Document:

Exhibit 4.1

                                FACE OF SECURITY
                             Fixed Rate Senior Note

REGISTERED                                                 REGISTERED
No. FXR - 2                                                $6,750,000
                                                           CUSIP: 00079FAZ5

     Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.

<PAGE>

                               ABN AMRO BANK N.V.
                    SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES A
                                  (Fixed Rate)

           11.50% Reverse Exchangeable Securities due August 21, 2003
              linked to common stock of General Electric Company.

<TABLE>
<S>                           <C>                        <C>                           <C>
==================================================================================================================
ORIGINAL ISSUE    DATE:       INITIAL REDEMPTION         INTEREST RATE:                MATURITY DATE:
  August 21, 2002                DATE:  N/A                  11.50% per annum              August 21, 2003
------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL DATE:        INITIAL REDEMPTION         INTEREST PAYMENT DATES:       OPTIONAL
  August 21, 2002                PERCENTAGE:  N/A          February 21, 2003 and          REPAYMENT DATE:  N/A
                                                           August 21, 2003
------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:           ANNUAL REDEMPTION          INTEREST PAYMENT PERIOD:      APPLICABILITY OF MODIFIED
    U.S. Dollars                  PERCENTAGE                 Semi-annually                 PAYMENT UPON
                                  REDUCTION:  N/A                                          ACCELERATION: N/A
                                                                                           (But see "Alternate
                                                                                           Exchange Calculation
                                                                                           in case of an Event
                                                                                           of Default")
------------------------------------------------------------------------------------------------------------------
IF SPECIFIED                  REDEMPTION NOTICE          APPLICABILITY OF              If yes, state issue Price:
    CURRENCY                      PERIOD:  N/A               ANNUAL INTEREST           N/A
    OTHER THAN U.S.                                          PAYMENTS:  N/A
    DOLLARS, OPTION
    TO ELECT
    PAYMENT IN U.S.
    DOLLARS: N/A
------------------------------------------------------------------------------------------------------------------
EXCHANGE RATE                                                                          ORIGINAL YIELD TO
    AGENT: N/A                                                                         MATURITY:  N/A
------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS: (see below)
------------------------------------------------------------------------------------------------------------------

==================================================================================================================
</TABLE>

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<PAGE>

Initial Price.........................  $31.55 per Underlying Share divided by
                                        the Exchange Factor.

Underlying Shares.....................  Common stock of the Underlying Company,
                                        par value $0.06 per share.

Underlying Company....................  General Electric Company

Minimum Denominations.................  $1,000 and integral multiples thereof.

Payment at Maturity:..................  At maturity, the Issuer shall pay or
                                        deliver for each $1,000 principal
                                        amount of Notes, either (I) a cash
                                        payment equal to $1,000, if the
                                        Determination Price on the
                                        Determination Date of the Underlying
                                        Shares is at or above the Initial
                                        Price, or (ii) the number of Underlying
                                        Shares equal to the Stock Redemption
                                        Amount, if the Determination Price on
                                        the Determination Date of the
                                        Underlying Shares is lower than the
                                        Initial Price. The Issuer shall pay
                                        cash in lieu of delivering fractional
                                        Underlying Shares in an amount equal to
                                        the corresponding fractional Closing
                                        Price of the Underlying Shares as
                                        determined by the Calculation Agent on
                                        the Determination Date.

                                        If the Issuer is required to deliver
                                        Underlying Shares pursuant to the terms
                                        of the Notes, it shall, or cause the
                                        Calculation Agent to, provide written
                                        notice to the Trustee at its New York
                                        office, on which notice the Trustee may
                                        conclusively rely, of the Stock
                                        Redemption Amount, on or prior to the
                                        Issuer Notice Date. The Issuer shall,
                                        or shall cause the Calculation Agent
                                        to, deliver such Underlying Shares
                                        (and/or Exchange Property, if
                                        applicable) to the Trustee for delivery
                                        to the Holders.

Stock Redemption Amount:..............  The Calculation Agent shall determine
                                        the Stock Redemption Amount for each
                                        $1,000 principal amount of Notes on the
                                        Determination Date by dividing $1,000
                                        by the Initial Price.

                                       3
<PAGE>

                                        The number of Underlying Shares to be
                                        delivered at maturity shall be subject
                                        to any applicable adjustments (i) to
                                        the Exchange Factor and (ii) in the
                                        Exchange Property, as defined in
                                        paragraph 5 under "Adjustment Events"
                                        below, to be delivered instead of, or
                                        in addition to, such Underlying Shares
                                        in each case as a result of any
                                        corporate event described under
                                        "Adjustment Events" below.

Determination Date:...................  The third Business Day prior to the
                                        Maturity Date, or if such day is not a
                                        Trading Day, the immediately succeeding
                                        Trading Day; provided that the
                                        Determination Date shall be no later
                                        than the second scheduled Trading Day
                                        preceding the Maturity Date,
                                        notwithstanding the occurrence of a
                                        Market Disruption Event on such second
                                        scheduled Trading Day.

Determination Price:..................  The Closing Price per Underlying Share
                                        on the Determination Date, as
                                        determined by the Calculation Agent.

Closing Price.........................  If the Underlying Shares (or any other
                                        security for which a Closing Price must
                                        be determined) are listed on a U.S.
                                        securities exchange registered under
                                        the Exchange Act, are securities of The
                                        Nasdaq National Market or are included
                                        in the OTC Bulletin Board Service (the
                                        "OTC Bulletin Board"), operated by the
                                        National Association of Securities
                                        Dealers, Inc., the Closing Price for
                                        one Underlying Share (or one unit of
                                        any such other security) on any Trading
                                        Day means (I) the last reported sale
                                        price, regular way, in the principal
                                        trading session on such day on the
                                        principal securities exchange on which
                                        the Underlying Shares (or any such
                                        other security) are listed or admitted
                                        to trading or (ii) if not listed or
                                        admitted to trading on any such
                                        securities exchange or if such last
                                        reported sale price is not obtainable
                                        (even if the Underlying Shares (or
                                        other such security) are listed or
                                        admitted to trading on such securities
                                        exchange), the last reported sale price
                                        in the principal trading session on the
                                        over-the-counter market as reported on
                                        The Nasdaq National Market or OTC
                                        Bulletin Board on such day. If the last
                                        reported sale price is not

                                       4
<PAGE>

                                        available pursuant to clause (i) or
                                        (ii) of the preceding sentence, the
                                        Closing Price for any Trading Day shall
                                        be the mean, as determined by the
                                        Calculation Agent, of the bid prices
                                        for the Underlying Shares (or any such
                                        other security) obtained from as many
                                        dealers in such security (which may
                                        include AAI or any of the Issuer's
                                        other subsidiaries or affiliates), but
                                        not exceeding three, as will make such
                                        bid prices available to the Calculation
                                        Agent. A "securities of The Nasdaq
                                        National Market" shall include
                                        securities included in any successor to
                                        such system and the term "OTC Bulletin
                                        Board Service" shall include any
                                        successor service thereto.

Issuer Notice Date....................  The Business Day immediately succeeding
                                        the Determination Date; provided that
                                        the Issuer Notice Date shall be no
                                        later than the second scheduled Trading
                                        Day preceding the Maturity Date,
                                        notwithstanding the occurrence of a
                                        Market Disruption Event on such
                                        scheduled Trading Day.

Trading Day:..........................  A day, as determined by the Calculation
                                        Agent, on which trading is generally
                                        conducted on the New York Stock
                                        Exchange, the American Stock Exchange
                                        Inc., the Nasdaq National Market, the
                                        Chicago Mercantile Exchange, and the
                                        Chicago Board of Options Exchange and
                                        in the over-the-counter market for
                                        equity securities in the United States
                                        and on which a Market Disruption Event
                                        has not occurred.

Market Disruption Event:..............  Means, with respect to the Underlying
                                        Shares:

                                        (i)   a suspension, absence or material
                                              limitation of trading of the
                                              Underlying Shares on the primary
                                              market for the Underlying Shares
                                              for more than two hours of trading
                                              or during the one-half hour period
                                              preceding the close of trading in
                                              such market; or a breakdown or
                                              failure in the price and trade
                                              reporting systems of the primary
                                              market for the Underlying Shares
                                              that is, in the sole discretion of
                                              the Calculation Agent, material;
                                              or the suspension, absence or
                                              material limitation on the primary
                                              market

                                       5
<PAGE>

                                              for trading in futures or options
                                              contracts related to the
                                              Underlying Shares, if available,
                                              during the one-half hour period
                                              preceding the close of trading in
                                              the applicable market, in each
                                              case as determined by the
                                              Calculation Agent in its sole
                                              discretion; and

                                        (ii)  a determination by the Calculation
                                              Agent in its sole discretion that
                                              the event described in clause (i)
                                              above materially interfered with
                                              the Issuer's ability or the
                                              ability of any of the Issuer's
                                              affiliates to unwind or adjust all
                                              or a material portion of the hedge
                                              with respect to the Notes.

                                        For purposes of determining whether a
                                        Market Disruption Event has occurred:
                                        (1) a limitation on the hours or number
                                        of days of trading will not constitute
                                        a Market Disruption Event if it results
                                        from an announced change in the regular
                                        business hours of the relevant
                                        exchange; (2) a decision to permanently
                                        discontinue trading in the relevant
                                        futures or options contract will not
                                        constitute a Market Disruption Event;
                                        (3) limitations pursuant to New York
                                        Stock Exchange Inc. Rule 80A (or any
                                        applicable rule or regulation enacted
                                        or promulgated by the New York Stock
                                        Exchange Inc., any other
                                        self-regulatory organization or the
                                        Commission of similar scope as
                                        determined by the Calculation Agent) on
                                        trading during significant market
                                        fluctuations shall constitute a
                                        suspension, absence or material
                                        limitation of trading; (4) a suspension
                                        of trading in futures or options
                                        contracts on the Underlying Shares by
                                        the primary securities market trading
                                        in such futures or options, if
                                        available, by reason of (x) a price
                                        change exceeding limits set by such
                                        securities exchange or market, (y) an
                                        imbalance of orders relating to such
                                        contracts or (z) a disparity in bid and
                                        ask quotes relating to such contracts
                                        will constitute a suspension, absence
                                        or material limitation of trading in
                                        futures or options contracts related to
                                        the Underlying Shares; and (5) a
                                        suspension, absence or material
                                        limitation of trading on the primary

                                       6
<PAGE>

                                        securities market on which futures or
                                        options contracts related to the
                                        Underlying Shares are traded will not
                                        include any time when such securities
                                        market is itself closed for trading
                                        under ordinary circumstances.

                                        The Calculation Agent shall as soon as
                                        reasonably practicable under the
                                        circumstances notify the Issuer, the
                                        Trustee, the Depository Trust Company
                                        and the Agents of the existence or
                                        occurrence of a Market Disruption Event
                                        on any day that but for the occurrence
                                        or existence of a Market Disruption
                                        Event would have been the Determination
                                        Date.

Exchange Factor.......................  The Exchange Factor shall initially be
                                        1.0, but shall be subject to adjustment
                                        by the Calculation Agent upon the
                                        occurrence of certain corporate events
                                        affecting the Underlying Shares though
                                        and including the Determination Date.
                                        See "Adjustment Events" below.

Adjustment Events:....................  The Exchange Factor or the amount paid
                                        at maturity (in the case of paragraph 5
                                        below) shall be adjusted as follows:

                                        1.   If the Underlying Shares are
                                             subject to a stock split or
                                             reverse stock split, then once
                                             such split has become effective,
                                             the Exchange Factor shall be
                                             adjusted to equal the product of
                                             the prior Exchange Factor and the
                                             number of shares issued in such
                                             stock split or reverse stock split
                                             with respect to one Underlying
                                             Share.

                                        2.   If the Underlying Shares are
                                             subject (i) to a stock dividend
                                             (issuance of additional Underlying
                                             Shares) that is given ratably to
                                             all holders of Underlying Shares
                                             or (ii) to a distribution of the
                                             Underlying Shares as a result of
                                             the triggering of any provision of
                                             the corporate charter of the
                                             Underlying Company, in each case
                                             other than a stock split described
                                             in paragraph 1, then once the
                                             dividend has become effective and
                                             the Underlying Shares are trading
                                             ex-dividend, the Exchange Factor
                                             shall be adjusted so

                                       7
<PAGE>

                                             that the new Exchange Factor shall
                                             equal the prior Exchange Factor
                                             plus the product of (i) the number
                                             of shares issued with respect to
                                             one Underlying Share and (ii) the
                                             prior Exchange Factor.

                                        3.   There shall be no adjustments to
                                             the Exchange Factor to reflect
                                             cash dividends or other
                                             distributions paid with respect to
                                             the Underlying Shares other than
                                             Extraordinary Dividends as
                                             described below (except that
                                             distributions described in
                                             paragraph 2 above shall not be
                                             subject to this paragraph). A cash
                                             dividend or other distribution
                                             with respect to the Underlying
                                             Shares shall be deemed to be an
                                             "Extraordinary Dividend" if such
                                             dividend or other distribution
                                             exceeds the immediately preceding
                                             non-Extraordinary Dividend for the
                                             Underlying Shares by an amount
                                             equal to at least 10% of the
                                             closing price of the Underlying
                                             Shares (as adjusted for any
                                             subsequent corporate event
                                             requiring an adjustment hereunder,
                                             such as a stock split or reverse
                                             stock split) on the Trading Day
                                             preceding the ex-dividend date for
                                             the payment of such Extraordinary
                                             Dividend (the "ex-dividend date").
                                             If an Extraordinary Dividend
                                             occurs with respect to the
                                             Underlying Shares, the Exchange
                                             Factor with respect to the
                                             Underlying Shares will be adjusted
                                             on the ex-dividend date with
                                             respect to such Extraordinary
                                             Dividend so that the new Exchange
                                             Factor will equal the product of
                                             (i) the then current Exchange
                                             Factor and (ii) a fraction, the
                                             numerator of which is the Closing
                                             Price on the Trading Day preceding
                                             the ex-dividend date, and the
                                             denominator of which is the amount
                                             by which the Closing Price on the
                                             Trading Day preceding the
                                             ex-dividend date exceeds the
                                             Extraordinary Dividend Amount. The
                                             "Extraordinary Dividend Amount"
                                             with respect to an Extraordinary
                                             Dividend for the Underlying Shares
                                             shall equal (i) in the case of
                                             cash dividends or other
                                             distributions that constitute
                                             regular dividends, the amount per

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<PAGE>

                                             share of such Extraordinary
                                             Dividend minus the amount per
                                             share of the immediately preceding
                                             non-Extraordinary Dividend for the
                                             Underlying Shares or (ii) in the
                                             case of cash dividends or other
                                             distributions that do not
                                             constitute regular dividends, the
                                             amount per share of such
                                             Extraordinary Dividend. To the
                                             extent an Extraordinary Dividend
                                             is not paid in cash, the value of
                                             the non-cash component will be
                                             determined by the Calculation
                                             Agent, whose determination shall
                                             be conclusive. A distribution on
                                             the Underlying Shares described in
                                             clause (i), clause (iv) or clause
                                             (v) of paragraph 5 below that also
                                             constitutes an Extraordinary
                                             Dividend shall not cause an
                                             adjustment to the Exchange Factor
                                             pursuant to this paragraph 3.

                                        4.   If the Underlying Company issues
                                             rights or warrants to all holders
                                             of the Underlying Shares to
                                             subscribe for or purchase
                                             Underlying Shares at an exercise
                                             price per share less than the
                                             Closing Price of the Underlying
                                             Shares on both (i) the date the
                                             exercise price of such rights or
                                             warrants is determined and (ii)
                                             the expiration date of such rights
                                             or warrants, and if the expiration
                                             date of such rights or warrants
                                             precedes the maturity of this
                                             Note, then the Exchange Factor
                                             shall be adjusted to equal the
                                             product of the prior Exchange
                                             Factor and a fraction, the
                                             numerator of which shall be the
                                             number of Underlying Shares
                                             outstanding immediately prior to
                                             the issuance of such rights or
                                             warrants plus the number of
                                             additional Underlying Shares
                                             offered for subscription or
                                             purchase pursuant to such rights
                                             or warrants and the denominator of
                                             which shall be the number of
                                             Underlying Shares outstanding
                                             immediately prior to the issuance
                                             of such rights or warrants plus
                                             the number of additional
                                             Underlying Shares which the
                                             aggregate offering price of the
                                             total number of shares of the
                                             Underlying Shares so offered for
                                             subscription or purchase pursuant
                                             to such rights or warrants

                                       9
<PAGE>

                                             would purchase at the Closing Price
                                             on the expiration date of such
                                             rights or warrants, which shall be
                                             determined by multiplying such
                                             total number of shares offered by
                                             the exercise price of such rights
                                             or warrants and dividing the
                                             product so obtained by such Closing
                                             Price.

                                        5.   If a Reorganization Event (as
                                             defined below) occurs, each holder
                                             of Notes will receive at maturity,
                                             in respect of each $1,000
                                             principal amount of each Note, the
                                             lesser of: (i) $1,000 in cash or
                                             (ii) Exchange Property (as defined
                                             below) in an amount with a value
                                             equal to the product of the stock
                                             redemption amount times the
                                             Transaction Value (as defined
                                             below). In the case of a
                                             Reorganization Event that is the
                                             result of any issuance of tracking
                                             stock by the Underlying Company or
                                             a Spin-off Event (as defined
                                             below), the Issuer may, at its
                                             sole option, in lieu of clause
                                             (ii) above, elect to deliver
                                             Exchange Property consisting
                                             solely of the reclassified
                                             Underlying Shares (in the case of
                                             an issuance of tracking stock) or
                                             the Underlying Shares with respect
                                             to which the spun-off security was
                                             issued (in the case of a Spin-off
                                             Event) and pay the cash value of
                                             such tracking stock or spun-off
                                             security as of the determination
                                             date. If the Issuer elects to
                                             deliver cash pursuant to the
                                             immediately preceding sentence,
                                             the Issuer will provide notice to
                                             holders of Notes as soon as
                                             practicable after the date of such
                                             Reorganization Event.

                                                "Reorganization Event" means
                                                (i) there has occurred any
                                                reclassification or change with
                                                respect to the Underlying
                                                Shares, including, without
                                                limitation, as a result of the
                                                issuance of any tracking stock
                                                by the Underlying Company; (ii)
                                                the Underlying Company or any
                                                surviving entity or subsequent
                                                surviving entity of the
                                                Underlying Company (an
                                                "Underlying Company Successor")
                                                has been subject to a merger,
                                                combination

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<PAGE>

                                                or consolidation and is not the
                                                surviving entity; (iii) any
                                                statutory exchange of
                                                securities of the Underlying
                                                Company or any Underlying
                                                Company Successor with another
                                                corporation occurs (other than
                                                pursuant to clause (ii) above);
                                                (iv) the Underlying Company is
                                                liquidated; (v) the Underlying
                                                Company issues to all of its
                                                shareholders equity securities
                                                of an issuer other than the
                                                Underlying Company (other than
                                                in a transaction described in
                                                clauses (ii), (iii) or (iv)
                                                above) (a "Spin-off Event"); or
                                                (vi) a tender or exchange offer
                                                or going-private transaction is
                                                consummated for all the
                                                outstanding Underlying Shares.

                                                "Exchange Property" means
                                                securities, cash or any other
                                                assets distributed to holders
                                                of the Underlying Shares in any
                                                Reorganization Event,
                                                including, in the case of the
                                                issuance of tracking stock, the
                                                reclassified Underlying Shares
                                                and, in the case of a Spin-off
                                                Event, the Underlying Shares
                                                with respect to which the
                                                spun-off security was issued.

                                                "Transaction Value", at any
                                                date, means (i) for any cash
                                                received in any such
                                                Reorganization Event, the
                                                amount of cash received per
                                                Underlying Share; (ii) for any
                                                property other than cash or
                                                securities received in any such
                                                Reorganization Event, the
                                                market value, as determined by
                                                the calculation agent, as of
                                                the date of receipt, of such
                                                Exchange Property received for
                                                each Underlying Share; and
                                                (iii) for any security received
                                                in any such Reorganization
                                                Event (including in the case of
                                                the issuance of tracking stock,
                                                the reclassified Underlying
                                                Shares and, in the case of a
                                                Spin-off Event, the Underlying
                                                Shares with respect to which
                                                the spun-off security was
                                                issued), an amount equal to the
                                                closing price, as of the
                                                determination date, per share
                                                of such

                                      11
<PAGE>

                                                security multiplied by the
                                                quantity of such security
                                                received for each Underlying
                                                Share.

                                            If Exchange Property consists of
                                            more than one type of property,
                                            holders of Notes will receive at
                                            maturity a pro rata share of each
                                            such type of Exchange Property in
                                            proportion to the quantity of such
                                            Exchange Property received in
                                            respect of each Underlying Share.
                                            If Exchange Property includes a
                                            cash component, holders will not
                                            receive any interest accrued on
                                            such cash component. In the event
                                            Exchange Property consists of
                                            securities, those securities will,
                                            in turn, be subject to the
                                            antidilution adjustments set forth
                                            in paragraphs 1 through 5.

                                            For purposes of this paragraph 5,
                                            in the case of a consummated tender
                                            or exchange offer or going-private
                                            transaction involving Exchange
                                            Property of a particular type,
                                            Exchange Property shall be deemed
                                            to include the amount of cash or
                                            other property paid by the offeror
                                            in the tender or exchange offer
                                            with respect to such Exchange
                                            Property (in an amount determined
                                            on the basis of the rate of
                                            exchange in such tender or exchange
                                            offer or going-private
                                            transaction). In the event of a
                                            tender or exchange offer or a
                                            going-private transaction with
                                            respect to Exchange Property in
                                            which an offeree may elect to
                                            receive cash or other property,
                                            Exchange Property shall be deemed
                                            to include the kind and amount of
                                            cash and other property received by
                                            offerees who elect to receive cash.

                                        With respect to paragraphs 1 through 5
                                        above, no adjustments to the Exchange
                                        Factor shall be required unless such
                                        adjustment would require a change of at
                                        least 0.1% in the Exchange Factor then
                                        in effect. The Exchange Factor
                                        resulting from any of the adjustments
                                        specified above shall be rounded to the
                                        nearest one hundred-thousandth with
                                        five one-millionths being

                                      12
<PAGE>

                                        rounded upward.

                                        No adjustments to the Exchange Factor
                                        or method of calculating the Exchange
                                        Factor shall be required other than
                                        those specified above. However, the
                                        Issuer may, at its sole discretion,
                                        cause the Calculation Agent to make
                                        additional changes to the Exchange
                                        Factor upon the occurrence of corporate
                                        or other similar events that affect or
                                        could potentially affect market prices
                                        of, or shareholders' rights in, the
                                        Underlying Shares (or other Exchange
                                        Property) but only to reflect such
                                        changes, and not with the aim of
                                        changing relative investment risk. The
                                        adjustments specified above do not
                                        cover all events that could affect the
                                        market price or the Closing Price of
                                        the Underlying Shares, including,
                                        without limitation, a partial tender or
                                        partial exchange offer for the
                                        Underlying Shares.

                                        The Calculation Agent shall be solely
                                        responsible for the determination and
                                        calculation of any adjustments to the
                                        Exchange Factor or method of
                                        calculating the Exchange Factor and of
                                        any related determinations and
                                        calculations with respect to any
                                        distributions of stock, other
                                        securities or other property or assets
                                        (including cash) in connection with any
                                        Reorganization Event described in
                                        paragraph 5 above, and its
                                        determinations and calculations with
                                        respect thereto shall be conclusive.

                                        The Calculation Agent will provide
                                        information as to any adjustments to
                                        the Exchange Factor or method of
                                        calculating the Exchange Factor upon
                                        written request by any Holder of this
                                        Note.

Alternate Exchange Calculation in
case of an Event of Default...........  In case an Event of Default with
                                        respect to this Note shall have
                                        occurred and be continuing, the amount
                                        declared due and payable upon any
                                        acceleration of this Note shall be
                                        determined by the Calculation Agent,
                                        and shall be equal to the principal
                                        amount of this Note plus any accrued
                                        interest to but not including the date
                                        of acceleration.

                                      13
<PAGE>

Calculation Agent.....................  ABN AMRO Incorporated ("AAI"). All
                                        determinations made by the Calculation
                                        Agent will be at the sole discretion of
                                        the Calculation Agent and shall, in the
                                        absence of manifest error, be
                                        conclusive for all purposes and binding
                                        on the Holders and on the Issuer.

Additional Amounts....................  The Issuer shall, subject to certain
                                        exceptions and limitations set forth
                                        below, pay such additional amounts (the
                                        "Additional Amounts") to each holder of
                                        this Note as may be necessary in order
                                        that the net payment of the principal
                                        of this Note and any other amounts
                                        payable on this Note, after withholding
                                        for or on account of any present or
                                        future tax, assessment or governmental
                                        charge imposed upon or as a result of
                                        such payment by The Netherlands (or any
                                        political subdivision or taxing
                                        authority thereof or therein) or the
                                        jurisdiction of residence or
                                        incorporation of any successor
                                        corporation will not be less than the
                                        amount provided for in this Note to be
                                        then due and payable. The Issuer shall
                                        not, however, be required to make any
                                        payment of Additional Amounts to any
                                        such holder for or on account of:

                                        (a) any such tax, assessment or other
                                            governmental charge that would not
                                            have been so imposed but for (i)
                                            the existence of any present or
                                            former connection between such
                                            holder (or between a fiduciary,
                                            settlor, beneficiary, member or
                                            shareholder of such holder, if
                                            such holder is an estate, a trust,
                                            a partnership or a corporation)
                                            and The Netherlands and its
                                            possessions, including, without
                                            limitation, such holder (or such
                                            fiduciary, settlor, beneficiary,
                                            member or shareholder) being or
                                            having been a citizen or resident
                                            thereof, being or having been
                                            engaged in a trade or business or
                                            present therein or having, or
                                            having had, a permanent
                                            establishment therein or (ii) the
                                            presentation, where presentation
                                            is required, by the holder of a
                                            Note for payment on a date more
                                            than 30 days after the date on
                                            which such payment became due and

                                      14
<PAGE>

                                            payable or the date on which
                                            payment thereof is duly provided
                                            for, whichever occurs later;

                                        (b) any estate, inheritance, gift,
                                            sales, transfer or personal
                                            property tax or any similar tax,
                                            assessment or governmental charge;

                                        (c) any tax, assessment or other
                                            governmental charge that is
                                            payable otherwise than by
                                            withholding from payments on or in
                                            respect of this Note;

                                        (d) any tax, assessment or other
                                            governmental charge imposed on a
                                            payment that is required to be
                                            made pursuant to any European
                                            Union Directive on the taxation of
                                            savings implementing the
                                            conclusions of the ECOFIN Council
                                            meetings of November 26-27, 2000
                                            or any law implementing or
                                            complying with, or introduced in
                                            order to conform to such
                                            Directive;

                                        (e) any tax, assessment or other
                                            governmental charge required to be
                                            withheld by any paying agent from
                                            any payment of principal or other
                                            amounts payable, or interest on
                                            this Note, to the extent that such
                                            payment can be made without such
                                            withholding by presentation of
                                            this Note to any other paying
                                            agent;

                                        (f) any tax, assessment or other
                                            governmental charge that would not
                                            have been imposed but for a
                                            holder's failure to comply with a
                                            request addressed to the holder
                                            or, if different, the direct
                                            nominee of a beneficiary of the
                                            payment, to comply with
                                            certification, information or
                                            other reporting requirements
                                            concerning the nationality,
                                            residence or identity of the
                                            holder or beneficial owner of this
                                            Note, if such compliance is
                                            required by statute or by
                                            regulation of The Netherlands (or
                                            other relevant jurisdiction), or
                                            of any political subdivision or
                                            taxing authority thereof or
                                            therein, as a precondition to
                                            relief or exemption from such tax,
                                            assessment or

                                      15
<PAGE>

                                            other governmental charge; or

                                        (g) any combination of items (a), (b),
                                            (c), (d), (e) or (f).

                                        Nor shall the Issuer pay Additional
                                        Amounts with respect to any payment on
                                        this Note to a holder who is a
                                        fiduciary or partnership or other than
                                        the sole beneficial owner of such
                                        payment to the extent such payment
                                        would be required by the laws of The
                                        Netherlands (or other relevant
                                        jurisdiction), or any political
                                        subdivision thereof, to be included in
                                        the income, for tax purposes, of a
                                        beneficiary or settlor with respect to
                                        such fiduciary or a member of such
                                        partnership or a beneficial owner who
                                        would not have been entitled to the
                                        additional amounts had such
                                        beneficiary, settlor, member or
                                        beneficial owner been the holder of
                                        this Note.

     ABN AMRO Bank N.V., a public limited liability company incorporated under
the laws of The Netherlands and with corporate seat in Amsterdam (together with
its successors and assigns, the "Issuer"), for value received, hereby promises
to pay to CEDE & CO., or registered assignees, the principal sum of U.S.
$6,750,000 (UNITED STATES DOLLARS SIX MILLION SEVEN HUNDRED AND FIFTY
THOUSAND), on the Maturity Date specified above (except to the extent redeemed
or repaid prior to maturity) and to pay interest thereon at the Interest Rate
per annum specified above, from and including the Interest Accrual Date
specified above until the principal hereof is paid or duly made available for
payment weekly, monthly, quarterly, semiannually or annually in arrears as
specified above as the Interest Payment Period on each Interest Payment Date
(as specified above), commencing on the Interest Payment Date next succeeding
the Interest Accrual Date specified above, and at maturity (or on any
redemption or repayment date); provided, however, that if the Interest Accrual
Date occurs between a Record Date, as defined below, and the next succeeding
Interest Payment Date, interest payments will commence on the second Interest
Payment Date succeeding the Interest Accrual Date to the registered holder of
this Note on the Record Date with respect to such second Interest Payment Date;
and provided, further, that if this Note is subject to "Annual Interest
Payments," interest payments shall be made annually in arrears and the term
"Interest Payment Date" shall be deemed to mean the first day of March in each
year.

     Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until, but excluding the date the principal hereof has been paid or duly made
available for payment. The interest so payable, and punctually paid or duly

                                      16
<PAGE>

provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the date 15
calendar days prior to such Interest Payment Date (whether or not a Business
Day (as defined below)) (each such date a "Record Date"); provided, however,
that interest payable at maturity (or any redemption or repayment date) will be
payable to the person to whom the principal hereof shall be payable. As used
herein, "Business Day" means any day, other than a Saturday or Sunday, (a) that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close (x) in The City of New
York or (y) if this Note is denominated in a Specified Currency other than U.S.
dollars, Australian dollars or euro, in the principal financial center of the
country of the Specified Currency, or (z) if this Note is denominated in
Australian dollars, in Sydney and (b) if this Note is denominated in euro, that
is also a day on which the Trans-European Automated Real-time Gross Settlement
Express Transfer System ("TARGET") is operating (a "TARGET Settlement Day").

     Payment of the principal of this Note, any premium and the interest due at
maturity (or any redemption or repayment date), unless this Note is denominated
in a Specified Currency other than U.S. dollars and is to be paid in whole or
in part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Paying Agent, as
defined on the reverse hereof, maintained for that purpose in the Borough of
Manhattan, The City of New York, or at such other paying agency as the Issuer
may determine, in U.S. dollars. U.S. dollar payments of interest, other than
interest due at maturity or on any date of redemption or repayment, will be
made by U.S. dollar check mailed to the address of the person entitled thereto
as such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which is
payable in U.S. dollars, shall be entitled to receive payments of interest,
other than interest due at maturity or on any date of redemption or repayment,
by wire transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date.

     If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of
interest, principal or any premium with regard to this Note will be made by
wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate wire
transfer instructions have been received by the Paying Agent in writing, with
respect to payments of interest, on or prior to the fifth Business Day after
the applicable Record Date and, with respect to payments of principal or any
premium, at least ten Business Days prior to the Maturity Date or any
redemption or repayment date, as the case may be; provided that, if payment of
interest, principal or any premium with regard to this Note is payable in euro,
the account must be a euro account in a country for which the euro is the
lawful currency, provided, further, that if such wire transfer instructions are
not received, such payments will be made by check payable in such Specified
Currency mailed to the address of the person entitled thereto as such address
shall appear in the Note register; and provided, further, that payment of the
principal of this Note, any premium and the interest due at maturity (or on any
redemption or repayment date) will be made upon surrender of this Note at the
office or agency referred to in the preceding paragraph.

                                      17
<PAGE>

     If so indicated on the face hereof, the holder of this Note, if
denominated in a Specified Currency other than U.S. dollars, may elect to
receive all or a portion of payments on this Note in U.S. dollars by
transmitting a written request to the Paying Agent, on or prior to the fifth
Business Day after such Record Date or at least ten Business Days prior to the
Maturity Date or any redemption or repayment date, as the case may be. Such
election shall remain in effect unless such request is revoked by written
notice to the Paying Agent as to all or a portion of payments on this Note at
least five Business Days prior to such Record Date, for payments of interest,
or at least ten days prior to the Maturity Date or any redemption or repayment
date, for payments of principal, as the case may be.

     If the holder elects to receive all or a portion of payments of principal
of and any premium and interest on this Note, if denominated in a Specified
Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate Agent (as
defined on the reverse hereof) will convert such payments into U.S. dollars. In
the event of such an election, payment in respect of this Note will be based
upon the exchange rate as determined by the Exchange Rate Agent based on the
highest bid quotation in The City of New York received by such Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign
exchange dealers (one of which may be the Exchange Rate Agent unless such
Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the
quoting dealer of U.S. dollars for the Specified Currency for settlement on
such payment date in the amount of the Specified Currency payable in the
absence of such an election to such holder and at which the applicable dealer
commits to execute a contract. If such bid quotations are not available, such
payment will be made in the Specified Currency. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments.

     Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture, as defined on the reverse
hereof, or be valid or obligatory for any purpose.

                                      18
<PAGE>

     IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.

                                      ABN AMRO BANK N.V.

Dated:                                By:
       ---------------------              -------------------------------
                                          Name:
                                          Title:

                                      By:
                                          -------------------------------
                                          Name:
                                          Title:

TRUSTEE' CERTIFICATE
  OF AUTHENTICATION

This is one of the Notes referred
  to in the within-mentioned
  Indenture.

JPMORGAN CHASE BANK,
  as Trustee

By:
   -------------------------------
    Authorized Officer

<PAGE>

                              REVERSE OF SECURITY

     This Note is one of a duly authorized issue of Global Medium-Term Notes,
Series A, having maturities more than nine months from the date of issue (the
"Notes") of the Issuer. The Notes are issuable under an Indenture, dated as of
November 27, 2000, between the Issuer and JPMorgan Chase Bank, as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture) (as
may be amended or supplemented from time to time, the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities of the Issuer, the Trustee and holders of the Notes and the terms
upon which the Notes are, and are to be, authenticated and delivered. The
Issuer has appointed JPMorgan Chase Bank at its corporate trust office in The
City of New York as the paying agent (the "Paying Agent," which term includes
any additional or successor Paying Agent appointed by the Issuer) with respect
to the Notes. The terms of individual Notes may vary with respect to interest
rates, interest rate formulas, issue dates, maturity dates, or otherwise, all
as provided in the Indenture. To the extent not inconsistent herewith, the
terms of the Indenture are hereby incorporated by reference herein.

     Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof
in accordance with the provisions of the following two paragraphs, will not be
redeemable or subject to repayment at the option of the holder prior to
maturity.

     If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Initial Redemption Date
specified on the face hereof on the terms set forth on the face hereof,
together with interest accrued and unpaid hereon to the date of redemption. If
this Note is subject to "Annual Redemption Percentage Reduction," the Initial
Redemption Percentage indicated on the face hereof will be reduced on each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction specified on the face hereof until the redemption price of this Note
is 100% of the principal amount hereof, together with interest accrued and
unpaid hereon to the date of redemption. Notice of redemption shall be mailed
to the registered holders of the Notes designated for redemption at their
addresses as the same shall appear on the Note register not less than 30 nor
more than 60 days prior to the date fixed for redemption or within the
Redemption Notice Period specified on the face hereof, subject to all the
conditions and provisions of the Indenture. In the event of redemption of this
Note in part only, a new Note or Notes for the amount of the unredeemed portion
hereof shall be issued in the name of the holder hereof upon the cancellation
hereof.

     If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments
of $1,000 or, if this Note is denominated in a Specified Currency other than
U.S. dollars, in increments of 1,000 units of such Specified Currency (provided
that any remaining principal amount hereof shall not be less than the minimum
authorized denomination hereof) at the option of the holder hereof at a price
equal to 100% of the principal amount to be repaid, together with interest
accrued and unpaid hereon to the date of repayment. For this Note to be repaid
at the option of the holder hereof, the Paying Agent must receive at its
corporate trust

<PAGE>

office in the Borough of Manhattan, The City of New York, at least 15 but not
more than 30 days prior to the date of repayment, (i) this Note with the form
entitled "Option to Elect Repayment" below duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or
a commercial bank or a trust company in the United States setting forth the
name of the holder of this Note, the principal amount hereof, the certificate
number of this Note or a description of this Note's tenor and terms, the
principal amount hereof to be repaid, a statement that the option to elect
repayment is being exercised thereby and a guarantee that this Note, together
with the form entitled "Option to Elect Repayment" duly completed, will be
received by the Paying Agent not later than the fifth Business Day after the
date of such telegram, telex, facsimile transmission or letter; provided, that
such telegram, telex, facsimile transmission or letter shall only be effective
if this Note and form duly completed are received by the Paying Agent by such
fifth Business Day. Exercise of such repayment option by the holder hereof
shall be irrevocable. In the event of repayment of this Note in part only, a
new Note or Notes for the amount of the unpaid portion hereof shall be issued
in the name of the holder hereof upon the cancellation hereof.

     Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Unless otherwise provided on
the face hereof, interest payments for this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months.

     In the case where the Interest Payment Date or the Maturity Date (or any
redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.

     This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured
and unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.

     This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and, if denominated
in U.S. dollars, unless otherwise stated above, is issuable only in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. If this Note is denominated in a Specified Currency other than U.S.
dollars, then, unless a higher minimum denomination is required by applicable
law, it is issuable only in denominations of the equivalent of U.S. $1,000
(rounded to an integral multiple of 1,000 units of such Specified Currency), or
any amount in excess thereof which is an integral multiple of 1,000 units of
such Specified Currency, as determined by reference to the noon dollar buying
rate in The City of New York for cable transfers of such Specified Currency
published by the Federal Reserve Bank of New York (the "Market Exchange Rate")
on the Business Day immediately preceding the date of issuance.

     The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note

<PAGE>

may be transferred at the aforesaid office of the Trustee by surrendering this
Note for cancellation, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and duly executed by the registered holder hereof
in person or by the holder's attorney duly authorized in writing, and thereupon
the Trustee shall issue in the name of the transferee or transferees, in
exchange herefor, a new Note or Notes having identical terms and provisions and
having a like aggregate principal amount in authorized denominations, subject
to the terms and conditions set forth herein; provided, however, that the
Trustee will not be required (i) to register the transfer of or exchange any
Note that has been called for redemption in whole or in part, except the
unredeemed portion of Notes being redeemed in part, (ii) to register the
transfer of or exchange any Note if the holder thereof has exercised his right,
if any, to require the Issuer to repurchase such Note in whole or in part,
except the portion of such Note not required to be repurchased, or (iii) to
register the transfer of or exchange Notes to the extent and during the period
so provided in the Indenture with respect to the redemption of Notes. Notes are
exchangeable at said office for other Notes of other authorized denominations
of equal aggregate principal amount having identical terms and provisions. All
such exchanges and transfers of Notes will be free of charge, but the Issuer
may require payment of a sum sufficient to cover any tax or other governmental
charge in connection therewith. All Notes surrendered for exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and executed by the registered holder in person or by the holder's
attorney duly authorized in writing. The date of registration of any Note
delivered upon any exchange or transfer of Notes shall be such that no gain or
loss of interest results from such exchange or transfer.

     In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, the Issuer in its discretion may execute a new Note
of like tenor in exchange for this Note, but, if this Note is destroyed, lost
or stolen, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.

     The Indenture provides that (a) if an Event of Default (as defined in the
Indenture) due to the default in payment of principal of, premium, if any, or
interest on, any series of debt securities issued under the Indenture,
including the series of Medium-Term Notes of which this Note forms a part, or
due to the default in the performance or breach of any other covenant or
warranty of the Issuer applicable to the debt securities of such series but not
applicable to all outstanding debt securities issued under the Indenture shall
have occurred and be continuing, either the Trustee or the holders of not less
than 25% in principal amount of the debt securities of each affected series
(voting as a single class) may then declare the principal of all debt
securities of all such series and interest accrued thereon to be due and
payable immediately and (b) if an Event of Default due to a default in the
performance of any other of the covenants or agreements in the Indenture
applicable to all outstanding debt securities issued thereunder, including this
Note, or due to certain events of bankruptcy or insolvency of the Issuer, shall
have occurred and be continuing, either the Trustee or the holders of not less
than 25% in principal amount of all debt securities issued under the Indenture
then outstanding (treated as one class) may declare the principal of all such
debt securities and interest accrued thereon to be due and payable immediately,
but upon

<PAGE>

certain conditions such declarations may be annulled and past defaults may be
waived (except a continuing default in payment of principal (or premium, if
any) or interest on such debt securities) by the holders of a majority in
principal amount of the debt securities of all affected series then
outstanding.

     If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is declared to be
due and payable as described in the preceding paragraph, the amount of
principal due and payable with respect to this Note shall be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Indenture prior to
the acceleration of payment of this Note, the principal amount hereof shall
equal the amount that would be due and payable hereon, calculated as set forth
in clause (i) above, if this Note were declared to be due and payable on the
date of any such vote and (iii) for the purpose of any vote of securityholders
taken pursuant to the Indenture following the acceleration of payment of this
Note, the principal amount hereof shall equal the amount of principal due and
payable with respect to this Note, calculated as set forth in clause (i) above.

     The Indenture permits the Issuer and the Trustee, with the consent of the
holders of not less than a majority in aggregate principal amount of the debt
securities of all series issued under the Indenture then outstanding and
affected (voting as one class), to execute supplemental indentures adding any
provisions to or changing in any manner the rights of the holders of each
series so affected; provided that the Issuer and the Trustee may not, without
the consent of the holder of each outstanding debt security affected thereby,
(a) extend the final maturity of any such debt security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on redemption or repayment
thereof, or change the currency of payment thereof, or modify or amend the
provisions for conversion of any currency into any other currency, or modify or
amend the provisions for conversion or exchange of the debt security for
securities of the Issuer or other entities (other than as provided in the
antidilution provisions or other similar adjustment provisions of the debt
securities or otherwise in accordance with the terms thereof), or impair or
affect the rights of any holder to institute suit for the payment thereof
without the consent of the holder of each debt security so affected or (b)
reduce the aforesaid percentage in principal amount of debt securities the
consent of the holders of which is required for any such supplemental
indenture.

     Except as set forth below, if the principal of, premium, if any, or
interest on, this Note is payable in a Specified Currency other than U.S.
dollars and such Specified Currency is not available to the Issuer for making
payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
then the Issuer will be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis of the Market
Exchange Rate on the date of such payment or, if the Market Exchange Rate is
not available on such date, as of the most recent practicable date; provided,
however, that if the euro has been substituted for such Specified Currency, the
Issuer may at its option (or shall, if so

<PAGE>

required by applicable law) without the consent of the holder of this Note
effect the payment of principal of, premium, if any, or interest on, any Note
denominated in such Specified Currency in euro in lieu of such Specified
Currency in conformity with legally applicable measures taken pursuant to, or
by virtue of, the treaty establishing the European Community (the "EC"), as
amended by the treaty on European Union (as so amended, the "Treaty"). Any
payment made under such circumstances in U.S. dollars or euro where the
required payment is in an unavailable Specified Currency will not constitute an
Event of Default. If such Market Exchange Rate is not then available to the
Issuer or is not published for a particular Specified Currency, the Market
Exchange Rate will be based on the highest bid quotation in The City of New
York received by the Exchange Rate Agent at approximately 11:00 a.m., New York
City time, on the second Business Day preceding the date of such payment from
three recognized foreign exchange dealers (the "Exchange Dealers") for the
purchase by the quoting Exchange Dealer of the Specified Currency for U.S.
dollars for settlement on the payment date, in the aggregate amount of the
Specified Currency payable to those holders or beneficial owners of Notes and
at which the applicable Exchange Dealer commits to execute a contract. One of
the Exchange Dealers providing quotations may be the Exchange Rate Agent unless
the Exchange Rate Agent is an affiliate of the Issuer. If those bid quotations
are not available, the Exchange Rate Agent shall determine the market exchange
rate at its sole discretion.

     The "Exchange Rate Agent," if any, shall be indicated on the face hereof.

     All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of Notes and coupons.

     So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the
Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated.

     With respect to moneys paid by the Issuer and held by the Trustee or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting
in any way any obligation that the Issuer may have to pay the principal of or
interest or premium, if any, on this Note as the same shall become due.

     No provision of this Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place,
and rate, and in the coin or currency, herein prescribed unless otherwise
agreed between the Issuer and the registered holder of this Note.

<PAGE>

     Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.

     No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.

     This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.

     All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.

<PAGE>

                                 ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

           TEN COM  -  as tenants in common
           TEN ENT  -  as tenants by the entireties
           JT TEN   -  as joint tenants with right of survivorship and not as
                       tenants in common

     UNIF GIFT MIN ACT -_____________________ Custodian ___________________
                                (Minor)                       (Cust)

     Under Uniform Gifts to Minors Act ____________________________________
                                                    (State)

     Additional abbreviations may also be used though not in the above list.

                            -----------------------

<PAGE>

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

-----------------------------------------
[PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE]

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.

Dated:__________________

NOTICE:  The signature to this assignment must correspond with the name as
         written upon the face of the within Note in every particular without
         alteration or enlargement or any change whatsoever.

<PAGE>

                           OPTION TO ELECT REPAYMENT

The undersigned hereby irrevocably requests and instructs the Issuer to repay
the within Note (or portion thereof specified below) pursuant to its terms at a
price equal to the principal amount thereof, together with interest to the
Optional Repayment Date, to the undersigned at

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
        (Please print or typewrite name and address of the undersigned)

     If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
________; and specify the denomination or denominations (which shall not be
less than the minimum authorized denomination) of the Notes to be issued to the
holder for the portion of the within Note not being repaid (in the absence of
any such specification, one such Note will be issued for the portion not being
repaid): ________.

Dated:
      -----------------------
                                        ---------------------------------------
                                        NOTICE: The signature on this Option to
                                        Elect Repayment must correspond with
                                        the name as written upon the face of
                                        the within instrument in every
                                        particular without alteration or
                                        enlargement.EXHIBIT 10.1

===============================================================================

                            ASSET PURCHASE AGREEMENT

                                  BY AND AMONG

                                  ALLOY, INC.,

                           CASS COMMUNICATIONS, INC.,

                        YOUTHSTREAM MEDIA NETWORKS, INC.,

                          AMERICAN PASSAGE MEDIA, INC.

                                       AND

                           NETWORK EVENT THEATER, INC.

                           DATED AS OF AUGUST 5, 2002

===============================================================================

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE I  PURCHASE AND SALE OF ASSETS; CLOSING...............................1

   1.1  PURCHASE AND SALE OF ACQUIRED ASSETS..................................1
   1.2  EXCLUDED ASSETS.......................................................4
   1.3  ASSUMPTION OF LIABILITIES.............................................5
   1.4  EXCLUDED LIABILITIES..................................................5
   1.5  CONTINUING LIABILITIES................................................7
   1.6  CLOSING...............................................................7
   1.7  CONSENTS OF THIRD PARTIES.............................................7
   1.8  CLOSING DELIVERIES....................................................9
   1.9  FURTHER ASSURANCES....................................................9

ARTICLE II  PURCHASE PRICE...................................................10

   2.1  PURCHASE PRICE.......................................................10
   2.2  WORKING CAPITAL ADJUSTMENT...........................................10
   2.3  ACQUIRED ASSETS ADJUSTMENT...........................................11

ARTICLE III  REPRESENTATIONS AND WARRANTIES..................................13

   3.1  REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND SELLER PARENT......13
   3.2  REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE BUYER PARENT.....27

ARTICLE IV  ADDITIONAL AGREEMENTS............................................28

   4.1  LITIGATION COOPERATION...............................................28
   4.2  PUBLIC ANNOUNCEMENTS.................................................28
   4.3  TRANSFER TAXES.......................................................28
   4.4  EMPLOYMENT MATTERS...................................................29
   4.5  TRANSITION...........................................................30

ARTICLE V  INDEMNIFICATION...................................................31

   5.5  CAP ON LIABILITY.....................................................33

ARTICLE VI  MISCELLANEOUS....................................................34

   6.1  EXPENSES.............................................................34
   6.3  INTERPRETATION.......................................................34
   6.4  NOTICES..............................................................34
   6.5  COUNTERPARTS.........................................................35
   6.6  GOVERNING LAW; VENUE.................................................35
   6.7  BENEFITS OF AGREEMENT................................................36
   6.8  PRONOUNS.............................................................36
   6.9  AMENDMENT, MODIFICATION AND WAIVER...................................36
   6.10  NO THIRD PARTY BENEFICIARIES........................................36
   6.11  CONSENTS............................................................36
   6.12  INTERPRETATION......................................................36
   6.13  NO JOINT VENTURE....................................................36
   6.14  SPECIFIC PERFORMANCE................................................36

                                       i

<PAGE>

                                    EXHIBITS

Exhibit A    Bill of Sale, Assignment and Assumption Agreement

Exhibit B    Trademark Assignment

Exhibit C    Non-Competition and Confidentiality Agreement - Sellers, Seller
             Parent and Buyer

Exhibit D    License Agreement

Exhibit E    Sellers' Legal Opinion

Exhibit F    Buyer's Legal Opinion

                                       ii

<PAGE>

                             INDEX TO DEFINED TERMS

Acquired Assets............................................Section 1.1
Actions....................................................Section 3.1(m)
Adjustment Notice..........................................Section 2.2(c)
AdRax......................................................Preamble
Affiliate..................................................Section 1.1 (end)
Agreement..................................................Preamble
Assigned Contracts.........................................Section 1.1(a)
Assumed Liabilities........................................Section 1.3
Audited Working Capital....................................Section 2.2(c)
Bill of Sale, Assignment and Assumption Agreement..........Section 1.8(a)
Business...................................................Preamble
Business Day...............................................Section 1.6
Business Liability.........................................Section 3.1(e)(iii)
Buyer Legal Opinion........................................Section 1.8(f)
Buyer Parent...............................................Preamble
Buyer......................................................Preamble
Campus Voice Boards........................................Preamble
CERCLA.....................................................Section 3.1(q)(iv)
Closing Date...............................................Section 1.6
Closing....................................................Section 1.6
Code.......................................................Section 3.1(f)
Contract(s)................................................Section 3.1(k)
Copyrights.................................................Section 1.1(m)
Damages....................................................Section 1.1(m)
Disclosure Schedule........................................Section 3.1
Dispute Notice.............................................Section 2.2(c)
Employee Plans.............................................Section 3.1(s)(iii)
Employees..................................................Section 3.1(r)
Encumbrances...............................................Section 3.1(g)
Environmental Laws.........................................Section 3.1(q)(i)
ERISA Affiliate............................................Section 3.1(s)(iii)
ERISA......................................................Section 3.1(s)(iii)
Estimated Working Capital..................................Section 2.2(b)
Event Marketing............................................Preamble
Excluded Assets............................................Section 1.2
Excluded Liabilities.......................................Section 1.4
FICA.......................................................Section 4.4(c)
Final Working Capital......................................Section 2.2(c)
Fraud Claims...............................................Section 6.2(c)
FUTA.......................................................Section 5.5(d)
Governmental Authority ....................................Section 3.1(m)
GymBoards..................................................Preamble
Independent Auditor........................................Section 2.2(c)

                                      iii

<PAGE>

Independent Contractor.....................................Section 3.1(r)(ii)
Intellectual Property Licenses.............................Section 3.1(i)(i)
IP Assets..................................................Section 1.1(m)
Law(s).....................................................Section 3.1(b)(ii)
Liabilities................................................Section 3.1(d)
Licensed Software..........................................Section 3.1(j)
Losses.....................................................Section 5.2(d)
Material...................................................Section 3.1(k) (end)
Material Adverse Effect....................................Section 3.1(a)
Newspaper Placement........................................Preamble
Non Competition and Confidentiality Agreement..............Section 1.8(c)
Ordinary Course of Business................................Section 3.1(d)
Owned IP...................................................Section 3.1(i)
Person.....................................................Section 1.1 (end)
Postering..................................................Preamble
Purchase Price.............................................Section 2.1
Related Agreements.........................................Section 1.8
Revised Working Capital....................................Section 2.2(c)
Seller Affiliate...........................................Section 7.1(g)
Seller Financial Statement.................................Section 3.1(c)
Sellers' Legal Opinion.....................................Section 1.8(e)
Seller Parent..............................................Preamble
Sellers....................................................Preamble
Tax(es)....................................................Section 3.1(f)
Third Party Claim..........................................Section 5.3
Trademark Assignment.......................................Section 1.8(b)
Trademarks.................................................Section 3.1(i)(ii)
Transfer Documents.........................................Section 1.8(b)
Transfer Taxes.............................................Section 4.3
Transferred Employees......................................Section 4.4(a)
Working Capital............................................Section 2.2(a)

                                       iv

<PAGE>

                            ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT"), dated as of August 5,
2002, is made by and among Alloy, Inc., a Delaware corporation (the "BUYER
PARENT") and its indirect wholly owned subsidiary, Cass Communications, Inc.
(the "BUYER"), a Delaware corporation and a wholly owned subsidiary of Buyer
Parent, YouthStream Media Networks, Inc. (the "SELLER PARENT"), a Delaware
corporation, American Passage Media, Inc. and Network Event Theater, Inc. (the
"SELLERS"), each a Delaware corporation and a wholly owned subsidiary of Seller
Parent.

     WHEREAS, the Sellers are engaged in the business of owning and operating
display media boards and providing related marketing and media network services
targeted at teenagers and young adults ages 12 to 24, including (i) owning and
operating wallboards (gym boards) in boys and girls high school and middle
school locker rooms ("GYMBOARDS"), (ii) owning and operating a college wallboard
network ("CAMPUS VOICE BOARDS"), (iii) owning and operating college newspaper
advertising stands ("ADRAX"), (iv) college and school campus postering
advertising services ("POSTERING"), (v) developing, soliciting and placing
advertising and promotional materials, as sales representative or otherwise, in
print and nonprint media ("NEWSPAPER PLACEMENT"), (vi) conducting event
marketing programs ("EVENT MARKETING PROGRAMS") and (vii) conducting film
screenings on college campuses (the "SCREENING BUSINESS") (collectively, the
"BUSINESS"); and

     WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Sellers wish to sell to the Buyer, and the Buyer wishes to purchase from the
Sellers, all of the assets and properties of the Business, all as identified or
described herein, and the Sellers wish to transfer to the Buyer, and the Buyer
has agreed to assume, certain of the Sellers' obligations and liabilities
associated with the Business, and in connection therewith the parties hereto
wish to make certain agreements related to such purchase, sale, assignment and
assumption.

     NOW, THEREFORE, in consideration of the mutual benefits to be derived from
this Agreement and the representations, warranties, covenants, agreements,
conditions and promises contained herein and therein, the parties hereby agree
as follows:

                                   ARTICLE I
                      PURCHASE AND SALE OF ASSETS; CLOSING

     1.1 PURCHASE AND SALE OF ACQUIRED ASSETS. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, the Sellers shall (and
to the extent required Seller Parent shall, and shall cause any Affiliate (as
defined below) of Seller Parent (the Seller Parent and each such Affiliate, a
"SELLER AFFILIATE") to sell, transfer, assign and deliver to the Buyer, and
relinquish to the Buyer in perpetuity, free and clear of all Encumbrances (as
defined in Section 3.1(g)), all of Sellers' and the Seller Affiliates' right,
title and interest in and to all of the Acquired Assets. As used in this
Agreement, the term "ACQUIRED ASSETS" means the following assets, properties,
goodwill and rights of every kind and nature, real, personal and mixed, tangible
and intangible, of the Sellers and the Seller Affiliates, but excluding all
assets,

                                       1

<PAGE>

properties, and rights of every kind and nature that constitute Excluded Assets
(as defined in Section 1.2):

     (a) all right, title and interest of the Sellers or any Seller Affiliate
in, to and under all written and oral contracts, agreements, guaranties,
understandings, arrangements, deeds, mortgages, indentures, leases, licenses,
commitments, undertakings and other documents and instruments relating in any
manner to the Business or any part thereof, including, but not limited to, those
set forth in Section 1.1(a) of the Disclosure Schedule (the "ASSIGNED
CONTRACTS");

     (b) all equipment, machinery, furniture, furnishings, vehicles, supplies,
tools, parts and other tangible personal property of the Sellers and each Seller
Affiliate listed in Section 1.1(b) of the Disclosure Schedule;

     (c) all Gym Boards, consisting of customized messages boards and
information centers owned, leased, used, held for use or operated by the Sellers
and each Seller Affiliate and located in schools locker rooms nationwide,
consisting in the aggregate of at least 15,000 Gym Boards located in middle and
high school locker rooms, including, without limitation, the Gym Boards listed
in Section 1.1(c) of the Disclosure Schedule;

     (d) all Campus Voice Boards, consisting of the entire college wallboard
network owned, leased, used, held for use or operated by the Sellers and each
Seller Affiliate, consisting in the aggregate of at least 4,000 wallboards
installed at university and college campuses, including, without limitation, the
Campus Voice Boards listed in Section 1.1(d) of the Disclosure Schedule;

     (e) all AdRax, consisting of the entire network of college newspaper
advertising stands owned, leased, used, held for use or operated by the Sellers
and each Seller Affiliate, consisting in the aggregate of at least 2,000 campus
newspaper distribution racks at colleges and universities including, without
limitation, the racks listed in Section 1.1(e) of the Disclosure Schedule;

     (f) [intentionally omitted];

     (g) all assets used in the Newspaper Placement Business, and all right,
title and interest in such Newspaper Placement Business;

     (h) all assets used in the Screening Business and all right, title and
interest in such Screening Business except for the satellite theater equipment
set forth in Section 1.2(g) of the Disclosure Schedule;

     (i) all right, title and interest of the Sellers and each Seller Affiliate
with respect to personal property leasehold interests and rights thereunder
listed in Section 1.1(i) of the Disclosure Schedule;

     (j) the accounts receivable of the Sellers and each Seller Affiliate listed
in Section 1.1(j) of the Disclosure Schedule;

     (k) all prepaid items listed in Section 1.1(k) of the Disclosure Schedule;

                                       2

<PAGE>

     (l) all rights of the Sellers and each Seller Affiliate, under all federal,
state, local and foreign governmental licenses, consents, approvals,
authorizations, permits, orders, decrees and other compliance agreements
relating in any manner to, or used in connection with or necessary for the
conduct of the Business or any part thereof, including, without limitation,
those listed in Section 1.1(l) of the Disclosure Schedule;

     (m) all Trademarks and copyrights (including any registrations,
applications and renewals for any of the foregoing (collectively, "COPYRIGHTS")
associated with any of the Acquired Assets or Assigned Contracts or used or held
for use primarily in connection with the operation of the Business, including
without limitation the Trademarks set forth in Section 1.1(m) of the Disclosure
Schedule, and all rights thereunder or in respect thereof, including, without
limitation, licenses and sublicenses granted to the Sellers and any Seller
Affiliate in respect thereto and rights thereunder, together with all claims
against third parties for (i) profits and (ii) all costs, losses, claims,
liabilities, fines, penalties, damages and expenses (including, without
limitation, interest which may be imposed in connection therewith), court costs
and reasonable fees and disbursements of counsel, consultants and expert
witnesses (collectively, "DAMAGES") incurred by reason of the past infringement,
alleged infringement, unauthorized use or disclosure or alleged unauthorized use
or disclosure of any Trademarks or any Copyrights together with the right to sue
for and collect the same, or to sue for injunctive relief, for the Buyer's own
use and benefit, and for the use and benefit of its successors, assigns or other
legal representatives ("IP ASSETS");

     (n) originals of all books, records, manuals and other materials (in any
form or medium) relating in any manner to the Business or any of the Acquired
Assets, or used in connection with or necessary for the conduct of the Business
or any part thereof, including, without limitation, all advertising materials,
catalogues, price lists, correspondence, mailing lists, lists of customers,
distribution lists, photographs, production data, sales and promotional
materials and records, purchasing materials and records, personnel records,
research and development files, records, data, books, intellectual property
disclosures, media materials, accounting records, sales order files and
litigation files, and all rights in and to the information contained therein
(collectively, "BOOKS AND RECORDS"); except that Sellers and Seller Parent may
retain copies of Books and Records and the right to use such Books and Records
in connection with any litigation, arbitration, or other legal proceeding, for
tax and accounting purposes, and for any other reasonable business purpose not
precluded by the provisions of this Agreement or any Related Agreement;

     (o) all claims, demands, causes of action, choses in action, rights of
recovery, rights of set off and rights of recoupment of the Sellers and each
Seller Affiliate which either (1) arise after the Closing and relate in any
manner to any of the other Acquired Assets or any of the Assumed Liabilities or
(2) arose prior to the Closing and relate exclusively to any of the other
Acquired Assets or any of the Assumed Liabilities;

     (p) all guarantees, warranties, indemnities and similar rights in favor of
the Sellers or any Seller Affiliate which either (1) arise after the Closing and
relate in any manner to the Acquired Assets or the Assumed Liabilities or (2)
arose prior to the Closing and relate exclusively to the Acquired Assets or the
Acquired Liabilities;

                                       3

<PAGE>

     (q) all right, title and interest to, and in respect of the websites and
Internet domain names used or held for use primarily in connection with the
operation of the Business, including, without limitation, those listed in
Section 1.1(q) of the Disclosure Schedule;

     (r) all of Seller Parent's right, title and interest in and to the name
"YouthStream" and Sellers' interest in and to the names "American Passage Media"
and "Network Event Theater," respectively (collectively, the "SELLER NAMES");
and

     (s) all goodwill of the Sellers and each Seller Affiliate relating to the
Business or any part thereof, including, without limitation, the Seller Names.

For purposes of this Agreement, "AFFILIATE" means, as to any Person, any Person,
directly or indirectly, through one or more intermediaries, controlling,
controlled by or under common control with such Person, and "PERSON" means an
individual, corporation, partnership, limited liability company, joint venture,
trust or unincorporated organization or other legal entity.

     1.2 EXCLUDED ASSETS. The following assets and property shall be retained by
the Sellers and Seller Affiliates, as the case may be, and shall not constitute
Acquired Assets, regardless of whether any of them relates in any manner to or
is used in the Business (collectively, the "EXCLUDED ASSETS"):

     (a) all of the assets, properties, goodwill and rights of the Sellers or
any Seller Affiliate of every kind and nature, real, personal and mixed,
tangible and intangible, that are not owned, used or held for use by the
Sellers, the Seller Parent or any Seller Affiliate primarily in connection with
the operation of the Business;

     (b) all insurance policies, contracts, coverages or bonds owned by the
Sellers or any Seller Affiliate, including, without limitation, entitlements to
the return of premiums on cancellation of policies, and all rights of the
Sellers or any Seller Affiliate of every nature and description under or arising
out of such insurance policies;

     (c) all accounts receivable, notes receivable, credits, refunds, prepaid
expenses, deferred charges, advance payments, security deposits and prepaid
items, other than any of the foregoing (i) securing open customer orders which
are included in the Assigned Contracts or (ii) which are listed on Schedules
1.1(j) or 1.1(k);

     (d) all cash, negotiable securities, certificates of deposit, commercial
paper, treasury bills and treasury notes and all other marketable securities,
bonds, bank accounts, lock boxes, letters of credit and other cash equivalents
held on the Closing Date;

     (e) all real property owned by the Sellers or any Seller Affiliate and all
plants, buildings and improvements thereon and all right, title and interest of
the Sellers or any Seller Affiliate with respect to real property leasehold
interests and rights thereunder;

     (f) all employment, consulting, independent contractor and similar
Contracts to which either of the Sellers or any Seller Affiliate is a party or
is bound, other than any Contracts or agreements with the Independent
Contractors set forth in Schedule 3(r)(ii) to the extent assignable and accepted
by the Buyer after the Closing Date;

                                       4

<PAGE>

     (g) those assets, if any, set forth in Section 1.2(g) of the Disclosure
Schedule;

     (h) account books of original entry, general ledgers, tax returns and other
documents and records directly relating to Taxes;

     (i) the corporate records consisting of director and stockholder minutes
and proceedings;

     (j) all rights of the Sellers or the Seller Parent under this Agreement and
the agreements and instruments executed and delivered to the Sellers or the
Seller Parent by the Buyer or the Buyer Parent pursuant to this Agreement or any
Related Agreement;

     (k) all rights of the Sellers or the Seller Parent to any Tax refunds or
claims for Tax refunds other than those relating to the Acquired Assets or the
Business as conducted after the Closing Date;

     (l) all claims, demands, causes of action, choses in action, rights of
recovery, rights of set off and rights of recoupment of the Sellers and each
Seller Affiliate that relate exclusively to any of the other Excluded Assets or
any of the Excluded Liabilities; and

     (m) all guarantees, warranties, indemnities and similar rights in favor of
the Sellers or any Seller Affiliate that relate exclusively to any of the other
Excluded Assets or any of the Excluded Liabilities.

     1.3 ASSUMPTION OF LIABILITIES. At the Closing, pursuant to the Bill of
Sale, Assignment and Assumption Agreement referred to in Section 1.8(a), the
Buyer shall assume and shall agree to pay, perform and discharge the following
Liabilities (as defined in Section 3.1(d)) of the Sellers (collectively, the
"ASSUMED LIABILITIES"):

     (a) Liabilities accruing after the Closing Date under the Assigned
Contracts, other than (i) Liabilities under any Assigned Contract required to be
disclosed in Section 3.1(k) of the Disclosure Schedule that is not disclosed
therein, or (ii) Liabilities under any Assigned Contract related to any material
misrepresentation made by the Sellers and the Seller Parent in Section 3.1(k)
relating to such Assigned Contract; and

     (b) All current liabilities (as defined in Section 2.2) of the Sellers or
any Seller Affiliate to the extent taken into account in the determination of
"WORKING CAPITAL" under Section 2.2.

     (c) The Buyer will not assume, discharge, undertake to perform or pay any
other Liabilities of the Sellers or any Seller Affiliate.

     1.4 EXCLUDED LIABILITIES. Notwithstanding Section 1.3 or any other
provision hereof or any schedule or exhibit hereto and regardless of any
disclosure to the Buyer or the Buyer Parent, the Buyer shall have no liability
whatsoever for any Liabilities of either of the Sellers or any Seller Affiliate
which are not specifically assumed under Section 1.3, and, without limiting the
generality of the foregoing, the Buyer shall not assume, nor shall it be deemed
to have assumed, any of the following Liabilities (the "EXCLUDED LIABILITIES"):

     (a) any Liabilities arising under or relating to any written or oral
contracts, agreements,

                                       5

<PAGE>

guaranties, understandings, deeds, mortgages, indentures, leases, licenses,
commitments, undertakings or other documents or instruments to which either of
the Sellers or any Seller Affiliate is a party, other than liabilities arising
under the Assigned Contracts to the extent provided in Section 1.3(a);

     (b) any Damages relating in any manner to or arising from any breach or
default by the Sellers or any Seller Affiliate of any Assigned Contract
occurring on or prior to the Closing Date regardless of whether the Sellers or
the Seller Parent discloses such breach or default pursuant to this Agreement;

     (c) any Liabilities of either of the Sellers or any Seller Affiliate in
respect of any indebtedness for, or guarantees of, borrowed money;

     (d) any Liabilities of either of the Sellers to any Seller Affiliate or
current or former stockholder of either of the Sellers or any Seller Affiliate,
including the Seller Parent;

     (e) any Liabilities of either of the Sellers or any Seller Affiliate for or
in respect of Taxes (as defined in Section 3.1(f)) other than those assessed by
operation of Law against the Buyer arising out of or in connection with the
transactions contemplated hereby;

     (f) any Liabilities of either of the Sellers or any Seller Affiliate
arising out of or relating, directly or indirectly, to any property of which
either of the Sellers or such Seller Affiliate has disposed or proposed to
dispose, including, without limitation, any and all Liabilities to any other
Person incurred in connection with any sale or proposed sale of (i) all or any
substantial part of the assets of either of the Sellers or any Seller Affiliate,
or any other business combination or proposed business combination, (ii) any
real property of either of the Sellers or any Seller Affiliate, (iii) any other
business or (iv) any securities of either of the Sellers, any Seller Affiliate
or any other Person;

     (g) any Liabilities arising out of or relating, directly or indirectly, to
any Employee Plan (as defined in Section 3.1(s)) or the termination thereof;

     (h) any Liabilities with respect to fees and expenses incurred by the
Sellers or any Seller Affiliate in connection with the sale or proposed sale or
other disposition or proposed disposition of all or part of the assets or
securities of either of the Sellers or any Seller Affiliate;

     (i) any Liabilities of either of the Sellers or any Seller Affiliate to any
present or former employee or independent contractor of either of the Sellers or
any Seller Affiliate, including, without limitation, any and all Liabilities
arising under any federal, state, local or foreign laws, ordinances, regulations
or orders;

     (j) any Liabilities of either of the Sellers or any Seller Affiliate
arising out of or related to any Actions (as defined in Section 3.1(m)) against
either Seller or any Seller Affiliate, including, without limitation, any
Actions pending or threatened against either of the Sellers as of the Closing
Date other than Liabilities arising out of any act of the Buyer, or the
operation of the Business by the Buyer or any Affiliate of the Buyer, after the
Closing;

                                       6

<PAGE>

     (k) any Liabilities of either of the Sellers or any Seller Affiliate for
damage or injury to Person or property including, without limitation, those
resulting from or arising out of environmental claims;

     (l) any Liabilities of either of the Sellers or any Seller Affiliate
arising out of or resulting from non-compliance with any Law;

     (m) any Liabilities of either of the Sellers or any Seller Affiliate
arising out of, relating to or resulting from any obligation to indemnify any
Person other than those arising after the Closing Date under any Assigned
Contract;

     (n) any other Liabilities of either of the Sellers or any Seller Affiliate
relating to or arising out of the operation of the Business or the ownership of
the Acquired Assets prior to the Closing other than the Assumed Liabilities;

     (o) any Liabilities attributable in any manner to any of the Excluded
Assets; and

     (p) any Liabilities of either of the Sellers or any Seller Affiliate
arising under this Agreement or any of the Related Agreements (as defined in
Article IV).

     1.5 CONTINUING LIABILITIES. To the extent that any Assumed Liability or any
Damages imposed on the Buyer by operation of law or otherwise in connection
with, or which otherwise arises out of or in relation to, the transactions
contemplated hereby (other than the Buyer's assumption of the Assumed
Liabilities pursuant to Section 1.3), results from or arises out of an event or
condition which is continuing or continuous in nature, the Buyer shall assume
and discharge only that portion of such Assumed Liability or Damage that results
from or arises out of that part of the event which occurs, or condition which
exists, after the Closing. The Sellers and the Seller Parent jointly and
severally agree to discharge all of such continuing or continuous Assumed
Liabilities or Damages, including, without limitation, those Assumed Liabilities
assumed by the Buyer pursuant to Section 1.3, if and to the extent they result
from a breach by either of the Sellers or the Seller Parent of any of their
respective representations, warranties or covenants hereunder.

     1.6 CLOSING. The closing of the transactions contemplated by this Agreement
(the "CLOSING") will take place at 10:00 a.m. (New York time) on August 5, 2002
(the "CLOSING DATE"), unless another date is agreed to in writing by the
parties. The Closing shall take place at the offices of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., 666 3rd Avenue, New York, New York, unless
another time or place is agreed to in writing by the parties.

     1.7 CONSENTS OF THIRD PARTIES.

     (a) Notwithstanding anything in this Agreement or in any Related Agreement
to the contrary, neither this Agreement nor any such Related Agreement shall
constitute an agreement to assign or otherwise transfer any Assigned Contract or
any other Acquired Asset, or any rights thereunder, if an attempted assignment
or transfer thereof would, without the consent of a third party to such
assignment or transfer, constitute a breach thereof, would be ineffective or
would affect adversely the rights of the Buyer or the Sellers thereunder.

                                       7

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     (b) If any such consent has not been obtained as of the Closing Date, the
Sellers and the Seller Parent shall continue to use all commercially reasonable
efforts to obtain such consent after the Closing. In such circumstances, until
such consent has been obtained, the Buyer shall use all commercially reasonable
efforts to perform in the name of the Sellers all of the obligations of the
Sellers with respect to each Assigned Contract for which any such consent has
not been obtained; provided, however, that the Buyer shall not be required to
take any action in performing such obligations which, in the Buyer's reasonable
judgment, would subject the Buyer to any significant Liability or an
unreasonable risk of incurring any such Liability.

     (c) If any Assigned Contract or other Acquired Asset is not transferred to
the Buyer at the Closing pursuant to this Agreement, the Sellers and the Seller
Parent shall cooperate with the Buyer in any reasonable arrangement requested by
the Buyer and designed to provide for the Buyer all of the benefits of, and to
have the Buyer assume the burdens, liabilities, obligations and expenses
expressly assumed by the Buyer hereunder with respect to, such Assigned Contract
or other Acquired Asset, as applicable. At the Buyer's request, the Sellers and
the Seller Parent shall, at Buyer's expense, take all reasonable actions
requested by the Buyer to enforce for the benefit of the Buyer any and all
rights of the Sellers or any Seller Affiliate with respect to any such Assigned
Contract or other Acquired Asset that is not otherwise transferred pursuant to
the provisions of this Agreement. The Sellers hereby authorize the Buyer to
perform all of the Sellers' obligations after the Closing with respect to all
such Assigned Contracts and other Acquired Assets and hereby grant to the Buyer
a power of attorney to act in the name of the Sellers with respect thereto. Such
power of attorney shall be coupled with an interest and shall be irrevocable.
The Sellers and the Seller Parent agree to remit, or cause to be remitted,
promptly to the Buyer all collections or payments received by the Sellers or any
Seller Affiliate in respect of all such Assigned Contracts and other Acquired
Assets, and shall hold or cause to be held all such collections or payments in
trust for the benefit of, and promptly pay the same over to, the Buyer;
provided, however, that nothing herein shall create or provide any rights or
benefits in or to third parties.

     (d) If, subsequent to the Closing, a claim brought within one year of
Closing by any party challenging any of the transactions contemplated hereby
results in any ruling or order which has the result of frustrating in a material
way the transfer of any of the Acquired Assets hereunder to the Buyer or the
Buyer's use thereof pursuant to the applicable transfer and licensing provisions
contained herein, the Sellers and the Seller Parent shall cooperate with the
Buyer in any reasonable arrangement requested by the Buyer and designed to give
the Buyer, as nearly as possible, the same economic benefits, and to have the
Buyer assume the same burdens, liabilities, obligations and expenses, as if such
transfer or license had been consummated in accordance with the provisions
hereof.

     (e) Nothing in this Section 1.7 shall be deemed to modify in any respect
any of the Sellers or the Seller Parent's representations or warranties set
forth herein or the conditions to the Buyer's obligations contained in Article V
hereof, be deemed a waiver by the Buyer of its right to have received on or
before the Closing Date an effective assignment of all of the Acquired Assets or
be deemed to constitute an agreement to exclude from the Acquired Assets any
assets described under Section 1.1.

                                       8

<PAGE>

     1.8 CLOSING DELIVERIES. At the Closing, in addition to the agreements set
forth in Article IV, the parties shall execute and deliver the following
documents (the documents referred to in 1.8 (a) - (d) below collectively, the
"RELATED AGREEMENTS"):

     (a) the Sellers, the Seller Parent and the Buyer shall execute and deliver
the bill of sale, assignment and assumption agreement in the form of EXHIBIT A
attached hereto (the "BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT")
pursuant to which the Sellers will transfer and assign to the Buyer certain of
the Acquired Assets and the Buyer will assume the Assumed Liabilities;

     (b) each of the Sellers and the Seller Affiliates who are holders of any
Trademarks (as defined in Section 3.1(i)) included as part of the Acquired
Assets shall execute and deliver, and the Seller Parent shall use its best
efforts to cause any third party who is not a Seller Affiliate but who holds
title or rights to any Trademark included in the Acquired Assets to execute and
deliver to the Buyer) one or more trademark assignments in the form of EXHIBIT B
attached hereto (the "TRADEMARK ASSIGNMENT" and together with the BILL OF SALE,
ASSIGNMENT AND ASSUMPTION AGREEMENT, the "TRANSFER DOCUMENTS");

     (c) the Sellers, the Seller Parent and the Buyer shall execute and deliver
the non-competition and confidentiality agreement in the form of EXHIBIT C
attached hereto (the "NON-COMPETITION AND CONFIDENTIALITY AGREEMENT") pursuant
to which the Sellers and the Seller Parent will covenant not to engage in any
Competitive Business (as defined therein);

     (d) the Seller Parent and the Buyer shall execute and deliver the license
agreement in substantially the form of Exhibit D attached hereto (the "License
Agreement") pursuant to which the Seller Parent shall be entitled to use the
name "YouthStream Media Networks, Inc.", for a period of time after the Closing;

     (e) the Sellers and the Seller Parent shall cause their legal counsel to
deliver legal opinions in the forms attached as EXHIBIT E hereto (the "SELLERS'
LEGAL OPINION"); and

     (f) the Buyer and the Buyer Parent shall cause their legal counsel to
deliver a legal opinion addressed to the Sellers and the Seller Parent in the
form attached as EXHIBIT F hereto (the "BUYER'S LEGAL OPINION").

     1.9 FURTHER ASSURANCES. At any time and from time to time after the
Closing, at the request of the Buyer and without further consideration, the
Sellers and the Seller Parent shall execute and deliver, or cause to be executed
and delivered, such other instruments of sale, transfer, conveyance, assignment
and confirmation, and will take such further action, as may be reasonably
requested in order to more effectively transfer, convey and assign to the Buyer,
and to confirm the Buyer's title in and to, the Acquired Assets, and shall
execute, or cause to be executed, such other documents and take, or cause to be
taken, such further action as may be reasonably required or desirable to carry
out the provisions of this Agreement, each of the Related Agreements and the
transactions contemplated hereby and thereby. Without in any way limiting the
foregoing, the Sellers and the Seller Parent shall use commercially reasonable
efforts to terminate the UCC filings listed in Section 3.1(g) of the Disclosure
Schedule. The Buyer may, in its sole discretion, elect to treat or not to treat
as an Assigned Contract any Contract to which

                                       9

<PAGE>

the Sellers or any Seller Affiliate is a party, or by which any of them or their
properties are bound, which was required by the provisions of this Agreement to
be disclosed in, but is not listed in, Section 3.1(k) of the Disclosure
Schedule. Without limiting the generality of the foregoing, the Sellers and the
Seller Parent shall, from time to time, cooperate with, and, to the extent
reasonably practicable, take all action reasonably requested by the Buyer, to
effectively transition the Acquired Assets and the Business to the Buyer,
including without limitation using commercially reasonable efforts to maintain
the continuity of the Business as it is transferred to the Buyer.

                                   ARTICLE II
                                 PURCHASE PRICE

     2.1 PURCHASE PRICE. The entire purchase price payable by the Buyer to the
Sellers for the Acquired Assets and the transactions contemplated by this
Agreement and the Related Agreements shall be Seven Million Dollars ($7,000,000)
(the "PURCHASE PRICE"). At the Closing, the Buyer shall deliver the Purchase
Price by wire transfer of immediately available funds on behalf of the Sellers
and Seller Parent, to the account specified in Section 2.1 of the Disclosure
Schedule.

     2.2 WORKING CAPITAL ADJUSTMENT.

     (a) For purposes hereof, the term "WORKING CAPITAL" means the excess of the
accounts receivable (less the allowance for bad debts) and prepaid expenses over
the accounts payable, accrued expenses and deferred revenues shown in Section
2.2 of the Disclosure Schedule (the "WORKING CAPITAL STATEMENT").

     (b) The amount of $283,523 shown on the Working Capital Statement is
referred to as the "ESTIMATED WORKING CAPITAL." Within ten (10) Business Days of
the Closing Date, the Buyer shall pay to the Sellers the amount of $283,523 by
wire transfer of immediately available funds or bank check. As used herein,
"BUSINESS DAY" means any day on which the banks in New York are open for
business.

     (c) As soon as reasonably practicable after the Closing, but in any event
within sixty (60) days of the Closing Date, the Buyer shall review the Working
Capital Statement to verify the accuracy of the determination of the Estimated
Working Capital as set forth therein. If the Buyer determines that the Working
Capital as of the Closing Date did not equal the Estimated Working Capital (the
Working Capital as so determined, the "REVISED WORKING CAPITAL"), the Buyer
shall deliver to the Sellers a notice (the "ADJUSTMENT NOTICE") setting forth
the Buyer's Revised Working Capital as determined by the Buyer and the
calculation thereof in reasonable detail. The Sellers shall have twenty (20)
Business Days from receipt of the Adjustment Notice to provide written notice
that they dispute the Adjustment Notice (a "DISPUTE NOTICE"), which Dispute
Notice shall provide a reasonably detailed description of such dispute and the
Sellers' calculation of the Working Capital as of the Closing Date. If the
Sellers do not timely deliver a Dispute Notice to the Buyer, or if the Sellers
notify the Buyer that they have no objection to the Dispute Notice, the Buyer's
determination of the Revised Working Capital shall be final and binding on all
parties and the Purchase Price shall be adjusted in accordance with the
provisions of Section 2.2(d). If the Sellers timely deliver a Dispute Notice to
the Buyer and the Buyer and

                                       10

<PAGE>

the Sellers are unable to mutually agree on the Revised Working Capital within
ten (10) days following receipt by the Buyer of the Dispute Notice, the Buyer
and the Sellers shall mutually agree on an independent public accounting firm
(the "INDEPENDENT AUDITOR") to review the Working Capital Statement, the
Adjustment Notice and the Dispute Notice (and all related information). The
Independent Auditor shall determine the Working Capital as of the Closing Date
(the "AUDITED WORKING CAPITAL") which determination shall be final and binding
on all parties absent manifest error. The costs of the Independent Auditor shall
be borne by the party (either the Buyer or the Sellers) whose determination of
the Working Capital (as set forth in the Adjustment Notice, for the Buyer, or in
the Dispute Notice, for the Sellers) was farthest from the determination of the
Audited Working Capital, or equally by the Buyer and the Sellers if the
determination by the Independent Auditor is equidistant between the
determinations of the parties. For purposes hereof, "FINAL WORKING CAPITAL"
shall equal (i) the Estimated Working Capital, if the Buyer does not deliver an
Adjustment Notice in accordance with the provisions hereof, (ii) the Revised
Working Capital, if the Buyer delivers an Adjustment Notice in accordance with
the provisions hereof and the Sellers do not timely deliver a Dispute Notice,
(iii) the amount agreed upon by the Buyer and the Sellers if the Sellers timely
deliver a Dispute Notice and the Independent Auditor is not engaged, or (iv) the
Audited Working Capital, if the Buyer delivers an Adjustment Notice in
accordance with the provisions hereof and the Independent Auditor is engaged.

     (d) Upon the determination of the Final Working Capital, the Purchase Price
shall be adjusted as follows:

          (i) if the Final Working Capital equals or exceeds the Estimated
     Working Capital, no adjustments to the Purchase Price pursuant to this
     Section 2.2(b), or

          (ii) if the Estimated Working Capital exceeds the Final Working
     Capital by more than $25,000, the Sellers and the Seller Parent, jointly
     and severally, agree to pay to Buyer the amount equal to the amount by
     which the Estimated Working Capital exceeds the Final Working Capital.

     (e) Any payment required pursuant to Section 2.2(d) shall be made within
ten (10) Business Days following the determination of the Final Working Capital.

     2.3 ACQUIRED ASSETS ADJUSTMENT.

     (a) At any time during the three month period following the Closing, the
Buyer may elect to commence an audit of the Gym Boards, Campus Voice Boards
and/or AdRax included as part of the Acquired Assets as set forth in 1.1(c),
1.1(d) and 1.1(e) of the Disclosure Schedule, respectively (each a "BOARD
NETWORK"). If the Buyer commences an audit, the Buyer will have three months
from the date of commencement of such audit in which to complete such audit.

     (b) The Buyer shall notify the Seller Parent in writing at least two (2)
Business Days prior to auditing any particular school where a portion of the
Board Network is maintained of (i) the Board Network(s) to be audited; (ii the
anticipated dates, times and locations to be included in such audit; and (iii)
with reasonable specificity, the methodology for conducting such audit. Any
audit shall be conducted by the then-existing representatives servicing the Gym
Boards,

                                       11

<PAGE>

Campus Voice Boards and/or AdRax, and may be subject to oversight and review by
a reputable independent third party auditor selected by the Buyer who is
experienced in conducting similar audits in the industry. The Buyer agrees that
any audit must include at least 10% of the applicable Board Network audited in
order for the Buyer to receive any adjustment for that Board Network.

     (c) The Buyer, on the one hand, and the Seller and the Seller Parent
jointly on the other, shall each be responsible for half of the costs of any
audit conducted up to a maximum of $25,000 each. In addition, the Seller Parent
and the Sellers shall have the right, at their sole own expense, to send any of
their employees, representatives or agents to participate in the audit, and the
Buyer shall facilitate such participation in conducting the audit, including by
providing a schedule of dates and times when auditors will visit each school
being audited.

     (d) The Buyer shall provide to the Seller Parent, the auditor's final
report, together with all supporting materials as reasonably requested by the
Sellers and the Seller Parent, promptly following the availability of the same,
and within ten (10) Business Days following completion of the audit, the Buyer,
the Seller Parent and the Sellers shall cooperate in good faith to resolve any
audit findings disputed by any party. If the Buyer and the Seller Parent are
unable to resolve any dispute within such ten (10) Business Day period, the
audit report as originally finalized by the auditor shall govern for purposes of
this Agreement.

     (e) Upon completion of the audit, the results of the audit shall be
extrapolated across the entire Board Network to calculate the amount of Gym
Boards, Campus Voice Boards and/or AdRax missing or damaged across the entire
Board Network. If based on the results of any such audit and extrapolation,
there is evidence that, after deducting the aggregate number of deemed "missing"
or "damaged" (to the point they reasonably require replacement) Gym Boards,
Campus Voice Boards or AdRax, as the case may be, the number of Gym Boards does
not equal at least 13,500; the number of Campus Voice Boards does not equal at
least 3,600; or the number of AdRax does not equal at least 1,800, as the case
may be, the Buyer shall be entitled to an adjustment as follows:

          (i) the Buyer shall first replace any missing or damaged Gym Boards,
     Campus Voice Boards or AdRax from such of the inventory of 1672 uninstalled
     Gym Boards, 942 uninstalled Campus Voice Boards or 942 uninstalled AdRax
     transferred as part of the Acquired Assets that are not themselves damaged
     so as to require replacement.

          (ii) for any additional missing or damaged Gym Boards, Campus Voice
     Boards or AdRax, the Seller Parent shall pay the Buyer the following agreed
     upon replacement value amounts to the extent Buyer is entitled to payment
     under paragraphs (a) through (f): (i) for each missing or damaged Gym Board
     - $100 each; (ii) Campus Voice Boards - $125 each and (iii) AdRax - $175
     each. The Seller Parent agrees to pay to Buyer any amounts due to the Buyer
     as result of the adjustment mechanism set forth in this Section 2.3 which
     are not in dispute and agrees to negotiate in good faith with the Buyer to
     resolve any disputed amounts.

                                       12

<PAGE>

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

     3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND SELLER PARENT. The
Sellers and the Seller Parent, jointly and severally, represent and warrant to
the Buyer and the Buyer Parent, that, except as disclosed in the disclosure
schedule dated the date hereof, and delivered to the Buyer (which disclosure
schedule shall contain specific references to the representations and warranties
to which the disclosures contained therein relate and an item on such disclosure
schedule shall be deemed to qualify only the particular subsection or
subsections specified for such item; provided, however, that for convenience
purposes, certain disclosures in one section or subsection of the disclosure
schedule may be specifically cross-referenced to another section or subsection
of the disclosure schedule and; provided, further, however, any item that is
disclosed in a particular section or subsection of the disclosure schedule shall
be deemed to be disclosed and incorporated into any other section or subsection
of the disclosure schedule where such disclosure would be otherwise appropriate
to the extent that it is reasonably apparent from the express language of such
disclosure that it applies to such other section or subsection) (the "DISCLOSURE
SCHEDULE"):

     (a) ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER. Each of Sellers
and Seller Parent (i) is a corporation duly organized, validly existing and in
good standing under the law of the State of Delaware, (ii) has all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as now being conducted, to enter into this
Agreement and the Related Agreements to which it is a party, to perform its
obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby and (iii) is duly qualified and in good standing
to do business as a foreign corporation in all jurisdictions where it is
required to be qualified except where the failure to be so qualified and in good
standing would have a Material Adverse Effect. For purposes of this Agreement,
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the Acquired
Assets, Assumed Liabilities or the Business taken as a whole. Each of the
Sellers and Seller Parent has delivered to the Buyer true and complete copies of
its Certificate of Incorporation and by-laws, in each case as amended or
restated to the date hereof.

     (b) AUTHORITY; NO CONSENTS.

          (i) The execution, delivery and performance by each of the Sellers and
     the Seller Parent of this Agreement and the Related Agreements, and the
     consummation of the transactions contemplated hereby and thereby, have been
     duly and validly authorized by all necessary corporate action on the part
     of each of the Sellers and the Seller Parent. This Agreement and the
     Related Agreements have been duly and validly executed and delivered, and
     are the valid and binding obligations of each of the Sellers or the Seller
     Parent, respectively, enforceable against each of the Sellers and the
     Seller Parent in accordance with their respective terms; except as the
     enforceability thereof may be limited by bankruptcy, insolvency,
     reorganization, moratorium or similar laws relating to or affecting the
     rights of creditors generally and by general equitable principles
     (regardless of whether such enforceability is considered in a proceeding in
     equity or at law).

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<PAGE>

          (ii) Neither the execution, delivery and performance of this Agreement
     or the Related Agreements by each of the Sellers and the Seller Parent, nor
     the consummation by each of the Sellers or the Seller Parent of the
     transactions contemplated hereby or thereby, nor compliance by each of the
     Sellers or the Seller Parent with any provision hereof or thereof will in
     any material respect (A) conflict with, (B) result in any violation of, (C)
     cause a default under (with or without due notice, lapse of time or both),
     (D) give rise to any right of termination, amendment, cancellation or
     acceleration of any obligation contained in or the loss of any material
     benefit under or (E) result in the creation of any Encumbrance (as defined
     in Section 3.1(g)) on or against any assets, rights or property of either
     of the Sellers or the Seller Parent under any term, condition or provision
     of (x) any instrument or agreement to which either of the Sellers or the
     Seller Parent is a party, or by which either of the Sellers or the Seller
     Parent or any of their respective properties, assets or rights may be
     bound, (y) any law, statute, rule, regulation, order, writ, injunction,
     decree, permit, concession, license or franchise of any Governmental
     Authority (as defined in Section 3.1(m)) (each a "LAW", and collectively,
     the "LAWS") applicable to either of the Sellers or the Seller Parent or any
     of their respective properties, assets or rights or (z) the Certificate of
     Incorporation or by-laws of either of the Sellers or the Seller Parent.

          (iii) Except as set forth in Section 3.1(b) of the Disclosure
     Schedule, no permit, authorization, consent or approval of or by, or any
     notification of or filing with, any Governmental Authority or other Person
     is required in connection with the execution, delivery and performance by
     each of the Sellers or the Seller Parent of this Agreement or the Related
     Agreements or the consummation by each of the Sellers or the Seller Parent
     of the transactions contemplated hereby or thereby other than those
     permits, authorizations, consents or approvals which may be required to be
     obtained from Governmental Authorities in connection with the assignment of
     any Contract with any state or government run school or university which
     failure, either in the aggregate or individually, will not have Material
     Adverse Effect.

     (c) FINANCIAL INFORMATION. Section 3.1(c) of the Disclosure Schedule
consists of an unaudited statement of assets and liabilities related to the
Acquired Assets and the Acquired Liabilities, dated as of August 1, 2002 (the
"SELLER FINANCIAL STATEMENT"). The Seller Financial Statement (a) was prepared
in accordance with the books and records of the Sellers or the Seller Parent, as
the case may be, and (b) fairly presents the financial condition of the Acquired
Assets and the Acquired Liabilities as of August 1, 2002.

     (d) ABSENCE OF UNDISCLOSED LIABILITIES. Neither of the Sellers nor the
Seller Parent nor any other Seller Affiliate has any liabilities or obligations
of any nature (whether known or unknown, fixed or contingent, secured or
unsecured, accrued, absolute or otherwise and whether due or to become due
(collectively, "LIABILITIES")), relating in any manner to, or arising from the
Business or the ownership, use or operation of any of the Acquired Assets except
(i) as set forth in Section 3.1(d) of the Disclosure Schedule, (ii) Liabilities
under leases, commitments and other agreements entered into in the ordinary
course of business (which, to the extent required by Section 3.1(k), are set
forth on Section 3.1(k) of the Disclosure Schedule), (iii) Liabilities disclosed
or reserved against in the Seller Financial Statement, (iv) Liabilities that
arose in the Ordinary Course of Business after the date of the Seller Financial
Statement that are not

                                       14

<PAGE>

individually or in the aggregate material to the Business and that have not had
or resulted in, and will not have or result in, a Material Adverse Effect, and
(v) other Liabilities which are being retained by the Sellers and the Seller
Parent as a part of the Excluded Liabilities and for which the Buyer will not
have any responsibility. As used in this Agreement, the term "ORDINARY COURSE OF
BUSINESS" means the operation of the Business in all material respects in a
manner consistent with usual and customary practices as they existed on May 1,
2002 without regard to the transactions contemplated by this Agreement or the
Related Agreements.

     (e) ABSENCE OF CHANGES. Except as set forth in Section 3.1(e) of the
Disclosure Schedule, since May 1, 2002, the Sellers have operated the Business
in the Ordinary Course of Business, and there has not been with respect to the
Business or the Acquired Assets:

          (i) any event that had a Material Adverse Effect other than losses, if
     any, incurred in the Ordinary Course of Business;

          (ii) any damage, destruction or loss to any of the Acquired Assets,
     whether or not covered by insurance;

          (iii) any Liability relating in any manner to, or arising from the
     Business (a "BUSINESS LIABILITY") created, assumed, guaranteed or incurred,
     or any material transaction or Contract relating in any manner to the
     Business entered into, by either of the Sellers or any Seller Affiliate
     other than in the Ordinary Course of Business and which individually or in
     the aggregate are not material to the Business;

          (iv) any payment, discharge or satisfaction of any material
     Encumbrance on any of the Acquired Assets or any Business Liability or any
     cancellation of any material debt or claim relating in any manner to, or
     arising from the Business or any of the Acquired Assets, or any amendment,
     termination or waiver of any right of either of the Sellers or any Seller
     Affiliate relating in any manner to, or arising from the Business or any
     part thereof or any of the Acquired Assets other than those undertaken in
     the Ordinary Course of Business;

          (v) any license, sale, transfer, pledge, mortgage or other disposition
     of any material tangible or intangible asset (including any IP Assets)
     relating in any manner to, or used or held for use in the Business or any
     part thereof, other than in the Ordinary Course of Business;

          (vi) any termination of, or written indication of an intention to
     terminate or not renew, any material Contract to which either of the
     Sellers or any Seller Affiliate is a party that relates in any manner to
     the Business or any part thereof or any of the Acquired Assets;

          (vii) any write-down or write-up of the value of any Acquired Asset,
     or any write-off of any accounts receivable or notes receivable of either
     of the Sellers or any Seller Affiliate or any portion thereof relating in
     any manner to, or arising from the Business or any part thereof or any of
     the Acquired Assets;

          (viii) any increase in or modification of compensation payable or to
     become

                                       15

<PAGE>

     payable to any Transferred Employee, or the entering into of any
     employment, consulting or similar Contract with any Transferred Employee;

          (ix) any increase in or modification or acceleration of any benefits
     payable or to become payable under any bonus, pension, severance, insurance
     or other benefit plan, payment or arrangement (including, but not limited
     to, the granting of stock options, restricted stock awards or stock
     appreciation rights) made to, for or with any Transferred Employee;

          (x) any change in the accounting methods or practices followed by the
     Sellers or any Seller Affiliate or any change in depreciation or
     amortization policies or rates theretofore adopted relating in any manner
     to the Business or any part thereof or any of the Acquired Assets;

          (xi) any change in the manner in which the Sellers or any Seller
     Affiliate extends discounts or credit to customers or otherwise deals with
     past or present customers of the Business;

          (xii) any amendments or changes in the governing instruments of either
     Seller, including, without limitation, the Certificate of Incorporation or
     by-laws of each of the Sellers;

          (xiii) any labor dispute or any union organizing campaign, which in
     any way affects any Transferred Employee;

          (xiv) the commencement of any litigation or other action by or against
     either of the Sellers or any Seller Affiliate that arose out of or in
     connection with the Business or any part thereof or relates to any of the
     Acquired Assets; or

          (xv) any agreement, understanding, authorization or proposal, whether
     in writing or otherwise, for either of the Sellers or any Seller Affiliate
     to take any of the actions specified in items (i) through (xiv) above.

     (f) TAX MATTERS. Except as set forth in Section 3.1(f) of the Disclosure
Schedule, each of the Sellers and the Seller Parent and each other corporation
or entity (if any) included in any consolidated or combined tax return in which
either of the Sellers or the Seller Parent has been included have timely paid or
will timely pay all Taxes due on or before the Closing Date if the failure to
pay would result in any Encumbrance on any Acquired Assets or would otherwise
interfere with the operation of the Business or with the Buyer's use or
enjoyment of any of the Acquired Assets.

     As used in this Agreement, "TAX" means any of the Taxes and "TAXES" means,
with respect to any entity, (A) all income taxes (including any tax on or based
upon net income, gross income, income as specially defined, earnings, profits or
selected items of income, earnings or profits) and all gross receipts, sales,
use, ad valorem, transfer, franchise, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property or windfall profits
taxes, alternative or add-on minimum taxes, customs duties and other taxes,
fees, assessments or charges of any kind whatsoever, together with all interest
and penalties, additions

                                       16

<PAGE>

to tax and other additional amounts imposed by any taxing authority (domestic or
foreign) on such entity and (B) any liability for the payment of any amount of
the type described in the immediately preceding clause (A) as a result of being
a "transferee" (within the meaning of Section 6901 of the Code or any other
applicable Law) of another entity or a member of an affiliated or combined
group.

     (g) TITLE TO ASSETS, PROPERTIES AND RIGHTS AND RELATED MATTERS.

     (i) Except as set forth in Section 3.1(g) of the Disclosure Schedule, the
Sellers have good and valid title to all of the Acquired Assets free and clear
of all Encumbrances of any kind or nature. Except as set forth in Section 3.1(g)
of the Disclosure Schedule and except for the Excluded Assets, the Acquired
Assets constitute all assets used in the operation of the Business, and include
all material assets, properties and interests in properties (real, personal and
mixed, tangible and intangible) and all material rights, leases, licenses and
other Contracts necessary to enable the Buyer to carry on the Business in the
Ordinary Course of Business. Except as set forth in Section 3.1(g) of the
Disclosure Schedule, and except for the Excluded Assets, the Acquired Assets
constitute all of the material properties and assets used or held by the Sellers
or any Seller Affiliate for use in connection with operation of the Business in
the Ordinary Course of Business (except cash disposed of, accounts receivable
collected, prepaid expense realized, Contracts fully performed, and properties
or assets replaced by equivalent or superior properties or assets, in each case
in the Ordinary Course of Business). The Acquired Assets are in all material
respects adequate for the purposes for which they are currently used or held for
use and the Acquired Assets that constitute tangible assets are in good
operating condition and repair (ordinary wear and tear excepted). To the best of
the knowledge of the Sellers and the Seller Parent, there are no facts or
conditions affecting the Acquired Assets or the Business that could,
individually or in the aggregate, interfere in any material respect with the use
or ownership of the Acquired Assets or the operation of the Business in the
Ordinary Course of Business, except as a result of Buyer's failure to employ the
employees of either of the Sellers or reach arrangements with the independent
contractors servicing the Board Networks to enable them to carry on the Business
in the Ordinary Course of Business. Except as set forth in Section 3.1(g) of the
Disclosure Schedule, the Sellers and the Seller Parent have conducted the
Business only through the Sellers and not through any other division, subsidiary
or Affiliate of the Sellers or the Seller Parent, and no Person other than
Sellers or the Seller Affiliates own or control any of the Acquired Assets. As
used herein, the term "ENCUMBRANCES" shall mean and include security interests,
mortgages, liens, pledges, guarantees, charges, easements, reservations,
restrictions, clouds, equities, rights of way, options, rights of first refusal
and all other encumbrances, whether or not relating to the extension of credit
or the borrowing of money.

     (ii) Section 3.1.(g)(ii) of the Disclosure Schedule sets forth a
description of Acquired Assets held in inventory, including numbers of units and
storage location. The inventory included in Acquired Assets includes 1672 Gym
Boards, 942 Campus Voice Boards and 942 AdRax.

     (h) REAL PROPERTY. The Sellers do not own any real property.

                                       17

<PAGE>

     (i) INTELLECTUAL PROPERTY.

          (i) The Sellers or Seller Parent own or have valid license to use all
     of the IP Assets. Except as set forth in Section 3.1(i)(i) of the
     Disclosure Schedule, immediately after the Closing, the Buyer will have a
     right or license to use all IP Assets and will own all IP Assets free of
     all Encumbrances. Section 3.1(i)(i) of the Disclosure Schedule sets forth a
     complete and correct list of all written or oral licenses and arrangements,
     (i) pursuant to which the use by any Person of any IP Assets or any part
     thereof is permitted by either of the Sellers or any Seller Affiliate and
     (ii) pursuant to which the use by either of the Sellers or any Seller
     Affiliate of any IP Assets or any part thereof is permitted by any Person
     (collectively, the "INTELLECTUAL PROPERTY LICENSES") and except as set
     forth in Section 3.1(i)(i) of the Disclosure Schedule, the Sellers are the
     only licensors or licensees, as the case may be, under the Intellectual
     Property Licenses. The Intellectual Property Licenses are in full force and
     effect in accordance with their terms, and are free and clear of any
     Encumbrances. To the best of the knowledge of the Sellers and the Seller
     Parent, neither the Sellers nor the Seller Parent is in default under any
     Intellectual Property License and no such default is currently threatened.
     To the best of the knowledge of the Sellers and the Seller Parent, the
     conduct of the Business as presently conducted does not infringe the rights
     of any third party in respect of any IP Assets. Except as set forth in
     Section 3.1(i)(i) of the Disclosure Schedule, none of the IP Assets used in
     the Business or any part thereof is being furnished by any Seller Affiliate
     or any other third party. There is no claim or demand of any Person
     pertaining to, or any proceeding that is pending or to the best of the
     knowledge of the Sellers and the Seller Parent, threatened that challenges
     the rights of the Sellers or the Seller Parent in respect of the IP Assets
     or Trademarks, or claims that any default exists under any Intellectual
     Property License. None of the IP Assets or the Intellectual Property
     Licenses is subject to any outstanding order, ruling, decree, judgment or
     stipulation by or with any court, tribunal arbitrator, or other
     governmental authority. As set forth in the "Registered Marks" section of
     Section 1.1(m) of the Disclosure Schedule, the IP Assets have been duly
     registered with, filed in or issued by, as the case may be, the United
     States Patent and Trademark Office and the United States Copyright Office
     or other filing offices, domestic or foreign, and such filings or
     registrations remain in full force and effect.

          (ii) Except as set forth in Section 3.1(i)(ii) of the Disclosure
     Schedule, to the best of the knowledge of the Sellers and the Seller
     Parent, all trademarks, service marks, trade names, service names, URLs and
     Internet domain names and applications therefor (and all interest therein),
     designs, slogans and general intangibles of like nature, together with all
     goodwill related to the foregoing (including any registrations and
     applications for any of the foregoing) (collectively, "TRADEMARKS") of the
     Sellers that constitute IP Assets have been in continuous use by the
     Sellers. To the best of the knowledge of the Sellers and the Seller Parent,
     there has been no prior use of such Trademarks by any third party that
     would confer upon said third party superior rights in such Trademarks.

     (j) LICENSED SOFTWARE. Section 3.1(j) of the Disclosure Schedule sets forth
a true and complete list of all software programs and applications licensed by
the Sellers or any Seller Affiliate (the "LICENSED SOFTWARE") that constitutes
an Acquired Asset or that is used or held for use by the Sellers or any Seller
Affiliate in the Business or any part thereof, except for shrink-

                                       18

<PAGE>

wrap licenses for off the shelf software. The Licensed Software may be used by
the Sellers pursuant to the applicable license agreement with respect thereto.
To the knowledge of the Sellers and the Seller Parent, there exists no event or
condition that will result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default by the Sellers or any
Seller Affiliate or the licensor under any such license agreement.

     (k) CONTRACTS. Section 3.1(k)(i) of the Disclosure Schedule sets forth a
true and complete list of all the following written or oral contracts,
agreements, arrangements, understandings, licenses, leases, commitments and
other instruments (and, with respect to any oral Contract, provides a
description of the terms of such Contract), and all material amendments,
modifications and supplements thereto (each a "CONTRACT" and, collectively,
"CONTRACTS"), to which either of the Sellers or any Seller Affiliate is a party
or by which their respective properties are bound and which directly relate to
the Business, the Acquired Assets or the Assumed Liabilities:

          (i) all Contracts for the development, modification or enhancement of
     computer software or multimedia products;

          (ii) all distributorship, dealer, sales, advertising, agency,
     manufacturer's representative, franchise or similar Contracts or
     relationship and all other Contracts relating to the payment of a
     commission or other fee calculated as, or by reference to, a percentage of
     the profits or revenues;

          (iii) all joint venture, partnership or other Contracts or arrangement
     for the sharing of profits;

          (iv) all collective bargaining Contracts or other Contracts with or
     commitment to any labor union;

          (v) all Contracts for the future purchase, sale or license of
     products, material, supplies, equipment or services requiring payments in
     an amount in excess of $25,000 per annum, which agreement, arrangement or
     understanding is not terminable on 30 days' notice without cost or other
     liability on or any time after the Closing Date, or pursuant to which
     manufacturing rights are granted or received, or which contain most favored
     nations pricing provisions or exclusive marketing or other exclusive or
     perpetual rights relating to any product, group of products, services,
     technology, assets or territory;

          (vi) all licenses (whether as licensor or licensee), or sublicenses,
     royalty, permits, franchise agreements or other Contracts, including,
     without limitation, any Contracts pursuant to which any intellectual
     property, including any Trademarks, is licensed to any third party (other
     than ordinary course licenses to end-users and "shrink-wrap" licenses for
     off-the-shelf software);

          (vii) all Contracts relating to the content or delivery of computer
     software or multimedia products and services (including the transmission or
     other performance (electronically or otherwise));

          (viii) all Contracts relating to the employment of any person as of
     the Closing

                                       19

<PAGE>

     Date who provides services in connection with the Business or any portion
     thereof which (except as otherwise generally provided by applicable Law) is
     not immediately terminable without cost or other liability at or at any
     time after the Effective Time;

          (ix) all profit-sharing, bonus, stock option, stock appreciation
     right, pension, retirement, disability, stock purchase, hospitalization,
     insurance or similar plans or agreements, formal or informal, providing
     benefits to any person as of the Closing Date who is employed by the Seller
     or any Seller Affiliate;

          (x) any indenture, mortgage, promissory note, loan agreement,
     guarantee or other agreement or commitment for the borrowing of money, for
     a line of credit or for a leasing transaction of a type required to be
     capitalized in accordance with Statement of Financial Accounting Standards
     No. 13 of the Financial Accounting Standards Board;

          (xi) all Contracts granting or permitting any Encumbrance on any of
     the properties, assets or rights of the Sellers relating to the Acquired
     Assets;

          (xii) all leases for real property (whether as lessor or lessee) and
     all other leases and agreements under which the Sellers are lessee of or
     hold or operate any items of tangible personal property owned by any third
     party;

          (xiii) all Contracts or commitments for charitable contributions;

          (xiv) all other Contracts or commitment not already listed for capital
     expenditures individually or in the aggregate in excess of $25,000 or which
     cannot be terminated by their terms on less than 60 (sixty) days notice
     without liability;

          (xv) all Contracts with a "disqualified individual" (as defined in
     Section 280G(c) of the Code), which could result in an "excess parachute
     payment" (as defined in Section 280G(b)(1) of the Code) being made under
     Section 280G of the Code as a result of the transactions contemplated
     hereby;

          (xvi) all Contracts which restrict either of the Sellers from engaging
     in any aspect of their business or competing in any line of business in any
     geographic area; or

          (xvii) all other Contracts or commitments not already listed that are
     material to the conduct of the Business.

     Solely for purposes of this Section 3.1(k) and 3.1(l) below, the term
"MATERIAL" shall mean and refer to those Contracts that involve payments or
expenditures by or to either of the Sellers, or otherwise have an aggregate
value, of at least $25,000. Except as disclosed in Section 3.1(k) of the
Disclosure Schedule, the Sellers or the Seller Parent have furnished to the
Buyer or the Buyer Parent true and complete copies of all such Contracts listed
in Section 3.1(k)(i) of Disclosure Schedule and (x) each such Contract (A) is
the legal, valid and binding obligation of either of the Sellers or the Seller
Parent, and, in each case enforceable in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the rights
of creditors generally and by general equitable principles (regardless of
whether such enforceability is

                                       20

<PAGE>

considered in a proceeding in equity or at law) and by an implied covenant of
good faith and fair dealing, (B) is in full force and effect and (y) neither of
the Sellers (or any Seller Affiliate, if applicable) nor to the best of the
knowledge of the Sellers, except as set forth in Section 3.1(k)(i) of Disclosure
Schedule, the other party or parties thereto is or are in material default
thereunder. Section 3.1(k)(ii) of the Disclosure Schedule sets forth information
regarding revenue recognized by the Sellers, billings made by the Sellers and
Collections received by the Sellers related to the Assigned Contracts as of
August 1, 2002 ("Historical Financial Information"). The Historical Information
is true, accurate and complete in all material respects as of the Closing Date.

     (l) NO DEFAULTS. Except as set forth in Section 3.1(l) of the Disclosure
Schedule, neither of the Sellers nor the Seller Parent is in default or alleged
to be in default under (i) its Certificate of Incorporation or by laws or (ii)
any material agreement, lease, license, Contract, commitment, instrument or
obligation relating to the Business to which it is a party or by which any of
the Acquired Assets are or may be bound or affected, and to the best of the
knowledge of the Sellers and the Seller Parent, there exists no event, condition
or occurrence which, with or without due notice or lapse of time, or both, would
constitute such a default or alleged default by it of any of the foregoing.

     (m) LITIGATION, ETC. Except as set forth in Section 3.1(m) of Disclosure
Schedule, there are no (i) actions, suits, claims, investigations or legal or
administrative or arbitration proceedings (collectively, "ACTIONS") pending, or
to the best of the knowledge of the Sellers and the Seller Parent, threatened
against either of the Sellers or any Seller Affiliate affecting or arising out
of the Business or use of the Acquired Assets, nor, to the best of the knowledge
of the Sellers and the Seller Parent, is there any basis therefor, whether at
law or in equity, or before or by any federal, state, municipal, foreign or
other governmental court, department, commission, board, bureau, agency or
instrumentality ("GOVERNMENTAL AUTHORITY"), (ii) judgments, decrees, injunctions
or orders of any Governmental Authority or arbitrator against the Sellers or any
Seller Affiliate affecting, relating in any manner to, or arising out of the
Business or use of the Acquired Assets, or (iii) disputes with customers or
vendors affecting, relating in any manner to, or arising out of the Business or
use of the Acquired Assets. There are no Actions pending or to the best of the
knowledge of the Sellers and the Seller Parent, any threatened Actions, nor is
there any basis therefor, with respect to (A) any of the Acquired Assets or
Assumed Liabilities, or (B) the employment by, or association with, the Sellers
or any Seller Affiliate, or future employment by, or association with, the Buyer
or any Affiliate of the Buyer, of any of the Transferred Employees. The Sellers
have delivered to the Buyer all material documents and correspondence relating
to such matters referred to in Section 3.1(m) of Disclosure Schedule (including,
in the case of clause (iii) of the first sentence of this Section 3.1(m), any
correspondence evidencing material customer dissatisfaction with either of the
Sellers or their respective products or services).

     (n) ACCOUNTS RECEIVABLE. All of the accounts receivable being transferred
and assigned to the Buyer as part of the Acquired Assets, to the extent included
in current assets for the purpose of the Working Capital Adjustment under
Section 2.2, constitute valid and enforceable claims that arose from bona fide
transactions in the Ordinary Course of Business, and are not subject to any
claims, refusals to pay or rights of set-off that will reduce them below the
amount included in current assets, and there is no basis for any such claim,
refusal or right of set-off. Except as set forth in Section 3.1(n) of the
Disclosure Schedule, there is (i) no account

                                       21

<PAGE>

debtor that has refused (or, to the best of the knowledge of the Sellers and the
Seller Parent, threatened to refuse) to pay any obligation to either of the
Sellers arising from or relating to the Business, (ii) to the best of the
knowledge of the Sellers and the Seller Parent, no account debtor or note debtor
of the Business is insolvent or bankrupt, and (iii) no account receivable
intended to be transferred as part of the Acquired Assets and that is included
in current assets for the purpose of the Working Capital Adjustment under
Section 2.2 is pledged to any third party by either of the Sellers or any Seller
Affiliate.

     (o) ACCOUNTS PAYABLE. Except as set forth in Section 3.1(o) of the
Disclosure Schedule, all accounts payable by either of the Sellers or any Seller
Affiliate that are to be assumed by the Buyer as part of the Assumed Liabilities
have arisen from bona fide transactions in the Ordinary Course of Business, and,
except as set forth in Section 3.1(o) of the Disclosure Schedule, there is no
such account payable delinquent in its payment, except those contested in good
faith and disclosed in Section 3.1(o) of Disclosure Schedule.

     (p) COMPLIANCE; GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Each of the
Sellers and the Seller Parent has complied and is in compliance with all Laws
applicable to the operation of the Business and the use of the Acquired Assets
except where the failure to comply would not have a Material Adverse Effect. To
the knowledge of Sellers and Seller Parent, Section 3.1(p) of the Disclosure
Schedule contains a true and complete list of all governmental licenses,
authorizations, consents, approvals or permits necessary for the conduct of the
Business or the use of the Acquired Assets. Neither of the Sellers is in default
or alleged to be in default under any thereof; and the Sellers have furnished to
the Buyer true and complete copies thereof. None of such licenses, consents,
approvals, authorizations or permits shall be terminated or revoked as a result
of the transactions contemplated hereby or by any of the Related Agreements.

     (q) ENVIRONMENTAL MATTERS.

          (i) To the best of the knowledge of the Sellers and the Seller Parent,
     the Business has been operated in compliance with and is in compliance with
     all foreign and domestic laws, governmental statutes (civil and criminal),
     common laws, ordinances, codes, regulations, rules, notices, permits,
     judgments, requirements, standards, guidelines, judicial and administrative
     orders and decrees applicable to it and its properties, assets, operations
     and businesses relating to pollution, worker and public health and safety,
     and/or environmental protection (collectively "ENVIRONMENTAL LAWS");

          (ii) to the best of the knowledge of the Sellers and the Seller
     Parent, each of the Sellers and the Seller Affiliates, has obtained and
     adhered to all necessary material permits and other approvals necessary to
     treat, transport, store, dispose of and otherwise handle Wastes, Hazardous
     Wastes and Hazardous Substances; except to the extent that a failure to do
     so, either singly or in the aggregate, does not and would not have a
     Material Adverse Effect;

          (iii) to the best of the knowledge of the Sellers and the Seller
     Parent, there have been no emissions, spills, discharges, releases or
     threats of releases (as defined in Environmental Laws) at, from, in or on
     any property owned, leased or operated by either

                                       22

<PAGE>

     of the Sellers or any Seller Affiliates or except as permitted by
     Environmental Laws or where such emissions, spills, discharges, and
     releases do not and would not have a Material Adverse Effect;

          (iv) none of the Sellers or Seller Parent knows of any on-site or
     off-site location to which it or any Seller Affiliate has transported or
     disposed of Wastes, Hazardous Wastes and/or Hazardous Substances or
     arranged for the transportation or disposition of Hazardous Wastes and
     Hazardous Substances, which site is the subject of any federal, state,
     local or foreign enforcement action or any other investigation which could
     lead to any claim against either of the Sellers, any Seller Affiliate or
     the Buyer for any clean-up cost, remedial work, damage to natural resources
     or personal injury, including without limitation any claim under the
     Comprehensive Environmental Response, Compensation and Liability Act of
     1980, as amended ("CERCLA"); and

          (v) to the knowledge of the Sellers and Seller Parent, none of the
     Sellers or Seller Affiliates has, nor will it have, any liability in
     connection with any release of any Hazardous Waste or Hazardous Substance
     into the environment, except to the extent that such liability does not and
     would not have a Material Adverse Effect.

          For purposes hereof, the term Environmental Laws includes, without
     limitation, the Comprehensive Environmental Response, Compensation, and
     Liability Act, 42 U.S.C. ss. 9601 et seq., the Resource Conservation and
     Recovery Act, 42 U.S.C. ss. 6901 et seq., the Federal Water Pollution
     Control Act, 33 U.S.C. ss. 1251 et seq., the Clean Air Act, 42 U.S.C. ss.
     1857 et seq., the Occupational Safety and Health Act of 1970, 29 U.S.C. ss.
     651 et seq., and the Toxic Substances Control Act, 15 U.S.C.ss. 2601 et
     seq.

     (r) LABOR RELATIONS; EMPLOYEES.

          (i) Section 3.1(r)(i) of the Disclosure Schedule identifies all
     employees employed on the Closing Date by either of the Sellers or any
     Seller Affiliate who perform or have performed services in connection with
     the Business or any part thereof, excluding (x) any employees performing
     legal, accounting or secretarial services; and (y) the Chairman, President,
     Acting Chief Financial Officer and General Counsel of the Seller Parent
     (the "EMPLOYEES"), and sets forth for each such individual: (i) rate of pay
     or annual compensation (including actual or potential bonus payments or
     commission arrangements), (ii) job title, (iii) state of employment, (iv)
     date of hire, (v) annual vacation and sick time allowance and (vi) accrued
     vacation and sick time as of August 1, 2002. Except for the Sellers'
     severance pay policy that is generally applicable to all employees, there
     are no employment, consulting, severance pay, continuation pay, termination
     or indemnification Contracts (hereinafter "EMPLOYMENT CONTRACTS") between
     either of the Sellers or any Seller Affiliate and any of the Employees that
     is being transferred as part of the Acquired Assets. The Assigned Contracts
     do not include any Employment Contracts. The Buyer will not as a direct or
     indirect result of the transactions contemplated hereby, be required to pay
     or accrue additional benefits, service or accelerated rights to payments
     under any Employee Plan, including the right to receive any parachute
     payment, as defined in Section 280G of the Code.

                                       23

<PAGE>

          (ii) Schedule 3.1(r)(ii) contains a list of independent contractors
     and project employees of the Sellers or any Seller Affiliate as of the
     Closing who perform or have performed services in connection with the
     Business or any part thereof ("INDEPENDENT CONTRACTORS"). Sellers and
     Seller Parent believe that the Independent Contractors are, and could only
     be reasonably considered to be, in fact "independent contractors" and not
     "employees" or "common law employees" of the Sellers or any Seller
     Affiliate for tax purposes.

          (iii) None of the Sellers or Seller Parent is, or to the best of the
     knowledge of the Sellers and the Seller Parent, are any of the Employees in
     violation or default of any term of any employment, non-disclosure,
     non-competition, inventions assignment or any other Contract to which such
     Person is a party.

          (iv) Except as set forth in Section 3.1(r)(iv) of the Disclosure
     Schedule, (A) there are no delinquent payments owed for any wages,
     salaries, commissions, bonuses or other direct compensation for any
     services performed by any Employee to date, or amounts required to be
     reimbursed to such employees, except that Employees may be owed
     reimbursement for expenses incurred in the ordinary course of business
     prior to Closing, which amounts the Sellers and the Seller Parent agree
     they will pay to such employees in accordance with their standard policies
     governing reimbursement of expenses, (B) upon termination of the employment
     of any such Employees, the Buyer will not be liable to any of such
     employees for so-called "severance pay" or any other payments that (x)
     accrued on or prior to the Closing Date or as a result of the consummation
     of the transactions contemplated hereby or (y) would otherwise accrue to
     Sellers or Seller Parent by operation of Law, (C) there is no unfair labor
     practice complaint against either of the Sellers or any Seller Affiliate
     pending before the National Labor Relations Board or any other Governmental
     Authority, and none of the employment policies or practices of either of
     the Sellers is currently being audited or investigated by any Federal,
     state or local Government Authority, in either case, relating in any manner
     to, or arising from the Business or involving any Employee (D) there is no
     labor strike, dispute, claim, charge, lawsuit, proceeding, labor slowdown
     or stoppage pending, or to the best of the knowledge of the Sellers and the
     Seller Parent, threatened against or involving either of the Sellers or any
     Seller Affiliate which relates in any manner to the Business or the manner
     in which it has been conducted or operated or involves any Employees, (E)
     no labor union has taken any action with respect to organizing the
     Employees, (F) neither of the Sellers nor the Seller Parent has any
     knowledge that (x) any of the Employees intends to terminate his or her
     employment or engagement with either of the Sellers or any Seller Affiliate
     or, (y) if any of such Employees is offered and accepts employment with or
     engagement by the Buyer, that such Employee(s) will or will not remain
     employees of the Buyer for at least 180 days after the Closing.

     (s) EMPLOYEE BENEFIT PLANS AND CONTRACTS.

          (i) There are no Employee Plans of either of the Sellers or any Seller
     Affiliate as to which the Buyer will become liable as a result of the
     transactions contemplated by this Agreement or any of the Related
     Agreements. None of the Acquired Assets is

                                       24

<PAGE>

     subject to any Encumbrance in favor of the, or enforceable by, the Pension
     Benefit Guaranty Corporation.

          (ii) The consummation of the transactions contemplated by this
     Agreement and the Related Agreements will not (A) cause any severance or
     separation pay to become due to any Employee, or (B) accelerate the time of
     payment or vesting, or increase the amount, of compensation due to any
     Employee, in each case that the Buyer would be legally required to pay or
     honor.

          (iii) As used herein the term Employee Plan means "employee benefit
     plans" as defined in Section 3(3) of the Employee Retirement Income
     Security Act of 1974, as amended ("ERISA"), and all bonus, phantom stock,
     stock appreciation rights, incentive, deferred compensation, retirement or
     supplemental retirement, severance, golden parachute, vacation, cafeteria,
     dependent care, medical care, employee assistance program, education or
     tuition assistance programs, insurance and other similar compensation,
     fringe or employee benefit plans, programs or arrangements, and any current
     or former employment or executive compensation or severance agreements,
     written or otherwise, for the benefit of, or relating to, any present or
     former Employee of either of the Sellers or any trade or business (whether
     or not incorporated) which is a member of a controlled group or which is
     under common control with either of the Sellers within the meaning of
     Section 414 of the Code and the regulations promulgated thereunder (an
     "ERISA AFFILIATE") and all other written or formal plans or agreements
     involving direct or indirect compensation (including any employment
     agreements entered into between either of the Sellers and any Employee, but
     excluding workers' compensation, unemployment compensation, other
     government-mandated programs and the salary and wage arrangements of the
     Sellers) currently or previously maintained, contributed to or entered into
     by either of the Sellers, or any ERISA Affiliate thereof for the benefit of
     any Employee or former Employee under which either of the Sellers or any
     ERISA Affiliate thereof has any present or future obligation or liability
     (the "EMPLOYEE PLANS"), whether or not such plan or arrangement has been
     terminated.

          (iv) All pension plans, as that term is defined in Section 3(2) of
     ERISA, ("PENSION PLANS") in which Employees participate that are intended
     to be qualified under Section 401(a) of the Code and their related trusts
     are qualified as to form and operation under Section 401(a) and Section
     501(a) of the Code, respectively.

     (t) INSURANCE. The Acquired Assets do not include any policies of
liability, theft, fidelity, fire, product liability, errors and omissions,
workmen's compensation, indemnification of directors and officers or other
similar forms of insurance held by the Sellers or the Seller Parent in
connection with, or that directly relate, to the Business or any part thereof,
the Acquired Assets or the Assumed Liabilities. To the knowledge of the Sellers
and the Seller Parent, neither of the Sellers nor the Seller Parent has, since
their inception, been denied or had revoked or rescinded any policy of insurance
in connection with their operation of the Business or the Acquired Assets.

     (u) POWER OF ATTORNEY. Section 3.1(u) of the Disclosure Schedule sets forth
a true and complete list of the names of all Persons, firms, associations,
corporations or business

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<PAGE>

organizations holding general or special powers of attorney from the Sellers or
the Seller Parent relating in any manner to the Business, the Acquired Assets or
the Acquired Liabilities and a summary of the terms thereof.

     (v) BROKERS. Neither of the Sellers or any Seller Affiliate has, nor have
any of their officers, directors, securityholders or employees, engaged any
broker or finder or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated hereby except
Allen & Company incorporated, the fees of which, if any, shall be paid by the
Sellers and the Seller Parent and with respect to which neither the Buyer nor
the Buyer Parent shall have any liability therefor.

     (w) RELATED TRANSACTIONS. Except as set forth in Section 3.1(w) of the
Disclosure Schedule, no current or former director, officer or securityholder of
either of the Sellers or the Seller Parent that is an Affiliate of either of the
Sellers or the Seller Parent or any associate (as defined in the rules
promulgated under the Exchange Act) thereof, is now, or has been since January
1, 2001, a party to any Assigned Contract or Assumed Liability (including, but
not limited to, any contract, agreement or other arrangement providing for the
furnishing of services by, or rental of real or personal property from, or
borrowing money from, or otherwise requiring payments to, any such director,
officer or affiliated stockholder of the either of the Sellers or the Seller
Parent or associate thereof), or the direct or indirect owner of an interest in
any corporation, firm, association or business organization which is a present
or potential competitor, supplier or customer of either of the Sellers or the
Seller Parent (other than non-affiliated holdings in publicly-held companies).

     (x) TERRITORIAL RESTRICTIONS. Except as set forth in Section 3.1(x) of the
Disclosure Schedule, neither of the Sellers nor any Seller Affiliate is
restricted by any Contract with any other Person from carrying on the Business
anywhere in the world. The Buyer, solely as a result of the consummation of the
transactions contemplated hereby, will not thereby become restricted in carrying
on any business anywhere in the world.

     (y) CUSTOMERS. Section 3.1(y) of the Disclosure Schedule sets forth a true
and complete list of the twenty (20) largest revenue producing customers of the
Sellers relating to the Business during the period from July 1, 2001 to the date
hereof.

     (z) BOOKS AND RECORDS. Except as set forth in Section 3.1(z) of the
Disclosure Schedule, the minute books of the Sellers provided to the Buyer for
review contain a complete summary of all meetings of and actions by their
directors and stockholders since July 1, 2001 to the date hereof and reflect all
actions referred to in such minutes accurately in all material respects.

     (aa) APPROVAL. The Boards of Directors of each of the Sellers and the
Seller Parent (i) have approved this Agreement and each of the Related
Agreements to which the Sellers or the Seller Parent is a party, as the case may
be, and the consummation of transactions contemplated hereby and thereby and
(ii) have determined that the consummation of transactions contemplated by this
Agreement and the Related Agreements are in the best interests of the Seller
Parent and the stockholders of the Seller Parent, as the case may be, and are on
terms that are fair to such stockholders. The approval of the sole stockholders
of the Sellers is the only approval of

                                       26

<PAGE>

stockholders of any class or series of capital stock or other securities of the
Sellers or the Seller Affiliates necessary to authorize the execution, delivery
and performance by the Sellers and the Seller Parent of this Agreement and each
of the Related Agreements and the consummation of transactions contemplated
hereby and thereby.

     (bb) SOLE SHAREHOLDER. Seller Parent or a Seller Affiliate owns 100% of the
outstanding capital stock of each of the Sellers.

     3.2 REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE BUYER PARENT. The
Buyer and the Buyer Parent jointly and severally represent and warrant to the
Sellers and the Seller Parent as follows:

     (a) ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER. The Buyer (i) is
a corporation duly organized, validly existing and in good standing under the
law of the State of Delaware, and (ii) has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as now being conducted, to enter into this Agreement and each of
the Related Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.

     (b) AUTHORITY. The execution, delivery and performance by the Buyer and the
Buyer Parent of this Agreement and each of the Related Agreements to which it is
party, and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of the
Buyer and the Buyer Parent. This Agreement and each of the Related Agreements to
which the Buyer or the Buyer Parent is a party are the valid and binding
obligations of the Buyer and the Buyer Parent, respectively, enforceable against
the Buyer and the Buyer Parent in accordance with their respective terms except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the rights
of creditors generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Neither the execution, delivery and performance by the Buyer or the Buyer Parent
of this Agreement and each of the Related Agreements to which the Buyer or the
Buyer Parent is a party, nor the consummation by the Buyer and the Buyer Parent
of the transactions contemplated hereby or thereby, will in any material respect
(A) conflict with, (B) result in any violation of, (C) cause a default under
(with or without due notice, lapse of time or both), (D) give rise to any right
of termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any benefit under, (E) result in the creation of any
Encumbrance on or against any assets, rights or property of the Buyer or the
Buyer Parent, under any term, condition or provision of (x) any Law applicable
to the Buyer or the Buyer Parent or any of its respective properties, assets or
rights or (y) the Buyer's or the Buyer Parent's Certificate of Incorporation or
by-laws, as amended through the date hereof, in each case, which conflict,
breach, default or violation or other event would prevent the consummation of
the transactions contemplated by this Agreement and each of the Related
Agreements or the performance in all material respects of the obligations of the
Buyer or the Buyer Parent. Except as contemplated by this Agreement, no permit,
authorization, consent or approval of or by, or any notification of or filing
with, any Governmental Authority or other Person is required in connection with
the execution, delivery and performance by the Buyer and the Buyer Parent of
this Agreement and each of the Related Agreements to which it is a party or the
consummation of the transactions contemplated hereby

                                       27

<PAGE>

or thereby, other than such other consents, waivers, authorizations, filings,
approvals and registrations which if not obtained or made would not impair in
any material respect the ability of the Buyer or the Buyer Parent to consummate
the transactions contemplated by this Agreement or to perform its respective
obligations under this Agreement.

     (c) BROKERS. Neither the Buyer, the Buyer Parent nor any of their
Affiliates, is obligated, or will become obligated, to make any payment to any
broker, finder or other Person in respect to the transactions contemplated
hereby or by the Related Agreements.

                                   ARTICLE IV
                              ADDITIONAL AGREEMENTS

     4.1 LITIGATION COOPERATION. If a party hereto shall become engaged or
participate in any investigation, claim, litigation, arbitration, mediation, or
other proceeding with any third party relating in any way to the Business, the
Acquired Assets or the Assumed Liabilities, the other parties shall cooperate in
all reasonable respects with such party in connection therewith, including,
without limitation, making available to such parties, without cost, all relevant
records and using its commercially reasonable efforts to make available to the
other the then employees of the parties or their Affiliates who may be helpful
with respect to such claim or litigation.

     4.2 PUBLIC ANNOUNCEMENTS. The parties hereto agree that, to the maximum
extent feasible, but subject to the public disclosure and other legal
obligations of the Buyer, the Buyer Parent, the Sellers and the Seller Parent
and regulatory obligations to which each may be subject, they shall advise and
confer prior to the issuance (and provide copies to the other party prior to
issuance) of any public announcement or reports or statements with respect to
the transactions contemplated hereby.

     4.3 TRANSFER TAXES. The Sellers and the Seller Parent, on the one hand and
the Buyer and the Buyer Parent, on the other hand, shall be jointly and
severally responsible for the timely payment of, and shall indemnify and hold
harmless the others against, all sales (including, without limitation, bulk
sales), use, value added, documentary, stamp, gross receipts, registration,
transfer, conveyance, excise, recording, license and other similar Taxes and
fees ("TRANSFER TAXES") to which the Sellers and the Seller Parent on the one
hand and the Buyer and the Buyer Parent on the other hand may be subject by
operation of Law, arising out of or in connection with or attributable to the
transactions effected pursuant to this Agreement and the Related Agreements. The
Sellers and the Seller Parent, on the one hand, and the Buyer and the Buyer
Parent, on the other hand, shall prepare and timely file all Tax Returns
required to be filed by it or them in respect of such Transfer Taxes (including,
without limitation, all notices required to be given with respect to bulk sales
taxes). As soon as practicable after the Closing Date, the Sellers and the
Seller Parent agree to obtain tax clearance certificates from the applicable
state tax authorities in each of the jurisdictions in which any of them
maintained an office within one (1) year of the Closing Date and upon receipt
thereof to provide copies of the same to the Buyer.

                                       28

<PAGE>

     4.4 EMPLOYMENT MATTERS.

     (a) The Sellers and the Seller Parent each will not interfere with the
Buyer's efforts to hire those employees, consultants, and officers of the
Sellers and the Seller Parent including without limitation Dennis Roche (the
"EMPLOYEES") the Buyer seeks to hire after the Closing Date. The Sellers and the
Seller Parent will not terminate any Employees unless and until Buyer has had an
opportunity to meet with and interview such Employees, provided that such
meeting occurs no later than midnight August 6, 2002. The Sellers and the Seller
Parent shall cooperate with Buyer to arrange such meetings. The Buyer may, but
is not required to, make offers of employment or consultancy to all or any of
such individuals. The terms and conditions (e.g., compensation matters,
full-time, part-time, temporary, permanent) of such offers shall be determined
by the Buyer in its sole discretion. Buyer agrees to notify Seller Parent of
those Employees to whom it makes offers of employment by August 7, 2002. Those
Employees who agree to accept a position with the Buyer or its Affiliates shall
be referred to herein as the "TRANSFERRED EMPLOYEES". Each of the Sellers and
the Seller Parent hereby consents to such hiring or engagement of the
Transferred Employees and effective as of the Closing waives in perpetuity, with
respect to the employment or engagement by the Buyer or any of its Affiliates of
the Transferred Employees, any claims or rights either of the Sellers or the
Seller Parent may have against the Buyer or any of its Affiliates or against any
such Transferred Employees under any non-competition, confidentiality,
employment, assignment of inventions or similar Contract.

     (b) Neither the Buyer nor any of its Affiliates shall have any Liability
which arises from either of Sellers or Seller Parent's employment of any current
or former employee, officer, director or consultant of the Sellers or any Seller
Affiliate or Employee Plan or any claim thereof or related thereto. From and
after the Closing, the Sellers and the Seller Parent shall remain jointly and
severally responsible for any and all Liabilities in respect of the current and
former Employees, including the Transferred Employees and their beneficiaries
and dependents, relating to or arising in connection with or as a result of (i)
the employment or the actual or constructive termination of employment or
consultancy of any such employee or consultant by either of the Sellers or any
Seller Affiliate (including, without limitation, in connection with the
consummation of the transactions contemplated by this Agreement), (ii) the
participation in or accrual of benefits or compensation under, or the failure to
participate in or to accrue compensation or benefits under, or the operation and
administration of, any Employee Plan or other employee or retiree benefit or
compensation plan, program, practice, policy, agreement or arrangement of either
of the Sellers or any Seller Affiliate or (iii) accrued but unpaid salaries,
wages, bonuses, incentive compensation, vacation or sick pay or other
compensation or payroll items (including, without limitation, deferred
compensation). Each of the Sellers and the Seller Parent shall remain jointly
and severally responsible for the payment of any and all retention, change in
control, severance or other similar compensation or benefits which are or may
become payable to any of their Employees in connection with the consummation of
the transactions contemplated by this Agreement.

     (c) At the request of the Buyer and to the extent commercially reasonable
and not requiring any costs or expenses to be paid by Sellers or Seller Parent,
the Sellers and the Seller Parent will cooperate with the Buyer to (i) treat the
Buyer as a "successor employer" and the Sellers or the Seller Parent as a
"predecessor," within the meaning of sections 3121(a)(1) and 3306(b)(1) of the
Code, with respect to Transferred Employees who are employed by the Buyer

                                       29

<PAGE>

for purposes of Taxes imposed under the United States Federal Unemployment Tax
Act ("FUTA") or the United States Federal Insurance Contributions Act ("FICA")
and (ii) avoid, to the extent possible, the filing of more than one IRS Form W-2
with respect to each such Transferred Employee for the calendar year within
which the Closing Date occurs, but the Buyer shall not be treated as a successor
employer for any other purpose. Further, at the request of the Buyer with
respect to any particular applicable tax Law relating to employment,
unemployment insurance, social security, disability, workers' compensation,
payroll, health care or other similar Tax other than Taxes imposed under FICA
and FUTA, the Sellers and the Seller Parent will (i) treat the Buyer as a
successor employer and the Sellers or Seller Parent as a predecessor employer,
within the meaning of the relevant provisions of such tax Law, with respect to
Transferred Employees who are employed by the Buyer and (ii) cooperate with the
Buyer to avoid, to the extent possible, the filing of more than one individual
information reporting form pursuant to each such tax Law with respect to each
such Transferred Employee for the calendar year within which the Closing Date
occurs.

     (d) For a period of two (2) years from the Closing Date, each of the
Sellers and the Seller Parent, will not, and will not permit any of their
respective Affiliates to, solicit, offer to employ or retain the services of or
otherwise interfere with the relationship of the Buyer or any of its Affiliates
with any individual employed by the Buyer or its Affiliates.

     4.5 TRANSITION.

     (a) (i) The Sellers and the Seller Parent each agrees that it will not take
any action that is designed or intended to have the effect of discouraging any
customer, supplier, licensor, lessor or other business associate from
maintaining the same business relationships with respect to the Business or the
Acquired Assets after the Closing as it maintained with respect to the Business
or the Acquired Assets prior to the Closing. The Sellers and the Seller Parent
shall promptly refer all customer inquiries relating to the Business or the
Acquired Assets to the Buyer from and after the Closing.

     (ii) For thirty days following Closing, the Sellers and the Seller Parent
shall cooperate with the Buyer as Buyer may reasonably request to effectuate the
delivery of the Acquired Assets (except those Acquired Assets set forth in
Schedules 1.1(c), 1.1(d) or 1.1(e)) to such location or locations as the Buyer
may request, at Buyer's sole cost and expense. The Buyer, at its election, may
notify the Seller Parent that the Buyer would like to assume some or all of the
Sellers' or the Seller Parent's existing storage or warehouse facilities and/or
arrangements housing any of the Acquired Assets ("FACILITIES"). In such event,
the Sellers or Seller Parent shall use commercially reasonable efforts to assist
the Buyer in assuming the leases or other contractual arrangements governing
such Facilities, but in no event shall Sellers or Seller Parent be required to
maintain any such Facilities for more than thirty days following Closing.

     (iii) The Sellers and the Seller Parent shall use commercially reasonable
efforts to maintain the functionality of the phone systems, computer networks,
servers and systems hardware included in the Acquired Assets or housing any
Acquired Assets, including any data relating to the Business or included in the
Acquired Assets as of the Closing Date for a period of at least (30) thirty days
after the Closing Date. The Buyer shall use its commercially reasonable efforts
to transition such systems, networks, servers and other hardware and to migrate
such data

                                       30

<PAGE>

over to systems or locations controlled by the Buyer as promptly as practicable
after the Closing Date. If the location housing such server, system, data or
other hardware ceases to be leased or occupied by the Seller or any Seller
Affiliate, the Seller Parent shall notify the Buyer and the Buyer shall promptly
make arrangements to transfer such equipment to a location or provide a host for
any such servers, systems or data.

     (iv) As soon as practicable following the Closing Date, but in any event
within (10) Business Days, the Sellers and the Seller Parent shall deliver to
the Buyer all software licenses and software source and object code and related
documentation to the Buyer.

     (b) For a period of thirty (30) days following the Closing Date, the Buyer
and the Buyer Parent agree to permit Transferred Employees to devote an amount
of their working time that is reasonably acceptable to the Buyer and the Buyer
Parent (and which otherwise does not unreasonably interfere with the completion
by such individuals of his or her duties as assigned by the Buyer or the Buyer
Parent from time to time after Closing) to assist the Sellers and the Seller
Parent in winding up any of the affairs of Sellers that do not constitute
Acquired Assets or Assumed Liabilities.

     (c) Promptly following the Closing Date, each of the Sellers shall change
its name to a name other than "American Passage Media" and "Network Event
Theater".

     4.6 VALUE OF ACQUIRED ASSETS. The parties acknowledge and agree that the
transactions contemplated hereby are the result of arm's length negotiations and
that the fair market value of the Acquired Assets as of the Closing is equal to
the Purchase Price.

                                   ARTICLE V
                                 INDEMNIFICATION

     5.1 SURVIVAL.

     (a) All representations and warranties of the parties contained in this
Agreement shall survive the Closing Date, but no party shall be liable to the
other for misrepresentation or breach of warranty except to the extent that
notice of a claim is asserted in writing and delivered to it prior to 5:00 New
York City time on August 6, 2003; provided, however, that the representations
and warranties contained in the first sentence of Section 3.1(g) and in Section
3.1(v) shall survive for the full period of the applicable statute of
limitations related to such representations and warranties. Any notice of a
claim for misrepresentation or breach of warranty shall state in reasonable
detail the representation or warranty with respect to which the claim is made,
the alleged basis for the claim, and the amount of liability asserted against
the other party by reason of the claim to the extent known.

     (b) The Buyer shall be deemed to have waived any claim for
misrepresentation or breach of warranty under Section 3.1 if, prior to the
Closing, it had actual knowledge of that misrepresentation or breach of
warranty; provided, however, that the Buyer shall only be deemed to have actual
knowledge of those misrepresentations and breaches of warranty if, prior to the
Closing, the relevant facts are known to Neil Vogel, Gina DiGioia or Jim Danatos
as of the Closing.

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<PAGE>

     (c) The Sellers and the Seller Parent shall be deemed to have waived any
claim for misrepresentation or breach of warranty under Section 3.2 if, prior to
the Closing, it had actual knowledge of that misrepresentation or breach of
warranty.

     5.2 INDEMNIFICATION.

     (a) Subject to the provisions of Sections 5.3, 5.4, 5.5 and 5.6, the
Sellers and the Seller Parent shall jointly and severally indemnify and hold
harmless the Buyer, the Buyer Parent and their respective Affiliates, successors
and assigns, and the respective officers, directors, employees and agents of
each of the foregoing, from and against all Losses (as defined below) that any
of them may suffer, sustain or become subject to, arising from or as a result of
(i) any misrepresentation by the Sellers or the Seller Parent in this Agreement
or any breach by the either of the Sellers or the Seller Parent of any warranty,
covenant or other agreement contained in this Agreement (unless waived by
Buyer); (ii) the failure of either of the Sellers or the Seller Parent to pay,
perform and discharge when due any Liabilities of the Sellers or the Seller
Parent other than the Assumed Liabilities and (iii) the failure of the Sellers
to terminate the UCC filings listed in Section 3.1(g) of the Disclosure Schedule
regardless of whether or not Sellers and Seller Parent have exerted commercially
reasonable efforts to obtain such terminations.

     (b) Subject to the provisions of Sections 5.3, 5.4, 5.5 and 5.6, the Buyer
and the Buyer Parent shall jointly and severally indemnify and hold harmless the
Sellers, the Seller Parent and their respective Affiliates, successors and
assigns, and the respective officers, directors, employees and agents of each of
the foregoing, from and against all Losses (as defined below) that any of them
may suffer, sustain or become subject to, arising from or as a result of (i) any
misrepresentation by the Buyer or the Buyer Parent in this Agreement or any
breach by the Buyer or the Buyer Parent of any warranty, covenant or other
agreement contained in this Agreement (unless waived by the Sellers or the
Seller Parent) and (ii) the failure of either the Buyer or the Buyer Parent to
pay, perform and discharge when due any Assumed Liabilities.

     (c) For purposes hereof, "Losses" means any and all losses, demands,
actions or causes of action, suits, proceedings, investigations, arbitrations,
claims, damages, liabilities (contingent or otherwise), payments, obligations,
expenses (including reasonable attorneys' and accountants' fees), assessments or
Taxes (including interest or penalties thereon) sustained, suffered or incurred
by any party arising from or in connection with any such matter that is the
subject of indemnification under this Article.

     5.3 NOTICE AND DEFENSE OF THIRD PARTY CLAIMS. Losses resulting from the
assertion of liability by third parties (each, a "THIRD PARTY CLAIM") shall be
subject to the following terms and conditions:

     (a) The indemnified parties shall promptly give written notice to the
indemnifying parties of any Third Party Claim that might give rise to any Loss
by the indemnified parties, stating the nature and basis of such Third Party
Claim, and the amount thereof to the extent known. Such notice shall be
accompanied by copies of all relevant documentation with respect to such Third
Party Claim, including, without limitation, any summons, complaint or other
pleading that may have been served, any written demand or any other document or
instrument. Notwithstanding the foregoing, the failure to provide notice as
aforesaid will not relieve the

                                       32

<PAGE>

indemnifying parties from any liability which they may have to the indemnified
parties under this Agreement or otherwise (unless and only to the extent that
such failure directly results in the loss or compromise of any rights or
defenses of the indemnifying parties and they were not otherwise aware of such
action or claim).

     (b) The indemnifying parties shall defend any Third Party Claims with
counsel of their own choosing, and shall act reasonably and in accordance with
their good faith business judgment in handling such Third Party Claims. The
indemnifying parties, on the one hand, and the indemnified parties, on the other
hand, shall make available to each other and their counsel and accountants all
books and records and information relating to any Third Party Claims, keep each
other fully apprised as to the details and progress of all proceedings relating
thereto and render to each other such assistance as may be reasonably required
to ensure the proper and adequate defense of any and all Third Party Claims.

     5.4 LIMITATIONS ON LIABILITY. Notwithstanding anything to the contrary in
this Agreement, (a) neither the Sellers nor Seller Parent, on the one hand, nor
the Buyer or Buyer Parent, on the other hand, shall be liable to the other for
misrepresentation or breach of warranty except to the extent that the aggregate
Losses incurred by the other as a result of all such misrepresentations and
breaches of warranty exceeds the sum of $100,000 and (b) in calculating the
amount of the Losses to the Buyer and Buyer Parent for misrepresentation or
breach of warranty by the Sellers or the Seller Parent (i) the Sellers and the
Seller Parent shall receive credit for any reduction in the indemnified party's
tax liability and any recovery by an indemnifying party from any third party
(including insurance proceeds) as a result of the facts or circumstance giving
rise to the Losses; provided, however, that no indemnified party shall be
obligated to seek any payment pursuant to the terms of any insurance policy in
respect of any Loss and (ii) no amount shall be included except for the
indemnified party's actual out-of-pocket costs and expenses.

     5.5 CAP ON LIABILITY. The aggregate liability of the Sellers to the Buyer
for misrepresentation or breach of warranty under this Agreement shall be
$700,000, and the Buyer shall have no other recourse against the Sellers or the
Seller Parent or any of their respective Affiliates. Notwithstanding any
provision of this Agreement to the contrary, nothing contained in this Agreement
shall in any way limit, impair, modify or otherwise affect the rights of any
party to bring any claim, demand, suit or cause of action otherwise available to
such party based upon (i) an allegation or allegations that the other party had
an intent to defraud or made a willful, intentional or reckless
misrepresentation or willful omission of a material fact in connection with this
Agreement or any Related Agreement and the transactions contemplated hereby or
thereby, (ii) any breach or alleged breach of any of the representations or
warranties set forth in Section 3.1(g), or 3.1(v) or (iii) the provisions for
adjustment to the Purchase Price pursuant to Section 2.2. Payments made or owed
under Section 2.3 shall not be counted towards the cap specified in this Section
5.5. In the event the Sellers and the Seller Parent are unable to terminate the
UCC filings listed in Section 3.1(g) of the Disclosure Schedule, then any Losses
incurred by Buyer as a result of such failure shall not be subject to the cap
specified in this Section 5.5.

     5.6 EXCLUSIVE REMEDY. The indemnification provisions of this Section 6
shall be the exclusive remedy for any misrepresentation or breach of warranty
under this Agreement, and no

                                       33

<PAGE>

party shall pursue any other remedy in respect of any such misrepresentation or
breach. In addition, with respect to any misrepresentation or breach of the
warranty set forth in Section 3.1(g)(ii) or otherwise relating to the number,
condition or location of any Gym Boards, Campus Voice Boards or AdRax, the
Buyer's exclusive remedy shall be to seek payment under the provisions of
Section 2.3.

                                   ARTICLE VI
                                  MISCELLANEOUS

     6.1 EXPENSES. Each party hereto shall bear its own fees and expenses in
connection with the transactions contemplated hereby.

     6.2 ENTIRE AGREEMENT. This Agreement (including the Disclosure Schedule and
the Exhibits attached hereto), the Related Agreements and the other writings
referred to herein and contemplated hereby contain the entire agreement among
the parties hereto with respect to the transactions contemplated hereby and
supersede all prior agreements or understandings, written or oral, among the
parties with respect thereto. Except as specifically set forth in this Agreement
or the Related Agreements, there are no representations or warranties by any
party in connection with the transactions contemplated by this Agreement.

     6.3 INTERPRETATION. Descriptive headings are for convenience only and shall
not control or affect the meaning or construction of any provision of this
Agreement. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The word "herein" and similar references mean, except where a specific Section
or Article reference is expressly indicated, the entire Agreement rather than
any specific Section or Article. The table of contents and the headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.

     6.4 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and shall be sufficient if delivered
personally or sent by nationally-recognized overnight courier or by registered
or certified mail, postage prepaid, return receipt requested, or by electronic
mail with a copy thereof to be delivered by mail (as aforesaid) within 24 hours
of such electronic mail, or by facsimile, with confirmation as provided above
addressed as follows:

     (i)  if to the Buyer, to:

             Cass Communications, Inc.
             c/o Alloy, Inc.
             151 West 26th Street, 11th Floor
             New York, NY 10001
             Attention:  Chief Executive Officer
             Facsimile:  (212) 244-4311

          with a copy to (which shall not constitute notice):

                                       34

<PAGE>

             c/o Alloy, Inc.
             151 West 26th Street, 11th Floor
             New York, NY 10001
             Attention:  General Counsel
             Facsimile:  (212) 244-4311

             and

             Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
             701 Pennsylvania Avenue, N.W.
             Washington, D.C.  20004
             Attention:  Richard M. Graf, Esq.
             Facsimile:  (202) 434-7400

     (ii) if to the Sellers or the Seller Parent, to:

             YouthStream Media Networks, Inc.
             28 West 23rd Street, 6th Floor
             New York, NY 10010
             Attention: Harlan Peltz

          with copies to (which shall not constitute notice):

             YouthStream Media Networks, Inc.
             28 West 23rd Street, 6th Floor
             New York, NY 10010
             Attention: General Counsel

             Proskauer Rose LLP
             1585 Broadway
             New York, NY 10036-8299
             Attention:  Bertram A. Abrams, Esq.
             Facsimile:  (212) 969-2900

or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All such notices
or communications shall be deemed to be received (a) in the case of personal
delivery, on the date of such delivery, (b) in the case of nationally-recognized
overnight courier, on the next business day after the date when sent, (c) in the
case of facsimile transmission or electronic mail, upon confirmed receipt, and
(d) in the case of mailing, on the third business day following the date on
which the piece of mail containing such communication was posted.

     6.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts by original or facsimile signature, each such counterpart shall be
an original instrument, and all such counterparts together shall constitute one
and the same agreement.

     6.6 GOVERNING LAW; VENUE. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without reference to its
conflicts of laws

                                       35

<PAGE>

provisions. The parties irrevocably and unconditionally submit to the exclusive
jurisdiction of the Federal courts sitting in New York City over any suit,
action or proceeding arising out of or relating to this Agreement or any Related
Agreement. The parties irrevocably and unconditionally waive any objection to
the laying of venue of any such suit, action or proceeding brought in such court
and any claim that any such suit, action or proceeding brought in such court has
been brought in an inconvenient forum. The parties agree that a final judgment
in any such suit, action or proceeding brought in such court shall be conclusive
and binding upon the parties and may be enforced in any other courts to whose
jurisdiction other parties are or may be subject, by suit upon such judgment.

     6.7 BENEFITS OF AGREEMENT. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. This Agreement shall not be
assignable by the Sellers or the Seller Parent without the prior written consent
of the Buyer.

     6.8 PRONOUNS. As used herein, all pronouns shall include the masculine,
feminine, neuter, singular and plural thereof whenever the context and facts
require such construction.

     6.9 AMENDMENT, MODIFICATION AND WAIVER. This Agreement shall not be altered
or otherwise amended except pursuant to an instrument in writing signed by the
Buyer, the Sellers and the Seller Parent; provided, however, that any party to
this Agreement may waive in writing any obligation owed to it by any other party
under this Agreement. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.

     6.10 NO THIRD PARTY BENEFICIARIES. Nothing express or implied in this
Agreement is intended to confer, nor shall anything herein confer, upon any
Person other than the parties and the respective successors or assigns of the
parties, any rights, remedies, obligations or liabilities whatsoever, except to
the extent that such third Person is an Indemnified Person or Indemnifying
Person in respect of the indemnification provided in accordance with Article VII
of this Agreement.

     6.11 CONSENTS. Except as otherwise expressly provided in this Agreement,
any consent or approval of the Buyer requested or permitted hereunder may be
given or withheld in the Buyer's sole discretion.

     6.12 INTERPRETATION. This Agreement has been negotiated between the parties
and will not be deemed to be drafted by, or the product of, any party. As such,
this Agreement will not be interpreted in favor of, or against, any party.

     6.13 NO JOINT VENTURE. No party hereto shall make any warranties or
representations, or assume or create any obligations, on the other party's
behalf except as may be expressly permitted hereunder or in writing by such
other party. Each party hereto shall be solely responsible for the actions of
all its respective employees, agents and representatives.

     6.14 SPECIFIC PERFORMANCE. Certain of the covenants contemplated by this
Agreement are unique and any failure on the part of either of the Sellers or
Seller Parent to perform such covenants will not be fully compensable in damages
and the breach or threatened breach of such

                                       36

<PAGE>

provisions of this Agreement would cause the Buyer irreparable harm.
Accordingly, in addition to and not in limitation of any other remedies
available to the Buyer for a breach or threatened breach of such covenants, the
Buyer will be entitled to specific performance of Sections 1.7, 1.9, 4.3, 4.4
and 4.5 of this Agreement upon any breach or threatened breach by either of the
Sellers or the Seller Parent, and to an injunction restraining any such party
from such breach or threatened breach.

                                       37

<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has caused this Asset
Purchase Agreement to be executed on its or his behalf as of the day and year
first above written.

                                         ALLOY, INC.

                                         By: /s/ GINA DIGIOIA
                                            ------------------------------
                                            Gina DiGioia
                                            Vice President and General Counsel

                                         CASS COMMUNICATIONS, INC.

                                         By: /s/ GINA DIGIOIA
                                            ------------------------------
                                            Gina DiGioia
                                            Assistant Secretary

                                         AMERICAN PASSAGE MEDIA, INC.

                                         By: /s/ DENNIS ROCHE
                                            ------------------------------
                                            Dennis Roche
                                            President

                                         NETWORK EVENT THEATER, INC.

                                         By: /s/ DENNIS ROCHE
                                            ------------------------------
                                            Dennis Roche
                                            President

                                         YOUTHSTREAM MEDIA NETWORKS, INC.

                                         By: /s/ DENNIS ROCHE
                                            ------------------------------
                                            Dennis Roche
                                            President

                                       38

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