Document:

Exhibit 10.1

    
      

      Exhibit 10.1

      STOCK PURCHASE AGREEMENT AMONG MAGIC MEDIA NETWORKS, INC.,

        MOHAMMAD R. AHMADI, AND INTEGRATED MEDIA SYSTEMS, INC.

      Recitals

      A.        WHEREAS Magic Media Networks, Inc., a Delaware corporation (referred to herein as either "MAGIC," "Magic," or "Buyer"), desires to acquire all of the outstanding shares of capital stock of Integrated Media Systems, Inc., a California corporation, d/b/a Be Media ("Be Media"), (the "Acquisition") from Mohammad R. Ahmadi (" Seller").

      B.         The boards of directors of MAGIC and Be Media, and the Seller have determined, subject to the terms and conditions set forth in this Agreement, that the purchase contemplated hereby, as a result of which Be Media will become a wholly owned subsidiary of MAGIC, is desirable and in the best interests of MAGIC, Be Media and their respective stockholders.  This Agreement is being entered into for the purpose of setting forth the terms and conditions of the proposed Acquisition.

      Agreement

      NOW, THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived herefrom, it is hereby agreed as follows:

      ARTICLE I

      REPRESENTATIONS, COVENANTS AND WARRANTIES OF BE MEDIA AND SELLER

      As an inducement to, and to obtain the reliance of, MAGIC, Be Media and the Seller hereby represent and warrant as follows:

      Section 1.1     

      Organization.   Be Media is a corporation duly organized, validly existing, and in good standing under the laws of the State of California and has the power and is duly authorized, qualified, franchised and licensed under all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it is now being conducted, including qualification to do business as a foreign entity in the jurisdictions in which the character and location of the assets owned by it, or the nature of the business transacted by it, requires qualification. Attached as Schedule 1.1, is a complete and correct copy of the articles of incorporation of Be Media as in effect on the date hereof. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not, violate any provision of Be Media's articles of incorporation.  Be Media and Seller have full power, authority and legal right and have taken all action required by law, Be Media's articles of incorporation or otherwise to authorize the execution and delivery of this Agreement.

      Section 1.2

      Capitalization.   The authorized, issued, and outstanding capital stock of Be Media consists of a total sum of one hundred thousand (100,000) shares of common stock, no par value.  Seller is the owner of all of the one hundred thousand (100,000) shares of Be Media's authorized capital stock, which constitutes all of Be Media's issued and outstanding shares.  As of the Closing Date hereof (as set forth in Section 3.5), all of the outstanding shares of Be Media will be owned by Seller. All issued and outstanding shares are legally issued, fully paid and nonassessable, and are not issued in violation of the preemptive or other rights of any person. Be Media has no other securities, warrants or options authorized or issued.

      Section 1.3

      Subsidiaries.   Except as otherwise set forth in the Be Media Schedules attached hereto, Be Media does not have any other subsidiaries and does not own, beneficially or of record, any shares of any other entity.

      Section 1.4

      Financial Statements.   Attached hereto as Schedule 1.2 are Be Media's audited financial statements for the fiscal years ending September 30, 2004 and 2005, as well as reviewed financial statements for  June 30, 2006 (including any predecessor companies), all of which include a balance sheet and related statements of operations, stockholder's equity, and cash flows and notes thereto.  Relevant thereto:

      (a) All such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved.  The Be Media balance sheets present fairly as of their dates the financial condition of Be Media; Be Media does not have, as of the dates of such balance sheets, except as noted and to the extent reflected or reserved against therein, any liabilities or obligations (absolute or contingent) which should be reflected in a balance sheet or the notes thereto and all material assets reflected therein are properly reported and present fairly the value of the assets of Be Media, in accordance with generally accepted accounting principles.  The statements of operations, stockholder's equity and changes in financial position reflect fairly the information required to be set forth therein by generally accepted accounting principles;

      (b) Be Media has no material liabilities with respect to the payment of any federal, state, county, local or other taxes (including any deficiencies, interest or penalties), except for taxes accrued but not yet due and payable;

      (c) Before the Closing, Be Media will file amended tax returns for 2004 as set forth in Schedule 1.4.  Be Media has filed all, state, federal and local income tax returns required to be filed by it from inception to the date hereof, if any; and

      (d) The books and records, financial and others, of Be Media are in all material respects complete and correct and have been maintained in accordance with good business accounting practices.

      (e) Be Media has agreed to have its financial statements for the fiscal year ended September 30, 2006 audited by a firm registered with the PCAOB and to include those financial statements in MAGIC’s Form 10-KSB which will be filed with the SEC by December 29, 2006.  MAGIC will change its fiscal year to September 30.

      Section 1.5

      Absence of Certain Changes or Events.   Except as set forth in this Agreement (including the Schedules), or as otherwise disclosed to MAGIC in writing, since June 30, 2006:

      (a) There has not been: (i) any material adverse change in the business, operations, properties, assets or condition of Be Media; or (ii) any damage, destruction or loss to Be Media (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of Be Media;

      (b) Be Media has not: (i) amended its articles of incorporation; (ii) declared or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any kind whatsoever to its shareholder or purchased or redeemed or agreed to purchase or redeem any of its shares; (iii) waived any rights of value which in the aggregate are extraordinary or material considering the business of Be Media; (iv) made any material change in its method of operation or accounting; or (v) entered into any other material transaction;

      (c) Be Media has not:  (i) borrowed or agreed to borrow any funds or incurred or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; (ii) paid any material obligation or liability (absolute or contingent) other than current liabilities reflected in or shown on the June 30, 2006 Be Media balance sheet and current liabilities incurred since that date in the ordinary course of business; (iii) sold or transferred, or agreed to sell or transfer, any of its assets, properties or rights; (iv) made or permitted any amendment or termination of any contract, agreement or license to which it is a party; or (v) issued, delivered or agreed to issue or deliver any stock, bonds or other corporate securities, including debentures (whether authorized and unissued or held as treasury stock); and

      (d) To the best knowledge of Be Media and Seller, Be Media has not become subject to any law or regulation which materially and adversely affects, or in the future may adversely affect, the business, operations, properties, assets or condition of Be Media.

      Section 1.6

      Title and Related Matters.   Excluding any real property, which Be Media does not own, Be Media has good and marketable title to and is the sole and exclusive owner of all of its properties, interests in properties and assets (collectively, the "Assets") which are reflected in the Be Media audited and unaudited balance sheets, or are being used by Be Media but not appearing on the Be Media balance sheets, such as intangibles and intellectual property, or acquired after that date (except properties and assets sold or otherwise disposed of since such date in the ordinary course of business), free and clear of all liens, pledges, charges or encumbrances except: (a) statutory liens or claims not yet delinquent; (b) such imperfections of title and easements as do not and will not, materially detract from or interfere with the present or proposed use of the properties subject thereto, or affected thereby, or otherwise materially impair present business operations on such properties; and (c) as described in the Be Media Schedules.  Except as set forth in the Be Media Schedules, no third party has any right to, and Be Media has not received any notice of infringement of or conflict with asserted rights of others with respect to any product, technology, data, trade secrets, know-how, proprietary techniques, trademarks, service marks, trade names or copyrights which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a materially adverse effect on the business, operations, financial conditions or income of Be Media or any material portion of its properties, assets or rights.

      Section 1.7

      Litigation and Proceedings.   To the best of Be Media's knowledge and belief, except as disclosed in the financial statements and for Jillian’s bankruptcy, as set forth in Schedule 1.7, there are no actions, suits, proceedings or investigations pending or threatened by or against Be Media or affecting Be Media or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind that if determined adversely would have a material adverse effect on the business, operations, financial condition or income of Be Media.  Be Media does not have any knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery of such a default.

      Section 1.8

      Contracts.   Except as included or described in Schedule 1.3 attached hereto:

      (a) There are no material contracts, agreements or other commitments to which Be Media is a party or by which it or any of its assets, products, technology or properties are bound; and

      (b) Except as included or described in the Be Media Schedules or reflected in the June 30, 2006 Be Media balance sheet in the Be Media Schedules; Be Media is not a party to any:  (i) employment agreement for any officer or employee which is not terminable on thirty (30) days or less notice; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, agreement or arrangement covered by Title IV of the Employee Retirement Income Security Act, as amended; (iii) agreement, contract or indenture relating to the borrowing of money; (iv) consulting or other similar contracts; (v) collective bargaining agreements; (vi) agreement with any present or former officer or director of Be Media; or (vii) contract, agreement or other commitment involving payments by it of more than $5,000 in the aggregate.

      Section 1.9

      Material Contract Defaults.   Except as set forth in the Be Media Schedules, to the best of Be Media's and Seller's knowledge and belief, Be Media is not in default in any material respect under the terms of any outstanding contract, agreement, lease or other commitment which is material to the business, operations, properties, assets or condition of Be Media.

      Section 1.10

      No Conflict with other Instruments.   To the best of Be Media and Seller's knowledge and belief, the execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust or other material contract, agreement or instrument to which Be Media or Seller is a party or to which any of Be Media’s properties or operations are subject.

      Section 1.11

      Governmental Authorizations.   To the best of Be Media's and Seller's knowledge, Be Media has all licenses, franchises, permits or other governmental authorizations legally required to enable Be Media to conduct its business in all material respects as conducted on the date hereof and no authorization, approval, consent or order of, or registration, declaration or filing with, any court or other governmental body is required in connection with the execution and delivery by Be Media or Seller of this Agreement or the consummation by Be Media or Seller of the transactions contemplated hereby.

      Section 1.12

      Compliance with Laws and Regulations.   To the best of Be Media's and Seller's knowledge, except as disclosed in the Be Media’s Schedules, Be Media has complied with all applicable statutes and regulations (including, but not limited to, ERISA, environmental laws, the Foreign Corrupt Procedures Act, and the Patriot Act, etc.) of any federal, state or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets or condition of Be Media or would not result in Be Media's incurring any material liability.

      Section 1.13

      Approval of Agreement.   The Shareholder of Be Media has authorized the execution and delivery of this Agreement by Be Media and has approved the transactions contemplated hereby.

      Section 1.14

      Material Transactions or Affiliations.   Except as disclosed herein and in the Be Media Schedules, there exists no material contract, agreement or arrangement between Be Media and any predecessor and any person who was at the time of such contract, agreement or arrangement an officer, director or person owning of record, or known by Be Media or Seller to own beneficially, ten percent (10%) or more of the issued and outstanding Be Media capital stock and which is to be performed in whole or in part after the date hereof.

      Section 1.15

      Principals of Be Media.  During the past five-year period, except as disclosed on Schedule 1.5, no officer or director of Be Media has been the subject of:

      (a) a petition under the Federal bankruptcy laws or any other insolvency law nor has a receiver, fiscal agent or similar officer been appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

      (b) a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations which do not relate to driving while intoxicated);

      (c) any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of  any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) engaging in any type of business practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal, state or other securities laws or commodities laws.

      (d) any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal, state or local authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in the preceding sub-paragraph, or to be associated with persons engaged in any such activity; or

      (e) a finding by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission ("SEC") to have violated any securities law, regulation or decree and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended or vacated.

      Section 1.16

      Labor and Employment Disputes.  To the best of its knowledge, there are no labor and/or employment disputes.

      Section 1.17

      Sophisticated Party.  They are sophisticated parties and have such knowledge and experience in business and financial matters that such parties are capable of evaluating the risks and merits of this Acquisition, the results of the consummation thereof, and of making an informed decision regarding the consummation of this Acquisition.

      ARTICLE II

      REPRESENTATIONS, COVENANTS AND WARRANTIES OF MAGIC AND DESTINATION TELEVISION, INC.

      As an inducement to, and to obtain the reliance of, Be Media and the Seller, MAGIC and Destination Television, Inc. hereby respectively represent and warrant as follows:

      Section 2.1

      Organization.   MAGIC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and is duly authorized, qualified, franchised and licensed under all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it are now being conducted, including qualification to do business as a foreign corporation in the states in which the character and location of the assets owned by it, or the nature of the business transacted by it, requires qualification.  Included in the MAGIC Schedules (as hereinafter defined) are complete and correct copies of the certificate of incorporation and bylaws of MAGIC as in effect on the date hereof.  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not, violate any provision of MAGIC's certificate of incorporation or bylaws.  MAGIC has taken all action required by law, its certificate of incorporation, its bylaws, or otherwise to authorize the execution and delivery of this Agreement.  MAGIC has full power, authority and legal right and has taken all action required by law, its certificate of incorporation, bylaws or otherwise to consummate the transactions herein contemplated.

      Destination Television, Inc. is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and has the corporate power and is duly authorized, qualified, franchised and licensed under all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it are now being conducted, including qualification to do business as a foreign corporation in the states in which the character and location of the assets owned by it, or the nature of the business transacted by it, requires qualification.  Included in the Destination Television, Inc. Schedules (as hereinafter defined) are complete and correct copies of the certificate of incorporation and bylaws of Destination Television, Inc. as in effect on the date hereof.  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not, violate any provision of Destination Television, Inc.'s certificate of incorporation or bylaws.  Destination Television, Inc. has taken all action required by law, its certificate of incorporation, its bylaws, or otherwise to authorize the execution and delivery of this Agreement.  Destination Television, Inc. has full power, authority and legal right and has taken all action required by law, its certificate of incorporation, bylaws or otherwise to consummate the transactions herein contemplated.

      Section 2.2

      Financial Statements.   Included in the MAGIC Schedules attached hereto are the audited balance sheet of MAGIC (which includes Destination Television, Inc.) for the fiscal years ended October 31, 2005 and 2004, and the related statements of operations, stockholders' equity and cash flows for the years then ended, and the unaudited balance sheet and related statement of operations, stockholders' equity and cash flows for the six month period ended April 30, 2006.  Relevant thereto:

      (a) All such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved.  The MAGIC balance sheets  (which includes Destination Television, Inc.)present fairly as of their respective dates the financial condition of MAGIC (which includes Destination Television, Inc.). MAGIC  (which includes Destination Television, Inc.)did not have as of the date of any of such MAGIC balance sheets (which includes Destination Television, Inc.), any liabilities or obligations (absolute or contingent) which should be reflected in a balance sheet or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of MAGIC (which includes Destination Television, Inc.), in accordance with generally accepted accounting principles. The statements of operations, stockholder's equity and changes in financial position reflect fairly the information required to be set forth therein by generally accepted accounting principles;

      (b) The books and records, financial and others, of MAGIC  (which includes Destination Television, Inc.)are in all material respects complete and correct and have been maintained in accordance with generally accepted accounting principles.

      Section 2.3

      Information.   The information concerning MAGIC  (which includes Destination Television, Inc.)as set forth in this Agreement and in the MAGIC Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.

      Section 2.4

      Absence of Certain Changes or Events.   Except as described herein or in the MAGIC Schedules, since April 30, 2006:

      (a) MAGIC  (which includes Destination Television, Inc.)has not:  (i) amended its certificate of incorporation or bylaws; (ii) made any material change in its method of management, operation or accounting; 

      (b) there has not been (i) any material adverse change in the business, operations, properties, assets or condition of MAGIC (which includes Destination Television, Inc.), or (ii) any damage, destruction or loss to MAGIC (which includes Destination Television, Inc.) (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of MAGIC (which includes Destination Television, Inc.); and

      (c) to the best knowledge of MAGIC (which includes Destination Television, Inc.), it has not become subject to any law or regulation which materially and adversely affects, or in the future may adversely affect, the business, operations, properties, assets or condition of MAGIC (which includes Destination Television, Inc.).

      (d) MAGIC (which includes Destination Television, Inc.) has not:  (i) borrowed or agreed to borrow any funds or incurred or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; (ii) paid any material obligation or liability (absolute or contingent) other than current liabilities reflected in or shown on its April 30, 2006 balance sheet and current liabilities incurred since that date in the ordinary course of business;  (iii) sold or transferred, or agreed to sell or transfer, any of its assets, properties or rights; or (iv) made or permitted any amendment or termination of any contract, agreement or license to which it is a party.

      Section 2.5

      Litigation and Proceedings.  Except as set forth in Schedule 1.8, there are no actions, suits or proceedings pending or, to the best of MAGIC's (which includes Destination Television, Inc.) knowledge and belief, threatened by or against or affecting MAGIC (which includes Destination Television, Inc.), at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind.

      Section 2.6

      No Conflict with other Instruments.   The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under, any indenture, mortgage, deed of trust or other contract, agreement or instrument to which MAGIC (which includes Destination Television, Inc.) is a party or to which any of its properties or operations are subject.

      Section 2.7

      Contract Defaults.   To the best of MAGIC's knowledge and belief (which includes Destination Television, Inc.), MAGIC  (which includes Destination Television, Inc.)is not in default in any respect under the terms of any outstanding contract, agreement, lease or other commitment which is material to the business, operations, properties, assets or condition of MAGIC, and there is no event of default in any respect under any such contract, agreement, lease or other commitment in respect of which MAGIC has not taken adequate steps to prevent such a default from occurring.

      Section 2.8

      Governmental Authorizations.   To the best of MAGIC's knowledge (which includes Destination Television, Inc.), MAGIC (which includes Destination Television, Inc.) has all licenses, franchises, permits and other governmental authorizations that are legally required to enable it to conduct its business operations in all material respects as conducted on the date hereof.  Except for compliance with federal and state securities or corporation laws, no authorization, approval, consent or order of, or registration, declaration or filing with, any court or other governmental body is required in connection with the execution and delivery by MAGIC of the transactions contemplated hereby.

      Section 2.9

      Compliance with Securities Laws and Regulations.   To the best of MAGIC's knowledge and belief (which includes Destination Television, Inc.), MAGIC (which includes Destination Television, Inc.) has complied with all applicable securities statutes and regulations (including, but not limited to, ERISA, environmental laws, the Foreign Corrupt Procedures Act, and the Patriot Act, etc.) of any federal, state or other governmental entity or agency thereof.  Further, MAGIC (which includes Destination Television, Inc.) is, as of the date of this Agreement, a "reporting company" under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"), and is current in filing all reports required to be filed pursuant to said Act.  

      The reports that Magic (which includes Destination Television, Inc.) has filed with the SEC have complied in all material respects with the requirements of Sarbanes-Oxley and that except as permitted by applicable law, since the enactment of Sarbanes-Oxley, Magic has not, directly or indirectly, including by its subsidiary, extended or maintained credit, arranged for the extension of credit or renewed an extension of credit in the form of a personal loan to or for the benefit any executive officer of Magic.

      Magic maintains disclosure controls and procedures that are consistent with those required for reporting companies that are subject to the provisions of Rule 13a-15 or Rule 15d-15 pursuant to the Securities Exchange Act of 1934 (the "Exchange Act").

      

       Magic maintains internal control of financial reporting (as defined in Rule 13a-15 or Rule 15d-15 pursuant to the Exchange Act, as applicable).

      Section 2.10

      Approval of Agreement. The board of directors of MAGIC (which includes Destination Television, Inc.) has authorized the execution and delivery of this Agreement by MAGIC  (which includes Destination Television, Inc.)and has approved the transactions contemplated hereby and the stockholders of MAGIC are not required under the laws of Delaware to approve the transactions contemplated hereby.

      Section 2.11

      Principals of MAGIC.  During the past five year period, no officer or director of MAGIC  (which includes Destination Television, Inc.)has been the subject of:

      (a) a petition under the Federal bankruptcy laws or any other insolvency law nor has a receiver, fiscal agent or similar officer been appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

      (b) a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations which do not relate to driving while intoxicated);

      (c) any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of  any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) engaging in any type of business practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal, state or other securities laws or commodities laws;

      (d) any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal, state or local authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in the preceding sub-paragraph, or to be associated with persons engaged in any such activity; or

      (e) a finding by a court of competent jurisdiction in a civil action or by the SEC to have violated any securities law, regulation or decree and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended or vacated.

      Section 2.12

      SEC Filings. None of MAGIC's  (which includes Destination Television, Inc.)SEC filings contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading at the time of such filings.

      Section 2.13

      Issuance of Magic’s Stock to Seller.  The shares of Magic’s capital stock that will be issued by it pursuant to Section 3.1 in connection with the consummation of this Acquisition, when issued, will be validly issued, fully paid and nonassessable and no shareholder of Magic will have any preemptive right of subscription or purchase regarding those shares.

      Magic will not sell, offer for sale or solicit offers to purchase any of its securities that would be integrated with the issuance of the shares of its capital stock that it will issue pursuant to Section 3.1 in connection with consummation of this Acquisition in such a manner that will require the registration of those shares of its capital stock.

      Section 2.14

      Labor and Employment Disputes.  To the best of their knowledge, there are no labor and/or employment disputes.

      Section 2.15

      Sophisticated Parties.  They are sophisticated parties and have such knowledge and experience in business and financial matters that such party is capable of evaluating the risks and merits of that transaction and the results of the consummation thereof and of making an informed decision regarding the consummation of that transaction.

      Section 2.16

      Title and Related Matters.   Excluding any real property, which MAGIC (which includes Destination Television, Inc.) does not own, MAGIC (which includes Destination Television, Inc.) has good and marketable title to and is the sole and exclusive owner of all of its properties, interests in properties and assets (collectively, the "Assets") which are reflected in the MAGIC (which includes Destination Television, Inc.) audited and unaudited balance sheets, or are being used by MAGIC (which includes Destination Television, Inc.) but not appearing on MAGIC’s (which includes Destination Television, Inc.) balance sheets, such as intangibles and intellectual property, or acquired after that date (except properties and assets sold or otherwise disposed of since such date in the ordinary course of business), free and clear of all liens, pledges, charges or encumbrances except: (a) statutory liens or claims not yet delinquent; (b) such imperfections of title and easements as do not and will not, materially detract from or interfere with the present or proposed use of the properties subject thereto, or affected thereby, or otherwise materially impair present business operations on such properties; and (c) as described in the MAGIC (which includes Destination Television, Inc.) Schedules.  Except as set forth in the MAGIC (which includes Destination Television, Inc.) Schedules, no third party has any right to, and MAGIC (which includes Destination Television, Inc.) has not received any notice of infringement of or conflict with asserted rights of others with respect to any product, technology, data, trade secrets, know-how, proprietary techniques, trademarks, service marks, trade names or copyrights which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a materially adverse effect on the business, operations, financial conditions or income of MAGIC (which includes Destination Television, Inc.) or any material portion of its properties, assets or rights.

      Section 2.17

      Capitalization.   The authorized capital stock of Magic consists of (i) a total sum of forty-six million two-hundred fifty thousand (46,250,000) shares of $0.0001 par value common stock, of which 41,667,658 are issued and outstanding, and (ii) three million seven hundred (3,750,000) shares of $0.0001 par value Series B Convertible Preferred Stock, of which 3,750,000 are issued and outstanding, and are owned by Gordon Scott Venters.  Magic is the owner of all of the outstanding shares of Destination Television, Inc.  As of the Closing Date hereof (as set forth in Section 3.5), all of the outstanding shares of Destination Television, Inc. will be owned by Magic. All issued and outstanding shares are legally issued, fully paid and non-assessable, and are not issued in violation of the preemptive or other rights of any person. Magic has no other securities, warrants or options authorized or issued, except as set forth herein.

      ARTICLE III

      CONSIDERATION, CLOSING, AND TERMINATION

      Section 3.1 

      Delivery of Updated Be Media Financial Statements

      Be Media and Seller shall deliver to Buyer at least seven (7) days before the scheduled Closing (as defined in Section 3.5 herein) reviewed financial statements of Be Media as of June 30, 2006.

      Purchase of Stock and Consideration

      Buyer hereby agrees to purchase all of the outstanding shares of the capital stock of Be Media (the "Acquired Stock"), all of which is owned beneficially and of record by Mohammad R. Ahmadi; namely, 100% of the 100,000 issued and outstanding common shares of Be Media.  The Acquisition will be accomplished by all of the Acquired Stock being exchanged by the Seller at the Closing for shares of Magic Convertible Preferred Stock (“MAGIC Preferred C Shares”).   Each such Preferred share shall have voting rights equal to the same number of common shares that it is convertible into.    

      Computation of Seller’s Percentage Ownership of Magic Assuming No Deficit in Be Media’s Stockholders’ Equity

      The precise total number of common shares into which such MAGIC Preferred C shares will be convertible, assuming that Be Media does not have any accumulated stockholder's equity deficit (i.e., no negative net worth) shall equal 49.9% of the total market capitalization of the combined company (including the MAGIC Preferred C Shares and Gordon Scott Venters' Series B preferred stock and any additional shares that may be issued prior to the Closing ). However, this 49.9% is computed before (i) the anticipated sale of Magic common shares to raise the $3,000,000 or more set forth in Sections 3.5 and 4.6 hereof, and (ii) any and all additional stock grants pursuant to this Agreement, (e.g., Global’s 2,800,000 Magic shares pursuant to Section 8.1; Neal Weinstock's 1,000,000 Magic shares pursuant to Section 8.2; and Gordon Scott Venters' 1,300,000 Magic shares pursuant to Section 4.9(e)).

      The total market capitalization of the combined company shall be computed by multiplying the volume weighted average price per share ("VWAP") of Magic common stock for the twenty (20) business days prior to the date of the Closing by the sum of the Magic shares outstanding plus the equivalent Magic shares based on the 49.9% maximum number of Magic Preferred C Shares.  For the purpose of computing such total market capitalization, the shares of Magic’s convertible preferred B stock  shall be treated as if they had been converted into Magic’s common stock.   For example, if the VWAP for such time period is $0.10 per share, and  number of Magic’s outstanding shares are 50,000,000, the amount of the equivalent Magic shares based on the 49.9% maximum number of Magic Preferred C Shares is 49,800,399 shares (i.e., 50,000,000 = 50.1% of the maximum total shares of the combined company  to be outstanding (x); then the total number  of shares to be outstanding for the combined company  is computed as follows: x/.501= 50,000,000, therefore x=99,800,399, and the amount of equivalent Magic shares based on the 49.9% maximum is  49,800,399, or 99,800,399 less 50,000,000).  Therefore, the total market capitalization of the combined company would be $9,980,039 (i.e., 99,800,399 shares times the VWAP of $0.10 per share).        

      Adjustment of the Amount of Magic’s Stock to Be Received by Seller Based Upon the Amount of Be Media’s Deficit in its  Stockholder’s Equity as of June 30, 2006.

      The total number of common shares to be issued upon conversion of the MAGIC Preferred C Shares, as described in the paragraph above, shall be reduced by the number of Magic common shares that equal the result of dividing the adjusted June 30, 2006 accumulated stockholder’s equity deficit of Be Media by the VWAP for the twenty (20) business days prior to the Closing. For example, assuming that the VWAP of Magic's stock for the 20 business days prior to the Closing is $0.10 per share; that the total number of Magic common and convertible preferred shares issued and outstanding as of the Closing is 50,000,000; and Be Media's adjusted net stockholder's equity deficit (after adjustment for the imputed gross profit of uncompleted contracts and the elimination of Be Media’s indebtedness to Seller) is $500,000, then Seller's Magic Preferred C Shares will be convertible into 44,800,399 Magic shares, or  47.3 % of the Magic's then  total outstanding shares, i.e.,94,800,399 computed as follows: 50,000,000 = 50.1% of the maximum total shares to be outstanding (x); which is computed as follows: x/.501= 50,000,000, therefore x=99,800,399. The total maximum shares to Seller = 99,800,399 minus 50,000,000, or 49,800,399. From that number of shares, the assumed adjusted shareholder’s equity deficit of $500,000 divided by the assumed VWAP of $0.10 per share equals 5,000,000 shares (i.e.,500.000/.10 = 5,000,000).  The number of shares then to be issued to Seller is 49,800,399 minus 5,000,000,or  44,800,399, which is 47.3% of the total then outstanding shares (i.e., 44,800,399/94,800,399=.473) .    

      The adjusted Be Media stockholder's equity deficit shall be the stockholder's equity deficit as presented on the June 30, 2006 balance sheet of Be Media, which was formally reviewed by Kabani & Company, Inc. in accordance with generally accepted accounting principles; to be adjusted for an imputed 35% gross profit margin on Be Media contracts that have commenced but have not been completed at June 30, 2006; and further adjusted by the elimination of Be Media's total indebtedness to Seller, which shall be forever released and forgiven by Seller.. At the Closing,  Seller shall have the option, but not the obligation, to contribute cash to Be Media to  reduce any of the remaining adjusted Be Media shareholder’s equity deficit.

      Section 3.2

      Restricted Shares.

      (a) None of the MAGIC Preferred C Shares to be issued to the Seller, as described in Section 3.1, shall, at the time of Closing, be registered under Federal securities laws but, rather, shall be issued pursuant to an exemption therefrom and be considered "restricted stock" within the meaning of Rule 144 promulgated under the Securities Act of 1933, as amended (the "Act").  All of such shares shall bear a legend worded substantially as follows: "The shares represented by this certificate have not been registered under the Securities Act of 1933 (the "Act") and are `restricted securities' as that term is defined in Rule 144 under the Act.  The shares may not be offered for sale, sold or otherwise transferred except pursuant to an exemption from registration under the Act, the availability of which is to be established to the satisfaction of the Company."  Magic will prepare and file any and all notices that are necessary or appropriate to perfect or evidence each exemption from the registration or qualification requirements of applicable federal and state securities laws relating the issuance of those shares of its capital stock to Seller pursuant to Section 3.1 of this Agreement.

      

      (b) The transfer agent of MAGIC shall annotate its records to reflect the restrictions on transfer embodied in the legend set forth above.

      Section 3.3

      Tax Treatment.  The transaction contemplated hereby is intended to qualify as a so-called "tax-free" reorganization under the provisions of Section 368 of the Internal Revenue Code.  MAGIC, Be Media, and Seller acknowledge, however, that they each have been represented by their own tax advisors in connection with this transaction; that neither has made any representation or warranty to the other with respect to the treatment of such transaction or the effect thereof under applicable tax laws, regulations, or interpretations; and that no attorney's opinion or private revenue ruling has been obtained with respect to the effects thereof under the Internal Revenue Code of 1986, as amended.

      Section 3.4

      Events Prior to Closing.   Upon execution hereof or as soon thereafter as practical, management of MAGIC and Be Media shall execute, acknowledge and deliver (or shall cause to be executed, acknowledged and delivered) any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby, subject only to the conditions to Closing referenced hereinbelow.

      Section 3.5

      Closing.   Unless this Agreement shall have been terminated pursuant to Section 3.6 herein, a Closing of the transactions contemplated by this Agreement (the "Closing") shall be held at the offices of Be Media on September 15, 2006, or on such other date as may be mutually agreed upon in writing (the "Closing Date").

      Conditions to the Closing of the Acquisition. The Closing of this Agreement will be subject to the following conditions:

      (a)  Magic (i) having raised on terms and conditions satisfactory to Magic, from the offer and sale of its equity securities, in a transaction not involving a public offering, that amount, which, after the payment of applicable expenses and fees, results in Magic receiving $3,000,000 (the "Net Proceeds"); and (ii) having distributed $1,000,000 of the Net Proceeds to Be Media, $1,000,000 to Magic, and $1,000,000 to Destination Television, Inc.

      (b)  Except as otherwise approved in writing by the parties, there shall not have been any material adverse change in the operations or business (financial or otherwise) of Be Media or Magic.

      (c)  There shall not be any pending or threatened litigation regarding the transactions contemplated hereby.

      (d)  Magic's shareholders shall have approved an increase in Magic's authorized common shares to two hundred million (200,000,000) shares.

      Closing Deliveries.  At the Closing:

       (a)  Seller will deliver to MAGIC:

              (i)  common stock share certificates of Be Media representing all of the issued and outstanding shares of Be Media, duly endorsed for transfer to MAGIC, with a Medallion guarantee;

                    (ii)   the Seller's Closing Certificate (pursuant to Section 5.3 herein); and

                    (iii)  the Seller' Investment Letter (pursuant to Section 5.5 herein).

       (b)   MAGIC will deliver to Seller:

              (i)   the MAGIC Preferred C Shares (pursuant to Section 3.1 herein);

              (ii)   the MAGIC Officer's Certificate (pursuant to Section 6.2 herein); and

              (iii)  the MAGIC Directors' Certificate (pursuant to Section 6.2 herein).

      Section 3.6

      Methods of Termination.  This Agreement may be terminated and the transactions herein contemplated may be abandoned at any time upon notice to the other party on or prior to the Closing Date:

      (a) by mutual written consent of MAGIC and Seller;

      (b) By MAGIC if any condition in Article V herein has not been satisfied as of the Closing Date or if satisfaction of such a condition by such date is or becomes impossible (other than through the failure of MAGIC to comply with its obligations under this Agreement), and MAGIC has not waived such condition in writing on or before such date;

      (c) By Be Media or Seller if any condition in Article VI herein has not been satisfied as of the Closing Date or if satisfaction of such a condition by such date is or becomes impossible (other than through the failure of Be Media and/or Seller to comply with its obligations under this Agreement), and Be Media or Seller has not waived such condition in writing on or before such date; or

      (d) By either MAGIC or Seller, if the Closing shall not have occurred on or before the Closing Date or the Termination Date, as applicable; provided, however, that the right to terminate this Agreement under this Section 3.6(d) shall not be available to any party whose failure to fulfill any obligation under this Agreement, has been the cause of or resulted in, the failure of the Closing Date to occur on or before the Termination Date.

      (e) by the board of directors of either MAGIC or BE MEDIA at any time prior to the Closing Date if (i) there shall be any action or proceeding before any court or any governmental body which shall seek to restrain, prohibit or invalidate the transactions contemplated by this Agreement and which, in the judgment of such board of directors, made in good faith and based on the advice of its legal counsel, makes it inadvisable to proceed with the exchange contemplated by this Agreement; or (ii) any of the transactions contemplated hereby are disapproved by any regulatory authority whose approval is required to consummate such transactions.

      Effect of Termination. 

      (a) Each party's right of termination under this Section 3.6 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of such right of termination will not be an election of remedies.  If this Agreement is terminated pursuant to this Section 3.6, no party hereto shall have any liability or further obligation to any other party to this Agreement, except that the obligations of the parties in this Section 3.6 and all of the sections of Article 8 will survive;  provided, however , that if this Agreement is terminated because of a breach of this Agreement by the non-terminating party or because one or more of the conditions to the terminating party's obligations under this Agreement is not satisfied as a result of the non-terminating party's failure to comply with its obligations under this Agreement, the terminating party may at its option enforce its rights against such breaching or defaulting party and seek any legal or equitable remedies which may be available, including without limitation specific performance.

      (b) In the event of termination pursuant to this Section 3.6, each party shall redeliver all documents and other material of any other party relating to the transactions contemplated hereby, whether obtained before or after the execution hereof, to the party furnishing the same.

      ARTICLE IV

      SPECIAL COVENANTS

      Section 4.1

      Access to Properties and Records.   Upon reasonable prior notice to Be Media and during Be Media's normal business hours, Be Media will afford to the officers and authorized representatives of MAGIC full access to the properties, books and records of Be Media, in order that MAGIC may have full opportunity to make such reasonable investigation as it shall desire to make of the affairs of Be Media, and Be Media and Seller will furnish MAGIC with such additional financial and operating data and other information as to the business and properties of Be Media, as MAGIC shall from time to time reasonably request.

      Section 4.2

      Information for MAGIC Public Reports.   Be Media and Seller will furnish MAGIC with all information concerning Be Media, including all financial statements, required for inclusion in any registration statement or public report intended to be filed by MAGIC pursuant to the Securities Act of 1933, the Exchange Act, or any other applicable federal or state law.  Be Media and Seller covenant that all information so furnished, including the financial statements described in Section 1.4, shall be true and correct in all material respects without omission of any material fact required to make the information stated not misleading.  Notwithstanding any language to the contrary in this Section 4.2 or otherwise in this Agreement, each of the parties hereto shall consult with the other before issuing any press release or otherwise making any public statement or making any other public disclosure relating to this Agreement or the transactions contemplated hereby, and neither shall issue any such press release or make any such statement or disclosure without the prior approval of the other, which approval shall not be unreasonably withheld, except as may be required by law.

      Section 4.3

      Third Party Consents.   MAGIC, Be Media, and Seller agree to cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions herein contemplated.

      Section 4.4

      Actions Prior to Closing.

      (a) From and after the date of this Agreement until the Closing Date and except as set forth in the MAGIC or Be Media Schedules or as permitted or contemplated by this Agreement, the parties hereto will each use its best efforts to (i) carry on its business in substantially the same manner as it has heretofore; (ii) maintain and keep its properties in states of good repair and condition as at present, except for depreciation due to ordinary wear and tear and damage due to casualty; (iii) maintain in full force and effect insurance comparable in amount and in scope of coverage to that now maintained by it; (iv) perform in all material respects all of its obligations under material contracts, leases and instruments relating to or affecting its assets, properties and business; (v) maintain and preserve its business organization intact, retain its key employees and maintain its relationship with its material suppliers and customers; and (vi) fully comply with and perform in all material respects all obligations and duties imposed on it by all federal and state laws and all rules, regulations and orders imposed by federal or state governmental authorities.

      (b) From and after the date of this Agreement until the Closing Date, Magic, Destination Television, Inc., Be Media, and Seller each agree that it will not, without the prior written consent of the other parties (i) except as otherwise specifically set forth herein, make any change in its charter documents; (ii) declare or pay any dividend on its outstanding shares of capital stock, except as may otherwise be required by law, or effect any stock split or otherwise change its capitalization, except as provided herein; (iii) enter into or amend any employment, severance or similar agreements or arrangements with any directors or officers; (iv) confer or award any options, warrants, conversion rights or other rights not existing on the date hereof to acquire any shares of its capital stock;  (v) purchase or redeem any shares of its capital stock, except as disclosed herein; or (vi) directly or indirectly, increase the compensation paid by that party to any of that party’s employees, directors, or officers.

      (c) Between the date of this Agreement and the Closing Date, each of the parties hereto, to the extent applicable, will use their best efforts to cause the Closing conditions in Articles 5 and 6 to be satisfied.

      Section 4.5

      Indemnification.

      (a) Be Media and the Seller hereby agree to indemnify MAGIC and each of the officers, agents and directors of MAGIC as of the date of execution of this Agreement against any loss, liability, claim, damage or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claim whatsoever), to which it or they may become subject arising out of or based on any (i) inaccuracy appearing in or misrepresentation made in this Agreement by Be Media or the Seller, or (ii) breach of any covenant or obligation of Be Media or the Seller in this Agreement or in any Schedule delivered by Be Media or Seller pursuant to this Agreement.  Except as may be specifically provided elsewhere in this Agreement, the indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement.

      (b) MAGIC  hereby agrees to indemnify Be Media and each of the officers, agents, current members of Be Media as of the Closing Date against any loss, liability, claim, damage or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claim whatsoever), to which it or they may become subject arising out of or based on any (i) inaccuracy appearing in or misrepresentation made in this Agreement by MAGIC, or (ii) breach of any covenant or obligation of MAGIC in this Agreement.  Except as specifically provided elsewhere in this Agreement, the indemnification provided for in this Section shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement.

      Section 4.6

      Anticipated Additional Financing. 

       Magic shall use it best efforts to prepare and file with the SEC a registration statement on Form SB-2 no later than 120 days after the Closing, which shall be used (i) to register certain securities which will be offered for sale by Magic for financing purposes and (ii) to register for sale or other disposition by the selling shareholders specified therein of those shares of Magic’s common stock held by them and registered for such sale or disposition.  Those selling shareholders shall include, but are not necessarily limited to, Mohammad Ahmadi, Gordon Scott Venters, Neal Weinstock, and Global Capital LLC (or its designee).  The number of shares of Magic’s common stock that will be registered by that registration statement shall be (i) 4,000,000 for Mohammad Ahmadi; (ii) 1,300,000 for Gordon Scott Venters; (iii) 1,000,000 shares for Neal Weinstock: and (iv) 2,800,000 shares for Global Capital LLC, or its designee,  At such time as that registration statement is declared effective with the SEC, those shareholders shall be entitled to sell or otherwise dispose of their shares of Magic’s common stock, on the terms and subject to the conditions and limitations specified in that registration statement; provided, however, notwithstanding the number of such shares registered for Mohammad Ahmadi and Gordon Scott Venters and the effectiveness of such registration statement, Mohammad Ahmadi and Gordon Scott Venters, and each of them, shall only sell or otherwise dispose of that number of those shares, during such time as such registration statement is effective, as they would be permitted to sell or otherwise dispose of (as affiliates or control persons) pursuant to the provisions of  Rule 144 promulgated pursuant to the Securities Act of 1933, as from time to time amended.  The parties acknowledge and agree that any underwriter or other person performing similar functions for Magic may demand that, the registration of their shares of Magic’s common stock notwithstanding, the parties not sell those shares for some period of time, to accommodate one or more financing transactions for Magic.

      Section 4.7

      Relocation of Magic’s Headquarters.

      Magic's headquarters will move to El Segundo, California.  Be Media and Destination Television, Inc. will share equally the actual out-of-pocket expenses incurred in moving Magic's staff and equipment to Be Media's El Segundo, California office.

      Section 4.8

      Employment of Gordon Scott Venters.  

      (a)  The parties will use their best efforts to ensure that Gordon Scott Venters will be the Chairman of the Board and a director of Magic for a three (3) year term commencing upon the Closing of the Acquisition.

      (b)  Gordon Scott Venters' existing employment agreement will be extended for an additional -- three years at the current compensation structure. The agreement will be assignable to Destination Television, Inc. (and guaranteed by Magic) upon the Closing of the Acquisition.

      (c)  Gordon Scott Venters will receive options to acquire up to two million (2,000,000) additional shares of Magic Media Networks, Inc., on terms and conditions to be determined by Magic's Compensation Committee.

      (d)  Gordon Scott Venters will be President and CEO of Destination Television, Inc. when his Magic employment agreement dated November 1, 2004 is assigned to Destination Television, Inc.

      (e)  Because of Mr. Gordon Scott Venters performance during fiscal 2006, the current Board of Directors of Magic has agreed to issue him 1,300,000 restricted common shares of Magic Media Networks, Inc. pursuant to Rule 144 upon execution of this Agreement.  Gordon Scott Venters agrees not to sell more than 10% of such stock per calendar month, notwithstanding the effectiveness of any  Registration Statement covering such stock.  Gordon Scott Venters also agrees to comply with all Federal and state securities laws, rules, and regulations governing any sales of such stock.

      Section 4.9

      Employment of Mohammad R. Ahmadi.

      (a)  Immediately after the Closing, Mohammad R. Ahmadi will be President and CEO of Magic Media Networks, Inc., as well as continuing to be President and CEO of Be Media.

      (b)  The parties shall use their best efforts to ensure that Mohammad R. Ahmadi will be an officer (President and CEO) and a director for a three (3) year term commencing upon the Closing of the Acquisition.

      (c)  Mohammad R. Ahmadi's employment agreement shall be the same as the remaining term and conditions as Gordon Scott Venters' existing employment agreement, except that his annual salary shall be two hundred fifty thousand dollars ($250,000).

      (d)  Mohammad R. Ahmadi will receive the same options as granted to Gordon Scott Venters to acquire up to two million (2,000,000) additional shares of Magic Media Networks, Inc., on terms and conditions to be determined by Magic's Compensation Committee.

      Section 4.10

      Board Representation, Audit Committee, and Compensation Committee.  

      (a) Immediately after the Closing, Magic shall have a five (5) person board of directors, of which Gordon Scott Venters and Mohammad R. Ahmadi shall be two members.  Messrs. Venters and Ahmadi shall agree on the other three directors, of which two shall be independent.

      (b)  The Audit Committee shall have at least two members composed of the independent members of the board of directors. 

      (c)  The Compensation Committee shall have three members, of which two shall be independent.  These two members shall select the third member.

      Section 4.11

      Use of Magic’s $100,000 of Restricted Cash Only for Payment of Payroll Taxes.

      The parties will use Magic’s $100,000 of cash, which will remain restricted for the payment of Magic’s past due payroll taxes, only for the payment of such taxes.

      ARTICLE V

      CONDITIONS PRECEDENT TO OBLIGATIONS OF MAGIC

      The obligations of MAGIC under this Agreement are subject to the satisfaction, at or before the Closing Date, of all of (i) the following conditions, and (ii) the conditions set forth in Section 3.5 hereof (any of which may be waived by MAGIC in writing, in whole or in part):

      Section 5.1

      Accuracy of Representations.   The representations and warranties made by Be Media and the Seller in this Agreement were true when made and shall be true in all material respects at the Closing Date with the same force and effect as if such representations and warranties were made at the Closing Date (except for changes therein permitted by this Agreement), and Be Media and the Seller shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by Be Media and the Seller prior to or at the Closing. As further set forth in Section 5.3 herein, MAGIC shall be furnished with a certificate, signed by a duly authorized officer of Be Media and dated the Closing Date, to the foregoing effect.

      Section 5.2

      Shareholder Approval. The Shareholder of Be Media (i.e., Seller) shall have approved this Agreement and the transactions contemplated thereby by executing a letter to such effect dated as of the Closing Date.

      Section 5.3

      Officer's Certificate.   MAGIC shall have been furnished with a certificate (the "Be Media's Closing Certificate") dated the Closing Date and signed by Seller to the effect that:  (a) the representations and warranties of Be Media and the Seller set forth in the Agreement and in all Schedules furnished in connection herewith are in all material respects true and correct as if made on the Closing Date; (b) Be Media and the Seller have performed all covenants, satisfied all conditions, and complied with all other terms and provisions of this Agreement to be performed, satisfied or complied with by it as of the Closing Date; (c) since the date of Be Media's reviewed Balance Sheet of June 30, 2006, and other than as previously disclosed to MAGIC in writing, Be Media has not entered into any material transaction other than transactions which are usual and in the ordinary course of its business; and (d) no litigation, proceeding, investigation or inquiry is pending or, to the best knowledge of Be Media  and Seller, threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the Be Media Schedules, by or against Be Media which might result in any material adverse change in any of the assets, properties, business or operations of Be Media.

      Section 5.4

      No Material Adverse Change.   Prior to the Closing Date, there shall not have occurred any material adverse change in the financial condition, business or operations of Be Media, nor shall any event have occurred which, with the lapse of time or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations of Be Media.

      Section 5.5

      Investment Letters.  MAGIC shall have received from the Seller a letter commonly known as an "investment letter" (the "Seller' Investment Letter") agreeing that the MAGIC Preferred C Shares to be received pursuant to the Acquisition are, among other things, being acquired for investment purposes and not with a view to public resale, are being acquired for the investor's own account, and that the Shares are restricted and may not be resold without registration, except in reliance of an exemption therefrom under the Securities Act of 1933.

      Section 5.6

      Other Items.   MAGIC shall have received from Be Media and the Seller such further documents, certificates or instruments relating to the transactions contemplated hereby as MAGIC may reasonably request.

      Section 5.7

      Seller's Performance.  All of the covenants and obligations that Be Media and the Seller are required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been duly performed and complied with in all material respects.  Each document required to be delivered by Be Media and the Seller at the Closing pursuant to Section 3.5 herein must have been delivered.

      ARTICLE VI

      CONDITIONS PRECEDENT TO OBLIGATIONS OF BE MEDIA AND SELLER

      The obligations of Be Media and Seller under this Agreement are subject to the satisfaction, at or before the Closing Date (unless otherwise indicated herein), of all of (i) the following conditions, and (ii) the conditions set forth in Section 3.5 hereof (any of which may be waived by Be Media or Seller in writing, in whole or in part):

      Section 6.1

      Accuracy of Representations.   The representations and warranties made by MAGIC in this Agreement were true when made and shall be true in all material respects as of the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such representations and warranties were made at and as of the Closing Date, and MAGIC shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by MAGIC prior to or at the Closing.  As further set forth in Section 6.2 herein, Be Media shall have been furnished with a certificate, signed by a duly authorized executive officer of MAGIC and dated the Closing Date, to the foregoing effect.

      Section 6.2

       Closing Certificates.   Seller shall be furnished with a certificate (the "MAGIC Officer's Certificate") dated the Closing Date and signed by a duly authorized officer of MAGIC to the effect that:  (a) the representations and warranties of MAGIC set forth in the Agreement and in all Exhibits, Schedules and other documents furnished in connection herewith are in all material respects true and correct as if made on the Closing Date; (b) MAGIC has performed all covenants, satisfied all conditions, and complied with all other terms and provisions of the Agreement to be performed, satisfied or complied with by it as of the Closing Date; and (c) no litigation, proceeding, investigation or inquiry is pending or, to the best knowledge of MAGIC, threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the MAGIC Schedules,  by or against MAGIC which might result in any material adverse change in any of the assets, properties, business or operations of MAGIC. At the Closing, Seller shall also be furnished with a certificate (the "MAGIC Directors' Certificate") dated as of the Closing Date and signed by the secretary of MAGIC to the effect that the transactions contemplated by this Agreement have been adopted, ratified, confirmed and approved in all respects by the board of directors of MAGIC.

      Section 6.3

      No Material Adverse Change.   Prior to the Closing Date, there shall not have occurred any material adverse change in the financial condition, business or operations of, nor shall any event have occurred which, with the lapse of time or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations of, MAGIC.

      Section 6.4

      Issuance of Shares to Seller.  The MAGIC Preferred C Shares of restricted stock to be issued to the Seller at Closing will be validly issued, nonassessable, and fully paid under Delaware corporation law and will be issued in a nonpublic transaction in compliance with all federal, state and applicable securities laws.   

      Section 6.5

      Compliance with Reporting Requirements.   As of the Closing Date, MAGIC shall be current in and in compliance with all requirements of all filings required to be tendered to the Securities and Exchange Commission pursuant to the Exchange Act.

      Section 6.6

      Other Items.   Be Media and Seller shall have received from MAGIC such further documents, certificates, or instruments relating to the transactions contemplated hereby as Be Media and Seller may reasonably request.

      Section 6.7

      MAGIC's Performance.  All of the covenants and obligations that MAGIC is required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been duly performed and complied with in all material respects.  Each document required to be delivered by MAGIC at the Closing pursuant to Section 3.5 herein must have been delivered.  

      ARTICLE VII

      POST CLOSING COVENANTS

      Section 7.1

      Financial Statements.  After the Closing, MAGIC shall timely file a current report on Form 8-K to report the Reorganization.  In addition, for a period of 12 months following the Closing, MAGIC shall use its commercially reasonable efforts to timely file all reports and other documents required to be filed by MAGIC under the Securities Exchange Act of 1934.

      ARTICLE VIII

      MISCELLANEOUS

      Section 8.1

      Brokers, and Finders.   Each party hereto hereby represents and warrants that it is under no obligation, express or implied, to pay certain finders in connection with the bringing of the parties together in the negotiation, execution, or consummation of this Agreement.

      Notwithstanding the above, in the event thatthis anticipated Acquisition closes  Global Capital Group, LLC of Alexandria, Virginia, or its designee, (" Global") will receive a finder's fee of 2,800,000 restricted Magic common shares.  Global was the sole procuring entity whose initial introduction of the parties to each other, and further facilitation, was responsible for the existence of this Agreement.  These Global shares shall have the same SB-2 registration rights and other restrictions as all of the other shares registered pursuant to Section 4.6 above.  Global agrees not to sell more than 10% of such stock per calendar month, notwithstanding the effectiveness of any Registration Statement that may cover such stock.  Global also agrees to comply with all Federal and state securities laws, rules, and regulations governing any sales of such stock.

      The parties each agree to indemnify the other(s) against any claim by any third person not listed above for any commission, brokerage or finder's fee or other payment with respect to this Agreement or the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party.

      Section 8.2

      Stock Payment to Neal Weinstock  for Services.

      In consideration of services rendered, and to be rendered, by Neal Weinstock as set forth in the August --, 2006 Agreement, Schedule 1.6  attached hereto, Neal Weinstock will receive 1,000,000 Magic restricted common shares upon the Closing of this Acquisition.  These shares shall have the same SB-2 registration rights and other restrictions as all of the other shares registered pursuant to Section 4.6 above.  Neal Weinstock agrees not to sell more than 10% of such stock per calendar month, notwithstanding the effectiveness of any  Registration Statement that may cover such stock.  Neal Weinstock also agrees to comply with all Federal and state securities laws, rules, and regulations governing any sales of such stock.

      Section 8.3

      Law, Forum and Jurisdiction.   This Agreement shall be construed and interpreted in accordance with the internal substantive laws of the State of California, without regard to conflicts of laws principles.  Each of the parties hereto hereby irrevocably submit to the jurisdiction of any Florida state or federal court sitting in Broward County, Florida over any action arising out of or relating to this Agreement.

      Section 8.4

      Notices.   Any notices or other communications required or permitted hereunder shall be sufficiently given if personally delivered to it or sent by registered mail or certified mail, return receipt requested, postage prepaid, addressed as follows:

      	
            If to MAGIC:

          	 	
            Gordon Scott Venters

             Magic Media Networks, Inc.

             530 North Federal Highway

             Fort Lauderdale, FL 33301

            

            

            

          
	
            If to Be Media:

          	 	
            Integrated Media Systems, Inc.

             655 Hawaii Street

             El Segundo, CA 90245

            

            

            

          
	
            If to Seller

          	 	
            Mohammad R. Ahmadi

             C/O Integrated Media Systems, Inc.

             655 Hawaii Street

             El Segundo, CA 90245

          

      or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given as of the date so delivered or mailed.

      Section 8.5

      Attorneys' Fees.   In the event that any party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the breaching party or parties shall reimburse the non-breaching party or parties for all costs, including reasonable attorneys' fees incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

      Section 8.6

      Confidentiality.   Except as otherwise required by law, all proprietary information concerning a party provided to the other parties (oral, written or otherwise), including all documents and copies of documents or papers containing proprietary information ("Evaluation Information") will be kept in confidence by the receiving party.  The party receiving such Evaluation Information will take reasonable steps necessary to ensure the confidentiality of the Evaluation Information by itself, its employees, agents, consultants, advisors and affiliates.  Evaluation Information does not include information that (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure by the receiving party or its affiliates or representatives; (ii) was within or comes into the receiving party's possession, provided that the source of such information was not known by the receiving party to be bound by a confidentiality agreement with, or other contractual, legal, or fiduciary obligation of confidentiality to the party providing the information; (iii) is disclosed by the receiving party to others with the consent of the other party; or (iv) is independently developed by the receiving party.  Notwithstanding the foregoing, any party hereto may make a disclosure of confidential information if said disclosure is ordered by any arbitrator, court or governmental authority, provided that the disclosing party provide the other party with immediate prior written notice of such order so that the other party may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this Section 8.5  Each of the parties hereto acknowledges and agrees that the other party's confidential information constitutes valuable, proprietary, special and unique assets, and that any breach or threatened breach of this Section 8.5 would cause irreparable injury for which money damages would be an inadequate remedy.  Accordingly, the injured party shall be entitled, without any requirement for security or the posting of any bond, to specific performance and injunctive and other equitable relief from the breach or threatened breach of any such covenant, in addition to and not in limitation of any other legal or equitable remedies which may be available.  The confidentiality provisions of this Section 8.5 shall survive any termination of this Agreement indefinitely.

      Section 8.7

      Force Majuere.  Each party’s obligations herein under shall be extended during the time period (not to exceed thirty (30) days) of any force majuere which prevents such party’s performance, except for the payment of monies due,

      Section 8.8

      Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof.  Any and all prior oral or written agreements among the parties relative to the specific subject matter hereof are superseded by this Agreement.

      Section 8.9

      Survival; Termination.   Except as otherwise provided herein, the representations, warranties and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated.

      Section 8.10

      Counterparts, Facsimile Execution.   This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  One or more counterparts of this Agreement may be delivered via facsimile with the intention that they shall have the same effect as an original executed counterpart hereof.  The signature of any party thereon, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document.  At the request of any party, a fax or telecopy document is to be re-executed in original form by the parties who executed the facsimile or telecopy document.  

      Section 8.11

      Amendment or Waiver.   Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.  At any time prior to the Closing Date, this Agreement may be amended only by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance hereof may be extended only by a writing signed by the party or parties for whose benefit the provision is intended.

      Section 8.12

      Incorporation of Recitals.   All of the recitals hereof are incorporated by this reference and are made a part hereof as though set forth at length herein.

      Section 8.13

      Expenses.   Each party herein shall bear all of their respective costs and expenses, including, but not limited to, accounting and legal fees, incurred in connection with the negotiation of this Agreement and in the consummation of the transactions provided for herein and the preparation therefor.

      Section 8.14

      Headings; Context.   The headings of the sections and paragraphs contained in this Agreement are for convenience of reference only and do not form a part hereof and in no way modify, interpret or construe the meaning of this Agreement.

      Section 8.15

      Benefit.   This Agreement shall be binding upon and shall inure only to the benefit of the parties hereto, and their permitted assigns hereunder.  This Agreement shall not be assigned by any party without the prior written consent of the other party.

      Section 8.16

      Severability.   In the event that any particular provision or provisions of this Agreement or the other agreements contained herein shall for any reason hereafter be determined to be unenforceable, or in violation of any law, governmental order or regulation, such unenforceability or violation shall not affect the remaining provisions of such agreements, which shall continue in full force and effect and be binding upon the respective parties hereto.

      Section 8.17

      Further Assurances.  At any time, and from time to time, after the Closing Date, each party will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to any property transferred hereunder or otherwise to carry out the intent and purposes of this Agreement.  Each party will update and provide to each other party, when and as necessary or appropriate, such party's disclosure schedule.

      

       Section 8.18

      Execution Knowing and Voluntary.   In executing this Agreement, the parties severally acknowledge and represent that each:  (a) has fully and carefully read and considered this Agreement; (b) has been or has had the opportunity to be fully apprised by its attorneys of the legal effect and meaning of this document and all terms and conditions hereof; and (c) is executing this Agreement voluntarily, free from any influence, coercion or duress of any kind.

                  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, and entered into as of the date first above written.

      	Global Capital Group, LLC 	 	
            Magic Media Networks, Inc.,

          
	 	 	a Delaware corporation
	
            

          	 	 
	
            By: Norman Gross

          	 	
            

          
	Its: Managing Partner	 	By: Gordon Scott Venters
	 	 	Its: President and CEO
	
            

          	 	 
	Neal Weinstock 	 	
            Integrated Media Systems, Inc.

          
	 	 	a California corporation
	
            

          	 	 
	Seller, Mohammad R. Ahmadi	 	
            

          
	 	 	By: Mohammad R. Ahmadi
	 	 	Its: President and CEO
	 	 	 
	 	 	
            Destination Television, Inc.,

          
	 	 	A Florida corporation
	 	 	 
	
            

          	 	
            

          
	
            Gordon Scott Venters

          	 	By: Gordon Scott Venters
	Individually	 	Its: President and CEOEx 4.1

    Exhibit
      4.1

    

    

    SYSTEMS
      EVOLUTION, INC.

    SECOND
      AMENDED 2006 STOCK INCENTIVE PLAN

     

    1.
         Purpose.    The
      purpose of the Second Amended 2006 Stock Incentive Plan of Systems Evolution,
      Inc. is to further align the interests of employees, directors and non-employee
      Consultants with those of the stockholders by providing incentive compensation
      opportunities tied to the performance of the Common Stock and by promoting
      increased ownership of the Common Stock by such individuals. The Plan is also
      intended to advance the interests of the Company and its stockholders by
      attracting, retaining and motivating key personnel upon whose judgment,
      initiative and effort the successful conduct of the Company’s business is
      largely dependent. 

     

    2.
         Definitions.    Wherever
      the following capitalized terms are used in the Plan, they shall have the
      meanings specified below: 

     

    “Affiliate”
      means
      (i) any entity that would be treated as an “affiliate” of the Company for
      purposes of Rule 12b-2 under the Exchange Act and (ii) any joint venture or
      other entity in which the Company has a direct or indirect beneficial ownership
      interest representing at least one-third (1/3) of the aggregate voting power
      of
      the equity interests of such entity or one-third (1/3) of the aggregate fair
      market value of the equity interests of such entity, as determined by the
      Committee.

     

    “Award”
      means an
      award of a Stock Option, Stock Award, or Restricted Stock Award granted under
      the Plan. 

     

    “Award
      Agreement”
      means a
      written or electronic agreement entered into between the Company and a
      Participant setting forth the terms and conditions of an Award granted to a
      Participant. 

     

    “Board”
      means
      the Board of Directors of the Company. 

     

    “Code”
      means
      the Internal Revenue Code of 1986, as amended. 

     

    “Common
      Stock”
      means
      the Company’s common stock, no par value per share. 

     

    “Committee”
      means
      the Compensation Committee of the Board, or such other committee of the Board
      appointed by the Board to administer the Plan, or if no such committee exists,
      the Board. 

     

    “Company”
      means
Systems
      Evolution, Inc., an Idaho corporation.
      

    

    “Consultant”
      means
      any
      person which is a consultant or advisor to the Company and which is a natural
      person and who provides bona fide services to the Company which are not in
      connection with the offer or sale of securities in a capital-raising transaction
      for the Company, and do not directly or indirectly promote or maintain a market
      for the Company’s securities.

    

    “Date
      of Grant”
      means
      the date on which an Award under the Plan is made by the Committee, or such
      later date as the Committee may specify to be the effective date of an Award.
      

     

    “Disability”
      means a
      Participant being considered “disabled” within the meaning of Section
      409A(a)(2)(C) of the Code, unless otherwise provided in an Award Agreement.
      

     

    “Eligible
      Person”
      means
      any person who is an employee of the Company or any Affiliate or any person
      to
      whom an offer of employment with the Company or any Affiliate is extended,
      as
      determined by the Committee, or any person who is a Non-Employee Director,
      or
      any person who is Consultant to the Company.

     

    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended. 

     

    “Fair
      Market Value”
      means
      the mean between the highest and lowest reported sales prices of the Common
      Stock on the New York Stock Exchange Composite Tape or, if not listed on such
      exchange, on any other national securities exchange on which the Company’s
      common stock is listed or on The Nasdaq Stock Market, or, if not so listed
      on
      any other national securities exchange or The Nasdaq Stock Market, then the
      average of the bid price of the Company’s common stock during the last five
      trading days on the OTC Bulletin Board immediately preceding the last trading
      day prior to the date with respect to which the Fair Market Value is to be
      determined. If the Company’s common stock is not then publicly traded, then the
      Fair Market Value of the Common Stock shall be the book value of the Company
      per
      share as determined on the last day of March, June, September, or December
      in
      any year closest to the date when the determination is to be made. For the
      purpose of determining book value hereunder, book value shall be determined
      by
      adding as of the applicable date called for herein the capital, surplus, and
      undivided profits of the Company, and after having deducted any reserves
      theretofore established; the sum of these items shall be divided by the number
      of shares of the Company’s common stock outstanding as of said date, and the
      quotient thus obtained shall represent the book value of each share of the
      Company’s common stock.

     

    “Incentive
      Stock Option”
      means a
      Stock Option granted under Section 6 hereof that is intended to meet the
      requirements of Section 422 of the Code and the regulations thereunder.

     

    “Non-Employee
      Director”
      means
      any member of the Board who is not an employee of the Company. 

     

    “Nonqualified
      Stock Option”
      means a
      Stock Option granted under Section 6 hereof that is not an Incentive Stock
      Option. 

     

    “Participant”
      means
      any Eligible Person who holds an outstanding Award under the Plan. 

     

    “Plan”
      means
      the Second
      Amended 2006 Stock Incentive Plan of Systems Evolution, Inc.
      as set
      forth herein, as amended from time to time. 

    

    “Restricted
      Stock Award”
      means a
      grant of shares of Common Stock to an Eligible Person under Section 8 hereof
      that are issued subject to such vesting and transfer restrictions as the
      Committee shall determine and set forth in an Award Agreement. 

     

    “Service”
      means a
      Participant’s employment with the Company or any Affiliate or a Participant’s
      service as a Non-Employee Director with the Company, as applicable.

     

    “Stock
      Award”
      means a
      grant of shares of Common Stock to an Eligible Person under Section 7 hereof
      that are issued free of transfer restrictions and forfeiture conditions.

     

    “Stock
      Option”
      means a
      contractual right granted to an Eligible Person under Section 6 hereof to
      purchase shares of Common Stock at such time and price, and subject to such
      conditions, as are set forth in the Plan and the applicable Award Agreement.
      

     

    3.
         Administration. 

     

    3.1    Committee
      Members.    The
      Plan shall be administered by a Committee comprised of one or more members
      of
      the Board, or if no such committee exists, the Board.

     

    3.2    Committee
      Authority.    The
      Committee shall have such powers and authority as may be necessary or
      appropriate for the Committee to carry out its functions as described in the
      Plan. Subject to the express limitations of the Plan, the Committee shall have
      authority in its discretion to determine the Eligible Persons to whom, and
      the
      time or times at which, Awards may be granted, the number of shares, units
      or
      other rights subject to each Award, the exercise, base or purchase price of
      an
      Award (if any), the time or times at which an Award will become vested,
      exercisable or payable, the performance goals and other conditions of an Award,
      the duration of the Award, and all other terms of the Award. Subject to the
      terms of the Plan, the Committee shall have the authority to amend the terms
      of
      an Award in any manner that is not inconsistent with the Plan, provided that
      no
      such action shall adversely affect the rights of a Participant with respect
      to
      an outstanding Award without the Participant’s consent. The Committee shall also
      have discretionary authority to interpret the Plan, to make factual
      determinations under the Plan, and to make all other determinations necessary
      or
      advisable for Plan administration, including, without limitation, to correct
      any
      defect, to supply any omission or to reconcile any inconsistency in the Plan
      or
      any Award Agreement hereunder. The Committee may prescribe, amend, and rescind
      rules and regulations relating to the Plan. The Committee’s determinations under
      the Plan need not be uniform and may be made by the Committee selectively among
      Participants and Eligible Persons, whether or not such persons are similarly
      situated. The Committee shall, in its discretion, consider such factors as
      it
      deems relevant in making its interpretations, determinations and actions under
      the Plan including, without limitation, the recommendations or advice of any
      officer or employee of the Company or such attorneys, consultants, accountants
      or other advisors as it may select. All interpretations, determinations and
      actions by the Committee shall be final, conclusive, and binding upon all
      parties. 

     

    3.3    Delegation
      of Authority.    The
      Committee shall have the right, from time to time, to delegate to one or more
      officers of the Company the authority of the Committee to grant and determine
      the terms and conditions of Awards granted under the Plan, subject to the
      requirements of state law and such other limitations as the Committee shall
      determine. In no event shall any such delegation of authority be permitted
      with
      respect to Awards to any members of the Board or to any Eligible Person who
      is
      subject to Rule 16b-3 under the Exchange Act or Section 162(m) of the Code.
      The
      Committee shall also be permitted to delegate, to any appropriate officer or
      employee of the Company, responsibility for performing certain ministerial
      functions under the Plan. In the event that the Committee’s authority is
      delegated to officers or employees in accordance with the foregoing, all
      provisions of the Plan relating to the Committee shall be interpreted in a
      manner consistent with the foregoing by treating any such reference as a
      reference to such officer or employee for such purpose. Any action undertaken
      in
      accordance with the Committee’s delegation of authority hereunder shall have the
      same force and effect as if such action was undertaken directly by the Committee
      and shall be deemed for all purposes of the Plan to have been taken by the
      Committee. 

     

    4.
         Shares Subject to the Plan. 

     

    4.1    Maximum
      Share Limitations.    Subject
      to Section 4.3 hereof, the maximum aggregate number of shares of Common Stock
      that may be issued and sold under all Awards granted under the Plan shall be
      150,000,000
      shares.
      Shares of Common Stock issued and sold under the Plan may be either authorized
      but unissued shares or shares held in the Company’s treasury. To the extent that
      any Award involving the issuance of shares of Common Stock is forfeited,
      cancelled, returned to the Company for failure to satisfy vesting requirements
      or other conditions of the Award, or otherwise terminates without an issuance
      of
      shares of Common Stock being made thereunder, the shares of Common Stock covered
      thereby will no longer be counted against the foregoing maximum share
      limitations and may again be made subject to Awards under the Plan pursuant
      to
      such limitations. Any Awards or portions thereof that are settled in cash and
      not in shares of Common Stock shall not be counted against the foregoing maximum
      share limitations. 

     

    4.2    Adjustments.
         If
      there shall occur any change with respect to the outstanding shares of Common
      Stock by reason of any recapitalization, reclassification, stock dividend,
      extraordinary dividend, stock split, or other distribution with respect to
      the
      shares of Common Stock, or any merger, reorganization, consolidation,
      combination, spin-off or other similar corporate change, or any other change
      affecting the Common Stock, the Committee may, in the manner and to the extent
      that it deems appropriate and equitable to the Participants and consistent
      with
      the terms of the Plan, cause an adjustment to be made in (i) the maximum number
      and kind of shares provided in Section 4.1 hereof, (ii) the number and kind
      of
      shares of Common Stock, or other rights subject to then outstanding Awards,
      (iii) the exercise or base price for each share or other right subject to then
      outstanding Awards, and (iv) any other terms of an Award that are affected
      by
      the event. Notwithstanding the foregoing, in the case of Incentive Stock
      Options, any such adjustments shall, to the extent practicable, be made in
      a
      manner consistent with the requirements of Section 424(a) of the Code.

    

    4.3
      Anti-Dilution.
      Notwithstanding anything contained in the Plan to cover the contrary, including
      any adjustments discussed in this Section 4, the maximum aggregate number of
      shares of Common Stock that may be issued and sold under all Awards granted
      under the Plan shall be anti-dilutive in the event of a reverse stock split
      by
      the Company and shall not result in any reduction in the number of shares
      available and authorized under the Plan at the effective time of such reverse
      stock split(s).

    

    5.
         Participation and Awards.

     

    5.1    Designations
      of Participants.    All
      Eligible Persons are eligible to be designated by the Committee to receive
      Awards and become Participants under the Plan. The Committee has the authority,
      in its discretion, to determine and designate from time to time those Eligible
      Persons who are to be granted Awards, the types of Awards to be granted and
      the
      number of shares of Common Stock or units subject to Awards granted under the
      Plan. In selecting Eligible Persons to be Participants and in determining the
      type and amount of Awards to be granted under the Plan, the Committee shall
      consider any and all factors that it deems relevant or appropriate.

     

    5.2    Determination
      of Awards.    The
      Committee shall determine the terms and conditions of all Awards granted to
      Participants in accordance with its authority under Section 3.2 hereof. An
      Award
      may consist of one type of right or benefit hereunder or of two or more such
      rights or benefits granted in tandem or in the alternative. In the case of
      any
      fractional share or unit resulting from the grant, vesting, payment or crediting
      of dividends or dividend equivalents under an Award, the Committee shall have
      the discretionary authority to (i) disregard such fractional share or unit,
      (ii)
      round such fractional share or unit to the nearest lower or higher whole share
      or unit, or (iii) convert such fractional share or unit into a right to receive
      a cash payment. To the extent deemed necessary by the Committee, an Award shall
      be evidenced by an Award Agreement as described in Section 11.1 hereof.

     

    6.
         Stock Options. 

     

    6.1    Grant
      of Stock Options.    A
      Stock Option may be granted to any Eligible Person selected by the Committee.
      Subject to the provisions of Section 6.8 hereof and Section 422 of the Code,
      each Stock Option shall be designated, in the discretion of the Committee,
      as an
      Incentive Stock Option or as a Nonqualified Stock Option. 

     

    6.2    Exercise
      Price.    The
      exercise price per share for any Stock Option shall be determined by the
      Committee in its discretion on the Date of Grant.

    

    6.3    Vesting
      of Stock Options.    The
      Committee shall in its discretion prescribe the time or times at which, or
      the
      conditions upon which, a Stock Option or portion thereof shall become vested
      and/or exercisable, and may accelerate the vesting or exercisability of any
      Stock Option at any time, provided, however, that any Stock Option shall vest
      at
      the rate of at least twenty percent (20%) per year over five (5) years from
      the
      date the Stock Option is granted, subject to reasonable conditions as may be
      provided for in the Award Agreement. However, in the case of a Stock Option
      granted to officers, Non-employee Directors, managers or Consultants of the
      Company, the Stock Option may become fully exercisable, subject to reasonable
      conditions, at anytime or during any period established by the Company. The
      requirements for vesting and exercisability of a Stock Option may be based
      on
      the continued Service of the Participant with the Company or its Affiliates
      for
      a specified time period (or periods) or on the attainment of specified
      performance goals established by the Committee in its discretion. 

     

    6.4    Term
      of Stock Options.    The
      Committee shall in its discretion prescribe in an Award Agreement the period
      during which a vested Stock Option may be exercised, provided that the maximum
      term of a Stock Option shall be ten years from the Date of Grant. Except as
      otherwise provided in this Section 6 or as otherwise may be provided by the
      Committee, no Stock Option issued to an employee or a Non-Employee Director
      of
      the Company may be exercised at any time during the term thereof unless the
      employee or a Non-Employee Director Participant is then in the Service of the
      Company or one of its Affiliates. 

     

    6.5    Termination
      of Service.    Subject
      to Section 6.8 hereof with respect to Incentive Stock Options, the Stock Option
      of any Participant whose Service with the Company or one of its Affiliates
      is
      terminated for any reason shall terminate on the earlier of (A) the date that
      the Stock Option expires in accordance with its terms or (B) unless otherwise
      provided in an Award Agreement, and except for termination for cause (as
      described in Section 10.2 hereof), the expiration of the applicable time period
      following termination of Service, in accordance with the following: (1) twelve
      months if Service ceased due to Disability, (2) eighteen months if Service
      ceased at a time when the Participant is eligible to elect immediate
      commencement of retirement benefits at a specified retirement age under a
      pension plan to which the Company or any of its Affiliates had made
      contributions, (3) eighteen months if the Participant died while in the Service
      of the Company or any of its Affiliates, or (iv) three months if Service ceased
      for any other reason. During the foregoing applicable period, except as
      otherwise specified in the Award Agreement or in the event Service was
      terminated by the death of the Participant, the Stock Option may be exercised
      by
      such Participant in respect of the same number of shares of Common Stock, in
      the
      same manner, and to the same extent as if he or she had remained in the
      continued Service of the Company or any Affiliate during the first three months
      of such period; provided that no additional rights shall vest after such three
      months. The Committee shall have authority to determine in each case whether
      an
      authorized leave of absence shall be deemed a termination of Service for
      purposes hereof, as well as the effect of a leave of absence on the vesting
      and
      exercisability of a Stock Option. Unless otherwise provided by the Committee,
      if
      an entity ceases to be an Affiliate of the Company or otherwise ceases to be
      qualified under the Plan or if all or substantially all of the assets of an
      Affiliate of the Company are conveyed (other than by encumbrance), such
      cessation or action, as the case may be, shall be deemed for purposes hereof
      to
      be a termination of the Service. 

     

    6.6    Stock
      Option Exercise; Tax Withholding.    Subject
      to such terms and conditions as shall be specified in an Award Agreement, a
      Stock Option may be exercised in whole or in part at any time during the term
      thereof by notice in the form required by the Company, together with payment
      of
      the aggregate exercise price therefor and applicable withholding tax. Payment
      of
      the exercise price shall be made in the manner set forth in the Award Agreement,
      unless otherwise provided by the Committee: (i) in cash or by cash equivalent
      acceptable to the Committee, (ii) by payment in shares of Common Stock that
      have
      been held by the Participant for at least six months (or such period as the
      Committee may deem appropriate, for accounting purposes or otherwise) valued
      at
      the Fair Market Value of such shares on the date of exercise, (iii) through
      an
      open-market, broker-assisted sales transaction pursuant to which the Company
      is
      promptly delivered the amount of proceeds necessary to satisfy the exercise
      price, (iv) by a combination of the methods described above or (v) by such
      other
      method as may be approved by the Committee and set forth in the Award Agreement.
      In addition to and at the time of payment of the exercise price, the Participant
      shall pay to the Company the full amount of any and all applicable income tax,
      employment tax and other amounts required to be withheld in connection with
      such
      exercise, payable under such of the methods described above for the payment
      of
      the exercise price as may be approved by the Committee and set forth in the
      Award Agreement.

     

    6.7    Limited
      Transferability of Nonqualified Stock Options.    All
      Stock Options shall be nontransferable except (i) upon the Participant’s death,
      in accordance with Section 11.2 hereof or (ii) in the case of Nonqualified
      Stock
      Options only, for the transfer of all or part of the Stock Option to a
      Participant’s “family member” (as defined for purposes of the Form S-8
      registration statement under the Securities Act of 1933), as may be approved
      by
      the Committee in its discretion at the time of proposed transfer. The transfer
      of a Nonqualified Stock Option may be subject to such terms and conditions
      as
      the Committee may in its discretion impose from time to time. Subsequent
      transfers of a Nonqualified Stock Option shall be prohibited other than in
      accordance with Section 11.2 hereof. 

     

    6.8    Additional
      Rules for Incentive Stock Options. 

     

    (a)    Eligibility.
         An
      Incentive Stock Option may only be granted to an Eligible Person who is
      considered an employee for purposes of Treasury Regulation §1.421-7(h) with
      respect to the Company or any Affiliate that qualifies as a “subsidiary
      corporation” with respect to the Company for purposes of Section 424(f) of the
      Code. 

     

    (b)     Termination
      of Employment.    An
      Award of an Incentive Stock Option may provide that such Stock Option may be
      exercised not later than 3 months following termination of employment of the
      Participant with the Company and all Subsidiaries, or not later than one year
      following a permanent and total disability within the meaning of Section
      22(e)(3) of the Code, as and to the extent determined by the Committee to comply
      with the requirements of Section 422 of the Code. 

     

    (c)    Other
      Terms and Conditions; Nontransferability.    Any
      Incentive Stock Option granted hereunder shall contain such additional terms
      and
      conditions, not inconsistent with the terms of the Plan, as are deemed necessary
      or desirable by the Committee, which terms, together with the terms of the
      Plan,
      shall be intended and interpreted to cause such Incentive Stock Option to
      qualify as an “incentive stock option” under Section 422 of the Code. An Award
      Agreement for an Incentive Stock Option may provide that such Stock Option
      shall
      be treated as a Nonqualified Stock Option to the extent that certain
      requirements applicable to “incentive stock options” under the Code shall not be
      satisfied. An Incentive Stock Option shall by its terms be nontransferable
      other
      than by will or by the laws of descent and distribution, and shall be
      exercisable during the lifetime of a Participant only by such Participant.
      

     

    (d)    Disqualifying
      Dispositions.    If
      shares of Common Stock acquired by exercise of an Incentive Stock Option are
      disposed of within two years following the Date of Grant or one year following
      the transfer of such shares to the Participant upon exercise, the Participant
      shall, promptly following such disposition, notify the Company in writing of
      the
      date and terms of such disposition and provide such other information regarding
      the disposition as the Company may reasonably require. 

     

    6.9    Repricing
      Prohibited.    Subject
      to the adjustment provisions contained in Section 4.2 hereof, without the prior
      approval of the Company’s stockholders, evidenced by a majority of votes cast,
      neither the Committee nor the Board shall cause the cancellation, substitution
      or amendment of a Stock Option that would have the effect of reducing the
      exercise price of such a Stock Option previously granted under the Plan, or
      otherwise approve any modification to such a Stock Option that would be treated
      as a “repricing” under the then applicable rules, regulations or listing
      requirements. 

     

    7.
         Stock Awards. 

     

    7.1    Grant
      of Stock Awards.    A
      Stock Award may be granted to any Eligible Person selected by the Committee.
      A
      Stock Award may be granted for past services, in lieu of bonus or other cash
      compensation, as directors’ compensation or for any other valid purpose as
      determined by the Committee. A Stock Award granted to an Eligible Person
      represents shares of Common Stock that are issued without restrictions on
      transfer and other incidents of ownership and free of forfeiture conditions,
      except as otherwise provided in the Plan and the Award Agreement. The Committee
      may, in connection with any Stock Award, require the payment of a specified
      purchase price. 

     

    7.2    Rights
      as Stockholder.    Subject
      to the foregoing provisions of this Section 10 and the applicable Award
      Agreement, upon the issuance of the Common Stock under a Stock Award the
      Participant shall have all rights of a stockholder with respect to the shares
      of
      Common Stock, including the right to vote the shares and receive all dividends
      and other distributions paid or made with respect thereto. 

    

    8.    Restricted
      Stock Awards. 

     

    8.1    Grant
      of Restricted Stock Awards.    A
      Restricted Stock Award may be granted to any Eligible Person selected by the
      Committee. The Committee may require the payment by the Participant of a
      specified purchase price in connection with any Restricted Stock Award.

     

    8.2    Vesting
      Requirements.    The
      restrictions imposed on shares granted under a Restricted Stock Award shall
      lapse in accordance with the vesting requirements specified by the Committee
      in
      the Award Agreement, provided that the Committee may accelerate the vesting
      of a
      Restricted Stock Award at any time. Such vesting requirements may be based
      on
      the continued Service of the Participant with the Company or its Affiliates
      for
      a specified time period (or periods) or on the attainment of specified
      performance goals established by the Committee in its discretion. If the vesting
      requirements of a Restricted Stock Award shall not be satisfied, the Award
      shall
      be forfeited and the shares of Common Stock subject to the Award shall be
      returned to the Company. 

     

    8.3    Restrictions.    Shares
      granted under any Restricted Stock Award may not be transferred, assigned or
      subject to any encumbrance, pledge, or charge until all applicable restrictions
      are removed or have expired, unless otherwise allowed by the Committee. Failure
      to satisfy any applicable restrictions shall result in the subject shares of
      the
      Restricted Stock Award being forfeited and returned to the Company. The
      Committee may require in an Award Agreement that certificates representing
      the
      shares granted under a Restricted Stock Award bear a legend making appropriate
      reference to the restrictions imposed, and that certificates representing the
      shares granted or sold under a Restricted Stock Award will remain in the
      physical custody of an escrow holder until all restrictions are removed or
      have
      expired. 

     

    8.4    Rights
      as Stockholder.    Subject
      to the foregoing provisions of this Section 8 and the applicable Award
      Agreement, the Participant shall have all rights of a stockholder with respect
      to the shares granted to the Participant under a Restricted Stock Award,
      including the right to vote the shares and receive all dividends and other
      distributions paid or made with respect thereto. The Committee may provide
      in an
      Award Agreement for the payment of dividends and distributions to the
      Participant at such times as paid to stockholders generally or at the times
      of
      vesting or other payment of the Restricted Stock Award. 

     

    8.5    Section
      83(b) Election.    If
      a Participant makes an election pursuant to Section 83(b) of the Code with
      respect to a Restricted Stock Award, the Participant shall file, within 30
      days
      following the Date of Grant, a copy of such election with the Company and with
      the Internal Revenue Service, in accordance with the regulations under Section
      83 of the Code. The Committee may provide in an Award Agreement that the
      Restricted Stock Award is conditioned upon the Participant’s making or
      refraining from making an election with respect to the Award under Section
      83(b)
      of the Code. 

     

    9.
         Change in Control. 

     

    9.1    Effect
      of Change in Control.    Except
      to the extent an Award Agreement provides for a different result (in which
      case
      the Award Agreement will govern and this Section 9 of the Plan shall not be
      applicable), notwithstanding anything elsewhere in the Plan or any rules adopted
      by the Committee pursuant to the Plan to the contrary, if a Triggering Event
      shall occur within the 12-month period beginning with a Change in Control of
      the
      Company, then, effective immediately prior to such Triggering Event, each
      outstanding Stock Option, to the extent that it shall not otherwise have become
      vested and exercisable, shall automatically become fully and immediately vested
      and exercisable, without regard to any otherwise applicable vesting requirement.
      

     

    9.2    Definitions 

     

    (a)    Cause.
         For
      purposes of this Section 9, the term “Cause” shall mean a determination by the
      Committee that a Participant (i) has been convicted of, or entered a plea of
      nolo contendere to, a crime that constitutes a felony under Federal or state
      law, (ii) has engaged in willful gross misconduct in the performance of the
      Participant’s duties to the Company or an Affiliate or (iii) has committed a
      material breach of any written agreement with the Company or any Affiliate
      with
      respect to confidentiality, non-competition, non-solicitation or similar
      restrictive covenant. Subject to the first sentence of Section 9.1 hereof,
      in
      the event that a Participant is a party to an employment agreement with the
      Company or any Affiliate that defines a termination on account of “Cause” (or a
      term having similar meaning), such definition shall apply as the definition
      of a
      termination on account of “Cause” for purposes hereof, but only to the extent
      that such definition provides the Participant with greater rights. A termination
      on account of Cause shall be communicated by written notice to the Participant,
      and shall be deemed to occur on the date such notice is delivered to the
      Participant. 

     

    (b)    Change
      in Control.    For
      purposes of this Section 9, a “Change in Control” shall be deemed to have
      occurred upon: 

     

    (i)
      the
      occurrence of an acquisition by any individual, entity or group (within the
      meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
      beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
      Exchange Act) of a percentage of the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the
      election of directors (the “Company Voting Securities”) (but excluding (1) any
      acquisition directly from the Company (other than an acquisition by virtue
      of
      the exercise of a conversion privilege of a security that was not acquired
      directly from the Company), (2) any acquisition by the Company or an Affiliate
      and (3) any acquisition by an employee benefit plan (or related trust) sponsored
      or maintained by the Company or any Affiliate) (an “Acquisition”) that is thirty
      percent (30%) or more of the Company Voting Securities; 

     

    (ii)
      at
      any time during a period of two (2) consecutive years or less, individuals
      who
      at the beginning of such period constitute the Board (and any new directors
      whose election by the Board or nomination for election by the Company’s
      stockholders was approved by a vote of at least two-thirds (2/3) of the
      directors then still in office who either were directors at the beginning of
      the
      period or whose election or nomination for election was so approved) cease
      for
      any reason (except for death, Disability or voluntary retirement) to constitute
      a majority thereof;

     

    (iii)
      an
      Acquisition that is fifty percent (50%) or more of the Company Voting
      Securities; 

     

    (iv)
      the
      consummation of a merger, consolidation, reorganization or similar corporate
      transaction, whether or not the Company is the surviving company in such
      transaction, other than a merger, consolidation, or reorganization that would
      result in the Persons who are beneficial owners of the Company Voting Securities
      outstanding immediately prior thereto continuing to beneficially own, directly
      or indirectly, in substantially the same proportions, at least fifty percent
      (50%) of the combined voting power of the Company Voting Securities (or the
      voting securities of the surviving entity) outstanding immediately after such
      merger, consolidation or reorganization; 

     

    (v)
      the
      sale or other disposition of all or substantially all of the assets of the
      Company; 

     

    (vi)
      the
      approval by the stockholders of the Company of a complete liquidation or
      dissolution of the Company; or 

     

    (vii)
      the
      occurrence of any transaction or event, or series of transactions or events,
      designated by the Board in a duly adopted resolution as representing a change
      in
      the effective control of the business and affairs of the Company, effective
      as
      of the date specified in any such resolution. 

     

    (c)    Constructive
      Termination.    For
      purposes of this Section 9, a “Constructive Termination” shall mean a
      termination of employment by a Participant within sixty (60) days following
      the
      occurrence of any one or more of the following events without the Participant’s
      written consent (i) any reduction in position, title (for Vice Presidents or
      above), overall responsibilities, level of authority, level of reporting (for
      Vice Presidents or above), base compensation, annual incentive compensation
      opportunity, aggregate employee benefits or (ii) a request that the
      Participant’s location of employment be relocated by more than fifty (50) miles.
      Subject to the first sentence of Section 9.1 hereof, in the event that a
      Participant is a party to an employment agreement with the Company or any
      Affiliate (or a successor entity) that defines a termination on account of
      “Constructive Termination,” “Good Reason” or “Breach of Agreement” (or a term
      having a similar meaning), such definition shall apply as the definition of
      “Constructive Termination” for purposes hereof in lieu of the foregoing, but
      only to the extent that such definition provides the Participant with greater
      rights. A Constructive Termination shall be communicated by written notice
      to
      the Committee, and shall be deemed to occur on the date such notice is delivered
      to the Committee, unless the circumstances giving rise to the Constructive
      Termination are cured within five (5) days of such notice. 

     

    (d)    Triggering
      Event.    For
      purposes of this Section 9, a “Triggering Event” shall mean (i) the termination
      of Service of a Participant by the Company or an Affiliate (or any successor
      thereof) other than on account of death, Disability or Cause, (ii) the
      occurrence of a Constructive Termination or (iii) any failure by the Company
      (or
      a successor entity) to assume, replace, convert or otherwise continue any Award
      in connection with the Change in Control (or another corporate transaction
      or
      other change effecting the Common Stock) on the same terms and conditions as
      applied immediately prior to such transaction, except for equitable adjustments
      to reflect changes in the Common Stock pursuant to Section 4.2 hereof.

     

    9.3    Excise
      Tax Limit.    In
      the event that the vesting of Awards together with all other payments and the
      value of any benefit received or to be received by a Participant would result
      in
      all or a portion of such payment being subject to the excise tax under Section
      4999 of the Code, then the Participant’s payment shall be either (i) the full
      payment or (ii) such lesser amount that would result in no portion of the
      payment being subject to excise tax under Section 4999 of the Code (the “Excise
      Tax”), whichever of the foregoing amounts, taking into account the applicable
      Federal, state, and local employment taxes, income taxes, and the Excise Tax,
      results in the receipt by the Participant, on an after-tax basis, of the
      greatest amount of the payment notwithstanding that all or some portion of
      the
      payment may be taxable under Section 4999 of the Code. All determinations
      required to be made under this Section 9 shall be made by Malone & Bailey,
      PLLC or any other accounting firm which is the Company’s outside auditor
      immediately prior to the event triggering the payments that are subject to
      the
      Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm
      to provide detailed supporting calculations of its determinations to the Company
      and the Participant. All fees and expenses of the Accounting Firm shall be
      borne
      solely by the Company. The Accounting Firm’s determinations must be made with
      substantial authority (within the meaning of Section 6662 of the Code). For
      the
      purposes of all calculations under Section 280G of the Code and the application
      of this Section 9.3, all determinations as to present value shall be made using
      120 percent of the applicable Federal rate (determined under Section 1274(d)
      of
      the Code) compounded semiannually, as in effect on December 30, 2004.

     

    10.
         Forfeiture Events. 

     

    10.1    General.
         The
      Committee may specify in an Award Agreement at the time of the Award that the
      Participant’s rights, payments and benefits with respect to an Award shall be
      subject to reduction, cancellation, forfeiture or recoupment upon the occurrence
      of certain specified events, in addition to any otherwise applicable vesting
      or
      performance conditions of an Award. Such events shall include, but shall not
      be
      limited to, termination of Service for cause, violation of material Company
      policies, breach of non-competition, confidentiality or other restrictive
      covenants that may apply to the Participant, or other conduct by the Participant
      that is detrimental to the business or reputation of the Company. 

     

    10.2    Termination
      for Cause.    Unless
      otherwise provided by the Committee and set forth in an Award Agreement, if
      a
      Participant’s employment with the Company or any Affiliate shall be terminated
      for cause, the Company may, in its sole discretion, immediately terminate such
      Participant’s right to any further payments, vesting or exercisability with
      respect to any Award in its entirety. In the event a Participant is party to
      an
      employment (or similar) agreement with the Company or any Affiliate that defines
      the term “cause,” such definition shall apply for purposes of the Plan. The
      Company shall have the power to determine whether the Participant has been
      terminated for cause and the date upon which such termination for cause occurs.
      Any such determination shall be final, conclusive and binding upon the
      Participant. In addition, if the Company shall reasonably determine that a
      Participant has committed or may have committed any act which could constitute
      the basis for a termination of such Participant’s employment for cause, the
      Company may suspend the Participant’s rights to exercise any option, receive any
      payment or vest in any right with respect to any Award pending a determination
      by the Company of whether an act has been committed which could constitute
      the
      basis for a termination for “cause” as provided in this Section 10.2.

     

    11.
         General Provisions. 

     

    11.1    Award
      Agreement.    To
      the extent deemed necessary by the Committee, an Award under the Plan shall
      be
      evidenced by an Award Agreement in a written or electronic form approved by
      the
      Committee setting forth the number of shares of Common Stock or units subject
      to
      the Award, the exercise price, base price, or purchase price of the Award,
      the
      time or times at which an Award will become vested, exercisable or payable
      and
      the term of the Award. The Award Agreement may also set forth the effect on
      an
      Award of termination of Service under certain circumstances. The Award Agreement
      shall be subject to and incorporate, by reference or otherwise, all of the
      applicable terms and conditions of the Plan, and may also set forth other terms
      and conditions applicable to the Award as determined by the Committee consistent
      with the limitations of the Plan. Award Agreements evidencing Incentive Stock
      Options shall contain such terms and conditions as may be necessary to meet
      the
      applicable provisions of Section 422 of the Code. The grant of an Award under
      the Plan shall not confer any rights upon the Participant holding such Award
      other than such terms, and subject to such conditions, as are specified in
      the
      Plan as being applicable to such type of Award (or to all Awards) or as are
      expressly set forth in the Award Agreement. The Committee need not require
      the
      execution of an Award Agreement by a Participant, in which case, acceptance
      of
      the Award by the Participant shall constitute agreement by the Participant
      to
      the terms, conditions, restrictions and limitations set forth in the Plan and
      the Award Agreement as well as the administrative guidelines of the Company
      in
      effect from time to time. 

     

    11.2    No
      Assignment or Transfer; Beneficiaries.    Except
      as provided in Section 6.7 hereof, Awards under the Plan shall not be assignable
      or transferable by the Participant, except by will or by the laws of descent
      and
      distribution, and shall not be subject in any manner to assignment, alienation,
      pledge, encumbrance or charge. Notwithstanding the foregoing, the Committee
      may
      provide in the terms of an Award Agreement that the Participant shall have
      the
      right to designate a beneficiary or beneficiaries who shall be entitled to
      any
      rights, payments or other benefits specified under an Award following the
      Participant’s death. During the lifetime of a Participant, an Award shall be
      exercised only by such Participant or such Participant’s guardian or legal
      representative. In the event of a Participant’s death, an Award may to the
      extent permitted by the Award Agreement be exercised by the Participant’s
      beneficiary as designated by the Participant in the manner prescribed by the
      Committee or, in the absence of an authorized beneficiary designation, by the
      legatee of such Award under the Participant’s will or by the Participant’s
      estate in accordance with the Participant’s will or the laws of descent and
      distribution, in each case in the same manner and to the same extent that such
      Award was exercisable by the Participant on the date of the Participant’s death.

     

    11.3    Deferrals
      of Payment.    The
      Committee may in its discretion permit a Participant to defer the receipt of
      payment of cash or delivery of shares of Common Stock that would otherwise
      be
      due to the Participant by virtue of the exercise of a right or the satisfaction
      of vesting or other conditions with respect to an Award. If any such deferral
      is
      to be permitted by the Committee, the Committee shall establish rules and
      procedures relating to such deferral in a manner intended to comply with the
      requirements of Section 409A of the Code, including, without limitation, the
      time when an election to defer may be made, the time period of the deferral
      and
      the events that would result in payment of the deferred amount, the interest
      or
      other earnings attributable to the deferral and the method of funding, if any,
      attributable to the deferred amount. 

     

    11.4    Rights
      as Stockholder.    A
      Participant shall have no rights as a holder of shares of Common Stock with
      respect to any unissued securities covered by an Award until the date the
      Participant becomes the holder of record of such securities. Except as provided
      in Section 4.2 hereof, no adjustment or other provision shall be made for
      dividends or other stockholder rights, except to the extent that the Award
      Agreement provides for dividend payments or dividend equivalent rights.

     

    11.5    Employment
      or Service.    Nothing
      in the Plan, in the grant of any Award or in any Award Agreement shall confer
      upon any Eligible Person any right to continue in the Service of the Company
      or
      any of its Affiliates, or interfere in any way with the right of the Company
      or
      any of its Affiliates to terminate the Participant’s employment or other service
      relationship for any reason at any time. 

     

    11.6    Securities
      Laws.    No
      shares of Common Stock will be issued or transferred pursuant to an Award unless
      and until all then applicable requirements imposed by Federal and state
      securities and other laws, rules and regulations and by any regulatory agencies
      having jurisdiction, and by any exchanges upon which the shares of Common Stock
      may be listed, have been fully met. As a condition precedent to the issuance
      of
      shares pursuant to the grant or exercise of an Award, the Company may require
      the Participant to take any reasonable action to meet such requirements. The
      Committee may impose such conditions on any shares of Common Stock issuable
      under the Plan as it may deem advisable, including, without limitation,
      restrictions under the Securities Act of 1933, as amended, under the
      requirements of any exchange upon which such shares of the same class are then
      listed, and under any blue sky or other securities laws applicable to such
      shares. The Committee may also require the Participant to represent and warrant
      at the time of issuance or transfer that the shares of Common Stock are being
      acquired only for investment purposes and without any current intention to
      sell
      or distribute such shares. 

     

    11.7    Tax
      Withholding.    The
      Participant shall be responsible for payment of any taxes or similar charges
      required by law to be withheld from an Award or an amount paid in satisfaction
      of an Award, which shall be paid by the Participant on or prior to the payment
      or other event that results in taxable income in respect of an Award. The Award
      Agreement may specify the manner in which the withholding obligation shall
      be
      satisfied with respect to the particular type of Award. 

     

    11.8    Unfunded
      Plan.    The
      adoption of the Plan and any reservation of shares of Common Stock or cash
      amounts by the Company to discharge its obligations hereunder shall not be
      deemed to create a trust or other funded arrangement. Except upon the issuance
      of Common Stock pursuant to an Award, any rights of a Participant under the
      Plan
      shall be those of a general unsecured creditor of the Company, and neither
      a
      Participant nor the Participant’s permitted transferees or estate shall have any
      other interest in any assets of the Company by virtue of the Plan.
      Notwithstanding the foregoing, the Company shall have the right to implement
      or
      set aside funds in a grantor trust, subject to the claims of the Company’s
      creditors or otherwise, to discharge its obligations under the Plan.

     

    11.9    Other
      Compensation and Benefit Plans.    The
      adoption of the Plan shall not affect any other share incentive or other
      compensation plans in effect for the Company or any Affiliate, nor shall the
      Plan preclude the Company from establishing any other forms of share incentive
      or other compensation or benefit program for employees of the Company or any
      Affiliate. The amount of any compensation deemed to be received by a Participant
      pursuant to an Award shall not constitute includable compensation for purposes
      of determining the amount of benefits to which a Participant is entitled under
      any other compensation or benefit plan or program of the Company or an
      Affiliate, including, without limitation, under any pension or severance
      benefits plan, except to the extent specifically provided by the terms of any
      such plan. 

     

    11.10    Plan
      Binding on Transferees.    The
      Plan shall be binding upon the Company, its transferees and assigns, and the
      Participant, the Participant’s executor, administrator and permitted transferees
      and beneficiaries. 

     

    11.11    Severability.
         If
      any provision of the Plan or any Award Agreement shall be determined to be
      illegal or unenforceable by any court of law in any jurisdiction, the remaining
      provisions hereof and thereof shall be severable and enforceable in accordance
      with their terms, and all provisions shall remain enforceable in any other
      jurisdiction. 

     

    11.12    Foreign
      Jurisdictions.    The
      Committee may adopt, amend and terminate such arrangements and grant such
      Awards, not inconsistent with the intent of the Plan, as it may deem necessary
      or desirable to comply with any tax, securities, regulatory or other laws of
      other jurisdictions with respect to Awards that may be subject to such laws.
      The
      terms and conditions of such Awards may vary from the terms and conditions
      that
      would otherwise be required by the Plan solely to the extent the Committee
      deems
      necessary for such purpose. Moreover, the Board may approve such supplements
      to
      or amendments, restatements or alternative versions of the Plan, not
      inconsistent with the intent of the Plan, as it may consider necessary or
      appropriate for such purposes, without thereby affecting the terms of the Plan
      as in effect for any other purpose. 

     

    11.13    Substitute
      Awards in Corporate Transactions.    Nothing
      contained in the Plan shall be construed to limit the right of the Committee
      to
      grant Awards under the Plan in connection with the acquisition, whether by
      purchase, merger, consolidation or other corporate transaction, of the business
      or assets of any corporation or other entity. Without limiting the foregoing,
      the Committee may grant Awards under the Plan to an employee or director of
      another corporation who becomes an Eligible Person by reason of any such
      corporate transaction in substitution for awards previously granted by such
      corporation or entity to such person. The terms and conditions of the substitute
      Awards may vary from the terms and conditions that would otherwise be required
      by the Plan solely to the extent the Committee deems necessary for such purpose.
      

     

    11.14
      Governing Law. The
      Plan
      and all rights hereunder shall be subject to and interpreted in accordance
      with
      the laws of the State
      of Idaho,
      without
      reference to the principles of conflicts of laws, and to applicable Federal
      securities laws. 

    

    11.15
      Performance Based Awards.    For
      purposes of Stock Awards and Restricted Stock Awards granted under the Plan
      that
      are intended to qualify as “performance-based” compensation under Section 162(m)
      of the Code, such Awards shall be granted to the extent necessary to satisfy
      the
      requirements of Section 162(m) of the Code. 

    

    12.
         Effective Date; Amendment and Termination.

     

    12.1    Effective
      Date.    The
      Plan shall become effective following its adoption by the Board. The term of
      the
      Plan shall be ten (10) years from the date of adoption by the Board, subject
      to
      Section 12.3 hereof. 

     

    12.2    Amendment.
         
      The Board may at any time and from time to time and in any respect, amend or
      modify the Plan. The Board may seek the approval of any amendment or
      modification by the Company’s stockholders to the extent it deems necessary or
      advisable in its discretion for purposes of compliance with Section 162(m)
      or
      Section 422 of the Code, or exchange or securities market or for any other
      purpose. No amendment or modification of the Plan shall adversely affect any
      Award theretofore granted without the consent of the Participant or the
      permitted transferee of the Award. 

     

    12.3    Termination.
         The
      Plan shall terminate on the tenth anniversary of the date of its adoption by
      the
      Board. The Board may, in its discretion and at any earlier date, terminate
      the
      Plan. Notwithstanding the foregoing, no termination of the Plan shall adversely
      affect any Award theretofore granted without the consent of the Participant
      or
      the permitted transferee of the Award.

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