws.
      Infinium shall comply with all applicable laws, rules and regulations in
      connection with its performance of its obligations under this Agreement
      including, without limitation, the Children’s Online Privacy Protection
      Act.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    
      
        	5.	
                Marketing.

              

      

    

     

    5.1  Promotion
      of the Service.
      Licensor may take part in promotional opportunities Infinium makes available
      via
      the Service. Such promotional opportunities are listed in Exhibit
      D,
      and may
      be amended from time to time at Infinium’s sole discretion. In addition, as
      mutually agreed upon by the parties hereto, Licensor shall promote Infinium
      as a
      distributor of the Licensed Products, including through use of logos provided
      by
      Infinium, in a manner and with a prominence no less favorable than other
      distributors, whether online, “brick and mortar” or otherwise. On a quarterly
      basis, personnel of Licensor and Infinium shall meet to disclose, review and
      discuss future promotional opportunities for the Licensed Products and the
      Service. Licensor shall otherwise promote the Service in marketing and
      promotional materials for the Licensed Products as agreed upon by the parties
      from time to time.

     

    5.2  Promotion
      of the Licensed Products.
      As part
      of promoting and marketing the Service, including at trade shows and in
      association with co-marketers and co-promoters, Infinium shall be permitted
      to
      (i) use Licensor’s trade name and the marks and branding elements associated
      with the Licensed Products (the “Marks”), (ii) use, display and distribute the
      Marketing Materials and (iii) display the Licensed Products. In using the Marks,
      Infinium shall comply with any branding guidelines provided by Licensor and
      shall discontinue any such use upon Licensor’s request. Such use of the Marks
      shall inure to the benefit of Licensor.

     

    5.3  No
      Tarnishment.
      Neither
      party shall disparage the other party or otherwise take any action with the
      intent of tarnishing the other party’s reputation.

     

    5.4  Publicity.
      Neither
      party shall issue a press release announcing the business relationship
      established by this Agreement without the prior written consent of the other
      party. Infinium may, however, disclose publicly that Infinium has become a
      licensee of Licensor and is entitled to distribute the Licensed Products
      electronically.

     

    
      
        	6.	
                Payments.

              

      

    

     

    6.1  Advance.
      Infinium shall pay to Licensor a non-refundable advance against royalties as
      set
      forth on Exhibit
      C
      (the
“Advance”). The Advance shall be credited against any royalty payments owed
      under Section 6.2, below.

     

    6.2  Royalties.
      Within
      thirty (30) days following the end of each calendar quarter during the term
      of
      this Agreement, Infinium shall (i) pay to Licensor the percentage of Net
      Receipts set forth in Exhibit
      C
      generated during the immediately preceding calendar quarter (the “Royalty”), and
      (ii) provide to Licensor a written report, in such detail as Licensor may
      reasonably require, of deductions taken from gross revenue received in
      connections with the Service, of Net Receipts generated during the immediately
      preceding calendar quarter and the Royalty due. If no Net Receipts have accrued
      during any such period, a written statement to that effect shall be furnished.
      

     

    6.3  Post-Termination
      Report.
      Infinium shall provide a written report to the Licensor within sixty (60) days
      following the date of any expiration or termination of this Agreement, in such
      detail as Licensor may reasonably require, of all Royalties due pursuant to
      Section 6.2 but that were not previously reported to Licensor, and shall pay
      to
      Licensor all such Royalties due to Licensor.

     

    6.4  Records.
      Infinium shall keep accurate records of all operations affecting payments
      hereunder, and shall permit Licensor or its duly authorized agent to inspect
      all
      such records for the purpose of determining the accuracy of Infinium’s payments
      under this Agreement and to make copies of or extracts from such records no
      more
      often than once per calendar year during regular business hours during the
      term
      of this Agreement. All such records shall be deemed Confidential Information
      of
      Infinium and shall be used solely for the purpose of determining compliance
      with
      Infinium’s payment obligations under this Agreement. In the event that an
      inspection reveals an underpayment to Licensor of five percent (5%) or more,
      Licensor shall bear the costs of such inspection and shall reimburse Licensor
      for the same upon receipt of a related invoice.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    6.5  Exchange
      Rate.
      All
      payments, including Royalties on Net Receipts from End Users located outside
      of
      the United States, shall be paid in United States dollars. For the purpose
      of
      computing royalties payable on Net Receipts from End Users located outside
      of
      the United States, amounts received by Infinium in foreign currencies shall
      be
      converted into United States dollars at that end of the calendar month in which
      such amounts were received at the market rate of exchange as published by the
      Wall Street Journal in effect as of the final business day of such calendar
      month.

    

      6.6  Late
        Payments.
        In the
        event of late payment of any money due to Licensor hereunder, Infinium shall
        pay
        to Licensor interest accruing from day to day calculated at the monthly rate
        of
        one and one-half percent (1.5%) (or the maximum rate allowed by law, if less)
        on
        all such money overdue from the due date for payment until the actual date
        of
        payment, whether before or after any formal judgment.

       

    

    
      
        	7.	
                Proprietary
                  Rights.

              

      

    

     

    Infinium
      acknowledges Licensor’s proprietary rights in the Licensed Products. Title to
      the Licensed Products shall at all times remain solely with Licensor. Licensor
      retains all rights not expressly granted. Except as expressly set forth herein,
      Infinium shall not disassemble, decompile, reverse engineer, copy, modify,
      transcribe, store, translate, sell, lease, or otherwise transfer or distribute
      the Licensed Products, in whole or in part, without prior authorization in
      writing from Licensor. 

     

    
      
        	8.	
                Warranties.

              

      

    

     

    8.1  Limited
      Product Warranty.
      Licensor warrants to Infinium that for a period of one (1) year following
      delivery of the Licensor Deliverables for a Licensed Product (the “Warranty
      Period”) to the best of Licensor’s knowledge such Licensed Products will not
      contain any undocumented back doors, trap doors, locks, time bombs, viruses,
      worms, Trojan horses or other destructive code. During the Warranty Period,
      Licensor shall, at its option, repair or replace or any Licensed Product that
      does not comply with the limited warranty set forth in this Section.

     

    8.2  By
      Infinium.  Infinium
      represents and warrants to Licensor as follows:  (a) Infinium has full
      corporate power and authority to enter into and carry out its obligations under
      this Agreement; (b) the execution, delivery and performance of this
      Agreement will not conflict with, are not inconsistent with and will not result
      in any breach of any terms, conditions or provisions of, or constitute (with
      due
      notice or lapse of time, or both) a default under any agreement, contract,
      document or instrument to which Infinium is a party or by which it is otherwise
      bound; (c) this Agreement has been duly executed and delivered by Infinium
      and
      constitutes the legal, valid and binding obligation of Infinium, enforceable
      against Infinium in accordance with its terms; (d) no authorization, consent,
      approval or similar action of or by any third party is required for or in
      connection with Infinium’s authorization, execution, delivery or performance of
      this Agreement; and (e) use of the Service and/ or Infinium Marks do not and
      will not infringe upon or constitute the misappropriation of any third party
      intellectual property or other propriety rights. 

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    8.3  By
      Licensor.  Licensor
      represents and warrants to Infinium as follows: (a) Licensor has full
      corporate power and authority to enter into and carry out its obligations under
      this Agreement; (b) the execution, delivery and performance of this
      Agreement will not conflict with, are not inconsistent with and will not result
      in any breach of any terms, conditions or provisions of, or constitute (with
      due
      notice or lapse of time, or both) a default under any agreement, contract,
      document or instrument to which Licensor is a party or by which it is otherwise
      bound; (c) this Agreement has been duly executed and delivered by Licensor
      and
      constitutes the legal, valid and binding obligation of Licensor, enforceable
      against Licensor in accordance with its terms; (d) no authorization, consent,
      approval or similar action of or by any third party is required for or in
      connection with Licensor’s authorization, execution, delivery or performance of
      this Agreement; (e) the promotion, distribution and use of the Licensed Products
      as expressly authorized herein will not infringe upon, or constitute a
      misappropriation of, any third party’s intellectual property rights; and (f) the
      use of the Marks by Infinium as permitted under this Agreement will not
      constitute an infringement or dilution of a third party’s trademark rights in
      the Territory.

     

    8.4  DISCLAIMER.  THE
      WARRANTIES SET FORTH IN THIS SECTION 8 ARE IN LIEU OF ALL OTHER
      REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESSED OR IMPLIED.  EXCEPT
      FOR THE WARRANTIES SET FORTH IN THIS SECTION 8, EACH PARTY HEREBY DISCLAIMS
      ANY AND ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND, EXPRESSED OR IMPLIED,
      WHETHER ARISING FROM A COURSE OF DEALING OR USAGE OF TRADE, INCLUDING, WITHOUT
      LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
      PARTICULAR PURPOSE. 

     

    
      
        	9.	
                Indemnification.

              

      

    

     

    9.1  Indemnification
      by Infinium.
      Infinium, at its own expense, shall indemnify, defend and hold harmless Licensor
      against any third-party claim, suit, action, proceeding, debt or liability,
      including reasonable attorneys’ fees, based on or arising from: (i) breach by
      Infinium of any of its covenants, representations or warranties under this
      Agreement; or (ii) breach by Infinium of any obligation owed by Infinium to
      an
      End User under a separate agreement (including the agreement for provision
      of
      the Service).

     

    9.2  Indemnification
      by Licensor.
      Licensor, at its own expense, shall indemnify, defend and hold harmless
      Infinium, its employees, representatives, agents and affiliates against any
      third-party claim, suit, action, proceeding, debt or liability, including
      reasonable attorneys’ fees, brought against Infinium based on or arising from:
      (i) breach by Licensor of any of its covenants, representations or warranties
      under this Agreement; or (ii) breach by Licensor of any obligation owed by
      Licensor to an End User under a separate agreement (including the “click-wrap”
license agreement applicable to the Licensed Products).

     

    9.3  Procedure.
      In
      claiming any indemnification hereunder, the party seeking indemnification shall
      promptly provide the indemnifying party with written notice of any claim which
      the party seeking indemnification believes falls within the scope of the
      foregoing paragraphs, at which time the indemnifying party shall be obligated
      to
      defend the action in its sole expense. In the event that the indemnifying party
      does not act promptly, but not less than thirty (30) days from receipt of notice
      of a claim, to secure counsel to act on behalf of a party seeking
      indemnification and defend such party against a claim, the party seeking
      indemnification shall be entitled to secure counsel of its own, defend and
      settle a relevant claim without the indemnifying party’s approval and the
      indemnifying party agrees to reimburse the party seeking indemnification for
      any
      and all costs incurred with respect to the same within thirty (30) days of
      its
      receipt of a detailed invoice for the same. The indemnified party may, at its
      own expense, participate in the defense if it so chooses, provided that the
      indemnifying party shall control such defense and all negotiations relative
      to
      the settlement of any such claim and further provided that any settlement
      intended to bind the indemnified party shall not be final without the
      indemnified party’s written consent, which shall not be unreasonably withheld.,
      at which time Licensor shall be obligated to defend Licensee with respect to
      the
      same at Licensor’s sole expense. In the event that Licensor does not act
      promptly, but not less than thirty (30) days from receipt of notice of a claim,
      to secure counsel to act on behalf of Licensee and defend Licensee against
      a
      Claim, Licensee shall be entitled to secure counsel of its own, defend and
      settle a relevant Claim without Licensor’s approval and Licensor agrees to
      reimburse Licensee for any and all costs incurred with respect to the same
      within thirty (30) days of Licensor’s receipt of a detailed invoice for the
      same. Licensee shall retain the right at all times, at its’ sole expense, to
      participate in the defense or settlement of any such Claim with counsel of
      its
      own selection, provided that Licensee will not be entitled to enter into any
      settlement of such Claim without Licensor’s prior written consent. 

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    9.4  Additional
      Rights for Claims of Infringement.  In
      the event a third party asserts or threatens any claim asserting: (a) that
      the
      marketing, licensing, distribution or use of any of the Licensed Products
      infringes upon, or constitutes a misappropriation of, such third party’s
      intellectual property rights in the Territory, then Licensor may, at its option
      (i) procure for Infinium and the End Users a license to continue
      distributing and using the Licensed Product, (ii) modify such Licensed Products
      to make them non-infringing, or (iii) if neither of the foregoing is
      commercially practicable, terminate this Agreement with respect to the allegedly
      infringing Licensed Product in the jurisdiction in which infringement is
      asserted, and pay to Infinium all amounts that Infinium refunds to End Users
      as
      a result of such termination. 

     

    
      
        	10.	
                Term
                  and Termination.

              

      

    

     

    10.1  Term
      of Agreement.
      The
      term of this Agreement shall commence on the Effective Date and, unless earlier
      terminated in accordance with the provisions of this Agreement, continue
      thereafter until December 31, 2005. 

     

    10.2  Termination
      for Breach.
      Either
      party may terminate this Agreement in the event the other party has breached
      any
      material term or condition of the Agreement and such breach remains uncured
      for
      thirty (30) days following receipt of written notice from the non-breaching
      party specifying the breach.

     

    10.3  Termination
      upon Insolvency.
      This
      Agreement may be terminated by either party immediately and without notice
      in
      the event the other (i) admits in writing its inability to pay its debts
      generally as they become due, (ii) makes a general assignment for the benefit
      of
      creditors, (iii) institutes proceedings to be adjudicated a voluntary bankrupt,
      or consents to the filing of a petition of bankruptcy against it, (iv) is
      adjudicated by a court of competent jurisdiction as being bankrupt or insolvent,
      (v) seeks reorganization under any bankruptcy act, or consents to the filing
      of
      a petition seeking such reorganization, or (vi) ceases to do business itself
      or
      through a successor.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    10.4  Effect
      of Termination.
      Upon
      termination of this Agreement, neither party shall be relieved of any obligation
      or liability that has accrued prior to the date of such termination. Each party
      shall return the other party’s Confidential Information or, at the request of
      the owner of the Confidential Information, destroy it and certify in writing
      that such destruction has been completed. In addition, upon termination or
      expiration of this Agreement, any and all rights granted hereunder by Licensor
      to Licensee shall terminate and shall revert in full back to
      Licensor.

     

    10.5  Survival.
      The
      obligations of the parties under the following Sections shall survive expiration
      or termination of this Agreement for any reason: Sections 6.3, 6.4, 8, 9, 10.4,
      10.5, 11 and 12.

     

    
      
        	11.	
                Confidentiality.

              

      

    

     

    11.1  Confidential
      Information.
      “Confidential Information” means any information (including, but not limited to,
      customer lists, marketing and distribution plans and activities), report,
      document or other materials disclosed or provided to the other party during
      the
      term of this Agreement which is of a trade secret, confidential, proprietary
      or
      like undisclosed nature or which is identified as such.

     

    11.2  Non-disclosure.
      All
      Confidential Information shall be retained by the receiving party in confidence
      for the term of this Agreement and for a period of three (3) years thereafter
      and shall not be used by a party except in connection with performance of their
      obligations or enjoyment of their rights under this Agreement. The receiving
      party shall not disclose or otherwise make available any of the Confidential
      Information to anyone, including employees and agents, except those employees
      or
      agents of the receiving party who need to know the Confidential Information
      for
      the receiving party to perform its obligations or enjoy its rights under this
      Agreement. The receiving party shall (i) instruct any such employees and agents
      not to disclose or otherwise make available any of the Confidential Information
      to anyone, and (ii) be liable to the disclosing party for any action or inaction
      of such employees or agents that would violate this Agreement, had the action
      or
      inaction been that of the receiving party directly. The receiving party shall
      exercise the same care and safeguards with respect to Confidential Information
      disclosed by the disclosing party as used to maintain the confidentiality of
      its
      own information of like character, but in any event a reasonable degree of
      care.

     

    11.3  Exceptions.
      Nothing
      in this Agreement shall in any way restrict the right of a receiving party
      to
      use, disclose, or otherwise deal with any information that (i) was already
      known to the receiving party at the time of disclosure as evidenced by written
      documents in the receiving party’s possession prior to disclosure, (ii) was
      generally available to the public or becomes publicly known through no wrongful
      act of the receiving party, (iii) was received by the receiving party from
      a third party who had a legal right to provide it, or (iv) was developed
      independently of knowledge of Confidential Information received by the receiving
      party from the disclosing party. In addition, a receiving party shall be
      permitted to disclose Confidential Information if required pursuant to the
      request of any governmental agency or any court of competent jurisdiction,
      provided that the receiving party shall limit disclosure to only that specific
      information required, shall use its reasonable efforts to obtain confidential
      treatment with respect to any such information disclosed, and shall notify
      the
      other party before providing such information in order to enable that party
      to
      seek a protective order.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    
      
        	12.	
                Miscellaneous.

              

      

    

     

    12.1  No
      Agency.
      The
      parties hereto are independent contractors and nothing in this Agreement shall
      create or imply any agency relationship between the parties, nor shall the
      Agreement be deemed to constitute a joint venture or partnership between the
      parties. Neither party shall have authority to bind or otherwise obligate the
      other in any manner whatsoever. 

     

    12.2  Waiver.
      No
      waiver shall be implied from conduct or failure to enforce rights. No waiver
      shall be effective unless in a writing signed by both parties.

     

    12.3  Assignment.
      Neither
      this Agreement nor any of the rights, interest or obligations hereunder may
      be
      assigned by any party hereto without the prior written consent of the other
      party, except that Licensor may assign its rights and obligations hereunder
      to a
      successor of a party in the event of a merger, acquisition or other change
      in
      control of such party. This Agreement shall bind and inure to the benefit of
      the
      parties and their respective successors and permitted assigns. 

     

    12.4  Notices.
      All
      notices, consents and other communications required or permitted to be given
      hereunder shall be in writing and shall be deemed to have been duly given if
      delivered by hand, mailed by registered or certified mail or sent by overnight
      courier as follows:

     

    If
      to
      Infinium:

    

    Infinium
      Labs, Inc.

    2033
      Main
      Street, Suite 309

    Sarasota,
      FL 34237 

    Attention:
      __________________

    

    with
      a
      copy to:

    

    Infinium
      Labs, Inc.

    2033
      Main
      Street, Suite 309

    Sarasota,
      FL 34237 

    Attention:
      General Counsel

    

    If
      to
      Licensor:

    

    Eidos,
      Inc.

    651
      Brannan Street, 4th
      Floor

    San
      Francisco, CA 94107

    Attention:
      VP Legal and Business Affairs

    

    or
      to
      such other address as a party may from time to time specify for itself by
      written notice given as provided above. All notices shall be deemed to have
      been
      given on the date of delivery if delivered by hand, three business days after
      mailing and on the business day after being sent by courier.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    12.5  Entire
      Agreement.
      This
      Agreement, including all exhibits hereto, constitutes the entire agreement
      between the parties with respect to the subject matter hereof and supersedes
      all
      prior and contemporaneous communications and agreements. In the event of a
      conflict between the body of this Agreement and an exhibit, such exhibit shall
      control. This Agreement may not be modified except by a written agreement dated
      subsequent to the Effective Date and signed on behalf of the parties by their
      respective duly authorized representatives.

     

    12.6  Severability.
      If any
      provision of this Agreement is held to be invalid, void or unenforceable, such
      provision shall be deemed to be restated to reflect as nearly as possible the
      original intentions of the parties in accordance with applicable law, and the
      remaining provisions of this Agreement shall remain in full force and
      effect.

     

    12.7  Governing
      Law.
      This
      Agreement and all claims related to it, its execution or the performance of
      the
      parties under it, shall be construed and governed in all respects according
      to
      the laws of the State of California, without regard to the conflict of law
      provisions thereof. Any claim, dispute or controversy of whatever nature arising
      out of or relating to this Agreement must be brought exclusively in a court
      of
      competent jurisdiction, located in San Francisco, California, and in no other
      jurisdiction.  The parties hereto consent to personal jurisdiction and
      venue in, and agree to service of process issued or authorized by, such
      court. 

     

    12.8  Counterparts;
      Facsimile Signatures.
      This
      Agreement may be executed in counterparts which, when taken together, shall
      constitute one and the same instrument. Facsimile signatures shall have the
      same
      effect as original signatures.

     

     

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

     

    
      	
              INFINIUM
                LABS CORPORATION

            	
              EIDOS
                INC.

            
	 	 
	
              By:__________________________________

            	
              By:__________________________________

            
	 	 
	
              Print
                Name: ___________________________

            	
              Print
                Name: ___________________________

            
	 	 
	
              Title:
                ________________________________

            	
              Title:
                ________________________________

            
	 	 
	
              Date:
                ________________________________

            	
              Date:
                ________________________________

            

    

    

    

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    EXHIBIT
      A 

    LICENSED
      PRODUCTS

     

    
      	
              Full
                Game Name, including trademarks

            	
              Term
                limitations (if any)

            
	
              Back
                Catalog Titles 

            
	
              Deus
                Ex: Game of the Year Edition

            	 
	
              Thief
                Gold

            	 
	
              Thief
                II

            	 
	
              Any
                content created by consumers using the Thief level editor for which
                Eidos
                controls rights via the EULA

            	 
	
              Other
                titles to be added by Eidos prior to contract signing

            	 
	
              Frontline
                Titles 

            
	
              Deus
                Ex: Invisible War

            	 
	
              Thief:
                Deadly Shadows

            	 

    

    

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

    EXHIBIT
      B

    LICENSOR
      DELIVERABLES

     

    For
      each Licensed Product:

     

    Gold
      master (without copy protection when available)

    Box
      cover
      art

    Digital
      logo

    Legal
      lines

    Patches
      and other updates

    Promotional
      Screen Shots

    Animated
      Demos

    Movie
      trailers

    Pre-release
      demo code

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

    EXHIBIT
      C

    TERRITORY;
      PAYMENTS

     

    Territory:

     

    United
      States of America, its territories and possessions, Canada and
      Mexico.

     

    Advance:

     

    $125,000,
      payable
      in two equal installments, the first installment due within ten (10) business
      days following the Effective Date, and the second installment due immediately
      upon Infinium's receipt of the Licensor Deliverables for all Licensed
      Products.

     

    Per
      Title Recoupment:

     

    The
      Advance is recoupable against Royalties on a per-Licensed Product (i.e.
      royalties paid hereunder shall not be cross-collateralized across Licensed
      Products) basis as follows:

     

    
      	o  	
              Thief:
                Deadly Shadows - $50,000

            

    

    
      	o  	
              Deus
                Ex: Invisible War - $30,000

            

    

    
      	o  	
              Deux
                Ex; Game of the Year Edition -
                $20,000

            

    

    
      	o  	
              Thief
                2 - $15,000

            

    

    
      	o  	
              Thief
                Gold - $10,000 

            

    

    

     

    Royalties:

     

    
      	
              Licensed
                Product

            	
              Royalty

            
	
              1)
                Frontline
                Titles (Licensed
                Products that are distributed via usual and customary videogame channels,
                and whose sales figures are reported by NPD):

            	
              25%
                of Net Receipts

            
	
              2)
                Digitally
                Distributed Titles
                (Licensed Products that are only distributed
                electronically):

            	
              50%
                of Net Receipts

            
	
              3)
                Back-Catalog
                Titles
                (Licensed Products that have been, but are no longer, distributed
                via
                usual and customary videogame channels, and whose sales figures are
                no
                longer reported by NPD):

            	
              50%
                of Net Receipts

            

    

    

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

     

    EXHIBIT
      D

    PROMOTIONAL
      OPPORTUNITIES FOR LICENSED PRODUCTS

    

     

    N/A

     

    
      
         

      

      
        -14-Exhibit 10.1 

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”) is entered into as of February 6, 2006, by and between DAG Media, Inc., a New York corporation (“Seller”), and DAG-Jewish Directories, Inc., a New York corporation (“Buyer”). Buyer and Seller are collectively referred to as the “Parties” or individually as a “Party”.

WITNESSETH

WHEREAS, Seller is a publicly traded corporation engaged in the business of creating, publishing and distributing yellow pages classified business telephone Directories Business known as “The Jewish Israeli Yellow Pages” and “The Jewish Master Guide” (aka “The Kosher Yellow Pages”) and related Web site and referral service (“Directories Business”); and 

WHEREAS, Buyer is a corporation founded by a group of sales agents and investors engaged in the business of promoting and selling, on behalf of Seller and in Seller’s name, listings and advertising spaces in the Directories Business; and

WHEREAS,  Seller desires to sell, transfer and assign to Buyer, and Buyer desires to purchase from Seller all of the identified below assets (“Purchased Assets”) used by Seller in connection with the conduct and operation of its Directories Business and subject to the assumption by Buyer of certain liabilities of Seller as defined; 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Parties hereto agree as follows: 

ARTICLE I

 

PURCHASE AND SALE OF ASSETS

1.1          Conditional Sale of Assets.  Upon the terms and subject to the conditions set forth in this Agreement and the performance by the Parties hereto of their respective obligations hereunder, Seller agrees to sell, assign, transfer and deliver to Buyer, and Buyer agrees to purchase from Seller, Seller’s right, title and interest in and to the properties and assets of Seller used in the Directories Business, including the following (collectively the “Purchased Assets”):

(a)          All tangible assets including but not limited to furniture and fixtures, tools, machines, computers, software, assets, inventory, supplies, files, telephones, account receivable, account payables and office equipment  as are set forth on Schedule 1; 

(b)          All trade names, domain names, trademarks, copyrights, trade secrets and any other intellectual property as are set forth on Schedule 2;  

(c)          All the intangible assets, such as software, literature, manuals, training materials, product brochures, business methods, procedures and customer lists of the Directories Business as are set forth on Schedule 3; 

 

 

(d)          All of Seller’s rights and obligations under contracts wherein Seller has agreed to provide products or services to any third party or under which any third party provides products, services, insurances, financing, real estate or equipment to Seller, and any leases for equipment, automobiles, land or buildings used by the Business (“Assumed Contracts”) as are set forth on Schedule 4; and

(e)          All documents and information relating to the Directories Business, for the past five (5) years, including, without limitation, customer lists and all books and records relating to the operations of the Business. 

1.2          All Assets.  The Purchased Assets constitute all of the material assets and properties held for use by Seller to conduct the Directories Business as presently conducted.

1.3          Assumed Liabilities.  (a)  Buyer will accept and assume all liabilities and obligations of Seller related to the Directories Business, and any obligations or liabilities relating to the Purchased Assets, including, but not limited to, all liabilities set forth on the Balance Sheet of the Directories Business dated as of the Closing, the assumption of the performance of Seller’s obligations under the Assumed Contracts.

(b)          Buyer will assume all pending and new litigations arising in the regular course of business, including all legal fees and related judgment obligations.  Specifically Buyer will assume:

(i)           All advertisers’ claims relating to their advertising on the Directories Business, including, without limitation, small claims court matters pending as of the date of Closing or new cases related to matters before or after the Closing.

(ii)          The currently pending legal action of the Jewish Sephardic Yellow Pages against DAG Media in the U.S. District Court for the Eastern District Of New York. Assaf Ran, CEO of Seller, will use reasonable efforts to cooperate with Buyer on and after the Closing Date in furnishing information, evidence and testimony in connection with this action. Assaf Ran will lead the defense strategy and is authorized by Buyer and Seller to negotiate and make settlement agreement. 

(c)          Buyer shall make timely payment of all liabilities and obligations related this Agreement.

1.4          The Closing.  The closing of the transactions contemplated by this Agreement will take place at the offices of Seller, 125-10 Queens Blvd., Suite 14, Kew Gardens, NY 11415, on the date when all of the conditions set forth in Section 1.10 have been satisfied, but no later than 11:00 A.M., March 31, 2006 (which time and place are designated as the “Closing”). 

1.5          Conditional Transfer of Subject Assets.  (a)  Simultaneously with the Execution hereof, Seller will deliver or cause to be delivered to a mutually agreed escrow agent (“Escrow Agent”), pursuant to the terms of the Escrow Agreement in the form to be agreed upon by the Parties hereto prior to the Closing, instruments of transfer transferring to Buyer title to all of the Purchased Assets, together with all required consents.  Such instruments of transfer will include (a) an executed Bill of Sale, in the form to be agreed upon by the Parties hereto prior to the 

 

 

Closing, (b) executed trademark assignments for filing with the United States Patent and Trademark Office assigning to Buyer the trademarks set forth on Schedule 2, in the form to be agreed upon by the Parties hereto prior to the Closing, (c) executed Assignment and Assumption Agreement, in the form to be agreed upon by the Parties hereto prior to the Closing, (d) executed Transition Services Agreement, in the form to be agreed upon by the Parties hereto prior to the Closing, (e) executed Services Agreement, in the form to be agreed upon by the Parties hereto prior to the Closing, (f) executed Consulting Services Agreement, in the form to be agreed upon by the Parties hereto prior to the Closing, (g) executed Note, in the form to be agreed upon by the Parties hereto prior to the Closing, (h) executed Security Agreement, in the form to be agreed upon by the
Parties hereto prior to the Closing, and (i) any other instruments of transfer or assignment necessary to transfer ownership of the domain names and all other proprietary rights set forth on Schedule 2 to Buyer.  Such instruments of transfer will effectively vest in Buyer good and marketable title to all of the Purchased Assets.

(b)          Upon Buyer’s full and timely payment of the Purchase Price to Seller, as defined hereunder, the Escrow Agent shall release to Buyer all instrument of transfer to the Purchased Assets. 

(c)          In the event Buyer defaults on any of its payments to Seller, as defined hereunder, the Escrow Agent shall release all instrument of transfer to the Purchased Assets to Seller. 

1.6          Purchase Price.  The consideration for the Purchased Assets shall be the sum of $875,000, plus assumption by Buyer of all accounts payable and Assumed Liabilities (“Purchase Price”).  The Purchase Price shall be paid as follows: 

	
             
 	
            (a)
 	
            $291,667.00 payable in cash at Closing.
 

(b)          the balance of $613,333.00 paid in 24 consecutive monthly installments of $25,556.00 each, bearing 5% interest per annum, to be paid on the first of each month,, in accordance with the terms of the promissory note (the “Note”) in the form to be agreed upon by the Parties hereto prior to the Closing; and

(c)          The Note shall be secured by all of the current and future assets of the Buyer in accordance with the terms of the Security Agreement in the form to be agreed upon by the Parties hereto prior to the Closing.

	
             
 	
            1.7
 	
            Buyer Limitations.
 

(a)          From the date of Closing until full and complete payment of the Purchase Price to Seller, Buyer will not transfer, assign, mortgage, pledge or encumber any of the Purchased Assets.

(b)          From the date of Closing until the full and complete payment of the Purchase Price to Seller, Buyer will not enter into any contract or commitment or take any other action that might, in any way, otherwise compromise the Purchased Assets.

 

 

 

 

1.8          Further Assurance.  Seller, from time to time after the Closing, at the reasonable request of Buyer and without further consideration, will execute and deliver further instruments of transfer and assignment and take such other action as Buyer may reasonably request (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any governmental authority or any other person) to effectively transfer and assign to, and vest in, Buyer the Purchased Assets.

1.9          Sales and Transfer Taxes.  All sales, transfer, use, recordation, documentary, stamp and excise taxes (including any real estate transfer taxes) under applicable law incurred in connection with this Agreement or the transactions contemplated hereby will be borne and paid by Buyer.  

1.10       Closing Deliverables.  At the Closing, the Parties shall deliver to each other the following:

	
             
 	
            (a)
 	
            the closing deliverables set forth in Section 1.5 above;
 

(b)          all necessary consents or assignments for all material contracts as set forth on Schedule 5 attached hereto have been obtained; and

(c)          all authorizations that are necessary for the Buyer to conduct the Business substantially as conducted by the Seller as of the date of this Agreement.

	
             
 	
            1.11
 	
            Closing Conditions.  The Closing shall be conditioned upon the following:
 

(a)          the requisite approval by the shareholders of the Seller obtained at a Special Meeting of Shareholders to be held as soon as reasonably practicable after the date hereof, pursuant to a proxy statement prepared by the Seller in its sole discretion;

(b)          the receipt of a fairness opinion from Empire Valuation Consultants, LLC; and

(c)          a review of the tax and accounting treatment of the transaction by the Seller’s independent registered public accounting firm.

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF SELLER

As a material inducement to Buyer to enter into this Agreement, Seller represents and warrants to Buyer as follows.  

2.1          Organization.  Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of New York with full power and authority to conduct its business as it is now conducted and to own, lease and operate its properties and assets.  

2.2          Required Action.  This Agreement and the transactions contemplated hereby are subject to approval by the Board of Directors and by shareholders of Seller.  Upon approval by 

 

 

Seller’s Board and shareholders, Seller has full right, authority, power and capacity to execute and deliver this Agreement and each agreement, document and instrument to be executed and delivered by or on behalf of it pursuant to, or as contemplated by this Agreement (collectively, the “Seller Documents”) and to carry out the transactions contemplated hereby and thereby.  This Agreement and each other Seller Document constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of Seller, enforceable against each of them in accordance with its respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws and judicial decisions of general application relating to or affecting the enforcement of creditors’ rights generally or by general equitable
principles and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

2.3          No Conflict.  The execution, delivery and performance by Seller of this Agreement and each other Seller Document does not and will not violate any provision of its certificates of incorporation or by-laws.

2.4          Disclosure. Seller has disclosed to Buyer all material information to which Seller has notice or knowledge relating to Seller and the Purchased Assets, which could reasonably be expected to have a material adverse effect on Buyer’s operation of the Purchased Assets.

2.5          Consents.  No approval or consent from any person or entity not a party to this Agreement is required to be obtained or made by Seller in connection with the execution and delivery of this Agreement and the Seller Documents and the consummation of the transactions contemplated hereby and thereby.

ARTICLE III           

 

REPRESENTATIONS AND WARRANTIES OF BUYER

As a material inducement to Seller entering into this Agreement, Buyer hereby represents and warrants to Seller as follows: 

3.1          Organization.  Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of New York with full power and authority to conduct its business as it is now conducted and to own, lease and operate its properties and assets. 

3.2          Required Action.  All actions and proceedings necessary to be taken by or on the part of Buyer in connection with the transactions contemplated by this Agreement have been duly and validly taken, and this Agreement has been duly and validly authorized, executed and delivered by Buyer, without default under or violation of any agreement, commitment or understanding to which it is a party.  This Agreement and the transactions contemplated hereby have been approved by the board of directors of Buyer.  Buyer has full right, authority, power and capacity to execute and deliver this Agreement and each agreement, document and instrument to be executed and delivered by or on behalf of it pursuant to, or as contemplated by this Agreement (collectively, the
“Buyer Documents”) and to carry out the transactions contemplated hereby and thereby. This Agreement and each other Buyer Document constitutes, or when executed and delivered will constitute, the legal, valid and binding obligations of Buyer 

 

 

enforceable in accordance with its respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws and judicial decisions of general application relating to or affecting the enforcement of creditors’ rights generally or by general equitable principles and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

3.3          No Conflict.  The execution, delivery and performance by Buyer of this Agreement and each other Buyer Document does not and will not violate any provision of its certificate of incorporation or by-laws. 

3.4          Consents.  No approval or consent from any person or entity not a party to this Agreement is required to be obtained or made by Buyer in connection with the execution and delivery of this Agreement and the Buyer Documents and the consummation of the transactions contemplated hereby and thereby.

3.5          Due Diligence.  Buyer is intimately familiar with all aspects of the Directories Business of Seller including, without limitation, its performance, employees, customers, vendors and financials. Furthermore, Buyer had reviewed all relevant information, had access to Seller’s records and management and, in general, completed a thorough due diligence of the Directories Business.

ARTICLE IV           

 

INDEMNIFICATION AND COOPERATION

	
             
 	
            4.1
 	
            Indemnification by Seller.
 

(a)          Seller hereby agrees to indemnify and hold harmless Buyer, its affiliates and its and their respective officers, directors, employees, and agents, (individually, an “Indemnified Party” and collectively, “Indemnified Parties”) against and in respect of all losses, liabilities, obligations, damages, deficiencies, actions, suits, proceedings, demands, assessments, orders, judgments, costs and expenses (including the reasonable fees, disbursements and expenses of attorneys and consultants) of any kind or nature whatsoever (collectively, “Damages”), to the extent sustained, suffered or incurred by or made against any Indemnified
Party, based upon, arising out of or in connection with:

(i)           any breach of any covenant or agreement made by Seller in this Agreement; or

(ii)          any breach of any representation or warranty made by Seller in this Agreement.

(b)          Buyer will give prompt written notice to Seller of any claim for indemnification hereunder, specifying to the extent known the amount and nature of the claim, and any matter which in Buyer’s opinion is likely to give rise to an indemnification claim.  The failure of Buyer to so notify Seller of any such action shall not relieve Seller from any liability which it may have to Buyer (i) other than pursuant to this Section 4.1 or (ii) under this Section 4.1 unless, and only to the extent that, such failure to notify results in the forfeiture of substantive 

 

 

rights or defenses or otherwise materially and adversely affects Seller.  Seller will have the right to control the defense through counsel of their choosing.  Buyer will have the right to the extent of its interests to participate on its own behalf and at its own expense in such matter or its settlement through counsel of its choosing.  Seller agrees that it will not, without the prior written consent of Buyer, which consent shall not be unreasonably withheld, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated hereby (if Buyer is a party thereto) unless such settlement, compromise or consent includes an unconditional release of Buyer from all liability arising or that may arise out of such claim, action or proceeding.  Seller shall not be liable for any settlement of any claim, action or proceeding affected
against Buyer without the prior written consent of Seller, which consent shall not be unreasonably withheld.  The rights accorded to Buyer hereunder shall be in addition to any rights Buyer may have at common law, by separate agreement or otherwise.  

(c)          Seller shall not be liable for any Loss or Losses pursuant to this section (i) unless and until the aggregate amount of all Buyer Losses incurred by the Buyer Indemnitees exceeds $25,000, in which event Seller shall be liable for all Buyer Losses in excess of $25,000, and (ii) to the extent that Buyer Losses exceed $291,000 in the aggregate; provided, however, nothing contained in this section shall be deemed to limit or restrict in any manner any rights or remedies which Buyer has, or might have, at Law, in equity or otherwise, based on fraud.

	
             
 	
            4.2
 	
            Indemnification by Buyer.
 

(a)          Buyer hereby agrees to indemnify and hold harmless Seller, its affiliates and its and their respective officers, directors, employees, and agents, (individually, an “Indemnified Party” and collectively, “Indemnified Parties”) against and in respect of all losses, liabilities, obligations, damages, deficiencies, actions, suits, proceedings, demands, assessments, orders, judgments, costs and expenses (including the reasonable fees, disbursements and expenses of attorneys and consultants) of any kind or nature whatsoever (collectively, “Damages”), to the extent sustained, suffered or incurred by or made against any Indemnified
Party, based upon, arising out of or in connection with:

(i)           any breach of any covenant or agreement made by Buyer in this Agreement;

(ii)          any breach of any representation or warranty made by Buyer in this Agreement; or

(iii)         any obligations assumed hereunder relating to the Directories Business, the Purchased Assets and or the Assumed Liabilities.

(b)          Seller will give prompt written notice to Buyer of any claim for indemnification hereunder, specifying to the extent known the amount and nature of the claim, and any matter which in Seller’s opinion is likely to give rise to an indemnification claim.  The failure of Seller to so notify Buyer of any such action shall not relieve Buyer from any liability which it may have to Seller (i) other than pursuant to this Section 4.2 or (ii) under this Section 4.2 unless, and only to the extent that, such failure to notify results in the forfeiture of substantive 

 

 

rights or defenses or otherwise materially and adversely affects Buyer.  Buyer will have the right to control the defense through counsel of their choosing.  Seller will have the right to the extent of its interests to participate on its own behalf and at its own expense in such matter or its settlement through counsel of its choosing.  Buyer agrees that it will not, without the prior written consent of Seller, which consent shall not be unreasonably withheld, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated hereby (if Seller is a party thereto) unless such settlement, compromise or consent includes an unconditional release of Seller from all liability arising or that may arise out of such claim, action or proceeding.  Buyer shall not be liable for any settlement of any claim, action or proceeding affected
against Seller without the prior written consent of Buyer, which consent shall not be unreasonably withheld.  The rights accorded to Seller hereunder shall be in addition to any rights Seller may have at common law, by separate agreement or otherwise.  

4.3          Post-Closing Cooperation.  To the extent reasonably requested by Buyer and at Buyer’s expense, Seller will use reasonable efforts to cooperate with Buyer on and after the Closing Date in furnishing information, evidence and testimony in connection with any actions, proceedings, arrangements or disputes of any nature with respect to matters pertaining to all periods prior to the Closing Date.  

4.4          Knowledge.  An Indemnitee’s right to indemnification or other remedies based upon the representations and warranties and covenants and agreements of the Indemnitor will be affected by any knowledge of the Indemnitee or any waiver by the Indemnitee of any condition based on the accuracy of any representation or warranty, or compliance with any covenant or agreement.  Such representations and warranties and covenants and agreements shall be deemed waived by Indemnitee by reason of the fact that the Indemnitee knew that any representation or warranty of Indemnitor might be inaccurate or that the Indemnitor failed to comply with any agreement or covenant.

ARTICLE V

 

COVENANTS

	
             
 	
            5.1
 	
            Buyer Non-compete.
 

During the period commencing on the Closing and for five years thereafter, Buyer or its affiliates, each agree that, it will not, in any manner, directly or indirectly, (i) compete with Seller in the business of its new subsidiary, DAG Interactive, Inc., online system for matching customers with businesses,  and will not, directly or indirectly, own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be employed by or connected in any manner with any corporation, firm, entity, or business that is so engaged unless duly authorized by written consent of the Seller, (ii) persuade or attempt to persuade any employee, salesperson or agent of the Seller to leave the employ of the Seller or to become employed by or to provide services to any other entity, (iii) persuade or attempt to persuade any current client or former client to reduce the
amount of business it does or intends or anticipates doing with the Seller or with any affiliate of the Seller.

 

 

 

 

	
             
 	
            5.2
 	
            Seller Non-compete.
 

During the period commencing on the Closing and for five years thereafter, Seller or its affiliates, each agree that, it will not, in any manner, directly or indirectly, (i) compete with Buyer in the Directory Business, and will not, directly or indirectly, own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be employed by or connected in any manner with any corporation, firm, entity, or business that is so engaged unless duly authorized by written consent of the Buyer, (ii) persuade or attempt to persuade any employee, salesperson or agent of the Buyer to leave the employ of the Buyer or to become employed by or to provide services to any other entity, (iii) persuade or attempt to persuade any current client or former client to reduce the amount of business it does or intends or anticipates doing with the Buyer or with any affiliate
of the Buyer.

	
             
 	
            5.3
 	
            Taxes.
 

 

The Buyer will pay and is responsible for all federal, state and local taxes relating to the Directories Business that are incurred and remain unpaid as of the Closing.

ARTICLE VI

 

TERMINATION

	
             
 	
            6.1
 	
            Termination.
 	
             

	
             
 	
            (a)
 	
            This Agreement may be terminated at any time prior to the Closing:
 
	
             
 	
            (i)
 	
            by mutual written consent of Buyer and Seller;
 	
             

	
             
 	
            (ii)
 	
            by Buyer or Seller if:
 	
             

								

(A)         the Closing does not occur on or before March 31, 2006; provided that the right to terminate this Agreement under this clause (ii)(A) shall not be available to any party whose breach of a representation, warranty, covenant or agreement under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date; or

(B)         a Governmental Entity shall have issued an Order or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, which Order or other action is final and non-appealable;

	
             
 	
            (iii)
 	
            by Buyer if:
 

(A)         there has been a breach by Seller of any representation, warranty, covenant or agreement contained in this Agreement or the Seller Disclosure Schedule, or if any representation or warranty of Seller shall have become untrue, in either case such that the conditions set forth in this Agreement would not be satisfied; or

 

 

 

 

	
             
 	
            (iv)
 	
            by Seller if:
 

(A)         any condition to the obligations of Seller hereunder becomes incapable of fulfillment other than as a result of a breach by Seller of any covenant or agreement contained in this Agreement, and such condition is not waived by Seller;

(B)         there has been a breach by Buyer of any representation, warranty, covenant or agreement contained in this Agreement or the Buyer Disclosure Schedule, or if any representation or warranty of Buyer shall have become untrue, in either case such that the conditions set forth in this Agreement would not be satisfied;

(C)         the Seller does not receive the requisite shareholder approval at its Special Meeting of Stockholders or it receives dissenters rights in excess of 20% of the then outstanding stock of the Seller;

(D)         the Seller does not receive a fairness opinion from Empire Valuation Consultants, LLC; or

(E)         At any time prior to the Seller stockholder approval, if: (1) a Superior Proposal (as define below) is made to Seller and is not withdrawn; (2) Seller shall have provided at least three business days’ prior written notice to the buyer stating (a) that it has received a Superior Proposal, (b) the terms and conditions of such Superior Proposal and the identity the person making such Superior Proposal, and (c) that it intends to terminate this Agreement; (3) the Buyer shall not have, within such three business day period, made an offer that the Board of Directors of the Seller by a majority vote determines in its good faith judgment (based on the written advice of its financial advisor) to be at least as favorable to the Seller and its stockholders as such Superior Proposal (it being agreed that
the Board of Directors of Seller shall convene a meeting to consider any such offer by the Buyer promptly following the receipt thereof and that Seller shall not enter into any such binding agreement during such three business day period); and (4) the Board of Directors of Seller concludes in good faith, after consultation with its outside legal counsel, that, in light of such Superior Proposal, the failure of the Board of Directors to accept such Superior Proposal would result in a breach of its fiduciary obligations to the Seller’s stockholders under applicable Law.  “Superior Proposal” means, with respect to the Seller, an unsolicited written bona fide third party proposal pursuant to which a person (or its stockholders) would own, if consummated, all or substantially all of the outstanding capital stock of such party (or of the surviving entity in a merger or the direct or indirect parent of the surviving entity in a
merger) or all or substantially all the assets of such party and its subsidiaries taken as a whole on terms that the Board of Directors of such party determines, in its good faith judgment (based on the written advice of a financial advisor), to be more favorable to such party’s stockholders from a financial point of view than the terms of the current transaction and with any financing required to consummate the transaction contemplated by such third party proposal committed or likely, in the good faith judgment of the Board of Directors of such party (based on the written advice of a financial advisor), to be obtained by such third party on a timely basis.  

(b)          The party desiring to terminate this Agreement pursuant to clause this section shall give written notice of such termination to the other party hereto. 

 

 

 

 

6.2          Effect of Termination.  In the event of termination of this Agreement as provided in this section, this Agreement shall immediately become null and void and there shall be no Liability or obligation on the part of Seller or Buyer or their respective officers, directors, stockholders or Affiliates; provided, however, the provisions of Section 8.11 (Public Announcements) and Section 6.3 (Remedies) and Article VIII of this Agreement shall remain in full force and effect and survive any termination of this Agreement.

6.3          Remedies.  As a result of a termination of this Agreement pursuant to this Article VI, each Party shall bear its own costs and expenses incurred in connection with the transactions contemplated by this Agreement; provided, however, any party terminating this Agreement pursuant to this section shall have the right to recover damages sustained by such party only as a result of any breach by the other party of any representation, warranty, covenant or agreement contained in this Agreement or fraud or willful misrepresentation; and provided, further, that the party seeking relief is not in breach of any representation, warranty, covenant or agreement contained in this Agreement under circumstances which would have permitted the other party to terminate the Agreement
under this section.

ARTICLE VII

 

NOTICES

7.1          All notices and other communications required to be given hereunder, or which may be given pursuant or relative to the provisions hereof, will be in writing and will be deemed to have been given when delivered in hand or mailed, postage prepaid, by first class United States mail, certified return receipt requested as follows:

If to Seller:

 

DAG Media, Inc.

Attn:  Assaf Ran, CEO

 

If to Buyer:

 

DAG Jewish Directories, Inc.

Attn:  Geman Katsnelson

 

or to such other substitute address as designated by the applicable Party in a written notice provided in accordance with this Article VII.

 

ARTICLE VIII

 

MISCELLANEOUS

8.1          Assignability; Effect.  This Agreement will not be assignable by Buyer, Seller except with the written consent of the other Parties, which consent will not be unreasonably 

 

 

delayed or withheld.  This Agreement will be binding upon and will inure to the benefit of the Parties hereto and their respective successors and assigns.

8.2          Headings.  The subject headings used in this Agreement are included for purposes of convenience only and will not affect the construction or interpretation of any of its provisions.

8.3          Amendments; Waivers.  This Agreement may not be amended or modified, nor may compliance with any condition or covenant set forth herein be waived, except by a writing duly and validly executed by Buyer and Seller or, in the case of a waiver, the party waiving compliance. No delay on the part of any Party in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of any Party of any such right, power or privilege, or any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege.

8.4          Entire Agreement.  This Agreement, together with the schedules, attachments and exhibits hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes and cancels any and all prior or contemporaneous arrangements, understandings and agreements between them relating to the subject matter hereof.

8.5          Severability.  In the event that any provision or any portion of any provision of this Agreement will be held to be void or unenforceable, then the remaining provisions of this Agreement (and the remaining portion of any provision held to be void or unenforceable in part only) will continue in full force and effect.

8.6          Governing Law.  This Agreement and the transactions contemplated hereby will be governed and construed in accordance with the internal laws of the State of New York without giving application to conflicts of laws provisions thereof, and the Parties hereto hereby submit to the exclusive jurisdiction of the state and federal courts residing in the State of New York.

8.7          Counterparts.  This Agreement may be executed in two or more counterparts, each of which will be deemed an original and all of which will constitute the same instrument.

8.8          Expenses.  Each Party will pay its own expenses incident to the negotiation, preparation and performance of this Agreement and the transactions contemplated hereby, including all fees and expenses of its counsel and accountants for all activities of such counsel and accountants undertaken pursuant to this Agreement, whether or not the transactions contemplated hereby are consummated.

8.9          Interpretation.  Whenever the words “include,” “includes,” or “including,” are used in this Agreement, they will be deemed to be followed by the words “without limitation.”  Reference to a Party’s “knowledge” means that Party’s actual knowledge.

8.10       Dispute Resolution.  The parties will use commercially reasonable efforts to resolve any dispute, controversy or claim arising out of or relating to this Agreement, or the breach thereof.  Any such dispute, controversy or claim which the parties are unable to resolve will be submitted to arbitration under the commercial arbitration rules of the American 

 

 

Arbitration Association, with the location for arbitration in New York, New York.  Notwithstanding the foregoing, the parties will be entitled to apply to the courts for mandatory or injunctive equitable relief in respect to a violation of this Agreement which would cause irreparable harm for which no adequate remedy at law exists.  

8.11       Publicity.  Buyer shall not, without the prior written consent of Seller, issue any publicity release or announcement or otherwise make any public disclosure concerning this Agreement or the transactions contemplated hereby. Buyer acknowledges that Seller is a publicly traded corporation and as such subject to certain disclosures and filings, including information related to this Agreement.

 

 

 

 

IN WITNESS WHEREOF, Seller and Buyer have caused this Asset Purchase Agreement to be executed as of the date first above written.

 

DAG – Jewish Directories, Inc.

 

 

	
             
 	
            By:                                          
            
 	
            and By:_____________________________
 
	
             
 	
            Name: Gary Katsnelson
 	
            Name: Avi Shefi
 	
             

	
             
 	
            Title:  Co- President
 	
            Title: Co-President
 	
             

							

 

 

DAG Media, Inc.

 

By:                                          
          

	
             
 	
            Name: Assaf Ran
 

Title: CEO

 

 

 

 

LIST OF EXHIBITS AND SCHEDULES

 

EXHIBITS

 

Exhibit A - Form of Bill of Sale

Exhibit B - Form of Trademark Assignment

Exhibit C - Form of Contract Assignment

 

SCHEDULES

 

	
            Schedule 1
 	
            Assets
 	
             

	
            Schedule 2
 	
            Trade Names and Copyright
 
	
            Schedule 3
 	
            Intangible Assets
 	
             

	
            Schedule 4
 	
            Assumed Contracts

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]