Document:

THIS
      COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
      COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH
      SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
      COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT,
      OR
      (C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES
      LAWS.

    
 

     

    a21,
      Inc.

     

    FORM
      OF

     

    COMMON
      STOCK PURCHASE WARRANT

     

    Number
      of
      shares: ________

     

    Holder:
      _________

     

    Expiration
      Date: May 15, 2010

     

    Exercise
      Price per Share: $1.00

     

    a21,
      Inc., a company organized and existing under the laws of the State of Texas
      (the
“Company”),
      hereby certifies that, for value received,_______________, or its registered
      assigns (the “Warrant
      Holder”),
      is
      entitled, subject to the terms set forth below, to purchase from the Company
      ___________ shares (the “Warrant
      Shares”)
      of
      common stock, $0.001 par value (the “Common
      Stock”),
      of
      the Company (each such share, a “Warrant Share” and all such shares, the
“Warrant
      Shares”)
      in
      exchange for (a) one (1) Warrant and (b) $1.00 per Warrant Share (as adjusted
      from time to time as provided in Section 7 (the “Exercise
      Price”),
      at
      any time and from time to time from and after the date thereof and through
      and
      including 5:00 p.m. New York City time on May 15, 2010 (the “Expiration
      Date”),
      subject to the following terms and conditions:

     

    1.  Registration
      of Warrant.
      The
      Company shall register this Warrant upon records to be maintained by the Company
      for that purpose (the “Warrant
      Register”),
      in
      the name of the record Warrant Holder hereof from time to time. The Company
      may
      deem and treat the registered Warrant Holder of this Warrant as the absolute
      owner hereof for the purpose of any exercise hereof or any distribution to
      the
      Warrant Holder, and for all other purposes, and the Company shall not be
      affected by notice to the contrary.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.  Investment
      Representation.
      The
      Warrant Holder by accepting this Warrant represents that the Warrant Holder
      is
      acquiring this Warrant for its own account or the account of an affiliate for
      investment purposes and not with the view to any offering or distribution and
      that the Warrant Holder will not sell or otherwise dispose of this Warrant
      or
      the underlying Warrant Shares in violation of applicable securities laws. The
      Warrant Holder acknowledges that the certificates representing any Warrant
      Shares will bear a legend indicating that they have not been registered under
      the Securities Act of 1933, as amended (the “1933
      Act”)
      and
      may not be sold by the Warrant Holder except pursuant to an effective
      registration statement or pursuant to an exemption from the registration
      requirements of the 1933 Act and in accordance with federal and state securities
      laws. 

     

    3.  Validity
      of Warrant and Issue of Shares.
      The
      Company represents and warrants that this Warrant has been duly authorized
      and
      validly issued and warrants and agrees that all the shares of Common Stock
      that
      may be issued upon the exercise of the rights represented by this Warrant will,
      when issued upon such exercise, be duly authorized, validly issued, fully paid
      and nonassessable and free from all taxes, liens and charges with respect to
      the
      issue thereof. The Warrant Holder understands that the Company does not
      currently have a sufficient number of authorized shares of its Common Stock
      available to issue upon exercise of this Warrant. The Company hereby agrees
      to
      use commercially reasonable efforts to increase the number of its authorized
      shares of Common Stock to cover the number of shares of Common stock that would
      be issuable upon exercise of the Warrant. After such increase in its authorized
      shares of Common Stock, the Company agrees that during the period within which
      the rights represented by this Warrant may be exercised, the Company will at
      all
      times have authorized and reserved a sufficient number of shares of Common
      Stock
      to provide for the exercise of the rights represented by this
      Warrant.

     

    4.  Registration
      of Transfers and Exchange of Warrants.

     

    a.  Subject
      to compliance with the legend set forth on the face of this Warrant, the Company
      shall register the transfer of any portion of this Warrant in the Warrant
      Register upon surrender of this Warrant with the Form of Assignment attached
      hereto duly completed and signed, to the Company at the office specified in
      or
      pursuant to Section 11 hereof. Upon any such registration or transfer, a new
      warrant to purchase Common Stock, in substantially the form of this Warrant
      (any
      such new warrant, a “New
      Warrant”),
      evidencing the portion of this Warrant so transferred shall be issued to the
      transferee and a New Warrant evidencing the remaining portion of this Warrant
      not so transferred, if any, shall be issued to the transferring Warrant Holder.
      The acceptance of the New Warrant by the transferee thereof shall be deemed
      the
      acceptance of such transferee of all of the rights and obligations of the New
      Warrant.

     

    b.  This
      Warrant is exchangeable, upon the surrender hereof by the Warrant Holder to
      the
      office of the Company specified in Section 11 hereof for one or more New
      Warrants, evidencing in the aggregate the right to purchase the number of
      Warrant Shares which may then be purchased hereunder. Any such New Warrant
      will
      be dated the date of such exchange.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.  Exercise
      of Warrants.

     

    a.  Upon
      surrender of this Warrant with the Form of Election to Purchase attached hereto
      duly completed and signed to the Company, at its address set forth in Section
      11
      hereof, and upon payment and delivery of the Exercise Price per Warrant Share
      multiplied by the number of Warrant Shares that the Warrant Holder intends
      to
      purchase hereunder, in lawful money of the United States of America, in cash,
      by
      certified or official bank check to the Company, or with a reduction in the
      aggregate principal amount of notes of the Company or any of the Company’s
      subsidiaries made in favor of the Warrant Holder (as specified by the Warrant
      Holder in the Form of Election to Purchase), the Company shall promptly issue
      and deliver to or, upon the written order of the Warrant Holder, in such name
      or
      names as the Warrant Holder may designate (subject to the restrictions on
      transfer described in the legend set forth on the face of this Warrant), a
      certificate for the Warrant Shares issuable upon such exercise, with such
      restrictive legend as required by the 1933 Act. Any person so designated by
      the
      Warrant Holder to receive Warrant Shares shall be deemed to have become the
      holder of record of such Warrant Shares as of the Date of Exercise of this
      Warrant. In the event that the Warrant Holder chooses to exercise this Warrant
      by reducing the aggregate principal amount of notes made by the Company or
      any
      of its subsidiaries in favor of the Warrant Holder, the Warrant Holder shall
      deliver the original note to the Company (provided that the Warrant Holder
      has
      complied with all applicable terms of any escrow agreement pursuant to which
      the
      notes are being held). In addition to issuing the Warrant Shares as described
      above, the Company shall, or shall cause its subsidiary to, issue a new note
      to
      the Warrant Holder with an aggregate principal amount equal to the aggregate
      principal amount of the original note less the exercise price of the Warrant
      attributable to such note. In the event that the Date of Exercise (as defined
      below) is prior to the date that the Company has increased it authorized shares
      of Common Stock to accommodate the exercise of the Warrants, the Warrant Holder
      agrees that the Warrant Holder will not be entitled to receive the Warrant
      Shares issuable to him upon such exercise until such time as the Company has
      increased its number of authorized shares of Common Stock to accommodate the
      exercise of the Warrants, provided that, as promptly as practicable after the
      date the Company has increased its authorized shares of Common Stock to
      accommodate the issuance of the Warrant Shares, the Company shall issue such
      number of Warrant Shares as the Warrant Holder would have been entitled to
      receive on the Date of Exercise.

     

    b.  A
      “Date
      of Exercise”
means
      the date on which the Company shall have received (i) this Warrant (or any
      New
      Warrant, as applicable), with the Form of Election to Purchase attached hereto
      (or attached to such New Warrant) appropriately completed and duly signed,
      and
      (ii) payment of the Exercise Price for the number of Warrant Shares to be
      purchased by the Warrant Holder.

     

    c.  If
      less
      than all of the Warrant Shares which may be purchased under this Warrant are
      exercised at any time, the Company shall issue or cause to be issued, at its
      expense, a New Warrant evidencing the right to purchase the remaining number
      of
      Warrant Shares for which no exercise has been evidenced by this
      Warrant.

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      d.  (i)
        Notwithstanding anything contained herein to the contrary, at any time on
        or
        after May ___, 2009, the holder of this Warrant may, at its election exercised
        in its sole discretion, exercise this Warrant in whole or in part and, in
        lieu
        of making the cash payment otherwise contemplated to be made to the Company
        upon
        such exercise in payment of the aggregate Exercise Price, elect instead to
        receive upon such exercise the “Net
        Number”
of
        shares of Common Stock determined according to the following formula (a
“Cashless
        Exercise”):

    

     

    Net
      Number = (A x (B - C))/B

     

     
      (ii) For purposes of the foregoing formula:

     

    A=
      the
      total number shares with respect to which this Warrant is then being
      exercised.

     

    B=
      the
      average of the last reported sale prices (as reported by Bloomberg) of the
      Common Stock on each of 20 trading days immediately preceding the date of the
      Exercise Notice.

     

    C=
      the
      Warrant Exercise Price then in effect at the time of such exercise.

     

    e.  If
      (i)
      this Warrant has not been exercised in full by the Expiration Date, or (ii)
      the
      Company calls this Warrant pursuant to Section 6, and (iii) the average of
      the
      last reported sale prices (as reported by Bloomberg) of the Common Stock on
      each
      of 20 trading days immediately preceding the date of the Exercise Notice is
      greater than the Exercise Price, then, immediately prior to the Expiration
      Date
      or the date that the Warrant may be repurchased by the Company pursuant to
      Section 6, as applicable, the Warrant Holder shall be deemed to have exercised
      this Warrant pursuant to Section 5(d).

     

    6.  Call
      of Warrant(s) by Company.
      In the
      event that the average of the last reported sale price of the Common Stock
      of
      the Company (as reported by Bloomberg) for a period of twenty consecutive
      trading days is 150% of the Exercise Price, the Company may call the Warrant
      on
      10 days written notice to the Warrant Holder. In the event that the Warrant
      Holder does not fully exercise the Warrant prior to the end of such 10 day
      notice period, the Warrant Holder shall be deemed to have waived such Warrant
      Holder’s right to exercise the Warrant and the Company may repurchase the
      Warrant from the Warrant Holder for a price equal to the product of $.01 and
      the
      number of Warrant Shares the Warrant is exercisable for. If the Company does
      not
      repurchase the Warrant within 30 days from the expiration of the 10 day notice
      period through no fault of the Warrant Holder, the Warrant Holder's right to
      exercise the Warrant will be deemed to be reinstated.

     

    7.  Adjustment
      of Exercise Price and Number of Shares.
      The
      character of the shares of stock or other securities at the time issuable upon
      exercise of this Warrant and the Exercise Price therefore, are subject to
      adjustment upon the occurrence of the following events:

     

    a.  Adjustment
      for Stock Splits, Stock Dividends, Recapitalizations, Etc.
      The
      Exercise Price of this Warrant and the number of shares of Common Stock or
      other
      securities at the time issuable upon exercise of this Warrant shall be
      appropriately adjusted to reflect any stock dividend, stock split, combination
      of shares, reclassification, recapitalization or other similar event affecting
      the number of outstanding shares of stock or securities.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    b.  Adjustment
      for Reorganization, Consolidation, Merger, Etc.
      In case
      of any consolidation or merger of the Company with or into any other
      corporation, entity or person, or any other corporate reorganization, in which
      the Company shall not be the continuing or surviving entity of such
      consolidation, merger or reorganization (any such transaction being hereinafter
      referred to as a "Reorganization"),
      then,
      in each case, the holder of this Warrant, on exercise hereof at any time after
      the consummation or effective date of such Reorganization (the "Effective
      Date"),
      shall
      receive, in lieu of the Warrant Shares issuable upon the exercise of the
      Warrant, the stock and other securities and property (including cash) to which
      such holder would have been entitled upon the Effective Date if such holder
      had
      exercised this Warrant immediately prior thereto (all subject to further
      adjustment as provided in this Warrant).

     

    c.  Certificate
      as to Adjustments.
      In case
      of any adjustment or readjustment in the price or kind of securities issuable
      on
      the exercise of this Warrant, the Company will promptly give written notice
      thereof to the holder of this Warrant in the form of a certificate, certified
      and confirmed by an officer of the Company, setting forth such adjustment or
      readjustment and showing in reasonable detail the facts upon which such
      adjustment or readjustment is based.

     

    8.  Fractional
      Shares.
      The
      Company shall not be required to issue or cause to be issued fractional Warrant
      Shares on the exercise of this Warrant. The number of full Warrant Shares that
      shall be issuable upon the exercise of this Warrant shall be computed on the
      basis of the aggregate number of Warrants Shares purchasable on exercise of
      this
      Warrant so presented. If any fraction of a Warrant Share would, except for
      the
      provisions of this Section 8, be issuable on the exercise of this Warrant,
      the
      Company shall, at its option, (i) pay an amount in cash equal to the Exercise
      Price multiplied by such fraction or (ii) round the number of Warrant Shares
      issuable up to the next whole number.

     

    9.  Lock-up.
      If this
      Warrant is exercised at any time before May 15, 2009 and the Warrant Shares
      issued upon exercise of this Warrant are legally salable or transferable by
      the
      holder thereof at any time after the issuance of the Warrant Shares,
      then:

     

    a.  1/3
      of
      the Warrant Shares issued upon such exercise may be sold or otherwise
      transferred by the holder of the Warrant Shares at any time after
      exercise;

     

    b.  1/3
      of
      the Warrant Shares issued upon such exercise may be sold or otherwise
      transferred by the holder of the Warrant Shares at any time after the three
      month anniversary of the date the Warrant was exercised; and

     

    c.  any
      remaining Warrant Shares issued upon such exercise may be sold or otherwise
      transferred by the holder of the Warrant Shares at any time after the six month
      anniversary of the date the Warrant was exercised.

     

    10.  Registration
      Rights.

     

    a.  Rights
      to Piggyback. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    i)  If
      (and
      on each occasion that) the Company proposes to register any of its securities
      under the 1933 Act, either for the Company’s own account or for the account of
      any of its stockholders (other than pursuant to a Form S-4 or Form S-8 or
      comparable form and other than pursuant to a demand registration right granted
      to other persons to the extent that such rights prohibit the Company from
      including securities of any other person in such registration statement) (each
      such registration not withdrawn or abandoned prior to the effective date thereof
      being herein called a “Piggyback Registration”), the Company will give written
      notice to the Warrant Holder of such proposal not later than the tenth day
      following the receipt by the Company of notice of exercise of any registration
      rights by any persons. 

     

    ii)  Subject
      to the provisions contained in Section 10(b) and in the last sentence of this
      paragraph (ii), (A) the Company will be obligated and required to include in
      each Piggyback Registration all Warrant Shares with respect to which the Company
      shall receive from the Warrant Holder, within 15 days after the date on which
      the Company shall have given written notice of such Piggyback Registration
      to
      the Warrant Holder, the written requests of the Warrant Holder for inclusion
      in
      such Piggyback Registration, and (B) the Company will use commercially
      reasonable efforts in good faith to effect promptly the registration of all
      such
      shares. The Warrant Holder shall be permitted to withdraw all or any part of
      the
      Warrant Shares of the Warrant Holder from any Piggyback Registration at any
      time
      prior to the effective date of such Piggyback Registration unless the Warrant
      Holder shall have entered into a written agreement with the Company’s
      underwriters establishing the terms and conditions under which the Warrant
      Holder would be obligated to sell such securities in such Piggyback
      Registration. The Company will not be obligated or required to include any
      Warrant Shares in any registration effected solely to implement an employee
      benefit plan or a transaction to which Rule 145 of the SEC is
      applicable.

     

    b.  Priority
      on Piggyback Registrations.
      If a
      Piggyback Registration is an underwritten registration, and the managing
      underwriters shall give written advice to the Company of a number of securities
      to which such registration should, in the opinion of the managing underwriters
      of such registration in the light of marketing factors, be limited (the
“Underwriters’ Maximum Number”), then: (i) the Company shall be entitled to
      include in such registration that number of securities which the Company
      proposes to offer and sell for its own account in such registration and/or
      number of securities requested to be included in such registration by persons
      exercising demand registration rights which does not exceed the Underwriters’
Maximum Number; (ii) if the Underwriters' Maximum Number exceeds the number
      of
      securities which the Company proposes to offer and sell for its own account
      in
      such registration, then the Company will be obligated and required to include
      in
      such registration that number of Warrant Shares requested by the Warrant Holder
      to be included in such registration and which does not exceed such excess and
      such securities to be registered shall be allocated pro rata among the Warrant
      Holder on the basis of the number of Warrant Shares requested to be included
      therein by the Warrant Holder and any other person to whom the Company has
      granted piggyback registration rights; (iii) if the Underwriters' Maximum Number
      exceeds the sum of the number of Warrant Shares which the Company shall be
      required to include in such registration pursuant to clause (ii) above and
      the
      number of securities which the Company proposes to offer and sell for its own
      account in such registration, then the Company may include in such registration
      that number of other securities which persons shall have requested be included
      in such registration and which shall not be greater than such
      excess.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    c.  Selection
      of Underwriters.
      In any
      Piggyback Registration, the Company shall have the right to select the
      investment bankers and managing underwriters in such registration.

     

    d.  Right
      to Terminate Registration.
      The
      Company shall have the right to terminate or withdraw any registration initiated
      by it under this Section 10 prior to the effectiveness of such registration
      whether or not the Warrant Holder has elected to include shares in such
      registration.

     

    e.  Other
      Rights of Warrant Holders.
      The
      Company acknowledges that the Warrant Holders have certain other rights relating
      to their registration rights as provided in Sections 8.6 through 8.11 of the
      Merger Agreement, dated as of the date hereof, by and among the Company, AE
      Acquisition Corp., ArtSelect, Inc. (“ASI”), the stockholders of ASI who are
      signatories thereto, and Udi Toledano, the terms of which are incorporated
      by
      reference herein and shall be deemed fully set forth herein.

     

    f.  Registration
      Procedures.
      If and
      whenever the Company is required by the provisions hereof to effect the
      registration of any Warrant Shares under the Securities Act, the Company will,
      as expeditiously as possible:

     

    i)  respond
      as promptly as commercially reasonable to any comments received from the
      Securities and Exchange Commission (the “Commission”), and use its commercially
      reasonable efforts to cause such Piggyback
      Registration to
      become
      effective;

     

    ii)  furnish
      to the Warrant Holder such number of copies of the Piggyback Registration and
      the prospectus included therein as the Warrant Holder reasonably may request
      to
      facilitate the public sale or disposition of the Warrant Shares covered by
      such
      Registration Statement;

     

    iii)  use
      its
      commercially reasonable efforts to register or qualify the Warrant Shares
      covered by such Piggyback Registration under the securities or “blue sky” laws
      of such jurisdictions within the United States as such Warrant Holder may
      reasonably request, provided, however, that the Company shall not for any such
      purpose be required to qualify generally to transact business as a foreign
      corporation in any jurisdiction where it is not so qualified or to consent
      to
      general service of process in any such jurisdiction; and

     

    iv)  list
      the
      Warrant Shares covered by such Piggyback Registration with any securities
      exchange on which the Common Stock of the Company is then listed.

     

    11.  Notice.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been given (i) on the date they are delivered if delivered in
      person; (ii) on the date initially received if delivered by facsimile
      transmission followed by registered or certified mail confirmation; (iii) on
      the
      date delivered by an overnight courier service; or (iv) on the third business
      day after it is mailed by registered or certified mail, return receipt requested
      with postage and other fees prepaid as follows:

     

    If
      to
      the Company:

     

    a21,
      Inc.

    Attention:
      President

    7660
      Centurion Parkway

    Jacksonville,
      FL 32256

    Direct
      Dial: 

    Facsimile:
      

     

    If
      to
      the Warrant Holder:

     

    To
      the
      address on the signature page to this Warrant.:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.  Miscellaneous.

     

    a.  This
      Warrant shall be binding on and inure to the benefit of the parties hereto
      and
      their respective successors and permitted assigns. This Warrant may be amended
      only in writing and signed by the Company and the Warrant Holder.

     

    b.  Nothing
      in this Warrant shall be construed to give to any person or corporation other
      than the Company and the Warrant Holder any legal or equitable right, remedy
      or
      cause of action under this Warrant; this Warrant shall be for the sole and
      exclusive benefit of the Company and the Warrant Holder.

     

    c.  This
      Warrant shall be governed by, construed and enforced in accordance with the
      internal laws of the State of New York without regard to the principles of
      conflicts of law thereof.

     

    d.  The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    e.  In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonably
      substitute therefore, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

     

    f.  The
      Warrant Holder shall not, by virtue hereof, be entitled to any voting or other
      rights of a shareholder of the Company, either at law or equity, and the rights
      of the Warrant Holder are limited to those expressed in this
      Warrant.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    g.  The
      Company will pay, when due and payable, any and all federal and state stamp,
      original issue or similar taxes which may be payable in respect of the
      issue of any Warrant Share or any certificate representing the Warrant Shares.
      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
      the
      authorized officer as of the date first above stated.

    
      	 	 	 
	Company	 
	
               

              a21,
                Inc.
 

            	 
 	 
 
	
              By:
                ______________________________

            	  	 
	 	
            
	
              Name: Thomas
                Butta

            	 
	 	 
	
              Title: President

            	 

    

     

    
      	Warrant
              Holder:	 	 
	 	 
	
               If
                an entity:
 

            	 
 	 
 
	
              Name:
                ____________________________

            	 	 
	  
              By:
                ______________________________

              Name:

              Title:

            	
            
	 	 
	
              If
                an individual:

            	 
	
              ______________________________

            	 
	
              Name:

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    FORM
      OF ELECTION TO PURCHASE

     

    (To
      be
      executed by the Warrant Holder to exercise the right to purchase shares of
      Common Stock under the foregoing Warrant)

     

    To:
      a21,
      Inc.:

     

    In
      accordance with the Warrant enclosed with this Form of Election to Purchase,
      the
      undersigned hereby irrevocably elects to purchase ______________ shares of
      Common Stock (“Common Stock”), $0.001 par value, of a21, Inc. and encloses one
      warrant and $1.00 for each Warrant Share being purchased or an aggregate of
      $________________ in cash or certified or official bank check or checks, which
      sum represents the aggregate Exercise Price (as defined in the Warrant) together
      with any applicable taxes payable by the undersigned pursuant to the
      Warrant.

     

    The
      undersigned requests that certificates for the shares of Common Stock issuable
      upon this exercise be issued in the name of:

     

      
        

      

       

      
        

      

    

     

      
        

      

    

    (Please
      print name and address)

     

      
        

      

    

    (Please
      insert Social Security or Tax Identification Number)

     

    If
      the
      number of shares of Common Stock issuable upon this exercise shall not be all
      of
      the shares of Common Stock which the undersigned is entitled to purchase in
      accordance with the enclosed Warrant, the undersigned requests that a New
      Warrant (as defined in the Warrant) evidencing the right to purchase the shares
      of Common Stock not issuable pursuant to the exercise evidenced hereby be issued
      in the name of and delivered to:

     

     

      
        

      

    

     

      
        

      

       

      
        

      

    

    (Please
      print name and address)

     

    Dated:
      ______________________     
Name
      of
      Warrant Holder:

     

    (Print)
      _____________________________________

     

    (By:)
      ______________________________________

     

    (Name:)
      ____________________________________

     

    (Title:)
      _____________________________________

     

    Signature
      must conform in all respects to name of Warrant Holder as specified on the
      face
      of the WarrantMERGER
        AGREEMENT

       

      MERGER
        AGREEMENT, dated May 15, 2006 (this “Agreement”), by and among a21, Inc., a
        Texas corporation (“Parent”), AE Acquisition Corp., a Delaware corporation
        (“Acquisition Corp.”), ArtSelect, Inc., a Delaware corporation (the “Company”),
        and the common and preferred stockholders of the Company listed on Schedule
        I
        hereto (each, a “Stockholder” and collectively, the “Stockholders”) and Udi
        Toledano (the “Stockholder Representative”).

       

      W
        I T N E
        S S E T H :

       

      WHEREAS,
        the Company is in the business of supplying home and office framed and unframed
        wall décor to retailers, catalogers, membership organizations and consumers
        through both online and traditional retail and wholesale distribution channels
        (the “Business”);

       

      WHEREAS,
        Stockholders constitute owners of at least 95% of the issued and outstanding
        shares of stock of the Company;

       

      WHEREAS,
        Parent owns all of the issued and outstanding shares of capital stock of
        Acquisition Corp.; and

       

      WHEREAS,
        Parent and Acquisition Corp. desire that Acquisition Corp. merge with and
        into
        the Company and, to realize the benefits thereof, the Company and the
        Stockholders also desire that Acquisition Corp. merge with and into the Company,
        upon the terms and subject to the conditions set forth herein and in accordance
        with the General Corporation Law of Delaware, and that the outstanding shares
        of
        preferred stock (Series A and B), par value $.001 per share (the “Company
        Preferred Stock”), of the Company, and the outstanding shares of common stock,
        par value $.001 per share, of the Company (“Company Common Stock”), excluding
        any such shares held in the treasury of the Company, be converted upon such
        merger (the “Merger”) into the right to receive such amount of consideration, as
        is provided herein.

       

      NOW,
        THEREFORE, in consideration of the foregoing and the representations,
        warranties, covenants and agreements herein contained and other good and
        valuable consideration, the receipt and sufficiency of which is hereby
        acknowledged, the parties hereto hereby agree as follows:

       

      ARTICLE
        I

       

      DEFINITIONS

       

      1.1.  Definitions.
        The
        following terms, as used herein, have the following meanings:

       

      “Accounts
        Receivable” has the meaning set forth in Section 3.11.

       

      “Act”
has
        the meaning set forth in Section 3.30(a).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “Action”
        means any action, suit, investigation, hearing or proceeding, including any
        audit for taxes or otherwise.

       

      “Additional
        Agreements” means each of the Escrow Agreement and the Intercreditor
        Agreement.

       

      “Affiliate”
        means, with respect to any Person, any Person directly or indirectly
        controlling, controlled by, or under common control with such other Person.
        With
        respect to any natural person, the term Affiliate shall also include any
        member
        of said person’s immediate family, any family limited partnership, limited
        liability company or other entity for said person and any trust, voting or
        otherwise, of which said person is a trustee or of which said person or any
        of
        said person’s immediate family is a beneficiary.

       

      “Agreement”
        has the meaning set forth in the Preamble.

       

      “Approved
        Image” has the meaning set forth in Section 3.16(d)(iii).

       

      “Acquisition
        Corp.” has the meaning set forth in the preamble.

       

      “Arbitrator”
        has the meaning set forth in Section 11.1(a).

       

      “Assigned
        Receivables” has the meaning set forth in Section 7.4.

       

      “Assumed
        Liabilities” has the meaning set forth in Section 2.3.

       

      “Authority”
        shall mean any governmental, regulatory or administrative body, agency or
        authority, any court or judicial authority, any arbitrator, or any public,
        private or industry regulatory authority, whether international, national,
        Federal, state, or local.

       

      “Books
        and Records” means all books and records, ledgers, employee records, customer
        lists, files, correspondence, and other records of every kind (whether written,
        electronic, or otherwise embodied) owned or used by the Company or in which
        the
        Company’s assets, business, or transactions are otherwise
        reflected.

       

      “Business”
        has the meaning set forth in the Recitals.

       

      “Business
        Day” means any day other than a Saturday, Sunday or a legal holiday on which
        commercial banking institutions in New York are not open for
        business.

       

      “Certificate
        of Merger” has the meaning set forth in Section 2.3.

       

      “Charter
        Documents” has the meaning set forth in Section 3.3.

       

      “Closing
        Balance Sheet” is the balance sheet of the Company prepared as of immediately
        before the Effective Time in accordance with GAAP.

       

      “Closing
        Date” has the meaning set forth in Section 2.10.

       

      “Closing”
        has the meaning set forth in Section 2.10.

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      “Closing
        Payment” has the meaning set forth in Section 2.6(b).

       

      “Code”
        means the Internal Revenue Code of 1986.

       

      “Company”
        has the meaning set forth in the Preamble.

       

      “Company
        Common Stock” has the meaning set forth in the Recitals.

       

      “Company
        Consent” has the meaning set forth in Section 3.9.

       

      “Company
        Indemnitees” has the meaning set forth in Section 11.3.

       

      “Company
        Merger Costs” shall mean the aggregate of all accounting (which shall not
        include regular audit fees), legal, printing, filing, financial advisory
        (including finders’ or investment banking fees), commitments by the Company to
        employees of the Company in the form of stay bonuses, severance, phantom
        stock
        or deemed participation in proceeds from the transactions contemplated hereby
        and other fees and expenses of the Company and Taxes (as hereinafter defined)
        of
        the Company, in each case incurred or anticipated to be incurred in connection
        with the transactions contemplated hereby, all estimated and agreed to by
        the
        parties two business days prior to the Effective Time.

       

      “Company
        Preferred Stock” has the meaning set forth in the Recitals.

       

      “Company
        Securities” means, collectively, the Company Common Stock and the Company
        Preferred Stock.

       

      “Constituent
        Corporations” has the meaning set forth in Section 2.1(a).

       

      “Contracts”
        has the meaning set forth in Section 2.1(e).

       

      “Conversion
        Shares” has the meaning set forth in Section 5.16.

       

      “December
        Balance Sheet” has the meaning set forth in Section 3.10(a).

       

      “Defaulted
        Contract” has the meaning set forth in Section 2.3.

       

      “Effective
        Time” has the meaning set forth in Section 2.4.

       

      “Employment
        Agreements” means the agreements between the Company and each of the persons
        listed on Exhibit 9.3(c).

       

      “ERISA”
        means the Employment Retirement Income Security Act of 1974.

       

      “Escrow
        Fund” has the meaning set forth in Section 2.7.

       

      “Excess
        Net Worth” has the meaning set forth in section 2.8(b).

       

      “Exchange
        Act” means the Securities Exchange Act of 1934.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      “Exchange
        Act Filings” means filings under the Exchange Act made by the Parent prior to
        the Closing Date.

       

      “Exchange
        Agent” means Loeb & Loeb LLP,
        a
        California limited liability partnership.

       

      “Financial
        Statements” has the meaning set forth in Section 3.10(a).

       

      “GAAP”
        means U.S. generally accepted accounting principles, consistently applied
        and
        interpreted.

       

      “Guaranty”
        means the guaranty of Parent given to the holders of the Notes as security
        for
        the payment and performance of all obligations of the Company under the
        Notes.

       

      “Image”
        has the meaning set forth in Section 3.16(d)(ii).

       

      “Indebtedness”
        includes with respect to any Person, (a) all obligations of such Person for
        borrowed money, or with respect to deposits or advances of any kind (including
        amounts by reason of overdrafts and amounts owed by reason of letter of credit
        reimbursement agreements) including with respect thereto, all interests,
        fees
        and costs, (b) all obligations of such Person evidenced by bonds, debentures,
        notes, liens, mortgages or similar instruments, (c) all obligations of such
        Person under conditional sale or other title retention agreements relating
        to
        property purchased by such Person, (d) all obligations of such Person issued
        or
        assumed as the deferred purchase price of property or services (other than
        accounts payable to creditors for goods and services incurred in the ordinary
        course of business), (e) all Indebtedness of others secured by (or for which
        the
        holder of such Indebtedness has an existing right, contingent or otherwise,
        to
        be secured by) any lien or security interest on property owned or acquired
        by
        such Person, whether or not the obligations secured thereby have been assumed,
        (f) all obligations of such Person under leases required to be accounted
        for as
        capital leases under GAAP, and (g) all guarantees by such Person.

       

      “Indemnification
        Notice” has the meaning set forth in Section 11.3(a).

       

      “Indemnified
        Parties” has the meaning set forth in Section 11.3(a).

       

      “Indemnifying
        Party” has the meaning set forth in Section 11.3.

       

      “Intellectual
        Property” has the meaning set forth in Section 3.16(d)(i).

       

      “Intercreditor
        Agreement” means the agreement between Queequeg Partners L.P., as agent and Udi
        Toledano, as agent, specifying the respective priorities of the parties thereto
        in collateral given by the Company as security for its obligations to such
        parties.

       

      “Labor
        Agreements” has the meaning set forth in Section 3.27.

       

      “Law”
        means any domestic or foreign Federal, state, municipality or local law,
        statute, ordinance, code, rule or regulation or common law.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      “Licensed
        Image” has the meaning set forth in Section 3.16(d)(vii).

       

      “Licensed
        Intellectual Property” has the meaning set forth in section
        3.16(c).

       

      “Lien”
        means, with respect to any asset, any mortgage, lien, pledge, charge, security
        interest or encumbrance of any kind in respect of such asset, including any
        agreement to give any of the foregoing and any conditional sale and including
        any voting agreement or proxy.

       

      “Loss(es)”
        has the meaning set forth in Section 11.1.

       

      “March
        Balance Sheet” has the meaning set forth in Section 3.10(a).

       

      “Material
        Adverse Change” means a material adverse change in the business, assets,
        condition (financial or otherwise), liabilities, results of operations or
        prospects of the Business individually or as a whole; provided,
        however,
        without
        prejudicing whether any other matter qualifies as a Material Adverse Change,
        any
        matter individually or in the aggregate involving a loss or payment in excess
        of
        $75,000 shall constitute a Material Adverse Change, per se.

       

      “Material
        Adverse Effect” means a material adverse effect on the business, assets,
        condition (financial or otherwise), liabilities, results of operations or
        prospects of the Business individually or as a whole; provided, however,
        without
        prejudicing whether any other matter qualifies as a Material Adverse Effect,
        any
        matter individually or in the aggregate involving a loss or payment in excess
        of
        $75,000 shall constitute a Material Adverse Effect, per se.

       

      “Merger”
        has the meaning set forth in the Recitals.

       

      “Merger
        Consideration” has the meaning set forth in Section 2.6(a).

       

      “Money
        Laundering Laws” has the meaning set forth in Section 3.35.

       

      “Net
        Worth” means, with respect to the Company, total assets minus total liabilities,
        in each case computed in accordance with GAAP provided that total liabilities
        does not include any liabilities relating to the Company’s Series A and Series B
        Preferred Stock, including any dividends thereon, as shown on the balance
        sheet
        of the Company used to calculate Net Worth.

       

      “Notes”
        has the meaning set forth in Section 2.6(a)(ii).

       

      “Offered
        Images” has the meaning set forth in section 3.16(d)(v).

       

      “Offices”
        has the meaning set forth in Section 3.1.

       

      “Office
        Lease” has the meaning set forth in Section 3.14(a).

       

      “Order”
        means any decree, order, judgment, writ, award, injunction, rule or consent
        of
        or by an Authority.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      “Outside
        Closing Date” means May 25, 2006, provided that the Outside Closing Date may be
        extended by thirty days by any party hereto upon notice to the other parties
        hereto.

       

      “Owned
        Intellectual Property” has the meaning set forth in Section
        3.16(a).

       

      “Owned
        Image” has the meaning set forth in Section 3.16(d)(vi).

       

      “Parent”
        has the meaning set forth in the Preamble.

       

      “Parent
        Charter Documents” has the meaning set forth in Section 5.9.

       

      “Parent
        Common Stock” means the Common Stock, $.001 par value per share, of
        Parent.

       

      “Parent
        Financial Statements” has the meaning set forth in Section 5.11.

       

      “Parent
        Indemnitees” has the meaning set forth in Section 11.1.

       

      “Permits”
        has the meaning set forth in Section 3.21.

       

      “Person”
        means an individual, a corporation, a partnership, a limited liability company,
        an association, a trust or other entity or organization, including a government,
        domestic or foreign, or political subdivision thereof, the Company or an
        agency
        or instrumentality thereof.

       

      “Preliminary
        Schedule” has the meaning set forth in Section 2.8(a).

       

      “Preferred
        Stock” has the meaning set forth in Section 2.6(a)(iii).

       

      “Proceeding”
        has the meaning set forth in Section 3.28(b).

       

      “Purchased
        Assets” has the meaning set forth in Section 2.1.

       

      “Purchaser”
        has the meaning set forth in the preamble.

       

      “Real
        Property” means, collectively, all real properties and interests therein
        (including the right to use), together with all buildings, fixtures, trade
        fixtures, plant and other improvements located thereon or attached thereto;
        all
        rights arising out of use thereof (including air, water, oil and mineral
        rights); and all subleases, franchises, licenses, permits, easements and
        rights-of-way which are appurtenant thereto.

       

      “Rebate
        Obligations” has the meaning set forth in Section 3.31(e).

       

      “Reg
        D”
has the meaning set forth in Section 3.30(a).

       

      “Restriction
        Period” has the meaning set forth in Section 7.2(a).

       

      “Restrictive
        Covenants” has the meaning set forth in Section 7.3.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      “SEC”
        means the Securities and Exchange Commission.

       

      “Securities
        Act” means the Securities Act of 1933.

       

      “Software”
        has the meaning set forth in Section 3.16(b).

       

      “Stockholder
        Representative” has the meaning set forth in the preamble.

       

      “Stockholders”
        has the meaning set forth in the Preamble.

       

      “Stockholder’s
        Securities” means, with respect to a Stockholder, the Company Common Stock
        and/or the Company Preferred Stock owned by such Stockholder as set forth
        on
Schedule
        I
        hereto.

       

      “Surviving
        Corporation” has the meaning set forth in Section 2.1(a).

       

      “Tangible
        Assets” has the meaning set forth in Section 2.1(c).

       

      “Tax”
has
        the meaning set forth in Section 3.28(c).

       

      “Tax
        Return” has the meaning set forth in Section 3.28(d).

       

      “Third
        Party Claim” has the meaning set forth in Section 11.3(a).

       

      “UCC”
        shall mean the Uniform Commercial Code of the State of New York, or any
        corresponding or succeeding provisions of Laws of the State of New
        York,
        or any
        corresponding or succeeding provisions of Laws, in each case as the same
        may
        have been and hereafter may be adopted, supplemented, modified, amended,
        restated or replaced from time to time.

       

      “Unapproved
        Image” has the meaning set forth in Section 3.16(d)(ii).

       

      “Warrants”
        has the meaning set forth in Section 2.6(a)(iv).

       

      “Warrant
        Shares” has the meaning set forth in Section 5.16.

       

      “Website(s)”
        shall mean all of the internet domain names for the Company set forth on
        Schedule 3.7.

       

      ARTICLE
        II 

       

      PURCHASE
        AND SALE

       

      2.1.  The
        Merger. 

       

      (a)  At
        the
        Effective Time, (i) the separate existence of Acquisition Corp. will cease
        and
        Acquisition Corp. will be merged with and into the Company (Acquisition Corp.
        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 Acquisition Corp. in effect immediately prior
        to
        the Effective Time shall be the Certificate of Incorporation of the Surviving
        Corporation; and (iii) the By-laws of Acquisition Corp. as in effect immediately
        prior to the Effective Time shall be the By-laws of the Surviving
        Corporation.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      (b)  At
        and
        after 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 have all of
        the
        liabilities of each Constituent Corporation.

       

      (c)  Immediately
        after the Effective Time, the members of the Board of Directors of the Surviving
        Corporation shall be as follows, provided however, neither Parent nor the
        Surviving Corporation is under any obligation to maintain any person in any
        such
        position:

       

      (i)  Tom
        Butta, Tom Costanza and Jerry Oliver; and

       

      (ii)  such
        persons as Parent may elect.

       

      (d)  Immediately
        after the Effective Time, the Board of Directors of the Surviving Corporation
        shall name the following persons as officers of the Surviving Corporation,
        provided however, subject only to the Employment Agreements, neither Parent
        nor
        the Surviving Corporation is under any obligation to maintain any person
        in any
        such position:

       

      (i)  Tom
        Butta
–
        President

       

      Jerry
        Oliver – Vice President and General Manager

       

      Tom
        Costanza – Vice President – Chief Financial Officer and Secretary

       

      (ii)  such
        other persons as the Board of Directors of the Surviving Corporation shall
        designate.

       

      (e)  The
        parties hereto acknowledge and agree that the fair market value of the shares
        of
        the Series A Convertible Preferred Stock of Parent issued to the Stockholders
        is
        $3,150,000 and will report it as such for all purposes with respect to the
        transaction contemplated hereby, including for tax purposes.

       

      2.2.  Intentionally
        Omitted.

       

      2.3.  Certificate
        of Merger.
        As soon
        as practicable following fulfillment or waiver of the conditions specified
        in
        Article IX hereof, and provided that this Agreement has not been terminated
        and
        abandoned pursuant to Article XIII hereof, the Company and Acquisition Corp.
        will cause the Certificate of Merger in substantially the form of Exhibit
        A
        attached
        hereto (the “Certificate of Merger”) to be executed and filed with the Delaware
        Secretary of State as provided in the Delaware General Corporation Law. The
        purpose of the Surviving Corporation shall be to engage in any and all business
        activities in which a corporation is permitted to engage in accordance with
        the
        Delaware General Corporation Law.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      2.4.  Effective
        Time of the Merger.
        The
        Merger shall become effective at 11:59 p.m. on the day of the filing of the
        Certificate of Merger with the Delaware Secretary of State or at such other
        date
        or time thereafter as the parties may agree. The date and time of such
        effectiveness is herein sometimes referred to as the “Effective
        Time”.

       

      2.5.  Effect
        on Capital Stock; Exchange Procedures. 

       

      (a)  As
        of the
        Effective Time, by virtue of the Merger and without any action on the part
        of
        the holder of any shares of the Company Securities or capital stock of
        Acquisition Corp.:

       

      (i)  Each
        issued and outstanding share of the Company Securities shall be converted
        into
        the right to receive a portion of the Merger Consideration as defined in
        Section
        2.6. All of the Company Securities shall be cancelled, and each holder of
        a
        certificate representing any of the Company Securities shall thereafter cease
        to
        have any rights with respect to the Company Securities except the right to
        receive the Merger Consideration pursuant to the terms hereof. Any shares
        of the
        Company Securities held as treasury shares by the Company shall be canceled
        and
        not be converted into the right to receive any consideration.

       

      (ii)  Each
        issued and outstanding share of the capital stock of Acquisition Corp. shall
        remain outstanding.

       

      (b)  Immediately
        after the Effective Time, Parent shall supply or cause to be supplied to
        the
        Exchange Agent, for exchange in accordance with this Section 2.5, through
        such
        reasonable procedures as the Exchange Agent may adopt, the Closing Payment.
        The
        Stockholders agree to comply with all such procedures, in addition to the
        procedures set forth in this Section 2.

       

      (c)  As
        soon
        as practicable after the Effective Time, each holder of Company Securities
        will
        surrender the certificates representing the Company Securities to the
Exchange
        Agent.
        Upon
        the surrender of all the Company Securities owned by a Stockholder, such
        Stockholder shall promptly receive from the Exchange
        Agent
        the
        portion of the Closing Payment which such Stockholder is entitled to receive
        pursuant to Schedule I.

       

      (d)  If
        the
        Closing Payment (or any portion thereof) to be paid to any Stockholder is
        to be
        delivered to any person other than the person in whose name the Company
        Securities are registered, it shall be a condition to such exchange that
        the
        Company Securities so surrendered shall be properly endorsed or otherwise
        in
        proper form for transfer and the person requesting such exchange (a) establish
        to the satisfaction of the Exchange
        Agent
        and the
        Parent the propriety of such transfer and (b) (i) pay any transfer or other
        taxes required by reason of the payment of such consideration to a person
        other
        than the registered holder of the Company Securities surrendered, or (ii)
        establish to the satisfaction of the Exchange
        Agent
        and the
        Parent that such tax has been paid or is not applicable.

       

      (e)  If
        any
        certificate representing Company Securities has been lost, stolen or destroyed,
        the Exchange
        Agent
        shall
        issue the applicable Closing Payment deliverable in respect thereof upon
        (i) the
        making of an affidavit of that fact by the person claiming such certificate
        to
        be lost, stolen or destroyed and (ii) if required by the Parent, the posting
        by
        such person of a bond in such reasonable amount as the Parent may direct
        as
        indemnity against any claim that may be made against it with respect to such
        certificate.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (f)  From
        and
        after the Effective Time, no transfer of any shares of Company Securities
        outstanding prior to the Effective Time shall be made on the stock transfer
        books of the Company.

       

      2.6.  Merger
        Consideration.

       

      (a)  The
        consideration that the Stockholders shall collectively be entitled to receive
        by
        virtue of the Merger shall be the sum of the cash set forth in subsection
        (a)(i)
        below, the Notes, the Preferred Stock and the Warrants, subject to adjustment
        as
        set forth in Sections 2.8 (collectively, the “Merger Consideration”). The Merger
        Consideration shall consist of:

       

      (i)  $4,500,000
        reduced by the Company Merger Costs in cash;

       

      (ii)  $2,350,000
        in the form of three-year secured notes substantially in the form of
Exhibit
        2.6(a)(ii)
        hereto
        (the “Notes”);

       

      (iii)  $3,150,000
        in Series A Convertible Preferred Stock of Parent in the form of Exhibit
        2.6(a)(iii)
        hereto
        (the “Preferred Stock”), at a per share price equal to $315;

       

      (iv)  Warrants
        to purchase 750,000 shares of the Common Stock of Parent substantially in
        the
        form of Exhibit
        2.6(a)(iv)
        hereto
        (the “Warrants”).

       

      (b)  The
        “Closing Payment” shall mean:

       

      (v)  $4,000,000
        reduced by the Company Merger Costs in cash;

       

      (vi)  $2,500,000
        face amount of Preferred Stock; and

       

      (vii)  the
        Warrants.

       

      Each
        Stockholder shall be entitled to receive the component of the Purchase Price
        set
        forth opposite his name on Schedule I hereto.

       

      2.7.  Payment
        of the Merger Consideration.
        The
        Merger Consideration shall be payable by Acquisition Corp. and Parent as
        follows:

       

      (a)  The
        Closing Payment shall be payable by Acquisition Corp. and Parent to Stockholders
        on the Closing Date. An amount equal to the Company Merger Costs will be
        paid by
        Acquisition Corp. and Parent to the Company on the Closing Date.

       

      (b)  The
        cash
        portion of the Closing Payment shall be payable in United States Dollars
        and
        shall be delivered by Acquisition Corp. and Parent on the Closing Date by
        wire
        transfer of immediately available funds.

       

      (c)  Subject
        to the provisions of this Section 2.7, $500,000 in cash, Notes in the aggregate
        principal amount of $2,350,000 and Preferred Stock in the face amount of
        $650,000 (collectively, the “Escrow Fund”) shall be held in escrow subject to
        the terms and conditions of the Escrow Agreement attached hereto as Exhibit
        C.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      2.8.  Procedure
        to Establish Net Worth.

       

      (a)  Not
        less
        than three days nor more than ten days prior to the Effective Time, the Company
        shall deliver to Parent a schedule (the “Preliminary Schedule”) detailing any
        unpaid Company Merger Costs.

       

      (b)  Within
        60
        days after the Closing Date, the Stockholder Representative will provide
        the
        Parent with a Closing Balance Sheet and a calculation of the Company’s Net
        Worth. For purposes of calculating Net Worth and the Closing Balance Sheet,
        Company Merger Costs will be excluded from the calculation of Net Worth and
        not
        listed as a liability on the Closing Balance Sheet. The Parent must dispute
        the
        Net Worth calculation or the Closing Balance Sheet within 45 days of receiving
        such calculation from the Stockholder Representative. If such calculation
        or the
        Closing Balance Sheet is not disputed by the Parent sending notice to the
        Stockholder Representative within such period, the Parent will be deemed
        to have
        accepted the Net Worth calculation and the Closing Balance Sheet. If by the
        120th
        day
        after the Closing Date the independent accountants regularly employed by
        the
        Parent (the “Parent’s accountants) and the independent accountants for the
        Stockholder Representative (which shall be the same firm of accountants
        previously employed by the Company) (the “Stockholder Representative’s
        Accountants) are unable to agree upon the Net Worth calculations or the Closing
        Balance Sheet, the Parent’s Accountants and the Stockholder Representative’s
        Accountants shall provide their calculations of Net Worth and Closing Balance
        Sheet to a third-party independent accountant (the “Third Party Accountant”)
        familiar with the Business and mutually agreed upon by the Parent’s Accountants
        and the Stockholder Representative’s Accountants who shall make a determination
        as to the Company’s Net Worth as of the Closing Date. If the Parent’s
        Accountants and the Stockholder Representative’s Accountants cannot agree upon
        the Third Party Accountant, the dispute shall be submitted to Arbitration
        in
        accordance with Section 12.1 of this Agreement. The expenses for the Independent
        Accountant shall be paid for by the party whose calculation of Net Worth
        was
        most different from the calculation of such third-party accountants, as
        determined by such Third-Party Accountant in its reasonable discretion. To
        the
        extent that the Net Worth of the Company as of the Closing Date as finally
        determined is in excess of $1,266,168 (the “Excess Net Worth”), additional Notes
        issued as of the Effective Time in the principal amount of the Excess Net
        Worth
        shall be deposited into Escrow pursuant to the Escrow Agreement. In such
        case
        and if so requested by the Stockholder Representative, that number of shares
        of
        Preferred Stock in a face amount equal to the Excess Net Worth shall be released
        from Escrow and distributed to the Stockholders in accordance with the Escrow
        Agreement. Notwithstanding anything contained in this Agreement to the contrary,
        if (i) the aggregate face amount of the Notes, plus (ii) the aggregate face
        amount of the additional Notes required to be issued pursuant to the foregoing
        provisions of this Section 2.8(b), would exceed forty percent (40%) of the
        Merger Consideration (taking into account the aggregate face amount of the
        additional Notes required to be issued pursuant to the foregoing provisions
        of
        this Section 2.8(c)), the aggregate face amount of the additional Notes in
        excess of forty percent (40%) of the Merger Consideration (taking into account
        the aggregate face amount of the additional Notes required to be issued pursuant
        to the foregoing provisions of this Section 2.8(c) shall not be issued and
        Parent shall instead issue such number of additional shares of Preferred
        Stock
        as is necessary to make-up the difference. If the Net Worth of the Company
        as of
        the Closing Date is less than $1,266,168, the deficiency will be addressed
        as
        provided in the Escrow Agreement. If the Net Worth of the Company as of the
        Closing Date is equal to $1,266,168, no adjustments to the Merger Consideration
        will be made pursuant to the provisions of this Section.

      
        
          
          

        

        
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      (c)  From
        and
        after the Closing, solely for the purpose of the Stockholder Representative
        preparing the Closing Balance Sheet and calculating the Company’s Net Worth as
        of the Closing Date, the Company will permit the Stockholder Representative
        and
        its representatives to have reasonable access to the Company’s respective
        officers, directors, employees, agents, assets and properties and all relevant
        books, records and documents of or relating to the Business and assets of
        the
        Company during normal business hours and will furnish to the Stockholder
        Representative and its representatives such information, financial records
        and
        other documents relating to the Company and the Business as may reasonably
        be
        requested. Any such information, financial records and other documents relating
        to the Company and the Business provided to the Stockholder Representative
        and
        its representative shall be subject to the provisions of Section 7.1 of this
        Agreement.

       

      2.9.  [Intentionally
        Omitted]

       

      2.10.  Closing.
        Subject
        to the satisfaction or waiver of the conditions set forth in Article VIII,
        the
        closing (the “Closing”) of the Merger hereunder shall take place at the offices
        of Loeb & Loeb LLP in New York, on May 10, 2006 at 10:00 a.m., or at such
        other date, time or place as Parent, Acquisition Corp., the Stockholder
        Representative and the Company may agree (the date and time at which the
        Closing
        is actually held being the “Closing Date”). In addition to those obligations set
        forth in Article IX, at the Closing,

       

      (a)  Parent
        shall deliver the Closing Payment in accordance with Section 2.7(a);
        and

       

      (b)  Each
        of
        the Stockholders will deliver to Acquisition Corp. certificates representing
        the
        Stockholder’s Company Securities, duly endorsed, together with any other
        documents that are necessary to transfer to Acquisition Corp. good title
        to all
        of the Stockholder’s Securities, free and clear of any and all
        Liens.

       

      2.11.  No
        Further Transfers; Lost, Stolen or Destroyed
        Certificates.
        The
        Merger Consideration paid pursuant to the Merger upon the surrender for exchange
        of shares of Company Securities in accordance with the terms hereof shall
        be
        deemed to have been paid in full satisfaction of all rights pertaining to
        such
        shares of Company Securities, and upon and after the Effective Time, no transfer
        of the shares of Company Securities outstanding prior to the Effective Time
        shall be made on the stock transfer books of the Surviving Corporation. 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 II.

       

      2.12.  Effect
        of the Merger.
        Upon
        and after the Effective Time: (a) the shares of the Company shall be converted
        as provided in this Agreement; (b) the former holders of such shares will
        be
        entitled only to the rights provided in this Agreement or to the rights provided
        under Delaware General Corporation Law; and (c) the Merger shall otherwise
        have
        the effect provided under the applicable laws of the state of
        Delaware.

      
        
          
          

        

        
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      ARTICLE
        III

       

      REPRESENTATIONS
        AND WARRANTIES OF

      THE
        STOCKHOLDERS AND THE COMPANY

       

      The
        Stockholders, joint and severally (but subject in all cases to the limitations
        and conditions contained in Article XI and in the Escrow Agreement) hereby
        represent and warrant to Parent and Acquisition Corp. that:

       

      3.1.  Corporate
        Existence and Power.
        The
        Company is a corporation duly formed, validly existing and in good standing
        under and by virtue of the Laws of the State of Delaware, and has all power
        and
        authority, corporate and otherwise, and all governmental licenses, franchises,
        permits, authorizations, consents and approvals required to own and operate
        its
        properties and assets and to carry on its business as now conducted and as
        proposed to be conducted. Except as set forth on Schedule 3.1, the Company
        is
        not qualified to do business as a foreign corporation in any jurisdiction,
        and
        there is no jurisdiction in which the character of the property owned or
        leased
        by the Company or the nature of its activities make qualification of the
        Company
        in any such jurisdiction necessary, except where the failure to so qualify
        would
        not have a Material Adverse Effect. The only offices, warehouses or business
        locations of the Company are listed on Schedule 3.1 (the “Offices”). The Company
        has not taken any action, adopted any plan, or made any agreement in respect
        of
        any merger, consolidation, sale of all or substantially all of its respective
        assets, reorganization, recapitalization, dissolution or liquidation, except
        as
        explicitly set forth in this Agreement.

       

      3.2.  Corporate
        Authorization.
        The
        execution, delivery and performance by the Company of this Agreement and
        each of
        the other Additional Agreements to which the Company is named as a party
        and the
        consummation by the Company of the transactions contemplated hereby and thereby
        are within the corporate powers of the Company and have been duly authorized
        by
        all necessary action on the part of the Company, including the approval of
        the
        Stockholders. This Agreement constitutes, and, upon their execution and
        delivery, each of the Additional Agreements will constitute, a valid and
        legally
        binding agreement of the Company, enforceable against the Company in accordance
        with their respective terms, subject
        to (i) laws of general application relating to bankruptcy, insolvency and
        the
        relief of debtors, or (ii) rules of law governing specific performance,
        injunctive relief or other equitable remedies.

       

      3.3.  Charter
        Documents; Legality.
        The
        Company has previously delivered to Parent true and complete copies of its
        Certificate of Incorporation and By-Laws, minute books and stock books (the
        “Charter Documents”), as in effect or constituted on the date hereof. The
        execution, delivery, and performance by the Company and each Stockholder
        of this
        Agreement and any Additional Agreement to which the Company or such Stockholder
        is to be a party has not violated and will not violate, and the consummation
        by
        the Company or the Stockholders of the transactions contemplated hereby or
        thereby will not violate, any of the Charter Documents or any
        Law.

      
        
          
          

        

        
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      3.4.  Capitalization
        and Ownership of the Company.
        Schedule 3.4 sets forth, with respect to the Company, (i) the Company’s
        authorized capital, (ii) the number of the Company’s securities that are
        outstanding, (iii) each Stockholder owning the Company’s securities and the
        number of shares of such securities owned by such Stockholder, and (iv) each
        security convertible into or exercisable or exchangeable for the Company’s
        securities, the number and type of securities such security is convertible
        into,
        the exercise or conversion price of such security and the holder of such
        security. Except as set forth on Schedule 3.4, no person other than the
        Stockholders owns any securities of the Company. Except as set forth on Schedule
        3.4, there is no Contract that requires or under any circumstance would require
        the Company to issue, or grant any right to acquire, any securities of the
        Company, or any security or instrument exercisable or exchangeable for or
        convertible into, the capital stock or membership interest of the Company
        or to
        merge, consolidate, dissolve, liquidate, restructure, or recapitalize the
        Company.
        The
        Company Securities (i) have been duly authorized and validly issued and are
        fully paid and nonassessable, and the shares of Company Common Stock issued
        upon
        conversion of the Company Preferred Stock will, upon such conversion, be
        validly
        issued, fully paid and nonassessable, and (ii) were issued in compliance
        with
        all applicable federal and state securities laws.

       

      3.5.  Subsidiaries.
        The
        Company does not own, and since its formation has not owned, directly or
        indirectly, any security or other ownership interest in any other Person.
        The
        Company is not a party to any agreement relating to the formation of any
        joint
        venture, association or other Person.

       

      3.6.  Affiliates.
        Other
        than the Stockholders, the Company is not controlled by any Person and the
        Company is not in control of any other Person. Schedule 3.6 lists each Contract,
        arrangement, or understanding to which the Company and any Stockholder or
        any
        Affiliate of any Stockholder is a party. Except as disclosed in Schedule
        3.6,
        none of the Stockholders or any Affiliate of any Stockholder (i) own, directly
        or indirectly, in whole or in part, any tangible or intangible property
        (including Intellectual Property rights) that the Company uses or the use
        of
        which is necessary for the conduct of the Company’s business, or (ii) have
        engaged in any transaction with the Company.

       

      3.7.  Assumed
        Names.
        Schedule 3.7 is a complete and correct list of all assumed or “doing business
        as” names currently or formerly used by the Company, including names on any
        Websites. The Company has not used any name other than the names listed on
        Schedule 3.7 to conduct its business. The Company has filed appropriate “doing
        business as” certificates in all applicable jurisdictions. Except as indicated
        on Schedule 3.7, all Websites are in good working order.

       

      3.8.  Governmental
        Authorization.
        None of
        the execution, delivery or performance by the Company of this Agreement or
        any
        Additional Agreement requires any consent, approval, license or other action
        by
        or in respect of, or registration, declaration or filing with, any
        Authority.

       

      3.9.  Consents.
        The
        Contracts listed on Schedule 3.9 are the only material agreements, commitments,
        arrangements, contracts or other instruments binding upon the Company or
        any of
        its properties requiring a consent, approval, authorization, order or other
        action of or filing with any Person as a result of the execution, delivery
        or
        performance of this Agreement or any of the Additional Agreements or the
        consummation of the transactions contemplated hereby or thereby (each of
        the
        foregoing, a “Company Consent”).

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      3.10.  Financial
        Statements.

       

      (a)  Attached
        hereto as Schedule 3.10(a) are audited balance sheets of the Company as of
        December 31, 2004 and December 31, 2005, and the related statements of
        operations, stockholders’ deficit and cash flows for each of the years in the
        three-year period ended December 31, 2005, and an unaudited balance sheet
        of the
        Company as of March 31, 2006 (collectively, the “Financial Statements”). The
        balance sheet contained in the Financial Statements as of December 31, 2005
        is
        referred to herein as the “December Balance Sheet”. The balance sheet contained
        in the Financial Statements as of March 31, 2006 is referred to herein as
        the
“March Balance Sheet”. The Financial Statements (i) were prepared from the Books
        and Records; (ii) except as set forth on Schedule 3.10, were prepared in
        accordance with GAAP; (iii) fairly and accurately present the Company’s
        financial condition and the results of its operations as of their respective
        dates and for the periods then ended; (iv) contain and reflect all necessary
        adjustments and accruals for a fair presentation of the Company’s financial
        condition as of their dates; and (v) contain and reflect adequate provisions
        for
        all reasonably anticipated liabilities for all material income, property,
        sales,
        payroll or other Taxes applicable to the Company with respect to the periods
        then ended. The Company has heretofore delivered to Parent complete and accurate
        copies of all “management letters” received by it from the Company’s accountants
        and all responses during the last three years by lawyers engaged by the Company
        to inquiries from the Company’s accountant or any predecessor
        accountants.

       

      (b)  Except
        as
        specifically disclosed, reflected or fully reserved against on the March
        Balance
        Sheet and for liabilities and obligations of a similar nature and in similar
        amounts incurred in the ordinary course of business since the date of the
        March
        Balance Sheet and except as set forth on Schedule 3.10(b), there are no
        liabilities, debts or obligations of any nature (whether accrued, absolute,
        contingent, liquidated or unliquidated, unasserted or otherwise) relating
        to the
        Company. All debts and liabilities, fixed or contingent, which should be
        included under GAAP on an accrual basis on the March Balance Sheets are included
        therein.

       

      (c)  The
        December Balance Sheet and March Balance Sheet accurately reflect the
        outstanding Indebtedness of the Company as of the date thereof. Except as
        set
        forth on Schedules 3.10(a), the Company does not have any
        Indebtedness.

       

      (d)  All
        forecasts, presentations or projections relating to the future results of
        operations of the Company were based upon reasonable assumptions and were
        prepared in good faith by the Company.

       

      (e)  All
        accounts, books and ledgers of the Company have been properly and accurately
        kept and completed in all material respects, and there are no material
        inaccuracies or discrepancies of any kind contained or reflected therein.
        The
        Company has none of its records, systems controls, data or information recorded,
        stored, maintained, operated or otherwise wholly or partly dependent on or
        held
        by any means (including any mechanical, electronic or photographic process,
        whether computerized or not) which (including all means of access thereto
        and
        therefrom) is not under the exclusive ownership (excluding licensed software
        programs) and direct control of the Company and which is not located at the
        Offices or at locations set forth on Schedule 3.10(e).

      
        
          
          

        

        
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      3.11.  Accounts
        Receivable.
        Schedule 3.11 sets forth as of a date within three days of the Closing Date
        all
        accounts, notes and other receivables, whether or not accrued, and whether
        or
        not billed, of the Company, in accordance with GAAP (“Accounts Receivable”).
        Except as set forth in Schedule 3.11, all Accounts Receivable represent bona
        fide revenues of the Company pursuant to the Business and are fully collectible,
        net of any reserves shown on the March Balance Sheet. Except as set forth
        on
        Schedule 3.11, all accounts and notes receivable reflected on the December
        Balance Sheet, or arising since December 31, 2005, have been collected, or
        are
        and to the knowledge of the Company will be good and collectible, in each
        case
        at the aggregate recorded amounts thereof without right of recourse, defense,
        deduction, return of goods, counterclaim, offset, or set off on the part
        of the
        obligor.

       

      3.12.  Books
        and Records.

       

      (a)  The
        Books
        and Records accurately and fairly, in reasonable detail, reflect the Company’s
        transactions and dispositions of assets. The Company maintains a system of
        internal accounting controls sufficient to provide reasonable assurance
        that:

       

      (i)  transactions
        are executed in accordance with management’s authorization;

       

      (ii)  access
        to
        assets is permitted only in accordance with management’s authorization;
        and

       

      (iii)  recorded
        assets are compared with existing assets at reasonable intervals, and
        appropriate action is taken with respect to any differences.

       

      (b)  The
        Company has heretofore made all of its Books and Records available to Parent
        for
        its inspection and has heretofore delivered to Parent complete and accurate
        copies of documents referred to in the Schedules or as Parent otherwise has
        requested. All Contracts, documents, and other papers or copies thereof
        delivered to Parent by or on behalf of the Company in connection with this
        Agreement and the transactions contemplated herein are accurate, complete,
        and
        authentic.

       

      (c)  Schedule
        3.12(c) is a complete and correct list of all savings, checking, brokerage
        or
        other accounts pursuant to which the Company has cash or securities on deposit
        and such list indicates the signatories on each account.

       

      3.13.  Absence
        of Certain Changes.

       

      (a)  Except
        as
        set forth in Schedule 3.13(a), since December 31, 2005, the Company has
        conducted its business in the ordinary course of business consistent with
        past
        practices, and there has not been:

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      (i)  any
        Material Adverse Change or any event, occurrence, development or state of
        circumstances or facts which could reasonably be expected to result individually
        or in the aggregate in a Material Adverse Effect on the Company’s ability to
        consummate the transactions contemplated herein or upon the value to Parent
        or
        Acquisition Corp. of the transactions contemplated hereby;

       

      (ii)  any
        transaction, contract, agreement or other instrument entered into, or commitment
        made, by the Company relating to the Business or any relinquishment by the
        Company of any Contract or other right, in either case other than transactions
        and commitments in the ordinary course of business consistent in all respects,
        including kind and amount, with past practices and those contemplated by
        this
        Agreement;

       

      (iii)  any
        bonus, salary or other compensation paid or agreed to be paid to any employee
        except in accordance with Schedule 3.13(a);

       

      (iv)  any
        capital expenditure except in the ordinary course of business consistent
        with
        past practice;

       

      (v)  any
        sale,
        lease, license or other disposition of any of its assets except (i) pursuant
        to
        existing Contracts or commitments disclosed herein and (ii) sales of products
        or
        inventory in the ordinary course of business consistent with past
        practice;

       

      (vi)  acceptance
        of any returns except in the ordinary course of business, consistent with
        past
        practice;

       

      (vii)  any
        default under any term or provision of any Contract;

       

      (viii)  an
        increase in the amount of Indebtedness of the Company;

       

      (ix)  the
        incurrence of Liens on any of its assets;

       

      (x)  any
        damage, destruction or loss of property related to any of its assets, whether
        or
        not covered by insurance;

       

      (xi)  any
        delay, acceleration or cancellation of any receivables or indebtedness owed
        to
        the Company or write-off or additional reserves made with respect to the
        same;

       

      (xii)  any
        merger or consolidation with or acquisition of any other Person;

       

      (xiii)  the
        lapse
        of any insurance policy protecting the Company’s assets;

       

      (xiv)  any
        change in its accounting principles or methods or write down the value of
        any
        inventory or assets;

       

      (xv)  any
        change in location where the Company conducts business;

      
        
          
          

        

        
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      (xvi)  any
        extension of any loans other than travel or other expense advances to employees
        in the ordinary course of business consistent with past practice exceeding
        $1,000 individually or $10,000 in the aggregate;

       

      (xvii)  any
        increase or reduction in the prices of products sold except in the ordinary
        course of business consistent with past practice;

       

      (xviii)  any
        agreement to change any practices or terms, including payment terms, with
        respect to customers or suppliers;

       

      (xix)  any
        change in the Company’s hiring practices for employees, consultants or
        advisors;

       

      (xx)  any
        dividend or distribution to Stockholders; or

       

      (xxi)  any
        agreement to do any of the foregoing.

       

      (b)  Except
        as
        set forth on Schedule 3.13(a) and actions taken in good faith to invest in
        the
        Company’s business, since December 31, 2005, through and including the Closing
        Date, the Company has not taken any action nor has had any event occur which
        would have violated any covenant of the Company set forth in Article VI
        hereof.

       

      3.14.  Real
        Property.

       

      (a)  The
        Company does not own any Real Property. The Company has delivered to Parent
        true, correct, and complete copies of the lease and all amendments thereto
        for
        office space listed on Schedule 3.14(a) (the “Office Lease”). The Office Lease,
        together with all amendments, is listed in Schedule 3.14(a) and is valid
        and
        enforceable by the Company with respect to the other party thereto. The Company
        has not breached or violated and is not in default under the Office Lease
        or any
        local zoning ordinance, the breach or violation of which could individually
        or
        in the aggregate have a Material Adverse Effect, and no notice from any Person
        has been received by the Company or served upon the Company or any Stockholder
        claiming any violation of any lease or any local zoning ordinance. The Company
        has no other leases for Real Property except as set forth on Schedule
        3.14(a).

       

      (b)  The
        Company has not experienced any material interruption in the delivery of
        adequate quantities of any utilities (including electricity, natural gas,
        potable water, water for cooling or similar purposes and fuel oil) or other
        public services (including sanitary and industrial sewer service) required
        by
        the Company in the operation of the Business.

       

      3.15.  Tangible
        Personal Property.

       

      (a)  Each
        piece of Tangible Assets is in operating condition and repair and functions
        in
        accordance with its intended use (ordinary wear and tear excepted), has been
        properly maintained, and is suitable for its present uses. Schedule 3.15(a)
        sets
        forth a complete and correct list of the Tangible Assets owned by the Company,
        setting forth a description of such property and its location, as of a date
        within three days of the Closing Date.

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      (b)  The
        Company has, and upon consummation of the transactions contemplated hereby
        will
        have, good, valid and marketable title in and to each piece of Tangible Assets
        listed on Schedule 3.15(a) hereto, free and clear of all Liens, except as
        set
        forth on Schedule 3.15(b).

       

      (c)  The
        Company has good title to, or a valid leasehold or license interest in, all
        its
        properties and assets (whether tangible or intangible), free and clear of
        all
        Liens. The
        personal and other properties and assets owned by the Company or leased or
        licensed by the Company from a third party constitute all such properties
        and
        assets which are necessary to the Business as presently conducted and as
        presently proposed to be conducted.

       

      (d)  The
        materials and supplies included in the inventory of the Company as of the
        Closing Date will be (i) substantially equivalent in quality and quantity,
        subject to seasonality, to the materials and supplies, and additions thereto,
        generally included in such inventory in the past; and (ii) valued in accordance
        with GAAP and applied on a basis consistent with that used in the Financial
        Statements.

       

      (e)  Except
        as
        indicated on Schedule 3.15(a), all Tangible Assets are located at the
        Offices.

       

      3.16.  Intellectual
        Property.

       

      (a)  Schedule
        3.16(a) sets forth a true and complete list of all patents and patent
        applications, trademarks, service marks, trademark and service mark
        registrations, trademark and service mark applications, registered copyrights
        and copyright applications, and Internet domain names and Websites, in each
        case
        that are owned by the Company and used or held for use by or otherwise material
        to the Business (collectively, together with unregistered copyrights and
        trade
        secrets, know-how and similar confidential and proprietary information owned
        by
        the Company and material to the Business (which unregistered copyrights and
        information are not listed on Schedule 3.16(a)), “Owned Intellectual
        Property”).

       

      (b)  Schedule
        3.16(b) sets forth a true and complete list of all material computer software
        developed in whole or in part by or on behalf of the Company, including such
        developed computer software and databases that are operated or used by the
        Company on its Websites or used by the Company in connection with processing
        customer orders, storing customer information or storing and archiving Images
        that are owned by the Company and used or held for use by or otherwise material
        to the business (collectively, “Software”).
        Except for the software (including prepackaged third party software) listed
        on
        Schedule 3.16(g), the Software is the only computer software that is used
        or
        held for use by or otherwise material to the Business.

       

      (c)  Schedule
        3.16(c) sets forth a true and complete list of all licenses, sublicenses
        and
        other agreements pertaining to Intellectual Property or Software to which
        the
        Company is a party, including agreements with major Internet service providers
        and major Internet portals, in each case which are valid and used or held
        for
        use by or otherwise material to the Business (collectively, “Licensed
        Intellectual Property”).

      
        
          
          

        

        
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      (d)  As
        used
        herein:

       

      (i)  “Intellectual
        Property” means any and all of the following, but excluding Images: (A) U.S.,
        international and foreign patents, patent applications and statutory invention
        registrations; (B) trademarks, licenses, inventions, service marks, trade
        names,
        trade dress, slogans, logos and Internet domain names, including registrations
        and applications for registration thereof; (C) copyrights, including
        registrations and applications for registration thereof, and copyrightable
        materials; (D) trade secrets, know-how and similar confidential and proprietary
        information; (E) “ArtSelect” and the additional names listed on Schedule 3.7 and
        all derivations thereof; (F) u.r.l.s; and (G) any other type of Intellectual
        Property right, and all embodiments and fixations thereof and related
        documentation, registrations and franchises and all additions, improvements
        and
        accessions thereto, in each case which is owned or licensed or filed by the
        Company or used or held for use in the Business, whether registered or
        unregistered or domestic or foreign.

       

      (ii)  “Image”
        means a reproduction of any artwork, photograph, illustration or image of
        any
        type.

       

      (iii)  “Approved
        Images” means Images used or held for use by the Company in connection with the
        Business for which the Company has the right to grant sublicenses to third
        parties.

       

      (iv)  “Unapproved
        Images” means Images used or held for use by the Company in connection with the
        Business for which the Company has not been granted the right to grant
        sublicenses to third parties.

       

      (v)  “Offered
        Images” means, collectively, Approved Images and Unapproved Images.

       

      (vi)  “Owned
        Images” means Images for which the Company owns the copyright
        thereto.

       

      (vii)  “Licensed
        Images” means Images for which the Company has licensed rights from a third
        party.

       

      (e)  The
        Company’s ownership and use in the ordinary course of the Owned Intellectual
        Property and the use of the Software and Licensed Intellectual Property does
        not
        infringe upon or misappropriate the valid Intellectual Property rights, privacy
        rights or right of publicity of any third party.

       

      (f)  Except
        as
        set forth in Schedule 3.16(f), the Company is the owner of the entire and
        unencumbered right, title and interest in and to each item of Owned Intellectual
        Property, and the Company is entitled to use, and is using in the Business,
        the
        Owned Intellectual Property, Software, Offered Images and Licensed Intellectual
        Property in the ordinary course.

       

      (g)  Except
        for the Intellectual Property listed on Schedule 3.16(g), the Owned Intellectual
        Property, Software, Offered Images and the Licensed Intellectual Property
        include all of the Intellectual Property used in the ordinary day-to-day
        conduct
        of the Business, and there are no other items of Intellectual Property,
        Software, Offered Images or Licensed Intellectual Property that are material
        to
        such ordinary day-to-day conduct of the Business. The Owned Intellectual
        Property and, to the knowledge of the Company, the Licensed Intellectual
        Property, is subsisting, valid and enforceable, and has not been adjudged
        invalid or unenforceable in whole or part.

      
        
          
          

        

        
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      (h)  Except
        as
        set forth on Schedule 3.16(h), no claims or legal proceedings have been asserted
        against the Company and not disposed of, or are pending or, to the knowledge
        of
        the Company, threatened against the Company: (i) based upon or challenging
        or
        seeking to deny or restrict the use by the Company of any of the Owned
        Intellectual Property, Software, Offered Images or Licensed Intellectual
        Property; (ii) alleging that any services provided by, processes used by,
        or
        Images offered by the Company infringe upon or misappropriate any Intellectual
        Property right, software or Images of any third party; (iii) alleging that
        any
        Intellectual Property licensed to the Company under the Licensed Intellectual
        Property infringes upon any Intellectual Property right, software or Images
        of
        any third party or is being licensed or sublicensed to the Company in conflict
        with the terms of any license or other agreement; or (iv) challenging the
        Company’s ownership of the Owned Intellectual Property or use of any Licensed
        Intellectual Property, Software, or Offered Images.

       

      (i)  To
        the
        knowledge of the Company, no Person is engaged in any activity that infringes
        upon the Owned Intellectual Property, the Licensed Intellectual Property,
        Software or Offered Images. The Company has not granted any license or other
        right currently outstanding to any third party with respect to the Owned
        Intellectual Property, Licensed Intellectual Property, Software, or Offered
        Images, except for (i) licenses comprising invoices incurred in the ordinary
        course, and (ii) those licenses set forth in Schedule 3.16(i). The consummation
        of the transactions contemplated by this Agreement will not result in the
        termination or impairment of any of the Owned Intellectual Property, Licensed
        Intellectual Property, Software or Offered Images.

       

      (j)  Except
        for licenses comprising invoices incurred in the ordinary course, the Company
        has delivered or made available to Acquisition Corp. correct and complete
        copies
        of all documents relating to Owned Intellectual Property, Software and Offered
        Images and licenses and sublicenses of the Licensed Intellectual Property
        to
        which the Company is a party. With respect to each such license and
        sublicense:

       

      (i)  such
        documents and license or sublicense are valid and binding and in full force
        and
        effect and, together with the related invoices, represents the entire agreement
        between the respective licensor and licensee with respect to the subject
        matter
        of such license or sublicense;

       

      (ii)  assuming
        the receipt or making of all necessary consents, approvals, waivers,
        authorizations, novations, notices and filings in connection with the
        transactions contemplated by this Agreement, such document, license or
        sublicense will not cease to be valid and binding and in full force and effect
        on terms identical to those currently in effect as a result of the consummation
        of the transactions contemplated by this Agreement, nor will the consummation
        of
        the transactions contemplated by this Agreement constitute a breach or default
        under such document, license or sublicense or otherwise give the licensor
        or
        sublicensor a right to terminate such document, license or
        sublicense;

      
        
          
          

        

        
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      (iii)  the
        Company has not (A) received any notice of termination or cancellation under
        such document, license or sublicense, (B) received any notice of a breach
        or
        default under such document, license or sublicense, which breach has not
        been
        cured, or (C) granted to any other third party any rights, adverse or otherwise,
        under such document, license or sublicense that would constitute a breach
        of
        such document, license or sublicense; and

       

      (iv)  assuming
        the receipt or making of all necessary consents, approvals, waivers,
        authorizations, novations, notices and filings in connection with the
        transactions contemplated by this Agreement, neither the Company nor, to
        the
        knowledge of any Company, any other party to such license or sublicense is
        in
        breach or default in any material respect under such license or sublicense
        and,
        no event has occurred that, with notice or lapse of time would constitute
        such a
        breach or default or permit termination, modification or acceleration under
        such
        license or sublicense.

       

      (k)  The
        Company has obtained all governmental authorizations necessary for exporting
        the
        Software outside the U.S. or Canada and importing the Software into any country
        in which the Software is now sold or licensed for use, and all such export
        and
        import Governmental Authorizations in the U.S. and Canada and throughout
        the
        world are valid, current outstanding and in full force and effect. No rights
        in
        the Software have been transferred by the Company to any third party except
        to
        the customers of the Company to whom the Company has licensed such Software
        in
        the ordinary course.

       

      (l)  The
        Company has the right to use all software development tools, image processing
        tools, library functions, compilers and other third party software that is
        material to the Business or that is required to operate or modify the
        Software.

       

      (m)  The
        Company has taken reasonable steps to maintain the confidentiality of its
        trade
        secrets and other confidential Intellectual Property and (i) there has been
        no
        misappropriation of any material trade secrets or other material confidential
        Intellectual Property of the Company by any Person; (ii) no employee,
        independent contractor or agent of the Company has misappropriated any trade
        secrets of any other Person in the course of his performance as an employee,
        independent contractor or agent; and (iii) no employee, independent contractor
        or agent of the Company is in default or breach of any term of any employment
        agreement, non-disclosure agreement, non-compete obligation, assignment of
        invention agreement or similar agreement or contract relating in any way
        to the
        protection, ownership, development, use or transfer of Intellectual Property,
        other than those which individually or in the aggregate would not have a
        Material Adverse Effect.

       

      (n)  The
        trademarks constituting Owned Intellectual Property have been duly registered
        with, filed in, issued by or applied for with, as the case may be, the United
        States Patent and Trademark Office or such other appropriate filing offices,
        domestic or foreign, as are identified on Schedule 3.16(a), and such
        registrations, filings, issuances, applications and other actions remain
        in full
        force and effect, and are current and unexpired.

      
        
          
          

        

        
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      3.17.  Images.

       

      (a)  To
        the
        knowledge of the Company, based upon reasonable commercial practices, Schedule
        3.17(a) sets forth a true and complete list of the 1,000 top Images by revenue
        in each of the three fiscal years ended December 31, 2005, the amount of
        revenue
        accounted for by each such image and the number of times such Image was sold
        or
        licensed. Except for public domain imagery and except as set forth in Schedule
        3.17(a), the Company either owns or licenses all Images used or held for
        use by
        the Company in connection with the Business. The Offered Images include all
        of
        the Images used or held for use by the Company and material to the operation
        of
        the Business as currently conducted. The Company has the right to display,
        reproduce, distribute, market, transmit electronically (except when expressly
        prohibited by contract), and (except in the case of Unapproved Images)
        sublicense the use of each Offered Image to the extent required for the
        continued operation of the Business in a manner consistent with the Company’s
        past practice. Except as detailed on Schedule 3.17(a), to the knowledge of
        the
        Company, no public domain Image included in the Offered Images requires a
        license or the payment of a fee for the Company’s use thereof in a manner
        consistent with the Company’s past practice.

       

      (b)  The
        Company has not granted any license, sublicense or other right to any Person
        with respect to any Unapproved Images. The Company has not granted any license,
        sublicense or other right to any Person with respect to any Approved Image
        that
        would constitute a breach of any agreement or license pertaining to such
        Approved Image or which have a Material Adverse Effect.

       

      (c)  The
        display, sale, reproduction, electronic transmission (except when expressly
        prohibited by contract), marketing, distribution and sublicensing of the
        Images
        by the Company does not infringe upon the Intellectual Property right, privacy
        rights or right of publicity of any third party, except for those that
        individually or in the aggregate would not have a Material Adverse Effect.
        The
        display, sale, reproduction, electronic transmission (except when expressly
        prohibited by contract), marketing, distribution and sublicensing of the
        Images
        by the Company does not constitute a breach of any agreement or license to
        which
        the Company is a party.

       

      (d)  Except
        as
        set forth in Schedule 3.17(d), no claims have been asserted and not disposed
        of,
        or are pending or, to the knowledge of the Company, threatened against the
        Company or, to the knowledge of the Company, against any customer of the
        Company
        or any third party licensor or licensee of any Images of the Company (whether
        Owned Images, Licensed Images, or Offered Images): (i) based upon or challenging
        or seeking to deny or restrict the display, sale, reproduction, electronic
        transmission, performance, marketing, distribution or sublicensing by the
        Company of any of the Images; (ii) alleging that the sale, reproduction,
        distribution or sublicensing of the Images does or may infringe upon the
        Intellectual Property rights, privacy rights, or right of publicity of any
        third
        party; or (iii) challenging the ownership of the Images or the Company’s rights
        to the Images. Except as set forth in Schedule 3.17(d), within the past 12
        months no Person has made a claim for indemnification from the Company based
        on
        the proper use of an Image.

       

      (e)  Except
        as
        set forth on Schedule 3.17(e), to the knowledge of the Company, no Person
        is
        engaging in any activity that infringes upon any Images or upon the rights
        of
        the Company therein. The consummation of the transactions contemplated by
        this
        Agreement will not result in the termination or impairment of the rights
        of the
        Company, as they exist on the date hereof or on the Closing Date, to sell,
        reproduce, market, transmit electronically, perform, distribute or sublicense
        any of the Images.

      
        
          
          

        

        
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      (f)  Prior
        to
        any display, sale, marketing, electronic transmission, performance,
        reproduction, distribution or sublicensing of any Image, either: (i) the
        Company
        has obtained in writing all such releases and/or other third party consents
        or
        authorizations necessary for such display, sale, marketing, electronic
        transmission, performance, reproduction, distribution or sublicensing; (ii)
        the
        artist or photographer providing such Image has represented and warranted
        to the
        Company that he has obtained such releases and/or other third party consents
        or
        authorizations; or (iii) the Company has advised the licensee that other
        third
        party consents or authorizations necessary for the intended use are required
        prior to any display by such licensee. Copies of such releases and/or other
        third party consents or authorizations are kept by the Company at its Offices.
        Schedule 3.17(f) identifies each Image for which the Company has assumed
        any
        obligation for the storage and handling of Images and whether or not the
        Company
        has an obligation to return such Image.

       

      (g)  With
        respect to each license or agreement by which the Company has obtained the
        right
        to display, sell, reproduce, market, transmit electronically, perform,
        distribute or sublicense the Images or by which the Company has granted to
        any
        third party the right to display, sell, reproduce, market, transmit
        electronically, or distribute any Images:

       

      (i)  such
        license or agreement is legal, valid, binding and enforceable and in full
        force
        and effect and, together with the related invoices, represents the entire
        agreement between the parties thereto with respect to the subject matter
        thereof;

       

      (ii)  assuming
        the receipt or making of all necessary consents, approvals, waivers,
        authorizations, novations, notices and filings in connection with the
        transactions contemplated by this Agreement, such license or agreement will
        not
        cease to be legal, valid, binding and enforceable and in full force and effect
        on terms identical to those currently in effect as a result of the consummation
        of the transactions contemplated by this Agreement, nor will the consummation
        of
        the transactions contemplated by this Agreement constitute a breach or default
        under such license or agreement, or otherwise give any party thereto a right
        to
        terminate such license or agreement;

       

      (iii)  the
        Company has not: (A) received any notice of termination or cancellation under
        such license or agreement, and no party thereto has any right of termination
        or
        cancellation thereunder except in accordance with its terms; (B) received
        any
        notice of a breach or default under such license or agreement which breach
        or
        default has not been cured; and (C) granted to any other Person any rights,
        adverse or otherwise, under such license or agreement; and

       

      (iv)  assuming
        the receipt or making of all necessary consents, approvals, waivers,
        authorizations, novations, notices and filings in connection with the
        transactions contemplated by this Agreement, neither the Company nor, to
        the
        knowledge of the Company, any other party to such license or agreement is
        in
        breach or default thereof in any material respect and, to the knowledge of
        the
        Company, no event has occurred that, with notice or lapse of time would
        constitute such a breach or default or permit termination, modification or
        acceleration under such license or agreement.

      
        
          
          

        

        
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      (h)  Schedule
        3.17(h) identifies each contract providing the Company with the right to
        display, reproduce, distribute or sublicense the use of any Image owned or
        controlled by a third party that has, since December 31, 2005, been terminated
        or revoked by either the Company or the third party.

       

      3.18.  Relationships
        With Licensees, Customers, Suppliers, Etc.

       

      (a)  Schedule
        3.18(a) identifies during the fiscal years ended December 31, 2005 and 2004,
        respectively (i) the 100 largest customers of the Company, the amount of
        revenues accounted for by such customer during each such period, and the
        responsible account principal in charge of the customer and (ii) the 50 largest
        suppliers of Images and the 20 largest other suppliers (other than attorneys,
        accountants and office leases) of the Company, the amount of expense accounted
        for by such supplier during each such period, and the responsible account
        principal in charge of the supplier.

       

      (b)  Schedule
        3.18(b) sets forth (i) all prepayments, pre-billed invoices and deposits
        that
        have been received by the Company as of the date hereof from customers for
        products to be shipped, or services to be performed, after the Closing Date,
        and
        (ii) with respect to each such prepayment, pre-billed invoice or deposit,
        (A)
        the party and contract credited, (B) the date received or invoiced, (C) the
        products and/or services to be delivered, and (D) the conditions for the
        return
        of such prepayment, pre-billed invoice or deposit. All such prepayments,
        pre-billed invoices and deposits are properly accrued for on the Financial
        Statements, in accordance with GAAP applied on a consistent basis with the
        past
        practice of the Company.

       

      (c)  Schedule
        3.18(c) sets forth since December 31, 2005, all purchases (other than attorneys,
        accountants and office leases) with a cost of in excess of $10,000 for any
        single item or series or related items.

       

      (d)  Except
        as
        set forth on Schedule 3.18(d), since December 31, 2005: (a) there has not
        been
        any termination of the business relationship of the Company with any material
        licensee, customer or supplier; (b) to the knowledge of the Company, there
        has
        not been any threatened termination or withholding of payments by, or any
        material dispute with, any material licensee, customer or supplier; and (c)
        the
        Company has not received any notice or been informed that any such event
        will
        occur in the future, either as a result of the consummation of the transactions
        contemplated by this Agreement or otherwise. Except as set forth on Schedule
        3.18(d), the Company is not currently in dispute over any terms of any contract
        or agreement to which the Company and any material licensee, customer or
        supplier is a party.

       

      3.19.  Litigation.
        There
        is no Action (or any basis therefor) pending against, or to the knowledge
        of the
        Company, threatened against or affecting the Company, any of its officers
        or
        directors, any Stockholder, the business of the Company, or any Contract
        before
        any court or arbitrator or any governmental body, agency or official or which
        in
        any manner challenges or seeks to prevent, enjoin, alter or delay the
        transactions contemplated hereby. There are no outstanding judgments against
        the
        Company. The Company is not now, nor has it been in the past five years,
        subject
        to any proceeding with the Federal Trade Commission or the Equal Employment
        Opportunity Commission or any comparable body of any state or political
        subdivision.

      
        
          
          

        

        
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      3.20.  Contracts.

       

      (a)  Each
        Contract to which the Company is a party is a valid and binding agreement,
        and
        is in full force and effect, and the Company nor, to the knowledge of the
        Company, any other party thereto is in breach or default (whether with or
        without the passage of time or the giving of notice or both) under the terms
        of
        any such Contract. The Company has not assigned, delegated, or otherwise
        transferred any of its rights or obligations with respect to any Contracts,
        or
        granted any power of attorney with respect thereto. The Company has given
        a true
        and correct fully executed copy of each material Contract to
        Parent.

       

      (b)  Schedule
        3.20(b) lists each material Contract (other than the Charter Documents) of
        the
        Company, including:

       

      (i)  any
        Contract pursuant to which the Company is required to pay, has paid or is
        entitled to receive or has received an amount in excess of $25,000 during
        the
        current fiscal year or any one of the two preceding fiscal years (other than
        purchase orders for Inventory entered into in the ordinary course of business
        (excluding however any such purchase orders which are open for purchases
        in
        excess of $50,000));

       

      (ii)  all
        employment contracts and sales representatives contracts;

       

      (iii)  all
        sales, agency, factoring, commission and distribution contracts to which
        the
        Company is a party;

       

      (iv)  all
        joint
        venture, strategic alliance, limited liability company and partnership
        agreements to which the Company is a party;

       

      (v)  all
        significant documents relating to any acquisitions or dispositions of assets
        by
        the Company (other than of dispositions of Inventory in the ordinary course
        of
        business);

       

      (vi)  all
        licensing agreements, including agreements licensing Intellectual Property
        rights, other than “shrink wrap” licenses;

       

      (vii)  all
        secrecy, confidentiality and nondisclosure agreements restricting the conduct
        of
        the Company;

       

      (viii)  all
        Contracts relating to patents, trademarks, service marks, trade names, brands,
        copyrights, trade secrets and other Intellectual Property rights of the
        Company;

       

      (ix)  all
        guarantees, with the terms and conditions and privacy policies and other
        provisions of the Websites, indemnification arrangements and other hold harmless
        arrangements made or provided by the Company;

      
        
          
          

        

        
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      (x)  all
        Website hosting contracts or agreements;

       

      (xi)  all
        Contracts or agreements with or pertaining to the Company to which any
        Stockholder or any Affiliate of any Stockholder is a party;

       

      (xii)  all
        agreements relating to real property, including any real property lease,
        sublease, or space sharing, license or occupancy agreement, whether the Company
        is granted or granting rights thereunder to occupy or use any
        premises;

       

      (xiii)  all
        agreements relating to Tangible Assets; and

       

      (xiv)  all
        agreements relating to outstanding Indebtedness.

       

      (c)  The
        Company is not subject to any Contract which prohibits, limits or restricts
        any
        use by it of any information regarding its customers, including limiting
        the
        solicitation of or other communication by it with its customers or providing
        any
        information regarding its customers to any third party.

       

      (d)  The
        Company is in compliance with all material covenants, including all financial
        covenants, in all notes, indentures, bonds and other instruments or agreements
        evidencing any Indebtedness.

       

      3.21.  Licenses
        and Permits.
        Schedule 3.21 is a complete and correct list of each material license,
        franchise, permit, order or approval or other similar authorization affecting,
        or relating in any way to, the Business, together with the name of the
        government agency or entity issuing the same (the “Permits”). Such Permits are
        valid and in full force and effect and, assuming the related Company Consents,
        if any, have been obtained prior to the Closing Date, are transferable by
        the
        Company, and none of the Permits will, assuming the related Company Consents
        have been obtained or waived prior to the Closing Date, be terminated or
        impaired or become terminable as a result of the transactions contemplated
        hereby. The Company has all Permits necessary to operate the Business other
        than
        those Permits whose absence individually or in the aggregate would not cause
        a
        Material Adverse Effect.

       

      3.22.  Compliance
        with Laws.
        The
        Company is not in violation of, has not violated, and to the knowledge of
        the
        Company, is not under investigation with respect to nor have been threatened
        to
        be charged with or given notice of, any violation or alleged violation of,
        any
        Law or Order, nor is there any basis for any such charge.

       

      3.23.  Pre-payments.
        Except
        as set forth on Schedule 3.23, the Company has not received any payments
        with
        respect to any services to be rendered or goods to be provided after the
        Closing.

       

      3.24.  Employees.
        Schedule 3.24 sets forth a true and complete list of the names, titles, annual
        salaries or wage rates and other compensation, vacation and fringe benefits,
        claims under benefit plans that the Company has been made aware of, resident
        alien status (if applicable), residence addresses, social security numbers,
        and
        office location of all employees of the Company, indicating part-time and
        full-time employment and all changes in salaries and wage rates per employee
        since January 1, 2004. The Company has not promised any employee, consultant
        or
        agent of the Company that he or she will be employed by or receive any
        particular benefits from the Parent or Acquisition Corp. on or after the
        Closing. Schedule 3.24 sets forth a true and complete list of the names,
        addresses and titles of the directors and officers of the
        Company.

      
        
          
          

        

        
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      3.25.  Compliance
        with Labor Laws and Agreements.
        The
        Company has complied with all applicable Laws and Orders relating to employment
        or labor other than those Laws and Orders with which it could fail to comply,
        either individually or in the aggregate, without causing a Material Adverse
        Effect. Except as set forth on Schedule 3.25, no present or former employee,
        officer or director of the Company has, or will have at the Closing Date,
        any
        claim against the Surviving Corporation for any matter including for wages,
        salary, vacation, severance, or sick pay except for the same incurred in
        the
        ordinary course of business for the last payroll period prior to the Closing
        Date. To the knowledge of the Company, there is no:

       

      (a)  unfair
        labor practice complaint against the Company pending before the National
        Labor
        Relations Board or any state or local agency;

       

      (b)  pending
        labor strike or other material labor trouble affecting the Company;

       

      (c)  material
        labor grievance pending against the Company;

       

      (d)  pending
        representation question respecting the employees of the Company; or

       

      (e)  pending
        arbitration proceeding arising out of or under any collective bargaining
        agreement to which the Company is a party.

       

      In
        addition, to the Company’s knowledge: (i) none of the matters specified in
        clauses (a) through (e) above is threatened against the Company; (ii) no
        union
        organizing activities have taken place with respect to the Company; and (iii)
        no
        basis exists for which a claim may be made under any collective bargaining
        agreement to which the Company is a party.

       

      3.26.  Pension
        and Benefit Plans.
        Except
        as set forth on Schedule 3.26, the Company is not individually or jointly
        and
        severally liable, and, to the knowledge of the Company, the Company’s officers
        and employees are not liable for any liability arising under ERISA, the Code
        or
        any other law or regulation, relating to: (1)
        an
        employee benefit plan, within the meaning of Section
        3(3) of
        ERISA (a “Plan”), covering or formerly covering any present or former employee
        of the Company (a “Company Plan”); (2) a Plan not described in clause (1)
        covering or formerly covering any present or former employee of a Person
        which,
        together with the Company, are treated as a single employer under Code Section
        414 (such Person hereinafter being referred to as an “ERISA Affiliate” and such
        Plan hereinafter being referred to as an “ERISA Affiliate Plan”); or (3) an
        employee benefit plan or arrangement, other than an ERISA Plan, maintained
        by
        the Company providing benefits to some or all their employees or directors,
        including, but not limited to, stock option, stock appreciation, equity
        incentive and deferred compensation plans and arrangements (a “Benefits
        Arrangement”), which (in all cases) is not fully and accurately reflected in the
        Company’s most recent Financial Statement or on Schedule
        3.26. No
        Company Plan or ERISA Affiliate Plan has incurred any “accumulated funding
        deficiency” as that term is defined in Section 412 of the Code (whether or not
        waived) and, with respect to each Company Plan and ERISA Affiliate Plan,
        the
        accumulated benefit obligation of the Plan does not exceed the fair market
        value
        of the assets of such Plan based upon actuarial 

      
        
          
          

        

        
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      assumptions
        which are reasonable in the aggregate. The Company Plans and Benefits
        Arrangements have been maintained and administered in all respects in compliance
        with all applicable laws, rules and regulations and the applicable plan
        documents except where the failure to comply would not have a Material Adverse
        Effect. The Company Plans which are intended to be qualified under Code Section
        401(a) have received a determination letter from the IRS that the Plan satisfies
        the requirements of the Code, as amended by the Tax Reform Act of 1986, has
        not
        been amended since receiving such determination letter (other than by the
        adoption of IRS model amendments) and nothing has occurred with respect thereto
        which could reasonably be expected to result in the loss of such qualification.
        Except as set forth on Schedule 3.26 hereto, (i) the Company has not received
        written or oral notice of any Claims pending (other than routine benefit
        claims)
        or, to the knowledge of the Company, threatened, relating to the Company
        Plan or
        Benefits Arrangement; (ii) the Company has not received written or oral notice
        from any Governmental Entity, including the IRS, the Department of Labor
        and the
        Pension Benefit Guaranty Corporation (“PBGC”), that such Governmental Entity has
        initiated an examination, audit or investigation of a Company Plan or Benefits
        Arrangement which has not been completed; (iii) the Company has not received
        written or oral notice of, no event has occurred and, to the Company’s
        knowledge, there does not now exist any condition or set of circumstances,
        that
        could subject the Company to any material liability arising under the Code,
        ERISA or any other applicable legal requirement or under any indemnity Agreement
        to which the Company is a party, excluding liability for routine benefit
        claims
        and funding obligations payable in the ordinary course; (iv) to the knowledge
        of
        the Company, the transactions contemplated by the Transaction Documents will
        not
        result in a reportable event, within the meaning of ERISA Section 4043, other
        than a reportable event with respect to which the ERISA Section 4043 reportable
        event notice requirement has been waived or the PBGC has announced that it
        will
        not apply a penalty for failure to satisfy the reportable event notice
        requirement; (v) the
        transactions contemplated by the Additional Agreements will not result in
        a
        liability for severance or termination pay or result in increased or accelerated
        employee benefits becoming payable to any of the employees of the Company
        pursuant to the terms of any Contract; (vi) all contributions to Company
        Plans
        and Benefit Arrangements (including both employee and employer contributions)
        which are required to have been made, whether by virtue of the terms of the
        particular plan or arrangement or by operation of law, have been made by
        the due
        date thereof (including all applicable extensions) and all contributions
        which
        are not yet due but which relate to periods which began prior to the date
        hereof
        have either been paid or have been reflected by the Company as an accrued
        liability on the Company’s books and records or are set forth on Schedule 3.26
        hereto; (vii) the Company does not maintain any plan or arrangement which
        provides for retiree health or other welfare benefits, except as required
        by
        COBRA; (viii) the
        Company has not currently or in the past participated in a multiemployer
        plan,
        within the meaning of Section 3(37) or 4001(a)(3) of ERISA (a “Multiemployer
        Plan”); and (ix) the Company is not under an obligation (express or implied) to
        modify the Company Plan or Benefit Arrangement. Schedule 3.26 contains a
        complete list of all Company Plans currently maintained by the Company or
        in
        which the Company currently participates (“Current Company Plans”) and all
        Benefit Arrangements. With respect to each current Company Plan, the Company
        has
        delivered to the Purchaser a correct and complete copy of (1) the Plan document,
        (2) the summary plan description, (3) the most recent Annual Report (Form
        5500
        series) and accompanying Schedules, (4) the most recent certified financial
        statements, and (5) if applicable, the most recent actuarial valuation report.
        With respect to each Benefit Arrangement, the Company has delivered to the
        Purchaser a correct and complete copy of each applicable plan document,
        Agreement and/or summary description.

      
        
          
          

        

        
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      3.27.  Employment
        Matters.
        Schedule 3.27 sets forth a true and complete list of every employment agreement,
        commission agreement, employee group or executive medical, life, or disability
        insurance plan, and each incentive, bonus, profit sharing, retirement, deferred
        compensation, equity, phantom equity, option, equity purchase, equity
        appreciation right or severance plan of the Company now in effect or under
        which
        the Company has or might have any obligation, or any understanding between
        the
        Company and any employee concerning the terms of such employee’s employment that
        does not apply to such Company’s employees generally (collectively, “Labor
        Agreements”).

       

      3.28.  Tax
        Matters.

       

      (a)  Compliance
        Generally.
        Except
        as set forth on Schedule 3.28(a), the Company has (A) duly and timely filed
        all
        Tax Returns required to be filed by the Company on or prior to the Effective
        Time, which Tax Returns are true, correct and complete, and (B) duly and
        timely
        paid all Taxes due and payable in respect of all periods up to and including
        the
        date which includes the Effective Time or has made adequate provision on
        its
        books and records and Financial Statements in accordance with GAAP for any
        such
        Tax which is not due on or before such time. Prior to the Closing Date, the
        Company shall provide Parent and Acquisition Corp. with a schedule which
        sets
        forth each Taxing jurisdiction in which the Company has filed or is required
        to
        file Tax Returns and whether the Company has filed consolidated, combined,
        unitary or separate income or franchise Tax Returns with respect to each
        such
        jurisdiction and a copy of such Tax Returns as have been requested by Parent
        and
        Acquisition Corp. Any Tax Returns filed subsequent thereto were consistent
        with
        the Tax Returns finished to the Buyer and did not make, amend or terminate
        any
        election with respect to any Tax or change any accounting method, practice
        or
        procedure. The Company has compiled with all applicable law relating to the
        reporting, payment, collection and withholding of Taxes and has duly and
        timely
        withheld or collected, paid over and reported all Taxes required to be withheld
        or collected by the Company on or before the date hereof.

       

      (b)  No
        Audit. Except
        as
        set forth on Schedule 3.28(b) (A) no Taxing Authority has asserted any
        adjustment that could result in an additional Tax for which the Company is
        or
        may be liable or that could result in a Lien on any of its assets which has
        not
        been fully paid or adequately provided for on the Closing Balance Sheet
        (collectively, “Tax Liability”), or which adjustment, if asserted in another
        period, would result in any Tax Liability, (B) there is not pending audit,
        examination, investigation, dispute, proceeding or claim (collectively,
“Proceeding”) relating to any Tax Liability and, to the knowledge of the
        Company, no Taxing Authority is contemplating such a Proceeding and there
        is not
        basis for any such Proceeding, (C) no statute of limitations with respect
        to any
        Tax has been waived or extended (unless the period to which it has been waived
        or extended has expired), (D) there is no outstanding power of attorney
        authorizing anyone to act on behalf of the Company in connection with any
        Tax
        Liability, Tax Return or Proceeding relating to any Tax, (E) there is not
        outstanding closing agreement, ruling request, request to consent to change
        a
        method of accounting, subpoena or request for information with or by any
        Taxing
        authority with respect to the Company, its income, assets or business, or
        any
        Tax Liability, (F) the Company is not required to include any adjustment
        under
        Section 481 of the Code (or any corresponding provision of applicable law)
        in
        income for any period ending after the Closing Date, (G) the Company is not
        and has never been a party to any Tax sharing or Tax allocation agreement,
        arrangement or understanding, (H) The Company is not and has never been
        included in any consolidated, combined or unitary Tax Return, (I) all Taxable
        periods for the assessment or collection of any Tax Liability are closed
        by
        agreement or by operation of the normal statute of limitations (without
        extension) or will close by operation of the normal statute of limitations
        for
        such Taxes (in each case determined without regard to any omission, fraud
        or
        other special circumstance other than the timely filing of the Tax Return),
        and
        (J) no Taxing Authority has ever asserted that the Company should file a
        Tax
        Return in a jurisdiction where it does not file.

      
        
          
          

        

        
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      (c)  Taxes.
        The
        Company is not a party to any agreement, contract or arrangement for services
        that would result, individually or in the aggregate, in the payment of any
        amount that would not be deductible by the Company by reason of Section 162,
        280G or 404 of the Code. The Company is not a “consenting corporation” within
        the meaning of Section 341(f) of the Code (as in effect prior to the repeal
        of
        such provision). The Company does not have any plan, arrangement or agreement
        providing for deferred compensation that
        is
        subject to Section 409A(a) of the Code or any asset, plan, arrangement or
        agreement that is subject to Section 409A(b) of the Code. The Company does
        not
        have any “tax-exempt bond financed property” or “tax-exempt use property” within
        the meaning of Section 168(g) or (h), respectively, of the Code. The Company
        has
        not entered into any sale-leaseback or leveraged lease transaction. None
        of the
        assets of the Company is required to be treated as being owned by any other
        person pursuant to the “safe harbor” leasing provisions of Section 168(f)(8) of
        the Internal Revenue Code of 1954, as in effect prior to the repeal of said
        leasing provisions. The Company has never made or been required to make an
        election under Section 338 of the Code. During the last two years, the Company
        has not engaged in any exchange under which gain realized on the exchanged
        was
        not recognized under Section 1031 of the Code. The Company has not constituted
        a
“distributing corporation” or a “controlled corporation” under Section 355 of
        the Code in any distribution in the last two years or pursuant to a plan
        or
        series of related transactions (within the meaning of Code Section 355(e))
        with
        the transactions contemplated by this Agreement. The Company is not and has
        never been a “personal holding company” (within the meaning of Code Section
        542), a shareholder in a “controlled foreign corporation” (within the meaning of
        Code Section 957), in a “foreign personal holding company” (within the meaning
        of Code Section 552), or in a “passive foreign investment company” (within the
        meaning of Code Section 1297), or an owner in any entity treated as a
        partnership or disregarded entity for federal income tax purposes. The Company
        does not have and has never had a fixed place of business or permanent
        establishment in any foreign country. None of the outstanding indebtedness
        of
        the Company constitutes indebtedness to which any interest deduction may
        be
        disallowed under Section 163(i), 163(l), 265 or 279 of the Code or under
        any
        other provision of Applicable Law. The Company has not been a “United States
        real property holding corporation” (within the meaning of Code Section
        897(c)(2)) at any time during the applicable period specified in Section
        897(c)(1)(A)(ii) of the Code. The Company has not entered into any “reportable
        transaction” (within the meaning of Treasury Regulations Section 1.6011-4 or any
        predecessor thereof). In the case of any transaction that could result in
        a
“substantial understatement to income tax” (within the meaning of Code Section
        6662(d)) if the claimed Tax treatment were disallowed, the Company has
“substantial authority” (within the meaning of Code Section 6662(d)) for the
        claimed treatment, or in the case of a transaction other than a “tax shelter”
(within the meaning of Code Section 6662(d)(2)(C)(ii)), has “adequately
        disclosed” (within the meaning of Code Section 6662(d)) the relevant facts
        affecting the tax treatment on its income Tax Return.

      
        
          
          

        

        
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      (d)  Taxes
        and Tax Return Defined.
        For
        purposes of this Agreement, “Tax” shall mean all federal, state, local and
        foreign tax, charge, fee, levy, deficiency or other assessment of whatever
        kind
        or nature (including without limitation, any net income, gross income, gross
        receipts, sales, use, ad valorem, transfer, franchise, profits, license,
        withholding, payroll, employment, unemployment, excise, estimated, severance,
        stamp, occupation, real property, personal property, intangible property,
        occupancy, recording, minimum, environmental and windfall profits tax),
        including any liability therefor as a transferee (including without limitation
        under Section 6901 of the Code or any similar provision of applicable law),
        as a
        result of Treasury Regulation Section 1.1502-6 or, any similar provision
        of
        applicable law, or as a result of any Tax sharing or similar agreement, together
        with any interest, penalty, addition to tax or additional amount imposed
        by any
        federal, state, local or foreign Taxing authority. For purposes of this
        Agreement, “Tax Return” includes any return, declaration, report, claim for
        refund or credit, information return or statement, and any amendment thereto,
        including without limitation any consolidated, combined or unitary return
        or
        other document (including any related or supporting information or schedule),
        filed or required to be filed with any federal, state, local or foreign
        governmental entity or agency in connection with the determination, assessment,
        collection or payment of Taxes or the administration of any laws, regulations
        or
        administrative requirements relating to Taxes or ERISA.

       

      3.29.  Finders’
        Fees.
        There
        is no investment banker, broker, finder or other intermediary that has been
        retained by or is authorized to act on behalf of the Company, any Stockholder
        or
        any of their respective Affiliates who might be entitled to any fee or
        commission from either Acquisition Corp., the Surviving Corporation, Parent
        or
        any of its Affiliates upon consummation of the transactions contemplated
        by this
        Agreement.

       

      3.30.  Business
        Operations; Servers.

       

      (a)  Schedule
        3.30(a) is a complete and correct list of the methods of payment (including
        specific types of credit cards accepted and whether or not personal checks,
        bank
        checks or money orders are accepted) that the Company accepts for sales on
        its
        Websites. Schedule 3.30(a) also indicates the average amount of time previously
        taken for the Company to receive payment on any form of payment and the
        likelihood of the Company not receiving payment based on the form of
        payment.

       

      (b)  The
        Company owns all of its servers and other computer equipment (other than
        webservers) necessary to operate its Business as conducted as of the date
        hereof
        and as such Business will be conducted by the Company as of the
        Closing.

       

      (c)  The
        amounts payable and paid by the Company each month for various hosting and
        bandwidth services provided to the Company have not materially increased
        since
        December 31, 2005 and except as set forth on Schedule 3.30(c), are not expected
        to materially increase. Consummation of the transactions contemplated by
        this
        Agreement will not result in any increase in fees or any change with respect
        to
        such services.

      
        
          
          

        

        
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      (d)  Acquisition
        Corp. has been furnished with complete and correct copies of the standard
        terms
        and conditions of sale, if any, of each of the products of the Company. Except
        as set forth on Schedule 3.30(d) or as required by law, no product manufactured,
        sold or delivered by the Company is subject to any guaranty, warranty or
        other
        indemnity, express or implied, beyond such standard terms and conditions.
        The
        warranty reserve is reflected in the Financial Statements in accordance with
        GAAP.

       

      (e)  Except
        in
        the ordinary course of business or as set forth on Schedule 3.30(e), the
        Company
        has not entered into, or offered to enter into, any written agreement, Contract
        or other arrangement with respect to the Business pursuant to which such
        the
        Company is or will be obligated to make any rebates, discounts, promotional
        allowances or similar payments or arrangements to any customer (“Rebate
        Obligations”). All Rebate Obligations listed on Schedule 3.30(e) and all
        ordinary course Rebate Obligations are reflected in the Financial Statements
        in
        accordance with GAAP.

       

      (f)  Except
        as
        set forth in Schedule 3.30(f), the Company has not experienced any returns
        of
        its products since December 31, 2005 other than returns in the ordinary course
        of business. All product returns listed on Schedule 3.30(f) are reflected
        on the
        Financial Statements in accordance with GAAP.

       

      3.31.  Powers
        of Attorney and Suretyships.
        The
        Company has no general or special powers of attorney outstanding (whether
        as
        grantor or grantee thereof) or any obligation or liability (whether actual,
        accrued, accruing, contingent, or otherwise) as guarantor, surety, co-signer,
        endorser, co-maker, indemnitor or otherwise in respect of the obligation
        of any
        Person.

       

      3.32.  Other
        Information.
        Neither
        this Agreement, nor any of the documents or other information made available
        to
        Parent or its Affiliates, attorneys, accountants, agents or representatives
        pursuant hereto or in connection with Parent’s due diligence review of the
        Business or the transactions contemplated by this Agreement contains or will
        contain any untrue statement of a material fact or omits or will omit to
        state a
        material fact necessary in order to make the statements contained therein
        not
        misleading. To the best knowledge of the Company, the Company has provided
        Parent with all material information regarding the Business.

       

      3.33.  Certain
        Business Practices.
        Neither
        the Company nor any director, officer, agent or employee of the Company (in
        their capacities as such) has (i) used any funds for unlawful contributions,
        gifts, entertainment or other unlawful expenses relating to political activity,
        (ii) made any unlawful payment to foreign or domestic government officials
        or
        employees, to foreign or domestic political parties or campaigns or violated
        any
        provision of the Foreign Corrupt Practices Act of 1977 or (iii) made any
        other
        unlawful payment. Neither the Company nor any director, officer, agent or
        employee of the Company (nor any Person acting on behalf of any of the
        foregoing, but solely in his or her capacity as a director, officer, employee
        or
        agent of the Company) has, since January 1, 2000, directly or indirectly,
        given
        or agreed to give any gift or similar benefit in any material amount to any
        customer, supplier, governmental employee or other Person who is or may be
        in a
        position to help or hinder the Company or assist the Company in connection
        with
        any actual or proposed transaction, which, if not given could reasonably
        be
        expected to have had an adverse effect on the Company, or which, if not
        continued in the future, could reasonably be expected to adversely affect
        the
        business or prospects of the Company, or which could reasonably be expected
        to
        subject the Company to suit or penalty in any private or governmental litigation
        or proceeding.

      
        
          
          

        

        
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      3.34.  Money
        Laundering Laws.
        The
        operations of the Company are and have been conducted at all times in compliance
        with laundering statutes in all applicable jurisdictions, the rules and
        regulations thereunder and any related or similar rules, regulations or
        guidelines, issued, administered or enforced by any governmental authority
        (collectively, the “Money Laundering Laws”) and no Action involving the Company
        with respect to the Money Laundering Laws is pending or, to the knowledge
        of the
        Company, threatened.

       

      ARTICLE
        IV

      REPRESENTATIONS
        AND WARRANTIES OF STOCKHOLDERS

       

      Each
        Stockholder, severally and not jointly, represents to the Acquisition Corp.
        and
        the Parent as follows:

       

      4.1.  Ownership
        of Stock; Authority.

       

      (a)  Each
        Stockholder has good and marketable title to the Stockholder’s Securities, free
        and clear of any and all Liens.

       

      (b)  Each
        Stockholder has full legal capacity, power and authority to execute and deliver
        this Agreement and the Additional Agreements to which such Stockholder is
        named
        as a party, to perform such Stockholder’s obligations hereunder and thereunder
        and to consummate the transactions contemplated hereby and thereby. This
        Agreement and the Additional Agreements to which each Stockholder is named
        as a
        party have been, or at Closing will be, duly executed and delivered by each
        Stockholder and are, or upon their execution and delivery will be, valid
        and
        legally binding obligations of each Stockholder, enforceable against each
        Stockholder in accordance with their respective terms, subject
        to (i) laws of general application relating to bankruptcy, insolvency and
        the
        relief of debtors, or (ii) rules of law governing specific performance,
        injunctive relief or other equitable remedies.

       

      (c)  Neither
        the execution and delivery by such Stockholder of any or all of the Agreements
        and the Additional Agreements to which such Stockholder is a party, nor the
        consummation by such Stockholder of the transaction contemplated thereby,
        will
        (i) conflict with, result in a breach of, constitute (with or without due
        notice
        or lapse of time or both) a default under, or require any notice, consent
        or
        waiver under, any instrument, contract, agreement or arrangement to which
        such
        Stockholder is a party or by which such Stockholder is bound, or (ii) result
        in
        the imposition of any Lien upon the Stockholder’s Securities owned by such
        Stockholder.

       

      4.2.  Approvals.
        No
        consent, approval, waiver, authorization or novation is required to be obtained
        by such Stockholder from, and no notice or filing is required to be given
        by
        such Stockholder to or made by any Stockholder with, any Authority or other
        Person in connection with the execution, delivery and performance by such
        Stockholder of this Agreement and each of the Additional
        Agreements.

      
        
          
          

        

        
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      4.3.  Non-Contravention.
        The
        execution, delivery and performance by such Stockholder of this Agreement
        and
        each of the Additional Agreements, and the consummation of the transaction,
        do
        not and will not (a) violate any provision of the articles of incorporation,
        bylaws or other organizational documents of such Stockholder if it is not
        a
        natural person, or (b) violate or result in a breach of or constitute a default
        under any Law, judgment, injunction, order, decree or other restriction of
        any
        Authority to which such Stockholder, or the Stockholder’s Securities owned by
        such Stockholder, is subject.

       

      4.4.  Litigation
        and Claims.
        There
        is no civil, criminal or administrative action, suit, demand, claim, hearing,
        proceeding or disclosed investigation pending or, to the knowledge of such
        Stockholder, threatened, against such Stockholder and such Stockholder is
        not
        subject to any order, writ, judgment, award, injunction or decree of any
        Authority of competent jurisdiction or any arbitrator that would prevent
        consummation of the transaction or materially impair the ability of such
        Stockholder to perform its obligations hereunder.

       

      4.5.  Merger
        Consideration.
        Each
        holder of Company Preferred Stock acknowledges that he, she or it is not
        receiving the consideration he, she or it would be entitled pursuant to the
        Company’s Certificate of Incorporation, as amended to date. Each holder of
        Company Preferred Stock hereby waives any and all right, title and interest
        in
        and to any consideration that he, she or it would be entitled to pursuant
        to the
        Certificate of Incorporation, as amended to date that is in excess of the
        consideration that is provided for in this Agreement.

       

      4.6.  Investment
        Representations.
        For
        purposes of this Section 4.6 of the Agreement only, “Stockholder” does not
        include any person receiving only cash as Merger Consideration in accordance
        with Schedule I hereto.

       

      (a)  Each
        Stockholder is an “accredited investor” as such term is defined in Rule 501 of
        Regulation D (“Reg. D”) promulgated under the Act by virtue of the fact that
        each Stockholder is a natural person whose individual net worth or joint
        net
        worth with that person’s spouse exceeds $1,000,000; and or is a natural person
        who had an individual income in excess of $200,000 in each of the two most
        recent years or joint income with that person’s spouse is in excess of $300,000
        in each of those years and has a reasonable expectation of reaching the same
        income in the current year. Each Stockholder acknowledges that Parent has
        the
        right to require evidence of such Stockholder’s status as an accredited
        investor, if necessary.

       

      (b)  Each
        Stockholder acknowledges that it has prior investment experience, including
        investments in non-listed and non-registered securities, or has employed
        the
        services of an investment advisory, attorney or accountant to evaluate the
        merits and risks of such an investment on its behalf, and each Stockholder
        represents that it or he, as the case may be, understands the highly speculative
        nature of an investment in Preferred Stock which may result in the loss of
        the
        total amount of such investment.

       

      (c)  Each
        Stockholder has adequate means of providing for such Stockholder’s current needs
        and possible personal contingencies, and each Stockholder has no need, and
        anticipates no need in the foreseeable future, for liquidity in such
        Stockholder’s investment in the Preferred Stock. Each Stockholder is able to
        bear the economic risks of this investment and, consequently, without limiting
        the generality of the foregoing, each Stockholder is able to hold the Preferred
        Stock for an indefinite period of time and has a sufficient net worth to
        sustain
        a loss of the entire investment in the event such loss should
        occur.

      
        
          
          

        

        
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      (d)  No
        Stockholder has made an overall commitment to investments which are not readily
        marketable that are disproportionate to such Stockholder’s net worth, and such
        Stockholder’s investment in the Preferred Stock will not cause such overall
        commitment to become excessive.

       

      (e)  Except
        as
        otherwise set forth in Article V, Parent has not and is not making any
        representations or warranties to the Stockholders or providing any advice
        or
        information to the Stockholders at all. Each Stockholder acknowledges that
        it
        has retained its own professional advisors to evaluate the tax and other
        consequences of an investment in the Preferred Stock and Parent Common
        Stock.

       

      (f)  Each
        Stockholder acknowledges that this offering of Preferred Stock has not been
        reviewed by the SEC because this is intended to be a non-public offering
        pursuant to Section 4(2) of the Act and Rule 506 under Regulation D of the
        Act.
        Each Stockholder acknowledges that it is not acquiring the Preferred Stock
        as a
        result of any general solicitation or advertising. The Preferred Stock and
        underlying Parent Common Stock will be received by each Stockholder for the
        Stockholder’s own account, for investment and not for distribution or resale to
        others.

       

      (g)  Each
        Stockholder understands that there is no market for the Preferred
        Stock.

       

      (h)  Each
        Stockholder understands and consents to the placement of a legend on any
        certificate or other document evidencing Preferred Stock and Parent Common
        Stock
        stating that such Preferred Stock or Parent Common Stock has not been registered
        under the Act and setting forth or referring to the restrictions on
        transferability and sale thereof. Each certificate evidencing the shares
        shall
        bear the legends set forth below, or legends substantially equivalent thereto,
        together with any other legends that may be required by federal or state
        securities laws at the time of the issuance of the Preferred Stock or Parent
        Common Stock:

       

      THE
        SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
        SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR
        OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL (I) REGISTERED
        UNDER THE ACT OR (II) THE ISSUER OF THE SHARES (THE “ISSUER”) HAS RECEIVED AN
        OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT
        SUCH
        OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE
        ACT.

      
        
          
          

        

        
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      4.7.  Tax.
        Neither
        the Stockholders nor the Company will be required to pay any transfer Taxes
        to
        any Authority with respect to any transaction contemplated by this
        Agreement.

       

      ARTICLE
        V

       

      REPRESENTATIONS
        AND WARRANTIES OF PARENT

       

      Parent
        represents and warrants to the Company and each Stockholder as
        follows:

       

      5.1.  Due
        Incorporation.
        Parent
        is a corporation duly organized, validly existing and in good standing under
        the
        Laws of the State of Texas. Except as set forth on Schedule 5.1, the Parent
        is
        not qualified to do business as a foreign corporation in any jurisdiction,
        and
        there is no jurisdiction in which the character of the property owned or
        leased
        by the Parent or the nature of its activities make qualification of the Parent
        in any such jurisdiction necessary, except where the failure to so qualify
        would
        have a Material Adverse Effect. Acquisition Corp. is a corporation duly
        organized, validly existing and in good standing under the Laws of the State
        of
        Delaware. Parent has all requisite power and authority, corporate and otherwise,
        and all governmental licenses, franchises, permits, authorizations, consents
        and
        approvals required to own, lease, and operate its assets, properties and
        businesses and to carry on its business as now conducted on the date hereof.
        Acquisition Corp. has not conducted any business to date and has only engaged
        in
        certain activities relating to its organization. Parent has not adopted any
        plan, or made any agreement in respect of any merger, consolidation, sale
        of all
        or substantially all of its assets, reorganization, recapitalization,
        dissolution or liquidation.

       

      5.2.  Corporate
        Authorization.
        The
        execution, delivery and performance by Parent and Acquisition Corp. of this
        Agreement and each of the other Additional Agreements to which it is a party
        and
        the consummation by Parent and Acquisition Corp. of the transactions
        contemplated hereby and thereby are within the corporate powers of Parent
        and
        Acquisition Corp. and have been duly authorized by all necessary corporate
        action on the part of Parent and Acquisition Corp. This Agreement constitutes,
        and upon their execution and delivery, each of the Additional Agreements
        will
        constitute, the valid and legally binding agreement of Parent or Acquisition
        Corp., as applicable, enforceable against each in accordance with their
        respective terms.

       

      5.3.  Governmental
        Authorization.
        Except
        for the Certificate of Amendment to Parent’s Certificate of Incorporation in
        connection with the issuance of Preferred Stock, none of the execution, delivery
        or performance by Parent or Acquisition Corp. of this Agreement or any
        Additional Agreement requires any consent, approval, license or other action
        by
        or in respect of, or registration, declaration or filing with, any Authority
        by
        Parent or Acquisition Corp., except for the filing of the certificate of
        amendment or certificate of designation by the Parent to create the Preferred
        Stock, a Form D with the SEC and applicable state authorities and a registration
        statement upon exercise of the Stockholders of their registration rights
        pursuant to the terms of this Agreement.

       

      5.4.  No
        Violation.
        Neither
        the execution and delivery of this Agreement or any Additional Agreement
        to be
        executed by Parent or Acquisition Corp. hereunder nor the consummation of
        the
        transactions contemplated herein and therein will (a) violate any provision
        of
        Parent’s or Acquisition Corp.’s Certificate of Incorporation, By-laws or other
        charter documents; (b) violate any Laws or Orders to which either Parent
        or
        Acquisition Corp. or their property is subject, or (c) violate the provisions
        of
        any material agreement or other material instrument binding upon or benefiting
        Parent or Acquisition Corp.

      
        
          
          

        

        
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      5.5.  Consents.
        There
        are no agreements, commitments, arrangements, contracts or other instruments
        binding upon Parent or Acquisition Corp. or any of their properties requiring
        a
        consent, approval, authorization, order or other action of or filing with
        any
        Person as a result of the execution, delivery and performance of this Agreement
        or any of the Additional Agreements or the consummation of the transactions
        contemplated hereby or thereby.

       

      5.6.  Litigation.
        There
        is no action, suit, investigation, hearing or proceeding pending against,
        or to
        the best knowledge of Parent, threatened against or affecting, Parent, any
        of
        its officers or directors, or the business of Parent, before any court or
        arbitrator or any governmental body, agency or official which if adversely
        determined against Parent, has or could reasonably be expected to have a
        material adverse effect on the business, assets, condition (financial or
        otherwise), liabilities, results or operations or prospects of Parent, or
        which
        in any manner challenges or seeks to prevent, enjoin, alter or delay the
        transactions contemplated hereby. There are no outstanding judgments against
        Parent.

       

      5.7.  Issuance
        of Preferred Stock.
        The
        Preferred Stock, when issued in accordance with this Agreement, will be duly
        authorized and validly issued, fully paid and nonassessable.

       

      5.8.  Finders’
        Fees.
        There
        is no investment banker, broker, finder or other intermediary which has been
        retained by or is authorized to act on behalf of Parent or Acquisition Corp.
        or
        any of their Affiliates who might be entitled to any fee or commission from
        The
        Company or the Stockholders or any of their respective Affiliates upon
        consummation of the transactions contemplated by this Agreement.

       

      5.9.  Charter
        Documents; Legality.
        Parent
        has previously delivered to the Company true and complete copies of its
        Certificate of Incorporation and By-Laws (the “Parent Charter Documents”), as in
        effect or constituted on the date hereof. The execution, delivery, and
        performance by Parent and Acquisition Corp. of this Agreement and any Additional
        Agreement to which Parent or Acquisition Corp. is to be a party has not violated
        and will not violate, and the consummation by Parent or Acquisition Corp.
        of the
        transactions contemplated hereby or thereby will not violate, any of the
        Parent
        Charter Documents or any Law.

       

      5.10.  Capitalization
        and Ownership of the Parent.
        Schedule 5.10 sets forth, with respect to the Parent, (i) Parent’s authorized
        capital, (ii) the number of Parent’s securities that are outstanding, and (iii)
        the number of securities convertible into or exercisable or exchangeable
        for the
        Parent’s securities. Except as set forth in the Exchange Act Filings, there is
        no Contract that requires or under any circumstance would require the Company
        to
        issue, or grant any right to acquire, any securities of the Parent, or any
        security or instrument exercisable or exchangeable for or convertible into,
        the
        capital stock or membership interest of the Parent or to merge, consolidate,
        dissolve, liquidate, restructure, or recapitalize the Parent.

      
        
          
          

        

        
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      5.11.  Financial
        Statements.

       

      (a)  Parent
        has filed with the SEC true and correct copies of the audited consolidated
        balance sheets of Parent and its consolidated subsidiaries as of December
        31,
        2005, and the related consolidated statements of operations, comprehensive
        loss
        and stockholders’ equity and cash flows for the year then ended, including
        footnotes thereto, audited by BDO Seidman LLP, registered independent public
        accountants ( the “Parent Financial Statements”). The Parent Financial
        Statements (i) were prepared in accordance with GAAP; (ii) fairly and accurately
        present the Parent’s financial condition and the results of its operations as of
        their respective dates and for the periods then ended, in all material respects;
        (iii) contain and reflect all necessary adjustments and accruals for a fair
        presentation of the Parent’s financial condition as of their dates, in all
        material respects; and (iv) contain and reflect adequate provisions for all
        reasonably anticipated liabilities for all material income, property, sales,
        payroll or other Taxes applicable to the Parent with respect to the periods
        then
        ended. The Parent has heretofore delivered to the Company complete and accurate
        copies of all “management letters” received by it from the Parent’s accountants
        and all responses during the last three years by lawyers engaged by the Parent
        to inquiries from the Parent’s accountant or any predecessor
        accountants.

       

      (b)  Except
        as
        specifically disclosed or as reflected in the Exchange Act Filings, reflected
        or
        fully reserved against in the Parent Financial Statements and for liabilities
        and obligations of a similar nature and in similar amounts incurred in the
        ordinary course of business since the date of the Parent Financial Statements,
        there are no liabilities, debts or obligations of any nature (whether accrued,
        absolute, contingent, liquidated or unliquidated, unasserted or otherwise)
        relating to the Parent. All debts and liabilities, fixed or contingent, which
        should be included under GAAP on an accrual basis on the Parent Financial
        Statements are included therein. Except as set forth on Schedule 5.11(b),
        the
        indebtedness evidenced by the Notes will be senior in right of payment to
        all
        existing indebtedness of the Parent, and the Liens that secure the Notes
        (consisting of all assets of the Company) will be senior in right of priority
        to
        all other Liens that secure any other existing or future indebtedness of
        the
        Parent covering the assets of the Company other than $3,000,000 in indebtedness
        in the aggregate.

       

      5.12.  Absence
        of Certain Changes.

       

      (a)  Except
        as
        set forth in Schedule 5.12(a), since December 31, 2005, the Parent has conducted
        its business in the ordinary course consistent with past practices, and there
        has not been:

       

      (i)  any
        Material Adverse Change or any event, occurrence, development or state of
        circumstances or facts which could reasonably be expected to result individually
        or in the aggregate in a Material Adverse Change or on the Parent’s ability to
        consummate the transactions contemplated herein or upon the value to the
        Stockholders or the Company of the transactions contemplated
        hereby;

       

      (ii)  any
        transaction, contract, agreement or other instrument entered into, or commitment
        made, by the Parent relating to the business of the Parent and its Subsidiaries
        or any relinquishment by the Parent or any Subsidiary of any Contract or
        other
        right, in either case other than transactions and commitments in the ordinary
        course of business consistent in all respects, including kind and amount,
        with
        past practices and those contemplated by this Agreement.

      
        
          
          

        

        
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      5.13.  Other
        Information.
        Neither
        this Agreement nor any of the documents filed by the Parent with the SEC,
        nor
        any other documents or other information made available to the Company, the
        Stockholders or their Affiliates, attorneys, accountants, agents or
        representatives pursuant hereto or in connection with the Company’s and the
        Stockholders’ due diligence review of the business of the Parent or the
        transactions contemplated by this Agreement contains or will contain any
        untrue
        statement of a material fact or omits or will omit to state a material fact
        necessary in order to make the statements contained therein not misleading.
        To
        the best knowledge of the Parent, the Parent has provided the Company with
        all
        material information regarding its business.

       

      5.14.  Compliance
        with Laws.
        The
        Parent is not in violation of, has not violated, and to the knowledge of
        Parent,
        is not under investigation with respect to nor have been threatened to be
        charged with or given notice of, any violation or alleged violation of, any
        Law
        or Order, nor is there any basis for any such charge.

       

      5.15.  Money
        Laundering Laws.
        The
        operations of the Parent are and have been conducted at all times in compliance
        with laundering statutes in all applicable jurisdictions, the rules and
        regulations thereunder and any related or similar rules, regulations or
        guidelines, issued, administered or enforced by any governmental authority
        (collectively, the “Money Laundering Laws”) and no Action involving the Parent
        with respect to the Money Laundering Laws is pending or, to the knowledge
        of the
        Parent, threatened.

       

      5.16.  Ownership
        of Parent Securities.
        Upon
        issuance and delivery of the Preferred Stock, Conversion Shares, Warrants
        and
        Warrant Shares, each as defined below, to each Stockholder pursuant to this
        Agreement against payment of the consideration therefor, the Preferred Stock,
        Conversion Shares, Warrants and Warrant Shares, as the case may be will be
        duly
        authorized and validly issued, fully paid and nonassessable, free and clear
        of
        all Liens, other than (i) restrictions arising from applicable securities
        laws,
        and (ii) any Lien created by or through such Stockholder. The delivery of
        the
        Notes, Preferred Stock and Warrants to each Stockholder at the Closing, the
        Parent Common Stock issuable upon conversion of the Preferred Stock (the
        “Conversion Shares”), and the Parent Common Stock issuable upon exercise of the
        Warrants (the “Warrant Shares”), will transfer good and valid title to, and
        beneficial ownership of, such securities to such Stockholder, provided that
        such
        securities will be subject to restrictions imposed by the Securities Act.
        The
        issuance and sale of the Notes, Preferred Stock and Warrants pursuant hereto
        (and the issuance of the Conversion Shares upon conversion of the Preferred
        Stock and the issuance of the Warrant Shares upon conversion of the Warrants)
        will not be subject to or give rise to any preemptive rights or rights of
        first
        refusal.

       

      5.17.  Acquisition
        Corp.
        Acquisition Corp. was incorporated in the State of Delaware on April 28,
        2006.
        Acquisition Corp. has no liabilities, debts or obligations of any nature
        (whether accrued, absolute, contingent, liquidated or unliquidated, unasserted
        or otherwise) except those incurred in connection with this Agreement and
        all of
        the transactions contemplated hereby.

      
        
          
          

        

        
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      ARTICLE
        VI  

       

      COVENANTS
        OF THE COMPANY PENDING CLOSING

       

      The
        Company covenants and agrees that:

       

      6.1.  Conduct
        of the Business.
        From the
        date hereof through the Closing Date, the Company shall conduct the Business
        only in the ordinary course (including the payment of accounts payable and
        the
        collection of accounts receivable), consistent with past practices, and shall
        not enter into any material transactions without the prior written consent
        of
        Parent, and shall use its best efforts to preserve intact the Company’s business
        relationships with employees, advertisers, suppliers, customers and other
        third
        parties.

       

      Without
        limiting the generality of the foregoing, from the date hereof until the
        Closing
        Date, without Parent’s prior written consent, the Company shall
        not:

       

      (a)  Except
        in
        the ordinary course of business, amend, waive any provision of, terminate
        prior
        to its scheduled expiration date, or otherwise compromise in any way, any
        Contract (including contracts described in clause (b) below), or any other
        right
        or asset of the Company;

       

      (b)  enter
        into any contract, agreement, lease, license or commitment, which (i) is
        with
        respect to real property, (ii) except in the ordinary course of business,
        extends for a term of one year or more or (iii) obligates the payment of
        more
        than $50,000 (individually or in the aggregate);

       

      (c)  make
        any
        capital expenditures in excess of $50,000 (individually or in the
        aggregate);

       

      (d)  sell,
        lease, license or otherwise dispose of any assets or assets covered by any
        Contract except (i) pursuant to existing contracts or commitments disclosed
        herein and (ii) sales of inventory in the ordinary course consistent with
        past
        practice;

       

      (e)  pay,
        declare or promise to pay any dividends or other distributions with respect
        to
        its capital stock, or pay, declare or promise to pay any other payments to
        any
        Stockholder or any Affiliate of the Company;

       

      (f)  authorize
        any salary increase of more than 10% for any employee making an annual salary
        of
        greater than $50,000 or in excess of $5,000 in the aggregate on an annual
        basis
        or change the bonus or profit sharing policies of the Company;

       

      (g)  obtain
        or
        suffer to exist any Indebtedness in excess of $25,000 in the
        aggregate;

       

      (h)  suffer
        or
        incur any Lien on any asset of the Company except for Liens existing as of
        the
        date hereof as set forth on Schedule 3.15(b);

      
        
          
          

        

        
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      (i)  suffer
        any material damage, destruction or loss of property related to any assets
        of
        the Company, which is not covered by insurance;

       

      (j)  delay,
        accelerate or cancel any receivables or Indebtedness owed to the Company
        or
        write-off or make further reserves against the same, except in the ordinary
        course of business;

       

      (k)  merge
        or
        consolidate with or acquire any other Person or be acquired by any other
        Person;

       

      (l)  suffer
        any insurance policy protecting the assets of the Company to lapse;

       

      (m)  make
        any
        change in its accounting principles or methods or write down the value of
        any
        inventory or assets;

       

      (n)  change
        the place of business of the Company;

       

      (o)  extend
        any loans other than travel or other expense advances to employees in the
        ordinary course of business not to exceed $2,000 individually or $7,500 in
        the
        aggregate;

       

      (p)  issue,
        redeem or repurchase any shares of their capital stock;

       

      (q)  effect
        or
        agree to any changes in shipping practices, terms or rates;

       

      (r)  reduce
        the prices of products sold from Inventory for customers except in the ordinary
        course of business;

       

      (s)  effect
        or
        agree to any change in any practices or terms, including payment terms, with
        respect to customers or suppliers;

       

      (t)  hire
        any
        employees, consultants or advisors;

       

      (u)  make
        or
        rescind any election related to Taxes, file any amended income Tax Return
        or
        make any changes in its methods of Tax accounting; or

       

      (v)  agree
        to
        do any of the foregoing.

       

      The
        Company will not (i) take or agree to take any action that might make any
        representation or warranty of the Company hereunder inaccurate in any respect
        at, or as of any time prior to, the Closing Date or (ii) omit to take, or
        agree
        to omit to take, any action necessary to prevent any such representation
        or
        warranty from being inaccurate in any respect at any such time.

       

      6.2.  Access
        to Information.

       

      (a)  From
        the
        date hereof until and including the Closing Date, the Company shall (a) continue
        to give Parent, its counsel and other representatives full access to the
        offices, properties, books and records of the Company, (b) furnish to Parent,
        its counsel and other representatives such information relating to the Business
        as such Persons may request and (c) cause the employees, counsel, accountants
        and representatives of the Company to cooperate with Parent in its investigation
        of the Business; provided
        that
        no
        investigation pursuant to this Section 6.2 (or any investigation prior to
        the date hereof) shall affect any representation or warranty given by the
        Company.

      
        
          
          

        

        
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      (b)  The
        Company shall arrange for representatives of Parent to meet with or speak
        to the
        representatives of the three largest customers of the Company.

       

      6.3.  Notices
        of Certain Events.
        The
        Company shall promptly notify Parent of:

       

      (i)  any
        notice or other communication from any Person alleging or raising the
        possibility that the consent of such Person is or may be required in connection
        with the transactions contemplated by this Agreement or that the transactions
        contemplated by this Agreement might give rise to any claims or causes of
        action
        or other rights by or on behalf of such Person or result in the loss of any
        rights or privileges of the Company to any such Person;

       

      (ii)  any
        notice or other communication from any Authority in connection with the
        transactions contemplated by this Agreement;

       

      (iii)  any
        actions, suits, claims, investigations or proceedings commenced or threatened
        against, relating to or involving or otherwise affecting the Company or the
        Business or that relate to the consummation of the transactions contemplated
        by
        this Agreement; and

       

      (iv)  the
        occurrence of any fact or circumstance which might make any representation
        made
        hereunder by the Company and/or any Stockholder false in any respect or result
        in the omission or the failure to state a material fact.

       

      ARTICLE
        VII

       

      COVENANTS
        OF THE COMPANY AND THE STOCKHOLDERS

       

      The
        Company and, to the extent specifically stated, each of the Stockholders,
        severally but not jointly, covenant and agree that:

       

      7.1.  Confidentiality.
        Except
        as otherwise required by law, on and after the Closing, no Stockholder shall,
        without the prior written consent of Parent, or a person authorized thereby,
        disclose to any other Person or use (whether for the account of any Stockholder
        or any other party) any confidential information or proprietary work product
        of
        Parent, Acquisition Corp. or the Company or any client of Parent, Acquisition
        Corp. or the Company. In the event the Company or any Stockholder believes
        that
        it is required to disclose any such confidential information pursuant to
        applicable Laws, the Company or such Stockholder shall give timely written
        notice to Parent so that Parent may have an opportunity to obtain a protective
        order or other appropriate relief. The Company and all Stockholders shall
        cooperate fully in any such action by Parent.

      
        
          
          

        

        
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      7.2.  Non-Solicitation.

       

      (a)  The
        Stockholders and their Affiliates may not, during the period beginning on
        the
        Closing Date and ending three years and six months (i.e.,
        3.5
        years) after the Closing Date (the “Restriction Period”), directly or indirectly
        through any other individual, person or entity, employ, solicit or induce
        any
        individual other than Roy David beginning ninety (90) days after the Closing
        Date, who is, or was at any time during the period beginning on or after
        December 31, 2005 and through and after, the Closing Date, an employee or
        consultant of the Company to terminate or refrain from renewing or extending
        his
        or her employment by or consulting relationship with the Company or to become
        employed by or enter into a consulting relationship with any of the Stockholders
        or any of their Affiliates or any other individual, person or
        entity.

       

      (b)  The
        Stockholders and their Affiliates shall not, during the Restriction Period,
        directly or indirectly through any other individual, person or entity, solicit,
        persuade or induce any Customer to terminate, reduce or refrain from renewing
        or
        extending its contractual or other relationship with the Company or any of
        its
        Affiliates in regard to the purchase of products or services manufactured,
        marketed or sold by the Company, or to become a customer of or enter into
        any
        contractual or other relationship with any of the Stockholders or any of
        their
        Affiliates or any other individual, person or entity in regard to the purchase
        of products or services similar or identical to those manufactured, marketed
        or
        sold by the Company or any of its Affiliates. For purposes hereof, “Customer”
means any individual, person or entity which is or was at any point in time
        during the two (2) year period prior to the Closing Date a customer of the
        Company or any of its Affiliates.

       

      (c)  The
        Stockholders and their Affiliates may not, during the Restriction Period,
        directly or indirectly through any other individual, person or entity, solicit,
        persuade or induce any customer or supplier to terminate, reduce or refrain
        from
        renewing or extending his, her or its contractual or other relationship with
        the
        Company or any of its Affiliates or to become a customer or supplier of or
        enter
        into any contractual or other relationship with the Company, directly or
        indirectly, in regard to the sale of products or services similar or identical
        to those manufactured, marketed or sold by the Company or any of its Affiliates
        as of the Closing Date.

       

      7.3.  Non-Competition.
        During
        the Restriction Period, neither the Stockholders, which for the purposes
        of this
        Section 7.3 of the Agreement only shall mean Stockholders owning more than
        5% of
        the common stock of the Company, par value $.001 per share, nor any of their
        Affiliates shall (except on behalf of the Company or any of its Affiliates,
        if
        any, with respect to any Stockholder who continues to be employed by the
        Company) directly or indirectly, in his, her and its own capacity or through
        one
        or more Affiliates, whether as owner, consultant, executive, partner, member,
        manager, officer, director, venturer, or agent, or through stock ownership,
        investment of capital, lending of money or property, or rendering of services,
        or otherwise, engage in the Business; provided, that the each Stockholder
        may
        own not more than 3% of the outstanding shares of a company engaged in such
        Business if such shares are listed on the Nasdaq Stock Market or a national
        securities exchange; provided further, that the restriction in this Section
        7.3
        is limited to businesses in which the Acquisition Corp. or Parent currently
        engages or which the Acquisition Corp. or Parent enters into or evaluates
        (that
        relates to its current Business) during the Restriction Period.

       

      7.4.  Reporting
        and Compliance With Law.
        From
        the date hereof through the Closing Date, the Company shall duly and timely
        file
        all Tax Returns required to be filed with Authorities, pay any and all Taxes
        required by any Authority and duly observe and conform, in all material
        respects, to all applicable Laws and Orders.

      
        
          
          

        

        
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      7.5.  Injunctive
        Relief.
        If one
        or more of the Stockholders breaches, or threatens to commit a breach of,
        any of
        the covenants set forth in Section 7.1 or Section 14.4 (the “Restrictive
        Covenants”), Parent shall have the following rights and remedies, which shall be
        in addition to, and not in lieu of, any other rights and remedies available
        to
        Parent by agreement (including those set forth in Section 12.1 hereof), under
        law or in equity:

       

      (a)  The
        right
        and remedy to have the Restrictive Covenants specifically enforced by any
        court
        having equity jurisdiction, all without the need to post a bond or any other
        security or to prove any amount of actual damage or that money damages would
        not
        provide an adequate remedy, it being acknowledged and agreed that any such
        breach or threatened breach will cause irreparable injury to Parent and that
        monetary damages will not provide adequate remedy to Parent; and

       

      (b)  The
        right
        and remedy to require such breaching Stockholder(s) (i) to account for and
        pay
        over to Parent all compensation, profits, monies, accruals, increments or
        other
        benefits derived or received by the Company or any associated party as the
        result of any such breach; and (ii) to indemnify Parent against any other
        losses, damages (including special and consequential damages), costs and
        expenses, including actual attorneys fees and court costs, which may be incurred
        by it and which result from or arise out of any such breach or threatened
        breach.

       

      7.6.  Resignations.
        The
        Company will deliver to Acquisition Corp. the resignations of all officers
        and
        directors of the Company effective as of the Closing Date, except for those
        officers and directors who Acquisition Corp. notifies the Company that it
        will
        retain in their current positions.

       

      ARTICLE
        VIII

      COVENANTS
        OF ALL PARTIES HERETO

       

      The
        parties hereto, as applicable, covenant and agree that:

       

      8.1.  Best
        Efforts; Further Assurances.
        Subject
        to the terms and conditions of this Agreement, each party shall use its best
        efforts to take, or cause to be taken, all actions and to do, or cause to
        be
        done, all things necessary or desirable under applicable Laws, and in the
        case
        of the Company and each Stockholder as reasonably requested by Parent, to
        consummate and implement expeditiously the transactions contemplated by this
        Agreement. The parties hereto shall execute and deliver such other documents,
        certificates, agreements and other writings and take such other actions as
        may
        be necessary or desirable in order to consummate or implement expeditiously
        the
        transactions contemplated by this Agreement.

       

      8.2.  Confidentiality
        of Transaction.
        Any
        information (except publicly available or freely usable material obtained
        from
        another source) respecting any party or its Affiliates will be kept in strict
        confidence by all other parties to this Agreement and their agents. Except
        as
        required by Law, neither the Company, any Stockholder nor any of their
        respective Affiliates, directors, officers, employees or agents will disclose
        the terms of the transactions contemplated hereunder at any time, currently,
        or
        on or after the Closing, regardless of whether the Closing takes place, except
        as necessary to their attorneys, accountants and professional advisors, in
        which
        instance such persons and any employees or agents of the Company shall be
        advised of the confidential nature of the terms of the transaction and shall
        themselves be required by the Company to keep such information confidential.
        Except as required by Law, each party shall retain all information obtained
        from
        the other and their lawyers on a confidential basis except as necessary to
        their
        attorneys, accountants and professional advisors, in which instance such
        persons
        and any employees or agents of such party shall be advised of the confidential
        nature of the terms of the transaction and shall themselves be required by
        such
        party to keep such information confidential.

      
        
          
          

        

        
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      8.3.  Best
        Efforts to Obtain Consents.
        The
        Company hereby agrees to use its reasonable best efforts to obtain each
        respective Company Consent as promptly as practicable hereafter; provided,
        however, that such reasonable best efforts shall not involve the expenditure
        of
        money.

       

      8.4.  Tax
        Matters. 

       

      (a)  The
        Stockholder Representative shall prepare or cause to be prepared and file
        or
        cause to be filed on a timely basis all Tax Returns with respect to the Company
        for taxable periods ending on or prior to the date that includes the Effective
        Time. Such Tax Returns shall be true, correct and complete, shall be prepared
        on
        a basis consistent with the similar Tax Returns for the immediately preceding
        periods and shall not make, amend, revoke or terminate any election or change
        any accounting practice or procedure without Parent’s consent. The Stockholder
        Representative shall give a copy of each such Tax Return to Parent with
        sufficient time for its review and comment prior to filing. The Company shall
        pay the Taxes shown due and owing on such Returns. Parent’s receipt or review of
        or giving comments on any Tax Return does not affect the obligations of the
        Stockholder’s pursuant to Article XI of this Agreement. The Company will permit
        the Stockholder Representative and its representatives to have reasonable
        access
        to the Company’s respective officers, directors, employees, agents, assets and
        properties and all relevant books, records and documents of or relating to
        the
        Business and assets of the Company during normal business hours and will
        furnish
        to the Stockholder Representative and its representatives such information,
        financial records and other documents relating to the Company and the Business
        as may reasonably be requested, provided, however, that such access and
        information is reasonably related to the completion of the Tax Returns the
        Stockholder Representative is required to filed pursuant to this Section
        8.4(a).
        Any such information, financial records and other documents relating to the
        Company and the Business provided to the Stockholder Representative and its
        representatives shall be subject to the provisions of Section 7.1 of this
        Agreement, but such information may be incorporated into any such Tax
        Return.

       

      (b)  To
        the
        extent permitted by applicable law, the parties shall elect to treat the
        period
        that includes the Effective Time with respect to any Tax as ending on the
        date
        that includes the Effective Time and shall take such steps as may be necessary
        therefor. For purposes of this Agreement, any Taxes for a period which includes
        but does not end on the date that includes the Effective Time shall be allocated
        between the period through and including the date that includes the Effective
        Time (the “Pre-Closing Period”) and the balance of the period based on an
        interim closing of the books as of the close of the date that includes the
        Effective Time, 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
        Period and the balance of the period.

      
        
          
          

        

        
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      (c)  Parent
        covenants and agrees that with respect to all Tax Returns to be filed by
        Parent
        for the period from the Effective Time through December 31, 2006, it will
        file
        consolidated Tax Returns, including in such Tax Returns, the Company, as
        the
        surviving entity in the Merger, and its results of operations.

       

      8.5.  Parent
        Common Stock. 

       

      (a)  Parent
        will take all commercially reasonable actions necessary in accordance with
        the
        laws of the State of Texas and Parent’s certificate of incorporation and bylaws
        to obtain the necessary consent from its shareholders to increase its authorized
        shares of Parent Common Stock to allow for the full conversion of the Preferred
        Stock into Common Stock and to reincorporate a21 in the State of Delaware
        and
        Parent will use its commercially reasonable efforts to obtain such consent
        as
        soon as practicable after the date of this Agreement, but in no event later
        than
        July 30, 2006. Parent’s Board of Directors will recommend that the shareholders’
consent to the increase of the authorized shares of Parent Common Stock and
        the
        reincorporation in the State of Delaware by Parent’s shareholders as provided
        herein and will use its commercially reasonable efforts to solicit such consent
        and provide any necessary notification pursuant to state and federal law,
        including the Securities Act, and Parent’s certificate of incorporation and
        bylaws to those shareholders who have not consented. All notices sent to
        holders
        of Parent Common Stock and all documents or instruments executed by Parent
        or
        filed with an Authority relating to the increase in the authorized shares
        of
        Parent Common Stock and the reincorporation in the State of Delaware shall
        be
        sent promptly to the Stockholder Representative. In the event that a holder
        of
        the Preferred Stock elects to convert the Preferred Stock into Common Stock
        prior to the date that the Company has increased its authorized shares of
        Common
        Stock to accommodate such conversion, the holder agrees that the holder will
        not
        be entitled to receive the Common Stock issuable to him upon such conversion
        until such time as the Parent has increased its number of authorized shares
        of
        Common Stock to accommodate the conversion of the Preferred Stock, provided
        that, as promptly as practicable after the date the Parent has increased
        its
        authorized shares of Common Stock to accommodate the issuance of the Common
        Stock, the Parent shall issue such number of shares of Common Stock as the
        holder would have been entitled to receive on the effective date of the Holder’s
        election to convert the Preferred Stock. In other words, if the effective
        date
        of the Holder’s election to convert the Preferred Stock is June 1, 2006, and the
        effective date of the increase in the authorized shares of Parent Common
        Stock
        is June 15, 2006, the Parent shall issue, on or about June 15, 2006, such
        number
        of shares as the Holder would have been entitled to receive on June 1,
        2006.

       

      (b)  Parent
        shall use its commercially reasonable efforts (including the filing of any
        necessary documentation with the SEC and applicable state authorities) to
        obtain
        the written authorization of a majority of its shareholders (the “Approval”) to
        increase the number of its authorized shares (the “Share Increase”) to allow for
        the full conversion of the Warrant Shares and the Preferred Stock into Parent
        Common Stock. If the Approval is not obtained prior to July
        30,
        2006, Parent shall pay to the Shareholder Representative three-quarters of
        a
        percent (.75%) per month on the face amount of the Preferred Stock on
July
        30,
        2006 and on the 30th
        day of
        each calendar month thereafter, up to a maximum of nine percent (9%) per
        annum
        on the face amount of the Preferred Stock, until the Approval is
        obtained.

      
        
          
          

        

        
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      8.6.  Rights
        to Piggyback.

       

      (a)  If
        (and
        on each occasion that) the Parent proposes to register any of its securities
        under the Securities Act, either for the Parent’s own account or for the account
        of any of its stockholders (other than pursuant to a Form S-4 or Form S-8
        or
        comparable form and other than pursuant to a demand registration right granted
        to other persons to the extent that such rights prohibit the Parent from
        including securities of any other person in such registration statement)
        (each
        such registration not withdrawn or abandoned prior to the effective date
        thereof
        being herein called a “Piggyback Registration”), the Parent will give written
        notice to the Stockholder’s owning Preferred Stock and/or Warrant Shares (each a
“Holder”) of such proposal not later than the tenth day following the receipt by
        the Parent of notice of exercise of any registration rights by any persons
        or
        twenty (20) days prior to filing of a registration statement with the SEC,
        whichever shall be earlier. For the purposes of this Agreement, the term
        “Registrable Securities” shall mean the Shares of Common Stock underlying the
        Preferred Stock and the Warrant Shares that have not been previously sold
        by the
        Stockholders.

       

      (b)  Subject
        to the provisions contained in Section 8.7 and in the last sentence of this
        paragraph (b), (A) the Parent will be obligated and required to include in
        each
        Piggyback Registration all Registrable Securities with respect to which the
        Parent shall receive from the Holder, within 15 days after the date on which
        the
        Parent shall have given written notice of such Piggyback Registration to
        the
        Holder, the written requests of such Holder for inclusion in such Piggyback
        Registration, and (B) the Parent will use commercially reasonable efforts
        in
        good faith to effect promptly the registration of all such Registrable
        Securities. The Holder shall be permitted to withdraw all or any part of
        the
        Registrable Securities of such Holder from any Piggyback Registration at
        any
        time prior to the effective date of such Piggyback Registration unless such
        Holder shall have entered into a written agreement with the Parent’s
        underwriters establishing the terms and conditions under which such Holder
        would
        be obligated to sell such Registrable Securities in such Piggyback Registration.
        The Parent will not be obligated or required to include any shares in any
        registration effected solely to implement an employee benefit plan or a
        transaction to which Rule 145 of the SEC is applicable.

       

      8.7.  Priority
        on Piggyback Registrations.
        If a
        Piggyback Registration is an underwritten registration, and the managing
        underwriters shall give written advice to the Parent of a number of securities
        to which such registration should, in the opinion of the managing underwriters
        of such registration in the light of marketing factors, be limited (the
“Underwriters’ Maximum Number”), then: (i) the Parent shall be entitled to
        include in such registration that number of securities which the Parent proposes
        to offer and sell for its own account in such registration and/or number
        of
        securities requested to be included in such registration by persons exercising
        demand registration rights which does not exceed the Underwriters’ Maximum
        Number; (ii) if the Underwriters' Maximum Number exceeds the number of
        securities which the Parent proposes to offer and sell for its own account
        in
        such registration, then the Parent will be obligated and required to include
        in
        such registration that number of Registrable Securities requested by the
        Holder
        thereof to be included in such registration and which does not exceed such
        excess and such securities to be registered shall be allocated pro rata among
        the Holder on the basis of the number of Registrable Securities requested
        to be
        included therein by the Holder and any other person to whom the Parent has
        granted piggyback registration rights; (iii) if the Underwriters' Maximum
        Number
        exceeds the sum of the number of Registrable Securities which the Parent
        shall
        be required to include in such registration pursuant to clause (ii) above
        and
        the number of securities which the Parent proposes to offer and sell for
        its own
        account in such registration, then the Parent may include in such registration
        that number of other securities which persons shall have requested be included
        in such registration and which shall not be greater than such
        excess.

      
        
          
          

        

        
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      8.8.  Procedures
        on Registration.
        If and
        whenever the Parent is required by the provisions hereof to effect the
        registration of any Registrable Securities under the Securities Act, the
        Company
        will, as expeditiously as possible:

       

      (a)  respond
        as promptly as commercially reasonable to any comments received from the
        SEC,
        and use its commercially reasonable efforts to cause such Piggyback Registration
        to become effective, and promptly provide to the Stockholder Representative
        copies of all filings and SEC letters of comment relating thereto provided
        that
        such letters do not contain material non-public information, in which case
        such
        letters may be redacted by the Parent;

       

      (b)  furnish
        to each Holder such number of copies of the Piggyback Registration and the
        prospectus included therein as such Holder reasonably may request to facilitate
        the public sale or disposition of the Registrable Securities covered by such
        Registration Statement;

       

      (c)  use
        its
        commercially reasonable efforts to register or qualify each Holder’s Registrable
        Securities covered by such Piggyback Registration under the securities or
“blue
        sky” laws of such jurisdictions within the United States as such Holder may
        reasonably request, provided, however, that the Parent shall not for any
        such
        purpose be required to qualify generally to transact business as a foreign
        corporation in any jurisdiction where it is not so qualified or to consent
        to
        general service of process in any such jurisdiction;

       

      (d)  list
        the
        Registrable Securities covered by such Piggyback Registration with any
        securities exchange on which the Common Stock of the Parent is then
        listed;

       

      (e)  immediately
        notify the Stockholder Representative at any time when a prospectus relating
        thereto is required to be delivered under the Securities Act, of the happening
        of any event of which the Parent has knowledge as a result of which the
        prospectus contained in such Piggyback Registration, as then in effect, includes
        an untrue statement of a material fact or omits to state a material fact
        required to be stated therein or necessary to make the statements therein
        not
        misleading in light of the circumstances then existing;
        and

       

      (f)  notify
        the Stockholder Representative of the effectiveness of each registration
        statement filed.

       

      8.9.  Selection
        of Underwriters.
        In any
        Piggyback Registration, the Parent shall have the right to select the investment
        bankers and managing underwriters in such registration.

      
        
          
          

        

        
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    8.10.  Right
      to Terminate Registration.
      The
      Parent shall have the right to terminate or withdraw any registration initiated
      by it under this Section 8.6 prior to the effectiveness of such registration
      whether or not any Holder has elected to include shares in such
      registration.

     

    8.11.  Indemnification.

     

    (a)  In
      the
      event of a registration of any securities under the Securities Act pursuant
      to
      this Agreement, the Parent will indemnify and hold harmless each Holder, and
      its
      officers, directors and each other person, if any, who controls such Holder
      within the meaning of the Securities Act, against any losses, claims, damages
      or
      liabilities, joint or several, to which such Holder, or such persons may become
      subject under the Securities Act or otherwise, insofar as such losses, claims,
      damages or liabilities (or actions in respect thereof) arise out of or are
      based
      upon any untrue statement or alleged untrue statement of any material fact
      contained in any Registration Statement under which such Securities were
      registered under the Securities Act pursuant to this Agreement, any preliminary
      prospectus or final prospectus contained therein, or any amendment or supplement
      thereof, or arise out of or are based upon the 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 such Holder, and
      each
      such person for any reasonable legal or other expenses incurred by them in
      connection with investigating or defending any such loss, claim, damage,
      liability or action; provided,
      however, that the Parent will not be liable in any such case if and to the
      extent that any such loss, claim, damage or liability arises out of or is based
      upon (i) an untrue statement or alleged untrue statement or omission or alleged
      omission so made in conformity with information furnished by or on behalf of
      such Holder, any other Holder or any such person in writing or (ii) the use
      by
      such Holder, any other Holder or any such person of an outdated or defective
      prospectus (without any Parent provided supplement correcting such outdated
      or
      defective prospectus) after the Parent has notified such Holder or any person
      in
      writing that such prospectus is suspended from use, outdated or
      defective.

     

    (b)  In
      the
      event of a registration of any securities under the Securities Act pursuant
      to
      this Agreement, each Holder will indemnify and hold harmless the Parent, its
      Subsidiaries and their respective officers, directors and each other person,
      if
      any, who controls the Parent or any such subsidiary within the meaning of the
      Securities Act, against all losses, claims, damages or liabilities, joint or
      several, to which the Parent, any such subsidiary or such persons may become
      subject under the Securities Act or otherwise, insofar as such losses, claims,
      damages or liabilities (or actions in respect thereof) arise out of or are
      based
      upon any untrue statement or alleged untrue statement of any material fact
      which
      was furnished in writing by such Holder to the Parent (and such information
      is
      contained in) the Registration Statement under which such Securities were
      registered under the Securities Act pursuant to this Agreement, any preliminary
      prospectus or final prospectus contained therein, or any amendment or supplement
      thereof, or arise out of or are based upon the 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 Parent, its
      subsidiaries and each such person for any reasonable legal or other expenses
      incurred by them in connection with investigating or defending any such loss,
      claim, damage, liability or action, provided, however, that such Holder will
      be
      liable in any such case if and only to the extent that any such loss, claim,
      damage or liability arises out of or is based upon an untrue statement or
      alleged untrue statement or omission or alleged omission so made in conformity
      with information furnished in writing to the Parent or such Subsidiary by or
      on
      behalf of such Holder specifically for use in any such document or the use
      by
      such Holder of an outdated or defective prospectus (without the Parent provided
      supplement correcting such outdated or defective prospectus) after the Parent
      has notified such Holder in writing that such prospectus is suspended from
      use,
      outdated or defective, and provided further, that in no case shall any such
      Holder be liable or responsible for any amount in excess of the net amount
      received by such Holder for shares sold by him, her or it pursuant to such
      Registration Statement.

    
      
        
        

      

      
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    (c)  Promptly
      after receipt by a party entitled to claim indemnification hereunder (a “Section
      8.10 Indemnified Party”) of notice of the commencement of any action, such
      Section 8.10 Indemnified Party shall, if a claim for indemnification in respect
      thereof is to be made against a party hereto obligated to indemnify such
      Indemnified Party (an “Section 8.10 Indemnifying Party”), notify the Section
      8.10 Indemnifying Party in writing thereof, but the omission so to notify the
      Section 8.10 Indemnifying Party shall not relieve it from any liability which
      it
      may have to such Section 8.10 Indemnified Party other than under this Section
      8.10 and shall only relieve it from any liability which it may have to such
      Section 8.10 Indemnified Party under this Section 8.10 if and to the extent
      the
      Section 8.10 Indemnifying Party is prejudiced by such omission. In case any
      such
      action shall be brought against any Section 8.10 Indemnified Party and it shall
      notify the Section 8.10 Indemnifying Party of the commencement thereof, the
      Section 8.10 Indemnifying Party shall be entitled to participate in and, to
      the
      extent it shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such Section 8.10 Indemnified Party, and, after notice from
      the
      Section 8.10 Indemnifying Party to such Section 8.10 Indemnified Party of its
      election so to assume and undertake the defense thereof, the Section 8.10
      Indemnifying Party shall not be liable to such Section 8.10 Indemnified Party
      under this Section 8.10 for any legal expenses subsequently incurred by such
      Section 8.10 Indemnified Party in connection with the defense thereof; if the
      Section 8.10 Indemnified Party retains its own counsel, then the Section 8.10
      Indemnified Party shall pay all fees, costs and expenses of such counsel,
provided,
      however, that, if the defendants in any such action include both the indemnified
      party and the Section 8.10 Indemnifying Party and the Section 8.10 Indemnified
      Party shall have reasonably concluded that there may be reasonable defenses
      available to it which are different from or additional to those available to
      the
      Section 8.10 Indemnifying Party or if the interests of the Section 8.10
      Indemnified Party reasonably may be deemed to conflict with the interests of
      the
      Section 8.10 Indemnifying Party, the Section 8.10 Indemnified Party shall have
      the right to select separate counsel and to assume such legal defenses and
      otherwise to participate in the defense of such action, with the reasonable
      expenses and fees of such separate counsel and other expenses related to such
      participation to be reimbursed by the Section 8.10 Indemnifying Party as
      incurred. 

     

    (d)  In
      order
      to provide for just and equitable contribution in the event of joint liability
      under the Securities Act in any case in which either (i) any Holder, or any
      officer, director or controlling person of such Holder, makes a claim for
      indemnification pursuant to this Section 8.10 but it is judicially determined
      (by the entry of a final judgment or decree by a court of competent jurisdiction
      and the expiration of time to appeal or the denial of the last right of appeal)
      that such indemnification may not be enforced in such case notwithstanding
      the
      fact that this Section 8.10 provides for indemnification in such case, or (ii)
      contribution under the Securities Act may be required on the part of such Holder
      or such officer, director or controlling person of such Holder in circumstances
      for which indemnification is provided under this Section 5; then, and in each
      such case, the Parent and such Holder will contribute to the aggregate losses,
      claims, damages or liabilities to which they may be subject (after contribution
      from others) in such proportion so that such Holder is responsible only for
      the
      portion represented by the percentage that the public offering price of its
      securities offered by the Registration Statement bears to the public offering
      price of all securities offered by such Registration Statement, provided,
      however, that, in any such case, (A) such Holder will not be required to
      contribute any amount in excess of the public offering price of all such
      securities offered by it pursuant to such Registration Statement; and (B) no
      person or entity guilty of fraudulent misrepresentation (within the meaning
      of
      Section 10(f) of the Act) will be entitled to contribution from any person
      or
      entity who was not guilty of such fraudulent misrepresentation.

    
      
        
        

      

      
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    ARTICLE
      IX  

    CONDITIONS
      TO CLOSING

     

    9.1.  Condition
      to the Obligations of Parent, Acquisition Corp., Stockholders and the
      Company.
      The
      obligations of Parent, Acquisition Corp., Stockholders and the Company to
      consummate the Closing are subject to the satisfaction of all the following
      conditions:

     

    (a)  No
      provision of any applicable Law or Order shall prohibit or impose any condition
      on the consummation of the Closing or limit in any material way Parent’s right
      to control or operate Acquisition Corp., the Surviving Corporation or any
      material portion of the Business.

     

    (b)  There
      shall not be pending or threatened any proceeding by a third-party to enjoin
      or
      otherwise restrict the consummation of the Closing.

     

    9.2.  Conditions
      to Obligations of Parent and Acquisition Corp.
      In
      addition to the terms and provisions of Section 2.10, the obligation of Parent
      and Acquisition Corp. to consummate the Closing is subject to the satisfaction,
      or the waiver at Parent’s and Acquisition Corp.’s sole and absolute discretion,
      of all the following further conditions:

     

    (a)  (i)
      Each
      of the Company and the Stockholders shall have duly performed in all material
      respects all of their respective obligations hereunder required to be performed
      by them at or prior to the Closing Date, (ii) the representations and warranties
      of the Company and the Stockholders contained in this Agreement, the Additional
      Agreements and in any certificate or other writing delivered by the Company
      or
      any Stockholder pursuant hereto, disregarding all qualifications and exceptions
      contained therein relating to materiality or Material Adverse Effect, shall
      be
      true and correct at and as of the Closing Date, as if made at and as of such
      date with only such exceptions as could not in the aggregate reasonably be
      expected to have a Material Adverse Effect, (iii) there shall have been no
      event, change or occurrence which individually or together with any other event,
      change or occurrence, could reasonably be expected to have a Material Adverse
      Change or a Material Adverse Effect, regardless of whether it involved a known
      risk, and (iv) Parent and Acquisition Corp. shall have received a certificate
      signed by the President and Secretary of the Company to the effect set forth
      in
      clauses (i), (ii) and (iii) of this Section 8.2(a).

    
      
        
        

      

      
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    (b)  Parent
      shall have received (i) a copy of the certificate of incorporation of the
      Company certified as of a recent date by the Secretary of State of Delaware,
      (ii) copies of the Company’s By-Laws as effective on the date hereof; (iii)
      copies of resolutions duly adopted by the Board of Directors of the Company
      and
      by the vote or consent of the Company’s stockholders authorizing this Agreement
      and the Additional Agreements and the transaction contemplated hereby and
      thereby, (iv) a certificate of the Secretary of the Company certifying each
      of
      the foregoing and as to signatures of the officer(s) authorized to execute
      this
      Agreement and any certificate or document to be delivered pursuant hereto,
      together with evidence of the incumbency of such Secretary, and (v) a recent
      good standing certificate regarding the Company from the office of the Secretary
      of State of the State of Delaware, and each other jurisdiction in which the
      Company is qualified to do business.

     

    (c)  Parent
      or
      Acquisition Corp. shall have reasonably determined that, after Parent or
      Acquisition Corp. has had the opportunity to meet or speak to representatives
      of
      the largest customers of the Company pursuant to Section 6.2, all such customers
      will continue the relationship such customer had with the Company.

     

    (d)  Parent
      shall have received all material Company Consents (including any required
      consents of the landlords under the Office Leases), in form and substance
      reasonably satisfactory to Parent, and no such material Company Consent shall
      have been revoked.

     

    (e)  The
      Company shall have delivered to Parent documents satisfactory to Parent to
      evidence the release of all Liens on any portion of the assets of the Company
      and the filing of appropriate UCC-3 Termination Statements.

     

    (f)  [Intentionally
      Omitted]

     

    (g)  Parent
      will have received an opinion of counsel to the Company and the Stockholders
      substantially in the form of Exhibit
      G
      hereto.

     

    (h)  Certificates
      representing no less than 95 percent, on a fully-diluted basis, of the issued
      and outstanding shares of the Company Securities shall be presented at the
      Closing for cancellation, together with the original stock ledgers and minute
      books of the Company.

     

    (i)  FIRPTA
      Certificate.
      At the
      Closing, each Stockholder shall deliver to Parent and Acquisition Corp. a
      certificate of non-foreign status, in the form set forth in Treasury Regulations
      Section 1.1445-2(b)(2)(iii)(B), signed under penalties of perjury. Each
      Stockholder understands that such certificates will be retained by Parent and
      Acquisition Corp. and will be made available to the Taxing authorities upon
      request.

     

    9.3.  Conditions
      to Obligations of the Company and the Stockholders.
      In
      addition to the terms and provisions of Section 2.10, the obligation of the
      Company and the Stockholders to consummate the Closing is subject to the
      satisfaction, or the waiver at the Company’s and the Stockholder’s discretion,
      of all the following further conditions:

    
      
        
        

      

      
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    (a)  Parent
      and Acquisition Corp. shall have performed in all material respects all of
      their
      respective obligations hereunder required to be performed by it at or prior
      to
      the Closing Date, (ii) the representations and warranties of Parent contained in
      this Agreement, the Additional Agreements and in any certificate or other
      writing delivered by Parent or Acquisition Corp. pursuant hereto, disregarding
      all qualifications and expectations contained therein relating to materiality,
      shall be true and correct in all material respects at and as of the Closing
      Date, as if made at and as of such date, (iii) there shall have been no event,
      change or occurrence which individually or together with any other event, change
      or occurrence, could reasonably be expected to have a material adverse effect,
      regardless of whether it involved a known risk, on the business, assets,
      condition (financial or otherwise), liabilities, result of operations of
      prospects of the Parent, and (iv) each Stockholder and the Company shall have
      received a certificate signed by an authorized officer of Parent and Acquisition
      Corp. to the foregoing effect.

     

    (b)  The
      Company and the Stockholders shall have received (i) a copy of the certificate
      of incorporation of each of Parent and Acquisition Corp., (ii) copies of the
      bylaws of each of Parent and Acquisition Corp. as effective on the date hereof;
      (iii) copies of resolutions duly adopted by the Board of Directors of Parent
      and
      Acquisition Corp. and by the unanimous vote or consent of Acquisition Corp.’s
      shareholders authorizing this Agreement and the Additional Agreements and the
      transaction contemplated hereby and thereby, (iv) a certificate of the Secretary
      or Assistant Secretary of Parent and Acquisition Corp. certifying each of the
      foregoing and as to signatures of the officer(s) authorized to execute this
      Agreement and any certificate or document to be delivered pursuant hereto,
      together with evidence of the incumbency of such Secretary or Assistant
      Secretary, and (v) a recent good standing certificate regarding Parent and
      Acquisition Corp. from the office of the Secretary of State of its respective
      jurisdiction of organization and each other jurisdiction in which each of Parent
      and Acquisition Corp. is qualified to do business.

     

    (c)  The
      Company shall have delivered to each of the persons listed on Schedule 9.3(c)
      a
      duly executed copy of their respective Employment Agreements.

     

    (d)  The
      Stockholders will have received an opinion of counsel to the Parent and the
      Acquisition Corp. substantially in the form of Exhibit
      H
      hereto.

     

    ARTICLE
      X  

    RELIANCE
      ON REPRESENTATIONS AND WARRANTIES

     

    10.1.  Reliance
      on Representations and Warranties of the Company and the
      Stockholders.
      Notwithstanding any right of Parent and Acquisition Corp. to fully investigate
      the affairs of the Company and notwithstanding any knowledge of facts determined
      or determinable by Parent and Acquisition Corp. pursuant to such investigation
      or right of investigation, Parent and Acquisition Corp. shall have the right
      to
      rely fully upon the representations, warranties, covenants and agreements of
      the
      Company and the Stockholders contained in this Agreement.

     

    10.2.  Reliance
      on Representations and Warranties of Parent.
      Notwithstanding any right of the Company or Stockholders to investigate the
      affairs of Parent and Acquisition Corp. and notwithstanding any knowledge of
      facts determined or determinable by the Company or Stockholders pursuant to
      such
      investigation or right of investigation, the Company and Stockholders shall
      have
      the right to rely fully upon the representations, warranties, covenants and
      agreements of Parent and Acquisition Corp. contained in this
      Agreement.

    
      
        
        

      

      
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    ARTICLE
      XI  

    INDEMNIFICATION

     

    11.1.  Indemnification
      of Parent, Acquisition Corp.
      Prior to
      the Effective Time, the Company and each Stockholder, and subsequent to the
      Effective Time each Stockholder, hereby severally agrees to indemnify and hold
      harmless Parent, Acquisition Corp., Surviving Corporation and their Affiliates
      and each of their respective directors, officers, employees, shareholders,
      attorneys and agents and permitted assignees (collectively, the “Parent
      Indemnitees,” provided,
      however,
      the
      term “Parent Indemnitees” shall not include any of the Stockholders regardless
      of their capacity), against and in respect of any and all loss, payments,
      demand, penalty, liability, judgment, damage, diminution in value, claim or
      out-of-pocket costs and expenses (including actual costs of investigation and
      attorneys’ fees and other costs and expenses) (all of the foregoing
      collectively, “Losses”) incurred or sustained by any Parent Indemnitee as a
      result of (i) any breach, inaccuracy or nonfulfillment or the alleged breach,
      inaccuracy or nonfulfillment of any of the representations, warranties and
      covenants of the Company or any of the Stockholders contained herein or in
      the
      Additional Agreements (but not the Employment Agreements) or any certificate
      or
      other writing delivered pursuant hereto or of the Stockholders, (ii) the
      exercise or attempted exercise of one or more Stockholders of appraisal or
      other
      similar rights in accordance with the Delaware General Corporation Law, or
      (iii)
      the failure to pay any claims by any third parties (including breach of contract
      claims, violations of warranties, trademark infringement, for “spamming”,
      privacy violations, torts or consumer complaints) with respect to the business
      of the Company for any period prior to the Closing Date; provided,
      that
      Losses in connection with Sections 11.1(iii), shall be deemed to include any
      amounts payable after the Closing pursuant to or otherwise in connection with
      any of the matters, and provided
      further
      that,
      (x) except to the extent provided in Section 11.2, it is hereby acknowledged
      and
      understood that the obligations of the Stockholders pursuant to this Section
      11.1 are limited to and that the Parent Indemnitees may only look to the Escrow
      Fund (and after the Escrow Fund is distributed, the proceeds thereof received
      by
      the Stockholders) to recover any Losses, (y) the Company and Stockholders shall
      not be liable under this Section 11.1 unless the aggregate amount of Losses
      with
      respect to all matters referred to in this Section 11.1 exceeds One Hundred
      Twenty Five Thousand Dollars ($125,000), but in the event that such Losses
      do
      exceed One Hundred Twenty Five Thousand Dollars ($125,000), the Company and
      the
      Stockholders will be liable for the entire amount of such Losses, and (z) the
      aggregate liability of the Stockholders may not exceed the amount of the Escrow
      Fund whether held pursuant to the Escrow Agreement or distributed to the
      Stockholders in accordance with its terms. The indemnification provided by
      this
      Article XI shall not apply to claims arising under or related to Section 8.10
      of
      this Agreement.

     

    11.2.  Special
      Indemnity.
      Each
      Stockholder, severally but not jointly, shall indemnify, defend and hold the
      Parent Indemnitees harmless from and against any Losses incurred by any Parent
      Indemnitee based upon, arising out of or otherwise in respect of (i) any
      breach or inaccuracy of the representations or warranties made by such
      Stockholder contained in Sections 4.1, 4.2, 4.3 or 4.4, (ii)  any breach,
      inaccuracy or nonfulfillment or the alleged breach, inaccuracy or nonfulfillment
      of any of the representations, warranties and covenants of any of the
      Stockholders contained herein or in the Additional Agreements, which breach
      occurs due to the intentional, willful, reckless or grossly negligent conduct
      of
      the Stockholders, or (iii) the exercise or attempted exercise of one or
      more Stockholders of appraisal or other similar rights in accordance with the
      Delaware General Corporation Law; provided,
      that
      Losses in connection with this Section 11.2, other than those Losses
      attributable to Sections 7.1, 7.2 and 7.3, shall be limited as to each such
      Stockholder to the amount of the Merger Consideration received by such
      Stockholder.

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    11.3.  Indemnification
      of Stockholders.
      Parent
      and Acquisition Corp. hereby agree to indemnify and hold harmless the
      Stockholders and their respective Affiliates, and each of their respective
      directors, officers, employees, shareholders, attorneys, agents and permitted
      assignees (the “Company Indemnitees”) against and in respect of any Losses
      incurred or sustained by the Company Indemnitees as a result of (i) any breach,
      inaccuracy or nonfulfillment or the alleged breach, inaccuracy or nonfulfillment
      of any of the representations, warranties and covenants of Parent or Acquisition
      Corp. contained herein or any certificate or other writing delivered pursuant
      hereto, and (ii) actions or inactions of the Surviving Corporation with regard
      to the Business occurring after the Closing; provided,
      that
      Losses in connection with this Section 11.3 shall be limited to the amount
      of
      the Merger Consideration.

     

    11.4.  Procedure.
      The
      following shall apply with respect to all claims by either a Parent Indemnitee
      or a Company Indemnitee (together, “Indemnified Party”) for
      indemnification:

     

    (a)  An
      Indemnified Party shall give the Parent, Acquisition Corp., or the
      Indemnification Agent, as applicable (either, “Indemnifying Parties”), prompt
      notice (an “Indemnification Notice”) of any third-party claim, investigation,
      action, suit, hearing or proceeding with respect to which such Indemnified
      Party
      seeks indemnification pursuant to Section 11.1, 11.2 or 11.3 (a “Third
      Party Claim”), which shall describe in reasonable detail the loss, liability or
      damage that has been or may be suffered by the Indemnified Party. The failure
      to
      give the Indemnification Notice shall not impair any of the rights or benefits
      of such Indemnified Party under Section 11.1, 11.2 or 11.3, except to the extent
      such failure materially and adversely affects the ability of the Indemnifying
      Parties to defend such claim or to the limited extent the failure to give such
      notice increases the amount of such liability.

     

    (b)  In
      the
      case of any Third Party Claims as to which indemnification is sought by any
      Indemnified Party, such Indemnified Party shall be entitled, at the sole expense
      and liability of the Indemnifying Parties, to exercise full control of the
      defense, compromise or settlement of any Third Party Claim unless the
      Indemnifying Parties, within a reasonable time after the giving of an
      Indemnification Notice by the Indemnified Party (but in any event within 10
      days
      thereafter), shall (i) deliver a written confirmation to such Indemnified Party
      that the indemnification provisions of Section 11.1, 11.2 or 11.3 are applicable
      to such claim, investigation, action, suit, hearing or proceeding and the
      Indemnifying Parties will indemnify such Indemnified Party in respect of such
      claim, investigation, action or proceeding pursuant to the terms of Section
      11.1, 11.2 or 11.3 and, notwithstanding anything to the contrary, shall do
      so
      without asserting any challenge, defense, limitation on the Indemnifying Parties
      liability for Losses, counterclaim or offset, (ii) notify such Indemnified
      Party
      in writing that the Indemnifying Parties is assuming the defense thereof, and
      (iii) retain legal counsel reasonably satisfactory to such Indemnified Party
      to
      conduct the defense of such Third Party Claim.

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    (c)  If
      the
      Indemnifying Parties assume the defense of any such Third Party Claim then
      the
      Indemnified Party shall cooperate with the Indemnifying Parties in any manner
      reasonably requested in connection with the defense, compromise or settlement
      thereof. If the Indemnifying Parties so assume the defense of any such Third
      Party Claim the Indemnified Party shall have the right to employ separate
      counsel and to participate in (but not control) the defense, compromise, or
      settlement thereof, but the fees and expenses of such counsel employed by the
      Indemnified Party shall be at the expense of such Indemnified Party unless
      (i)
      the Indemnifying Parties have agreed to pay such fees and expenses, or (ii)
      the
      named parties to any such Third Party Claim (including any impleaded parties)
      include an Indemnified Party and an Indemnifying Party and such Indemnified
      Party shall have been advised by its counsel that there may be a conflict of
      interest between such Indemnified Party and the Indemnifying Parties in the
      conduct of the defense thereof, and in any such case the reasonable fees and
      expenses of such separate counsel shall be borne by the Indemnifying
      Parties.

     

    (d)  If
      the
      Indemnifying Parties elect to direct the defense of any Third Party Claim,
      the
      Indemnified Party shall not pay, or permit to be paid, any part of any claim
      or
      demand arising from such asserted liability unless the Indemnifying Parties
      withdraw from or fail to vigorously prosecute the defense of such asserted
      liability, or unless a judgment is entered against the Indemnified Party for
      such liability. If the Indemnifying Parties do not elect to defend, or if,
      after
      commencing or undertaking any such defense, the Indemnifying Parties fail to
      prosecute or withdraw such defense, the Indemnified Party shall have the right
      to undertake the defense or settlement thereof, at the Indemnifying Parties’
expense. Notwithstanding anything to the contrary, the Indemnifying Parties
      shall not be entitled to control, but may participate in, and the Indemnified
      Party (at the expense of the Indemnifying Parties) shall be entitled to have
      sole control over, the defense or settlement of (x) that part of any Third
      Party
      Claim (i) that seeks a temporary restraining order, a preliminary or permanent
      injunction or specific performance against the Indemnified Party, or (ii) to
      the
      extent such Third Party Claim involves criminal allegations against the
      Indemnified Party or (y) the entire Third Party Claim if such Third Party Claim
      could impose liability on the part of the Indemnified Party in an amount which
      is greater than the amount as to which the Indemnified Party is entitled to
      indemnification under this Agreement. In the event the Indemnified Party retains
      control of the Third Party Claim, the Indemnified Party will not settle the
      subject claim without the prior written consent of the Indemnifying Party,
      which
      consent will not be unreasonably withheld or delayed.

     

    (e)  If
      the
      Indemnified Party assumes the defense of any such Third Party Claim pursuant
      to
      Section 11.1, 11.2 or 11.3 and proposes to settle the same prior to a final
      judgment thereon or to forgo appeal with respect thereto, then the Indemnified
      Party shall give the Indemnifying Parties prompt written notice thereof and
      the
      Indemnifying Parties shall have the right to participate in the settlement,
      assume or reassume the defense thereof or prosecute such appeal, in each case
      at
      the Indemnifying Parties’ expense. The Indemnifying Parties shall not, without
      the prior written consent of such Indemnified Party, settle or compromise or
      consent to entry of any judgment with respect to any such Third Party Claim
      (i)
      in which any relief other than the payment of money damages is or may be sought
      against such Indemnified Party or (ii) which does not include as an
      unconditional term thereof the giving by the claimant, person conducting such
      investigation or initiating such hearing, plaintiff or petitioner to such
      Indemnified Party a release from all liability with respect to such Third Party
      Claim and all other claims or causes of action (known or unknown) arising or
      which might arise out of the same facts.

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    11.5.  Periodic
      Payments.
      Any
      indemnification required by Section 11.1, 11.2 or 11.3 for costs, disbursements
      or expenses of any Indemnified Party in connection with investigating, preparing
      to defend or defending any claim, action, suit, hearing, proceeding or
      investigation shall be made by periodic payments by the Indemnifying Parties
      to
      each Indemnified Party during the course of the investigation or defense, as
      and
      when bills are received or costs, disbursements or expenses are incurred. With
      respect to an indemnification required by Section 11.1 and 11.2, any such cost,
      disbursement or expense shall be payable as provided in the Escrow
      Agreement.

     

    11.6.  Payment
      of Indemnification by Stockholders.
      In the
      event that Parent or Acquisition Corp. or the Surviving Corporation is entitled
      to any indemnification pursuant to this Article, the Parent, Acquisition Corp.
      and the Stockholder Representative shall issue an instruction to the escrow
      agent named in the Escrow Agreement to release such Escrow Funds as are
      necessary to cover the Losses as provided in the Escrow Agreement.

     

    11.7.  Insurance.
      Any
      indemnification payments hereunder shall only be reduced by any insurance
      proceeds or other third party reimbursement actually received by the
      Company.

     

    11.8.  Survival
      of Indemnification Rights.
      Except
      for the representations and warranties in Section 3.4 (Capitalization and
      Ownership of Shares), Section 3.10(b) (Financial Statements), Section 3.28
      (Tax
      Matters), Section 4.1 (Ownership of Stock; Authority), Section 5.10
      (Capitalization and Ownership of the Parent) and Section 5.11(b) (Financial
      Statements) which shall survive until three months after the expiration of
      the
      statute of limitations with respect thereto (including any extensions and
      waivers thereof), the representations and warranties of the Stockholders, Parent
      and Acquisition Corp. shall survive until the third anniversary of the Closing
      Date. The indemnification to which any Indemnified Party is entitled from the
      Indemnifying Parties pursuant to Section 11.1, 11.2 or 11.3 for Losses shall
      be
      effective so long as it is asserted prior to the third anniversary of the
      Closing Date (or three months after expiration of the statute of limitations,
      in
      the case of the section specifically mentioned in the first sentence of this
      Section 11.8), in the case of all representations and warranties of the
      Stockholders and Parent hereunder. Notwithstanding the foregoing, any claim
      arising pursuant to Section 11.2 shall survive until three (3) months after
      the
      expiration of the statute of limitations with respect thereto (including any
      extensions and waivers thereof).

     

    ARTICLE
      XII  

     

    DISPUTE
      RESOLUTION

     

    12.1.  Arbitration.

    
      
        
        

      

      
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    (a)  In
      the
      event a dispute arises relating to this Agreement, the parties agree to meet
      to
      resolve their disputes in good faith. Any party may seek injunctive relief,
      without the need to post a bond, pending the completion of arbitration under
      this Agreement for any breach or threatened breach of any covenant contained
      herein.

     

    (b)  If
      after
      good faith negotiations the dispute is not resolved, the parties shall promptly
      submit any dispute, claim, or controversy arising out of or relating to this
      Agreement, or any Additional Agreement (including with respect to the meaning,
      effect, validity, termination, interpretation, performance, or enforcement
      of
      this Agreement or any Additional Agreement) or any alleged breach thereof
      (including any action in tort, contract, equity, or otherwise), to binding
      arbitration before one arbitrator that is familiar with the Business and not
      an
      Affiliate of any party to this Agreement (“Arbitrator”). The parties agree that
      binding arbitration shall be the sole means of resolving any dispute, claim,
      or
      controversy arising out of or relating to this Agreement or any Additional
      Agreement (including with respect to the meaning, effect, validity, termination,
      interpretation, performance or enforcement of this Agreement or any Additional
      Agreement) or any alleged breach thereof (including any claim in tort, contract,
      equity, or otherwise).

     

    (c)  If
      the
      parties cannot agree upon the Arbitrator, the Arbitrator shall be selected
      by
      the New York City chapter head of the American Arbitration Association upon
      the
      request of either side. The Arbitrator shall be selected within 30 days of
      request.

     

    (d)  The
      laws
      of the State of New York shall apply to any arbitration hereunder. In any
      arbitration hereunder, this Agreement and any agreement contemplated hereby
      shall be governed by the laws of the State of New York applicable to a contract
      negotiated, signed, and wholly to be performed in the State of New York, which
      laws the Arbitrator shall apply in rendering his decision. The Arbitrator shall
      issue a written decision, setting forth findings of fact and conclusions of
      law,
      within sixty (60) days after he shall have been selected. The Arbitrator shall
      have no authority to award punitive or other exemplary damages.

     

    (e)  The
      arbitration shall be held in New York City, New York in accordance with and
      under the then-current provisions of the rules of the American Arbitration
      Association, except as otherwise provided herein.

     

    (f)  On
      application to the Arbitrator, any party shall have rights to discovery to
      the
      same extent as would be provided under the Federal Rules of Civil Procedure,
      and
      the Federal Rules of Evidence shall apply to any arbitration under this
      Agreement; provided, however, that the Arbitrator shall limit any discovery
      or
      evidence such that his decision shall be rendered within the period referred
      to
      in Section 12.1(e).

     

    (g)  The
      Arbitrator may, at his discretion and at the expense of the party who will
      bear
      the cost of the arbitration, employ experts to assist him in his
      determinations.

     

    (h)  The
      costs
      of the arbitration proceeding and any proceeding in court to confirm any
      arbitration award or to obtain relief as provided in Section 12.1, as applicable
      (including actual attorneys’ fees and costs), shall be borne by the unsuccessful
      party and shall be awarded as part of the Arbitrator’s decision, unless the
      Arbitrator shall otherwise allocate such costs for the reasons set forth in
      such
      decision. The determination of the Arbitrator shall be final and binding upon
      the parties and not subject to appeal.

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

     

    (i) Any
      judgment upon any award rendered by the Arbitrator may be entered in and
      enforced by any court of competent jurisdiction. The parties expressly consent
      to the exclusive jurisdiction of the courts (Federal and state) in New York
      City, New York to enforce any award of the Arbitrator or to render any
      provisional, temporary, or injunctive relief in connection with or in aid of
      the
      Arbitration. The parties expressly consent to the personal and subject matter
      jurisdiction of the Arbitrator to arbitrate any and all matters to be submitted
      to arbitration hereunder. None of the parties hereto shall challenge any
      arbitration hereunder on the grounds that any party necessary to such
      arbitration (including the parties hereto) shall have been absent from such
      arbitration for any reason, including that such party shall have been the
      subject of any bankruptcy, reorganization, or insolvency
      proceeding.

     

    (j) The
      parties shall indemnify the Arbitrator and any experts employed by the
      Arbitrator and hold them harmless from and against any claim or demand arising
      out of any arbitration under this Agreement or any agreement contemplated
      hereby, unless resulting from the willful misconduct of the person
      indemnified.

     

    (k) This
      arbitration clause shall survive the termination of this Agreement and any
      agreement contemplated hereby.

     

    12.2. Waiver
      of Jury Trial; Exemplary Damages.
      ALL
      PARTIES HEREBY WAIVE THEIR RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE
      ARISING UNDER THIS AGREEMENT OR ANY ADDITIONAL AGREEMENT. No party shall be
      awarded punitive or other exemplary damages respecting any dispute arising
      under
      this Agreement or any Additional Agreement.

     

    12.3. Attorneys’
      Fees.
      The
      unsuccessful party to any court or other proceeding arising out of this
      Agreement that is not resolved by arbitration under Section 12.1 shall pay
      to
      the prevailing party all actual attorneys’ fees and costs actually incurred by
      the prevailing party, in addition to any other relief to which it may be
      entitled. As used in this Section 12.3 and elsewhere in this Agreement, “actual
      attorneys’ fees” means the full and actual cost of any legal services actually
      performed in connection with the matter for which such fees are sought,
      calculated on the basis on the usual fees charged by the attorneys performing
      such services, and shall not be limited to “reasonably attorneys’ fees” as that
      term may be defined in statutory or decisional law.

     

    ARTICLE
      XIII

     

    TERMINATION

     

    13.1. Termination
      Without Default.
      In the
      event that the Closing of the transactions contemplated hereunder has not
      occurred by the Outside Closing Date and no material breach of this Agreement
      by
      the party seeking to terminate this Agreement shall have occurred or have been
      made (as provided in Section 13.2 hereof), Parent and Acquisition Corp. or
      the
      Company and the Stockholder Representative shall have the right, at its or
      their
      sole option, to terminate this Agreement without liability to the other side.
      Such right may be exercised by Parent and Acquisition Corp., on the one hand,
      or
      the Company and the Stockholder Representative on the other, as the case may
      be,
      giving written notice to the other at any time after the Scheduled Closing
      Date.

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

     

    13.2. Termination
      Upon Default.

     

    (a) Parent
      and Acquisition Corp. may terminate this Agreement by giving notice to the
      Company and the Stockholder Representative on or prior to the Closing, without
      prejudice to any rights or obligations Parent and Acquisition Corp. may have,
      if
      the Company or any Stockholder shall have materially breached any representation
      or warranty or breached any agreement or covenant contained herein or in any
      Additional Agreement to be performed prior to Closing and such breach shall
      not
      be cured within the earlier of the Scheduled Closing Date and five (5) days
      following receipt by the Company or the Stockholders of a notice describing
      in
      reasonable detail the nature of such breach.

     

    (b) The
      Company and the Stockholder Representative may terminate this Agreement by
      giving prior written notice to Parent on or prior to the Closing, without
      prejudice to any rights or obligations the Company or the Stockholders may
      have,
      if Parent or Acquisition Corp. shall have materially breached any of its
      covenants, agreements, representations, and warranties contained herein to
      be
      performed prior to Closing and such breach shall not be cured within the earlier
      of the Scheduled Closing Date and five (5) days following receipt by Parent
      of a
      notice describing in reasonable detail the nature of such breach.

     

    13.3. Survival.
      The
      provisions of Sections 8.2 and 14.4 shall survive any termination hereof
      pursuant to Article XIII.

     

    ARTICLE
      XIV

     

    MISCELLANEOUS

     

    14.1. Notices.
      All
      notices, requests, demands and other communications to any party hereunder
      shall
      be in writing and shall be given to such party at its address or telecopier
      number set forth below, or such other address or telecopier number as such
      party
      may hereinafter specify by notice to each other party hereto:

     

    if
      to
      Parent and Acquisition Corp., to:

     

    c/o
      a21,
      Inc.

    7660
      Centurion Parkway

    Jacksonville,
      FL 32256

    Attn:
      President

    Telecopy:
      (904) 565-1620

    
      
        
        

      

      
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    with
      a
copy
      to:

     

    Loeb
      & Loeb LLP

    345
      Park
      Avenue

    New
      York,
      New York 10154

    Attention:
      Lloyd L. Rothenberg

    Telecopy:
      (212) 656-1076

     

    if
      to the
Company
      or any
      Stockholders:

     

    ArtSelect,
      Inc.

    2094
      185th
      Street,
      Suite G

    Fairfield,
      Iowa 52556

    Attention:
      Jerry Oliver 

    Telecopy:
      (641) 472-1495

     

    with
      a
copy
      to:

     

    Ellenoff
      Grossman & Schole LLP

    370
      Lexington Avenue,

    New
      York,
      New York 10017

    Attention:
      Barry I. Grossman

    Telecopy
      : (212) 370-7889

     

    if
      to the
Stockholder
      Representative

     

    Mr.
      Udi
      Toledano

    Millennium
      3 Capital, Inc.

    4
      Becker
      Farm Road

    Roseland,
      NJ 07068

    Telecopy:
      (973) 992-6336

     

    Each
      such
      notice, request or other communication shall be effective (i) if given by
      telecopy, when such telecopy is transmitted to the telecopy number specified
      herein and the appropriate answer back is received or, (ii) if given by
      certified mail, 72 hours after such communication is deposited in the mails
      with
      first class postage prepaid, properly addressed or, (iii) if given by any other
      means, when delivered at the address specified herein.

     

    14.2. Amendments;
      No Waivers.

     

    (a) Any
      provision of this Agreement may be amended or waived if, and only if, such
      amendment or waiver is in writing and signed, in the case of an amendment,
      by
      each party hereto, or in the case of a waiver, by the party against whom the
      waiver is to be effective.

     

    (b) No
      failure or delay by any party hereto in exercising any right, power or privilege
      hereunder shall operate as a waiver thereof nor shall any single or partial
      exercise thereof preclude any other or further exercise thereof or the exercise
      of any other right, power or privilege. The rights and remedies herein provided
      shall be cumulative and not exclusive of any rights or remedies provided by
      law.

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    14.3. Ambiguities.
      The
      parties acknowledge that each party and its counsel has materially participated
      in the drafting of this Agreement and consequently the rule of contract
      interpretation that, and ambiguities if any in, the writing be construed against
      the drafter, shall not apply.

     

    14.4. Publicity.
      Except
      as required by law, the parties agree that neither they nor their agents shall
      issue any press release or make any other public disclosure concerning the
      transactions contemplated hereunder without the prior approval of the other
      party hereto.

     

    14.5. Expenses.
      Except
      as specifically provided in this Agreement, all costs and expenses incurred
      in
      connection with this Agreement and the transactions contemplated hereby shall
      be
      paid by the party incurring such cost or expense.

     

    14.6. Successors
      and Assigns.
      The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns; provided,
      that
      (i) neither the Company nor any Stockholder may assign, delegate or
      otherwise transfer any of its rights or obligations under this Agreement without
      the prior written consent of Parent; (ii) in the event Parent assigns its
      rights and obligations under this Agreement to an Affiliate, Parent shall
      continue to remain liable for its obligations hereunder; and (iii) Parent,
      the
      Surviving Corporation or Acquisition Corp. may assign any of its rights and
      benefits under this Agreement to secured lenders of Parent, the Surviving
      Corporation or Acquisition Corp. Except as specifically set forth in clauses
      (ii) and (iii) above, neither Parent nor Acquisition Corp. may assign, delegate
      or otherwise transfer any of its rights or obligations under this Agreement
      without the prior written consent of the Company.

     

    14.7. Governing
      Law.
      This
      Agreement has been entered into in the State of New York. This Agreement shall
      be construed in accordance with and governed by the laws of the State of New
      York, without giving effect to the conflict of laws principles
      thereof.

     

    14.8. Counterparts;
      Effectiveness.
      This
      Agreement may be signed by facsimile signatures and in any number of
      counterparts, each of which shall be an original and all of which shall be
      deemed to be one and the same instrument, with the same effect as if the
      signatures thereto and hereto were upon the same instrument.

     

    14.9. Entire
      Agreement.
      This
      Agreement constitutes the entire agreement among the parties with respect to
      the
      subject matter hereof and supersedes all prior agreements, understandings and
      negotiations, both written and oral, among the parties with respect to the
      subject matter of this Agreement. No representation, inducement, promise,
      understanding, condition or warranty not set forth herein has been made or
      relied upon by any party hereto. Neither this Agreement nor any provision hereof
      is intended to confer upon any Person other than the parties hereto any rights
      or remedies hereunder other than Indemnified Parties as set forth in Section
      10.1 and 10.2 hereof, which shall be third party beneficiaries
      hereof.

     

    14.10. Severability.
      If
      any
      one or more provisions of this Agreement shall, for any reasons, be held to
      be
      invalid, illegal or unenforceable in any respect, such invalidity, illegality
      or
      unenforceability shall not affect any other provision of this Agreement, but
      this Agreement shall be construed as if such invalid, illegal or unenforceable
      provision had never been contained herein.

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

     

    14.11. Captions.
      The
      captions herein are included for convenience of reference only and shall be
      ignored in the construction or interpretation hereof.

     

    14.12. Construction.
      References in this Agreement to “Articles,” “Sections,” “Schedules” and
“Exhibits” shall
      be
      to the Articles, Sections, Schedules and Exhibits of
      this
      Agreement, unless otherwise specifically provided; all Schedules to this
      Agreement are incorporated herein by reference; any use in this Agreement of
      the
      singular or plural, or the masculine, feminine or neuter gender, shall be deemed
      to include the others, unless the context otherwise requires; the words
“herein”, “hereof” and “hereunder” and words of similar import, when used in
      this Agreement, shall refer to this Agreement as a whole and not to any
      particular provision of this Agreement; the word “including” when used in this
      Agreement shall mean “including without limitation”; and except as otherwise
      specified in this Agreement, all references in this Agreement (a) to any
      agreement, document, certificate or other written instrument shall be a
      reference to such agreement, document, certificate or instrument, in each case
      together with all exhibits, schedules, attachments and appendices thereto,
      and
      as amended, restated, supplemented or otherwise modified from time to time
      in
      accordance with the terms thereof; and (b) to any law, statute or regulation
      shall be deemed references to such law, statute or regulation as the same may
      be
      supplemented, amended, consolidated, superseded or modified from time to
      time.

     

    14.13. Stockholder
      Representative.
      Udi
      Toledano is hereby appointed as agent and attorney-in-fact (the “Stockholder
      Representative”) for each Stockholder, (i) to give and receive notices and
      communications to Parent and Acquisition Corp. for any purpose under this
      Agreement and the Additional Agreements, (ii) to agree to, negotiate, enter
      into
      settlements and compromises of and demand arbitration and comply with orders
      of
      courts and awards of arbitrators with respect to any indemnification claims
      (including Third Party Claims) under Section 11.1 or other disputes arising
      under or related to this Agreement, (iii) to enter into and deliver the Escrow
      Agreement on behalf of each of the Stockholders, (iv) to authorize or object
      to
      delivery to Parent, Acquisition Corp. and the Surviving Corporation of the
      Escrow Fund, or any portion thereof, in satisfaction of indemnification claims
      by Parent, Acquisition Corp. and the Surviving Corporation in accordance with
      the provisions of the Escrow Agreement, (v) to act on behalf of Stockholders
      in
      accordance with the provisions of the Agreement, the Notes, the Warrants, the
      Guaranty, the Intercreditor Agreement and any other document or instrument
      executed in connection with the Agreement and the Merger and (vi) to take all
      actions necessary or appropriate in the judgment of the Stockholder
      Representative for the accomplishment of the foregoing. Such agency may be
      changed by the Stockholders from time to time upon no less than twenty (20)
      days
      prior written notice to the Parent, the Acquisition Corp. and, if after the
      Effective Time, the Surviving Corporation, provided, however, that the
      Stockholder Representative may not be removed unless holders of at least 51%
      of
      all of the Company Preferred Stock on an as-if converted basis outstanding
      immediately prior to the transaction contemplated by this Agreement agree to
      such removal. Any vacancy in the position of Stockholder Representative may
      be
      filled by approval of the holders of at least 51% of all of the Company
      Preferred Stock on an as-if converted basis outstanding immediately prior to
      the
      transaction contemplated by this Agreement. Any removal or change of the
      Stockholder Representative shall not be effective until written notice is
      delivered to Parent. No bond shall be required of the Stockholder
      Representative, and the Stockholder Representative shall not receive any
      compensation for his services. Notices or communications to or from the
      Stockholder Representative shall constitute notice to or from the Stockholders.
      The Stockholder Representative shall not be liable for any act done or omitted
      hereunder while acting in good faith and in the exercise of reasonable business
      judgment. A decision, act, consent or instruction of the Stockholder
      Representative shall, for all purposes hereunder, constitute a decision, act,
      consent or instruction of all of the Stockholders of the Company and shall
      be
      final, binding and conclusive upon each of the Stockholders. In order to aid
      the
      Stockholder Representative in the performance of his duties hereunder, the
      Stockholders shall contribute at Closing the amount of One Hundred Thousand
      ($100,000) Dollars (the “Expense Fund”) from the Closing Payment, on a pro rata
      basis, to a fund to be established by the Stockholder Representative to cover
      the costs and expenses that may be incurred by the Stockholder
      Representative. Upon the cessation of his duties hereunder, any amount in
      the Expense Fund shall be returned to the Stockholders on a pro rata basis.
      The
      Stockholders shall severally indemnify the Stockholder Representative and hold
      him harmless against any loss, liability, or expense incurred without gross
      negligence or bad faith on the part of the Stockholder Representative and
      arising out of or in connection with the acceptance or administration of his
      duties hereunder. Notwithstanding anything in this Section 14.13 to the
      contrary, the Stockholder Representative shall have no obligation or authority
      with respect to any indemnification claims against a Stockholder made by Parent,
      Acquisition Corp. or the Surviving Corporation under Section 11.2.

     

    [The
      balance of this page is intentionally left blank]

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, Parent, Acquisition Corp. and the Company have caused this
      Agreement to be duly executed by their respective authorized officers and the
      Stockholders and the Representative have executed this Agreement as of the
      day
      and year first above written.

     

    
      	 	 	a21,
              Inc.
	 
 	 
 	 
 
	 	
              
Name:

	 	
              Title:

            

    

     

    
      	 	 	 AE
              Acquisition Corp.
	 
 	 
 	 
 
	 	  	 
	 	
              
Name:
	 	Title 

    

     

    
      	 	 	ArtSelect,
              Inc.
	 
 	 
 	 
 
	 	
              
Name:

	 	
              Title:

            

    

     

    
      	 	 	 

              Stockholder
                Representative

            
	 
 	 
 	 
 
	 	 	 
	 	
              
Udi
              Toledano
	 	 

    

    
       

    

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

    
      	 	 	
              Stockholder:

            
	 	 
	 
 	 
 	If
              an entity:
 
	 	 	
              Name:___________________

            
	 	
            
	 	 

    

     

    
      	 	 	 
	 
 	 
 	 
 
	 	  	
              By:
                _____________________

            
	 	
              Name:

            
	 	
               Title:

            
	 	 
	 	
               If
                an individual:

            
	 	
              _____________________

            
	 	
              
                Name:

              

            

    

     

    
      
        
           

        

        
        

      

      
        66

        
          

        

      

      
        
        

        
        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
      I

    

    
        

      
        	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Stockholders

              	 	
                Number
                  of Shares

              	 	
                Total
                  Consideration 

              	 	
                Consideration
                  to be paid on Closing Date

              	 	
                Consideration
                  to be held in the Escrow Fund

              	 
	 	 	 	 	
                Cash

              	 	
                Notes
                  

              	 	
                Preferred
                  Stock

              	 	
                Warrants

              	 	
                Cash

              	 	
                Notes
                  

              	 	
                Preferred
                  Stock

              	 	
                Warrants

              	 	
                Cash

              	 	
                Notes
                  

              	 	
                Preferred
                  Stock

              	 	
                Warrants

              	 
	
                Common
                  stock

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Founders

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Paul
                  Tarnoff, Inc.

              	 	 	
                1,142,417

              	 	
                $

              	
                22,737.85

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                22,737.85

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Fairfield
                  Consulting Group, Inc.

              	 	 	
                1,475,750

              	 	
                $

              	
                29,372.27

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                29,372.27

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Nathan
                  Otto

              	 	 	
                2,196,500

              	 	
                $

              	
                43,717.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                43,717.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	 	 	 	
                4,814,667

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Series
                  A holders of common

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Beta
                  Assets Limited

              	 	 	
                25,000

              	 	
                $

              	
                497.58

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                497.58

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Christopher
                  Hawk

              	 	 	
                2,545

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                David
                  Mans

              	 	 	
                71,854

              	 	
                $

              	
                1,430.13

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                1,430.13

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Estate
                  of Joe A. Lillis

              	 	 	
                119,757

              	 	
                $

              	
                2,383.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                2,383.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                James
                  Willenborg

              	 	 	
                71,854

              	 	
                $

              	
                1,430.13

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                1,430.13

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Jane
                  W. Bernstein

              	 	 	
                119,761

              	 	
                $

              	
                2,383.64

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                2,383.64

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Janine
                  Popick

              	 	 	
                59,880

              	 	
                $

              	
                1,191.81

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                1,191.81

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Jennifer
                  Lefcourt

              	 	 	
                95,806

              	 	
                $

              	
                1,906.85

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                1,906.85

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                KMM
                  Enterprises, LLC

              	 	 	
                83,830

              	 	
                $

              	
                1,668.49

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                1,668.49

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Laurent
                  Massa (F1 Venture)

              	 	 	
                119,757

              	 	
                $

              	
                2,383.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                2,383.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Mans/Spector
                  Living Trust

              	 	 	
                119,757

              	 	
                $

              	
                2,383.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                2,383.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Marc
                  Sznajderman

              	 	 	
                119,757

              	 	
                $

              	
                2,383.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                2,383.56

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Michael
                  Hawk

              	 	 	
                2,545

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Okoboji
                  Trust

              	 	 	
                479,029

              	 	
                $

              	
                9,534.25

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                9,534.25

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Paul
                  Baastad

              	 	 	
                59,879

              	 	
                $

              	
                1,191.79

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                1,191.79

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                R.
                  Casey Hawk

              	 	 	
                2,545

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Robert
                  A. Ellis Rev. Trust

              	 	 	
                359,281

              	 	
                $

              	
                7,150.87

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                7,150.87

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Robert
                  C. Hawk

              	 	 	
                226,790

              	 	
                $

              	
                4,513.87

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                4,513.87

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Robert
                  J. Skalicky

              	 	 	
                2,545

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Scott
                  E. Lipsky

              	 	 	
                239,514

              	 	
                $

              	
                4,767.12

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                4,767.12

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Stephanie
                  G. Hawk

              	 	 	
                2,545

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                50.65

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	 	 	 	
                2,384,231

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Series
                  B holders of common

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Millennium
                  3 Opportunity Fund, LLC

              	 	 	
                8,475,117

              	 	
                $

              	
                168,682.66

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                168,682.66

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Gerald
                  Katcher

              	 	 	
                2,102,719

              	 	
                $

              	
                41,851.01

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                41,851.01

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Entrust
                  Capital Frontier Fund L.P.

              	 	 	
                7,141,782

              	 	
                $

              	
                142,144.92

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                142,144.92

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	 	 	 	
                17,719,618

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Employee
                  or former employee holders of common

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Denyce
                  Rusch

              	 	 	
                6,933

              	 	
                $

              	
                137.99

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                137.99

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Erik
                  Vigmostad

              	 	 	
                100

              	 	
                $

              	
                1.99

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                1.99

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Haydn
                  Huntley

              	 	 	
                143,250

              	 	
                $

              	
                2,851.15

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                2,851.15

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Hugh
                  Brennan

              	 	 	
                20,000

              	 	
                $

              	
                398.07

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                398.07

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Joseph
                  C. Moschak

              	 	 	
                667

              	 	
                $

              	
                13.28

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                13.28

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Lila
                  Wallace

              	 	 	
                312

              	 	
                $

              	
                6.21

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                6.21

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Mei
                  Sze Viau

              	 	 	
                1,438

              	 	
                $

              	
                28.62

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                28.62

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                Nick
                  Hahn

              	 	 	
                266

              	 	
                $

              	
                5.29

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                5.29

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	
                William
                  C. Schulz

              	 	 	
                10,000

              	 	
                $

              	
                199.03

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                199.03

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	 	 	 	
                182,966

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Other
                  holders of common

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                David
                  Katz

              	 	 	
                20,000

              	 	
                $

              	
                398.07

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                398.07

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                -
                  

              	 
	 	 	 	
                20,000

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Total
                  common stock

              	 	 	
                25,121,482
                  

              	 	
                $

              	
                500,000.00

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                500,000.00

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Series
                  A Preferred

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Beta
                  Assets Limited

              	 	 	
                212,500

              	 	
                $

              	
                53,059.57

              	 	
                $

              	
                35,434.95

              	 	
                $

              	
                47,498

              	 	 	
                11,101
                  

              	 	
                $

              	
                45,520.22

              	 	
                $

              	
                -

              	 	
                $

              	
                37,696.76

              	 	 	
                11,101
                  

              	 	
                $

              	
                7,539.35

              	 	
                $

              	
                35,434.95

              	 	
                $

              	
                9,801.16

              	 	 	
                -
                  

              	 
	
                Okoboji
                  Trust

              	 	 	
                400,000

              	 	
                $

              	
                99,876.84

              	 	
                $

              	
                66,701.09

              	 	
                $

              	
                89,408

              	 	 	
                20,895
                  

              	 	
                $

              	
                85,685.12

              	 	
                $

              	
                -

              	 	
                $

              	
                70,958.60

              	 	 	
                20,895
                  

              	 	
                $

              	
                14,191.72

              	 	
                $

              	
                66,701.09

              	 	
                $

              	
                18,449.24

              	 	 	
                -
                  

              	 
	
                Robert
                  C. Hawk

              	 	 	
                189,375

              	 	
                $

              	
                47,285.44

              	 	
                $

              	
                31,578.80

              	 	
                $

              	
                42,329

              	 	 	
                9,893
                  

              	 	
                $

              	
                40,566.55

              	 	
                $

              	
                -

              	 	
                $

              	
                33,594.46

              	 	 	
                9,893
                  

              	 	
                $

              	
                6,718.89

              	 	
                $

              	
                31,578.80

              	 	
                $

              	
                8,734.56

              	 	 	
                -
                  

              	 
	
                Laurent
                  Massa (F1Ventures.com)

              	 	 	
                100,000

              	 	
                $

              	
                24,969.21

              	 	
                $

              	
                16,675.27

              	 	
                $

              	
                22,352

              	 	 	
                5,224
                  

              	 	
                $

              	
                21,421.28

              	 	
                $

              	
                -

              	 	
                $

              	
                17,739.65

              	 	 	
                5,224
                  

              	 	
                $

              	
                3,547.93

              	 	
                $

              	
                16,675.27

              	 	
                $

              	
                4,612.31

              	 	 	
                -
                  

              	 
	
                Janine
                  Popick

              	 	 	
                50,001

              	 	
                $

              	
                12,484.85

              	 	
                $

              	
                8,337.80

              	 	
                $

              	
                11,176

              	 	 	
                2,612
                  

              	 	
                $

              	
                10,710.85

              	 	
                $

              	
                -

              	 	
                $

              	
                8,870.00

              	 	 	
                2,612
                  

              	 	
                $

              	
                1,774.00

              	 	
                $

              	
                8,337.80

              	 	
                $

              	
                2,306.20

              	 	 	
                -
                  

              	 
	
                Robert
                  A Ellis Revocable Trust

              	 	 	
                300,008

              	 	
                $

              	
                74,909.63

              	 	
                $

              	
                50,027.15

              	 	
                $

              	
                67,058

              	 	 	
                15,672
                  

              	 	
                $

              	
                64,265.55

              	 	
                $

              	
                -

              	 	
                $

              	
                53,220.37

              	 	 	
                15,672
                  

              	 	
                $

              	
                10,644.07

              	 	
                $

              	
                50,027.15

              	 	
                $

              	
                13,837.30

              	 	 	
                -
                  

              	 
	
                Jane
                  W. Bernstein

              	 	 	
                100,003

              	 	
                $

              	
                24,969.96

              	 	
                $

              	
                16,675.77

              	 	
                $

              	
                22,353

              	 	 	
                5,224
                  

              	 	
                $

              	
                21,421.92

              	 	
                $

              	
                -

              	 	
                $

              	
                17,740.18

              	 	 	
                5,224
                  

              	 	
                $

              	
                3,548.04

              	 	
                $

              	
                16,675.77

              	 	
                $

              	
                4,612.45

              	 	 	
                -
                  

              	 
	
                Mark
                  Sznajderman

              	 	 	
                100,000

              	 	
                $

              	
                24,969.21

              	 	
                $

              	
                16,675.27

              	 	
                $

              	
                22,352

              	 	 	
                5,224
                  

              	 	
                $

              	
                21,421.28

              	 	
                $

              	
                -

              	 	
                $

              	
                17,739.65

              	 	 	
                5,224
                  

              	 	
                $

              	
                3,547.93

              	 	
                $

              	
                16,675.27

              	 	
                $

              	
                4,612.31

              	 	 	
                -
                  

              	 
	
                Joe
                  A. Lillis

              	 	 	
                100,000

              	 	
                $

              	
                24,969.21

              	 	
                $

              	
                16,675.27

              	 	
                $

              	
                22,352

              	 	 	
                5,224
                  

              	 	
                $

              	
                21,421.28

              	 	
                $

              	
                -

              	 	
                $

              	
                17,739.65

              	 	 	
                5,224
                  

              	 	
                $

              	
                3,547.93

              	 	
                $

              	
                16,675.27

              	 	
                $

              	
                4,612.31

              	 	 	
                -
                  

              	 
	
                Scott
                  E. Lipsky

              	 	 	
                200,000

              	 	
                $

              	
                49,938.42

              	 	
                $

              	
                33,350.54

              	 	
                $

              	
                44,704

              	 	 	
                10,448
                  

              	 	
                $

              	
                42,842.56

              	 	
                $

              	
                -

              	 	
                $

              	
                35,479.30

              	 	 	
                10,448
                  

              	 	
                $

              	
                7,095.86

              	 	
                $

              	
                33,350.54

              	 	
                $

              	
                9,224.62

              	 	 	
                -
                  

              	 
	
                KMM
                  Enterprises, LLC

              	 	 	
                70,000

              	 	
                $

              	
                17,478.45

              	 	
                $

              	
                11,672.69

              	 	
                $

              	
                15,646

              	 	 	
                3,657
                  

              	 	
                $

              	
                14,994.90

              	 	
                $

              	
                -

              	 	
                $

              	
                12,417.76

              	 	 	
                3,657
                  

              	 	
                $

              	
                2,483.55

              	 	
                $

              	
                11,672.69

              	 	
                $

              	
                3,228.62

              	 	 	
                -
                  

              	 
	
                Mans/Spector
                  Living Trust

              	 	 	
                100,000

              	 	
                $

              	
                24,969.21

              	 	
                $

              	
                16,675.27

              	 	
                $

              	
                22,352

              	 	 	
                5,224
                  

              	 	
                $

              	
                21,421.28

              	 	
                $

              	
                -

              	 	
                $

              	
                17,739.65

              	 	 	
                5,224
                  

              	 	
                $

              	
                3,547.93

              	 	
                $

              	
                16,675.27

              	 	
                $

              	
                4,612.31

              	 	 	
                -
                  

              	 
	
                Paul
                  Baastad

              	 	 	
                50,000

              	 	
                $

              	
                12,484.60

              	 	
                $

              	
                8,337.64

              	 	
                $

              	
                11,176

              	 	 	
                2,612
                  

              	 	
                $

              	
                10,710.64

              	 	
                $

              	
                -

              	 	
                $

              	
                8,869.83

              	 	 	
                2,612
                  

              	 	
                $

              	
                1,773.97

              	 	
                $

              	
                8,337.64

              	 	
                $

              	
                2,306.15

              	 	 	
                -
                  

              	 
	
                Christopher
                  Hawk

              	 	 	
                2,125

              	 	
                $

              	
                530.60

              	 	
                $

              	
                354.35

              	 	
                $

              	
                475

              	 	 	
                111
                  

              	 	
                $

              	
                455.20

              	 	
                $

              	
                -

              	 	
                $

              	
                376.97

              	 	 	
                111
                  

              	 	
                $

              	
                75.39

              	 	
                $

              	
                354.35

              	 	
                $

              	
                98.01

              	 	 	
                -
                  

              	 
	
                Stephanie
                  G. Hawk

              	 	 	
                2,125

              	 	
                $

              	
                530.60

              	 	
                $

              	
                354.35

              	 	
                $

              	
                475

              	 	 	
                111
                  

              	 	
                $

              	
                455.20

              	 	
                $

              	
                -

              	 	
                $

              	
                376.97

              	 	 	
                111
                  

              	 	
                $

              	
                75.39

              	 	
                $

              	
                354.35

              	 	
                $

              	
                98.01

              	 	 	
                -
                  

              	 
	
                R.
                  Casey Hawk

              	 	 	
                2,125

              	 	
                $

              	
                530.60

              	 	
                $

              	
                354.35

              	 	
                $

              	
                475

              	 	 	
                111
                  

              	 	
                $

              	
                455.20

              	 	
                $

              	
                -

              	 	
                $

              	
                376.97

              	 	 	
                111
                  

              	 	
                $

              	
                75.39

              	 	
                $

              	
                354.35

              	 	
                $

              	
                98.01

              	 	 	
                -
                  

              	 
	
                Michael
                  Hawk

              	 	 	
                2,125

              	 	
                $

              	
                530.60

              	 	
                $

              	
                354.35

              	 	
                $

              	
                475

              	 	 	
                111
                  

              	 	
                $

              	
                455.20

              	 	
                $

              	
                -

              	 	
                $

              	
                376.97

              	 	 	
                111
                  

              	 	
                $

              	
                75.39

              	 	
                $

              	
                354.35

              	 	
                $

              	
                98.01

              	 	 	
                -
                  

              	 
	
                Robert
                  J. Skalicky

              	 	 	
                2,125

              	 	
                $

              	
                530.60

              	 	
                $

              	
                354.35

              	 	
                $

              	
                475

              	 	 	
                111
                  

              	 	
                $

              	
                455.20

              	 	
                $

              	
                -

              	 	
                $

              	
                376.97

              	 	 	
                111
                  

              	 	
                $

              	
                75.39

              	 	
                $

              	
                354.35

              	 	
                $

              	
                98.01

              	 	 	
                -
                  

              	 
	
                Jennifer
                  Lefcourt

              	 	 	
                80,000

              	 	
                $

              	
                19,975.37

              	 	
                $

              	
                13,340.22

              	 	
                $

              	
                17,882

              	 	 	
                4,179
                  

              	 	
                $

              	
                17,137.02

              	 	
                $

              	
                -

              	 	
                $

              	
                14,191.72

              	 	 	
                4,179
                  

              	 	
                $

              	
                2,838.34

              	 	
                $

              	
                13,340.22

              	 	
                $

              	
                3,689.85

              	 	 	
                -
                  

              	 
	
                James
                  Willenborg

              	 	 	
                60,000

              	 	
                $

              	
                14,981.53

              	 	
                $

              	
                10,005.16

              	 	
                $

              	
                13,411

              	 	 	
                3,134
                  

              	 	
                $

              	
                12,852.77

              	 	
                $

              	
                -

              	 	
                $

              	
                10,643.79

              	 	 	
                3,134
                  

              	 	
                $

              	
                2,128.76

              	 	
                $

              	
                10,005.16

              	 	
                $

              	
                2,767.39

              	 	 	
                -
                  

              	 
	
                David
                  Mans

              	 	 	
                60,000

              	 	
                $

              	
                14,981.53

              	 	
                $

              	
                10,005.16

              	 	
                $

              	
                13,411

              	 	 	
                3,134
                  

              	 	
                $

              	
                12,852.77

              	 	
                $

              	
                -

              	 	
                $

              	
                10,643.79

              	 	 	
                3,134
                  

              	 	
                $

              	
                2,128.76

              	 	
                $

              	
                10,005.16

              	 	
                $

              	
                2,767.39

              	 	 	
                -
                  

              	 
	 	 	 	
                2,182,512

              	 	
                $

              	
                544,956.00

              	 	
                $

              	
                363,939.80

              	 	
                $

              	
                487,834

              	 	 	
                114,012
                  

              	 	
                $

              	
                467,522.00

              	 	
                $

              	
                -

              	 	
                $

              	
                387,170.00

              	 	 	
                114,012
                  

              	 	
                $

              	
                77,434.00

              	 	
                $

              	
                363,939.80

              	 	
                $

              	
                100,664.20

              	 	 	
                -
                  

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Series
                  B Preferred 

              	 	 	

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Entrust
                  Capital

              	 	 	
                1,913,281

              	 	
                $

              	
                1,076,141.39

              	 	
                $

              	
                708,285.19

              	 	
                $

              	
                949,403.55

              	 	 	
                226,811
                  

              	 	
                $

              	
                925,442.41

              	 	
                $

              	
                -

              	 	
                $

              	
                753,494.88

              	 	 	
                226,811
                  

              	 	
                $

              	
                150,698.98

              	 	
                $

              	
                708,285.19

              	 	
                $

              	
                195,908.67

              	 	 	
                -
                  

              	 
	
                Millennium
                  3

              	 	 	
                1,913,281

              	 	
                $

              	
                1,076,141.39

              	 	
                $

              	
                708,285.19

              	 	
                $

              	
                949,403.55

              	 	 	
                226,811
                  

              	 	
                $

              	
                925,442.41

              	 	
                $

              	
                -

              	 	
                $

              	
                753,494.88

              	 	 	
                226,811
                  

              	 	
                $

              	
                150,698.98

              	 	
                $

              	
                708,285.19

              	 	
                $

              	
                195,908.67

              	 	 	
                -
                  

              	 
	
                Gerald
                  Katcher

              	 	 	
                765,312

              	 	
                $

              	
                430,456.33

              	 	
                $

              	
                283,313.93

              	 	
                $

              	
                379,761.22

              	 	 	
                90,724
                  

              	 	
                $

              	
                370,176.77

              	 	
                $

              	
                -

              	 	
                $

              	
                301,397.79

              	 	 	
                90,724
                  

              	 	
                $

              	
                60,279.56

              	 	
                $

              	
                283,313.93

              	 	
                $

              	
                78,363.43

              	 	 	
                -
                  

              	 
	
                Entrust
                  Capital (from warrants)

              	 	 	
                322,101

              	 	
                $

              	
                181,168.48

              	 	
                $

              	
                119,239.86

              	 	
                $

              	
                159,832.16

              	 	 	
                38,184
                  

              	 	
                $

              	
                155,798.30

              	 	
                $

              	
                -

              	 	
                $

              	
                126,850.92

              	 	 	
                38,184
                  

              	 	
                $

              	
                25,370.18

              	 	
                $

              	
                119,239.86

              	 	
                $

              	
                32,981.24

              	 	 	
                -
                  

              	 
	
                Millennium
                  3 (from warrants)

              	 	 	
                322,101

              	 	
                $

              	
                181,168.48

              	 	
                $

              	
                119,239.86

              	 	
                $

              	
                159,832.16

              	 	 	
                38,184
                  

              	 	
                $

              	
                155,798.30

              	 	
                $

              	
                -

              	 	
                $

              	
                126,850.92

              	 	 	
                38,184
                  

              	 	
                $

              	
                25,370.18

              	 	
                $

              	
                119,239.86

              	 	
                $

              	
                32,981.24

              	 	 	
                -
                  

              	 
	
                Gerald
                  Katcher (from warrants)

              	 	 	
                128,841

              	 	
                $

              	
                72,467.73

              	 	
                $

              	
                47,696.17

              	 	
                $

              	
                63,933.16

              	 	 	
                15,274
                  

              	 	
                $

              	
                62,319.61

              	 	
                $

              	
                -

              	 	
                $

              	
                50,740.60

              	 	 	
                15,274
                  

              	 	
                $

              	
                10,148.12

              	 	
                $

              	
                47,696.17

              	 	
                $

              	
                13,192.56

              	 	 	
                -
                  

              	 
	 	 	 	
                5,364,917

              	 	
                $

              	
                3,017,543.81

              	 	
                $

              	
                1,986,060.20

              	 	
                $

              	
                2,662,165.80

              	 	 	
                635,988
                  

              	 	
                $

              	
                2,594,977.81

              	 	
                $

              	
                -

              	 	
                $

              	
                2,112,830.00

              	 	 	
                635,988
                  

              	 	
                $

              	
                422,566.00

              	 	
                $

              	
                1,986,060.20

              	 	
                $

              	
                549,335.80

              	 	 	
                -
                  

              	 

      

       

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

         

      

    

     

     

    MERGER
      AGREEMENT 

     

    dated

     

    May
      15,
      2006

     

    

     

    by
      and
      among

     

    a21,
      Inc., a Texas corporation,

     

    as
      the
      Parent,

     

    AE
      Acquisition Corp., a Delaware corporation,

     

    as
      the
      Acquisition Corp.,

     

    ArtSelect,
      Inc.

    a
      Delaware corporation,

     

    as
      the
      Company,

     

    the
      Stockholders of the Company

     

    as
      the
      Stockholders

     

    and

     

    Udi
      Toledano

     

    As
      the
      Stockholder Representative

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

         

      

    

     

    
      TABLE
        OF CONTENTS

       

    

    
      
        	 	 	 

                Page

              
	
                ARTICLE
                  I 

              	
                DEFINITIONS

              	
                1

              
	
                1.1.

              	
                Definitions

              	
                1

              
	
                ARTICLE
                  II 

              	
                PURCHASE
                  AND SALE

              	
                7

              
	
                2.1.

              	
                The
                  Merger.

              	
                7

              
	
                2.2.

              	
                Intentionally
                  Omitted.

              	
                8

              
	
                2.3.

              	
                Certificate
                  of Merger

              	
                8

              
	
                2.4.

              	
                Effective
                  Time of the Merger

              	
                9

              
	
                2.5.

              	
                Effect
                  on Capital Stock; Exchange Procedures.

              	
                9

              
	
                2.6.

              	
                Merger
                  Consideration.

              	
                10

              
	
                2.7.

              	
                Payment
                  of the Merger Consideration

              	
                10

              
	
                2.8.

              	
                Procedure
                  to Establish Net Worth.

              	
                11

              
	
                2.9.

              	
                [Intentionally
                  Omitted]

              	
                12

              
	
                2.10.

              	
                Closing

              	
                12

              
	
                2.11.

              	
                No
                  Further Transfers; Lost, Stolen or Destroyed Certificates

              	
                12

              
	
                2.12.

              	
                Effect
                  of the Merger

              	
                12

              
	
                ARTICLE
                  III

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE STOCKHOLDERS AND THE COMPANY

              	
                13

              
	
                3.1.

              	
                Corporate
                  Existence and Power

              	
                13

              
	
                3.2.

              	
                Corporate
                  Authorization

              	
                13

              
	
                3.3.

              	
                Charter
                  Documents; Legality

              	
                13

              
	
                3.4.

              	
                Capitalization
                  and Ownership of the Company

              	
                14

              
	
                3.5.

              	
                Subsidiaries

              	
                14

              
	
                3.6.

              	
                Affiliates

              	
                14

              
	
                3.7.

              	
                Assumed
                  Names

              	
                14

              
	
                3.8.

              	
                Governmental
                  Authorization

              	
                14

              
	
                3.9.

              	
                Consents

              	
                14

              
	
                3.10.

              	
                Financial
                  Statements.

              	
                15

              
	
                3.11.

              	
                Accounts
                  Receivable

              	
                16

              
	
                3.12.

              	
                Books
                  and Records.

              	
                16

              
	
                3.13.

              	
                Absence
                  of Certain Changes.

              	
                16

              
	
                3.14.

              	
                Real
                  Property.

              	
                18

              
	
                3.15.

              	
                Tangible
                  Personal Property.

              	
                18

              
	
                3.16.

              	
                Intellectual
                  Property.

              	
                19

              
	
                3.17.

              	
                Images.

              	
                22

              
	
                3.18.

              	
                Relationships
                  With Licensees, Customers, Suppliers, Etc.

              	
                25

              
	
                3.19.

              	
                Litigation

              	
                25

              
	
                3.20.

              	
                Contracts.

              	
                26

              
	
                3.21.

              	
                Licenses
                  and Permits

              	
                27

              
	
                3.22.

              	
                Compliance
                  with Laws

              	
                27

              
	
                3.23.

              	
                Pre-payments

              	
                27

              
	
                3.24.

              	
                Employees

              	
                27

              

      

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	 	 	 

                Page

              
	
                3.25.

              	
                Compliance
                  with Labor Laws and Agreements

              	
                28

              
	
                3.26.

              	
                Pension
                  and Benefit Plans

              	
                28

              
	
                3.27.

              	
                Employment
                  Matters

              	
                30

              
	
                3.28.

              	
                Tax
                  Matters.

              	
                30

              
	
                3.29.

              	
                Finders’
                  Fees

              	
                32

              
	
                3.30.

              	
                Business
                  Operations; Servers.

              	
                32

              
	
                3.31.

              	
                Powers
                  of Attorney and Suretyships

              	
                33

              
	
                3.32.

              	
                Other
                  Information

              	
                33

              
	
                3.33.

              	
                Certain
                  Business Practices

              	
                33

              
	
                3.34.

              	
                Money
                  Laundering Laws

              	
                34

              
	
                ARTICLE
                  IV

              	
                REPRESENTATIONS
                  AND WARRANTIES OF STOCKHOLDERS

              	
                34

              
	
                4.1.

              	
                Ownership
                  of Stock; Authority.

              	
                34

              
	
                4.2.

              	
                Approvals

              	
                34

              
	
                4.3.

              	
                Non-Contravention

              	
                35

              
	
                4.4.

              	
                Litigation
                  and Claims

              	
                35

              
	
                4.5.

              	
                Merger
                  Consideration

              	
                35

              
	
                4.6.

              	
                Investment
                  Representations

              	
                35

              
	
                4.7.

              	
                Tax

              	
                37

              
	
                ARTICLE
                  V

              	
                REPRESENTATIONS
                  AND WARRANTIES OF PARENT

              	
                37

              
	
                5.1.

              	
                Due
                  Incorporation

              	
                37

              
	
                5.2.

              	
                Corporate
                  Authorization

              	
                37

              
	
                5.3.

              	
                Governmental
                  Authorization

              	
                37

              
	
                5.4.

              	
                No
                  Violation

              	
                37

              
	
                5.5.

              	
                Consents

              	
                38

              
	
                5.6.

              	
                Litigation

              	
                38

              
	
                5.7.

              	
                Issuance
                  of Preferred Stock

              	
                38

              
	
                5.8.

              	
                Finders’
                  Fees

              	
                38

              
	
                5.9.

              	
                Charter
                  Documents; Legality

              	
                38

              
	
                5.10.

              	
                Capitalization
                  and Ownership of the Parent

              	
                38

              
	
                5.11.

              	
                Financial
                  Statements.

              	
                39

              
	
                5.12.

              	
                Absence
                  of Certain Changes.

              	
                39

              
	
                5.13.

              	
                Other
                  Information

              	
                40

              
	
                5.14.

              	
                Compliance
                  with Laws

              	
                40

              
	
                5.15.

              	
                Money
                  Laundering Laws

              	
                40

              
	
                5.16.

              	
                Ownership
                  of Parent Securities

              	
                40

              
	
                5.17.

              	
                Acquisition
                  Corp

              	
                40

              
	
                ARTICLE
                  VI

              	
                COVENANTS
                  OF THE COMPANY PENDING CLOSING

              	
                41

              
	
                6.1.

              	
                Conduct
                  of the Business

              	
                41

              
	
                6.2.

              	
                Access
                  to Information.

              	
                42

              
	
                6.3.

              	
                Notices
                  of Certain Events

              	
                43

              

      

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

       

      
        	 	 	 

                Page

              
	
                ARTICLE
                  VII

              	
                COVENANTS
                  OF THE COMPANY AND THE STOCKHOLDERS

              	
                43

              
	
                7.1.

              	
                Confidentiality

              	
                43

              
	
                7.2.

              	
                Non-Solicitation.

              	
                43

              
	
                7.3.

              	
                Non-Competition

              	
                44

              
	
                7.4.

              	
                Reporting
                  and Compliance With Law

              	
                44

              
	
                7.5.

              	
                Injunctive
                  Relief

              	
                45

              
	
                7.6.

              	
                Resignations

              	
                45

              
	
                ARTICLE
                  VIII

              	
                COVENANTS
                  OF ALL PARTIES HERETO

              	
                45

              
	
                8.1.

              	
                Best
                  Efforts; Further Assurances

              	
                45

              
	
                8.2.

              	
                Confidentiality
                  of Transaction

              	
                45

              
	
                8.3.

              	
                Best
                  Efforts to Obtain Consents

              	
                46

              
	
                8.4.

              	
                Tax
                  Matters.

              	
                46

              
	
                8.5.

              	
                Parent
                  Common Stock.

              	
                47

              
	
                8.6.

              	
                Rights
                  to Piggyback.

              	
                48

              
	
                8.7.

              	
                Priority
                  on Piggyback Registrations

              	
                48

              
	
                8.8.

              	
                Procedures
                  on Registration

              	
                49

              
	
                8.9.

              	
                Selection
                  of Underwriters

              	
                49

              
	
                8.10.

              	
                Right
                  to Terminate Registration

              	
                50

              
	
                8.11.

              	
                Indemnification.

              	
                50

              
	
                ARTICLE
                  IX

              	
                CONDITIONS
                  TO CLOSING

              	
                52

              
	
                9.1.

              	
                Condition
                  to the Obligations of Parent, Acquisition Corp., Stockholders and
                  the
                  Company

              	
                52

              
	
                9.2.

              	
                Conditions
                  to Obligations of Parent and Acquisition Corp

              	
                52

              
	
                9.3.

              	
                Conditions
                  to Obligations of the Company and the Stockholders

              	
                53

              
	
                ARTICLE
                  X

              	
                RELIANCE
                  ON REPRESENTATIONS AND WARRANTIES

              	
                54

              
	
                10.1.

              	
                Reliance
                  on Representations and Warranties of the Company and the
                  Stockholders

              	
                54

              
	
                10.2.

              	
                Reliance
                  on Representations and Warranties of Parent

              	
                54

              
	
                ARTICLE
                  XI

              	
                INDEMNIFICATION

              	
                55

              
	
                11.1.

              	
                Indemnification
                  of Parent, Acquisition Corp

              	
                55

              
	
                11.2.

              	
                Special
                  Indemnity

              	
                55

              
	
                11.3.

              	
                Indemnification
                  of Stockholders

              	
                56

              
	
                11.4.

              	
                Procedure

              	
                56

              
	
                11.5.

              	
                Periodic
                  Payments

              	
                58

              
	
                11.6.

              	
                Payment
                  of Indemnification by Stockholders

              	
                58

              
	
                11.7.

              	
                Insurance

              	
                58

              
	
                11.8.

              	
                Survival
                  of Indemnification Rights

              	
                58

              
	
                ARTICLE
                  XII

              	
                DISPUTE
                  RESOLUTION

              	
                58

              
	
                12.1.

              	
                Arbitration.

              	
                58

              
	
                12.2.

              	
                Waiver
                  of Jury Trial; Exemplary Damages

              	
                60

              

      

       

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        	 	 	 

                Page

              
	
                12.3.

              	
                Attorneys’
                  Fees

              	
                60

              
	
                ARTICLE
                  XIII

              	
                TERMINATION

              	
                60

              
	
                13.1.

              	
                Termination
                  Without Default

              	
                60

              
	
                13.2.

              	
                Termination
                  Upon Default.

              	
                61

              
	
                13.3.

              	
                Survival

              	
                61

              
	
                ARTICLE
                  XIV

              	
                MISCELLANEOUS

              	
                61

              
	
                14.1.

              	
                Notices

              	
                61

              
	
                14.2.

              	
                Amendments;
                  No Waivers.

              	
                62

              
	
                14.3.

              	
                Ambiguities

              	
                63

              
	
                14.4.

              	
                Publicity

              	
                63

              
	
                14.5.

              	
                Expenses

              	
                63

              
	
                14.6.

              	
                Successors
                  and Assigns

              	
                63

              
	
                14.7.

              	
                Governing
                  Law

              	
                63

              
	
                14.8.

              	
                Counterparts;
                  Effectiveness

              	
                63

              
	
                14.9.

              	
                Entire
                  Agreement

              	
                63

              
	
                14.10.

              	
                Severability

              	
                63

              
	
                14.11.

              	
                Captions

              	
                64

              
	
                14.12.

              	
                Construction

              	
                64

              
	
                14.13.

              	
                Stockholder
                  Representative

              	
                64

              
	
                Schedule
                  I

              	 	
                68

              

      

    

     

     

    
      
        
        

      

      
        iv

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}]]