Document:

ARGYLE
      CAPITAL MANAGEMENT CORPORATION

    14
      EAST
      82ND
      STREET

    NEW
      YORK,
      NY 10028

     

    

      

      

      February
        9, 2007

      

      SpatiaLight,
        Inc. 

      Attn:
        David Hakala

      5
        Hamilton Landing, Suite 100

      Novata,
        California 94949

      

      Re:
        Prepayment of Interest on Promissory Notes 

      

      Gentlemen:

      

      Please
        refer to the Promissory Notes payable in the aggregate principal amount of
        $1,188,000 (the “Notes”) payable to the order of Argyle Capital Management
        Corporation (“Argyle”) and the various agreements between SpatiaLight, Inc.
        (“SpatiaLight”) and Argyle relating to the Notes. From time to time, SpatiaLight
        has prepaid interest due on the Notes by the issuance of shares of SpatiaLight
        common stock, $.01 par value. Existing documentation relating to the prepayment
        of interest does not adequately establish the intention of Argyle and
        SpatiaLight in the event that the Notes are repaid or converted according
        to
        their terms prior to maturity. 

      

      This
        letter confirms and acknowledges that it is, and at all times has been, our
        understanding that in the event of Argyle’s request that any Note is converted
        into shares of common stock prior to its maturity, Argyle will return to
        SpatiaLight those shares of SpatiaLight common stock issued for unearned
        interest on such Note. 

      

      We
        acknowledge that this letter evidences our understanding of the obligations
        of
        Argyle at any time under the Notes, whether prior to or after the date hereof,
        and that Argyle will not be allowed to make any claim or assert any position
        that is different from the foregoing understanding.

      

      

      ARGYLE
        CAPITAL MANAGEMENT CORPORATION

      

      By:
        /s/
        Robert A. Olins

      _______________________________________________

      Robert
        A.
        OlinsAGREEMENT
      AND PLAN OF MERGER

     

    BY
      AND
      AMONG

     

    GOFISH
      CORPORATION, BM ACQUISITION CORP, INC.,

     

    BOLT,
      INC.

     

    AND

     

    THE
      INDEMNIFICATION REPRESENTATIVE

     

    February
      11, 2007

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    AGREEMENT
      AND PLAN OF MERGER

     

    Agreement
      entered into as of February 11, 2007 by and among GoFish Corporation, a Nevada
      corporation (the “Buyer”), BM Acquisition Corp Inc., a Delaware corporation and
      a wholly-owned subsidiary of the Buyer (the “Transitory Subsidiary”), Bolt,
      Inc., a/k/a Bolt Media, Inc. a Delaware corporation (the “Company”) and John
      Davis (the “Indemnification Representative”). The Buyer, the Transitory
      Subsidiary and the Company are referred to collectively herein as the
“Parties.”

     

    This
      Agreement contemplates a merger of the Company with and into the Transitory
      Subsidiary. In such Merger (as defined below), the stockholders of the Company
      will receive Merger Consideration (as defined below) in exchange for their
      capital stock of the Company.

     

    Buyer,
      Transitory Subsidiary, and the Company desire that the Merger qualifies as
      a
“plan of reorganization” under Section 368(a) of the Internal Revenue Code of
      1986, as amended (the “Code”).

     

    As
      a
      condition and further inducement to Buyer to enter into this Agreement and
      incur
      the obligations set forth herein, Aaron Cohen, Jason Gould and Lou Kerner (each,
      a “Major Stockholder”) concurrently herewith are entering into a Stockholders
      Support Agreement (the “Stockholders Support Agreement”), dated as of the date
      hereof with Buyer, in the form attached hereto as Exhibit
      A,
      pursuant to which each such Major Stockholder has, among other things, upon
      the
      terms and subject to the conditions set forth therein, agreed (i) to vote
      all Company Shares that are beneficially owned by him in favor of the adoption
      of this Agreement and the approval of the Merger and (ii) not to vote any
      Company Shares in favor of any other acquisition (whether by way of merger,
      consolidation, share exchange, stock purchase or asset purchase) of all or
      a
      majority of the outstanding capital stock or assets of the Company other than
      a
      Superior Offer (as defined below).

     

    Now,
      therefore, in consideration of the representations, warranties and covenants
      herein contained, the Parties agree as follows.

     

    ARTICLE
      I

     

    THE
      MERGER

     

    1.1  The
      Merger.
      Upon
      and subject to the terms and conditions of this Agreement, the Company shall
      merge with and into the Transitory Subsidiary (with such merger referred to
      herein as the “Merger”) at the Effective Time (as defined below). From and after
      the Effective Time, the separate corporate existence of the Company shall cease
      and the Transitory Subsidiary shall continue as the surviving corporation in
      the
      Merger (the “Surviving Corporation”). The “Effective Time” shall be the time at
      which the Surviving Corporation files a certificate of merger or other
      appropriate documents prepared and executed in accordance with
      Section 251(c) of the Delaware General Corporation Law (the “Certificate of
      Merger”) with the Secretary of State of the State of Delaware. The Merger shall
      have the effects set forth in Section 259 of the Delaware General
      Corporation Law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2  The
      Closing.
      The
      closing of the transactions contemplated by this Agreement (the “Closing”) shall
      take place at the offices of McGuireWoods LLP in New York, New York, commencing
      at 9:00 a.m. local time on March 15, 2007, or, if all of the conditions to
      the obligations of the Parties to consummate the transactions contemplated
      hereby have not been satisfied or waived by such date, on such mutually
      agreeable later date up to the Termination Date as soon as practicable (and
      in
      any event not later than three business days) after the satisfaction or waiver
      of all conditions (excluding the delivery of any documents to be delivered
      at
      the Closing by any of the Parties) set forth in Article V hereof (the
“Closing Date”).

     

    1.3  Actions
      at the Closing.
      At the
      Closing:

     

    (a)  the
      Company shall deliver to the Buyer and the Transitory Subsidiary the various
      certificates, instruments and documents referred to in
      Section 5.2;

     

    (b)  the
      Buyer
      and the Transitory Subsidiary shall deliver to the Company the various
      certificates, instruments and documents referred to in
      Section 5.3;

     

    (c)  the
      Surviving Corporation shall file with the Secretary of State of the State of
      Delaware the Certificate of Merger;

     

    (d)  each
      of
      the stockholders of record of the Company immediately prior to the Effective
      Time (the “Company Stockholders”) shall deliver to the Buyer the certificate(s)
      representing his, her or its Company Shares (as defined below);

     

    (e)  the
      Buyer
      shall deliver certificates for the shares of Buyer Common Stock to each former
      Company Stockholder in accordance with Section 1.5, and

     

    (f)  the
      Buyer, the Indemnification Representative and US Bank Trust National Association
      (the “Escrow Agent”) shall execute and deliver an
      Escrow
      Agreement attached hereto as Exhibit B
      (the
“Escrow Agreement”) and the Buyer shall deliver to the Escrow Agent (x) a
      certificate for the Escrow Shares being placed in escrow on the Closing Date
      pursuant to Section 1.9 (collectively, the “Escrow Fund”). 

     

    1.4  Additional
      Action.
      The
      Surviving Corporation may, at any time after the Effective Time, take any
      action, including executing and delivering any document, in the name and on
      behalf of either the Company or the Transitory Subsidiary, in order to
      consummate the transactions contemplated by this Agreement.

     

    1.5  Merger
      Consideration; Conversion of Shares.
      The
      aggregate consideration that the Company Stockholders will be entitled to
      receive by virtue of the Merger shall be the Buyer Common Stock issuable as
      set
      forth below (collectively, the “Merger Consideration”).

     

    (a)  Conversion
      of Shares.
      At the
      Effective Time, by virtue of the Merger and without any action on the part
      of
      any Party or the holder of any of the following securities:

     

    (i)  Each
      share of Preferred Stock, $0.001 par value per share, of the Company (“Preferred
      Shares”; and, together with the Common Shares, the “Company Shares”) issued and
      outstanding immediately prior to the Effective Time and not converted into
      Common Shares at the Effective Time (other than Preferred Shares owned
      beneficially by the Buyer or the Transitory Subsidiary, Dissenting Shares,
      any
      Preferred Shares held in the Company’s treasury and any Preferred Shares issued
      in the name of the Escrow Agent pursuant to Section 1.9) shall be converted
      into
      and represent the right to receive a number of shares of Buyer Common Stock
      equal to (x) the liquidation preference per share, including all accrued
      dividends thereon, for the applicable class or series to which such Preferred
      Share belongs divided by (y) the Average Pre-Signing Price.

     

    
      
        
        

      

      
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    (ii)  
      Ten
      percent (10%) of the shares of Buyer Common Stock issuable to each former holder
      of Preferred Shares shall be subject to the Escrow Agreement pursuant to Section
      1.3(f)
      (the
“Preferred Escrow Shares”).

     

    (iii)  Each
      share of common stock, $0.001 par value per share, of the Company (“Common
      Shares”) issued and outstanding immediately prior to the Effective Time (after
      giving effect to the conversion into Common Shares of all outstanding Preferred
      Shares that have converted into Common Shares prior to the Closing and excluding
      any Common Shares owned beneficially by the Buyer or the Transitory Subsidiary,
      Dissenting Shares, Common Shares held in the Company’s treasury and any Common
      Shares issued in the name of the Escrow Agent pursuant to Section 1.9) shall
      be
      converted into and represent the right to receive (subject to the provisions
      of
      Section 1.9) such number of shares of common stock, $0.001 par value per
      share, of the Buyer (“Buyer Common Stock”) as is equal to the Basic Common
      Conversion Ratio (as defined below), (the “Basic Shares”), allocated to the
      Company Stockholders who are holders of Common Shares immediately prior to
      the
      Effective Time (including Common Shares issued upon conversion of Preferred
      Shares immediately prior to the Effective Time), allocated as follows: (x)
      0% of
      the Basic Shares shall be issued to Aaron Cohen, Jay Gould and Caron Kramer
      and
      other employees of the Company named on Schedule 1.5(a)(iii)
      (the
“Managing Shareholders”), allocated among them in the percentages set forth on
      Schedule 1.5(a)(iii),
      and (y)
      100% of the Basic Shares shall be issued to the Company Stockholders holding
      Common Shares other than the Managing Shareholders (the “Non-Managing
      Shareholders”), allocated on a pro rata basis according to the amount of Common
      Shares held by each such Non-Managing Shareholder in proportion to the aggregate
      amount of Common Shares held by all Non-Managing Shareholders. 

     

    The
      “Basic Common Conversion Ratio” shall be the result obtained by dividing (i)
      $500,000 by (ii) the number of outstanding Common Shares held by
      Non-Managing Shareholders immediately prior to the Effective Time (after giving
      effect to the exchange into Common Shares of all outstanding Preferred Shares
      and Options that have been converted into or exercised for Common Shares prior
      to the Closing), and dividing such amount by (iii) the greater of (A) the
      average of the last reported sale prices per share of the Buyer Common Stock
      on
      the NASD OTC Bulletin Board (the “OTCBB”) over the twenty (20) consecutive
      trading days ending on the trading day that is two (2) trading days prior to
      the
      date hereof and (B) if the transactions contemplated by this Agreement are
      publicly disclosed by Buyer prior to the date of this Agreement, the average
      of
      the last reported sale prices per share of the Buyer Common Stock on the OTCBB
      over the twenty (20) consecutive
      trading days ending on the trading day that is two (2) trading days prior to
      such public announcement not to exceed $4.50 per share of Buyer Common Stock,
      subject to equitable adjustment in the event of any stock split, stock dividend,
      reverse stock split or similar event affecting the Buyer Common Stock between
      the beginning of such twenty-day period and the Effective Time (the “Average
      Pre-Signing Price”). 

    

    
      
        
        

      

      
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    (iv)  
      Ten
      percent (10%) of the Basic Shares issuable to each former holder of Common
      Shares shall be subject to the Escrow Agreement pursuant to Section 1.3(f)
      (the
“Basic Escrow Shares”).

     

    (v)  In
      addition to the Basic Shares issuable pursuant to Section 1.5(a)(iii),
      those
      Persons holding Common Shares issued and outstanding immediately prior to the
      Effective Time (other than Common Shares owned beneficially by the Buyer or
      the
      Transitory Subsidiary, Dissenting Shares, Common Shares held in the Company’s
      treasury and any Common Shares issued in the name of the Escrow Agent pursuant
      to Section 1.9) shall receive, subject to the terms, conditions and restrictions
      set forth in Schedule 1.5(a)(v),
      such
      number of Shares of Buyer Common Stock (the “Subsequent Shares”) as follows: (x)
      80% of the Subsequent Shares shall be issued to the Managing Shareholders,
      allocated as set forth in Schedule 1.5(a)(iii)
      and (y)
      20% of the Subsequent Shares shall be issued to the Non-Managing Shareholders,
      allocated on a pro rata basis according to the amount of Common Shares held
      by
      each such Non-Managing Shareholder in proportion to the aggregate amount of
      Common Shares held by all Non-Managing Shareholders.

     

    The
      Basic
      Shares and the Subsequent Shares shall together be referred to herein as the
      “Merger Shares.”

     

    (vi)  
      In
      addition to being subject to the other restrictions on the Subsequent Shares,
      the first in time to be issued of the Subsequent Shares, in an amount equal
      to
      $1,500,000 divided by the Average Pre-Signing Price, issuable to each former
      holder of Common Shares shall be subject to the Escrow Agreement pursuant to
      Section 1.3(f)
      (the
“Subsequent Escrow Shares” and together with the Preferred Escrow Shares and the
      Basic Escrow Shares, the “Escrow Shares”).

     

    (vii)  Each
      Company Share held in the Company’s treasury immediately prior to the Effective
      Time, each Company Share owned beneficially by the Buyer or the Transitory
      Subsidiary and any Company Shares issued in the name of the Escrow Agent
      pursuant to Section 1.9 shall be cancelled and retired without payment of any
      consideration therefor.

     

    (viii)  Each
      share of common stock, $0.001 par value per share, of the Transitory Subsidiary
      issued and outstanding immediately prior to the Effective Time shall be
      converted into and thereafter evidence one share of common stock, $0.001 par
      value per share, of the Surviving Corporation.

     

    (b)  Indebtedness.
      All
      indebtedness of the Company evidenced by promissory notes outstanding
      immediately prior to the Effective Time shall be converted into and represent
      the right to receive a number of shares of Buyer Common Stock equal to (x)
      the
      principal and accrued interest thereon divided by (y) the Average Pre-Signing
      Price. 

     

    1.6  Dissenting
      Shares.
      

     

    
      
        
        

      

      
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    (a)  For
      purposes of this Agreement, “Dissenting Shares” means Company Shares held as of
      the Effective Time by a Company Stockholder who has not voted such Company
      Shares in favor of the adoption of this Agreement and the Merger and with
      respect to which appraisal shall have been duly demanded and perfected in
      accordance with Section 262 of the Delaware General Corporation Law and not
      effectively withdrawn or forfeited prior to the Effective Time. Dissenting
      Shares shall not be converted into or represent the right to receive Merger
      Consideration, unless such Company Stockholder shall have forfeited his, her
      or
      its right to appraisal under the Delaware General Corporation Law or properly
      withdrawn, his, her or its demand for appraisal. If such Company Stockholder
      has
      so forfeited or withdrawn his, her or its right to appraisal of Dissenting
      Shares, then (i) as of the occurrence of such event, such holder’s
      Dissenting Shares shall cease to be Dissenting Shares and shall be converted
      into and represent the right to receive the Merger Consideration issuable in
      respect of such Company Shares pursuant to Section 1.5, and (ii) and
      shall be exchangeable solely for the right to receive the applicable Merger
      Consideration.

     

    (b)  The
      Company shall give the Buyer (i) prompt notice of any written demands for
      appraisal of any Company Shares, withdrawals of such demands, and any other
      instruments that relate to such demands received by the Company and
      (ii) the opportunity to direct all negotiations and proceedings with
      respect to demands for appraisal under the Delaware General Corporation Law.
      The
      Company shall not, except with the prior written consent of the Buyer, make
      any
      payment with respect to any demands for appraisal of Company Shares or offer
      to
      settle or settle any such demands.

     

    1.7  Fractional
      Shares.
      No
      certificates or scrip representing fractional Merger Shares shall be issued
      to
      former Company Stockholders upon the surrender for exchange of Company Shares
      or
      certificates that, immediately prior to the Effective Time, represented Company
      Shares converted into Merger Shares pursuant to Section 1.5 (including any
      Company Shares referred to in the last sentence of Section 1.6(a))
      (“Certificates”), and Company Stockholders shall not be entitled to any voting
      rights, rights to receive any dividends or distributions or other rights as
      a
      stockholder of the Buyer with respect to any fractional Merger Shares that
      would
      have otherwise been issued to such Company Stockholder. In lieu of any
      fractional Merger Shares that would have otherwise been issued, each Company
      Stockholder that would have been entitled to receive a fractional Merger Share
      shall, upon proper surrender of such person’s Certificates, receive a cash
      payment equal to the closing price per share of the Buyer Common Stock on the
      OTCBB on the business day immediately preceding the Closing Date, multiplied
      by
      the fraction of a share that such Company Stockholder would otherwise be
      entitled to receive.

     

    1.8  Options
      and Warrants. 

     

    (a)  As
      of the
      Effective Time, the Company’s obligations under all unvested options to purchase
      Common Shares issued by the Company pursuant to the Company’s stock option
      plan (the
      “Option Plan”) or otherwise (collectively, “Options”) and the Option Plan,
      insofar as it relates to Options outstanding under such Plan immediately after
      the Effective Time, shall be assumed by the Buyer. Immediately after the
      Effective Time, each unvested Option outstanding immediately prior to the
      Effective Time shall be deemed to constitute an option to acquire, on the same
      terms and conditions as were applicable under such Option at the Effective
      Time,
      such number of shares of Buyer Common Stock as is equal to the number of Common
      Shares subject to the unexercised portion of such Option multiplied by the
      Basic
      Common Conversion Ratio (subject to the Lockup Agreement in the form attached
      hereto as Exhibit
      C
      (the
“Lockup Agreement”), with any fraction resulting from such multiplication to be
      rounded down to the nearest whole number). The exercise price per share of
      each
      such assumed Option shall be equal to the exercise price of such Option
      immediately prior to the Effective Time, divided by the Basic Common Conversion
      Ratio (rounded up to the nearest whole cent). The term, exercisability, vesting
      schedule, status as an “incentive stock option” under Section 422 of the
      Code, if applicable, and all of the other terms of the Options shall otherwise
      remain unchanged.

     

    
      
        
        

      

      
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    (b)  Prior
      to
      the Closing Date, the Company shall cause the holders of each vested Option
      outstanding immediately prior to the Effective Time to exercise for cash or
      by
      cashless exercise and in each case in accordance with the Option Plan (or if
      not
      issued pursuant to the Option Plan, pursuant to the applicable option agreement)
      all of his or her vested Options, such vested Options to, accordingly, be
      cancelled, terminated and extinguished immediately prior to the Effective Time
      in exchange for the underlying amount of Common Shares. The Company shall in
      its
      good faith discretion determine the terms of the cashless exercise provisions
      to
      be afforded to the holders of Options if and to the extent that Options do
      not
      contain cashless exercise provisions, provided, that such provisions shall
      be in
      form and substance agreed by the Buyer. 

     

    (c)  As
      soon
      as practicable after the Effective Time, the Buyer or the Surviving Corporation
      shall deliver to the holders of non-vested Options that remain outstanding
      after
      the Effective Time appropriate notices setting forth such holders’ rights
      pursuant to such Options, as amended by this Section 1.8,
      and the
      agreements evidencing such Options shall continue in effect on the same terms
      and conditions (subject to the amendments provided for in this
      Section 1.8
      and such
      notice).

     

    (d)  The
      Buyer
      shall take all corporate action necessary to reserve for issuance a sufficient
      number of shares of Buyer Common Stock for delivery upon exercise of the Options
      assumed in accordance with this Section 1.8.
      Within
      90 days after the Effective Time, the Buyer shall file a Registration Statement
      on Form S-8 (or any successor form) under the Securities Act of 1933 (as
      amended, the “Securities Act”) with respect to all shares of Buyer Common Stock
      subject to such Options that may be registered on a Form S-8, and shall use
      its best efforts to maintain the effectiveness of such Registration Statement
      for so long as such Options remain outstanding.

     

    (e)  The
      Company shall cause the termination, as of the Effective Time, of all unexpired
      and exercisable common stock purchase warrants issued by the Company prior
      to
      the Closing (the “Warrants”) which remain unexercised immediately prior to the
      Effective Time.

     

    (f)  The
      Company shall obtain, prior to the Closing, the consent from each holder of
      an
      Option or a Warrant to the amendment (in the case of Options) or termination
      (in
      the case of Warrants) of such Option or Warrant pursuant to this
      Section 1.8
      (unless
      such consent is not required under the terms of the Option Plan or other
      applicable agreement, instrument or Option grant).

     

    1.9  Escrow. 

     

    
      
        
        

      

      
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    (a)  On
      the
      Closing Date, the Buyer shall deliver to the Escrow Agent stock certificates
      (issued in the name of the Escrow Agent or its nominee) representing the Escrow
      Shares for the purpose of securing the indemnification obligations of the
      Indemnifying Stockholders (as defined in Section 6.1) set forth in this
      Agreement. The Escrow Fund shall be held by the Escrow Agent under the Escrow
      Agreement pursuant to the terms thereof. The Escrow Fund shall be held as a
      trust fund and shall not be subject to any lien, attachment, trustee process
      or
      any other judicial process of any creditor of any party, and shall be held
      and
      disbursed solely for the purposes and in accordance with the terms of the Escrow
      Agreement.

     

    (b)  The
      adoption of this Agreement and the approval of the Merger by the Company
      Stockholders shall constitute approval of the Escrow Agreement and of all of
      the
      arrangements relating thereto, including without limitation the placement of
      the
      Escrow Shares in escrow and the appointment of the Indemnification
      Representative.

     

    (c)  Within
      five (5) days of the date hereof, the Buyer shall deliver to the Escrow Agent
      $1,500,000 in cash to secure Buyers obligations pursuant to Article
      VII.

     

    (d)  Within
      five (5) days of the date hereof, the Company shall deliver to the Escrow Agent
      $1,750,000 in cash or, a certificate for Company Shares (issued in the name
      of
      the Escrow Agent or its nominee) in an amount equal to seven and one-half
      percent (7.5%) of the then-issued and outstanding shares of capital stock of
      the
      Company to secure the Company’s obligations in the event of a termination by the
      Buyer or the Company pursuant to Article VII. 

     

    1.10  Certificate
      of Incorporation and By-laws.
      

     

    (a)  The
      Certificate of Incorporation of the Transitory Subsidiary shall continue as
      the
      Certificate of Incorporation of the Surviving Corporation following the
      Effective Time.

     

    (b)  The
      By-laws of the Surviving Corporation immediately following the Effective Time
      shall be the same as the By-laws of the Transitory Subsidiary immediately prior
      to the Effective Time.

     

    1.11  No
      Further Rights.
      From
      and after the Effective Time, no Company Shares shall be deemed to be
      outstanding, and holders of Certificates shall cease to have any rights with
      respect thereto, except as provided herein or by law.

     

    1.12  Closing
      of Transfer Books.
      At the
      Effective Time, the stock transfer books of the Company shall be closed and
      no
      transfer of Company Shares shall thereafter be made. If, after the Effective
      Time, Certificates are presented to the Buyer or the Surviving Corporation,
      they
      shall be cancelled and exchanged for Merger Shares in accordance with
      Section 1.5, subject to Section 1.9 and to applicable law in the case
      of Dissenting Shares.

     

    1.13  Basic
      Shares.
      In the
      event that at any time, or from time to time, Basic Shares in excess of those
      issued at Closing become issuable pursuant to the terms of this Agreement,
      the
      Buyer shall promptly issue certificates for such Basic Shares and deliver such
      certificates to the Company Stockholders. 

     

    
      
        
        

      

      
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    ARTICLE
      II

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

     

    The
      Company represents and warrants to the Buyer that the statements contained
      in
      this Article II are true and correct, except as set forth in the disclosure
      schedule provided by the Company to the Buyer on the date hereof and accepted
      in
      writing by the Buyer (the “Disclosure Schedule”). The Disclosure Schedule shall
      be arranged in paragraphs corresponding to the numbered and lettered paragraphs
      contained in this Article II, and the disclosures in any paragraph of the
      Disclosure Schedule shall qualify only the corresponding paragraph in this
      Article II. For purposes of this Article II, the phrase “to the
      knowledge of the Company” or any phrase of similar import shall be deemed to
      refer to the actual knowledge of the following executive officers of the
      Company: Aaron Cohen and Jason Gould.

     

    2.1  Organization,
      Qualification and Corporate Power.
      The
      Company is a corporation duly organized, validly existing and in corporate
      and
      tax good standing under the laws of the State of Delaware. The Company is duly
      qualified to conduct business and is in corporate and tax good standing under
      the laws of each jurisdiction in which the nature of its businesses or the
      ownership or leasing of its properties requires such qualification, except
      where
      the failure to be so qualified or in good standing, individually or in the
      aggregate, has not had and would not reasonably be expected to have a Company
      Material Adverse Effect (as defined below). The Company has all requisite
      corporate power and authority to carry on the businesses in which it is engaged
      and to own and use the properties owned and used by it. The Company has
      furnished to the Buyer complete and accurate copies of its Certificate of
      Incorporation and By-laws. The Company is not in default under or in violation
      of any provision of its Certificate of Incorporation or By-laws. For purposes
      of
      this Agreement, “Company Material Adverse Effect” means a material adverse
      effect on the assets, business, condition (financial or otherwise), results
      of
      operations or future prospects of the Company and the Subsidiaries (as defined
      below), taken as a whole, excluding any changes, events or effects that are
      attributable to: (i) conditions that materially and adversely affect the general
      worldwide economy; (ii) conditions that materially and adversely affect the
      industry in which the Company and the Subsidiaries operate; (iii) any effect
      arising out of or attributable to the public announcement of the transactions
      contemplated by this Agreement or (iv) any effect arising out of or attributable
      to any action taken or failed to be taken by the Company or any of its
      Subsidiaries at the written request of Buyer or the Transitory Subsidiary.
      

     

    2.2  Capitalization.
      The
      capital stock of the Company authorized, issued and outstanding, on a
      fully-diluted basis, is set forth in Section 2.2 of the Disclosure Schedule.
      Section 2.2 of the Disclosure Schedule sets forth a complete and accurate
      list of (i) all stockholders of the Company, indicating the number and
      class or series of Company Shares held by each stockholder and (for Company
      Shares other than Common Shares) the number of Common Shares (if any) into
      which
      such Company Shares are convertible, (ii) all outstanding Options and
      Warrants, indicating (A) the holder thereof, (B) the number and class
      or series of Company Shares subject to each Option and Warrant and (for Company
      Shares other than Common Shares) the number of Common Shares (if any) into
      which
      such Company Shares are convertible, (C) the exercise price, date of grant,
      vesting schedule and expiration date for each Option or Warrant, and
      (D) any terms regarding the acceleration of vesting, and (iii) all
      stock option plans and other stock or equity-related plans of the Company.
      All
      of the issued and outstanding Company Shares are, and all Company Shares that
      may be issued upon exercise of Options or Warrants will be (upon issuance in
      accordance with their terms), duly authorized, validly issued, fully paid,
      nonassessable and free of all preemptive rights. Other than the Options and
      Warrants listed in Section 2.2 of the Disclosure Schedule, there are no
      outstanding or authorized options, warrants, rights, agreements or commitments
      to which the Company is a party or which are binding upon the Company providing
      for the issuance or redemption of any of its capital stock. There are no
      outstanding or authorized stock appreciation, phantom stock or similar rights
      with respect to the Company. There are no agreements to which the Company is
      a
      party or by which it is bound with respect to the voting (including without
      limitation voting trusts or proxies), registration under the Securities Act,
      or
      sale or transfer (including without limitation agreements relating to
      pre-emptive rights, rights of first refusal, co-sale rights or “drag-along”
rights) of any securities of the Company. To the knowledge of the Company,
      there
      are no agreements among other parties, to which the Company is not a party
      and
      by which it is not bound, with respect to the voting (including without
      limitation voting trusts or proxies) or sale or transfer (including without
      limitation agreements relating to rights of first refusal, co-sale rights or
      “drag-along” rights) of any securities of the Company. All of the issued and
      outstanding Company Shares were issued in compliance with applicable federal
      and
      state securities laws.

     

    
      
        
        

      

      
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    2.3  Authorization
      of Transaction.
      The
      Company has all requisite power and authority to execute and deliver this
      Agreement and to perform its obligations hereunder. The execution and delivery
      by the Company of this Agreement and, subject to the adoption of this Agreement
      and the approval of the Merger by a majority of the votes represented by the
      outstanding Company Shares entitled to vote on this Agreement and the Merger
      (the “Requisite Stockholder Approval”), the consummation by the Company of the
      transactions contemplated hereby have been duly and validly authorized by all
      necessary corporate action on the part of the Company. Without limiting the
      generality of the foregoing, the Board of Directors of the Company, at a meeting
      duly called and held, by the unanimous vote of all directors (i) determined
      that the Merger is fair and in the best interests of the Company and its
      stockholders, (ii) adopted this Agreement in accordance with the provisions
      of the Delaware General Corporation Law, and (iii) directed that this
      Agreement and the Merger be submitted to the stockholders of the Company for
      their adoption and approval and resolved to recommend that the stockholders
      of
      Company vote in favor of the adoption of this Agreement and the approval of
      the
      Merger. This Agreement has been duly and validly executed and delivered by
      the
      Company and constitutes a valid and binding obligation of the Company,
      enforceable against the Company in accordance with its terms, subject only
      to:
      (i) the effects of bankruptcy, insolvency, fraudulent conveyance,
      reorganization, moratorium and other similar laws relating to or affecting
      the
      enforcement of creditors’ rights generally and (ii) general equitable principles
      (whether considered in a proceeding in equity or at law) (collectively, the
      “Equitable Exceptions”).

     

    2.4  Noncontravention.
      Subject
      to the filing of the Certificate of Merger as required by the Delaware General
      Corporation Law, neither the execution and delivery by the Company of this
      Agreement, nor the consummation by the Company of the transactions contemplated
      hereby, will (a) conflict with or violate any provision of the Certificate
      of Incorporation or By-laws of the Company or the charter, By-laws or other
      organizational document of any Subsidiary (as defined below), (b) require on
      the
      part of the Company or any Subsidiary any filing with, or any permit,
      authorization, consent or approval of, any court, arbitrational tribunal,
      administrative agency or commission or other governmental or regulatory
      authority or agency (a “Governmental Entity”), (c) conflict with, result in
      a breach of, constitute (with or without due notice or lapse of time or both)
      a
      default under, result in the acceleration of obligations under, create in any
      party the right to terminate, modify or cancel, or require any notice, consent
      or waiver under, any contract or instrument to which the Company or any
      Subsidiary is a party or by which the Company or any Subsidiary is bound or
      to
      which any of their assets is subject, (d) result in the imposition of any
      Security Interest (as defined below) upon any assets of the Company or any
      Subsidiary or (e) violate any material: order, writ, injunction, decree,
      statute, rule or regulation applicable to the Company, any Subsidiary or any
      of
      their properties or assets. For purposes of this Agreement: “Security Interest”
means any mortgage, pledge, security interest, encumbrance, charge or other
      lien
      (whether arising by contract or by operation of law), other than
      (i) mechanic’s, materialmen’s, and similar liens, (ii) liens arising
      under worker’s compensation, unemployment insurance, social security,
      retirement, and similar legislation, and (iii) liens on goods in transit
      incurred pursuant to documentary letters of credit, in each case arising in
      the
      Ordinary Course of Business (as defined below) of the Company and not material
      to the Company; and “Ordinary Course of Business” means the ordinary course of
      the Company’s business, consistent with past custom and practice (including with
      respect to frequency and amount).

     

    
      
        
        

      

      
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    2.5  Subsidiaries.
      

     

    (a)  Section 2.5
      of the Disclosure Schedule sets forth: (i) the name of each corporation,
      partnership, joint venture or other entity in which the Company has, directly
      or
      indirectly, an equity interest representing 50% or more of the capital stock
      thereof or other equity interests therein (individually, a “Subsidiary” and,
      collectively, the “Subsidiaries”); (ii) the number and type of outstanding
      equity securities of each Subsidiary and a list of the holders thereof;
      (iii) the jurisdiction of organization of each Subsidiary; (iv) the
      names of the officers and directors of each Subsidiary; and (v) the
      jurisdictions in which each Subsidiary is qualified or holds licenses to do
      business as a foreign corporation or other entity.

     

    (b)  Each
      Subsidiary is a corporation duly organized, validly existing and in corporate
      and tax good standing under the laws of the jurisdiction of its incorporation.
      Each Subsidiary is duly qualified to conduct business and is in corporate and
      tax good standing under the laws of each jurisdiction in which the nature of
      its
      businesses or the ownership or leasing of its properties requires such
      qualification, except where the failure to be so qualified or in good standing,
      individually or in the aggregate, has not had and would not reasonably be
      expected to have a Company Material Adverse Effect. Each Subsidiary has all
      requisite power and authority to carry on the businesses in which it is engaged
      and to own and use the properties owned and used by it. The Company has
      delivered to the Buyer complete and accurate copies of the charter, By-laws
      or
      other organizational documents of each Subsidiary. No Subsidiary is in default
      under or in violation of any provision of its charter, By-laws or other
      organizational documents. All of the issued and outstanding shares of capital
      stock of each Subsidiary are duly authorized, validly issued, fully paid,
      nonassessable and free of preemptive rights. All shares of each Subsidiary
      that
      are held of record or owned beneficially by either the Company or any Subsidiary
      are held or owned free and clear of any restrictions on transfer (other than
      restrictions under the Securities Act and state securities laws), claims,
      Security Interests, options, warrants, rights, contracts, calls, commitments,
      equities and demands. There are no outstanding or authorized options, warrants,
      rights, agreements or commitments to which the Company or any Subsidiary is
      a
      party or which are binding on any of them providing for the issuance,
      disposition or acquisition of any capital stock of any Subsidiary. There are
      no
      outstanding stock appreciation, phantom stock or similar rights with respect
      to
      any Subsidiary. There are no voting trusts, proxies or other agreements or
      understandings with respect to the voting of any capital stock of any
      Subsidiary.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (c)  The
      Company does not control directly or indirectly or have any direct or indirect
      equity participation or similar interest in any corporation, partnership,
      limited liability company, joint venture, trust or other business association
      which is not a Subsidiary.

     

    2.6  Financial
      Statements.
      The
      Company has provided to the Buyer (a) the unaudited consolidated balance
      sheets and statements of income, changes in stockholders’ equity and cash flows
      of the Company as of and for each of the last three fiscal years; and
      (b) the unaudited consolidated balance sheet and statements of income,
      changes in stockholders’ equity and cash flows as of and for the nine months
      ended as of September 30, 2006 (the “Most Recent Balance Sheet Date”). Such
      financial statements (collectively, the “Financial Statements”) have been
      prepared on an accrual basis and on a consistent basis throughout the periods
      covered thereby, fairly present the financial condition, results of operations
      and cash flows of the Company and the Subsidiaries as of the respective dates
      thereof and for the periods referred to therein and are consistent with the
      books and records of the Company and the Subsidiaries; provided,
      however,
      that
      the Financial Statements referred to in clause (b) above are subject
      to normal recurring year-end adjustments (which will not be material) and do
      not
      include footnotes.

     

    2.7  Absence
      of Certain Changes.
      Since
      the Most Recent Balance Sheet Date, (a) there has occurred no event or
      development which, individually or in the aggregate, has had, or could
      reasonably be expected to have in the future, a Company Material Adverse Effect,
      and (b) neither the Company nor any Subsidiary has taken any of the actions
      set forth in paragraphs (a) through (n) of Section 4.4.

     

    2.8  Undisclosed
      Liabilities.
      None of
      the Company and its Subsidiaries has any liability (whether known or unknown,
      whether absolute or contingent, whether liquidated or unliquidated and whether
      due or to become due), except for (a) liabilities shown on the balance
      sheet referred to in clause (b) of Section 2.6 (the “Most Recent
      Balance Sheet”), (b) liabilities which have arisen since the Most Recent
      Balance Sheet Date in the Ordinary Course of Business and (c) contractual
      and other liabilities incurred in the Ordinary Course of Business which are
      not
      required by United States generally accepted accounting principles (“GAAP”) to
      be reflected on a balance sheet.

     

    2.9  Tax
      Matters.
      

     

    (a)  For
      purposes of this Agreement, the following terms shall have the following
      meanings:

     

    (i)  “Taxes”
      means all taxes, charges, fees, levies or other similar assessments or
      liabilities, including without limitation income, gross receipts, ad valorem,
      premium, value-added, excise, real property, personal property, sales, use,
      transfer, withholding, employment, unemployment insurance, social security,
      business license, business organization, environmental, workers compensation,
      payroll, profits, license, lease, service, service use, severance, stamp,
      occupation, windfall profits, customs, duties, franchise and other taxes imposed
      by the United States of America or any state, local or foreign government,
      or
      any agency thereof, or other political subdivision of the United States or
      any
      such government, and any interest, fines, penalties, assessments or additions
      to
      tax resulting from, attributable to or incurred in connection with any tax
      or
      any contest or dispute thereof.

     

    
      
        
        

      

      
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    (ii)  “Tax
      Returns” means all reports, returns, declarations, statements or other
      information required to be supplied to a taxing authority in connection with
      Taxes.

     

    (iii)  “Affiliated
      Group” means a group of corporations with which the Company or any Subsidiary
      has filed (or was required to file) consolidated, combined, unitary or similar
      Tax Returns.

     

    (iv)  “Affiliated
      Period” means any period in which the Company or a Subsidiary was a member of an
      Affiliated Group.

     

    (b)  Each
      of
      the Company and the Subsidiaries has filed on a timely basis all Tax Returns
      that it was required to file, and all such Tax Returns were complete and
      accurate in all material respects. Neither the Company nor any Subsidiary is
      or
      has ever been a member of a group of corporations with which it has filed (or
      been required to file) consolidated, combined or unitary Tax Returns, other
      than
      a group of which only the Company and the Subsidiaries are or were members.
      Each
      of the Company and the Subsidiaries has paid on a timely basis all Taxes that
      were due and payable. The unpaid Taxes of the Company and the Subsidiaries
      for
      tax periods through the Most Recent Balance Sheet Date do not exceed the
      accruals and reserves for Taxes (excluding accruals and reserves for deferred
      Taxes established to reflect timing differences between book and Tax income)
      set
      forth on the Most Recent Balance Sheet. Neither the Company nor any Subsidiary
      has any actual or potential liability for any Tax obligation of any taxpayer
      (including without limitation any affiliated group of corporations or other
      entities that included the Company or any Subsidiary during a prior period)
      other than the Company and the Subsidiaries. All Taxes that the Company or
      any
      Subsidiary is or was required by law to withhold or collect have been duly
      withheld or collected and, to the extent required, have been paid to the proper
      Governmental Entity.

     

    (c)  The
      Company has delivered to the Buyer complete and accurate copies of all federal
      income Tax Returns, examination reports and statements of deficiencies assessed
      against or agreed to by the Company or any Subsidiary prior to the Effective
      Time. The federal income Tax Returns of the Company and each Subsidiary have
      been audited by the Internal Revenue Service (“IRS”) or are closed by the
      applicable statute of limitations for all taxable years through the taxable
      year
      specified in Section 2.9(c) of the Disclosure Schedule. No examination or
      audit of any Tax Return of the Company or any Subsidiary by any Governmental
      Entity is currently in progress or, to the knowledge of the Company, threatened
      or contemplated. Neither the Company nor any Subsidiary has been informed by
      any
      jurisdiction that the jurisdiction believes that the Company or Subsidiary
      was
      required to file any Tax Return that was not filed. Neither the Company nor
      any
      Subsidiary has waived any statute of limitations with respect to Taxes or agreed
      to an extension of time with respect to a Tax assessment or
      deficiency.

     

    
      
        
        

      

      
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    (d)  Neither
      the Company nor any Subsidiary: (i) is a “consenting corporation” within
      the meaning of Section 341(f) of the Code, and none of the assets of the
      Company or the Subsidiaries are subject to an election under Section 341(f)
      of the Code; (ii) has been a United States real property holding
      corporation within the meaning of Section 897(c)(2) of the Code during the
      applicable period specified in Section 897(c)(l)(A)(ii) of the Code;
      (iii) except as set forth on Section 2.9(d) of the Disclosure Schedule, has
      made any payments, is obligated to make any payments, or is a party to any
      agreement that could obligate it to make any payments that may be treated as
      an
“excess parachute payment” under Section 280G of the Code; (iv) has
      any actual or potential liability for any Taxes of any person (other than the
      Company and its Subsidiaries) under Treasury Regulation Section 1.1502-6
      (or any similar provision of federal, state, local, or foreign law), or as
      a
      transferee or successor, by contract, or otherwise; or (v) is or has been
      required to make a basis reduction pursuant to Treasury Regulation
      Section 1.1502-20(b) or Treasury Regulation
      Section 1.337(d)-2(b).

     

    (e)  None
      of
      the assets of the Company or any Subsidiary: (i) is property that is
      required to be treated as being owned by any other person pursuant to the
      provisions of former Section 168(f)(8) of the Code; (ii) is
“tax-exempt use property” within the meaning of Section 168(h) of the Code;
      or (iii) directly or indirectly secures any debt the interest on which is
      tax exempt under Section 103(a) of the Code.

     

    (f)  Neither
      the Company nor any Subsidiary has undergone a change in its method of
      accounting resulting in an adjustment to its taxable income pursuant to
      Section 481 of the Code.

     

    (g)  No
      state
      or federal “net operating loss” or any capital losses or credits of the Company
      or any Subsidiary determined as of the period underlying any Tax Return of
      the
      Company prior to the Closing Date is subject to limitation on its use pursuant
      to the Code or Treasury Regulations thereunder (including without limitation
      Section 382 of the Code) or relevant provisions of state law as a result of
      any
“ownership change” within the meaning of Section 382(g) of the Code or
      comparable provisions of any state law or any other change in the ownership
      of
      stock of the Company or any Subsidiary occurring prior to the Closing Date.
      

     

    (h)  Neither
      the Company nor any Subsidiary has at any time participated in any "reportable
      transaction" within the meaning of Treasury Regulation Sections 1.6011-(b),
      made
      any disclosure or protective disclosure pursuant to section 6011 of the Code
      or
      the Treasury Regulations thereunder, or received any communication from the
      IRS
      or any state or local taxing authority with respect to any transaction which
      the
      IRS or any such state or local taxing authority has asserted is or may be a
      "reportable transaction."

     

    2.10  Assets.
      Each of
      the Company and the Subsidiaries owns or leases all tangible assets necessary
      for the conduct of its businesses as presently conducted. Each such material
      tangible asset is free from material defects, has been maintained in accordance
      with normal industry practice, is in good operating condition and repair
      (subject to normal wear and tear) and is suitable for the purposes for which
      it
      presently is used. No asset of the Company or any Subsidiary (tangible or
      intangible) is subject to any Security Interest.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    2.11  Owned
      Real Property.
      Neither
      the Company nor any Subsidiary or any of their respective predecessor entities
      owns, or at any time owned, any real property.

     

    2.12  Real
      Property Leases.
      Section 2.12 of the Disclosure Schedule lists all real property leased or
      subleased to or by the Company or any Subsidiary and lists the term of such
      lease, any extension and expansion options, and the rent payable thereunder.
      The
      Company has delivered to the Buyer complete and accurate copies of the leases
      and subleases listed in Section 2.12 of the Disclosure Schedule. With
      respect to each lease and sublease listed in Section 2.12 of the Disclosure
      Schedule:

     

    (a)  the
      lease
      or sublease is legal, valid, binding, enforceable and in full force and
      effect;

     

    (b)  the
      lease
      or sublease will continue to be legal, valid, binding, enforceable and in full
      force and effect immediately following the Closing in accordance with the terms
      thereof as in effect immediately prior to the Closing;

     

    (c)  neither
      the Company nor any Subsidiary nor, to the knowledge of the Company, any other
      party, is in breach or violation of, or default under, any such lease or
      sublease, and no event has occurred, is pending or, to the knowledge of the
      Company, is threatened, which, after the giving of notice, with lapse of time,
      or otherwise, would constitute a breach or default by the Company or any
      Subsidiary or, to the knowledge of the Company, any other party under such
      lease
      or sublease;

     

    (d)  neither
      the Company nor any Subsidiary has assigned, transferred, conveyed, mortgaged,
      deeded in trust or encumbered any interest in the leasehold or subleasehold;
      and

     

    (e)  the
      Company is not aware of any Security Interest, easement, covenant or other
      restriction applicable to the real property subject to such lease, except for
      recorded easements, covenants and other restrictions which do not materially
      impair the current uses or the occupancy by the Company or a Subsidiary of
      the
      property subject thereto.

     

    2.13  Intellectual
      Property.
      

     

    (a)  Each
      of
      the Company and the Subsidiaries owns or has the right to use all Intellectual
      Property (as defined below) necessary (i) to provide the services provided
      by
      the Company or the Subsidiaries to other parties, (together, the “Customer
      Deliverables”) and (ii) to operate the internal systems of the Company or the
      Subsidiaries that are material to its business or operations, including, without
      limitation, computer hardware systems, software applications and embedded
      systems (the “Internal Systems”; the Intellectual Property owned by or licensed
      to the Company or the Subsidiaries and incorporated in or underlying the
      Customer Deliverables or the Internal Systems is referred to herein as the
      “Company Intellectual Property”). Each item of Company Intellectual Property
      will be owned or available for use by the Surviving Corporation immediately
      following the Closing on substantially identical terms and conditions as it
      was
      immediately prior to the Closing. The Company or the appropriate Subsidiary
      has
      taken all reasonable measures to protect the proprietary nature of each item
      of
      Company Intellectual Property. To the knowledge of the Company, except for
      the
      works of authorship uploaded by the Company’s users to the websites hosted by
      the Company or in the course of services provided by the Company and works
      that
      are the subject of alleged copyright infringement as alleged in the Record
      Label
      Litigation (as defined in Section 2.18), (a) no other person or entity has
      any
      rights to any of the Company Intellectual Property owned by the Company or
      a
      Subsidiary (except pursuant to agreements or licenses specified in Section
      2.13(c) of the Disclosure Schedule), (b) no Company Intellectual Property
      infringes the rights of any other Person, and (c) no other person or entity
      is
      infringing, violating or misappropriating any of the Company Intellectual
      Property. For purposes of this Agreement, “Intellectual Property” means all (i)
      patents and patent applications, (ii) copyrights and registrations thereof,
      (iii) mask works and registrations and applications for registration thereof,
      (iv) computer software, data and documentation, (v) trade secrets and
      confidential business information, whether patentable or unpatentable and
      whether or not reduced to practice, know-how, manufacturing and production
      processes and techniques, research and development information, copyrightable
      works, financial, marketing and business data, pricing and cost information,
      business and marketing plans and customer and supplier lists and information,
      (vi) trademarks, service marks, trade names, domain names and applications
      and
      registrations therefor and (vii) other proprietary rights relating to any of
      the
      foregoing. Section 2.13(a) of the Disclosure Schedule lists each patent, patent
      application, copyright registration or application therefor, mask work
      registration or application therefor, and trademark, service mark and domain
      name registration or application therefor of the Company or any
      Subsidiary.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (b)  None
      of
      the Customer Deliverables, or the marketing, distribution, provision or use
      thereof by the Company, infringes or violates, or constitutes a misappropriation
      of, any Intellectual Property rights of any person or entity. None of the
      Internal Systems, or the use thereof by the Company, infringes or violates,
      or
      constitutes a misappropriation of, any Intellectual Property rights of any
      person or entity. Section 2.13(b) of the Disclosure Schedule lists any
      complaint, claim or notice, or written threat thereof, received by the Company
      or any Subsidiary alleging any such infringement, violation or misappropriation;
      and the Company has provided to the Buyer complete and accurate copies of all
      written documentation in the possession of the Company or any Subsidiary
      relating to any such complaint, claim, notice or threat. The Company has
      provided to the Buyer complete and accurate copies of all written documentation
      in the Company’s possession relating to claims or disputes known to the Company
      concerning any Company Intellectual Property.

     

    (c)  Section 2.13(c)
      of the Disclosure Schedule identifies each license or other agreement (or type
      of license or other agreement) pursuant to which the Company or a Subsidiary
      has
      licensed, distributed or otherwise granted any rights to any third party with
      respect to, any Company Intellectual Property.

     

    (d)  Section 2.13(d)
      of the Disclosure Schedule identifies each item of Company Intellectual Property
      that is owned by a party other than the Company or a Subsidiary, and the license
      or agreement pursuant to which the Company or a Subsidiary uses it (excluding
      off-the-shelf software programs licensed by the Company pursuant to “shrink
      wrap” licenses).

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (e)  Neither
      the Company nor any Subsidiary has disclosed the source code for any of the
      software owned by the Company or a Subsidiary (the “Software”) or other
      confidential information constituting, embodied in or pertaining to the Software
      to any person or entity, except pursuant to the agreements listed in
      Section 2.13(e) of the Disclosure Schedule, and the Company has taken
      reasonable measure to prevent disclosure of such source code.

     

    (f)  All
      of
      the copyrightable materials (including Software) except for works of authorship
      uploaded to any Company websites by the Company’s users thereof in the course of
      using the Company’s websites or other services (“Customer
      Provided Content”)
      incorporated in or bundled with the Customer Deliverables have been created
      by
      employees of the Company or a Subsidiary within the scope of their employment by
      the Company or a Subsidiary or by independent contractors of the Company or
      a
      Subsidiary who have executed agreements expressly assigning all right, title
      and
      interest in such copyrightable materials to the Company or a Subsidiary. No
      portion of such copyrightable materials was jointly developed with any third
      party.

     

    (g)  To
      the
      knowledge of the Company, the Customer Deliverables and the Internal Systems
      are
      free from significant defects or programming errors and conform in all material
      respects to the written documentation and specifications therefor.

     

    2.14  Contracts.
      

     

    (a)  Section 2.14(a)
      of the Disclosure Schedule lists the following agreements (written or oral)
      to
      which the Company or any Subsidiary is a party as of the date of this
      Agreement:

     

    (i)  any
      agreement (or group of related agreements) for the lease of personal property
      from or to third parties providing for lease payments in excess of $10,000
      per
      annum or having a remaining term longer than one year;

     

    (ii)  any
      agreement (or group of related agreements) for the purchase or sale of products
      or for the furnishing or receipt of services (A) which calls for
      performance over a period of more than one year, (B) which involves more
      than the sum of $10,000, or (C) in which the Company or any Subsidiary has
      granted licensing rights, “most favored nation” pricing provisions or marketing
      or distribution rights relating to any products or services or territory or
      has
      agreed to purchase a minimum quantity of goods or services or has agreed to
      purchase goods or services exclusively from a certain party;

     

    (iii)  any
      agreement establishing a partnership or joint venture;

     

    (iv)  any
      agreement (or group of related agreements) under which it has created, incurred,
      assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness
      (including capital lease obligations but not including trade payables incurred
      in the Ordinary Course of Business) involving more than $10,000 or under which
      it has imposed (or may impose) a Security Interest on any of its assets,
      tangible or intangible;

     

    (v)  any
      agreement by which the Company is bound by any noncompetition or nondisclosure
      covenant other than nondisclosure agreements entered into in the Ordinary Course
      of Business;

     

    
      
        
        

      

      
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    (vi)  any
      employment or consulting agreement between the Company or any Subsidiary and
      any
      employee or consultant;

     

    (vii)  any
      material agreement involving any current officer, director or stockholder of
      the
      Company or any affiliate (an “Affiliate”), as defined in Rule 12b-2 under
      the Securities Exchange Act of 1934, as amended (the “Exchange Act”), thereof
      not otherwise disclosed pursuant to this Section 2.14;

     

    (viii)  any
      agreement under which the consequences of a default or termination would
      reasonably be expected to have a Company Material Adverse Effect;

     

    (ix)  any
      agreement which contains any provisions requiring the Company or any Subsidiary
      to indemnify any other party thereto (excluding indemnities contained in
      agreements for the purchase, sale or license of products entered into in the
      Ordinary Course of Business); and

     

    (x)  any
      other
      agreement (or group of related agreements) either involving more than $10,000
      or
      not entered into in the Ordinary Course of Business.

     

    (b)  The
      Company has delivered to the Buyer a complete and accurate copy of each
      agreement listed in Section 2.13 or Section 2.14 of the Disclosure
      Schedule. With respect to each agreement so listed: (i) the agreement is
      legal, valid, binding and enforceable and in full force and effect;
      (ii) the agreement will continue to be legal, valid, binding and
      enforceable and in full force and effect immediately following the Closing
      in
      accordance with the terms thereof as in effect immediately prior to the Closing;
      and (iii) neither the Company nor any Subsidiary nor, to the knowledge of
      the Company, any other party, is in material breach or material violation of,
      or
      default under, any such agreement, and no event has occurred, is pending or,
      to
      the knowledge of the Company, is threatened, which, after the giving of notice,
      with lapse of time, or otherwise, would constitute a material breach or material
      default by the Company or any Subsidiary or, to the knowledge of the Company,
      any other party under such contract.

     

    2.15  Accounts
      Receivable.
      All
      accounts receivable of the Company and the Subsidiaries reflected on the Most
      Recent Balance Sheet are valid receivables subject to no setoffs or
      counterclaims and are current and collectible (within 90 days after the date
      on
      which it first became due and payable), net of the applicable reserve for bad
      debts on the Most Recent Balance Sheet. All accounts receivable reflected in
      the
      financial or accounting records of the Company that have arisen since the Most
      Recent Balance Sheet Date are valid receivables subject to no setoffs or
      counterclaims and are collectible (within 90 days after the date on which it
      first became due and payable), net of a reserve for bad debts in an amount
      proportionate to the reserve shown on the Most Recent Balance
      Sheet.

     

    2.16  Powers
      of Attorney.
      There
      are no outstanding powers of attorney executed on behalf of the Company or
      any
      Subsidiary.

     

    2.17  Insurance.
      Section 2.17 of the Disclosure Schedule lists each insurance policy
      (including fire, theft, casualty, general liability, workers compensation,
      business interruption, environmental, product liability and automobile insurance
      policies and bond and surety arrangements) to which the Company or any
      Subsidiary is a party. Such insurance policies are of the type and in amounts
      customarily carried by organizations conducting businesses or owning assets
      similar to those of the Company and the Subsidiaries. There is no material
      claim
      pending under any such policy as to which coverage has been questioned, denied
      or disputed by the underwriter of such policy. All premiums due and payable
      under all such policies have been paid, neither the Company nor any Subsidiary
      may be liable for retroactive premiums or similar payments, and the Company
      and
      the Subsidiaries are otherwise in compliance in all material respects with
      the
      terms of such policies. The Company has no knowledge of any threatened
      termination of, or material premium increase with respect to, any such policy.
      Each such policy will continue to be enforceable and in full force and effect
      immediately following the Closing in accordance with the terms thereof as in
      effect immediately prior to the Closing.

     

    
      
        
        

      

      
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    2.18  Litigation. Other
      than the Copyright infringement lawsuits described as UMG Recordings, Inc.,
      et
      al v. Bolt, Inc., et al, USDC Case No. CV06-Q6577-AHM, pending in the Federal
      District Court for the Central District of California and all comparable claims
      that may be made by any major or independent record labels or publishers
      (together, the “Record Label Litigation”) and Net.Present.com, Inc. v. Bolt,
      Inc., pending in the Superior Court o the State of California (the “Zeocast
      Litigation”), as of the date of this Agreement, there is no action, suit,
      proceeding, claim, arbitration or investigation before any Governmental Entity
      or before any arbitrator which is pending or has been threatened in writing
      against the Company or any Subsidiary (a “Legal Proceeding”) which (a) seeks
      either damages in excess of $10,000 or equitable relief, (b) in any manner
      challenges or seeks to prevent, enjoin, alter or delay the transactions
      contemplated by this Agreement, or (c) if determined adversely to the Company
      or
      such Subsidiary, would have, individually or in the aggregate, a Company
      Material Adverse Effect.

     

    2.19  Warranties.
      No
      product or service manufactured, sold, leased, licensed or delivered by the
      Company or any Subsidiary is subject to any guaranty, warranty, right of return,
      right of credit or other indemnity other than (i) the applicable standard
      terms and conditions of sale or lease of the Company or the appropriate
      Subsidiary, which are set forth in Section 2.19 of the Disclosure Schedule
      and (ii) manufacturers’ warranties for which neither the Company nor any
      Subsidiary has any liability. Section 2.19 of the Disclosure Schedule sets
      forth the aggregate expenses incurred by the Company and the Subsidiaries in
      fulfilling their obligations under their guaranty, warranty, right of return
      and
      indemnity provisions during each of the fiscal years and the interim period
      covered by the Financial Statements; and the Company does not know of any reason
      why such expenses should significantly increase as a percentage of sales in
      the
      future.

     

    2.20  Employees.
      

     

    (a)  Section 2.20(a)
      of the Disclosure Schedule contains a list of all employees of the Company
      and
      each Subsidiary whose annual rate of compensation exceeds $50,000 per year,
      along with the position and the annual rate of compensation of each such person.
      Section 2.20(a) of the Disclosure Schedule contains a list of all current
      and past employees of the Company or any Subsidiary who are a party to
      non-competition, confidentiality and/or assignments of inventions agreements
      with the Company or any Subsidiary; copies of such agreements have previously
      been delivered to the Buyer. To the knowledge of the Company, no key employee
      or
      group of employees has any plans to terminate employment with the Company or
      any
      Subsidiary.

     

    
      
        
        

      

      
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    (b)  Neither
      the Company nor any Subsidiary is a party to or bound by any collective
      bargaining agreement, nor has any of them experienced any strikes, grievances,
      claims of unfair labor practices or other collective bargaining disputes. The
      Company has no knowledge of any organizational effort made or threatened, either
      currently or within the past two years, by or on behalf of any labor union
      with
      respect to employees of the Company or any Subsidiary.

     

    2.21  Employee
      Benefits.
      

     

    (a)  For
      purposes of this Agreement, the following terms shall have the following
      meanings:

     

    (i)  “Employee
      Benefit Plan” means any “employee pension benefit plan” (as defined in
      Section 3(2) of ERISA), any “employee welfare benefit plan” (as defined in
      Section 3(1) of ERISA), and any other written or oral plan, agreement or
      arrangement involving direct or indirect compensation, including without
      limitation insurance coverage, severance benefits, disability benefits, deferred
      compensation, bonuses, stock options, stock purchase, phantom stock, stock
      appreciation or other forms of incentive compensation or post-retirement
      compensation or other benefits.

     

    (ii)  “ERISA”
      means the Employee Retirement Income Security Act of 1974, as
      amended.

     

    (iii)  “ERISA
      Affiliate” means any entity which is a member of (1) a controlled group of
      corporations (as defined in Section 414(b) of the Code), (2) a group
      of trades or businesses under common control (as defined in Section 414(c)
      of the Code), or (3) an affiliated service group (as defined under
      Section 414(m) of the Code or the regulations under Section 414(o) of
      the Code), any of which includes or included the Company or a
      Subsidiary.

     

    (b)  Section 2.21(b)
      of the Disclosure Schedule contains a complete and accurate list of all Employee
      Benefit Plans maintained, or contributed to, by the Company, any Subsidiary
      or
      any ERISA Affiliate. Complete and accurate copies of (i) all Employee
      Benefit Plans which have been reduced to writing, (ii) written summaries of
      all unwritten Employee Benefit Plans, (iii) all related trust agreements,
      insurance contracts and summary plan descriptions, and (iv) all annual
      reports filed on IRS Form 5500 and (for all funded plans) all plan financial
      statements for the last three plan years for each Employee Benefit Plan, have
      been delivered to the Buyer. Each Employee Benefit Plan has been administered
      in
      all material respects in accordance with its terms and each of the Company,
      the
      Subsidiaries and the ERISA Affiliates has in all material respects met its
      obligations with respect to such Employee Benefit Plan and has made all required
      contributions thereto. The Company, each Subsidiary, each ERISA Affiliate and
      each Employee Benefit Plan are in compliance in all material respects with
      the
      currently applicable provisions of ERISA and the Code and the regulations
      thereunder (including without limitation Section 4980 B of the Code,
      Subtitle K, Chapter 100 of the Code and Sections 601 through 608 and
      Section 701 et seq. of ERISA). All filings and reports as to each Employee
      Benefit Plan required to have been submitted to the IRS or to the United States
      Department of Labor have been duly submitted.

     

    
      
        
        

      

      
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    (c)  There
      are
      no Legal Proceedings (except claims for benefits payable in the normal operation
      of the Employee Benefit Plans and proceedings with respect to qualified domestic
      relations orders) against or involving any Employee Benefit Plan or asserting
      any rights or claims to benefits under any Employee Benefit Plan that could
      give
      rise to any material liability.

     

    (d)  Except
      for Employee Benefit Plans using prototype or other plan documents which are
      pre-approved by the IRS, all the Employee Benefit Plans listed on Section
      2.21(b) of the Disclosure Schedule that are intended to be qualified under
      Section 401(a) of the Code have received determination letters from the IRS
      to the effect that such Employee Benefit Plans are qualified and the plans
      and
      the trusts related thereto are exempt from federal income taxes under Section
      501(a) of the Code, no such determination letter has been revoked and revocation
      has not been threatened, and no act or omission has occurred, that would
      adversely affect its qualification or materially increase its cost. All of
      the
      Employee Benefit Plans listed on Section 2.21(b) of the Disclosure Schedule
      that
      are intended to be qualified under Section 401(a) of the Code, and that have
      not
      received determination letters from the IRS, use plan and trust documents that
      have been pre-approved by the IRS, evidenced by the IRS’s issuance of an opinion
      letter to the sponsor of such plan and trust documents. Copies of each such
      determination letter and opinion letter have previously been delivered to the
      Buyer. Each Employee Benefit Plan listed on Section 2.21(b) of the Disclosure
      Schedule which is required to satisfy Section 401(k)(3) or
      Section 401(m)(2) of the Code has been tested for compliance with, and
      satisfies the requirements of, Section 401(k)(3) and Section 401(m)(2)
      of the Code for each plan year ending prior to the Closing Date.

     

    (e)  Neither
      the Company, any Subsidiary, nor any ERISA Affiliate has ever maintained an
      Employee Benefit Plan subject to Section 412 of the Code or Title IV of
      ERISA.

     

    (f)  At
      no
      time has the Company, any Subsidiary or any ERISA Affiliate been obligated
      to
      contribute to any “multiemployer plan” (as defined in Section 4001(a)(3) of
      ERISA).

     

    (g)  There
      are
      no material unfunded obligations under any Employee Benefit Plan listed on
      Section 2.21(b) of the Disclosure Schedule providing benefits after termination
      of employment to any employee of the Company or any Subsidiary (or to any
      beneficiary of any such employee), including but not limited to retiree health
      coverage and deferred compensation, but excluding severance benefits identified
      in Section 2.21(g) of the Disclosure Schedule, continuation of health
      coverage required to be continued under Section 4980B of the Code or other
      applicable law and insurance conversion privileges under state law. The assets
      of each Employee Benefit Plan listed on Section 2.21(b) of the Disclosure
      Schedule which is funded are reported at their fair market value on the books
      and records of such Employee Benefit Plan.

     

    (h)  To
      the
      knowledge of the Company, no act or omission has occurred and no condition
      exists with respect to any Employee Benefit Plan listed on Section 2.21(b)
      of
      the Disclosure Schedule that would subject the Company, any Subsidiary or any
      ERISA Affiliate to (i) any material fine, penalty, tax or liability of any
      kind
      imposed under ERISA or the Code or (ii) any contractual indemnification or
      contribution obligation protecting any fiduciary, insurer or service provider
      with respect to any such Employee Benefit Plan.

     

    
      
        
        

      

      
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    (i)  No
      Employee Benefit Plan listed on Section 2.21(b) of the Disclosure Schedule
      is
      funded by, associated with or related to a “voluntary employee’s beneficiary
      association” within the meaning of Section 501(c)(9) of the
      Code.

     

    (j)  Each
      Employee Benefit Plan listed on Section 2.21(b) of the Disclosure Schedule
      may
      be amended or terminated by the Company or by a Subsidiary or an ERISA
      Affiliate, as the case may be, at any time without liability, except as set
      forth in such plan and described in Section 2.21(j) of the Disclosure
      Schedule or as required by law, to the Company or any Subsidiary or ERISA
      Affiliate as a result thereof and no summary plan description or other written
      communication distributed generally to employees with respect to any such
      Employee Benefit Plan by its terms prohibits the Company, any Subsidiary or
      any
      ERISA Affiliate from amending or terminating such Employee Benefit
      Plan.

     

    (k)  Section 2.21(k)
      of the Disclosure Schedule discloses each: (i) agreement with any
      stockholder, director, executive officer or other key employee of the Company
      or
      any Subsidiary (A) the benefits of which are contingent, or the terms of
      which are materially altered, upon the occurrence of a transaction involving
      the
      Company or any Subsidiary of the nature of any of the transactions contemplated
      by this Agreement, (B) providing any term of employment or compensation
      guarantee or (C) providing severance benefits or other benefits after the
      termination of employment of such director, executive officer or key employee;
      (ii) agreement, plan or arrangement under which any person may receive
      payments from the Company or any Subsidiary that may be subject to the tax
      imposed by Section 4999 of the Code or included in the determination of
      such person’s “parachute payment” under Section 280G of the Code; and
      (iii) agreement or plan binding the Company or any Subsidiary, including
      without limitation any stock option plan, stock appreciation right plan,
      restricted stock plan, stock purchase plan, severance benefit plan or other
      Employee Benefit Plan listed on Section 2.21(b) of the Disclosure Schedule,
      any
      of the benefits of which will be increased, or the vesting of the benefits
      of
      which will be accelerated, by the occurrence of any of the transactions
      contemplated by this Agreement or the value of any of the benefits of which
      will
      be calculated on the basis of any of the transactions contemplated by this
      Agreement.

     

    (l)  Section 2.21(l)
      of the Disclosure Schedule sets forth the policy of the Company and any
      Subsidiary with respect to accrued vacation, accrued sick time and earned time
      off and the amount of such liabilities as of December 31, 2006.

     

    2.22  Environmental
      Matters.
      

     

    (a)  Except
      as
      would have a Company Material Adverse Effect, each of the Company and the
      Subsidiaries has complied with all applicable Environmental Laws (as defined
      below). There is no pending or, to the knowledge of the Company, threatened
      civil or criminal litigation, written notice of violation, formal administrative
      proceeding, or investigation, inquiry or information request by any Governmental
      Entity, relating to any Environmental Law involving the Company or any
      Subsidiary. For purposes of this Agreement, “Environmental Law” means any
      federal, state or local law, statute, rule or regulation or the common law
      relating to the environment or occupational health and safety, including without
      limitation any statute, regulation, administrative decision or order pertaining
      to (i) treatment, storage, disposal, generation and transportation of
      industrial, toxic or hazardous materials or substances or solid or hazardous
      waste; (ii) air, water and noise pollution; (iii) groundwater and soil
      contamination; (iv) the release or threatened release into the environment
      of industrial, toxic or hazardous materials or substances, or solid or hazardous
      waste, including without limitation emissions, discharges, injections, spills,
      escapes or dumping of pollutants, contaminants or chemicals; (v) the
      protection of wild life, marine life and wetlands, including without limitation
      all endangered and threatened species; (vi) storage tanks, vessels,
      containers, abandoned or discarded barrels, and other closed receptacles;
      (vii) health and safety of employees and other persons; and
      (viii) manufacturing, processing, using, distributing, treating, storing,
      disposing, transporting or handling of materials regulated under any law as
      pollutants, contaminants, toxic or hazardous materials or substances or oil
      or
      petroleum products or solid or hazardous waste. As used above, the terms
“release” and “environment” shall have the meaning set forth in the
      Comprehensive Environmental Response, Compensation and Liability Act of 1980,
      as
      amended (“CERCLA”).

     

    
      
        
        

      

      
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    (b)  To
      the
      knowledge of the Company, there have been no releases of any Materials of
      Environmental Concern (as defined below) into the environment at any parcel
      of
      real property or any facility formerly or currently owned, operated or
      controlled by the Company or a Subsidiary. With respect to any such releases
      of
      Materials of Environmental Concern, the Company or such Subsidiary has given
      all
      required notices to Governmental Entities (copies of which have been provided
      to
      the Buyer). The Company is not aware of any releases of Materials of
      Environmental Concern at parcels of real property or facilities other than
      those
      owned, operated or controlled by the Company or a Subsidiary that could
      reasonably be expected to have an impact on the real property or facilities
      owned, operated or controlled by the Company or a Subsidiary. For purposes
      of
      this Agreement, “Materials of Environmental Concern” means any chemicals,
      pollutants or contaminants, hazardous substances (as such term is defined under
      CERCLA), solid wastes and hazardous wastes (as such terms are defined under
      the
      Resource Conservation and Recovery Act), toxic materials, oil or petroleum
      and
      petroleum products or any other material subject to regulation under any
      Environmental Law.

     

    (c)  Set
      forth
      in Section 2.22(c) of the Disclosure Schedule is a list of all documents
      (whether in hard copy or electronic form) that contain any environmental
      reports, investigations and audits relating to premises currently or previously
      owned or operated by the Company or a Subsidiary (whether conducted by or on
      behalf of the Company or a Subsidiary or a third party, and whether done at
      the
      initiative of the Company or a Subsidiary or directed by a Governmental Entity
      or other third party) which the Company has possession of or access to. A
      complete and accurate copy of each such document has been provided to the
      Buyer.

     

    (d)  The
      Company is not aware of any material environmental liability of any solid or
      hazardous waste transporter or treatment, storage or disposal facility that
      has
      been used by the Company or any Subsidiary.

     

    2.23  Legal
      Compliance.
      Each of
      the Company and the Subsidiaries, and the conduct and operations of their
      respective businesses, are in compliance with each applicable law (including
      rules and regulations thereunder) of any federal, state, local or foreign
      government, or any Governmental Entity, except for any violations or defaults
      that, individually or in the aggregate, have not had and would not reasonably
      be
      expected to have a Company Material Adverse Effect.

     

    
      
        
        

      

      
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    2.24  Customers
      and Suppliers.
      Section 2.24 of the Disclosure Schedule sets forth a list of (a) each
      customer that accounted for more than 1% of the consolidated revenues of the
      Company during the last full fiscal year or the interim period through the
      Most
      Recent Balance Sheet Date and the amount of revenues accounted for by such
      customer during each such period and (b) each supplier that is the sole
      supplier of any significant product to the Company or a Subsidiary. No such
      customer or supplier has indicated within the past year that it will stop,
      or
      decrease the rate of, buying products or supplying products, as applicable,
      to
      the Company or any Subsidiary. No unfilled customer order or commitment
      obligating the Company or any Subsidiary to process, manufacture or deliver
      products or perform services will result in a loss to the Company or any
      Subsidiary upon completion of performance. No purchase order or commitment
      of
      the Company or any Subsidiary is in excess of normal requirements, nor are
      prices provided therein in excess of current market prices for the products
      or
      services to be provided thereunder.

     

    2.25  Permits.
      Section 2.25 of the Disclosure Schedule sets forth a list of all permits,
      licenses, registrations, certificates, orders or approvals from any Governmental
      Entity (including without limitation those issued or required under
      Environmental Laws and those relating to the occupancy or use of owned or leased
      real property) (“Permits”) issued to or held by the Company or any Subsidiary.
      Such listed Permits are the only Permits that are required for the Company
      and
      the Subsidiaries to conduct their respective businesses as presently conducted,
      except for those the absence of which, individually or in the aggregate, have
      not had and would not reasonably be expected to have a Company Material Adverse
      Effect. Each such Permit is in full force and effect and, to the knowledge
      of
      the Company, no suspension or cancellation of such Permit is threatened and
      there is no basis for believing that such Permit will not be renewable upon
      expiration. Each such Permit will continue in full force and effect immediately
      following the Closing.

     

    2.26  Certain
      Business Relationships With Affiliates.
      No
      Affiliate of the Company or of any Subsidiary (a) owns any property or
      right, tangible or intangible, which is used in the business of the Company
      or
      any Subsidiary, (b) has any claim or cause of action against the Company or
      any Subsidiary, or (c) owes any money to, or is owed any money by, the
      Company or any Subsidiary. Section 2.26 of the Disclosure Schedule
      describes any transactions or relationships between the Company or a Subsidiary
      and any Affiliate thereof which have occurred or existed since the beginning
      of
      the time period covered by the Financial Statements.

     

    2.27  Brokers’
      Fees.
      Neither
      the Company nor any Subsidiary has any liability or obligation to pay any fees
      or commissions to any broker, finder or agent with respect to the transactions
      contemplated by this Agreement, other than the fees payable to Savvian,
      LLC.

     

    2.28  Books
      and Records.
      The
      minute books and other similar records of the Company and each Subsidiary
      contain complete and accurate records of all actions taken at any meetings
      of
      the Company’s or such Subsidiary’s stockholders, Board of Directors or any
      committee thereof and of all written consents executed in lieu of the holding
      of
      any such meeting. The books and records of the Company and each Subsidiary
      accurately reflect in all material respects the assets, liabilities, business,
      financial condition and results of operations of the Company or such Subsidiary
      and have been maintained in accordance with good business and bookkeeping
      practices.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    2.29  Certain
      Business Practices
      . To the
      Company’s knowledge, neither the Company, nor any Subsidiary, nor any director,
      officer, agent or employee of the Company or any Subsidiary (in their capacities
      as such) has (i) used any funds for unlawful contributions, gifts, entertainment
      or other unlawful expenses relating to political activity, (ii) made any
      unlawful payment to foreign or domestic government officials or employees,
      to
      foreign or domestic political parties or campaigns or violated any provision
      of
      the Foreign Corrupt Practices Act of 1977 to the extent applicable to the
      Company or any Subsidiary or (iii) made any other unlawful payment. Neither
      the
      Company, nor any Subsidiary, nor any director, officer, agent or employee of
      the
      Company or any Subsidiary (nor any Person acting on behalf of any of the
      foregoing, but solely in his or her capacity as a director, officer, employee
      or
      agent of the Company) has, since January 1, 2000, directly or indirectly, given
      or agreed to give any gift or similar benefit in any material amount to any
      customer, supplier, governmental employee or other Person who is or may be
      in a
      position to help or hinder the Company or any Subsidiary or assist the Company
      or any Subsidiary in connection with any actual or proposed transaction, which,
      if not given could reasonably be expected to have had an adverse effect on
      the
      Company or any Subsidiary, or which, if not continued in the future, could
      reasonably be expected to adversely affect the business or prospects of the
      Company or any Subsidiary or that could reasonably be expected to subject the
      Company to penalty in any private or governmental litigation or proceeding.
      To
      the knowledge of Company, there is no material violation of the laundering
      statutes of the States in which the Company or the Subsidiaries do business,
      applicable to the Company’s business, and the Laws of the United States
      applicable to the Company’s business, the rules and regulations thereunder and
      any related or similar rules, regulations or guidelines, issued, administered
      or
      enforced by any governmental authority (collectively, the “Money Laundering
      Laws”) that are applicable to the Company’s business, and no criminal or
      material civil Action involving the Company or any Subsidiary with respect
      to
      the Money Laundering Laws is pending or, to the knowledge of the Company,
      threatened.

     

    2.30  Disclosure.
      No
      representation or warranty by the Company contained in this Agreement, and no
      statement contained in the Disclosure Schedule or any other document,
      certificate or other instrument delivered or to be delivered by or on behalf
      of
      the Company pursuant to this Agreement, contains or will contain any untrue
      statement of a material fact or omits or will omit to state any material fact
      necessary, in light of the circumstances under which it was or will be made,
      in
      order to make the statements herein or therein not misleading.

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF THE BUYER

    AND
      THE TRANSITORY SUBSIDIARY

     

    Each
      of
      the Buyer and the Transitory Subsidiary represents and warrants to the Company
      as follows (such representations and warranties being made to and for the
      benefit of the Company and the Indemnifying Stockholders (as defined in Section
      6.1) only and not for the benefit of any other Person, and no other Person
      may
      rely on the accuracy of the foregoing representations and warranties for any
      purpose whatsoever):

     

    
      
        
        

      

      
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    3.1  Organization,
      Qualification and Corporate Power.
      Each of
      the Buyer and the Transitory Subsidiary is a corporation duly organized, validly
      existing and in good standing under the laws of the state of its incorporation.
      The Buyer is duly qualified to conduct business and is in corporate and tax
      good
      standing under the laws of each jurisdiction in which the nature of its
      businesses or the ownership or leasing of its properties requires such
      qualification, except where the failure to be so qualified or in good standing
      would not have a Buyer Material Adverse Effect (as defined below). The Buyer
      has
      all requisite corporate power and authority to carry on the businesses in which
      it is engaged and to own and use the properties owned and used by it. The Buyer
      has furnished or made available to the Company complete and accurate copies
      of
      its Certificate of Incorporation and By-laws. For purposes of this Agreement,
      “Buyer Material Adverse Effect” means a material adverse effect on the assets,
      business, condition (financial or otherwise), results of operations or future
      prospects of the Buyer and its subsidiaries, taken as a whole. The Buyer is
      not
      a shell company as defined in Rule 12b-2 under the Exchange Act. 

     

    3.2  Capitalization.
      

     

    (a)  The
      authorized and outstanding capital stock of the Buyer (on a fully diluted basis)
      is set forth on Section 3.2(a) of the Disclosure Schedule. All of the issued
      and
      outstanding shares of Buyer Common Stock are duly authorized, validly issued,
      fully paid, nonassessable and free of all preemptive rights. Other
      than as set forth in the previous sentence and other than securities issuable
      pursuant
      to the transactions contemplated by this Agreement,
      there
      are
      no outstanding securities, options, warrants, calls, rights, commitments,
      agreements, arrangements or undertakings of any kind (contingent or otherwise)
      to which Buyer is a party or bound obligating Buyer to issue, deliver or sell,
      or cause to be issued, delivered or sold additional shares of capital stock
      or
      other voting securities of Buyer or obligating Buyer to issue, grant, extend
      or
      enter into any agreement to issue, deliver or sell any such capital stock or
      securities. 

     

    (b)  Neither
      Buyer nor any Subsidiary of Buyer is subject to any obligation or requirement
      to
      provide material funds for or to make any material investment (in the form
      of a
      loan or capital contribution) in any Person (other than to or in the Buyer
      or
      any of its Subsidiaries). There are no accrued or unpaid dividends with respect
      to any issued and outstanding shares of any class or series of capital stock
      of
      Buyer. There are no bonds, debentures, notes or other indebtedness of Buyer
      having the right to vote (or convertible into securities having the right to
      vote) on any matters on which stockholders of Buyer may vote. Except for
      pursuant to the Registration Rights Agreement dated as of October 27, 2006,
      no
      Person has the right to require Buyer to register any capital stock under the
      Securities Act. 

     

    (c)  All
      of
      the Merger Shares will be, when issued in accordance with this Agreement, duly
      authorized, validly issued, fully paid, nonassessable and free of all preemptive
      rights.

     

    (d)  The
      issuance of the Merger Shares is exempt from the registration requirements
      of
      the
      Securities Act.

     

    3.3  Authorization
      of Transaction.
      Each of
      the Buyer and the Transitory Subsidiary has all requisite power and authority
      to
      execute and deliver this Agreement and (in the case of the Buyer) the Escrow
      Agreement and to perform its obligations hereunder and thereunder. The execution
      and delivery by the Buyer and the Transitory Subsidiary of this Agreement and
      (in the case of the Buyer) the Escrow Agreement and the consummation by the
      Buyer and the Transitory Subsidiary of the transactions contemplated hereby
      and
      thereby have been duly and validly authorized by all necessary corporate action
      on the part of the Buyer and Transitory Subsidiary, respectively. This Agreement
      has been duly and validly executed and delivered by the Buyer and the Transitory
      Subsidiary and constitutes a valid and binding obligation of the Buyer and
      the
      Transitory Subsidiary, enforceable against them in accordance with its
      terms.

     

    
      
        
        

      

      
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    3.4  Noncontravention.
      Subject
      to compliance with the applicable requirements of the Securities Act and any
      applicable state securities laws, the Exchange Act and the filing of the
      Certificate of Merger as required by the Delaware General Corporation Law,
      neither the execution and delivery by the Buyer or the Transitory Subsidiary
      of
      this Agreement or (in the case of the Buyer) the Escrow Agreement, nor the
      consummation by the Buyer or the Transitory Subsidiary of the transactions
      contemplated hereby or thereby, will (a) conflict with or violate any
      provision of the charter or By-laws of the Buyer or the Transitory Subsidiary,
      (b) require on the part of the Buyer or the Transitory Subsidiary any
      filing with, or permit, authorization, consent or approval of, any Governmental
      Entity, (c) conflict with, result in breach of, constitute (with or without
      due notice or lapse of time or both) a default under, result in the acceleration
      of obligations under, create in any party any right to terminate, modify or
      cancel, or require any notice, consent or waiver under, any contract or
      instrument to which the Buyer or the Transitory Subsidiary is a party or by
      which either is bound or to which any of their assets are subject, except for
      (i) any conflict, breach, default, acceleration, termination, modification
      or cancellation which would not adversely affect the consummation of the
      transactions contemplated hereby or (ii) any notice, consent or waiver the
      absence of which would not adversely affect the consummation of the transactions
      contemplated hereby, or (d) violate any order, writ, injunction, decree,
      statute, rule or regulation applicable to the Buyer or the Transitory Subsidiary
      or any of their properties or assets.

     

    3.5  SEC
      Filings.
      

     

    (a)  As
      of
      their respective filing dates, all of the forms, reports and documents filed
      by
      Buyer with the U.S. Securities and Exchange Commission (“SEC”) on or after
      October 31, 2006 (collectively, the “Buyer SEC Filings”) complied in all
      material respects with the requirements of the Securities Act and the Exchange
      Act, as the case may be, and none of Buyer SEC Filings contained any untrue
      statement of a material fact or omitted to state a material fact required to
      be
      stated therein or necessary to make the statements made therein, in the light
      of
      the circumstances under which they were made, not misleading, in each case
      except to the extent corrected by a subsequent Buyer SEC Filing. The financial
      statements of Buyer included in Buyer SEC Filings complied as to form in all
      material respects with applicable accounting requirements and the published
      rules and regulations of the SEC with respect thereto, were prepared in
      accordance with GAAP (except, in the case of unaudited statements, as permitted
      by Form 10-Q of the SEC) applied on a consistent basis during the periods
      involved (except as may be indicated in the notes thereto) and fairly presented
      the consolidated financial position of Buyer as of the dates thereof and the
      consolidated results of its operations and cash flows for the periods then
      ended
      (subject, in the case of unaudited statements, to normal year-end audit
      adjustments). Between October 31, 2006 and the date of this Agreement, Buyer
      has
      not incurred any liabilities of the type required to be disclosed in the
      liabilities column of a balance sheet prepared in accordance with GAAP, except
      for liabilities incurred in the ordinary course of business.

     

    
      
        
        

      

      
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    (b)  The
      management of Buyer has established and maintains disclosure controls and
      procedures (as defined in 15d-15(e) of the Exchange Act) to ensure that material
      information required to be disclosed by Buyer in the reports that it files
      or
      submits under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified in the SEC’s rules and forms and is
      accumulated and communicated to Buyer’s management as appropriate to allow
      timely decisions regarding required disclosure. Buyer has complied with the
      applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and
      regulations promulgated thereunder or under the Exchange Act. Each Buyer SEC
      Filing that was required to be accompanied by a certification required to be
      filed or submitted by the Company’s principal executive officer or the Company’s
      principal financial officer was accompanied by such certification and at the
      time of filing such certification was, to the knowledge of the Company, true
      and
      accurate.

     

    3.6  Financial
      Statements.
      The
      audited financial statements and unaudited interim financial statements of
      the
      Buyer included in the Buyer SEC Filings (i) complied as to form in all
      material respects with applicable accounting requirements and the published
      rules and regulations of the SEC with respect thereto when filed, (ii) were
      prepared in accordance with GAAP applied on a consistent basis throughout the
      periods covered thereby (except as may be indicated therein or in the notes
      thereto), (iii) fairly present the consolidated financial condition,
      results of operations and cash flows of the Buyer as of the respective dates
      thereof and for the periods referred to therein, and (iv) are consistent
      with the books and records of the Buyer.

     

    3.7  Undisclosed
      Liabilities.
      Buyer
      and its Subsidiaries do not have any material liabilities or obligations,
      whether fixed, contingent, accrued or otherwise, liquidated or unliquidated
      and
      whether due or to become due, in each case of a nature required by GAAP to
      be
      reflected on a consolidated balance sheet of Buyer, other than: (i) liabilities
      reflected or reserved against on the balance sheet contained in Buyer’s Form 8-K
      filed with the SEC on October 31, 2006; (ii) liabilities or obligations incurred
      since October 31, 2006 in the Ordinary Course of Business consistent in all
      material respects with past practice; and (iii) liabilities or obligations
      that
      would not reasonably be expected to have a Buyer Material Adverse
      Effect.

     

    3.8  Solvency.
      As of
      and immediately following the Effective Time, (a) Buyer and the Surviving
      Corporation shall be able to pay their respective debts as they become due
      and
      shall own assets having a fair saleable value greater than the amounts required
      to pay their respective debts (including a reasonable estimate of the amount
      of
      all contingent liabilities) as they become due, and (b) Buyer and the Surviving
      Corporation shall have reasonably adequate capital to carry on their respective
      businesses. No transfer of property is being made and no obligation is being
      incurred in connection with the Merger and the other transactions contemplated
      by this Agreement with the intent to hinder, delay or defraud either present
      or
      future creditors of Buyer or the Surviving Corporation.

     

    3.9  Financing.
      At
      the
      Closing, Buyer and the Transitory Subsidiary will have sufficient funds to
      consummate the Merger.

     

    
      
        
        

      

      
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    3.10  Subsidiaries.
      Each of
      the Subsidiaries of Buyer is a corporation duly organized, validly existing
      and
      in corporate and tax good standing under the laws of the jurisdiction of its
      incorporation. The Transitory Subsidiary was formed solely to effectuate the
      Merger. Buyer has delivered or made available to the Company complete and
      accurate copies of the charter, bylaws or other organizational documents of
      each
      Subsidiary of Buyer. The Transitory Subsidiary has no assets other than minimal
      paid-in capital, has no liabilities or other obligations, and is not in default
      under or in violation of any provision of its charter, bylaws or other
      organizational documents. All of the issued and outstanding shares of capital
      stock of the Transitory Subsidiary is duly authorized, validly issued, fully
      paid, nonassessable and free of preemptive rights. All shares of the Transitory
      Subsidiary is owned by Buyer free and clear of any restrictions on transfer
      (other than restrictions under the Securities Act and state securities laws),
      claims, security interests, options, warrants, rights, contracts, calls,
      commitments, equities and demands. There are no outstanding or authorized
      options, warrants, rights, agreements or commitments to which Buyer or the
      Transitory Subsidiary is a party or which are binding on any of them providing
      for the issuance, disposition or acquisition of any capital stock of any
      Subsidiary of Buyer. There are no outstanding stock appreciation, phantom stock
      or similar rights with respect to the Transitory Subsidiary. There are no voting
      trusts, proxies or other agreements or understandings with respect to the voting
      of any capital stock of the Transitory Subsidiary.

     

    3.11  Absence
      of Material Adverse Change.
      Since
      the date of the Buyer SEC Filings, there has occurred no event or development
      which has had, or could reasonably be expected to have in the future, a Buyer
      Material Adverse Effect.

     

    3.12  Intellectual
      Property.

     

    (a)  The
      Buyer
      owns or has the right to use all Intellectual Property necessary (i) to provide
      the services provided by the Buyer to other parties (together, the “Buyer
      Deliverables”) and (ii) to operate the Internal Systems of the Buyer; the
      Intellectual Property owned by or licensed to the Buyer and incorporated in
      or
      underlying the Buyer Deliverables or the Buyer’s Internal Systems is referred to
      herein as the “Buyer Intellectual Property”). Each item of Buyer Intellectual
      Property will be owned or available for use by the Surviving Corporation
      immediately following the Closing on substantially identical terms and
      conditions as it was immediately prior to the Closing. The Buyer has taken
      all
      reasonable measures to protect the proprietary nature of each item of Buyer
      Intellectual Property. To the knowledge o the Buyer, except for the works of
      authorship uploaded by the Buyer’s users to the websites hosted by the Buyer or
      in the course of services provided by the Buyer and works that may be alleged
      to
      be infringed by the Buyer on facts analogous to those alleged in the Record
      Label Litigation (a) no other person or entity has any rights to any of the
      Buyer Intellectual Property owned by the Buyer (except pursuant to agreements
      or
      licenses specified in Section 3.12(c) of the Disclosure Schedule), and (b)
      no
      other person or entity is infringing, violating or misappropriating any of
      the
      Buyer Intellectual Property. 

     

    (b)  None
      of
      the Buyer Deliverables, or the marketing, distribution, provision or use thereof
      by the Buyer, infringes or violates, or constitutes a misappropriation of,
      any
      Intellectual Property rights of any person or entity. To the knowledge of the
      Buyer, none of the Internal Systems, or the use thereof by the Buyer, infringes
      or violates, or constitutes a misappropriation of, any Intellectual Property
      rights of any person or entity. Section 3.12(b) of the Disclosure Schedule
      lists
      any complaint, claim or notice, or written threat thereof, other than made
      available in the Buyer SEC Filings, received by the Buyer alleging any such
      infringement, violation or misappropriation; and the Buyer has provided or,
      through the Buyer SEC Filings, made available to the Company complete and
      accurate copies of all written documentation in the possession of the Buyer
      or
      any Subsidiary relating to any such complaint, claim, notice or threat. The
      Buyer has provided or, through the Buyer SEC Filings, made available to the
      Company complete and accurate copies of all written documentation in the Buyer’s
      possession relating to claims or disputes known to the Buyer concerning any
      Buyer Intellectual Property.

     

    
      
        
        

      

      
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    (c)  Section
      3.12(c) of the Disclosure Schedule identifies each license or other agreement
      (or type of license or other agreement) not made available in the Buyer SEC
      Filings pursuant to which the Buyer has licensed, distributed or otherwise
      granted any rights to any third party with respect to, any Buyer Intellectual
      Property.

     

    (d)  Section
      3.12(d) of the Disclosure Schedule identifies each item of Buyer Intellectual
      Property not made available in the Buyer SEC Filings that is owned by a party
      other than the Buyer, and the license or agreement pursuant to which the Buyer
      uses it (excluding off the shelf software programs licensed by the Buyer
      pursuant to “shrink wrap” licenses).

     

    (e)  The
      Buyer
      has not disclosed the source code for any of the software owned by the Buyer
      (the “Buyer Software”) or other confidential information constituting, embodied
      in or pertaining to the Buyer Software to any person or entity, except pursuant
      to the agreements listed in Section 3.12(e) of the Disclosure Schedule or made
      available in the Buyer SEC Filings, and the Buyer has taken reasonable measure
      to prevent disclosure of such source code.

     

    (f)  All
      of
      the copyrightable materials (including Buyer Software) except for Buyer Provided
      Content (works of authorship uploaded by Buyer’s customers in the course of
      using the services provided by Buyer) incorporated in or bundled with the Buyer
      Deliverables have been created by employees of the Buyer within the scope of
      their employment by the Buyer or by independent contractors of the Buyer who
      have executed agreements expressly assigning all right, title and interest
      in
      such copyrightable materials to the Buyer. No portion of such copyrightable
      materials was jointly developed with any third party.

     

    (g)  To
      the
      knowledge of the Buyer, the Buyer Deliverables and the Internal Systems are
      free
      from significant defects or programming errors and conform in all material
      respects to the written documentation and specifications therefor.

     

    3.13  Litigation.
      Except
      as disclosed in the Buyer SEC Filings, as of the date of this Agreement, there
      is no Legal Proceeding which is pending or, to the Buyer’s knowledge, threatened
      against the Buyer or any subsidiary of the Buyer which, if determined adversely
      to the Buyer or such subsidiary, could have, individually or in the aggregate,
      a
      Buyer Material Adverse Effect or which in any manner challenges or seeks to
      prevent, enjoin, alter or delay the transactions contemplated by this
      Agreement.

     

    
      
        
        

      

      
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    3.14  Interim
      Operations of the Transitory Subsidiary.
      The
      Transitory Subsidiary was formed solely for the purpose of engaging in the
      transactions contemplated by this Agreement and has engaged in no business
      activities other than as contemplated by this Agreement.

     

    3.15  Brokers’
      Fees.
      Neither
      the Buyer nor the Transitory Subsidiary has any liability or obligation to
      pay
      any fees or commissions to any broker, finder or agent with respect to the
      transactions contemplated by this Agreement.

     

    3.16  No
      Buyer Vote Required.
      No vote
      or other action of the stockholders of Buyer is required by the laws of the
      state of Nevada, the organizational documents of Buyer or otherwise in order
      for
      Buyer to consummate the transactions contemplated by this
      Agreement.

     

    3.17  Disclosure.
      No
      representation or warranty by the Buyer contained in this Agreement, and no
      statement contained in the any document, certificate or other instrument
      delivered or to be delivered by or on behalf of the Buyer pursuant to this
      Agreement, contains or will contain any untrue statement of a material fact
      or
      omits or will omit to state any material fact necessary, in light of the
      circumstances under which it was or will be made, in order to make the
      statements herein or therein not misleading.

     

    ARTICLE
      IV

    COVENANTS

     

    4.1  Closing
      Efforts; Company Financial Statements. 

     

    (a)  Each
      of
      the Parties shall use its best efforts, to the extent commercially reasonable
      (“Reasonable Best Efforts”), to take all actions and to do all things necessary,
      proper or advisable to consummate the transactions contemplated by this
      Agreement, including without limitation using its Reasonable Best Efforts to
      ensure that (i) its representations and warranties remain true and correct
      in all material respects through the Closing Date, (ii) the conditions to
      the obligations of the other Parties to consummate the Merger are satisfied,
      (iii) the Buyer’s preparation of consolidated pro forma financial
      statements by the Buyer’s independent accountants, the Buyer, the Company and
      the Subsidiaries are prepared in an accurate, complete and timely fashion and
      in
      accordance with GAAP, including without limitation the assistance of Company’s
      management and employees with regard to providing records, information and
      all
      other assistance requested by Buyer in a responsive manner so as to facilitate
      the expeditions preparation of such financial statements and (iv) the Merger
      qualifies as a “plan of reorganization” under Section 368(a) of the Code
      (including making any amendments to this Agreement as may be advisable in the
      view of tax counsel to Buyer and the Company).

     

    (b)  The
      Company shall use its Reasonable Best Efforts to assist Buyer and auditors
      selected by the Buyer in the preparation and delivery to the Buyer the following
      (1) the unaudited consolidated balance sheet and statements of income, changes
      in stockholders’ equity and cash flows as of and for the twelve months ended as
      of December 31, 2006 and (2) a reconciliation statement with respect to the
      Company’s Financial Statements and the December 31, 2006 financial statements
      referred to the in the foregoing clause (1) identifying in reasonable detail
      all
      material differences between the manner as presented and the manner as if
      presented in accordance with GAAP. The Company shall also use its Reasonable
      Best Efforts to assist Buyer and auditors selected by the Buyer in the conduct
      of an audit of the financial statements of the Company for prior periods, with
      a
      view towards preparing combined, consolidated audited financial statements
      of
      Buyer and the Company on a pro forma basis. Fees payable to third parties by
      the
      Company or the Buyer for audit services and other professional services
      performed in connection with the preparation of financial statements and
      reconciliation pursuant to this Section 4.1(b)
      shall be
      at the Buyer’s sole expense.

     

    
      
        
        

      

      
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    (c)  Notwithstanding
      the foregoing or any other thing in this Agreement to the contrary, Buyer shall
      have the right to terminate this Agreement and the transactions contemplated
      hereby in its sole discretion if a settlement agreement upon terms and
      conditions reasonably satisfactory to the Buyer of the litigation pending in
      the
      United States District Court for the Central District of California, entitled
      UMG
      Recordings, Inc.,
      et
      al
      v. Bolt, Inc.,
      et
      al,
      CV
      06-06577 has not been entered into and delivered by UMG Recordings, Inc. and
      the
      Company on or before the date that is five (5) days from the date of this
      Agreement. 

     

    4.2  Governmental
      and Third-Party Notices and Consents.
      

     

    (a)  Each
      Party shall use its Reasonable Best Efforts to obtain, at its expense, all
      waivers, permits, consents, approvals or other authorizations from Governmental
      Entities, and to effect all registrations, filings and notices with or to
      Governmental Entities, as may be required for such Party to consummate the
      transactions contemplated by this Agreement and to otherwise comply with all
      applicable laws and regulations in connection with the consummation of the
      transactions contemplated by this Agreement. 

     

    (b)  The
      Company shall use its Reasonable Best Efforts to obtain, at its expense, all
      such waivers, consents or approvals from third parties, and to give all such
      notices to third parties, as are required to be listed in Section 2.4 of
      the Disclosure Schedule.

     

    4.3  Stockholder
      Approval.
      

     

    (a)  The
      Company shall use its Reasonable Best Efforts to obtain, as promptly as
      practicable, the Requisite Stockholder Approval, either at a special meeting
      of
      stockholders or pursuant to a written stockholder consent, all in accordance
      with the applicable requirements of the Delaware General Corporation Law. In
      connection with such special meeting of stockholders or written stockholder
      consent, the Company shall provide to its stockholders a written proxy or
      information statement (the “Disclosure Statement”) which includes (A) a summary
      of the Merger and this Agreement (which summary shall include a summary of
      the
      terms relating to the indemnification obligations of the Company Stockholders,
      the escrow arrangements and the authority of the Indemnification Representative,
      and a statement that the adoption of this Agreement by the stockholders of
      the
      Company shall constitute approval of such terms), (B) all of the information
      required by Rule 502(b)(2) of Regulation D under the Securities Act and
      (C) a statement that appraisal rights are available for the Company Shares
      pursuant to Section 262 of the Delaware General Corporation Law and a copy
      of such Section 262. The Buyer agrees to cooperate with the Company in the
      preparation of the Disclosure Statement. The Company agrees not to distribute
      the Disclosure Statement until the Buyer has had a reasonable opportunity to
      review and comment on the Disclosure Statement and the Disclosure Statement
      has
      been approved by the Buyer (which approval may not be unreasonably withheld
      or
      delayed). If the Requisite Stockholder Approval is obtained by means of a
      written consent, the Company shall send, pursuant to Sections 228 and
      262(d) of the Delaware General Corporation Law, a written notice to all
      stockholders of the Company that did not execute such written consent informing
      them that this Agreement and the Merger were adopted and approved by the
      stockholders of the Company and that appraisal rights are available for their
      Company Shares pursuant to Section 262 of the Delaware General Corporation
      Law (which notice shall include a copy of such Section 262), and shall
      promptly inform the Buyer of the date on which such notice was
      sent.

     

    
      
        
        

      

      
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    (b)  The
      Company, acting through its Board of Directors, shall include in the Disclosure
      Statement the unanimous recommendation of its Board of Directors that the
      stockholders of the Company vote in favor of the adoption of this Agreement
      and
      the approval of the Merger. Notwithstanding the foregoing, the obligation set
      forth in the foregoing sentence shall not apply (and the Board of Directors
      shall be permitted to modify or withdraw any such recommendation previously
      made) if:

     

    (i)  the
      Company receives an unsolicited bona fide written offer to acquire (whether
      by
      way of merger, consolidation, share exchange, stock purchase or asset purchase)
      all of the outstanding capital stock or all or substantially all of the assets
      of the Company, which satisfies each of the following conditions (such an offer
      being referred to herein as a “Superior Offer”): (A) such offer is subject
      only to customary conditions (which may include the termination of this
      Agreement, but which may not include any financing condition), (B) the
      Board of Directors of the Company reasonably concludes, after consultation
      with
      its outside legal counsel and its financial advisors, that such offer would
      likely be consummated if the Company were to accept it, and (C) the Board
      of Directors of the Company reasonably concludes, after consultation with its
      financial advisors, that such offer would, if consummated, constitute a
      transaction which is more favorable, from a financial point of view, to the
      stockholders of the Company than the Merger; and

     

    (ii)  the
      Board
      of Directors of the Company reasonably concludes, after consultation with its
      outside legal counsel, that the fiduciary duties of the Board of Directors
      under
      applicable law permit it to accept the Superior Offer, provided that such
      conclusion shall be supported by and consistent with a comparative valuation
      report prepared by the Company’s financial advisor and presented to the
      Company’s Board of Directors prior to the determination of whether to accept a
      Superior Offer, which report shall set forth such financial advisor’s evaluation
      of the Superior Offer versus the transaction contemplated by this
      Agreement.

     

    (c)  The
      Company shall ensure that the Disclosure Statement does not contain any untrue
      statement of a material fact or omit to state a material fact necessary in
      order
      to make the statements made, in light of the circumstances under which they
      were
      made, not misleading (provided that the Company shall not be responsible for
      the
      accuracy or completeness of any information furnished by the Buyer in writing
      for inclusion in the Disclosure Statement).

     

    
      
        
        

      

      
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    (d)  The
      Buyer
      shall ensure that any information furnished by the Buyer to the Company in
      writing for inclusion in the Disclosure Statement does not contain any untrue
      statement of a material fact or omit to state a material fact necessary in
      order
      to make the statements made, in light of the circumstances under which they
      were
      made, not misleading.

     

    4.4  Operation
      of Business.
      Except
      as contemplated by this Agreement, during the period from the date of this
      Agreement to the Effective Time, the Company shall (and shall cause each
      Subsidiary to) conduct its operations in the Ordinary Course of Business and
      in
      compliance with all applicable laws and regulations and, to the extent
      consistent therewith, use its Reasonable Best Efforts to preserve intact its
      current business organization, keep its physical assets in good working
      condition, keep available the services of its current officers and employees
      and
      preserve its relationships with customers, suppliers and others having business
      dealings with it to the end that its goodwill and ongoing business shall not
      be
      impaired in any material respect. Without limiting the generality of the
      foregoing, prior to the Effective Time, the Company shall not (and shall cause
      each Subsidiary not to), without the written consent of the Buyer:

     

    (a)  issue
      or
      sell, or redeem or repurchase, any stock or other securities of the Company
      or
      any rights, warrants or options to acquire any such stock or other securities
      (except pursuant to the conversion or exercise of convertible securities or
      Options or Warrants outstanding on the date hereof), or amend any of the terms
      of (including without limitation the vesting of) any such convertible securities
      or Options or Warrants;

     

    (b)  split,
      combine or reclassify any shares of its capital stock; declare, set aside or
      pay
      any dividend or other distribution (whether in cash, stock or property or any
      combination thereof) in respect of its capital stock;

     

    (c)  create,
      incur or assume any indebtedness (including obligations in respect of capital
      leases but not including trade payables incurred in the Ordinary Course of
      Business); assume, guarantee, endorse or otherwise become liable or responsible
      (whether directly, contingently or otherwise) for the obligations of any other
      person or entity; or make any loans, advances or capital contributions to,
      or
      investments in, any other person or entity;

     

    (d)  enter
      into, adopt or amend any Employee Benefit Plan or any employment or severance
      agreement or arrangement or increase in any manner the compensation or fringe
      benefits of, or materially modify the employment terms of, its directors,
      officers or employees, generally or individually, or pay any bonus or other
      benefit to its directors, officers or employees, except for (1) amendments
      to an
      Employee Benefit Plan listed on Section 2.21(b) of the Disclosure Schedule
      which
      are required by law, (2) normal compensation increases in the ordinary course
      of
      business and (3) existing payment obligations listed in Section 2.20 of the
      Disclosure Schedule;

     

    (e)  acquire,
      sell, lease, license or dispose of any assets or property (including without
      limitation any shares or other equity interests in or securities of any
      Subsidiary or any corporation, partnership, association or other business
      organization or division thereof), other than acquisitions, sales, leases,
      licenses and dispositions of assets or property in the Ordinary Course of
      Business;

     

    
      
        
        

      

      
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    (f)  mortgage
      or pledge any of its property or assets or subject any such property or assets
      to any Security Interest;

     

    (g)  discharge
      or satisfy any Security Interest or pay any obligation or liability other than
      in the Ordinary Course of Business;

     

    (h)  amend
      its
      charter, by-laws or other organizational documents;

     

    (i)  change
      in
      any material respect its accounting methods, principles or practices, except
      insofar as may be required by a generally applicable change in
      GAAP;

     

    (j)  enter
      into, amend, terminate, take or omit to take any action that would constitute
      a
      violation of or default under, or waive any rights under, any material contract
      or agreement;

     

    (k)  make
      or
      commit to make any capital expenditure in excess of $50,000 per item or $100,000
      in the aggregate;

     

    (l)  institute
      or settle any Legal Proceeding including without limitation making any offers
      of
      settlement thereof, including offers of settlement to Sony, BMG Entertainment,
      Warner Music Group, Universal Music Group, and EMI Recorded Music (each a “Major
      Record Label” and collectively the Major Record Labels”) and any independent
      record label, in each case in connection with the Record Label Litigation,
      it
      being acknowledged and agreed that any settlement offer(s) or agreement(s)
      regarding the Record Label Litigation shall only be made with the prior approval
      of the Buyer;

     

    (m)  take
      any
      action or fail to take any action permitted by this Agreement with the knowledge
      that such action or failure to take action would result in (i) any of the
      representations and warranties of the Company set forth in this Agreement
      becoming untrue or (ii) any of the conditions to the Merger set forth in
      Article V not being satisfied; or

     

    (n)  agree
      in
      writing or otherwise to take any of the foregoing actions.

     

    4.5  Access
      to Information.
      

     

    (a)  The
      Company shall (and shall cause each Subsidiary to) permit representatives of
      the
      Buyer to have full access (at all reasonable times, and in a manner so as not
      to
      interfere with the normal business operations of the Company and the
      Subsidiaries) to all premises, properties, financial and accounting records,
      contracts, other records and documents, and personnel, of or pertaining to
      the
      Company and each Subsidiary.

     

    (b)  Prior
      to
      or on the date of this Agreement (with respect to the month ended
      December 31, 2006) and within 15 days after the end of each month ending
      prior to the Closing, beginning with February 15, 2007 (with respect to the
      month ended January 31, 2007), the Company shall furnish to the Buyer an
      unaudited income statement for such month and a balance sheet as of the end
      of
      such month, prepared on a basis consistent with the Financial Statements. Such
      financial statements shall present fairly the financial condition and results
      of
      operations of the Company and the Subsidiaries on a consolidated basis as of
      the
      dates thereof and for the periods covered thereby, and shall be consistent
      with
      the books and records of the Company and the Subsidiaries.

     

    
      
        
        

      

      
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    (c)  Each
      of
      the Buyer and the Transitory Subsidiary (i) shall treat and hold as
      confidential any Confidential Information (as defined below), (ii) shall
      not use any of the Confidential Information except in connection with this
      Agreement, and (iii) if this Agreement is terminated for any reason
      whatsoever, shall return to the Company all tangible embodiments (and all
      copies) thereof which are in its possession. For purposes of this Agreement,
      “Confidential Information” means any confidential or proprietary information of
      the Company or any Subsidiary that is furnished in writing to the Buyer or
      the
      Transitory Subsidiary by the Company or any Subsidiary in connection with this
      Agreement and is labeled confidential or proprietary; provided,
      however,
      that it
      shall not include any information (A) which, at the time of disclosure, is
      available publicly, (B) which, after disclosure, becomes available publicly
      through no fault of the Buyer or the Transitory Subsidiary, (C) which the
      Buyer or the Transitory Subsidiary knew or to which the Buyer or the Transitory
      Subsidiary had access prior to disclosure or (D) which the Buyer or the
      Transitory Subsidiary rightfully obtains from a source other than the Company
      or
      a Subsidiary.

     

    4.6  Exclusivity.
      

     

    (a)  The
      Company shall not, and the Company shall require each of its officers,
      directors, employees, representatives and agents not to, directly or indirectly,
      (i) initiate, solicit, encourage or otherwise facilitate any inquiry,
      proposal, offer or discussion with any party (other than the Buyer) concerning
      any merger, reorganization, consolidation, recapitalization, business
      combination, liquidation, dissolution, share exchange, sale of stock, sale
      of
      material assets or similar business transaction involving the Company, any
      Subsidiary or any division of the Company, (ii) furnish any non-public
      information concerning the business, properties or assets of the Company, any
      Subsidiary or any division of the Company to any party (other than the Buyer)
      or
      (iii) engage in discussions or negotiations with any party (other than the
      Buyer) concerning any such transaction. Notwithstanding the foregoing, prior
      to
      the obtaining of the Requisite Stockholder Approval, the Company may furnish
      non-public information concerning the business, properties or assets of the
      Company, a Subsidiary or a division of the Company to another party, and may
      engage in discussions or negotiations with such party, if (x) the Company
      receives a Superior Offer from such party, (y) the Company first executes
      with such party a confidentiality agreement with terms no less favorable to
      the
      Company than those contained in the Confidentiality Agreement between the Buyer
      and the Company dated December 1, 2006 and (z) the Board of Directors of
      the Company reasonably concludes, after consultation with its outside legal
      counsel, that the fiduciary duties of the Board of Directors under applicable
      law permit the Company to do so.

     

    (b)  The
      Company shall immediately notify any party with which discussions or
      negotiations of the nature described in paragraph (a) above were pending
      that the Company is terminating such discussions or negotiations. If the Company
      receives any inquiry, proposal or offer of the nature described in
      paragraph (a) above, the Company shall, within one business day after such
      receipt, notify the Buyer of such inquiry, proposal or offer, including the
      identity of the other party and the terms of such inquiry, proposal or offer.
      If
      the Company makes a determination under the final sentence of paragraph (a)
      above that it is permitted to furnish non-public information and/or engage
      in
      discussions or negotiations with another party, the Company shall, within one
      business day after such determination, notify the Buyer in writing of such
      determination and the basis therefor, and shall keep the Buyer informed, on
      a
      current basis, of the status of such discussions or negotiations and the terms
      being discussed or negotiated.

     

    
      
        
        

      

      
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    4.7  Expenses.
      Except
      as set forth in Article VI and the Escrow Agreement, each of the Parties
      shall bear its own costs and expenses (including legal fees and expenses and
      the
      fees and expenses of each Party’s own financial advisors and investment bankers)
      incurred in connection with this Agreement and the transactions contemplated
      hereby (the “Transaction Expenses”). Notwithstanding the foregoing, prior to the
      Closing, the Company will provide to Buyer an itemized and complete list (the
      “Transaction Expenses List”) of all Transaction Expenses incurred or to be
      incurred by the Company prior to or in connection with the Closing. Any of
      the
      Company’s Transaction Expenses that were not paid by the Company prior to the
      Closing shall be paid by the Buyer or the Surviving Corporation to the extent
      that such Transaction Expenses do not exceed $250,000. In the event that the
      Company’s Transaction Expenses that were not paid by the Company prior to the
      Closing exceed $250,000 (such expenses, “Excess Transaction Expenses”), then
      such Excess Transaction Expenses shall be paid by Buyer or the Surviving
      Corporation and Buyer shall have the right to be reimbursed by the Escrow Agent
      from the Escrow Fund on a dollar-for-dollar basis. In addition, notwithstanding
      anything herein to the contrary, Buyer shall not be responsible for (i) any
      fees, costs, expenses or other obligations or liabilities of the Major
      Stockholders, the Management Shareholders or any other of the Company
      Stockholders or (ii) any fees, costs, expenses or other obligations or
      liabilities of the Company incurred in connection with the Merger except those
      that are solely and directly related to the Merger within the meaning of Revenue
      Ruling 73-54. Schedule 4.7 sets forth the Company’s good faith estimate of the
      Transaction Expenses by vendor, category and amount. Notwithstanding any other
      provision of this Agreement, the fees and expenses of counsel with respect
      to
      the Record Label Litigation shall be deemed to be Transaction Expenses. At
      the
      Closing, the Buyer shall issue to Savvian, LLC a number of shares of Buyer
      Common Stock equal to $750,000 divided by (y) the Average Pre-Signing Price
      and
      shall issue additional shares of Buyer Common Stock to Savvian, LLC in
      accordance with Schedule 1.5(a)(v).

     

    4.8  Directors
      and Officers Insurance; Indemnification.
      

     

    (a)  Buyer
      shall purchase, to the extent commercially available at a cost per annum to
      the
      Buyer of not greater than $50,000, “prior acts” coverage, for a term of not less
      than six (6) years, for the benefit of present and former officers and directors
      of the Company in respect to any claim asserted against such officers and
      directors, or any of them, arising from acts or omissions in their capacity
      as
      officers and/or directors of the Company occurring prior to the Effective
      Time.

     

    (b)  Until
      the
      sixth (6th)
      anniversary of the Closing Date, the Certificate of Incorporation and Bylaws
      of
      the Surviving Corporation shall contain, and Buyer shall cause the Certificate
      of Incorporation and Bylaws of the Surviving Corporation to so contain,
      provisions no less favorable with respect to indemnification, advancement of
      expenses and exculpation of present and former directors and officers of the
      Company and its Subsidiaries than are presently set forth in the Certificate
      of
      Incorporation and Bylaws of the Buyer.

     

    
      
        
        

      

      
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    (c)  The
      provisions of this Section 4.8 are intended to be in addition to the rights
      otherwise available to the current officers and directors of the Company by
      law,
      charter, bylaw or agreement, and shall operate for the benefit of, and shall
      be
      enforceable by, each of the Indemnified Directors and Officers, or, if such
      person has died, his or her estate.

     

    4.9  Listing
      of Merger Shares.
      Buyer
      shall take whatever steps are necessary to cause the Merger Shares to be
      eligible for quotation on the OTCBB.

     

    4.10  Securities
      Filings.
      Buyer
      shall make, within the specified time periods, all required filings with respect
      to the Merger Shares with the SEC and state securities agencies including,
      without limitation, filing of Form D with the SEC. 

     

    4.11  Employee
      Benefits Obligation of Buyer.
      For
      purposes of determining eligibility, vesting and benefit accruals under the
      employee benefit plans of Buyer or the Surviving Corporation to individuals
      employed by the Company Immediately prior to the Closing Date who continue
      their
      employment with the Surviving Corporation or any of its subsidiaries on and
      after the Closing Date (each, a “Continuing Employee” and such employee benefit
      plans, the “Buyer Benefit Plans”), Buyer shall credit, or cause to be credited,
      each Continuing Employee with his or her years of service with the Company,
      its
      Subsidiaries that are ERISA Affiliates, and any predecessor entities, to the
      same extent as such Continuing Employee was entitled to credit for such service
      under any Employee Benefit Plan maintained immediately prior to the Closing
      Date
      by the Company or any ERISA Affiliate, except that Continuing Employees shall
      receive no such credit (i) to the extent that such credit would result in a
      duplication of benefits or (ii) under any newly-established Buyer Benefit Plan
      for which similarly-situated employees of Buyer do not receive credited service.
      The Buyer Benefit Plans that are “group health plans” (within the meaning of
      Section 5000(b)(1) of the Code), shall not deny Continuing Employees coverage
      under the Buyer Benefit Plans that are “group health plans” (within the meaning
      of Section 5000(b)(1) of the Code) on the basis of pre-existing conditions
      and
      shall credit such Continuing Employees (and their dependents) for any
      deductibles and out-of-pocket expenses paid under the Employee Benefit Plans
      maintained by the Company or any ERISA Affiliate in the year of initial
      participation in the applicable Buyer Benefit Plans that are group health plans
      (within the meaning of Section 5000(b)(1) of the Code). The Buyer shall satisfy
      or cause to be satisfied and be fully responsible for any and all COBRA
      obligations that arise with respect to any “M&A Beneficiary” (as such term
      is defined in as defined in Treasury Regulation Section 54.4980B-9, Q&A
      4).

     

    4.12  Preparation
      of Securities Disclosures.
      If
      prior to the Closing Date the Buyer determines to prepare or distribute any
      offering materials including disclosures pertaining to the Company then the
      Buyer shall involve the Company to the extent it deems necessary to prepare
      such
      materials and shall keep the Company reasonably informed regarding the status
      or
      progress of any such transaction, and the Company shall provide all reasonable
      assistance related thereto to the Buyer and its accountants, auditors,
      attorneys, financial advisors and/or other professional service providers of
      the
      Buyer.

     

    
      
        
        

      

      
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    ARTICLE
      V

    CONDITIONS
      TO CONSUMMATION OF MERGER

     

    5.1  Conditions
      to Each Party’s Obligations.
      The
      respective obligations of each Party to consummate the Merger are subject to
      the
      satisfaction, on or prior to the Termination Date, of the following
      condition:

     

    (a)  this
      Agreement and the Merger shall have received the Requisite Stockholder
      Approval.

     

    5.2  Conditions
      to Obligations of the Buyer and the Transitory Subsidiary.
      The
      obligation of each of the Buyer and the Transitory Subsidiary to consummate
      the
      Merger is subject to the satisfaction (or waiver by the Buyer), on or prior
      to
      the Termination Date, of the following additional conditions:

     

    (a)  the
      number of Dissenting Shares shall not exceed 10% of the number of outstanding
      Common Shares as of the Effective Time (calculated after giving effect to the
      conversion into Common Shares of all outstanding Preferred Shares);

     

    (b)  the
      Company and the Subsidiaries shall have obtained (and shall have provided copies
      thereof to the Buyer) all of the waivers, permits, consents, approvals or other
      authorizations, and effected all of the registrations, filings and notices,
      referred to in Section 4.2 which are required on the part of the Company or
      the Subsidiaries, except for any the failure of which to obtain or effect would
      not, individually or in the aggregate, have a Company Material Adverse Effect
      or
      a material adverse effect on the ability of the Parties to consummate the
      transactions contemplated by this Agreement;

     

    (c)  the
      representations and warranties of the Company shall have been true and correct
      as of the date of the Agreement and shall be true and correct as of the Closing
      Date, except with respect to representations and warranties made as of a
      particular date which shall be true and correct on and as of such date, except,
      in each case, where the failure to be so true and correct has not had and would
      not reasonably be expected to, individually or collectively, have a Company
      Material Adverse Effect, provided that for purposes of the foregoing, neither
      (1) the existence of any conflict, breach, default, acceleration or right in
      contravention of Section 2.4(c) that does not itself constitute a Company
      Material Adverse Effect nor (2) the existence of or facts underlying the Record
      Label Litigation or the Zeocast Litigation shall not be construed as a Company
      Material Adverse Effect for purposes of this Section 5.2(c);

     

    (d)  the
      Company shall have performed or complied with its agreements and covenants
      required to be performed or complied with under this Agreement as of or prior
      to
      the Effective Time, except where the failure to comply has not had and would
      not
      reasonably be expected to have a Company Material Adverse Effect;

     

    (e)  no
      Legal
      Proceeding shall be pending or threatened wherein an unfavorable judgment,
      order, decree, stipulation or injunction would (i) prevent consummation of
      any of the transactions contemplated by this Agreement, (ii) cause the
      Merger to be rescinded following consummation or (iii) have, individually
      or in the aggregate, a Company Material Adverse Effect, provided that for
      purposes of this Section 5.2(e), neither (1) the existence of or facts
      underlying the Record Label Litigation nor (2) the Zeocast Litigation shall
      be
      construed as a Company Material Adverse Effect, and no such judgment, order,
      decree, stipulation or injunction shall be in effect;

     

    
      
        
        

      

      
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    (f)  the
      Company shall have delivered to the Buyer and the Transitory Subsidiary a
      certificate (the “Company Certificate”) to the effect that each of the
      conditions specified in clause (a) of Section 5.1 and clauses (a)
      through (e) (insofar as clause (e) relates to Legal Proceedings involving
      the Company or a Subsidiary) of this Section 5.2 is satisfied in all
      material respects;

     

    (g)  each
      of
      the Company Stockholders (other than holders of Dissenting Shares) shall have
      executed and delivered to the Buyer a counterpart of the Lockup
      Agreement;

     

    (h)  the
      Buyer
      shall have received from counsel to the Company an opinion with respect to
      the
      matters set forth in Exhibit F
      attached
      hereto, in a form to be reasonably agreed by the Buyer and counsel to the
      Company, addressed to the Buyer and dated as of the Closing Date;

     

    (i)  the
      Buyer
      shall have received such other certificates and instruments (including without
      limitation certificates of good standing of the Company and the Subsidiaries
      in
      their jurisdiction of organization and the various foreign jurisdictions in
      which they are qualified, certified charter documents, certificates as to the
      incumbency of officers and the adoption of authorizing resolutions) as it shall
      reasonably request in connection with the Closing; and

     

    (j)  the
      Buyer, the Surviving Corporation and each of the Managing Shareholders shall
      have entered into employment agreements containing non-disclosure, non-compete
      obligations, and assignment of invention agreements reasonably acceptable to
      the
      Buyer and such individuals.

     

    (k)  the
      Company and each Company Stockholder shall have entered into an agreement in
      form and substance reasonably satisfactory to the Buyer providing for an
      acknowledgment by each Company Stockholder of the amount of shares held by
      it,
      an acknowledgment as to the Merger and the Merger Shares to be issuable to
      such
      Company Stockholder hereunder and a release of the Company and its Subsidiaries
      and affiliates for any and all causes of action accrued prior to the effective
      time. 

     

    5.3  Conditions
      to Obligations of the Company.
      The
      obligation of the Company to consummate the Merger is subject to the
      satisfaction on or prior to the Termination Date, of the following additional
      conditions:

     

    (a)  the
      Merger Shares shall have been authorized for quotation on the OTCBB upon
      official notice of issuance;

     

    (b)  the
      Buyer
      shall have effected all of the registrations, filings and notices referred
      to in
      Section 4.2 which are required on the part of the Buyer , except for any
      which if not obtained or effected would not have a Buyer Material Adverse Effect
      or a material adverse effect on the ability of the Parties to consummate the
      transactions contemplated by this Agreement;

     

    (c)  the
      representations and warranties of the Buyer and the Transitory Subsidiary set
      forth in the first sentence of Section 3.1 and Section 3.3 and any
      representations and warranties of the Buyer and the Transitory Subsidiary set
      forth in this Agreement that are qualified as to materiality shall be true
      and
      correct, and the representations and warranties of the Buyer and the Transitory
      Subsidiary set forth in this Agreement that are not so qualified (other than
      those set forth in Section 3.1 and Section 3.3) shall be true and
      correct in all material respects, in each case as of the date of this Agreement
      and as of the Effective Time as though made as of the Effective Time, except
      to
      the extent such representations and warranties are specifically made as of
      a
      particular date (in which case such representations and warranties shall be
      true
      and correct as of such date);

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    (d)  each
      of
      the Buyer and the Transitory Subsidiary shall have performed or complied with
      in
      all material respects its agreements and covenants required to be performed
      or
      complied with under this Agreement as of or prior to the Effective
      Time;

     

    (e)  no
      Legal
      Proceeding shall be pending or threatened (other than with respect to the Record
      Label Litigation or the Zeocast Litigation) wherein an unfavorable judgment,
      order, decree, stipulation or injunction would (i) prevent consummation of
      any of the transactions contemplated by this Agreement, (ii) cause any of
      the transactions contemplated by this Agreement to be rescinded following
      consummation or (iii) have, individually or in the aggregate, a Buyer
      Material Adverse Effect, and no such judgment, order, decree, stipulation or
      injunction shall be in effect;

     

    (f)  the
      Buyer
      shall have delivered to the Company a certificate (the “Buyer Certificate”) to
      the effect that each of the conditions specified in clauses (a) through (e)
      (insofar as clause (e) relates to Legal Proceedings involving the Buyer) of
      this Section 5.3 is satisfied in all respects;

     

    (g)  the
      Buyer
      shall have executed and delivered to the Company and the Company Stockholders
      a
      Registration Rights Agreement in the form of Exhibit
      G;

     

    (h)  the
      Company shall have received from counsel to the Buyer and the Transitory
      Subsidiary an opinion with respect to the matters set forth in Exhibit H
      attached
      hereto, in a form to be reasonably agreed by the Company and counsel to the
      Buyer, addressed to the Company and dated as of the Closing Date;
      and

     

    (i)  the
      Company shall have received such other certificates and instruments (including
      without limitation certificates of good standing of the Buyer and the Transitory
      Subsidiary in their jurisdiction of organization, certified charter documents,
      certificates as to the incumbency of officers and the adoption of authorizing
      resolutions) as it shall reasonably request in connection with the
      Closing.

     

    ARTICLE
      VI

    INDEMNIFICATION

     

    6.1  Indemnification
      by the Company Stockholders.
      The
      holders of Company Shares immediately prior to the Effective Time (the
“Indemnifying Stockholders”) shall indemnify the Buyer in respect of, and hold
      it harmless against, any and all debts, obligations and other liabilities
      (whether absolute, accrued, contingent, fixed or otherwise, or whether known
      or
      unknown, or due or to become due or otherwise), monetary damages, fines, fees,
      penalties, interest obligations, deficiencies, losses and expenses (including
      without limitation amounts paid in settlement, interest, court costs, costs
      of
      investigators, fees and expenses of attorneys, accountants, financial advisors
      and other experts, and other expenses of litigation) (“Damages”) incurred or
      suffered by the Surviving Corporation or the Buyer or any Affiliate thereof
      resulting from, relating to or constituting:

     

    
      
        
        

      

      
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    (a)  any
      misrepresentation, breach of warranty or failure to perform any covenant or
      agreement of the Company contained in this Agreement or the Company
      Certificate;

     

    (b)  any
      failure of any Company Stockholder to have good, valid and marketable title
      to
      the issued and outstanding Company Shares issued in the name of such Company
      Stockholder, free and clear of all Security Interests; or

     

    (c)  any
      claim
      by a stockholder or former stockholder of the Company, or any other person
      or
      entity, seeking to assert, or based upon: (i) ownership or rights to
      ownership of any shares of stock of the Company; (ii) any rights of a
      stockholder (other than the right to receive the Merger Shares pursuant to
      this
      Agreement or appraisal rights under the applicable provisions of the Delaware
      General Corporation Law), including any option, preemptive rights or rights
      to
      notice or to vote; (iii) any rights under the Certificate of Incorporation
      or By-laws of the Company; or (iv) any claim that his, her or its shares
      were wrongfully repurchased by the Company.

     

    6.2  Indemnification
      by the Buyer.
      The
      Buyer shall indemnify the Indemnifying Stockholders in respect of, and hold
      them
      harmless against, any and all Damages incurred or suffered by the Indemnifying
      Stockholders resulting from, relating to or constituting any misrepresentation,
      breach of warranty or failure to perform any covenant or agreement of the Buyer
      or the Transitory Subsidiary contained in this Agreement or the Buyer
      Certificate.

     

    6.3  Indemnification
      Claims.
      

     

    (a)  A
      party
      entitled, or seeking to assert rights, to indemnification under this
      Article VI (an “Indemnified Party”) shall give written notification to the
      party from whom indemnification is sought (an “Indemnifying Party”) of the
      commencement of any suit or proceeding relating to a third party claim for
      which
      indemnification pursuant to this Article VI may be sought. Such
      notification shall be given within 20 business days after receipt by the
      Indemnified Party of notice of such suit or proceeding, and shall describe
      in
      reasonable detail (to the extent known by the Indemnified Party) the facts
      constituting the basis for such suit or proceeding and the amount of the claimed
      damages; provided, however, that no delay on the part of the Indemnified Party
      in notifying the Indemnifying Party shall relieve the Indemnifying Party of
      any
      liability or obligation hereunder except to the extent of any damage or
      liability caused by or arising out of such failure. Within 20 days after
      delivery of such notification, the Indemnifying Party may, upon written notice
      thereof to the Indemnified Party, assume control of the defense of such suit
      or
      proceeding with counsel reasonably satisfactory to the Indemnified Party;
      provided that (i) the Indemnifying Party may only assume control of such
      defense if (A) it acknowledges in writing to the Indemnified Party that any
      damages, fines, costs or other liabilities that may be assessed against the
      Indemnified Party in connection with such suit or proceeding constitute Damages
      for which the Indemnified Party shall be indemnified pursuant to this
      Article VI and (B) the ad
      damnum
      is less
      than or equal to the amount of Damages for which the Indemnifying Party is
      liable under this Article VI and (ii) the Indemnifying Party may not assume
      control of the defense of a suit or proceeding involving criminal liability
      or
      in which equitable relief is sought against the Indemnified Party. If the
      Indemnifying Party does not so assume control of such defense, the Indemnified
      Party shall control such defense. The party not controlling such defense (the
      “Non-controlling Party”) may participate therein at its own expense; provided
      that if the Indemnifying Party assumes control of such defense and the
      Indemnified Party reasonably concludes that the Indemnifying Party and the
      Indemnified Party have conflicting interests or different defenses available
      with respect to such suit or proceeding, the reasonable fees and expenses of
      counsel to the Indemnified Party shall be considered Damages for purposes of
      this Agreement. The party controlling such defense (the “Controlling Party”)
      shall keep the Non-controlling Party advised of the status of such suit or
      proceeding and the defense thereof and shall consider in good faith
      recommendations made by the Non-controlling Party with respect thereto. The
      Non-controlling Party shall furnish the Controlling Party with such information
      as it may have with respect to such suit or proceeding (including copies of
      any
      summons, complaint or other pleading which may have been served on such party
      and any written claim, demand, invoice, billing or other document evidencing
      or
      asserting the same) and shall otherwise cooperate with and assist the
      Controlling Party in the defense of such suit or proceeding. The Indemnifying
      Party shall not agree to any settlement of, or the entry of any judgment arising
      from, any such suit or proceeding without the prior written consent of the
      Indemnified Party, which shall not be unreasonably withheld or delayed; provided
      that the consent of the Indemnified Party shall not be required if the
      Indemnifying Party agrees in writing to pay any amounts payable pursuant to
      such
      settlement or judgment and such settlement or judgment includes a complete
      release of the Indemnified Party from further liability and has no other adverse
      effect on the Indemnified Party. The Indemnified Party shall not agree to any
      settlement of, or the entry of any judgment arising from, any such suit or
      proceeding without the prior written consent of the Indemnifying Party, which
      shall not be unreasonably withheld or delayed.

     

    
      
        
        

      

      
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    (b)  In
      order
      to seek indemnification under this Article VI, an Indemnified Party shall
      give written notification (a “Claim Notice”) to the Indemnifying Party which
      contains (i) a description and the amount (the “Claimed Amount”) of any Damages
      incurred or reasonably expected to be incurred by the Indemnified Party, (ii)
      a
      statement that the Indemnified Party is entitled to indemnification under this
      Article VI for such Damages and a reasonable explanation of the basis
      therefor, and (iii) a demand for payment (in the manner provided in
      paragraph (c) below) in the amount of such Damages. If the Indemnified
      Party is the Buyer, the Indemnifying Party shall deliver a copy of the Claim
      Notice to the Escrow Agent.

     

    (c)  Within
      20
      days after delivery of a Claim Notice, or such shorter period as may be
      necessitated by the nature and timing of the suit or proceeding, the
      Indemnifying Party shall deliver to the Indemnified Party a written response
      (the “Response”) in which the Indemnifying Party shall: (i) agree that the
      Indemnified Party is entitled to receive all of the Claimed Amount (in which
      case the Response shall be accompanied by a payment by the Indemnifying Party
      to
      the Indemnified Party of the Claimed Amount, by check or by wire transfer;
      provided that if the Indemnified Party is the Buyer, the Indemnifying Party
      and
      the Indemnified Party shall deliver to the Escrow Agent, within three days
      following the delivery of the Response, a written notice executed by both
      parties instructing the Escrow Agent to distribute to the Buyer such number
      of
      Escrow Shares; (ii) agree that the Indemnified Party is entitled to receive
      part, but not all, of the Claimed Amount (the “Agreed Amount”) (in which case
      the Response shall be accompanied by a payment by the Indemnifying Party to
      the
      Indemnified Party of the Agreed Amount, by check or by wire transfer; provided
      that if the Indemnified Party is the Buyer, the Indemnifying Party and the
      Indemnified Party shall deliver to the Escrow Agent, within three days following
      the delivery of the Response, a written notice executed by both parties
      instructing the Escrow Agent to distribute to the Buyer such number of Escrow
      Shares as have an aggregate Value equal to fifty percent (50%) of the Agreed
      Amount) of Escrow Shares or (iii) dispute that the Indemnified Party is
      entitled to receive any of the Claimed Amount. If the Indemnifying Party in
      the
      Response disputes its liability for all or part of the Claimed Amount, the
      Indemnifying Party and the Indemnified Party shall follow the procedures set
      forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
      For purposes of this Article VI, the “Value” of any Escrow Shares delivered
      in satisfaction of an indemnity claim shall be the closing price per share
      of
      the Buyer Common Stock on the OTCBB on the Closing Date (subject to equitable
      adjustment in the event of any stock split, stock dividend, reverse stock split
      or similar event affecting the Buyer Common Stock since the Closing Date),
      multiplied by the number of such Escrow Shares.

     

    
      
        
        

      

      
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    (d)  During
      the 60-day period following the delivery of a Response that reflects a Dispute,
      the Indemnifying Party and the Indemnified Party shall use good faith efforts
      to
      resolve the Dispute. If the Dispute is not resolved within such 60-day period,
      the Indemnifying Party and the Indemnified Party shall discuss in good faith
      the
      submission of the Dispute to a mutually acceptable alternative dispute
      resolution procedure (which may be non-binding or binding upon the parties,
      as
      they agree in advance) (the “ADR Procedure”). In the event the Indemnifying
      Party and the Indemnified Party agree upon an ADR Procedure, such parties shall,
      in consultation with the chosen dispute resolution service (the “ADR Service”),
      promptly agree upon a format and timetable for the ADR Procedure, agree upon
      the
      rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure.
      The provisions of this Section 6.3(d) shall not obligate the Indemnifying
      Party and the Indemnified Party to pursue an ADR Procedure or prevent either
      such party from pursuing the Dispute in a court of competent jurisdiction;
      provided that, if the Indemnifying Party and the Indemnified Party agree to
      pursue an ADR Procedure, neither the Indemnifying Party nor the Indemnified
      Party may commence litigation or seek other remedies with respect to the Dispute
      prior to the completion of such ADR Procedure. Any ADR Procedure undertaken
      by
      the Indemnifying Party and the Indemnified Party shall be considered a
      compromise negotiation for purposes of federal and state rules of evidence,
      and
      all statements, offers, opinions and disclosures (whether written or oral)
      made
      in the course of the ADR Procedure by or on behalf of the Indemnifying Party,
      the Indemnified Party or the ADR Service shall be treated as confidential and,
      where appropriate, as privileged work product. Such statements, offers, opinions
      and disclosures shall not be discoverable or admissible for any purposes in
      any
      litigation or other proceeding relating to the Dispute (provided that this
      sentence shall not be construed to exclude from discovery or admission any
      matter that is otherwise discoverable or admissible). The fees and expenses
      of
      any ADR Service used by the Indemnifying Party and the Indemnified Party shall
      be shared equally by the Indemnifying Party and the Indemnified Party. If the
      Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified
      Party
      shall deliver to the Escrow Agent, promptly following the resolution of the
      Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result
      of a judicial decision or otherwise), a written notice executed by both parties
      instructing the Escrow Agent as to the distribution of Escrow Shares equal
      to
      the Value of the Claim determined by in accordance with the resolution of the
      Dispute (which notice shall be consistent with the terms of the resolution
      of
      the Dispute).

     

    
      
        
        

      

      
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    (e)  Notwithstanding
      the other provisions of this Section 6.3, if a third party asserts (other
      than by means of a lawsuit) that an Indemnified Party is liable to such third
      party for a monetary or other obligation which may constitute or result in
      Damages for which such Indemnified Party may be entitled to indemnification
      pursuant to this Article VI, and such Indemnified Party reasonably
      determines that it has a valid business reason to fulfill such obligation,
      then
      (i) such Indemnified Party shall be entitled to satisfy such obligation,
      without prior notice to or consent from the Indemnifying Party, (ii) such
      Indemnified Party may subsequently make a claim for indemnification in
      accordance with the provisions of this Article VI, and (iii) such
      Indemnified Party shall be reimbursed, in accordance with the provisions of
      this
      Article VI, for any such Damages for which it is entitled to
      indemnification pursuant to this Article VI (subject to the right of the
      Indemnifying Party to dispute the Indemnified Party’s entitlement to
      indemnification, or the amount for which it is entitled to indemnification,
      under the terms of this Article VI).

     

    6.4  Survival
      of Representations and Warranties.
      All
      representations and warranties contained in this Agreement, the Company
      Certificate or the Buyer Certificate shall survive the Closing and any
      investigation at any time made by or on behalf of an Indemnified Party and
      shall
      expire on the date that is thirteen (13) months following the Closing, provided
      that those representations and warranties pertaining to Company’s Taxes set
      forth in Section 2.9 shall expire on the date that is thirty (30) days following
      the third (3rd)
      anniversary of the date of Filing of the related Tax Return (or, if applicable,
      the date of any voluntary extension to the applicable statute of limitations
      that the Surviving Corporation may grant). If an Indemnified Party delivers
      to
      an Indemnifying Party, before expiration of a representation or warranty, either
      a Claim Notice based upon a breach of such representation or warranty, or a
      notice that, as a result a legal proceeding instituted by or written claim
      made
      by a third party, the Indemnified Party reasonably expects to incur Damages
      as a
      result of a breach of such representation or warranty (an “Expected Claim
      Notice”), then such representation or warranty shall survive until, but only for
      purposes of, the resolution of the matter covered by such notice. If the legal
      proceeding or written claim with respect to which an Expected Claim Notice
      has
      been given is definitively withdrawn or resolved in favor of the Indemnified
      Party, the Indemnified Party shall promptly so notify the Indemnifying Party;
      and if the Indemnified Party has delivered a copy of the Expected Claim Notice
      to the Escrow Agent and Escrow Shares have been retained in escrow after the
      Termination Date (as defined in the Escrow Agreement) with respect to such
      Expected Claim Notice, the Indemnifying Party and the Indemnified Party shall
      promptly deliver to the Escrow Agent a written notice executed by both parties
      instructing the Escrow Agent to distribute such retained Escrow Shares to the
      Indemnifying Stockholders in accordance with the terms of the Escrow
      Agreement.

     

    6.5  Limitations. 

     

    (a)  Notwithstanding
      anything to the contrary herein but subject to Sections 6.5(c) and 6.5(d),
      (i) the aggregate liability of the Indemnifying Stockholders for Damages
      under this Article VI shall not exceed the amount of the Escrow Fund, and
      (ii) the Indemnifying Stockholders shall not be liable under this
      Article VI unless and until (x) any individual Damage incurred by Buyer
      exceeds exceed $10,000 and (y) the aggregate Damages incurred by Buyer exceeds
      the sum of $250,000 (the “Stockholder Deductible Amount”), at which point the
      Indemnifying Stockholders shall become liable for the aggregate Damages equal
      to
      the Stockholder Deductible Amount plus the Damages in excess of the Stockholder
      Deductible Amount; 

     

    
      
        
        

      

      
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    (b)  Notwithstanding
      anything to the contrary herein but subject to Section 6.5(c), (i) the
      aggregate liability of the Buyer for Damages under this Article VI shall
      not exceed $2,500,000, and (ii) Buyer shall not be liable under this
      Article VI unless and until (x) any individual Damage incurred by the
      Indemnifying Stockholders exceeds exceed $10,000 and (y) the aggregate Damages
      incurred by the Indemnifying Stockholders exceeds the sum of $250,000 (the
      “Buyer Deductible Amount”), at which point the Buyer shall become liable for the
      aggregate Damages equal to the Buyer Deductible Amount plus the Damages in
      excess of the Buyer Deductible Amount; 

     

    (c)  The
      limitations set forth in clauses (a)(ii) and (b)(ii) above shall not apply
      to
      (A) a claim pursuant to Section 6.1(a) relating to a breach of the
      representations and warranties set forth in Sections 2.1, 2.2, 2.3, 2.13,
      2.18 or 2.23 (or the portion of the Company Certificate relating thereto) or
      to
      a breach of the covenants set forth in Section 4.7, (B) a claim
      pursuant to Section 6.2 relating to a breach of the representations and
      warranties set forth in Sections 3.1, 3.2, or 3.3 (or the portion of the
      Buyer Certificate relating thereto) or (C) a claim with respect to Excess
      Transaction Expenses. For purposes solely of this Article VI, all
      representations and warranties of the Company in Article II and all
      representations and warranties of the Buyer and the Transitory Subsidiary in
      Article III shall be construed as if the term “material” and any reference to
“Company Material Adverse Effect” and “Buyer Material Adverse Effect” (and
      variations thereof) were omitted from such representations and
      warranties.

     

    (d)  The
      Indemnifying Stockholders shall have no liability for Damages arising from
      or
      based upon the facts alleged in the Record Label Litigation.

     

    (e)  The
      Escrow Fund shall be the exclusive means for the Buyer to collect any Damages
      for which it is entitled to indemnification under this Article VI. Any
      Damages that are satisfied out of the Escrow Fund shall be satisfied by the
      delivery of the Escrow Shares to Buyer in accordance with this Article VI and
      the Escrow Agreement. 

     

    (f)  Except
      with respect to claims based on fraud, after the Closing, the rights of the
      Indemnified Parties under this Article VI and the Escrow Agreement shall be
      the exclusive remedy of the Indemnified Parties with respect to claims resulting
      from or relating to any misrepresentation, breach of warranty or failure to
      perform any covenant or agreement contained in this Agreement.

     

    (g)  No
      Indemnifying Stockholder shall have any right of contribution against the
      Company or the Surviving Corporation with respect to any breach by the Company
      of any of its representations, warranties, covenants or agreements.

     

    
      
        
        

      

      
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    (h)  The
      amount of Damages recoverable by an Indemnified Party under this Article VI
      with
      respect to an indemnity claim shall be reduced by (i) any proceeds received
      by
      such Indemnified Party or an Affiliate, with respect to the Damages to which
      such indemnity claim relates, from an insurance carrier, and each Indemnified
      Party shall be required to submit all matters underlying an indemnity claim
      to
      all applicable insurance carriers prior to making a claim pursuant to this
      Article VI and (ii) the amount of any tax savings actually realized by such
      Indemnified Party or an Affiliate which are attributable to the Damages to
      which
      such indemnity claim relates (net of any increased tax liability which may
      result from the receipt of the indemnity payment or any insurance proceeds
      relating to such Damages.

     

    6.6  Indemnification
      Representative. 

     

    (a)  Upon
      the
      adoption of this Agreement and the approval of the Merger and the transactions
      contemplated hereby by the Indemnifying Stockholders, and without further act
      of
      any Indemnifying Stockholder, John Davis shall be appointed as the
      Indemnification Representative hereunder to give and receive notices and
      communications, to authorize payment to Buyer in any case where the Buyer is
      the
      Indemnified Party from the Escrow Fund in satisfaction of Damages in any case
      where the Buyer is the Indemnified Party, to object to such payments, to agree
      to, negotiate, enter into settlements and compromises of, and demand arbitration
      and comply with orders of courts and awards of arbitrators with respect to
      such
      Damages, to receive payments on behalf of the Indemnifying Stockholders due
      and
      owing pursuant to this Agreement and acknowledge receipt thereof, to waive
      any
      breach or default of Buyer or Transitory Subsidiary under this Agreement
      following the Effective Time, to receive service of process on behalf of the
      Indemnifying Stockholders and in connection with any claims under this Agreement
      or any related document or instrument, and to take all other actions that are
      either (i) necessary or appropriate in the judgment of the Indemnification
      Representative for the accomplishment of the foregoing or (ii) specifically
      mandated by the terms of this Agreement. Such agency may be changed by the
      Indemnifying Stockholders from time to time upon not less than thirty (30)
      days
      prior written notice to Buyer; provided,
      however,
      that
      the Indemnification Representative may not be removed unless holders of a
      two-thirds interest of the Escrow Fund agree to such removal and to the identity
      of the substituted agent. A vacancy in the position of Indemnification
      Representative may be filled by the holders of a majority in interest of the
      Escrow Fund. No bond shall be required of the Indemnification Representative,
      and the Indemnification Representative shall not receive any compensation for
      its services. Notices or communications to or from the Indemnification
      Representative shall constitute notice to or from the Indemnifying
      Stockholders.

     

    (b)  The
      Indemnification Representative shall not be liable for any act done or omitted
      without gross negligence and or bad faith hereunder as Indemnification
      Representative. Pursuant to the following sentence, and to the fullest extent
      permitted by applicable Law, the Indemnifying Stockholders shall be, severally
      based on such Indemnifying Stockholder’s pro rata share of the Merger
      Consideration and not jointly, obligated to indemnify the Indemnification
      Representative and hold the Indemnification Representative harmless against
      any
      loss, liability or expense incurred without gross negligence or bad faith on
      the
      part of the Indemnification Representative and arising out of or in connection
      with the acceptance or administration of the Indemnification Representative's
      duties hereunder, including the reasonable fees and expenses of any legal
      counsel retained by the Indemnification Representative. At the time of
      distribution to
      the
      Company Stockholders
      of
      any
      proceeds remaining in the Escrow Fund, the Indemnification Representative shall
      be entitled to deduct and withhold from the portion of the Escrow Fund included
      in such distribution to pay and reimburse fees and expenses of third parties
      incurred or expected to be incurred in connection with its role as
      Indemnification Representative pursuant to this Agreement to the extent that
      the
      Indemnification Representative Reserve would be insufficient to pay
      and
      reimburse fees and expenses of third parties.

     

    
      
        
        

      

      
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    (c)  The
      grant
      of authority provided for in this Section 6.6:
      (i) is coupled with an interest and is being granted, in part, as an
      inducement to Buyer and Transitory Subsidiary to enter into this Agreement
      and
      the Escrow Agreement, and shall be irrevocable and survive the death,
      incompetency, bankruptcy or liquidation of the Company or any Indemnifying
      Stockholder and shall be binding on any successor thereto and (ii) shall
      survive the delivery of an assignment by any Indemnifying Stockholder of the
      whole or any fraction of his, her or its interest in the Escrow
      Fund.

     

    (d)  In
      connection with the performance of its obligations hereunder and under the
      Escrow Agreement, the Indemnification Representative shall have the right at
      any
      time and from time to time to select and engage, at the cost and expense of
      the
      Indemnifying Stockholders, attorneys, accountants, investment bankers, advisors,
      consultants and clerical personnel and obtain such other professional and expert
      assistance, and maintain such records, as the Indemnification Representative
      may
      deem necessary or desirable and incur other out-of-pocket expenses related
      to
      performing its services hereunder.

     

    (e)  In
      dealing with this Agreement, the Escrow Agreement and any instruments,
      agreements or documents relating thereto, and in exercising or failing to
      exercise all or any of the powers conferred upon the Indemnification
      Representative hereunder or thereunder, (i) the Indemnification
      Representative and its agents, counsel, accountants and other representatives
      shall not assume any, and shall incur no, responsibility whatsoever (in each
      case, to the extent permitted by applicable law) to the Indemnifying
      Stockholders, Buyer or the Surviving Corporation by reason of any error in
      judgment or other act or omission performed or omitted hereunder or in
      connection with this Agreement, the Escrow Agreement or any such other
      agreement, instrument or document other than with respect to willful misconduct
      or gross negligence on the part of the Indemnification Representative, and
      (ii) the Indemnification Representative shall be entitled to rely in good
      faith on the advice of counsel, public accountants or other independent experts
      experienced in the matter at issue, and any error in judgment or other act
      or
      omission of the Indemnification Representative pursuant to such advice shall
      in
      no event subject the Indemnification Representative to liability to the
      Indemnifying Stockholders, Buyer or the Surviving Corporation.

     

    (f)  All
      of
      the immunities and powers granted to the Indemnification Representative under
      this Agreement shall survive the Closing and/or any termination of this
      Agreement and the Escrow Agreement.

     

    (g)  A
      decision, act, consent or instruction of the Indemnification Representative,
      including an extension or waiver of this Agreement, shall constitute a decision
      of the Indemnifying Stockholders and shall be final, binding and conclusive
      upon
      the Indemnifying Stockholders; and the Escrow Agent, Buyer and the Surviving
      Corporation may rely upon any such decision, act, consent or instruction of
      the
      Indemnification Representative as being the decision, act, consent or
      instruction of the Indemnifying Stockholders. The Escrow Agent, Buyer and the
      Surviving Corporation are hereby relieved from any Liability to any Person
      for
      any acts done by them in accordance with such decision, act, consent or
      instruction of the Indemnification Representative. 

     

    
      
        
        

      

      
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    (h)  The
      Indemnification Representative has all requisite power, authority and legal
      capacity to execute and deliver this Agreement and each other agreement,
      document, or instrument or certificate contemplated by this Agreement or to
      be
      executed by the Indemnification Representative in connection with
      the consummation of the transactions contemplated by this Agreement
      (together with this Agreement, the “Indemnification Representative Documents”),
      and to consummate the transactions contemplated hereby and thereby. The
      execution and delivery of this Agreement and each of the Indemnification
      Representative Documents, the performance of its respective obligations
      hereunder and thereunder and the consummation of the transactions contemplated
      hereby and thereby have been duly authorized by all required action on the
      part
      of the Indemnification Representative. This Agreement has been, and each of
      the
      Indemnification Representative Documents will be at or prior to the Closing,
      duly and validly executed and delivered by the Indemnification Representative
      and (assuming the due authorization, execution and delivery by the other parties
      hereto and thereto) this Agreement constitutes, and each of the Indemnification
      Representative Documents when so executed and delivered will constitute, legal,
      valid and binding obligations of the Indemnification Representative enforceable
      against it in accordance with their respective terms, subject to applicable
      bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
      creditors’ rights and remedies generally, and subject, as to enforceability, to
      general principles of equity, including principles of commercial reasonableness,
      good faith and fair dealing (regardless of whether enforcement is sought in
      a
      proceeding at law or in equity). 

     

    (i)  For
      purposes of Section 6.3 and the last two sentences of Section 6.4,
      (i) if the Indemnifying Stockholders comprise the Indemnifying Party, any
      references to the Indemnifying Party (except provisions relating to an
      obligation to make or a right to receive any payments provided for in
      Section 6.3 or Section 6.4) shall be deemed to refer to the
      Indemnification Representative and (ii) if the Indemnifying Stockholders
      comprise the Indemnified Party, any references to the Indemnified Party (except
      provisions relating to an obligation to make or a right to receive any payments
      provided for in Section 6.3 or Section 6.4) shall be deemed to refer
      to the Indemnification Representative. 

     

    ARTICLE
      VII

    TERMINATION

     

    7.1  Termination
      of Agreement.
      The
      Parties may terminate this Agreement prior to the Effective Time (whether before
      or after Requisite Stockholder Approval), as provided below:

     

    (a)  the
      Buyer
      and the Company may terminate this Agreement by mutual written
      consent;

     

    
      
        
        

      

      
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    (b)  the
      Buyer
      may terminate this Agreement by giving written notice to the Company in the
      event the Company is in breach of any representation, warranty or covenant
      contained in this Agreement, and such breach, individually or in
      combination with any other such breach, (i) would cause the conditions set
      forth in clauses (c) or (d) of Section 5.2 not to be satisfied and (ii) is
      not cured within 20 days following delivery by the Buyer to the Company of
      written notice of such breach;

     

    (c)  the
      Company may terminate this Agreement by giving written notice to the Buyer
      in
      the event the Buyer or the Transitory Subsidiary is in breach of any
      representation, warranty or covenant contained in this Agreement, and such
      breach, individually or in combination with any other such breach,
      (i) would cause the conditions set forth in clauses (c) or (d) of
      Section 5.3 not to be satisfied and (ii) is not cured within 20 days
      following delivery by the Company to the Buyer of written notice of such
      breach;

     

    (d)  the
      Buyer
      or the Company may terminate this Agreement by giving written notice to the
      other Parties at any time after the Company Stockholders have voted on whether
      to approve this Agreement and the Merger in the event this Agreement and the
      Merger failed to receive the Requisite Stockholder Approval;

     

    (e)  the
      Buyer
      may terminate this Agreement by giving written notice to the Company
pursuant
      to Section 4.1 or if
      the
      Closing shall not have occurred on or before April 29,
      2007
      (the “Termination Date”) by reason of the failure of any condition precedent
      under Section 5.1 or 5.2 hereof (unless the failure results primarily from
      a breach by the Buyer or the Transitory Subsidiary of any representation,
      warranty or covenant contained in this Agreement); 

     

    (f)  the
      Company may terminate this Agreement by giving written notice to the Buyer
      and
      the Transitory Subsidiary if the Closing shall not have occurred on or before
      the Termination Date unless there exists on the Termination Date a failure
      by
      the Company to satisfy a condition set forth in Section 5.2;
      or

     

    (g)  the
      Buyer
      or the Company may terminate this Agreement by giving written notice to the
      other Parties in the event that the Board of Directors of the Company agrees
      to
      accept a Superior Offer.

     

    7.2  Effect
      of Termination.
      If any
      Party terminates this Agreement pursuant to Section 7.1,
      other
      than a termination by the Company pursuant to Section 7.1(c) or 7.1(f) or a
      termination by Company or the Buyer pursuant to Section 7.1(g), all obligations
      of the Parties hereunder shall terminate without any liability of any Party
      to
      any other Party (except for any liability of any Party for willful breaches
      of
      this Agreement). Notwithstanding the foregoing, the obligations of the Parties
      pursuant to Section 4.5(c) shall survive termination of this Agreement. In
      the event of a termination on or before the Termination Date by the Company
      or
      pursuant to Section 7.1(g) then, the Company shall pay the Buyer the greater
      of
      (x) $5,000,000 or (y) 25% of the amounts payable to the Company or its
      stockholders pursuant to such Superior Offer. In either case of (x) or (y),
      the
      amount held in escrow pursuant to Section 1.9(d)
      shall be
      released to the Buyer upon the termination of this Agreement and the additional
      amounts payable shall be paid to the Buyer upon the closing pursuant to the
      Superior Offer. In the event of a termination by the Company pursuant to Section
      7.1(c) or 7.1(f) then, the Buyer shall immediately pay the Company $1,500,000
      in
      cash. Each Party acknowledges that the agreements contained in this Section
      7.2
      are an integral part of the transactions contemplated by this Agreement and
      constitute liquidated damages and not a penalty, and that, without these
      agreements, the other Parties would not enter into this Agreement.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

       

    

    ARTICLE
      VIII

     DEFINITIONS

     

    For
      purposes of this Agreement, each of the following defined terms is defined
      in
      the Section of this Agreement indicated below.

     

    
      	
              Defined
                Term

            	 	
              Section

            
	
              ADR
                Procedure

            	 	
              6.3(d)

            
	
              ADR
                Service

            	 	
              6.3(d)

            
	
              Affiliate

            	 	
              2.14(a)(vii)

            
	
              Affiliated
                Group

            	 	
              2.9(a)(iii)

            
	
              Affiliated
                Period

            	 	
              2.9(a)(iv)

            
	
              Agreed
                Amount

            	 	
              6.3(c)

            
	
              Average
                Pre-Signing Price

            	 	
              1.5(a)(ii)

            
	
              Basic
                Common Conversion Ratio

            	 	
              1.5(a)(ii)

            
	
              Basic
                Shares

            	 	
              1.5(a)(ii)

            
	
              Buyer

            	 	
              Introduction

            
	
              Buyer
                Benefit Plan

            	 	
              4.11

            
	
              Buyer
                Certificate

            	 	
              5.3(f)

            
	
              Buyer
                Common Stock

            	 	
              1.5(a)(ii)

            
	
              Buyer
                Deductible Amount

            	 	
              6.5(b)

            
	
              Buyer
                Deliverables

            	 	
              3.12(a)

            
	
              Buyer
                Intellectual Property

            	 	
              3.12(a)

            
	
              Buyer
                Material Adverse Effect

            	 	
              3.1

            
	
              Buyer
                SEC Filings

            	 	
              3.5(a)

            
	
              Buyer
                Software

            	 	
              3.12(e)

            
	
              CERCLA

            	 	
              2.22(a)

            
	
              Certificates

            	 	
              1.7

            
	
              Certificate
                of Merger

            	 	
              1.1

            
	
              Claim
                Notice

            	 	
              6.3(b)

            
	
              Claimed
                Amount

            	 	
              6.3(b)

            
	
              Closing

            	 	
              1.2

            
	
              Closing
                Date

            	 	
              1.2

            
	
              Code

            	 	
              Introduction

            
	
              Common
                Shares

            	 	
              1.5(a)(ii)

            
	
              Company

            	 	
              Introduction

            
	
              Company
                Certificate

            	 	
              5.2(f)

            
	
              Company
                Intellectual Property

            	 	
              2.13(a)

            
	
              Company
                Material Adverse Effect

            	 	
              2.1

            

    

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    
      	
              Company
                Shares

            	 	
              1.5(a)(i)

            
	
              Company
                Stockholder

            	 	
              1.3(d)

            
	
              Confidential
                Information

            	 	
              4.5(c)

            
	
              Continuing
                Employees

            	 	
              4.11

            
	
              Controlling
                Party

            	 	
              6.3(a)

            
	
              Customer
                Deliverables

            	 	
              2.13(a)

            
	
              Customer
                Provided Content

            	 	
              2.13(f)

            
	
              Damages

            	 	
              6.1

            
	
              Disclosure
                Schedule

            	 	
              Article II

            
	
              Disclosure
                Statement

            	 	
              4.3(a)

            
	
              Dispute

            	 	
              6.3(c)

            
	
              Dissenting
                Shares

            	 	
              1.6(a)

            
	
              Effective
                Time

            	 	
              1.1

            
	
              Employee
                Benefit Plan

            	 	
              2.21(a)(i)

            
	
              Environmental
                Law

            	 	
              2.22(a)

            
	
              Equitable
                Exceptions

            	 	
              2.3

            
	
              ERISA

            	 	
              2.21(a)(ii)

            
	
              ERISA
                Affiliate

            	 	
              2.21(a)(iii)

            
	
              Escrow
                Agreement

            	 	
              1.3(f)

            
	
              Escrow
                Agent

            	 	
              1.3(f)

            
	
              Escrow
                Fund

            	 	
              1.3(f)

            
	
              Escrow
                Shares

            	 	
              1.5(a)(iv)

            
	
              Excess
                Transaction Expenses

            	 	
              4.7

            
	
              Exchange
                Act

            	 	
              2.14(a)(vii)

            
	
              Expected
                Claim Notice

            	 	
              6.4

            
	
              Financial
                Statements

            	 	
              2.6

            
	
              GAAP

            	 	
              2.8

            
	
              Governmental
                Entity

            	 	
              2.4

            
	
              Indemnification
                Representative

            	 	
              Introduction

            
	
              Indemnification
                Representative Documents

            	 	
              6.6(h)

            
	
              Indemnified
                Party

            	 	
              6.3(a)

            
	
              Indemnifying
                Party

            	 	
              6.3(a)

            
	
              Indemnifying
                Stockholders

            	 	
              6.1

            
	
              Intellectual
                Property

            	 	
              2.13(a)

            
	
              Internal
                Systems

            	 	
              2.13(a)

            
	
              IRS

            	 	
              2.9(c)

            
	
              Legal
                Proceeding

            	 	
              2.18

            
	
              Lockup
                Agreement

            	 	
              1.8(a)

            
	
              M&A
                Beneficiary

            	 	
              4.11

            
	
              Major
                Record Label

            	 	
              4.4(1)

            
	
              Major
                Stockholder

            	 	
              Introduction

            
	
              Managing
                Shareholder

            	 	
              1.51.5(a)1.5(a)(iii)

            
	
              Materials
                of Environmental Concern

            	 	
              2.22(b)

            
	
              Merger

            	 	
              1.1

            
	
              Merger
                Consideration

            	 	
              1.5

            

    

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    
      	
              Merger
                Shares

            	 	
              1.5(a)(vi)

            
	
              Money
                Laundering Laws

            	 	
              2.29

            
	
              Most
                Recent Balance Sheet

            	 	
              2.8

            
	
              Most
                Recent Balance Sheet Date

            	 	
              2.6

            
	
              Non-controlling
                Party

            	 	
              6.3(a)

            
	
              Non-Managing
                Shareholders

            	 	
              1.51.5(a)1.5(a)(iii)

            
	
              Options

            	 	
              1.8(a)

            
	
              Option
                Plan

            	 	
              1.8(a)

            
	
              Ordinary
                Course of Business

            	 	
              2.4

            
	
              OTCBB

            	 	
              1.5(a)(ii)

            
	
              Parties

            	 	
              Introduction

            
	
              Permits

            	 	
              2.25

            
	
              Preferred
                Shares

            	 	
              1.5(a)(i)

            
	
              Reasonable
                Best Efforts

            	 	
              4.1(a)

            
	
              Record
                Label Litigation

            	 	
              2.18

            
	
              Response

            	 	
              6.3(c)

            
	
              Requisite
                Stockholder Approval

            	 	
              2.3

            
	
              SEC

            	 	
              3.5(a)

            
	
              Securities
                Act

            	 	
              1.8(d)

            
	
              Security
                Interest

            	 	
              2.4

            
	
              Software

            	 	
              2.13(e)

            
	
              Stockholder
                Deductible Amount

            	 	
              6.5(a)

            
	
              Stockholders
                Support Agreement

            	 	
              Introduction

            
	
              Subsequent
                Shares

            	 	
              1.5(a)(vi)

            
	
              Subsidiary

            	 	
              2.5(a)

            
	
              Superior
                Offer

            	 	
              4.3(b)(i)

            
	
              Surviving
                Corporation

            	 	
              1.1

            
	
              Taxes

            	 	
              2.9(a)(i)

            
	
              Tax
                Returns

            	 	
              2.9(a)(ii)

            
	
              Termination
                Date

            	 	
              7.1(e)

            
	
              Transaction
                Expenses

            	 	
              4.7

            
	
              Transaction
                Expenses List

            	 	
              4.7

            
	
              Transitory
                Subsidiary

            	 	
              Introduction

            
	
              Value

            	 	
              6.3(c)

            
	
              Warrants

            	 	
              1.8(e)

            
	
              Zeocast
                Litigation

            	 	
              2.18

            

    

     

    ARTICLE
      IX

    MISCELLANEOUS

     

    9.1  Press
      Releases and Announcements.
      No
      Party shall issue any press release or public announcement relating to the
      subject matter of this Agreement without the prior written approval of the
      other
      Parties; provided,
      however,
      that
      any Party may make any public disclosure it believes in good faith is required
      by applicable law, regulation or stock market rule (in which case the disclosing
      Party shall use reasonable efforts to advise the other Parties and provide
      them
      with a copy of the proposed disclosure prior to making the
      disclosure).

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    9.2  No
      Third Party Beneficiaries.
      This
      Agreement shall not confer any rights or remedies upon any person other than
      the
      Parties and their respective successors and permitted assigns; provided,
      however,
      that
      (a) the provisions in Article I concerning issuance of the Merger
      Shares and Article VI concerning indemnification are intended for the
      benefit of the Company Stockholders and (b) the provisions in
      Section 4.8 concerning indemnification are intended for the benefit of the
      individuals specified therein and their successors and assigns.

     

    9.3  Entire
      Agreement.
      This
      Agreement (including the documents referred to herein) constitutes the entire
      agreement among the Parties and supersedes any prior understandings, agreements
      or representations by or among the Parties, written or oral, with respect to
      the
      subject matter hereof; provided that the Confidentiality Agreement dated
      December 1, 2006 between the Buyer and the Company shall remain in effect in
      accordance with its terms.

     

    9.4  Succession
      and Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the Parties named
      herein and their respective successors and permitted assigns. No Party may
      assign either this Agreement or any of its rights, interests or obligations
      hereunder without the prior written approval of the other Parties; provided
      that
      the Transitory Subsidiary may assign its rights, interests and obligations
      hereunder to an Affiliate of the Buyer.

     

    9.5  Counterparts
      and Facsimile Signature.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original but all of which together shall constitute one and the same
      instrument. This Agreement may be executed by facsimile signature.

     

    9.6  Headings.
      The
      section headings contained in this Agreement are inserted for convenience only
      and shall not affect in any way the meaning or interpretation of this
      Agreement.

     

    9.7  Notices.
      All
      notices, requests, demands, claims, and other communications hereunder shall
      be
      in writing. Any notice, request, demand, claim or other communication hereunder
      shall be deemed duly delivered four business days after it is sent by registered
      or certified mail, return receipt requested, postage prepaid, or one business
      day after it is sent for next business day delivery via a reputable nationwide
      overnight courier service, in each case to the intended recipient as set forth
      below:

     

    
      	
              If
                to the Buyer, or the Transitory Subsidiary:

               

              GoFish
                Corporation 

              500
                Third Street Suite 260

              San
                Francisco, CA 94107

              Attn:
                Michael Downing, President and Chief Executive Officer

              Facsimile:
                (415) 738-8834

               

            	
              Copy
                to (which copy shall not constitute notice
                hereunder):

               

              McGuireWoods
                LLP

              1345
                Avenue of the Americas

              New
                York, NY 10105

              Attn:
                Louis W. Zehil, Esq.

              Facsimile:
                (212) 548-2175

            
	
              If
                to the Company:

               

              Bolt
                Media, Inc.

              304
                Hudson Street, 7th Floor

              New
                York NY 10013-1015

            	
              Copy
                to (which copy shall not constitute notice
                hereunder):

               

              Mintz
                Levin Cohn Ferris

              Glovsky
                and Popeo, P.C.

              701
                Pennsylvania Avenue, N.W.

              Suite
                900

              Washington,
                D.C. 20004

              Attn:
                Sam E. Feigin, Esq.

              Facsimile:
                (202) 434-7400

            

    

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    
      	 
	
              If
                to Indemnification Representative:

               

              John
                Davis

              4603
                Dutchess Lane

              Durham,
                NC 27707

            	 

    

     

    Any
      Party
      may give any notice, request, demand, claim or other communication hereunder
      using any other means (including personal delivery, expedited courier, messenger
      service, telecopy, telex, ordinary mail or electronic mail), but no such notice,
      request, demand, claim or other communication shall be deemed to have been
      duly
      given unless and until it actually is received by the party for whom it is
      intended. Any Party may change the address to which notices, requests, demands,
      claims, and other communications hereunder are to be delivered by giving the
      other Parties notice in the manner herein set forth.

     

    9.8  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of Delaware without giving effect to any choice or conflict
      of
      law provision or rule (whether of the State of Delaware or any other
      jurisdiction) that would cause the application of laws of any jurisdictions
      other than those of the State of Delaware.

     

    9.9  Amendments
      and Waivers.
      The
      Parties may mutually amend any provision of this Agreement at any time prior
      to
      the Effective Time; provided,
      however,
      that
      any amendment effected subsequent to the Requisite Stockholder Approval shall
      be
      subject to any restrictions contained in the Delaware General Corporation Law.
      No amendment of any provision of this Agreement shall be valid unless the same
      shall be in writing and signed by all of the Parties. No waiver of any right
      or
      remedy hereunder shall be valid unless the same shall be in writing and signed
      by the Party giving such waiver. No waiver by any Party with respect to any
      default, misrepresentation or breach of warranty or covenant hereunder shall
      be
      deemed to extend to any prior or subsequent default, misrepresentation or breach
      of warranty or covenant hereunder or affect in any way any rights arising by
      virtue of any prior or subsequent such occurrence.

     

    9.10  Severability.
      Any
      term or provision of this Agreement that is invalid or unenforceable in any
      situation in any jurisdiction shall not affect the validity or enforceability
      of
      the remaining terms and provisions hereof or the validity or enforceability
      of
      the offending term or provision in any other situation or in any other
      jurisdiction. If the final judgment of a court of competent jurisdiction
      declares that any term or provision hereof is invalid or unenforceable, the
      Parties agree that the court making the determination of invalidity or
      unenforceability shall have the power to limit the term or provision, to delete
      specific words or phrases, or to replace any invalid or unenforceable term
      or
      provision with a term or provision that is valid and enforceable and that comes
      closest to expressing the intention of the invalid or unenforceable term or
      provision, and this Agreement shall be enforceable as so modified.

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    9.11  Submission
      to Jurisdiction.
      Each of
      the Parties (a) submits to the jurisdiction of any state or federal court
      sitting in San Francisco, California in any action or proceeding arising out
      of
      or relating to this Agreement, (b) agrees that all claims in respect of
      such action or proceeding may be heard and determined in any such court, and
      (c) agrees not to bring any action or proceeding arising out of or relating
      to this Agreement in any other court. Each of the Parties waives any defense
      of
      inconvenient forum to the maintenance of any action or proceeding so brought
      and
      waives any bond, surety or other security that might be required of any other
      Party with respect thereto. Any Party may make service on another Party by
      sending or delivering a copy of the process to the Party to be served at the
      address and in the manner provided for the giving of notices in
      Section 9.7. Nothing in this Section 9.11, however, shall affect the
      right of any Party to serve legal process in any other manner permitted by
      law.

     

    9.12  Construction.
      

     

    (a)  The
      language used in this Agreement shall be deemed to be the language chosen by
      the
      Parties to express their mutual intent, and no rule of strict construction
      shall
      be applied against any Party.

     

    (b)  Any
      reference to any federal, state, local or foreign statute or law shall be deemed
      also to refer to all rules and regulations promulgated thereunder, unless the
      context requires otherwise.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

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

    
      	 	 	 
	 	
              GOFISH CORPORATION

            
	 
 	 
 	 
 
	 	By:  	
              /s/ Michael Downing

            
	 	
              
Title:
              Chief Executive Officer
	 	 

    

    
      	 	 	 
	 	BM
              ACQUISITION
              CORP INC.
	 
 	 
 	 
 
	 	By:  	/s/
              Michael Downing
	 	
              
Title:
              Chief Executive Officer
	 	
            

    

    
      	 	 	 
	 	BOLT,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ Aaron
              Cohen
	 	
              
Title:
              Chief Executive Officer
	 	 

    

    
      	 	 	 
	 	INDEMNIFICATION
              REPRESENTATIVE
	 
 	 
 	 
 
	 	By:  	/s/ John
              Davis
	 	
              
John
              Davis

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