Document:

Unassociated Document

    SECOND
      AMENDMENT TO THE

    EMPLOYMENT
      AGREEMENT

    BETWEEN

    FOSTER
      WHEELER LTD.

    AND

    RAYMOND
      J. MILCHOVICH

     

    THIS
      SECOND AMENDMENT (this “Amendment”) to the Employment Agreement between Foster
      Wheeler LTD., a Bermuda company (“Foster Wheeler”), and Raymond J.
      Milchovich (the “Executive”) dated as of August 11, 2006 (the “Employment
      Agreement”) is made and entered into as of February 27, 2007.

     

    WITNESSETH

     

    WHEREAS,
      Foster Wheeler and the Executive heretofore entered into the Employment
      Agreement and the First Amendment to the Employment Agreement, dated as of
      January 20, 2007; 

     

    WHEREAS,
      the parties each desire to further amend the Employment Agreement as set forth
      below.

     

    NOW
      THEREFORE, Foster Wheeler and the Executive hereby mutually agree to amend
      the
      Employment Agreement as follows:

     

    1. Section
      4.1 of the Agreement is hereby modified in its entirety as follows:

     

    4.1 General.
      Except
      as otherwise provided in this Section 4, following any termination of the
      Executive’s employment, the Company shall pay to, provide to, or allow the
      retention by, the Executive, or his estate or beneficiary, as the case may
      be,
      (i) Base Salary earned through the date of such termination; (ii) except in
      the
      case of a termination described in Section 4.4, any earned, but unpaid, annual
      cash incentive or other incentive awards; (iii) a payment representing the
      Executive’s accrued but unpaid vacation; (iv) any vested, but not forfeited,
      benefits on the date of such termination under the Company’s employee benefit
      plans in accordance with the terms of such plans; (v) the vested portion of
      his
      Restricted Stock and Options granted under Section 3.3 of this Agreement; and
      (vi) benefit continuation and conversion rights to which the Executive is
      entitled under the Company’s employee benefit plans and this Agreement.

     

    2. Section
      4.4 of the Agreement is hereby modified in its entirety as follows:

     

    4.4 For
      Cause.
      In
      addition to those payments and benefits described in clauses (i), (ii), (iii),
      (iv) and (vi) of Section 4.1, if the Company terminates the Executive’s
      employment for Cause, the Term shall terminate immediately and (i) the Executive
      shall be entitled to receive no further amounts or benefits hereunder, except
      as
      required by law; (ii) all unvested Options and Restricted Stock set forth in
      Section 3.3 herein shall be immediately forfeited; and (iii) all vested Options
      and Restricted Stock set forth in Section 3.3 herein which are not forfeited
      pursuant to clause (ii) of this sentence shall be forfeited on the date which
      is
      ninety (90) days following such termination. For purposes of this Agreement,
      “Cause”
shall
      mean the Executive (i) being convicted of, or pleading guilty or no contest
      to,
      a felony (except for motor vehicle violations); (ii) engaging in conduct that
      constitutes gross misconduct or fraud in connection with the performance of
      his
      duties to the Company; or (iii) materially breaching this Agreement which the
      Executive does not cure within thirty (30) days after the Company provides
      written notice of such breach to the Executive. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3. A
      new
      Section 4.9 is hereby added to the Agreement to read as follows:

     

    4.9 Without
      Good Reason.
      In
      addition to those payments and benefits described in Section 4.1, if during
      the
      Term the Executive voluntarily terminates his employment other than for Good
      Reason, the exercise period set forth in Section 5(e)(ii) of the Employee
      Nonqualified Stock Option Agreement issued to the Executive as of August 11,
      2006 (the “Option Agreement”), shall be extended to the maximum period permitted
      under Proposed Treasury Regulation Section 1.409A-5(v)(C) to allow the Executive
      to exercise any vested Option through the later of: (i) the 15th day of the
      third month following the date the Option would otherwise have expired, or
      (ii)
      December 31 of the year in which the Option would otherwise have expired. This
      Section 4.9 is intended to comply with Section 409A of the Internal Revenue
      Code
      and Proposed Treasury Regulation Section 1.409A-5(v)(C) to avoid treatment
      of
      the Option as deferred compensation thereunder, and shall be interpreted and
      operated in accordance with such laws as they may be amended or finalized.
      The
      Executive shall not voluntarily terminate his employment without Good Reason
      prior to the date which is thirty (30) days following the date on which the
      Executive provides written notice of such termination to the Company; provided,
      however, that the Company may waive such notice period in writing.

     

    4. A
      new
      Section 4.10 is hereby added to the Agreement to read as follows:

     

    4.10 Extension
      for Securities Laws Restrictions.
      In the
      event that on the last date on which an Option may be exercised under this
      Agreement or the Option Agreement, applicable law would preclude the Executive
      from exercising or selling such Option, then the expiration of the applicable
      exercise period under this Agreement and the Option Agreement shall be tolled
      and extended until the last trading day that is 30 days following the date
      upon
      which the exercise or sale of the Option would first no longer violate
      applicable laws. For the purpose of this section 4.10, applicable law shall
      be
      deemed to so preclude the Executive if, among other things, his legal counsel
      has advised him or the Company in writing that he is so precluded. This Section
      4.10 is intended to comply with Section 409A of the Internal Revenue Code and
      Proposed Treasury Regulation Section 1.409A-5(v)(C) to avoid treatment of the
      Option as deferred compensation thereunder, and shall be interpreted and
      operated in accordance with such laws as they may be amended or finalized.
      

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    5. A
      new
      Section 10.9 is hereby added to the Agreement to read as follows:

     

    10.9 The
      Executive agrees that Foster Wheeler’s Share Ownership Guidelines, adopted and
      effective November 6, 2006, apply to the Restricted Stock and Options (as well
      as any shares resulting from the exercise of the Options) awarded to him on
      August 11, 2006, notwithstanding any provision in the foregoing Guidelines
      to
      the contrary.

     

    6. For
      the
      avoidance of doubt, in the event of any inconsistency between the Option
      Agreement and this Amendment, this Amendment shall govern and
      control.

     

     

    IN
      WITNESS WHEREOF, Foster Wheeler and the Executive have executed this Second
      Amendment effective as of the date first written above.

    

     

    
      	
              FOSTER
                WHEELER LTD.

               

               

              By:
                /s/ Diane C.
                Creel                                      
                

              Name:
                Diane C. Creel

              Title:
                Chair of the Compensation Committee

            	
              RAYMOND
                J. MILCHOVICH

               

               

              /s/
                Raymond J.
                Milchovich                                
                

            

    

    

     

    
      
         

      

      
        3ASSET
      PURCHASE AGREEMENT

    

    By
      and Between

    

    OW
      HOLDINGS, INC., as Seller,

    

    and

    

    SITESTAR
      CORPORATION, as Buyer,

    

    February
      28, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF
      CONTENTS

     

    EXHIBITS

     

    Annex
      I  Certain
      Definitions

    

    SCHEDULES

    

    
      	
              2.1(c)

            	 	
              List
                of Customers

            
	
              2.1(c)(i)

            	 	
              Excluded
                High Bandwidth Customers

            
	
              2.1(c)(iv)

            	 	
              Excluded
                Broadband Customers

            
	
              2.1(e)

            	 	
              Equipment
                Conveyed

            
	
              2.1(j)

            	 	
              Domain
                Names

            
	
              2.4

            	 	
              Transition
                Plan

            
	
              2.4(a)

            	 	
              Transition
                Related Expenses

            
	
              3.1(a)

            	 	
              Accounts
                Payable

            
	
              3.1(d)

            	 	
              Contracts
                to be assumed

            
	
              4.1(a)

            	 	
              Estimated
                Purchase Price

            
	
              4.3(b)

            	 	
              Active
                Prepaid Service Contracts

            
	
              5.11

            	 	
              Litigation

            
	
              5.16(a)

            	 	
              Telecom
                circuits and Service Contracts

            
	
              8.2(a)(vii)

            	 	
              Disputed
                Accounts Payable

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    ASSET
      PURCHASE AGREEMENT

     

    THIS
      ASSET PURCHASE AGREEMENT (“Agreement”)is entered into as of the 28th day of
      February, 2007, by and between OW Holdings, Inc., a Wyoming corporation
      (“Seller”), and Sitestar Corporation a Nevada corporation (“Buyer”).

     

    WITNESSETH:
      

     

    RECITALS

     

    A.  Seller
      operates a business known as “OneWest.net,” which provides Internet services to
      residential and commercial customers, including principally dial-up and high
      speed Internet access and hosting services (the “Business”).

     

    B.  Seller
      now desires to sell to Buyer and Buyer now desires to purchase from Seller
      certain of the assets owned by Seller and/or used or held for use in the
      operation of the Business, and in connection therewith Buyer is willing to
      assume certain limited liabilities of Seller relating to the Business, all
      on
      the terms and conditions as more fully set forth in this Agreement.

     

    C.  The
      Parties have agreed that an orderly consummation of this transaction requires
      three distinct steps as described herein so that the funds are remitted to
      Seller and the assets are transferred to Buyer. 

     

    NOW,
      THEREFORE, in consideration of the premises and of the mutual covenants,
      agreements, representations and warranties herein contained, and other good
      and
      valuable consideration, the Parties agree as follows:

     

    AGREEMENT

     

    ARTICLE 1.
      DEFINITIONS
      AND CONSTRUCTION

     

    1.1
      Definitions.
      All
      terms not defined when used shall have the respective meanings given such terms
      in Annex
      I.

     

    1.2
      Accounting
      Terms.
      All
      terms of an accounting nature not specifically defined herein shall have the
      respective meanings given to them under GAAP.

     

    1.3
      Other
      Definition Provisions.
      The
      masculine form of words includes the feminine and the neuter and vice versa,
      and, unless the context otherwise requires, the singular form of words includes
      the plural and vice versa and “or” is used in the sense of “and/or.” The words
“herein,” “hereof,” “hereunder” and other words of similar import when used in
      this Agreement refer to this Agreement as a whole, and not to any particular
      section or subsection.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.4
      Transaction
      timeline terminology. This transaction shall be consummated in three steps.
      In
      this Agreement these are referred to as:

     

    (a)
      “Closing” SIX HUNDRED THOUSAND DOLLARS ($600,000) of the Estimated Purchase
      Price is transferred from Buyer to Seller. The Estimated Purchase Price
      computation is based on Seller’s audit of the revenue generated by the customers
      contained in the PLATYPUS database. The Closing will be during business hours
      on
      February 28, 2007.

     

    (b)
      “Transfer” The Acquired Assets and billing responsibilities and Assumed
      Liabilities are transferred to control of the Buyer with the customer database
      and supporting information. Transfer shall occur at midnight on February 28,
      2007.

     

    (c)
      “Settlement” This occurs within 90 days after Transfer. Buyer shall have 90 days
      (the “Holdback Period”)within which to confirm Seller’s computation of the
      Purchase Price and reconcile other adjustments as set forth herein. The balance
      of the purchase price as adjusted shall be paid not later than 90 days after
      Transfer.

     

    ARTICLE 2.

    PURCHASE
      AND SALE OF ASSETS

     

    2.1
      Assets
      to be Sold to Buyer.
      On the
      terms and subject to the conditions of this Agreement, and on the basis of
      the
      representations and warranties herein contained, Seller shall sell, assign,
      transfer, convey and deliver to Buyer, on the Closing Date, free and clear
      of
      all Liens, all of the assets described herein (collectively, the “Acquired
      Assets or Assets”). , Such Acquired Assets shall include, without limitation,
      all right, title and interest of Seller in, to and under the
      following:

     

    (a)  Accounts
      Receivable.
      Any and
      all accounts receivable from conveyed Customers of Good Standing of Seller
      that
      are due and collectable as of Transfer including all Accounts Receivable due
      from USAC.

     

    (b)  Prepaid
      Expenses.
      All
      prepaid expenses existing as of the Closing Date (“Prepaid
      Expenses”);

     

    (c)  Clients
      and Customers All
      current clients and customers of the Business in all Wyoming, Idaho and Montana
      locations, which are set forth on Schedule 2.1(c), including, without
      limitation, the following: 

     

    
      	
            	(i)	
              Dedicated
                Access High Bandwidth Customers, except for certain Wyoming customers
                identified in Schedule 2.1(c)(i); 

            

    

     

    
      	
            	(ii)	
              Dial-Up
                Customers including “IKANO Customers”, Email customers and value-added
                service (i.e., web acceleration)
                customers

            

    

     

    
      	
            	(iii)	
              Web
                and Domain Hosting Customers; and

            

    

     

    
      
        
        

      

      
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            	(iv)	
              Qwest
                DSL Customers (It is expressly understood that there are certain
                broadband
                customers served by wireless and Contact DSL which are not a part
                of this
                Agreement, which customers are identified in Schedule 2.1(c)(iv));
                

            

    

     

    (d)  Asset
      Contracts.
      All the
      client and customer contracts and agreements of the Business, including without
      limitation, those listed in Sections 2.1(c)(i) through 2.1(c)(iv).

     

    (e)  Equipment
      All
      computer servers used exclusively for the provision of services for the Clients
      and Customers of the Business and listed on Schedule 2.1(e); 

     

    (f)  Claims
      and Rights.
      All
      claims and rights of every kind relating to the Acquired Assets of the Business,
      including, without limitation, all deposits, prepayments and prepaid expenses,
      refunds.

     

    (g)  Governmental
      Authorizations.
      All
      Governmental Authorizations and all pending applications therefore or renewals
      thereof to the extent transferable Buyer;

     

    (h)  Books
      and Records, etc.
      Copies
      of all operating data and billing records, including, without limitation,
      databases, accounts, prospect lists, client lists, archives, and related
      materials used or held for use in the Business and relating to the Acquired
      Assets.

     

    (i)  Web
      Site Copies
      of
      all files that comprise the web site known as www.OneWest.net.

     

    (j)  Seller
      Owned Internet Domains.
      All
      Company owned domains used for the purpose of operating the Business, including
      Domain Names. Such domains are listed in schedule 2.1(j).

     

    (k)  Telephone
      Numbers All
      telephone, telex, telecopy and telecommunication numbers (except DID phone
      numbers), e-mail addresses; and

     

    (l)  Goodwill.
      All
      goodwill related to the Business.

     

    2.2
      Excluded
      Assets.
      Notwithstanding anything to the contrary in Section 2.1, all of the right,
      title
      and interest of Seller in, to and under the following assets, properties and
      other rights (collectively, the “Excluded Assets”) shall be excluded from the
      Acquired Assets:

     

    (a)  All
      wireless broadband and Contact DSL customers 

     

    (b)  All
      Seller cash on hand, investments and marketable securities.

     

    (c)  All
      Seller-owned furniture, fixtures and equipment not listed on Schedule
      2.1(c);

     

    
      
        
        

      

      
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    (d)  All
      Tax
      returns and Tax refund claims of any type or description for matters arising
      prior to the Closing Date;

     

    (e)  All
      Accounts Receivable presently under the control of a collection
      agency;

     

    (f)  All
      Benefit Plans and any employment agreements with any Business Employee (unless
      specifically assigned to Buyer herein);

     

    (g)  All
      insurance policies and rights thereunder, other than claims with respect to
      Acquired Assets;

     

    (h)  All
      rights and obligations of Seller under any Business Contract that is not
      assigned to Buyer as an Acquired Contract;

     

    (i)  The
      company books and records of Seller, including its Articles of Incorporation
      and
      Bylaws, seals, minute books, and other documents relating to the organization,
      maintenance and existence of Seller as a corporation; and

     

    (j)  All
      information pertaining to shareholders and investors in the Seller.

     

    2.3
      Assignment
      of Contracts and Rights.
      Other
      than the Acquired Contracts, Buyer assumes no rights or responsibilities for
      any
      contracts, agreements, commitments, obligations, liabilities or any other duties
      of Seller except as specifically set forth in Schedule 3.1(d) or elsewhere
      in
      this agreement. Notwithstanding anything to the contrary in this Agreement,
      this
      Agreement shall not constitute an agreement to assign any Governmental
      Authorization or any instrument, contract, lease, permit or other arrangement
      included among the Acquired Assets or Acquired Contracts, or any claim or right
      or any benefit arising thereunder or resulting therefrom, if an assignment
      or
      transfer thereof, without the consent of a necessary third party, would
      constitute a breach or other contravention thereof or in any way adversely
      affect the rights of Buyer thereunder; any assignment or transfer which requires
      such a consent shall be made subject to such consent being obtained. Seller
      shall use its best efforts at all times (before and after Closing, as
      applicable) to obtain required consents to assignment of the Acquired Contracts;
      and if a consent is not obtained, or if an assignment thereof would be
      ineffective as to Buyer, Seller and Buyer will enter into an arrangement
      acceptable to Buyer under which Buyer will obtain the benefits and assume the
      obligations thereunder in accordance with this Agreement, whether by
      subcontract, sub-license or sublease, and by which Seller would enforce such
      rights and/or agreements for the benefit of Buyer. To the extent such an
      arrangement is effected, Seller shall promptly pay to Buyer all monies received
      by Seller under any Acquired Assets or any claim or right or any benefit arising
      thereunder, except to the extent the same represents an Excluded Asset. Seller
      acknowledges that the assignment of certain Acquired Contracts is material
      to
      this agreement. Nothing herein shall be deemed or construed to cure or excuse
      any breach by Seller or Buyer of any of its representations, warranties and
      covenants in this Agreement, and the rights and remedies under this Section
      2.3
      shall be in addition to, and not in lieu of, any other such rights or remedies
      provided for under this Agreement or by operation of law.

     

    
      
        
        

      

      
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    2.4
      Transition.
      Both
      Parties agree to the transition plans and terms provided in Schedule 2.4. During
      the transition period, which shall not exceed 90 days, Seller shall provide
      to
      Buyer such assistance as is reasonably required to provide for the transfer
      of
      customer accounts and the billing of such accounts. Should such assistance
      require travel to Buyer’s location, all travel, lodging and per diem expense
      shall be at the expense of Buyer. 

     

    ARTICLE 3.

    ASSUMPTION
      OF
      LIABILITIES

     

    3.1
      Assumed
      Liabilities.
      Buyer
      agrees that at Closing it will assume, and agree to pay, perform and discharge
      when due, only the following obligations of Seller as such obligations relate
      to
      the Business (the “Assumed Liabilities”):

     

    (a)  Accounts
      Payable.
      All
      accounts payable by Seller in respect of the Business, but only to the extent
      existing from and after Closing and reflected in Schedule 3.1(a) (“Accounts
      Payable”);

     

    (b)  Accrued
      Expenses.
      All
      expenses of Seller with respect to the Business, the type of which are typically
      classified as an accrued expense, but only to the extent existing as of Transfer
      (“Accrued Expenses”);

     

    (c)  Deferred
      Revenue Liability.
      All
      unearned revenue fulfillment obligations of the Business attributable to prepaid
      service contracts for active customers (the “Active Prepaid Service Contracts”)
      and any credits for services not yet rendered, but only to the extent existing
      as of Transfer (“Deferred Revenue Liability”); and

     

    (d)  Liabilities
      Under Contracts.
      All
      obligations of Seller under the Contracts set forth in Schedule 3.1(d), but
      only
      to the extent such obligations are to be performed from and after the Transfer
      Date and do not constitute payment in arrears for services or other matters
      occurring prior to Closing or delayed payment on the purchase price of an
      Acquired Asset. 

     

    (e)  Excluded
      Liabilities.
      Notwithstanding any provision of Section 3.1 of this Agreement or any other
      document or instrument to the contrary, Buyer shall assume only the Assumed
      Liabilities as specifically set forth on the Schedules herein set forth and
      shall not assume or in any way be liable or responsible for any other debts,
      obligations or liabilities of Seller of any kind whatsoever, whether known
      or
      unknown, absolute, contingent, accrued or otherwise, and whether arising before
      or after the Closing Date (the “Excluded Liabilities”). The Excluded Liabilities
      shall remain the sole obligation of Seller and shall be retained, paid,
      performed and discharged by such parties. 

     

    
      
        
        

      

      
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    ARTICLE 4.

    PURCHASE
      PRICE, MANNER OF PAYMENT AND CLOSING

     

    4.1
      Purchase
      Price.

     

    a.  In
      consideration for the sale, assignment, transfer, conveyance and delivery of
      the
      Acquired Assets to Buyer at Closing, and as consideration for the
      representations, warranties, covenants and agreements of Seller contained in
      this Agreement and contained in the Ancillary Agreements, Buyer shall purchase
      all of the Acquired Assets for a total purchase price based on a price multiple
      of revenues plus accounts receivable minus deferred revenue. The price multiple
      will be based on the annualized value of the current monthly service obligations
      of the customers in Good Standing conveyed (herein referred as “Annualized
      Revenues”) as follows: The dial-up services, email services and web acceleration
      and other related services shall be valued at sixty percent (60%) of the
      annualized revenues for such services. The Qwest DSL and related services shall
      be valued at fifty percent (50%) of their annualized revenues. The dedicated
      T-1
      and other high bandwidth (Ethernet) services shall be valued at twenty percent
      (20%) of their annualized revenues. All web hosting, IP address and domain
      hosting services shall be valued at seventy-five percent (75%) of their
      annualized revenues. Advertising trade accounts will be valued based on the
      retail value of the services provided by Seller. No other trade accounts will
      be
      valued in the sale. No value shall be placed on non-recurring services. All
      of
      the foregoing in aggregate shall be known as the “Subscriber Value”. Seller’s
      computation of the purchase price shall be set forth on Schedule 4.1(a) and
      shall serve as the Estimated Purchase Price at Closing. The Purchase Price
      shall
      be computed by Buyer and Seller at Settlement pursuant to 4.3.

     

    4.2
      Manner
      of Payment.

     

    (a)  The
      Purchase Price shall be paid as follows: 

     

    (i)  At
      Closing, Buyer shall deliver to Seller (by wire transfer or other immediately
      available funds) a cash amount equal to SIX HUNDRED THOUSAND DOLLARS ($600,000)
      of the Estimated Purchase Price (the “Closing Payment”). Buyer shall also
      provide assurances in a form acceptable to Seller that an amount sufficient
      to
      pay the remaining amounts due on the Purchase Price is reserved and available
      for payment to Seller.; and 

     

    (ii)  At
      Settlement, Buyer shall deliver or cause to be delivered to Seller a cash amount
      equal to the Purchase Price minus the cash amount previously paid (the
“Holdback”), . 

     

    
      
        
        

      

      
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    4.3
      Computation
      of Estimated Purchase Price and Purchase Price.

     

    (a)  Estimated
      Purchase Price.
      At
      Closing, Seller will calculate the Estimated Purchase Price by determining
      the
      annualized revenues per service category and apply the multipliers from 4.1
      for
      each category of service (Subscriber Value). Expenses paid by Seller for periods
      on or after Transfer, valued at 100%, and Accounts Receivable for these
      customers shall be added to the Purchase Price. Deferred Revenue for these
      customers shall be subtracted from the Purchase Price. For determining the
      Estimated Purchase Price all customers who are paid through the date of Transfer
      or who have made payments on their accounts during January, 2007 shall be
      included and valued as set forth in 4.1.

     

    (b)  Purchase
      Price.
      The
      Purchase Price shall be determined at Settlement as set forth in this section.
      At
      Settlement, Buyer and Seller shall determine the Subscriber Value by determining
      the actual value of the annualized revenues per service category of the
      customers conveyed and in Good Standing as of the date of Transfer multiplied
      by
      the multipliers from 4.1.
      Amounts
      prepaid by customers for periods after Transfer that are received and retained
      by Seller for services to be received after Transfer, and liabilities assumed
      by
      Buyer shall be deducted. Schedule 4.3(b) sets forth a list of all Active Prepaid
      Service Contracts, which list is complete and correct in all respects. The
      actual list will be delivered to Buyer in electronic form

     

    (c)  Any
      payments not accounted for in the calculation of the Purchase Price and received
      by Buyer for services provided by Seller prior to Transfer or any other payments
      accruing to Seller for times prior to Transfer shall be paid to Seller by Buyer
      upon receipt. 

     

    (i)  Transition
      Related Expenses:
      All
      transition related expenses, included in schedule 2.4(a) herein, or determined
      after closing, due to either Buyer or Seller will be added or deducted from
      the
      Holdback amount at Settlement. 

     

    (d)  Allocation
      of Purchase Price.
      The
      Purchase Price shall be allocated at or after final Settlement by mutual
      agreement. A reasonable allocation of consideration will be determined by Buyer
      and must thereafter be approved by the Seller. Each Party shall file its
      respective income tax returns on the basis of the allocations agreed upon ,
      and
      no Party shall thereafter take a return position inconsistent with such
      allocation. Each Party shall fully comply with the reporting requirements of
      Section 1060 of the Code relating to allocation rules for certain asset
      acquisitions, and will use this allocation as the basis for completing IRS
      Form
      8594, which the Parties shall each file with the IRS on a timely
      basis.

     

    4.4
      Other
      Adjustments and Prorations.
      Any
      real estate, personal property, and other taxes, utilities, rents, charges,
      license charges and other assessments that inure to the benefit of both Seller
      and Buyer, if any, shall be prorated at the Closing between Seller and Buyer
      based on the actual number of days applicable to pre-Closing and post-Closing
      use.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    4.5
      Closing
      and Settlement.
      

     

    (a)  Closing
      shall take place via fax transmission on February 28, 2007. Monies will be
      paid
      via electronic transfer of funds. Subsequent to closing original signed
      documents will be exchanged via overnight mail. All conditions set forth in
      Sections 7.1 and 7.2 must have been satisfied or waived (other than conditions
      with respect to actions that the respective Parties will take at Closing and
      Settlement ) Closing may also occur on a date and at a location as the Parties
      may mutually determine. (the “Closing Date”).

     

    (b)  
      Transfer
      of Assets and Assumption of Liabilities shall take place as of midnight on
      the
      28th of February, 2007. This shall be the effective time and date for all
      matters regarding valuation of revenues, assets and liabilities pursuant to
      this
      transaction.

     

    (c)  Settlement
      of the consideration payable under the terms of this Agreement (“Settlement”)
      shall occur no later than ten (10) days after the end of the Holdback Period.
      If
      any amount is in dispute on the Settlement date, the amount not in dispute
      shall
      be paid and the disputed amount shall be held in escrow at Smith River Bank
      pending resolution of the dispute with interest accruing for the benefit of
      the
      party receiving such sum or any portion thereof. 

     

    ARTICLE 5.

    REPRESENTATIONS
      AND WARRANTIES OF SELLER

     

    In
      order
      to induce Buyer to enter into this Agreement, Seller hereby represents and
      warrants to Buyer that the statements contained in this ARTICLE 5 are, to the
      best of Seller’s knowledge based upon diligent investigation and reliable
      information, correct and complete as of the date of this Agreement and will
      be
      correct and complete on the Closing Date (as though made then and as though
      the
      Closing Date were substituted for the date of this Agreement throughout this
      ARTICLE 5, except where a specific date is indicated).

     

    5.1
      Organization,
      Power and Authority.
      Seller
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of Wyoming. Seller is duly qualified to do business as a foreign
      corporation and is in good standing under the laws of Idaho and Montana. Seller
      has full corporate and other power and authority to conduct its business and
      to
      own its property, as now conducted and owned. 

     

    5.2
      Authorization,
      etc.
      Seller
      will have full corporate and other power and authority to execute and deliver
      this Agreement and all Ancillary Agreements required to be executed and
      delivered by it under this Agreement, and to perform the terms of this Agreement
      and of all such other Ancillary Agreements. The execution, delivery and
      performance of this Agreement and the Ancillary Agreements by Seller shall,
      on
      the Closing Date, have been duly and validly authorized by all necessary action
      in respect thereof on the part of Seller (including, without limitation, all
      approvals required by Seller’s Shareholders and Board of Directors), and no
      other corporate action on the part of Seller or its shareholders will then
      be
      necessary. This Agreement and the Ancillary Agreements each represent the legal,
      valid and binding obligation of Seller, enforceable against each of them in
      accordance with their respective terms.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    5.3
      No
      Legal Bar.
      The
      execution and delivery by Seller of this Agreement does not, and the
      consummation of the transactions contemplated hereby will not, violate, conflict
      with, result in a breach of, result in or constitute a default (or an event
      which, with notice or lapse of time or both, would constitute a default) under,
      or result in the cancellation or unilateral modification or amendment of, or
      accelerate the performance required by, or result in a right of termination
      or
      acceleration under, or result in the creation of any Lien upon any of the
      Acquired Assets under any of the terms, conditions or provisions of (i) the
      Articles of Incorporation or Bylaws of Seller, (ii) any contract, except
      for such defaults (or rights of termination, cancellation or acceleration)
      as to
      which requisite waivers or consents have been or will be obtained by Seller
      prior to the Closing or the obtaining of which has been waived by Buyer in
      writing, or (iii) any order, writ, judgment, injunction, decree, award, ruling,
      statute, rule or regulation applicable to Seller or any of the Acquired Assets
      or the Business. There is no requirement applicable to Seller to make any filing
      with, or to obtain any permit, authorization, consent, waiver or approval of
      any
      governmental authority or any third party as a condition to the lawful
      consummation of the transactions contemplated by this Agreement or the transfer
      to Buyer of ownership of the Acquired Assets.

     

    5.4
      No
      Defaults.
      Seller
      is not in violation of, or in default under, (a) any provision of the Articles
      of Incorporation or Bylaws of Seller, as amended to the Closing Date, (b) any
      Governmental Authorization, (c) any law, rule or regulation, (d) any order,
      judgment, writ, injunction, award, decree, determination, license or permit
      by
      which Seller or its assets or properties is or may be bound, or (e) any contract
      relating to or otherwise affecting the operation of the Business to which Seller
      is a party. To the best knowledge of Seller, no event or circumstance has
      occurred and is continuing which with the giving of notice or the passage of
      time or both would constitute a default, or would cause any of the
      representations and warranties contained in (a), (b), (c), (d) or (e) above
      not
      to be true and correct. Except with respect to the Qwest Contracts, there are
      no
      renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate
      any Business Contract.

     

    5.5
      Governmental
      Authorizations.
      All
      Governmental Authorizations necessary to permit Seller to own the Acquired
      Assets and operate the Business as it is now being operated are in full force
      and effect. 

     

    5.6
      RESERVED

     

    5.7
      Absence
      of Certain Changes or Events.
      Since
      October 16, 2006, Seller has carried on the Business in the ordinary course,
      consistent with past practice, and has not:

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (a)  suffered
      (involuntarily or voluntarily (or received notice of any event or occurrence
      which, with our without notice or the passage of time or both, could reasonably
      result in) any adverse changes in the condition (financial or otherwise),
      results of operations, earnings, properties, business, or prospects which
      individually or in the aggregate have been materially adverse to the Acquired
      Assets or the condition (financial or otherwise), results of operations,
      earnings, properties, business or prospects of the Business other than
      historically consistent growth and churn in the number of subscribers
      experienced by Seller;

     

    (b)  incurred
      or paid any indebtedness, obligation, or other liability (contingent or
      otherwise), except for indebtedness, obligations and liabilities incurred or
      paid solely for the benefit of the Business in the ordinary course of business,
      and there does not exist a set of circumstances that could reasonably be
      expected to result in any such indebtedness, obligation or
      liability;

     

    (c)  changed
      the manner in which it collects its accounts receivable;

     

    (d)  failed
      to
      pay any material account payable or indebtedness when due or otherwise delayed
      the payment of any material account payable outside the ordinary course of
      business;

     

    (e)  changed
      the payment terms with its vendors;

     

    (f)  guaranteed
      any liabilities or obligations of any other Person;

     

    (g)  created,
      permitted or allowed any Lien of any kind with respect to the Acquired Assets
      or
      any of its other properties, businesses or assets;

     

    (h)  made
      any
      capital expenditure or commitments for any addition to property, plant or
      equipment, or entered into any service agreement, capital or operating lease,
      or
      any other agreement related to the operation of the Business, which exceeds
      $5,000 in the aggregate;

     

    (i)  suffered
      or received notice of any damage, destruction or loss in excess of $5,000
      (whether or not covered by insurance) to any FF&E or
      properties;

     

    (j)  
      suffered
      any strike, collective bargaining negotiation, dispute, grievance, controversy
      or other similar labor trouble;

     

    
      (k)  sold,
        transferred, licensed, leased or removed from its premises any of its tangible
        assets except in the ordinary course of business or sold, assigned, licensed,
        transferred or granted any rights under or with respect to any of its
        Intellectual Property;

       

      (l)  
        executed, amended, or terminated any material Business Contract to which
        it is
        or was a party or by which the Acquired Assets are or were bound or affected;
        amended, terminated or waived any of its rights thereunder; or received notice
        of termination, amendment, or waiver of any agreement or any material rights
        thereunder;

       

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (m)  disclosed
      any confidential information or trade secrets of Seller to any third party
      (other than Buyer);

     

    (n)  made
      any
      change in its accounting methods or policies; or

     

    (o)  entered
      into any agreement or made any commitment to take any of the types of action
      described in subsections 5.8(a) through 5.8(p) through above.

     

    5.8
      Title
      Conveyed; Condition and Sufficiency of Assets.

     

    (a)  Seller
      is
      the sole and exclusive owner of all right, title and interest in and to the
      Acquired Assets and has good and valid title to the Acquired Assets, free and
      clear of Liens. Seller has complete and unrestricted power and the unqualified
      right to sell, assign, transfer and deliver the Acquired Assets to Buyer, and
      at
      the Closing Buyer will acquire good and valid title to the Acquired Assets,
      free
      and clear of all Liens (including, without limitation, obligations under capital
      leases). Except for the Excluded Assets and for such assets or properties as
      have been consumed or otherwise disposed of in the ordinary course of business,
      the Acquired Assets constitute all of the assets, properties and property rights
      used by Seller to carry on the Business as presently conducted and as proposed
      to be conducted and include all tangible and intangible assets relating to
      the
      Business. None of the Excluded Assets are essential for the operation of the
      Business in the manner in which it is currently operated. 

     

    (b)  Each
      item
      of tangible personal property included in the Acquired Assets has been
      maintained in accordance with normal industry practice, is in good operating
      condition and repair (subject to normal wear and tear), and is suitable for
      the
      purposes for which it is presently used; provided
      that,
      other than warranties provided by manufacturers and included in the Acquired
      Assets transferred to Buyer under the terms of this Agreement, and, except
      as
      otherwise agreed to or represented to Buyer in this or other documents executed
      in consummation of this transaction, SELLER SHALL HAVE NO WARRANTY, OBLIGATION
      OR LIABILITY TO BUYER WITH RESPECT TO ANY NON-COMFORMANCE OR DEFECT IN ANY
      TANGIBLE PROPERTY INCLUDED IN THE ACQUIRED ASSETS SOLD PURSUANT TO THIS
      AGREEMENT, INCLUDING BUT NOT LIMITED TO: (A) ANY IMPLIED WARRANTY OF
      MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; (B) ANY IMPLIED
      WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF
      TRADE; BUYER
      IS
      PURCHASING THE TANGIBLE PROPERTY INCLUDED IN THE ACQUIRED ASSETS “AS
      IS”.

     

    5.9
      Accounts
      Receivable.
      To the
      best of Seller’s knowledge, except with respect to accounts billed pursuant to
      USAC governmental procedures, the Active Accounts Receivable are reflected
      properly on the books and records of Seller, are valid receivables arising
      only
      from bona fide transactions, are subject to no setoffs or counterclaims, are
      collectible, and will be collected in due course at their recorded amounts,
      subject only to actual bad debts experienced. Seller is not aware of any
      material vendor/payor relationship where the vendor/payor has given notice
      of
      any inability to pay accounts receivable according to the terms
      thereof.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    5.10
      Tax
      Matters.

     

    (a)  All
      federal, state, local and foreign Tax returns (including, without limitation,
      consolidated, combined or unitary income Tax returns) required to be filed
      by or
      on behalf of Seller or with respect to Taxes for which Seller may have any
      liability have been accurately and correctly prepared and duly and timely filed.
      All Taxes due and payable by Seller on or before Closing have been paid. No
      Tax
      return relating to Seller is on extension, and to the knowledge of Seller there
      is no audit examination, deficiency or refund litigation or matter in
      controversy with respect to any Taxes that might result in a determination
      adverse to Seller or the Business except as adequately reserved against in
      its
      financial statements.
      Seller
      has sufficient assets in reserve, not including the Acquired Assets, to fully
      pay any taxes, interest thereon, and/or penalties which may or will become
      due
      to any taxing authority.

     

    5.11
      No
      Litigation.
      Except
      as disclosed on Schedule 5.11, there are no actions, suits, claims,
      investigations or proceedings pending or, to the knowledge of Seller, threatened
      in any court or by or before any governmental agency to which Seller is a party
      or otherwise affecting the Acquired Assets or the Business as now or heretofore
      conducted by Seller. The foregoing notwithstanding, there is no action, suit,
      claim, investigation or proceeding which is pending or threatened which
      questions the validity or propriety of this Agreement or any action taken or
      to
      be taken by Seller in connection with this Agreement. Seller is not subject
      to
      any judicial injunction or mandate or any quasi-judicial order or quasi-judicial
      restriction directed to or against it as a result of its ownership of the
      Acquired Assets or its conduct of the Business as now or heretofore conducted
      by
      it, and no governmental agency has at any time challenged or questioned in
      writing, or commenced or given notice of intention to commence any investigation
      relating to, the legal right of Seller to conduct the Business or any part
      thereof as now or heretofore conducted by it.

     

    5.12
      Insurance.
      Seller
      shall, until the Closing Date, maintain insurance policies against casualty
      losses on all Acquired Assets to the extent such coverage is available and
      in
      such amounts as Seller deems appropriate. There are no disputes with the
      underwriters of any such policies and all premiums due, payable and invoiced
      have been paid. There are no pending or, to the best knowledge of Seller,
      threatened terminations or premium increases with respect to any of such
      policies and Seller has no knowledge of any condition or circumstance applicable
      to the Business which might result in such termination or increase. To the
      best
      of Seller’s knowledge, Seller is not in default with respect to any provisions
      or requirements of any such policy and Seller has not failed to give any notice
      or present any claim thereunder in due and timely fashion.

     

    5.13
      Compliance
      with Laws.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (a)  Seller,
      to the
      best of its knowledge,

     

    (i)  is
      in
      compliance with all laws, rules, regulations, ordinances, reporting and
      licensing requirements and orders (including, without limitation, all equal
      opportunity, safety (including the Occupational Safety and Health Act of 1970),
      environmental and zoning laws, rules and regulations) applicable to the Business
      or any Business Employees (because of such employees’ activities on behalf of
      it), and no condition exists which with or without notice or passage of time
      or
      both shall cause Seller not to remain in such compliance; and

     

    (ii)  has
      received no notification from any agency or department of federal or state
      or
      local government asserting that Seller is not in compliance (or in the past
      has
      not been in compliance) with any of the statutes, regulations, ordinances or
      standards of such governmental authority, or threatening to revoke or not renew
      any license, franchise, permit or other Governmental Authorization, and is
      subject to no agreement or written understanding with any governmental authority
      with respect to its assets or the Business. 

     

    5.14
      Vendor
      Contracts 

     

    (a)  Schedule
      5.16(a) is complete
      list of all telecommunications circuit and service contracts to be assumed
      or
      executed by Buyer. 

     

    (b)  Buyer
      agrees to maintain the existing contractual relationship with Contact
      Communications by executing new contracts for the existing services for a
      minimum of one year following the date of Transfer. These contracts are material
      elements of this sale and shall be executed at Closing. True copies of all
      such
      contracts and other vendor contracts to be assumed by Buyer have been provided
      to Buyer. 

     

    (c)  All
      such
      vendor contracts are assignable to Buyer (with or without consent) and, upon
      assignment to and assumption by Buyer pursuant to this Agreement, will be valid,
      binding and in full force and effect and enforceable by Buyer in accordance
      with
      their respective terms.

     

    5.15 RESERVED

     

    5.16
      RESERVED
      

     

    5.17
      No
      Guaranties.
      None of
      the obligations or liabilities of Seller are guaranteed by any Person, nor
      has
      Seller guaranteed the obligations or liabilities of any other
      Person.

     

    5.18
      No
      Bankruptcy.
      Seller
      is not insolvent or the subject of Bankruptcy or any similar
      proceeding.

     

    5.19
      RESERVED
      

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    5.20
      Misstatements
      and Omissions.
      No
      representation or warranty made by the Seller in this Agreement or the Ancillary
      Agreements, or in any statement, certificate, exhibit, schedule, or other
      instrument furnished to Buyer pursuant hereto, or in connection with the
      transactions contemplated by this Agreement, to the best of Seller’s knowledge
      contains any untrue statement of material fact or omits to state a material
      fact
      necessary to make the statements contained herein or therein not misleading
      and
      to the best of Seller’s knowledge there is no fact or condition which has not
      been disclosed in writing to Buyer that adversely affects Seller or the Business
      or the ability of Seller to perform its obligations under this
      Agreement.

     

    ARTICLE 6.

    REPRESENTATIONS
      AND WARRANTIES OF BUYER

     

    In
      order
      to induce Seller to enter into this Agreement, Buyer hereby represents and
      warrants to Seller that the statements contained in this ARTICLE 6 are, to
      the
      best of Buyer’s knowledge, correct and complete as of the date of this Agreement
      and will be correct and complete on the Closing Date (as though made then and
      as
      though the Closing Date were substituted for the date of this Agreement
      throughout this ARTICLE 6, except where a specific date is
      indicated).

     

    6.1
      Organization.
      Buyer
      is a corporation, duly organized, validly existing, and in good standing under
      the laws of the State of Nevada.

     

    6.2 Authorization,
      etc.
      Buyer
      has full corporate power and authority to execute and deliver this Agreement
      and
      all Ancillary Agreements required to be executed and delivered by it, and to
      perform the terms of this Agreement and of all such other Ancillary Agreements.
      The execution, delivery and performance of this Agreement and the Ancillary
      Agreements by Buyer has been duly and validly authorized by all necessary action
      in respect thereof on the part of Buyer (including, without limitation, all
      approvals required by Buyer’s board of directors and shareholders), and no other
      corporate action on the part of Buyer or its members or managers is necessary.
      This Agreement and the Ancillary Agreements each represent the legal, valid
      and
      binding obligation of Buyer, enforceable against it in accordance with their
      respective terms.

     

    6.3
      No
      Legal Bar.
      The
      execution and delivery by Buyer of this Agreement does not, and the consummation
      of the transactions contemplated hereby will not (a) conflict with or violate
      (i) any provision of Buyer’s Articles of Incorporation or Bylaws or
      (ii) any contract, obligation, agreement, plan, arrangement, commitment or
      the like to which Buyer is a party or by which Buyer or its assets or properties
      may be bound or affected; (b) to Buyer’s knowledge, breach or contravene any
      law, rule, or regulation; (c) violate any order, judgment, writ, injunction,
      award, decree, determination, license or permit by which Buyer or its assets
      or
      properties may be bound or affected; or (d) result in or require the
      creation or the imposition of any Lien on any assets or properties of
      Buyer.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    6.4 No
      Bankruptcy.
      Buyer
      is not insolvent or the subject of any Bankruptcy or any similar
      proceeding.

     

    6.5
      Broker’s
      and Other Fees.
      Neither
      Buyer nor its members, managers, directors or officers had employed any broker
      or finder or incurred any liability for any broker’s or finder’s fees or
      commissions in connection with any of the transactions contemplated by this
      Agreement. 

     

    6.6
      Buyers
      Funding.
      Buyer
      has sufficient funds and/or financing available or committed as of the date
      of
      this Agreement to close the transaction contemplated by this Agreement.

     

    6.7
      Due
      Diligence.
      By
      executing this Agreement, Buyer acknowledges the receipt, review and sufficiency
      of all documents, reports, financial information and other material requested
      in
      the course of execution of due diligence by Buyer in connection with execution
      of this Agreement. The parties acknowledge that Buyer’s access to certain
      information was either restricted by agreement in order not to disturb the
      orderly operation of the company during the due diligence period or reserved
      for
      inspection after execution of this agreement. 

     

    ARTICLE 7.

    CLOSING
      CONDITIONS

     

    7.1
      Conditions
      to Closing of Buyer.
      The
      obligation of Buyer to consummate the transactions to be performed by it in
      connection with the Closing is subject to the following conditions
      precedent:

     

    (a)  Representations
      and Warranties.
      The
      representations and warranties of Seller contained in ARTICLE 5 (i) shall be
      true and correct in all respects (in the case of any representation or warranty
      containing any materiality qualification) or in all material respects (in the
      case of any representation or warranty without any materiality qualification)
      at
      and as of the date hereof, and (ii) shall be repeated and shall, without giving
      effect to any supplement to the disclosure schedules, be true and correct in
      all
      respects (in the case of any representation or warranty containing any
      materiality qualification) or in all material respects (in the case of any
      representation or warranty without any materiality qualification) on and as
      of
      the Closing Date with the same effect as though made on and as of the Closing
      Date;

     

    (b)  Performance.
      Seller
      shall have duly performed and complied in all material respects with all
      covenants, agreements and conditions required to be performed or complied with
      by it prior to or on the Closing Date;

     

    (c)  No
      Objecting Litigation.
      No
      action, suit or proceeding shall be pending or threatened before any court,
      governmental agency or other regulatory or administrative agency or commission,
      in which Seller is named as a party, which seeks to restrain, prevent or change
      the transactions contemplated hereby, questions the validity of such
      transactions, or which would negatively impact the Business (including, without
      limitation, any action, suit or proceeding wherein an unfavorable judgment
      or
      order would cause the transactions contemplated hereby to be
      rescinded);

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (d)  Closing
      Certificate.
      Seller
      shall have delivered to Buyer a certificate to the effect that each of the
      conditions specified above in Sections 7.1(a), 7.1(b) and 7.1(c) has been
      satisfied in all respects;

     

    (e)  RESERVED.

     

    (f)  Secretary’s
      Certificate.
      Delivery to Buyer of a certificate from the secretary
      or assistant secretary of Seller (i) attaching copies of its Articles of
      Incorporation and board and shareholder resolutions recommending and authorizing
      the execution, delivery and performance of this Agreement and all Ancillary
      Agreements and the taking of all action required hereunder and thereunder or
      in
      connection herewith and therewith on behalf of Seller, and (ii) certifying
      the
      incumbency of officers of Seller and their genuine signatures, with a cross
      certification of such secretary’s or assistant secretary’s incumbency and
      genuine signature;

     

    (g)  Third
      Party Approvals and Consents.
      Except
      as provided in Section 2.3 and 3.1(d), delivery to Buyer of all such written
      approvals, consents and waivers (including the passage of time for objection)
      of
      third parties (in a form satisfactory to Buyer) which are required to be
      obtained in connection with the transactions contemplated by this Agreement
      and
      which are necessary for the ownership by Buyer of any of the Acquired Assets,
      free and clear of all Liens, including, without limitation, all consents to
      assignment of Acquired Contracts; 

     

    (h)  Instruments
      of Transfer.
      Execution and delivery to Buyer by Seller on the Closing Date of a Bill of
      Sale
      and Assignment and such other endorsements, assignments, and other good and
      sufficient instruments of conveyance and transfer as are provided for herein,
      and any other instruments in form and substance reasonably satisfactory to
      Buyer
      and its counsel as shall be effective to vest in Buyer all of the right, title
      and interest of Seller in, to and under the Acquired Assets, free and clear
      of
      all Liens (including, without limitation, an Assignment of United States Service
      Mark in respect of Seller ’s “OneWest” service mark and related service
      marks);
      

     

    7.2
      Conditions
      to Closing of Seller.
      The
      obligation of Seller to consummate the transactions to be performed by it in
      connection with the Closing is subject to the following additional conditions
      precedent:

     

    (a)  Representations
      and Warranties True and Correct.
      The
      representations and warranties of Buyer contained in ARTICLE 6 (i) shall be
      true and correct in all respects (in the case of any representation or warranty
      containing any materiality qualification) or in all material respects (in the
      case of any representation or warranty without any materiality qualification)
      at
      and as of the date hereof, and (ii) shall be repeated and shall, without
      giving effect to any supplement to the disclosure schedules, be true and correct
      in all respects (in the case of any representation or warranty containing any
      materiality qualification) or in all material respects (in the case of any
      representation or warranty without any materiality qualification) on and as
      of
      the Closing Date with the same effect as though made on and as of the Closing
      Date;

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (b)  Performance.
      Buyer
      shall have duly performed and complied in all material respects with all
      covenants, agreements and conditions required to be performed or complied with
      by it prior to or on the Closing Date;  

     

    (c)  Closing
      Certificate.
      Buyer
      shall have delivered to Seller a certificate to the effect that each of the
      conditions specified above in Section 7.2(a) and 7.2(b) has been satisfied
      in
      all respects;

     

    (d)  Good
      Standing Certificate.
      Delivery to Seller of a certificate issued by the Nevada Secretary of State
      as
      to the good standing of Buyer as of a date not more than thirty (30) days prior
      to Closing;

     

    (e)  Secretary’s
      Certificate.
      Delivery to Seller of a certificate from the manager of Buyer (i) attaching
      copies of its Articles of Incorporation and Bylaws and resolutions authorizing
      the execution, delivery and performance of this Agreement and all Ancillary
      Agreements and the taking of all action required hereunder and thereunder or
      in
      connection herewith and therewith on behalf of Buyer, and (ii) certifying the
      incumbency of officers of Buyer and their genuine signatures, with a cross
      certification of such officer’s incumbency and genuine signature;
      and

     

    (f)  Instruments
      of Assumption.
      Execution and delivery to Seller by Buyer on the Closing Date of an Assumption
      Agreement. 

     

    7.3
      Waiver
      of Conditions.
      Closing
      of the transaction contemplated by this Agreement shall be deemed fulfillment
      of
      any of the conditions precedent set forth in this ARTICLE 7 to such Party’s
      obligations hereunder, but the waiver of any such condition shall not, unless
      such Party expressly so provides, constitute a waiver of any other rights or
      remedies that such Party may have hereunder, including without limitation,
      those
      provided under ARTICLE 9 hereof.

     

    ARTICLE 8.

    COVENANTS

     

    8.1
      Joint
      Covenants.
      Seller
      and Buyer covenant and agree with the other as follows:

     

    (a)  Public
      Announcements.
      No
      Party shall make or cause to be made any public announcement, statement or
      release to the press, or written statement to a competitor, customer or other
      third party (except to its advisors, attorneys or consultants), with respect
      to
      this Agreement or the transactions contemplated hereby without the other Party’s
      written consent, except as may be necessary, in the opinion of counsel, to
      comply with any law. Without limiting the generality of the foregoing, neither
      shall disclose the terms or subject matter of the transaction contemplated
      by
      this Agreement without the express written consent of the other Party, unless
      and except to the extent required by law after prior notice to the
      non-disclosing Party.
      Both
      parties agree that Buyer must file an 8-K with the SEC as required by law that
      contains this agreement and other supporting Closing documents. Both parties
      agree that a press release acceptable to both parties must be issued to inform
      Buyer’s shareholders of this transaction. 

     

    
      
        
        

      

      
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    (b)  Best
      Efforts.
      Subject
      to the terms and conditions herein provided and consistent with the respective
      obligations of each Party, each Party shall use its reasonable best efforts
      to
      take, or cause to be taken, all action, and to do, or cause to be done, all
      things necessary, proper or advisable to consummate and make effective as
      promptly as practicable the transactions contemplated by this
      Agreement.

     

    (c)  Further
      Assurances.
      Each
      Party shall, at any time and from time to time after the Closing Date, upon
      request of any other Party, do, execute, acknowledge and deliver, or cause
      to be
      done, executed, acknowledged and delivered, all such further acts, instruments,
      assignments, transfers, powers of attorney and assurances as may be reasonably
      required in order to carry out the intent of this Agreement

     

    8.2
      Additional
      Covenants of Seller.
      Seller
      further covenants and agrees with Buyer as follows:

     

    (a)  Affirmative
      Business Covenants.
      Except
      with the prior written consent of Buyer in its sole discretion, prior to the
      Closing Date, Seller shall conduct the Business only in the ordinary course
      and
      shall to the best of its ability do the following:

     

    (i)  Preserve
      the Business and maintain the Acquired Assets and its business organization
      intact;

     

    (ii)  Preserve
      the good will of contract parties, customers, clients, lessors, suppliers,
      employees of and others having relations with the Business;

     

    (iii)  Maintain
      the Acquired Assets in customary repair, working order and condition (reasonable
      wear and tear excepted) and not dispose of any such assets, except consistent
      with standard industry practices;

     

    (iv)  Provide
      Buyer with copies of all Business Contracts executed subsequent to the date
      hereof and prior to Closing;

     

    (v)  Comply
      with all regulations and laws applicable to it in the conduct of the Business
      and present to Buyer for approval prior to submission all materials to be
      submitted to any applicable government agency or regulatory body between the
      date hereof and Closing;

     

    (vi)  Keep
      in
      full force and effect insurance coverage with reputable insurers, which in
      respect of amounts, types and risks insured is that which its management
      reasonably believes to be adequate for the conduct of the Business;

     

    
      
        
        

      

      
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    (vii)  Pay
      all
      Accounts Payable incurred in connection with the conduct of the Business which
      are due and owing within thirty (30) days of receipt of the corresponding
      invoice except Accounts Payable disputed by Seller in good faith as set forth
      on
      Schedule 8.2(a)(vii); and

     

    (viii)  Give
      any
      notices to third parties and use best efforts to obtain any third party consents
      required for the assignment to Buyer of any Acquired Contracts or otherwise
      required in connection with the transactions contemplated hereby, and give
      any
      notices to, make any filings with and use its best efforts to obtain any
      authorizations, consents and approvals of any governmental or regulatory
      agencies required in connection with the transactions contemplated
      hereby.

     

    (b)  Negative
      Business Covenants.
      On and
      after the date hereof, until the Closing Date, Seller shall not take (and the
      Principals shall cause Seller not to take) any of the following actions, or
      agree to take any such actions with respect to or in connection with the
      operation of the Business, except with the prior written consent of Buyer in
      its
      sole discretion or as otherwise provided in this Agreement:

     

    (i)  Transfer,
      assign, dispose of, pledge or encumber, or otherwise alter in any material
      respect, any of the Acquired Assets;

     

    (ii)  Merge
      or
      consolidate with any other Person or permit any other Person to merge into
      Seller; acquire any stock; issue any of its equity, whether in exchange for
      money, goods and services required for use in connection with the Business,
      or
      otherwise; effect any reorganization or recapitalization; or acquire any assets
      of any other Person;

     

    (iii)  Authorize
      or make any material change in operations (including, without limitation, any
      material change in the manner in which accounts receivable are collected);
      incur
      any material absolute or contingent liabilities or commitments; lease, sell
      or
      dispose of any material part of its assets; enter into any capital or operating
      lease or any other agreement for the purchase of materials, supplies, services,
      equipment or capital item or items involving consideration of more than $5,000
      per contract or series of related contracts or continuing over a period of
      more
      than three (3) months after the Closing Date;

     

    (iv)  Take
      any
      action or permit the occurrence of any change or event which would render any of
      its representations and warranties contained in this Agreement untrue in any
      respect at and as of the Closing Date with the same effect as though such
      representations and warranties had been made at and as of the Closing Date,
      or
      which might reasonably be expected to have a material adverse effect on the
      Business or the Acquired Assets; or

     

    (v)  Take
      any
      action that would adversely affect the ability of any Party to obtain any
      necessary approvals of governmental authorities or consents of private parties
      required for the transaction contemplated hereby or which would adversely affect
      its ability to perform its covenants and agreements contained
      herein.

     

    
      
        
        

      

      
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    (c)  Notification.
      Seller
      shall promptly advise Buyer in writing of any material adverse change, known
      or
      threatened, in (i) the financial condition, business or affairs of either Seller
      or the Business or (ii) the validity of the representations and warranties
      herein other than historically consistent growth and churn in the number of
      subscribers experienced by Seller. In addition, Seller will update by written
      amendment or supplement any matters previously disclosed on the schedules hereto
      or other disclosures made in writing by Seller to Buyer, and Seller hereby
      represents and warrants that such written disclosures, as so amended or
      supplemented, shall be true, correct and complete as of the date or dates
      thereof. Such updates and supplements shall not in any way be deemed or
      construed to modify any representations or warranties previously made, all
      of
      which shall continue in full force and effect, nor shall the provision of such
      updates or supplements be deemed or construed to cure or otherwise excuse any
      breach of a representation or warranty by Seller under ARTICLE 5.

     

    (d)  Other
      Offers.
      On and
      after the date hereof through Closing, Seller shall not directly or indirectly
      solicit, encourage, facilitate, entertain or accept (nor shall Seller permit
      any
      of its officers, directors, employees or agents, directly or indirectly, to
      solicit, encourage, facilitate, entertain or accept), including by way of
      furnishing information, any inquiries or proposals for a merger, consolidation,
      share exchange or similar transaction involving Seller or the Business or for
      the acquisition of the stock or other ownership interests or all or any
      substantial portion of the assets or business of Seller, or discuss with or
      enter into conversations with any Person concerning such merger, consolidation,
      share exchange, acquisition or other similar transaction. Seller shall withdraw
      or reject any such offers outstanding as of the date hereof. Seller shall
      promptly notify Buyer orally (to be confirmed in writing as soon as practicable
      thereafter) of all of the relevant details relating to any inquiries or
      proposals that it they may receive relating to any such matters. Seller
      acknowledges and agrees that any remedy at law for breach of the foregoing
      covenant shall be inadequate, and in addition to any other relief which may
      be
      available, Buyer shall be entitled to temporary and permanent injunctive relief
      without the necessity of proving actual damages, without regard to the adequacy
      of any remedy at law, and without the necessity of posting any
      bond.

     

    (e)  Access.
      Between
      the date of this Agreement and Closing, Seller shall provide to the authorized
      representatives of Buyer complete and unimpeded access at all reasonable times
      to all of the offices, warehouses, properties and other facilities, books and
      records of Seller, will permit the Buyer to make such inspections of the
      Business and the Acquired Assets as the Buyer may reasonably require and will
      cause its officers and management personnel to furnish the Buyer with such
      financial and operating data and other information with respect to the Business
      and its assets and properties as the Buyer may reasonably from time to time
      request. In addition, Seller shall, upon Buyer's reasonable request and at
      such
      times as Buyer and Seller deem appropriate, use reasonable best efforts to
      arrange for access to and meetings with the vendors, suppliers, customers and
      sales channels of, and other third parties related to, the Business for purposes
      of discussing the transfer and transition to Buyer following Closing of Seller’s
      relationships with such vendors, suppliers, customers and sales
      channels.

     

    
      
        
        

      

      
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    (f)  Enforcement
      of Beneficial Agreements.
      To the
      extent Seller is the beneficiary of any non-disclosure, non-competition,
      confidentiality or other similar agreement or covenant related to the Acquired
      Assets or the Business, Seller shall, at the request of Buyer, enforce
      subsequent to Closing the terms of such agreement or covenant and/or shall
      permit Buyer to maintain an action to enforce such agreement or covenant in
      Seller’s name.

     

    (g)  Post-Closing
      Tax Matters.
      Following the Closing, Seller shall pay over to the taxing authorities of each
      jurisdiction to which it is subject all Taxes not paid prior to Closing for
      which Buyer could have transferee liability or in respect of which any of the
      Acquired Assets could be subjected to a Lien therefor, including sales taxes.
      Notwithstanding the foregoing, Seller may contest in good faith, at its expense,
      the validity or application, in whole or in part, of any Taxes that it is
      obligated by this subsection 8.2(g) to pay.

     

    (h)  RESERVED.

     

    (i)  Covenant
      Not To Use Names.
      Seller
      may continue to operate under the name “OneWest, Inc.” in order to fulfill the
      purposes of this Agreement, but, in order that Buyer may have and enjoy the
      full
      benefit of the Acquired Assets and the Business, Seller agrees that it will
      not
      use or permit any Person under its joint or individual control to use the terms
      “OneWest.net”, “OneWest” or “OneWest Internet Services”, or any logo associated
      therewith, or any confusingly similar copyright, trademark, trade name, service
      mark, service name, slogan or assumed name or logo in any manner whatsoever,
      including, without limitation, the use of such copyright, trademark, trade
      name,
      service mark, service name, slogan or assumed name in promotional materials.
      Effective upon the Closing, Seller grants to Buyer all rights as Seller has
      in
      and to the terms “OneWest.net”, “OneWest” and “OneWest Internet Services”. This
      provision shall not be deemed to be in limitation or derogation of the full
      and
      complete transfer of the Intellectual Property to be made to Buyer at Closing
      as
      provided herein.

     

    (j)  Transition.
      Seller
      shall not take any action that is designed or intended to discourage, or which
      has the effect of discouraging, any customer, client, supplier, vendor or trade
      creditor of the Business from maintaining a business relationship with Buyer
      following Closing substantially similar to that maintained by Seller prior
      to
      Closing, or otherwise harming or interfering with such relationship, nor shall
      Seller make any statement to any third party or otherwise in public that is
      intended to or has the effect of disparaging such business relationships or
      Buyer or the Business.

     

    (k)  Collection
      of Assets.
      Subsequent to Closing, Buyer shall have the right and authority to collect
      all
      receivables and other items transferred and assigned to it by Seller hereunder
      and to endorse with Seller’s name any checks received on account of such
      receivables or other items, and Seller agrees that it will promptly transfer
      or
      deliver to Buyer from time to time any cash or other property that Seller may
      receive with respect to any claims, contracts, licenses, leases, commitments,
      sales orders, purchase orders or any other items included in the Acquired Assets
      and incurred after Closing.

     

    
      
        
        

      

      
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    (l)  Non-competition
      Agreement.
      Commencing
      with the Closing and continuing for five years thereafter, Seller and its
      officers as set forth on Schedule 8.2(l) each shall and do hereby agree not
      to
      invest in, start, or take a senior management role in any company whose
      principal business is providing Internet access services in the states of
      Montana and Idaho. Commencing with Closing and continuing for two years
      thereafter, Seller and its officers each shall and do hereby agree not to
      directly target for solicitation for ISP related services any person that was
      a
      customer of Seller acquired by the Buyer in this transaction, and not to solicit
      any Buyer employees to leave the employment of Buyer. 

     

    ARTICLE 9.

    EXPENSES,
      INDEMNITY AND SET OFF 

     

    9.1
      Expenses.
      Except
      as expressly set forth to the contrary herein, Buyer and Seller shall be
      responsible for their own costs and expenses incurred in connection with the
      transactions contemplated hereby, including the fees and expenses of counsel,
      accountants and consultants. All applicable state sales taxes, transfer taxes,
      and real estate transfer taxes, if any, in respect of the transactions
      contemplated hereby and all fees or charges payable with respect to the sale,
      assignment or transfer to Buyer of any of the Acquired Assets shall be borne
      by
      Seller.

     

    9.2
      Indemnification
      by Seller.

     

    (a)  Seller
      shall indemnify, defend and hold harmless Buyer and its Affiliates from and
      against, and will reimburse Buyer and its Affiliates the amount of, any claim,
      expense, damage, liability or loss (including, without limitation, reasonable
      attorneys’ fees and other reasonable costs and expenses incident to, and amounts
      paid or required to be paid in settlement of, any claim, suit, action or
      proceeding, including, without limitation, claims, suits, actions or proceedings
      to enforce this indemnity obligation), whether or not involving a Third Party
      Claim (a “Loss”), suffered, sustained, incurred, paid or required to be paid by
      Buyer or its Affiliates which arises out of, results from or is related
      to:

     

    (i)  the
      breach by Seller of any representation, warranty, covenant or agreement
      contained in this Agreement or any Ancillary Agreement (without giving effect
      to
      any supplement or bring down to the disclosure schedules at
      Closing);

     

    (ii)  Taxes
      (including sales and use Taxes) imposed on the Business or the Acquired Assets
      or Buyer or any Affiliate thereof as a result of operations relating to the
      Business conducted prior to the Closing Date, 

     

    
      
        
        

      

      
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      (iii)  any
        claim
        (known or unknown, contingent or otherwise, whether arising in contract,
        contribution, indemnity, tort or otherwise), suit, action or proceeding that
        relates to Seller, the Business, or the Acquired Assets (including any Acquired
        Contract), in which the principal event giving rise thereto (i) occurred
        prior
        to the Closing Date, or (ii) arises after the Closing Date from events or
        circumstances occurring, or any action or inaction of or representations,
        warranties or guaranties made, or alleged to have been made, by Seller, its
        members, managers, directors, officers, employees or agents, prior to the
        Closing Date.

    

     

    9.3
      Indemnification
      by Buyer.
      Buyer
      shall indemnify, defend and hold harmless Seller and its Affiliates from and
      against, and will reimburse Seller and its Affiliates the amount of, any Losses
      suffered, sustained, incurred, paid or required to be paid by Seller or its
      Affiliate which arises out of, results from or is related to (a) the breach
      by
      Buyer of any representation, warranty, covenant or agreement contained in this
      Agreement or any Ancillary Agreement, (b) any of the Assumed Liabilities,
      except to the extent such Losses arise out of, result from or are related to
      Excluded Liabilities or constitute Losses for which Seller is required to
      indemnify Buyer under Section 9.2 above, or (c) operation of the Business or
      Acquired Assets from and after the Closing Date. 

     

    9.4
      Indemnification
      Procedure--Third Party Claims.

     

    (a)  Promptly
      after receipt by an indemnified party of notice of a claim from a third party
      (a
“Third Party Claim”) which may give rise to a claim for indemnification
      hereunder, such indemnified party shall, if a claim is to be made against an
      indemnifying party, give notice to the indemnifying party of such Third Party
      Claim. Notwithstanding the foregoing, the failure to notify the indemnifying
      party will not relieve the indemnifying party of any liability that it may
      have
      to any indemnified party, except to the extent that the indemnifying party
      demonstrates that the defense of such action is materially prejudiced by the
      indemnified party’s failure to give such notice, and then only to the extent of
      such prejudice.

     

    (b)  Any
      indemnifying party will have the right to defend the indemnified party against
      the Third Party Claim with counsel of its choice reasonably satisfactory to
      the
      indemnified party so long as (i) the indemnifying party notifies the indemnified
      party in writing within ten (10) days after the indemnified party has given
      notice of the Third Party Claim that the indemnifying party will indemnify
      the
      indemnified party from and against the entirety of any Loss the indemnified
      party may suffer resulting from, arising out of, relating to, in the nature
      of,
      or caused by the Third Party Claim, (ii) the indemnifying party provides the
      indemnified party with evidence reasonably acceptable to the indemnified party
      that the indemnifying party will have the financial resources to defend against
      the Third Party Claim and fulfill its indemnification obligations hereunder,
      (iii) the Third Party Claim involves only money damages and does not seek an
      injunction or other equitable relief, (iv) settlement of, or an adverse judgment
      with respect to, the Third Party Claim is not, in the good faith judgment of
      the
      indemnified party, likely to establish a precedential custom or practice
      materially adverse to the continuing business interests of the indemnified
      party, and (v)  the indemnifying party conducts the defense of the Third
      Party Claim actively and diligently.

     

    
      
        
        

      

      
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    (c)  So
      long
      as the indemnifying party is conducting the defense of the Third Party Claim
      in
      accordance with Section 9.4(b) above, (i) the indemnified party may retain
      separate co-counsel at its sole cost and expense and participate in the defense
      of the Third Party Claim, (ii) the indemnified party will not consent to the
      entry of any judgment or enter into any settlement with respect to the Third
      Party Claim without the prior written consent of the indemnifying party (not
      to
      be withheld or delayed unreasonably), and (iii) the indemnifying party will
      not
      consent to the entry of any judgment or enter into any settlement with respect
      to the Third Party Claim without the prior written consent of the indemnified
      party (not to be withheld or delayed unreasonably).

     

    (d)  In
      the
      event any of the conditions in Section 9.4(b) above is or becomes unsatisfied
      in
      any material respect, however, (i) the indemnified party may defend against,
      and
      consent to the entry of any judgment or enter into any settlement with respect
      to, the Third Party Claim in any manner it reasonably may deem appropriate
      (and
      the indemnified party need not consult with, or obtain any consent from, any
      indemnifying party in connection therewith), (ii) the indemnifying party will
      reimburse the indemnified party promptly and periodically for the costs of
      defending against the Third Party Claim (including reasonable attorneys’ fees
      and expenses), and (iii) the indemnifying party will remain responsible for
      any
      Loss the indemnified party may suffer resulting from, arising out of, relating
      to, in the nature of, or caused by the Third Party Claim to the fullest extent
      provided in this ARTICLE 9. 

     

    9.5
      Indemnification
      Procedure-Other Claims.
      A claim
      for indemnification for any matter not involving a Third Party Claim may be
      asserted by notice to the party from whom indemnification is
      sought.

     

    9.6
      Buyer’s
      Right of Setoff.
      After
      the Holdback Period, unless otherwise mutually agreed by the Parties, Buyer
      may
      offset against payment of the Purchase Price, or any other amount due from
      Buyer
      to Seller hereunder or under any other agreement to which Buyer and Seller
      are
      parties, (i) the amount of any Loss to which it is entitled under this
      Agreement, and (ii) any amount due to Buyer from Seller as damages for the
      breach of any of the provisions of the Non-competition Agreement and/or any
      other agreement to which Buyer and Seller are parties. The foregoing
      notwithstanding, Buyer’s right of setoff as provided for in this Section 9.6
      shall be subject to, and not in lieu of, the remedy provided for in Section
      11.11 of this Agreement. 

     

    9.7
      Survival.
      All
      representations, warranties, covenants and obligations in this Agreement and
      any
      other certificate or document delivered pursuant to this Agreement shall survive
      the Closing and the consummation of the transaction contemplated hereby. The
      right to indemnification, reimbursement, or other remedy based on the breach
      of
      such representations, warranties, covenants and obligations shall not be
      affected by any due diligence or other investigation conducted by the Party
      seeking relief. The waiver of any condition based on the accuracy of any
      representations or warranty, or on the performance of or compliance with any
      covenant or obligation, will not affect the right to indemnification,
      reimbursement, or other remedy based on the breach of such representations,
      warranties, covenants and obligations.

     

    
      
        
        

      

      
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    ARTICLE 10.

    TERMINATION

     

    (a)  Termination
      of Agreement.
      This
      Agreement may be terminated prior to Closing only by mutual written consent
      of
      Seller and Buyer. If at Closing, either Buyer or Seller is unable to close
      for
      any reason this agreement shall be considered terminated without further notice
      required. 

     

    ARTICLE 11.

    GENERAL
      PROVISIONS

     

    The
      following shall be applicable throughout the term of this
      Agreement:

     

    11.1
      Amendments
      and Waivers; Construction.
      No
      amendment, modification, termination or waiver of any provision of this
      Agreement shall be effective unless the same shall be set forth in a writing
      duly executed by Seller and Buyer, and then only to the extent specifically
      set
      forth therein. This Agreement shall not be construed more strictly against
      one
      Party than the other by virtue of the fact that it may have been prepared by
      counsel for one of the Parties, it being recognized that Buyer and Seller have
      contributed substantially and materially to the preparation of this
      Agreement.

     

    11.2
      Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of Seller and Buyer
      and
      their respective successors and assigns. However, except for an assignment
      of
      this Agreement by Buyer to an Affiliate of Buyer, which shall be permitted
      without the prior written consent of Seller, no Party may assign or transfer
      any
      of its rights under this Agreement or any interest herein without the prior
      written consent of the other Party.

     

    11.3
      Counterparts.
      This
      Agreement and any amendment hereof may be executed in any number of counterparts
      and by each Party on a separate counterpart, each of which, when so executed
      and
      delivered, shall be deemed to be an original and all of which taken together
      shall constitute one and the same instrument. In producing this Agreement,
      it
      shall not be necessary to produce or account for more than one such counterpart
      signed by the Party against whom enforcement is sought.

     

    11.4
      No
      Waivers by Implication.
      No
      waiver by any Party of any condition or the breach of any term, covenant,
      representation or warranty contained in this Agreement, whether by conduct
      or
      otherwise, in any one or more instances, shall be deemed a further or continuing
      waiver of any condition or covenant, representation or warranty of this
      Agreement. No course of dealing on the part of any Party (or their respective
      officers, directors, employees, consultants and agents) nor any failure or
      delay
      by any Party with respect to exercising any of their respective rights, powers
      or privileges under this Agreement shall operate as a waiver
      thereof.

     

    
      
        
        

      

      
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    11.5
      Notices.
      Unless
      otherwise specified herein, all notices, requests and other communications
      to
      any Party hereunder shall be in writing (including telexes, telecopies,
      facsimile transmissions and similar writings) 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 hereafter specify for that purpose by notice
      to the other Party.

     

    If
      to
      Buyer:

     

    Sitestar
      Corporation

    7109
      Timberlake Road #201

    Lynchburg,
      VA 24502

    Telecopier:
      (818) 332-4213

    Attention:
      Mr. Frank R. Erhartic, Jr.

    

    If
      to
      Seller :

     

    OW
      Holdings, Inc.

    937
      West
      Main Street

    Riverton,
      WY 82501

    Telecopier: (307)
      856-1499

    Attention: Mr.
      Steve
      Mossbrook

     

    With
      Copies to:

     

    Patton
      & Davison

    P.O.
      Box
      945

    1920
      Thomes Ave. Suite 600

    Cheyenne,
      WY 82001-0945

    Telecopier: (307)
      635-6904

    Attention: Alex
      Davison, Esq.

    

    Each
      such
      notice, request or other communication shall be effective (a) if given by
      telecopier, when such telecommunication is transmitted and confirmation of
      receipt obtained, (b) if given by mail, upon receipt, or (c) if given by any
      other means, when delivered at the address specified in this Section 11.5.
      

     

    11.6
      Reproductions.
      This
      Agreement and all other documents, instruments and agreements in the possession
      of Buyer or Seller which relate hereto or thereto may be reproduced by Buyer
      or
      Seller, and any such reproduction shall be admissible in evidence, with the
      same
      effect as the original itself, in any judicial or other administrative
      proceeding, whether the original is in existence or not. No Party will object
      to
      the admission in evidence of any such reproduction, unless the objecting Party
      reasonably believes that the reproduction does not accurately reflect the
      contents of the original and objects on that basis.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    11.7
      Entire
      Agreement.
      This
      Agreement, together with the exhibits and schedules to this Agreement, embodies
      the entire agreement and understanding between Buyer and Seller with respect
      to
      the subject matter hereof, and supersedes all prior agreements and
      understandings between such parties relating to the subject matter hereof and
      thereof, including, without limitation, that certain Letter of Intent dated
      October 16, 2006, by and among the Parties. If there is a conflict between
      the
      terms, conditions, representations, warranties and covenants contained in this
      Agreement and any other document, then the provisions in this Agreement shall
      control.

     

    11.8
      Exhibits,
      Schedules and Attachments.
      The
      exhibits, schedules and attachments attached to this Agreement are incorporated
      herein and shall be considered a part of this Agreement for the purposes stated
      herein, except that in the event of any conflict between any of the provisions
      of such exhibits, schedules and attachments and the provisions of this
      Agreement, the provisions in this Agreement shall control. Each Party is
      responsible for the accuracy of its respective schedules regardless of any
      assistance provided by any other Party in connection with the preparation of
      the
      schedules.

     

    11.9
      Rights
      Cumulative.
      Except
      as set forth herein, all rights, powers and remedies herein given to the Parties
      are cumulative and not alternative, and are in addition to all statutes or
      rules
      of law; any forbearance or delay by any Party in exercising the same shall
      not
      be deemed to be a waiver thereof; and the exercise of any right or partial
      exercise thereof shall not preclude the further exercise thereof, and the same
      shall continue in full force and effect until specifically waived by an
      instrument in writing executed by Buyer or the Selling Parties, as the case
      may
      be.

     

    11.10
      Governing
      Law.
      This
      Agreement, and the rights and obligations of the Parties hereunder, shall be
      governed by and construed in accordance with the laws of the Wyoming applicable
      to contracts made and to be performed entirely within Wyoming. 

     

    11.11
      Arbitration.
      Any
      unresolved controversy or dispute between the Parties, including, without
      limitation, one arising out of or relating to this Agreement, the Acquired
      Assets or the Business, shall be settled by binding arbitration. The arbitration
      proceedings shall be initiated and conducted before the Judicial Arbiter Group
      of Denver, Colorado or another arbitrator mutually agreed to by the parties
      in
      accordance with, but not administered by, the then-existing rules and procedures
      for expedited procedures of the American Arbitration Association. The Parties
      understand and agree that the arbitration does not allow a trial by jury. The
      Parties agree that the decision of the arbitration proceeding shall be final
      and
      binding on the Parties except for any appeal rights granted by applicable law.
      Payments of the arbitrator’s expenses and fees, together with other expenses,
      not including attorneys’ fees incurred in the conduct of the arbitration, shall
      be shared equally by the Parties. Each party shall pay its own attorneys’ fees,
      even though that party may be the prevailing party in the arbitration
      proceedings. The enforceability of this provision shall be governed by federal,
      not state, law in accordance with the Federal Arbitration Act, 9 U.S.C.
§ 1, et
      seq. 

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    11.12
      Severability.
      If any
      provision of this Agreement or the application thereof to any person or
      circumstance is held invalid, such invalidity shall not affect any other
      provision that can be given effect without the invalid provision or application,
      and to this end the provisions hereof shall be severable.

     

    11.13
      Captions.
      The
      captions of and sections in this Agreement are for convenience of reference
      only, shall not define or limit the provisions hereof and shall not have any
      legal or other significance whatsoever.

     

    11.14
      Third
      Party Rights.
      It is
      the intention of the Parties that nothing in this Agreement shall be deemed
      to
      create any right with respect to any Person not a party to this Agreement or
      the
      successor or assign thereof.

     

    11.15
      Written
      Agreement Required/No Oral Modification.
      Notwithstanding any negotiations or discussions between Seller and/or Buyer,
      or
      any statements made in connection therewith, there shall be no legally binding
      agreement with regard to the transactions contemplated by and the subject matter
      of this Agreement, unless and until the Parties have duly executed and delivered
      to each other a final agreement among them.

     

    11.16
      Confidentiality
      and Non-Disclosure.
      Neither
      Buyer nor Seller nor any of their shareholders, directors, officers, employees,
      representatives or advisors shall (i) make any public statement about the
      contemplated transaction without the prior written consent of the other party,
      unless that party determines in good faith, on the advice of legal counsel,
      that
      public disclosure is required by law, in which case that party shall consult
      with the other party prior to making a statement, or (ii) discuss the
      potential transaction with any third party, other than representatives and
      advisors who are bound to confidence. Any public announcement concerning the
      transaction contemplated by this Agreement shall be jointly prepared and
      approved by the parties. Notwithstanding the foregoing, both Parties agree
      that
      the terms of the transaction, including financial, business and all other
      specifics of the transaction, including financial, business and all other
      specifics of the transaction, will not be disclosed, except as required by
      a
      governmental entity or court of law, to any third party without the expressed
      written consent of both Parties, and that such disclosure will constitute a
      material breach of this Agreement. Both parties agree that Buyer must file
      an
      8-K with the SEC as required by law that contains this agreement and other
      supporting Closing documents. Both parties agree that a press release acceptable
      to both parties must be issued to inform shareholders of this transaction.
      This
      provision shall survive Closing.

     

    [Remainder
      of page intentionally left blank — signature
      page(s)
      follow]

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	 	 
	 	
              BUYER:

            
	 	 
	 	
              Sitestar
                Corporation.

            
	 	
              a
                Nevada corporation

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                Frank R. Erhartic, Jr.

            
	 	
              Title:
                President

            

    

     

    
      	 	 	 
	 	
              SELLER:

            
	 	 
	 	
              OW
                Holdings, Inc.

            
	 	
              a
                Wyoming corporation

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                Steven A. Mossbrook

            
	 	
              Title:
                President

            

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    ANNEX
      I

     

    Certain
      Definitions

     

    “Accounts
      Payable”
shall
      have the meaning given in Section 3.1(a).

     

    “Accrued
      Expenses”
shall
      have the meaning given in Section 3.1(b).

     

    “Acquired
      Assets”
shall
      have the meaning given in Section 2.1.

     

    “Acquired
      Contracts”
shall
      have the meaning given in subsection 2.1(d).

     

    “Active
      Accounts Receivable”
shall
      have the meaning given in Section 2.1(a). 

     

    “Active
      Prepaid Service Contracts”
shall
      have the meaning of the services of the customers that are conveyed and in
      Good
      Standing that have paid for service but have not fully received it as of the
      Transfer Date. These Customers, their service and the value of their unused
      portion of their service are listed in Schedule 4.3(b)

     

    “Affiliate”
means
      (i) any Person directly or indirectly controlling, controlled by or under common
      control with another Person; (ii) any Person owning or controlling ten percent
      (10%) or more of the outstanding voting securities of such other Person; (iii)
      any officer, director or partner of such Person; and (iv) if such Person is
      an
      officer, director or partner, any such company for which such Person acts in
      such capacity.

     

    “Agreement”
means
      this Asset Purchase Agreement, as originally executed, as amended, supplemented
      or otherwise modified from time to time.

     

    “Ancillary
      Agreements”
means
      all exhibits or agreements contemplated by this Agreement to which Seller is
      a
      necessary party.

     

    “Assumed
      Liabilities”
shall
      have the meaning given in Section 3.1.

     

    “Bankruptcy”
means
      with respect to any Party: (i) the filing of an application by a Party for,
      or
      its consent to, the appointment of a trustee, receiver or custodian of its
      assets; (ii) the entry of an order for relief with respect to a Party in
      proceedings under the United States Bankruptcy Code, as amended or superseded
      from time to time; (iii) the making by a Party of a general assignment for
      the benefit of creditors; (iv) the entry of an order, judgment or decree by
      any court of competent jurisdiction appointing a trustee, receiver or custodian
      of the assets of a Party; (v) the failure by a Party generally to pay its debts
      as the debts become due within the meaning of Section 303(h)(1) of the United
      States Bankruptcy Code or the admission in writing of its inability to pay
      its
      debts as they become due.

     

    “Business”
shall
      have the meaning given in the Recitals.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Buyer”
shall
      have the meaning given in the Preamble.

     

    “Closing”
means
      the closing of the purchase and sale of the Acquired Assets occurring on the
      Closing Date.

     

    “Closing
      Date”
means
      the date of Closing, as determined pursuant to Section 4.5.

     

    “Closing
      Payment”
shall
      have the meaning given in Section 4.2(a)(i).

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended, and the regulations thereunder,
      or any subsequent legislative enactment thereof, as in effect from time to
      time.

     

    “Deferred
      Revenue Liability”
shall
      have the meaning given in Section 3.1(c).

     

    “Domain
      Names”
means
      all Internet domain names and URLs, goodwill associated therewith, licenses
      and
      sublicenses granted and obtained with respect thereto, and rights thereunder,
      remedies against infringements thereof, and rights to protection of interests
      therein under the laws of all jurisdictions, including, without limitation,
      all
      rights to the domain name “onewest.net” and other URLs used in the Business as
      well as those listed in Schedule 2.1(j). 

     

    “Estimated
      Purchase Price ”
shall
      have the meaning given in Section 4.3(a).

     

    “Excluded
      Assets”
shall
      have the meaning given in Section 2.2.

     

    “Excluded
      Liabilities”
shall
      have the meaning given in Section 3.1(e).

     

    “Generally
      accepted accounting principles”
or
      “GAAP”
means
      accounting principles that are generally accepted in the United
      States.

     

    “Good
      Standing”
      customers who, at Settlement, have paid through the date of Transfer shall
      be
      considered in Good Standing. see Section 4.3(a).

     

    “Governmental
      Authorizations”
means
      the governmental licenses, franchises, permits, privileges, immunities,
      approvals and other governmental authorizations that are required in connection
      with the operation of the Business and ownership of the Acquired Assets by
      Seller, including, without limitation, all licenses issued by the Federal
      Communications Commission.

     

    “Holdback”
shall
      have the meaning given in Section 4.2(a)(ii). 

     

    “Holdback
      Period”
shall
      have the meaning given in Section 4.2(b). 

     

    “Lien”
means
      any interest in property securing an obligation owed to, or a claim by, a Person
      other than the owner of the property, whether such interest is based on common
      law, statute or contract, and including but not limited to a lien or security
      interest arising from a mortgage, charge, pledge, assignment, hypothecation,
      security agreement, conditional sale or trust receipt or a lease, consignment
      or
      bailment for security purposes, or other encumbrance of any nature whatsoever
      on
      or with respect to any cash, property, right to receive income or other assets
      of any nature whatsoever.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Loss”
or
      “Losses”
shall
      have the meaning given in Section 9.2(a).

     

    “Party”
or
      “Parties”
shall
      have the meaning given the term in the Preamble.

     

    “Person”
means
      any individual, corporation, limited liability company, partnership, joint
      venture, trust, unincorporated organization, association, or other entity or
      a
      government or any agency, authority or political subdivision
      thereof.

     

    “Prepaid
      Expenses”
shall
      have the meaning given in Section 2.1(b).

     

    “Principals”
shall
      have the meaning given in the Preamble.

     

    “Purchase
      Price”
shall
      have the meaning given in Section 4.3 . 

     

    “Seller”
shall
      have the meaning given in the Preamble.

     

    “Settlement”
and
      “Settlement
      Amount”
shall
      have the meaning given in Section 4.5. 

     

    “Taxes”
means
      all federal, state, local and foreign income, employment, franchise, capital
      stock, excise, gross receipts, sales, use, property, real estate and stamp
      taxes, payments in lieu of taxes, levies, duties, assessments and fees of any
      nature, together with all related penalties, fines or additions to tax or
      interest thereon.

     

    “Third
      Party Claim”
shall
      have the meaning given in Section 9.4(a).

     

    “Transition
      Period”
shall
      have the meaning given in Section 2.4. 

     

    “USAC”
shall
      mean the Universal Service Administrative Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Schedule
      2.1(c)

    

    List
      of
      all current clients and customers of the Business, which lists are to be
      delivered to Buyer at Closing in electronic format and labeled as Schedule
      2.1(c). 

    

    Schedule
      2.1(c)(i)

    List
      of
      High Bandwidth customers to be excluded from the Agreement, which lists are
      to
      be delivered to Buyer at Closing in electronic format and labeled as Schedule
      2.1(c)(i).

    

    Schedule
      2.1(c)(iv)

    

    List
      of
      Broadband customers to be excluded from the Agreement, which lists are to be
      delivered to Buyer at Closing in electronic format and labeled as Schedule
      2.1(c)(iv).

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      2.1(e)

    Equipment
      Conveyed

     

    This
      list
      has been provided to Buyer in electronic format.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      2.1 (j)

    

    Included
      herein is a list of all Seller owned domains that will transferred to Buyer
      upon
      Closing:

     

    
      	o 	
              onewest.net

            

    

     

    
      	o 	
              rmisp.com

            

    

     

    
      	o 	
              blissnet.com

            

    

     

    
      	o 	
              sweetwater.net

            

    

     

    
      	o 	
              lightcom.net

            

    

     

    
      	o 	
              magiclink.com

            

    

     

    
      	o 	
              srv.net

            

    

     

    
      	o 	
              hi-line.net

            

    

     

    
      	o 	
              ixi.net

            

    

     

    
      	o 	
              lib.org

            

    

     

    
      	o 	
              imine.net

            

    

     

    
      	o 	
              mthomepage.com

            

    

     

    
      	o 	
              usalinks.net

            

    

     

    
      	o 	
              zoomtime.net

            

    

     

    
      	o 	
              surfband.net

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      2.4

    

    The
      Parties agree to the following transition related terms at Closing;

    

    
      	1.  	
              Seller
                agrees to provide Buyer with a list of all necessary user names and
                passwords to servers and software on or immediately after the Transfer
                Date.

            

    

    
      	 	 

      	2.  	
              Buyer
                and Seller agree that pro-rata apportionment of any Accounts Payable
                (A/P)
                relating to A/P assumed by Buyer will be adjusted appropriately in
                the
                final Settlement.

            

      	 	 

    

    
      	3.  	
              Seller
                shall implement appropriate steps to ensure that business related
                communication shall be forwarded to Buyer during the transition
                period.

            

      	 	 

    

    
      	4.  	
              Seller
                will provide Buyer with a compressed version of all Platypus data
                files as
                of midnight on the Date of Transfer. These files will be placed on
                a
                secure FTP site for Buyer to download as soon as possible after Transfer,
                but in no event later than 2 am on the following day. These data
                files
                will be the record from which Subscriber Value is to be determined
                and
                audited, and will be retained as a static record for this
                purpose.

            

    

     

    Schedule
      2.4(a)

    

    There
      are
      no anticipated Transition Related Expenses. Any such expenses that develop
      during transition will be credited to the Buyer or Seller as appropriate at
      Settlement.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      3.1a

    Accounts
      Payable

    Buyer
      Assumed Non-Contractual and Other Liabilities

    

      
        	
                Vendor

              	 	
                Purpose

              	 	
                Period

              	 	
                Amount

              	 	
                Agrmt?

              
	
                Dexonline.com

              	 	
                Online
                  phone directory listing for all markets

              	 	
                Monthly

              	 	
                TBD

              	 	
                No

              
	
                Google
                  

              	 	
                On-line
                  advertising

              	 	
                Monthly

              	 	
                ~$600

              	 	
                No

              
	
                Fremont
                  Telecom

              	 	
                Dial-up
                  service

              	 	
                Monthly

              	 	
                TBD

              	 	
                No

              
	
                Level
                  3

              	 	
                National
                  Roaming

              	 	
                Monthly

              	 	
                ~$500.00

              	 	
                Yes

              
	
                Silver
                  Star Telephone

              	 	
                Redirection
                  of customer calls

              	 	
                Monthly

              	 	
                18.65

              	 	 
	
                Phone
                  Directories

              	 	
                Phone
                  Book Listings in Various Markets

              	 	 	 	 	 	
                No

              
	
                Dexmedia

              	 	
                Yellow
                  Page Advertisements in all markets

              	 	
                Monthly

              	 	
                ~$1,700
                  

              	 	
                No

              
	
                Qwest

              	 	
                All
                  Frame circuits, PVCs and IPVCs on Frame Relays not covered by
                  Agreement

              	 	
                Monthly

              	 	
                Various

              	 	
                No

              
	
                Qwest

              	 	
                Certain
                  voice telephone lines not covered by the Qwest Agreements

              	 	
                Monthly

              	 	
                Various

              	 	
                No

              
	
                Yellow
                  Book USA

              	 	
                Yellow
                  Page Advertisements in various markets

              	 	
                Monthly

              	 	
                ~$200.00
                  

              	 	
                No

              

      
 

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      3.1d

    

    Buyer
      Assumed Contractual Liabilities.

    

    
      	
            	1.	
              Buyer
                agrees to the full assumption and assignment of all of Seller’s
                Telecommunications Contracts in this Schedule
                3.1(d)

            

    

     

    
      	
            	2.	
              Buyer
                agrees to the full assumption and assignment of all of Seller’s Other
                Vendor Contracts in this Schedule
                3.1(d).

            

    

    

      
        	
                Vendor

              	 	
                Purpose

              	 	
                Period

              	 	
                Amount

              	 	
                Agrmt?

              	 
	
                Contact
                  Communications

              	 	 	
                Network
                  services

              	 	 	
                Monthly

              	 	 	
                Various

              	 	 	
                To
                  be replaced

              	 
	
                Hostopia

              	 	 	
                Web
                  services

              	 	 	
                Monthly

              	 	 	
                ~$100.00

              	 	 	
                Yes

              	 
	
                Level
                  3

              	 	 	
                Roaming

              	 	 	
                Monthly

              	 	 	
                ~$500.00

              	 	 	
                Yes

              	 
	
                CallWave

              	 	 	
                Call
                  Intercept

              	 	 	
                Monthly

              	 	 	
                ~250.00

              	 	 	
                Yes

              	 
	
                WCS

              	 	 	
                Long
                  Distance

              	 	 	
                Monthly

              	 	 	
                ~1,500.00

              	 	 	
                No

              	 
	
                Propel

              	 	 	
                Accelerator
                  service

              	 	 	
                Monthly

              	 	
                 

              	
                
                  $1,000

                

              	 	 	
                Yes

              	 
	
                Ikano

              	 	 	
                Internet
                  services

              	 	 	
                Monthly

              	 	 	
                ~$500.00

              	 	 	
                Yes

              	 
	
                Qwest
                  Communications

              	 	 	
                DSL
                  Megahost

              	 	 	
                Monthly

              	 	 	
                NA

              	 	 	
                No

              	 

      
 

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      4.1(a)

    

    The
      Estimated Purchase Price will be determined at closing and delivered to Buyer
      in
      electronic format.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      4.3(b)

    

    The
      list
      of all Active Prepaid Service Contracts will be determined at Closing and
      delivered to Buyer in electronic format.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      5.11

    

    Included
      herein is a list of all litigation in which Seller is a named
      party.

     

    District
      Court of the Ninth Judicial District, County of Fremont, State of Wyoming.
      Docket No. 34168.

     

    Entitled:
      OW HOLDINGS, INC. d/b/a ONEWEST.NET, a Wyoming Corporation, Plaintiff v. ROCKY
      MOUNTAIN INTERNET, INC., a Montana Corporation, Defendant.

     

    Complaint
      for Declaratory Judgment in which the Plaintiff seeks a declaration from the
      court that no further payments are due and owning to RMI under a certain
      agreement under which Plaintiff purchased subscribers from Defendant in
      Montana.

     

    Amount
      in
      Controversy - approx. $20,000.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      5.16(a)

    

    The
      list
      of telecommunications circuits and contracts will be delivered to Buyer in
      electronic format.

    

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      8.2(a)(vii)

    

    Seller
      has disputed a number of invoices from Qwest Communications. Seller will pay
      the
      invoices when the disputes are resolved and the correct amount is determined.
      No
      other Accounts Payable are in dispute.

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